BOARD OF TRADE. ON the 22nd March, 1927, the Board of Trade made a reference to us for enquiry under Section 2, Sub-section 1, of the Merchandise Marks Act, 1926, in respect of : (a) The following descriptions of imported steel Plates, rails, joists, angles, channels, sectional material of all descriptions, castings, forgings, rounds, squares, flats, hexagons, hoops, hot and cold rolled strip; (b) The following descriptions of imported wrought iron— Bars, hoops, sections, plates and sheets. In pursuance of this reference it has become our duty, in accordance with the provisions of Sub-section 6 of Section 2 of the Act, to make a report to the Board of Trade as to whether, in our opinion, an Order-in-Council ought to be made under Section 2 of the Act requiring any or all of the above descriptions of imported iron and steel to bear an indication of origin at the time of sale or exposure for sale in the United Kingdom; and also whether these goods should bear an indication of origin at the time of importation into the United Kingdom. 2. We held six meetings and heard the evidence of twenty witnesses, all of which was given in public. Five of the witnesses appeared on behalf of the Applicants, and fifteen on behalf of the Opponents. During the course of the enquiry we consulted officers of the Board of Customs in the presence of representatives of the Applicants and Opponents on certain questions relating to Customs procedure and examination at the ports. Members of the Committee also visited the London Docks to observe current methods of importing and handling the goods covered by this Application. 3. The Applicants were the National Federation of Iron and Steel Manufacturers and were represented by Counsel, Mr. Jacques Abady. [16389] B 2 4. The following parties appeared in opposition to the Application (a) The British Tube Association, who were represented by Mr. William Stewart; (b) The Iron, Steel, Tinplate and Metal Merchants' Section of the London Chamber of Commerce, who were represented by Mr. H. J. Wallington; (c) The Shipbuilding Employers' Federation, who were represented by Mr. Norman Birkett, K.C., and Mr. Arthur Davis; (d) The Scottish Stockholders' Association, who were represented by Mr. W. J. Fleming; (e) The Dock and Harbour Authorities' Association, who were represented by Mr. M. Kissane; (f) Messrs. J. Brockhouse and Company, Limited (Manufacturers of ironwork for road transport vehicles), who were represented by Mr. F. Mullings; (g) Messrs. J. Westwood and Company, Limited (Bridge builders and constructional engineers), who were represented by Mr. F. G. Woolley. 5. The Applicants claimed (and their claim was not questioned) to represent a very large percentage of the British industry concerned with the production of the descriptions of goods specified in the Application. The President of the Iron and Steel Trades Confederation, which includes a large proportion of the workpeople employed in the industry, gave evidence in support of the Application in his personal capacity, and expressed the opinion that the workmen engaged in the industry were generally favourable to the marking of imported iron and steel. 6. The Applicants asked that the indication of origin should be required to be given at the time of importation. 7. The Applicants pointed out at an early stage in the proceedings that their application did not include (a) Billets, blooms and slabs, sheet bars, tinplate bars; (b) Tin, terne and black plates, galvanised sheets, sleepers and fish plates, wire rods, spring steel. 8. With a view to meeting the objections of the British Tube Association, the Applicants expressed their willingness to exclude. hot rolled strip from their Application and, in order to meet the objections of the Shipbuilding Employers' Federation, they also expressed willingness to exclude from the Application all shipbuilding material which is tested and certified by or on behalf of Lloyds Register, British Corporation, Bureau Veritas, or British Board of Trade, consigned to British shipbuilders or ship repairers and so declared on the shipping documents and invoices. At a subsequent stage, the Applicants expressed willingness to limit the exclusion of hot rolled strip to cases in which it is consigned direct to the users. 9. During the hearing, the Applicants put in a statement of the method of marking which appeared to them to be most suitable for the purpose. Their proposals provided for embossed lettering on rails, joists, angles, channels, sections and heavy castings, the lettering to be cast on in the last-mentioned case, and rolled on in the others. They provided for the stamping of plates, flats, rounds, squares and hexagons, and for the stencilling of sheets and heavy forgings. In addition, the proposals specified certain varying sizes of lettering for different descriptions and sizes of goods, and in some cases, the intervals at which the indication of origin should be repeated. For small castings and forgings (i.e., those under 28 lbs. in weight) no specific proposal was made. In the case of bundled material it was proposed that the bonds should be stamped and that the tallies should bear an embossed mark. Packing cases which contained imported iron and steel of the descriptions in question were to bear an indication of the origin of the contents. The Applicants stated that the above proposals were based generally on the practice of manufacturers in the United Kingdom. 10. We do not propose in the present report to attempt to summarise the evidence and arguments submitted to us on behalf of the Applicants and Opponents respectively. In the case of proceedings of a highly technical character lasting for six days, an adequate summary would necessarily be very lengthy, while a brief summary would be liable to omit points to which, rightly or wrongly, one side or the other attach importance. Some indication, however, of the contentions of the respective parties on the chief points that appear to us to be relevant to the decision of the question can be gathered from the following paragraphs. 11. Throughout the remainder of this report we shall, for the sake of brevity, term an indication of origin which is required to be borne at the time of sale or exposure for sale in the United Kingdom a Mark on Sale, and an indication of origin required to be borne at the time of importation a Mark on Importation. The Orders-inCouncil requiring such indications of origin to be borne will be called Sale Orders and Importation Orders, respectively. 12. In view of a misunderstanding which emerged in the course of our Enquiry, we desire to make it clear that the essential distinction between a Mark on Sale and a Mark on Importation consists not in the nature of the mark or the stage at which it is, in fact, applied to the goods, but in the point at which the legal requirement takes effect. In the case of a Mark on Importation, the requirement operates at the port of entry and is enforced through the Customs. In the case of a Mark on Sale, it does not operate until the goods are sold or exposed for sale in the United Kingdom. Hence, all classes of goods not imported for sale in the United Kingdom (e.g., those consigned by foreign sellers direct to users in this country, or intended for re-exportation) are not within the scope of a Sale Order, though they are or may be affected by an Importation Order. 13. Under Section 2 of the Act it is our primary duty to report whether a Sale Order ought to be made. It is true that in the present case the Applicants originally asked only for an Importation Order, though in the course of the hearing they expressed a wish to include a Sale Order within their Application. It is also true that the greater part of the hearing was occupied by evidence and argument with regard to an Importation Order. But we are satisfied that in the case of iron and steel goods the question of an Importation Order can only arise as a practical proposition in the event of a Sale Order being also recommended. For example, it is plain that an Importation Order, unsupported by a Sale Order, would fail to protect those who buy in this country the lighter classes of iron and steel goods which are imported in bundles or cases, since any mark on such bundles or cases necessarily disappears as soon as bulk is broken. We are consequently of opinion that in the present case the only practicable alternatives (assuming that some form of marking is recommended) are (1) a Sale Order only, (2) a Sale Order accompanied by an Importation Order, and we would further observe that in our judgment the second alternative, inasmuch as it brings within the scope of compulsion a large area of trade which under the first alternative would be exempt, ought not to be recommended by us, unless it be shown that the first alternative is inadequate for the purpose. 14. Before considering the question of the expediency of a Sale Order in respect of the goods to which the Application relates, it is necessary to deal with certain preliminary objections which were raised at the hearing. 15. It was urged by Opponents that most of the descriptions of goods mentioned in the application are outside the scope of the Act, which (it was suggested) only contemplates the marking of finished goods and not goods which are the materials for further processes of manufacture. This contention, which also appeared to find some support on the part of the Applicants, was apparently founded on a strained construction of the language of Section 10 (1) (a) of the Act, which lays down, in effect, that the expression. imported goods" shall not include goods which after importation have undergone a substantial change through any treatment or process. It is, however, clear to us that the object and effect of this provision is not to limit the classes of imported goods to which the Act applies, but to define the point at which goods which, when imported, were of a character to which a Marking Order applied, have so changed their character in consequence of further treatment in this country, that they have passed outside the scope of the Act. We see nothing to justify the contention that the Act is inapplicable to goods which are to be subjected to further manufacture. 16. It was further suggested to us that we ought not to recommend a Marking Order in respect of certain classes of goods. so long as other classes of goods remained free from the obligation. For example, it was urged that steel flats ought not to be required. to be marked unless the obligation extends to the billets from which they are made and the horseshoes into which they are fashioned. We cannot, however, accept this proposition. The difficulties of a procedure which requires individual classes and descriptions of goods to be dealt with separately are obvious, but they are inherent in the policy of the Act and there is nothing to prevent further Orders being applied for. 17. It was also contended that certain iron and steel products included in the Application resembled so closely certain others which are excluded, that in some cases it is practically impossible to say what is included and what is not. This objection was chiefly directed to the case of an Importation Order, on the ground that a nontechnical officer of Customs could not possibly distinguish between, e.g., small rounds and thick wire. Without denying the force of this objection in relation to an Importation Order we do not think that it has substantial validity in relation to a Sale Order. Marginal cases of doubt are always liable to arise under any system of marking which is not universal, but we see no reason to believe that such difficulties will be more frequent or more serious in the case of the goods now under consideration than in that of other descriptions of goods. 18. Again objection was taken to the proposed exclusion of certain material consigned to shipbuilders, on the ground that such material is, in many cases, identical with material which would remain subject to the Order. It was contended, in effect, that for the purpose of an Importation Order the expression "goods of any class or description" in Section 2 (1) of the Act must refer to the physical and technical characteristics of the goods and not to their commercial purpose. This argument might merit consideration in relation to an Importation Order, but in the case of a Sale Order cadit quæstio, since the proposed exemption of shipbuilding material was limited to goods which are consigned direct from abroad to the users and hence fall outside the scope of Sale Order. If, as we understood from the Applicants, the proposed exemption of hot rolled strip used by tube makers was intended to be similarly limited, the same observation applies to that case. 19. Having dealt with these preliminary difficulties and objections, we are in a position to consider the expediency of a Sale Order. In our judgment the two things that have to be proved in order to make a primâ facie case for such an Order are— (a) that it is practically possible to apply an indication of origin effectively and without injury to the goods; (b) that there is a substantial possibility that purchasers may not be aware of the origin of the goods in the absence of marking. If and when these two propositions have been established, the question of the possible effect of a Marking Order on trade will arise for consideration. 20. As regard 19 (a) there was general agreement as to the practicability of applying a mark without injury to the goods, though not as to the particular methods of marking advocated by |