On a point of Order. I wish to take your advice, Mr. Young, with regard to the conduct of this Debate. The request I want to make to you is in connection with the amount of latitude you will give us in this Debate. You will notice in the Supplementary Estimate the Subhead "Economic Mission to South America." It is quite clear, I take it, that that Economic Mission is a new service, and that therefore the policy, and, moreover, the Report which has recently been published, will be open to full discussion and free Debate, but there may be some doubt whether or not you will allow a general discussion on the item C. 1 relating to salaries and provision for two commercial secretaries in Russia. I think that, possibly, you might allow a general discussion on that head, and I would like to give you the ground on which, possibly, a general Debate might be allowed. Might I refer you to pages 536 and 537 in Erskine May? You will read there a decision by Mr. Speaker Peel, on 3rd March, 1893, in a note beginning at the bottom of page 536. Speaker Peel says:

"As a general rule, on the Supplementary Estimates it is in order to discuss only the particular items which constitute the Supplementary Estimates, and the Sub-heads of the original Estimates can only be referred to so far as they are involved in the fair discussion of the points contained in the items asked for in the Supplementary Estimates."

That is laid down as a general rule. Further down there are some exceptions. Speaker Peel says:

"I think, however, that I ought to state that items of Supplementary Estimates may raise in themselves questions of policy, but the interpretation whether they do raise questions of policy, or not, must clearly be left to the Chairman of Committees."

Of course, with that I am in complete agreement. Speaker Peel goes on to say:

"If I may be allowed to illustrate what I mean, I would say a Vote for the drainage of the Embassy at Constantinople would clearly not raise the whole question of foreign embassies."

I think we are all agreed on that.

"But, on the other hand, a Vote which would largely increase the Vote for a railway to Uganda might raise the whole question of the policy involved in the original Vote for Uganda."

I would submit that in this Estimate we are not merely increasing the Vote, but that this is actually the first Vote we have had for the services of commercial secretaries in Russia. I would submit that authority has never been sought for this action, and certainly the House has never given its approval to these commercial secretaries being sent to Russia. May I give you three proofs? In the first place, there was nothing in the original Estimate for this year regarding this particular service. Another proof I could give you would be by quoting a speech delivered by the hon. Member the Secretary to the Department of Overseas Trade in the House on 20th February of this year, when he introduced this Supplementary Estimate. He said:

"when there was a resumption of relations with Russia and an Ambassador had been appointed to Moscow, the question came up as to whether there should be a commercial attaché appointed also."

It is quite clear from that, that it was not until the House had given permission for the Ambassador to be sent to Russia that the matter of commercial representation was to be reopened. It was not until the Ambassador had been disposed of that a decision was taken to send Commercial Secretaries to Russia. It is quite a different decision, taken at a time later than when the House gave its decision with regard to the Ambassador. Further in his speech, the hon. Member used these words:

"The reason why we decided to have these commercial representatives in Russia was firstly because some of the business interests in this country asked to have them appointed, and secondly, because there are very considerable financial interests in Russia at the present time connected with this country."—[OFFICIAL RBPOET, 20th February, 1930; col. 1734, Vol. 235].

You will note that it was not because the House demanded these commercial secretaries. It was not because the House had expressed any opinion at all as to whether they should go, but it was because some business interests asked for them. I hope that I have given ample proof that the authority of this House has never been sought on this particular subject. It has never been sought, and it certainly has never been granted, and if I have given you sufficient proof of that, I submit that Sub-head C 1 must, in fact, be taken as a new service. At any rate, it is certainly of much greater importance to this country than the increase of a vote for a railway in Uganda, and if the policy of Uganda as a whole could rightly be discussed on an increase in the Vote for that railway, it is quite clear to my mind that policy should certainly be discussed upon this Vote. I trust, therefore, that you will allow a wide Debate to cover the policy of trade with Russia, and certainly you will, I know, allow the Debate to range upon whether it is a wise or unwise decision to make these appointments in that country.

Before you reply, Mr. Young, I should like to point out to you that I do not quite know how far the right hon. Gentleman wants to go in this Debate—whether he is asking you for a full Debate on the whole question of whether we can renew relationships with Russia. I would point out that this question, of course, never arose until the main principle of having an Ambassador in Moscow had been decided. That seems to me to settle the main question of the relationship with Russia. The appointment of commercial attachés is, of course, the object of the Vote, but I gather that the right hon. Gentleman wants a debate wider than that covered by the Vote.

I say that the appointment of commercial secretaries was made subsequent to the decision of this House with regard to diplomatic relations being resumed with Russia. It is, therefore, a different matter, on which the House has not been consulted. The Russian Government having to do with the trade of the country, the only way in which we can get a great volume of trade with Russia is through the commercial secretaries, and by the appointment of these secretaries we are opening up the whole question of trade with that country. I maintain that we ought to be allowed in this Committee to discuss trade with Russia on account of the fact that, but for these secretaries being appointed, as the hon. Gentleman will at any rate admit, little or no additional trade would be possible.

May I ask you to consider, Mr. Young, whether it is not a perfectly normal thing when we appoint an ambassador to a country, with whom we have relations agreed upon by the House of Commons, to attach to the ambassador gentlemen in our service who have to do with the trade of the country? If that is so with regard to other countries, why should it not be the same with Russia?

The hon. Gentleman is inaccurate. It does not follow, because we have a representative in a country, that we have a commercial staff attached to him. It may very well be that that is a desirable thing, but, as a matter of fact, it does not happen. What my right hon. Friend is asking is that we should discuss that very aspect of the question in the Debate to-day.

In relation to the question raised by the right hon. Gentleman, this is clearly a new Vote, there being no original Estimate for an economic mission to South America. There is no question about it. In relation to the matter of the salaries that are embraced in the Vote in connection with the commercial diplomatic service, part of the Supplementary Estimate is an expenditure of £1,525 for two commercial secretaries in Russia. I have looked at the Uganda precedent, if I may call it so, and I find that it says, "A vote which would largely increase the Vote for a railway to Uganda." I do not think that it can be said that this £1,525 largely increases the Vote for the Commercial Diplomatic Service, and, as a result of that, I feel that the Committee are con- fined to the discussion whether these two commercial secretaries and their duties are necessary, and whether the amount of money spent on them is adequate or inadequate for the purposes for which they have been appointed. I do not think that we are entitled to go into the wider question of relations with Russia, for that seems to be a matter which should come up on the Foreign Office Vote.

When this matter came up for discussion for a few moments on 20th February, the Debate broke off at a point when I was directing the attention of the Committee to the importance of the provisions made by the Supplementary Estimate under heading C 1 in respect of salaries for two commercial secretaries in Russia. It was no part of my object, nor is it to-day, especially in view of the Ruling of the Chair, to impinge upon the subject of commercial relations with Russia. The point to which I wish to direct the attention of the Committee is somewhat different. It is really whether, having regard to the relatively meagre resources at the disposal of the Department of Overseas Trade for the purpose of commercial secretaries, this particular expenditure of £1,525 is one which should receive the approbation of the Committee. The despatch of commercial secretaries to Russia must be considered in relation to the requirements of the Service elsewhere.

It is interesting to observe that it is now proposed to send two commercial secretaries to Russia, whereas, in the whole of Europe, there are only nineteen, and certain countries, such as Switzerland, are not represented by a commercial counsellor at all. That is a remarkable state of affairs. Switzerland does not stand alone, for Finland and Bulgaria are without trade representatives from us. It is not only in relation to Europe that the position is so curious. In our whole Empire the number of trade commissioners is only 15. Yet it is here proposed that we should send two commercial counsellors to Russia. In India, with its vast opportunities for trade, embracing so many millions of population, and so large an area, there are only three officers—those at Calcutta and Bombay, and the whole of the rest of that vast and rich territory, offering so many opportunities for useful trade and commerce—

That seems to be an argument for more commercial secretaries in other parts of the Empire rather than dealing with the question of two for Russia.

I bow at once to your Ruling, and I am sorry that I should have allowed myself to transgress the strict rules, but I cannot have expressed myself clearly if I led you to the opinion that I was endeavouring to direct the attention of the Committee to the desirability of appointing fresh commissioners in India. That is a matter on which the Committee will form their own judgment. My object was rather to ask the attention of the Committee to the question whether at this time, with the resources available, and having regard to the obvious gaps in the Service in very many other places, Russia was the right place to send representatives, and then to send not one, but two. That is why I was endeavouring to direct the mind of the Committee to the general lay-out of the Commercial Oversea Service as regards commercial counsellors and trade commissioners.

I leave India at once, and come far nearer home to France and to Germany, and ask the Secretary to the Overseas Trade Department whether, when acquiescing, as he said on 20th February, in the views of business interests who asked for commercial representatives to be appointed to Russia, he took into account the fact that even in France and Germany, with which our relations have necessarily during the past few years been so much closer, there are only two commercial counsellors? May it not yet be better to concentrate the resources that are available upon France and Germany, and other countries with whom we have close affiliations, rather than to make this expenditure on Russia at this juncture?

Really, the hon. and gallant Gentleman must keep to the two commercial secretaries for Russia. He can say that there are so many in other parts of Europe and the Empire, and draw his conclusions, but he must not on this Estimate ask or argue for more commercial secretaries in France or in any part of the Empire.

I am much obliged, and I express my regrets that I have overstepped the permissible boundaries of discussion. I think that I am permitted to say that nothing I have said is to be interpreted as suggesting that, in my view, commercial counsellors should not be sent to Russia. On the contrary, I think that they are essential, and I do not think that anyone in the Committee could object, in view of the reasons given by the Secretary to the Overseas Trade Department, to commercial counsellors being sent there, but, in view of the Ruling of the Chairman, I am unable to elaborate the point that the number sent there should bear some relation to the number sent elsewhere, and to the requirements of the situation both in Europe and in the Empire.

In connection with these two gentlemen of whom, as they are anonymous, I speak without knowledge as to their qualifications, I wish to ask the hon. Gentleman whether he is satisfied that for such posts as this, and in particular these posts in Russia, he is able to appoint men of precisely the right calibre and qualification? Let me make it quite clear that I am dealing with the general question without relation at all to these two appointments and specific individuals. I make no criticism of them, because I am not in a position to do so, even were criticism permissible, nor do I criticise their method of selection; but I ask the hon. Gentleman, observing that the first grade officer is to receive a salary on the normal scale of from £1,200 to £1,500 a year, and the third grade officer a salary on the normal scale of from £600 to £800 a year, whether he considers that for a position of first-rate importance of this character these salaries are sufficient to attract the right type of man? Would it not be better for the Department to try and induce into the service and to send to Russia and elsewhere men who have had an actual successful experience in business, and who know from their own past experience what are the problems and the particular points to which the attention of the British industrial community at home should be directed in relation to Russia, or whatever country to which they may be accredited? I am doubtful whether salaries of this range attract the right type of man. I am not at all sure that they are not too small for the right type of man, and too large for other types which are perhaps not best qualified for this particular kind of business.

I should like to see the hon. Gentleman take a really bold step, and say: "Here is Russia with its vast potentialities, with business men in this country wanting to open up relations there, and requiring the best information, and I want a man of the £5,000 scale; I want a man who has had actual successful business experience in his own career, and whose judgment will carry the weight to which success is entitled." I feel apprehensive that the success of the Overseas Trade Department may be unduly limited because of the failure to attract to it just the right type of man for this extraordinarily useful but also extraordinarily difficult piece of business.

I should like to ask what sort of instructions have been given to these two officers about to be sent to Russia. How have their duties been defined to them in relation to the objects of the Department? Have they simply been asked to prepare reports, to be printed and issued to the public, at a price? Most of the reports issued by the Department have been documents full of invaluable material, but coming into the hands of the public rather late in the day, when their chief value has largely evaporated. I should like to know what instructions they have been given as regards reports for publication, in view of the obligations of the Department to communicate direct with the merchanting and manufacturing firms on its own special register—there are about 3,000 firms I think—and to answer specific inquiries received from manufacturers and merchants. They are quite different duties; in the one case the initiative rests with the merchant or manufacturer, and in the other the initiative lies with the Department. Has the hon. Member given instructions as to the kind of information with which he wishes to be supplied by these commercial secretaries? What contact is being established between his Department and the English merchant or manufacturer on the one hand and the commercial secretaries on the other?

Last of all, I would ask what instructions the hon. Member has given, or proposes to give, to these officers as to their initiative, as to their attempts to sell and popularise and advertise British products in Russia? In these days when British goods no longer sell themselves, but have to be sold, what we want in Russia as in every other part of the world is a vigorous and aggressive initiative. Has the hon. Gentleman inspired these officers with that essential spirit without which an increase of trade will be hard to come by either in Russia or in any other country where we are represented? I put these questions not in any hostile spirit, but with a view to elucidating the position, and with a view, also, to giving an opportunity to the hon. Member—the first opportunity which the head of the Department has had, I think, since it was established more than 10 years ago—to reveal to the Committee the spirit which inspires it, and show whether it is prepared to take in all parts of the world what I have called a vigorous initiative on behalf of the manufacturers and merchants of this country.

I do not intend to follow the hon. and gallant Member for North-East Bethnal Green (Major Nathan) in the general line he took, as I prefer to concentrate on the details in the Supplementary Estimate. Before I go into any details, however, I must say how terribly disappointed I was with the lack of information given to us by the Minister when he introduced these Estimates 10 days ago. He hardly told us anything about the expenditure referred to in these Supplementary Estimates. There are two ways in which Parliament gets information from a Minister. The first is when the Minister gives the information of his own free will, making one speech; and the second method is when information must be obtained from him under pressure by the Opposition, a course which leads to taking up the time of the Committee because it means that questions have to be put to him and he has to answer them, whereas only one speech would be entailed if he had given the information in the first place. Any criticism of these Estimates which I put forward must not be regarded as hostile in any party sense, for when I occupied the position now held by the hon. Member I always looked upon the Department as the one Department in the State which could never be accused of taking any party line, being purely concerned with the export trade of the country, and I always appealed to Members of the House of Commons to give me their support irrespective of the party to which they belonged. But Members have a perfect right to know how the money is being spent, and to know that it is being used in the best possible manner.

Although it ought to have been unnecessary for me to ask many of the questions which I now put, I must ask them in the interests of economy and in the interests of the wise and sound expenditure of public money. On page 15 of the Estimates I read under Subhead "C. 1—Salaries" that provision is required for two commercial secretaries in Russia. I agree with the hon. and gallant Member for North-East Bethnal Green. Why is it necessary to send two commercial secretaries to Russia, at any rate in the first place? I think we might have started with one. Until quite recently there was only one in the Argentine, and he has to do a great deal of travelling about the country; whereas one imagines that in Russia these two commercial secretaries will be in one place. I assume that as Russian trade is all done through Government Departments it will not be necessary for our commercial secretaries to do a great deal of travelling, but that business, such as it is, will be found in one centre, probably Moscow. If the hon. Member thought it was advisable to send two commercial secretaries to Russia why is one Grade I and the other Grade III? I must confess that I had never heard of a Grade III commercial secretary till I read of it in these Supplementary Estimates. So far as I know, there is not another country in the world which has other than Grade I or Grade II commercial secretaries sent to it; and if the hon. Member thinks he is going to gain such a great deal by sending commercial secretaries to Russia one would think he would not have started by causing them any offence by sending a Grade III officer when other countries have either Grade I or Grade II. France, Germany, Italy and Japan have Grade I and Grade II officers. Does the hon. Member really think that Russia is of less importance than those countries? If he does, perhaps he is entitled to tell them so by sending a Grade III officer to their country.

I turn to the local allowances of £300 and £250 respectively for the two commercial secretaries. An allowance of £250 for a Grade III commercial secretary seems very excessive. I know that the cost of living is very high in Russia, probably because it is a highly nationalised country, but I should imagine there is not a great deal of difference in the expenses in Turkey, and I notice that in Turkey only £50 is granted as a local allowance, and that not for a Grade III officer, but for a Grade II, actually acting as Grade I in that instance. Although it would be wrong, and false economy, to starve any of our representatives who went to Russia, I think it is worth while considering whether too much is not being paid in local allowances in comparison with other countries. Then there is a charge of £810 for outfit allowances. I am not sure what the usual outfit allowance is, and we are also not told how this £810 is accounted for. Is it all for one officer, or is it divided between the two? Also, I am not sure whether that outfit allowance has all to be spent. If there is any balance after buying their outfits, do they retain the money; or have they to spend it all on their outfit before they leave this country? I come next to the estimated savings, £700—estimated savings, I assume, upon commercial secretaries in other countries. The sum of money which has to be expended in connection with commercial secretaries in Russia would have been very much larger had it not been for the fact that other countries have been starved of £700. We have not had one word of explanation about that £700, except that the hon. Member, when he moved the Estimate, did say that it was being saved

"on other items such as travelling expenses."—[OFFICIAL REPORT, 20th February, 1930; col. 1734, Vol. 235.]

I do not think that is sufficient information for the Committee. I would like to know definitely how this saving is being effected, and the countries in which the economies have been practised. I intend to return to Subhead C1 in a few moments, but I want to go on with detailed inquiries in connection with other subheads with regard to trade commissioner services, in particular the salaries of the trade commissioners, Grade II, at Sydney and Singapore. We already have a trade commissioner, Grade I, at Sydney, and we also have at Sydney a chief clerk. It might have been desirable, rather than send another trade com- missioner to Sydney, to send one to some other part of Australia. At present we have trade commissioners only at Sydney and Melbourne, in Australia. The hon. Member might say: "We will send them there to begin with, and if we find they are not in the best places, let us send one somewhere else afterwards." When I was occupying the position of the hon. Member we had trouble of that kind in moving trade commissioners in South Africa. Originally we had two trade commissioners in Johannesburg, and we felt it desirable to send one of them to Cape Town. The trouble that was created in Johannesburg was very difficult to deal with; in fact, I might almost say that the Trade Commissioner who was left in Johannesburg had a very bad time of it, and he was not able to carry out his duties properly because he was practically ignored. It took that official a long time to settle down to his work, and do the work which he could have done at once if he had, in the first place, been placed there as the man in charge. I think it is a bad thing to send an additional Trade Commissioner to Sydney. It might have been better to send this new man either to Perth or Brisbane where at present we are only served by imperial trade correspondents.

I think the appointment at Singapore is a very wise one. I well remember reading a report sent by Mr. Beale, in which there was a passage comparing our trade with British Malaya. We have been told that the imports there are £100,000,000 a year, of which we only get a very small proportion. I hope the presence of our commissioner there will have the effect of getting a great deal more trade from that country. My congratulations extend to the appointment of a chief clerk at Johannesburg. I am glad of that, because we have been very much understaffed there, and frequently, when our representative has been home on leave, or has had to travel about the country, the office at Johannesburg has been left without a representative. I am glad that there will be someone to look after the office when the chief is away. I notice that the chief clerk at Singapore receives £500 for local allowances. I have looked at allowances to other chief clerks, and I find that the amount is £1,155. I wonder what the scale is with regard to these local travelling allowances, and perhaps the Secretary to the Overseas Trade Department will inquire whether it is possible to effect some economy in regard to those allowances. There is a sum of £890 for outfit allowances, and it is not clear to whom it has to be paid. Is it going to be paid to the chief clerk, or is it to be paid to the trade commissioners at Singapore. It is difficult to tell from the Supplementary Estimate to whom it has to be paid. These are all matters of substance, and I think we ought to have a reply upon them. With regard to the estimated savings on Item D 1, we have not heard a single word about them. That point has been completely ignored, and I think we are entitled to have some explanation before we pass it. I see that under Subhead D 2, there is an item of £500 for office allowances at Singapore. I would like to know if that is a single grant or an annual expenditure.

Turning to Subhead D.3 for travelling, I find that there is an item of £245 for trade commissioners' travelling expenses on appointment. I do not know whether I should be in order in asking how the travelling expenses of other trade commissioners are accounted for. I remember that only a few months ago Mr. Beale came back from New Zealand and Mr. Paish went out there. I cannot imagine that their expenses could have been included in the Estimate produced at the beginning of the year, and therefore I would like to know how the sum of £845 arises.

I am afraid that the right hon. Gentleman would only be in order in asking about this particular sum of money under this Vote.

I presume that the travelling expenses of Mr. Beale and Mr. Paish will be accounted for in some other way. Now I come to the Economic Mission to South America. I agree with the policy in connection with which a mission was sent out by my right hon. Friend who was then the President of the Board of Trade, and I would like to congratulate most sincerely Lord D'Abernon on the interesting report which was issued by the Economic Mission. We have not heard a word, however, from the hon. Member for Finsbury (Mr. Gillett) as to how this expenditure of £5,000 is made up, and I would like to ask for more details in that respect. Although the Mission may have been a wise one, and undoubtedly it was, it does not necessarily mean that the expenditure is not, to some extent, excessive.

I turn to Subhead C.1, which deals with salaries, about which I desire to ask some general questions. Would the Secretary to the Overseas Trade Department, when he replies, tell us who these individuals are who were sent out to Russia? Up to the present we have not been told who they are. Were they promoted from within the Diplomatic Service, had they any business qualifications, or had they any previous knowledge of Russia? Did they know anything about the Russian language, and can the hon. Gentleman tell us in what town or city they are to reside? Will both these commercial secretaries live in the same town or city, and will they have to travel about the country? It is quite clear that the functions and duties of commercial secretaries in Russia will be very different from the functions of similar officers in other countries. If these two secretaries are to do their job properly, they will have to have an entrée to all the trade departments of Soviet Russia. Can the hon. Gentleman in charge of this Vote assure us that these secretaries will have that facility before leaving this country? Otherwise they may fail in their mission to secure more trade between Russia and this country. I think that we are entitled to receive some information on all those points.

Probably I should be out of order if I attempted to compare this expenditure with expenditure for a similar purpose in other countries, but I think we are entitled to ask if the prospects are sufficiently good to warrant the expenditure of what, I assume, will be £4,500 a year on this service. The Secretary to the Overseas Trade Department has already stated that the expenditure for this purpose would be £1,500 for a quarter of the year, and that would mean £6,000 a year, but I understand that the expenditure on these two commercial secretaries will be £4,500. I think that is so, but I hope I do not misrepresent the hon. Gentleman when I say that he gave £1,500 as the amount for a quarter.

That is so; it was a special grant.

We are told in the D'Abernon Report, in the introduction, that as far as the Argentine is concerned,

"We look forward to the rapid development of commercial possibilities in South America with greater confidence than in any other part of the world."

What is the volume of business done between the Argentine and this country? I believe it is in the region of £30,000,000 a year. £30,000,000 worth of goods are purchased from this country by the Argentine in 12 months. Our expenditure upon a commercial counsellor in the Argentine amounts to £3,764 a year as compared with £4,500 for thus purpose in Russia. It is quite clear that we shall never get the same results in Russia as we get from the Argentine. That is why I ask if this £4,500 a year which is being spent in Russia is being spent to the best advantage, and whether it could not be spent to better advantage in other countries? What does the Secretary to the Overseas Trade Department think about Russia? He has already told us that the Advisory Committee will not give the Russian Government more than 12 months' credit, whereas they are prepared to give to individuals in other countries, without the backing of their Governments, credit extending to about five years.

The hon. Gentleman in charge of this Vote thinks so little about Russians, and the amount of trade we are likely to do with that country, that he did not invite them to the British Industries Fair. It is true that the hon. Gentleman sent an invitation to the Russian Embassy, and, as a result of that, he said that one Russian turned up. The question which I put to the Secretary to the Overseas Trade Department was:

"Whether he could state the nature and approximate value of any orders placed at Olympia by the one representative from Russia who attended the British Industries Fair this year?"

And he replied:

"No, Sir. It has never been the practice to inquire into the nature or value of orders placed by individual buyers."—[OFFICIAL REPORT, 10th March, 1930; col. 906, Vol. 236.]

Surely this Russian must not be considered as an individual buyer, because he was representing the great country of Russia, and although in the reply which I received he is referred to as a buyer, I doubt whether he purchased anything at all. I did not refer to him as a buyer, but as a representative, but I see in the reply which I received that he is referred to as an individual buyer. We have been told that satisfaction has been expressed by exhibitors with the general volume of business done at the British Industries Fair, but will the hon. Member tell us, not about this individual buyer, but whether the exhibitors at Olympia were satisfied with the volume of business done with Russia? I doubt whether the hon. Member can give us any information under that heading, but it is apparent that our relations with Russia at the present moment are not giving this country satisfaction in many ways.

5.0 p.m.

Many of us think, rightly or wrongly, that diplomatic relations may be severed with Russia very shortly, and if they are severed none of the expenses of the officers who will become redundant will be recoverable, and will be a dead loss. In these circumstances, I submit that it would have been far better to have waited for a period of months in order to see whether Russia settled down before expending this large amount of money on commercial secretaries. These appointments, I understand, have definitely been made. It is too late to stop all the expenditure, but the Committee can stop what has not already been expended. Spend this amount, if you like, in other countries, after having obtained the approval of the House of Commons, especially in the trade commissioner service, but I suggest to the hon. Gentleman that he should take back this portion of the Estimate now, and bring it forward again in three months' time, when, if he is proved to be right and we are proved to be wrong, I am certain that the House will grant him his desire. I contend, however, that this money spent in Russia is absolutely wasted. I intended to move a reduction of this Subhead before I sat down, but it may be for the convenience of Members of the Committee to have a general discussion on all the Subheads, rather than curtail the Debate to the discussion of this particular one, and, therefore, I refrain at the moment from moving the reduction which I had intended to move; but I would warn the Minister that, unless he can give to the Committee some more information of a satisfactory character, I shall move this reduction, and shall appeal to the Committee to support me in the Division Lobby.

There are one or two matters to which I desire to refer in connection with this Supplementary Estimate. First of all, I should like to say that I note with satisfaction that additional appointments are being made, particularly at Sydney and Singapore, because the constituency which I represent is very much interested in Australian trade, and it has been found that the existing official of the Department at Sydney has been very helpful. It is interesting to notice that it has now been found necessary to appoint another, and I should be glad if the hon. Gentleman would explain exactly why it has become necessary at this juncture to make an additional appointment, in view of the fact that the Australian Government have recently raised their tariff on British goods to a very considerable extent. One would think that the result of that would be that there would be less work for these commercial representatives to do; or perhaps they will have to work harder in order to get any business at all. In my constituency, in one particular trade, three-fourths of the men employed have been thrown out of work entirely as a result of the tariff that has been put on by the Australian Government, and it does seem rather curious that this should be the particular moment chosen for appointing additional officials in order to develop trade with Australia, which is bound to be smaller in quantity, I imagine, owing to the, as I think, very foolish and short-sighted policy that is being carried out by the Australian Government at the present time.

So far as my constituency is concerned in dealing with the Department of Overseas Trade in regard to Australia, and, indeed, all other matters, I should like to pay a tribute to the work that the Department is doing, and to say that it has always been found to be exceedingly helpful and useful—quite the opposite, indeed, to what many people would imagine a Government Department to be in dealing with business. I know that it is appreciated in Wolverhampton, and in that part of the country generally, by those who are trying to make use of the services of the Department, and so increase their trade in Australia and elsewhere. May I, in this connection, express the hope that, when the official of the Department in Sydney—and this is a general remark which applies throughout the world, but I make it only with reference to Sydney for reasons of order—is invited, as these officials sometimes are, to become a member of the Rotary Club, he will be glad to accept such an invitation, because it will bring him into touch with a number of the most important business and professional men in the town, and it will be very much to the advantage of the work that he is doing to accept such an invitation. I make this suggestion because I know that there has been, for some reason, a certain reluctance and unwillingness to accept invitations of this kind and to join the Rotary Club when invitations have been offered to representatives of the Consular Service or of the Department of Overseas Trade abroad. I hope that the Minister may find it possible, either publicly or by letter, to indicate that there is no possible objection to officials accepting such an invitation, but that, in fact, the Government would look favourably and sympathetically upon any action of that kind.

The other point to which I should like to refer is with regard to the Economic Mission to South America. I want, in the first place, to congratulate the late Government on this very excellent policy which they initiated. I do not have too many opportunities of congratulating them on their good work, and, therefore, I gladly seize this one to say how very delighted I am that they have thought of such an admirable policy. I hope that it will be developed by the present Government, and that they will extend it very much further. It is really the introduction of quite a new element and a new instrument in the economic policy of this country. We are, as I understand, for the first time, using our bulk purchasing power in order to get trade in exchange. In the Argentine we have said, "We are purchasing, and we shall purchase, so much from you annually, and we ask you, recognising that, in return to purchase from us certain materials what you want." I understand, and I shall be glad if the Minister will confirm this, that, as a result of that particular bargain, the Argentine Republic is going to buy £9,000,000 worth of material, chiefly for railways—iron and steel—spread over the next two years, which has not previously been bought in this country, or at any rate only to a minor extent. If that be so, it is a very valuable contribution towards the employment policy of this country, and I hope that the Government will persevere with it and will try to extend it to other parts of the world as well.

I understand, also, that there have been negotiations with regard to the Silk Duty, and I shall be glad if the Minister will state the position in that regard. I gather that the Argentine Government were prepared to reduce substantially the duties on silk coming from this country, in exchange for a declaration by the British Government that we should continue our policy of refraining from imposing duties on food coming from the Argentine. If that be the bargain, I hope that we shall carry out our part of it, and that the Government, following up the very excellent policy carried out by the right bon. Gentleman the Member for Epping (Mr. Churchill) rather more than 20 years ago, will bang, bolt, and bar the door as securely as they can upon any taxation of foodstuffs coming into this country. If by so doing they interfere with any little schemes that hon. Members above the Gangway may have it in mind to impose, whether through a Referendum or otherwise, I hope that it will not deter them in any way, but will rather encourage them to go forward in making a declaration of that kind. We want to use this economic power which we possess. We import many millions of pounds' worth of goods from abroad, and up to the present we have not been using our purchasing power. As I said just now, I hope that the Government will make use of it, and will try to go forward with the principle of reciprocal bulk purchases—for that is really what it is—not only in foreign countries, but in the Empire as well.

I hope that the hon. Member will not go too far. He must confine his argument to the Economic Mission and the countries which they visited, as stated in the Estimate.

I quite realise that I strayed momentarily from the straight and narrow path, but I hope that the Government will go forward with this policy of reciprocal bulk purchases, encouraged by the results that they have obtained from the visit of the Economic Mission to South America. I hope that they will go forward, and will apply that policy to other parts of the world as well. I cannot develop the particular argument that I was going to develop with reference to the Dominions, but I do say that I heartily support this Vote for the Economic Mission to South America, and also as regards the appointment at Sydney, because I believe that it will contribute to the greater success of our overseas trade. The late Government initiated an enormously powerful new weapon, which can be used to the great advantage of this country, if we persevere with it energetically and on an organised basis, and I hope that the Minister will be able to indicate that it is the definite intention of the Government to extend the work of the Economic Mission to South America, to many other parts of the world and to the Empire as well.

I much regret that the exigencies of order must cut off the fascinating prospect of debate which was opened up by some of the observations of the last speaker. Let me refer to the hard details of the Subheads, and say that it is most sincerely to be hoped that some subsequent speaker will carry out the intention expressed by my right hon. Friend the Member for Chorley (Mr. Hacking), and move a reduction of the Subhead relating to the appointment of commercial secretaries in Russia, in order to bring this matter to a test, in view of the very powerful arguments which were advanced by my right hon. Friend questioning the wisdom of this step. Several reasons against this step can be given, and one which appears to me to carry particular weight can perhaps best be expressed in this way. It is the common object of all parties to promote trade with Russia, but we seriously question whether this measure of the appointment of commercial secretaries—officials—at Moscow at the present time is calculated to advance that end, and for this reason, among others.

The Russian Government exercises a monopoly of foreign trade. It carries on that monopoly of foreign trade by means of representatives—commercial secretaries and so forth—in foreign countries, who always claim, and sometimes obtain, diplomatic status. That is the way in which they choose to carry on their foreign trade, and it may be said that it is no business of ours, but it has another consequence which is relevant, as it appears to me, in this connection. As I can say from personal experience, it produces, in the minds of those who are responsible for the conduct of the business of the Russian Government, an illusion that other countries conduct their business in the same way, and that to promote Russian trade it is only necessary for them to negotiate with foreign Governments. In the interests of Russian trade itself, the most necessary thing in the world is to remove that illusion, and to persuade those responsible for the Government of Russia of the hard fact that they can only promote trade by promoting business relations with individual traders. It is only by restoring their credit, their reputation for honesty, their reputation as decent business men, and restoring it with the individual traders of the world, that they can hope to promote Russian trade, or restore it to its prosperity.

That illusion being present, and the best of all objects for the sake of our trade with Russia being to remove that illusion, it is to be feared that this act of appointing commercial secretaries who are Government officials to represent us in Moscow at the present time can only have the effect of promoting that illusion and postponing the fortunate day when the Russians will begin to understand that they have to get along with individual traders. Necessarily, on the scene of Russian trade, these commercial secretaries will be engaged, not only in the task of procuring information for the sake of English traders, but also in the task of actually taking part in and promoting the larger form of negotiation, and interfering—I use the word in no derogatory sense—with the conduct of ordinary business relations. If that be done at the present time on the Russian scene by official representatives of the Government, it must tend to prolong the state of illusion in the minds of the Russians, and put off the better day when they come to understand on what lines business can really be conducted. That is one of the aspects of the general issue on this Vote.

May I, in the interest of economy, which has always been the interest of this House, reinforce some of the things which have been said by my right hon. Friend. He criticised, it appeared to me with very great force, the scale of the allowances for housing and the local allowances given to these commercial secretaries in Russia, Sydney, and Singapore, and he advanced reasons, which appeared to me very conclusive, for supposing that they were not only adequate but even too big. The allowance which I should like particularly to criticise is the so-called representation allowance. Assuming, as we may assume, that the other allowance given to these officials is generous and adequate, what conceivable reason can there be for giving officials of the status of commercial secretaries representation allowance?

This is no new question. It is an old one. You find there is always a tendency on the part of those engaged on behalf of their country abroad to enlarge the area over which these representation allowances are given, and its enlargement is in such cases totally illegal. What is a representation allowance? It is something given to one who represents his country in view of the special honour and dignity which attaches to the position and expenses incidental to that fact. But one who carries on the most useful but very different work of a commercial secretary has no necessity to appear as a representative of his country. He is not in the position of an Ambassador, or the Chancellor of an Embassy. He has other and more definitely business and commercial functions to perform, and it appears to me quite unnecessary to make this extension in that case. I will ask the Secretary to the Overseas Trade Department to give serious consideration, in the interests of economy, to the question whether it is necessary to make this extension of representation allowances.

Let me not fail to join in the general chorus of admiration for the work that has been done by the economic mission to South America, which has been of such practical service to the country, but why have we not had this Estimate before? The mission is over. The money is spent. It is very late in the day. It is the func- tion of this Committee to secure that Supplementary Estimates are presented at the earliest possible opportunity, and, particularly, is that so in the case of a new service to which the assent, as it were, of the House of Commons has been obtained. The hon. Gentleman shares this responsibility with the late Government, but only to a very small extent, because his own run of time has been much longer.

I want to call attention to the last item with reference to the Economic Mission to South America. This Government has never spent £5,000 more wisely than in this instance. The report alone is worth the money. It is extremely attractively written; it is clear, concise and comprehensive, and, if we could have a report on similar lines dealing with our trade with various other countries, we should be in a far better position to judge the situation and to make representations for an improvement of the present conditions. The report naturally falls into two different departments, recommendations which the Government can carry out, and recommendations and suggestions that can be carried out alone by trade and industry itself. In reading the report, one is occasionally astounded at the magnificent efforts that have been made by certain sections of industry throughout a long period of time to maintain and carry on the very high standard of industrial concerns in the Argentine and elsewhere. At other times one is appalled at the opportunities we have missed to increase and develop our trade in recent years in those countries. I should like to call attention to one or two items in the report and to hear from the Minister what action he contemplates taking, whether he can take that action soon, and what it is within his power to do in order to carry out these very excellent recommendations and suggestions.

We learn that there are somewhere in the neighbourhood of £1,000,000,000 of British capital invested in South America. A large proportion of that is in the Argentine. The trade and industry of this country and the Argentine are really complementary one to the other. The Argentine is from three to four times as rich as any other country in the whole of South America, and, therefore, it is true, as we read in the report, that the prospects of developing further extensions of trade are naturally brighter with reference to that country than to any other. There is a paragraph in the report dealing with the question of our representatives in the various South American countries. It is very important that we should be adequately and efficiently represented, not only in the Argentine but in Brazil and all the other South American countries.

It is interesting to note that the United States have adopted a very definite and distinct line in regard to this matter. As soon as President Hoover came into office, he withdrew from Europe all the best Ministers that he had and appointed them to various States in South America. He withdrew his Minister in Sweden and appointed him to Uruguay, because he realised that the prospects of trade and industry in South America were such as to merit the best energies and services which the diplomatic service were capable of producing. I should like to say one word on behalf of our late Ambassador in the Argentine, who has been in such a large way responsible not only for this report, but for the increase and the development of trade and industry between the Argentine and this country during the past few years. I feel certain that it would be the unanimous wish of Members on all sides of the House to record their appreciation of his services in this respect.

One of the chief complaints made in this report is the same that we hear in various parts of the world, namely, that we are continuing to try to sell goods to the Argentine which we think they ought to want and are not producing the articles that they themselves prefer, and, in consequence, we have lost a very large proportion of the position in Argentine imports which we held up to the years immediately preceding the War. Of exports from the Argentine we take between 70 and 80 per cent., and we are only responsible for importing some 19 per cent. Surely this is a gulf, which I admit is somewhat bridged over by the dividends from investments in railways and other concerns, but which could be filled by an extension of our export trade.

One of the most sinister statements in the report is in regard to shipping. Practically the whole of the grain that we import from the Argentine is carried by Continental, very largely German, firms, and 60 per cent. of the meat is brought here through the agency of American firms. If we are going to continue to import, as I presume we shall for some years to come, large quantities of grain and meat, surely it is up to industry in this country to see that those commodities are brought here in English ships and that we get the benefit all along the line. There is another incredible statement, that our manufacturers still quote prices in South America in pounds, shillings and pence, instead of local currency. It is obvious that countries that have a decimal system have a slight advantage over us, but to quote prices in pounds, shillings and pence seems to be asking for trouble.

As I understand it, there are going to be two separate agreements, or negotiations, as the result of this Economic Mission. First of all, there is the question of the exchange of goods within two years of the value of some £8,500,000. Under that agreement we stand to gain everything, as far as I can understand, because we already import to the tune of some £75,000,000 each year from the Argentine. All that we are asked to do is to guarantee in two years to import £8,500,000 worth of goods, but the figure will in all probability be somewhere in the neighbourhood of £160,000,000. On the other hand, the Argentine Government binds itself to buy for the State railways and various other departments some £8,500,000 worth of goods from this country which have not been bought before. I should like to know if that agreement has been signed, and, if not, what is holding it up. Secondly, I understand that a separate agreement is being discussed in regard to lowering the duties on artificial silk and articles composed partially of silk, in return for a declaration by this country that for some specific period we will not impose taxes on foodstuffs. I should like very much to know in what state that agreement is to-day. Is it nearing completion, and, if not, why not?

I do not think much need be said in regard to Brazil. That country to-day imports a greater quantity of manufactured goods than we import from Brazil, but the report shows that there is still a very large field for the development of trade and industry in that country. In respect of Uruguay, there is one appalling figure. Comparing our exports with those of the United States, and taking the years 1913 and 1928, we find that we have increased our exports by only some 18 per cent., whereas the United States has increased her exports by 600 per cent. Even when we take into consideration the War and the propinquity of the United States, I do not think that is sufficient to excuse the extraordinary disparity between those two figures, when you also consider the long period—half a century—of intimate relationship that has existed between this country and Uruguay, and also the fact that we are their best customers to-day and that there is no less than £40,000,000 of British capital invested in that country. In page 50 of the Report we have given to us the various rates for cable and wireless communication between this country and the countries visited by this mission. There is no item in the Report which requires closer investigation or more immediate action to be taken upon it than that in reference to the various rates which prevail to-day. The distance between Buenos Ayres and London is almost the same as the distance between New York and Buenos Ayres, and yet we find that the rate charged is 9d. per word more from Buenos Ayres to London than the rate charged from New York to Buenos Ayres. Why, I do not know. Usually these things are laid at the door of the Post Office.

I hope that the hon. and gallant Member will not pursue that matter further. The hon. Member the Secretary to the Overseas Trade Department is not responsible; it is a matter for the Postmaster-General.

Surely this matter is dealt with in the Report and we are entitled to bring up any matter contained in the Report in regard to any service? Representations, surely, can be made through the Secretary to the Overseas Trade Department who is responsible for the Report.

Certainly, that is why I did not interrupt the hon. and gallant Member until he had ventilated the point, but I asked him not to pursue it, because it is not a matter for which the Secretary to the Overseas Trade Department is directly responsible.

He could make representations.

I bow to your ruling Sir Archibald. I only desired to direct the attention of the Minister responsible to what is actually stated in this Report. If I may keep strictly within the ruling given by your predecessor in the Chair, that we could have a full discussion actually on the policy proposed in this Report, I should like to quote the following sentence which seems to put the matter very succinctly:

"The abnormality of the position"—

that is in regard to telephonic and cable rates between this country and South America—

"is proved by the fact that it costs less to send a Press telegram to New York and retransmit it to Buenos Ayres … than it does to send a telegram direct from London to Buenos Ayres."

If we cannot have a detailed explanation of the reason I hope that we may, at any rate, have some information upon the matter. It is cheaper to send a message to the Argentine over a distance which is double as great, namely, first to New York and then on to Buenos Ayres, than it does to send it direct to that country. It seems almost incredible, when we come to discuss the question of telephonic communication, that this country, which has more money and responsibility, and more interests in the Argentine than any other country in Europe, is practically the only country of any size in Europe who has not got telephonic communication with the Argentine. We have to-day to telephone through Spain or through France or Germany. Naturally, in accordance with the ruling of the Chair, I have no desire to pursue the matter, but I think that it is fundamental to the question of the increase of trade between this country and South America.

As to the recommendation of the Report with reference to aircraft, France, Italy, Germany and Spain have all sent aeroplanes or airships to the Argentine and various other South American countries. It is quite clear that the manufacture of aeroplanes is going to be one of the important industries of the future. This country alone has taken no steps whatever in this matter. I do not know whether we have an Air attaché in Buenos Ayres. Perhaps the hon. Gentleman will tell us? I quite appreciate the fact that perhaps former Governments may have been responsible to a very large degree for not having put into practice many of the recommendations which find a place in this Report. I have no desire to make a party matter of these considerations, because the important thing is that something ought to be done to fulfil the recommendations in this excellent Report. Nobody expects the Minister to carry out all of them in a week's time. The Report has been out only a few days. I should like to hear from him what is his intention in regard to these suggestions and recommendations which come within the purview and the power of the Government, and what steps he intends to take to put them into execution as soon as possible?

I want to direct a few remarks mainly to the question of the work which has been done by the mission under Lord D'Abernon. I am delighted to think, as one who has lived in South America for some years, that at last in this House a considerable amount of interest has been evoked by a Report of such value as that produced by Lord D'Abernon. I would say, without the slightest suggestion of disrespect, that there is very little which is entirely new in that Report, or that was not known already to those familiar with the relations between this country and South America. When I read that Report, in the light of 15 years' experience, I heard echoed precisely what has been stated in relation to our trade in Latin America during the last 25 years. We have heard something this afternoon relative to the practical results of the Mission as distinct from recommendation; as to trade. That Mission concluded two most important and vital agreements on behalf of the commerce and industry of this country. The first was the agreement for reciprocal credits under which this country was to purchase an ear-marked lot of meat, grain and other produce which we were already importing, and on their side the Argentine Government were to purchase approximately £9,000,000 worth of material for railways and other public works. If there is anybody in this House or in this country who is under the impression that we were able to wring that arrangement out of the Argentine Government, I would like to correct the impression. That country has always peculiarly been in a position to buy in any market which it chose, particularly in relation to railway and similar material. This agreement was entered into with Lord D'Abernon's Mission almost entirely because of the good will existing in that country towards Great Britain, and President Irigoyen himself announced that he was doing something on his own responsibility entirely, because he wished to show, on behalf of his country, their recognition of the debt of gratitude owed by them to Great Britain from the very first days when they became a republic.

The Argentine Republic has been in a favoured position to purchase railway materials in the United States, Germany and elsewhere. It has entered into this agreement in a most generous spirit, and in order to demonstrate to this country its belief in the slogan developed there by the Argentine Rural Society—"Buy from those who buy from us." They recognise that this country purchasing £75,000,000 worth of pastoral and agricultural produce per annum is the best customer they have, and that as far as possible they should purchase their materials or requirements here. The position of that agreement, I understand from Argentine official reports, is that it has been signed. It has been ratified by the Chamber of Deputies, but it has still to be ratified, and undoubtedly it will be approved, by the Argentine Senate. The position, as far as I understand it, in relation to the second very valuable agreement regarding the Silk Duties which was entered into largely as a result of this Mission but peculiarly and specially as a result of the very fine work done by our late Ambassador, Sir Malcolm Robertson, is that owing to the representations of France, Italy and other countries—and, in my view, these representations were unfortunately inspired to a great extent by ill-informed criticism in this House—the reduction by 50 per cent. of the duties on artificial silk and other silk goods had to be temporarily, at least, but, unfortunately, in my view, permanently, abandoned. It was pointed out to the Argentine Government that it could not honour its treaties with other nations if it entered into this agreement, which would undoubtedly have conferred peculiar advantages on the manufacturers of this country. I am in a position to know that when this agreement was negotiated, the President of the Republic said specifically, "This is a concession to the United Kingdom, and is intended for no other country." Had there been no undue publicity in relation to it, I believe that that agreement would have gone through, that it would have proved acceptable to the Argentine Congress and would have been in operation at this moment.

Reference has been made to our general trading position with the Argentine Republic as revealed in the Report of Lord D'Abernon's Mission. A great deal of emphasis has lately been laid in connection with a certain policy, upon what is called the unfairness of our trading position with the Argentine Republic. It has been pointed out, quite accurately, that we purchase produce to the value of £75,000,000 or £76,000,000 per annum and that the Argentine Republic in return in 1928 bought from us goods to the value of only £31,000,000, leaving, on the face of it, a very large direct, adverse trade balance. Those who have been using those figures in connection with the policy to which I have referred have never emphasised the fact that there is, in addition, a very large trade for this country in what we call invisible exports. Lord D'Abernon points out that we have invested in the Republic between £500,000,000 and £600,000,000. There are at least £261,000,000 in four great railways alone, and of the entire mileage of railways in that country, approximately 20,000, British railways account for 16,000, which is a figure nearly as great as the entire railway mileage in this country. From these enormous investments of £500,000,000 to £600,000,000 this country must derive at least an annual interest income of somewhere about 5 per cent. That interest alone would largely readjust the unfavourable balance. In addition, we conduct a very great percentage of the entire shipping services of that country, most of its banking and almost the bulk of the insurance.

The hon. Member opposite said—I think he was somewhat confused—that the grain shipments from the Argentine Republic were mostly in foreign ships. That is not quite accurate. It is true that the entire grain business of the Argentine Republic is conducted by three great combines of foreign origin, which have bought out old-established British firms that were there 60 or 70 years ago, but the bulk of the grain coming through to the Continent, and particularly to this country, is handled in British bottoms. If a charge can be made in regard to Argentina that the conditions of trade are unfair from the British point of view, I would ask those who maintain that charge what they have to say in relation to Brazil where, in 1928, we sold £16,000,000 worth of goods, and in return we bought only £4,000,000 worth. I sometimes wish that those who make criticisms in regard to our dealings with these great countries would be a little more consistent and logical. If it be unfair to trade with the Argentine Republic, it must be unfair to trade in the case of Brazil, where there is a great disparity, and the unfavourable balance is on the side of the Brazilian Republic.

A remark was also made that our industrialists should be ashamed of the general situation of British trade in South America, That remark, coming from the opposite side of the Committee, is not so drastic or iconoclastic as it would be if it came from this side; but I want to endorse it in its entirety. The whole position of British trade in Latin America is something of which we ought to be entirely ashamed. We have had, and still have, a wonderful opportunity for the expansion of our trade and commerce there, and it is my personal view that without any great effort, but with a little more energy, the export trade of this country to those very wealthy, progressive and highly civilised Republics could be increased by at least £50,000,000 within the next few years. Why is that not being done at the present time? If right hon. and hon. Members will study the D'Abernon Report carefully they will see precisely the reasons. One of the main facts is that this country is still lamentably ignorant regarding the South American Republics, and another fact is that very few of our business principals or directors will spare the time or take the trouble to visit those lands in which so much of our money is invested, and in which, as Lord D'Abernon has pointed out, there are magnificent opportunities for us to do more business.

The question of the news services and cable and telegraphic charges is a longstanding grievance all over South America among the British people established there. To my knowledge, for the last 20 years one British Chamber of Commerce after another has been passing resolutions condemning the attitude and the tariffs of the British cable companies who have conducted the service there. It is cheaper, I believe, to send a cablegram from Buenos Aires or Rio de Janerio through these same British cable companies to France or Germany than it is to send a cablegram through to London. The hon. Member who raised the point was astounded, and asked the reason for it. There can be no reason other than the unreasonableness of the British cable companies themselves. They have entirely failed to respond in any patriotic or commercial sense to the insistent demand that they should bring their tariffs down to at least those charged by the United States companies.

In conclusion, I would like to make a very strong appeal to this Committee, to the British business men and industrialists in general to take Lord D'Abernon' Report, to weight it, to analyse it and, by all means, to act upon its recommendations. I cannot say that it is for the Government or for the Department of Overseas Trade itself to go out to do the business. If it were necessary I would be the first to stand up in this House and urge that we should create a State Trade and Export Department, but already the Department of Overseas Trade is doing a great amount of work which private enterprise, if it were fully efficient, should do for itself. The very fact that this nation has paid for the despatch of the British Economic Mission to South America is some evidence of State Socialism.

The hon. Member must not pursue that subject on a Supplementary Estimate.

The D'Abernon Mission is not going automatically to bring business to manufacturers and private enterprise in this country. It is for our business men and private enterprise, in the light of the investigations that have been made by the mission, and in fulfilment of its recommendations, to show some of the enterprise which is so vital to our trading welfare, to visit South America, and to get the orders which the D'Abernou Mission tells us are there.

We have in the Department of Overseas Trade one of the best organised and most efficient Departments of the public service, but it is lamentably understaffed and much smaller than it ought to be, in relation to the similar Department maintained by our greatest commercial competitor, the United States of America. Nevertheless, it is doing magnificent work. I am in a position to know that the service and information coming to the Department, particularly from Latin America, although we have the language problem to deal with there, is of a very high order. The sorry fact is that that information is either neglected in this country or the recommendations or suggestions contained in it are not followed up. I am glad to have learned, from a question which I put to the Secretary to the Department of Overseas Trade, that the principle of economic missions is to be extended this year very considerably and that, in addition to those planned for other countries, a mission is to be despatched to some of the Latin American Republics. I presume that it will visit such countries as Venezuela, Colombia, Chile and Peru. We are in great danger in this country of over-accentuating the importance of Argentina and Brazil, and forgetting that on the west coast of South America and in the Central American countries, where we should be at work, the field is practically untilled and is waiting for us.

I beg to move "That Item C 1 be reduced by £100."

This Estimate is supplementary to the amount granted originally to what I am bound to say is the most interesting of all the Departments of Government. I had the pleasure of serving that Department for three years and I thoroughly enjoyed myself there. The hon. and gallant Member for North-East Bethnal Green (Major Nathan) asked the Secretary for the Department of Overseas Trade whether he had "inspired the new officers." My right hon. Friend the Member for Chorley (Mr. Hacking), who held the office of Secretary to the Department of Overseas Trade in the last Government, made a remark with which I entirely agree. He said that the speech of the Minister left him entirely uninstructed on very vital points, and he asked for further information. I listened to the Minister's speech, and its effect upon me was that I was utterly amazed. It contained no note of inspiration. Here is the most romantic Department of the whole of our Government, dealing with the whole export trade of Britain, representing £800,000,000 a year, a larger sum than the revenue, a Department which calls for the full play of imagination and initiative, embracing trade to all parts of the world from the Moluccas to Vancouver, London to Singapore, Cape Town to Hong Kong, Sydney to Liverpool, and I felt as I listened to the Minister that if he went on much longer I should want to go and hang myself on the upper gallery rail: it was so depressing, and he was speaking in such an atmosphere of gloom. Why should he be so depressing, so dismal? Inspired me, indeed! No, he depressed me.

He went on to give us a bald statement of expenditure on what is nothing more than establishment matters. He did not tell us for what particular purposes the money was being spent. Dealing with the consular service, the commercial diplomatic service and the trade commissioners he went on to say that in that connection confusion has sometimes arisen owing to different terms. Confusion has arisen about the statements made in relation to these officers in the Department of Overseas Trade. I thought that he was going to give me a courteous reply to a question which I had intended to raise, and of which I had given notice to the Lord Privy Seal, owing to the fact that on 20th December the Lord Privy Seal made a statement on which I wrote him a private letter. I told him that I intended to raise it in this Debate, and he replied that he was sorry that he would not be present, but that the Secretary for the Overseas Trade Department would deal with the point.

6.0 p.m.

I do not know where the Minister has got his savings. There is a saving shown in the Supplementary Estimate amounting to £700 under Item C 1, "Commercial Diplomatic Service," and there is a saving of £850 under the Item D1, "Trade Commissioner Services." A statement was made in this House on 20th December last by the Lord Privy Seal that at one fell stroke the Conservative Government wiped out trade commissioners in 22 different countries in order to have £1,000 here—is the saving in this Supplementary Estimate that £1,000—or £2,000 there, and where was actually sacrificed trade amounting to £2,000,000 or £8,000,000 a year. I asked the Lord Privy Seal to give me the information, and he has deputed that task to my hon. Friend the Secretary for the Overseas Trade Department. Where are the 22 posts which have been wiped out in one fell stroke among the trade commissioners in 22 different countries? I have charged my memory. I was at the Department for three years, and all that I know is that we wiped out one trade commissioner at Singapore—he is being restored—that there were eight commercial diplomatic service men abolished in Bulgaria, Colombia, Hong Kong, Persia, Peru, Portugal, Switzerland, Uruguay, not trade commissioners. It is true that we terminated a post in Cologne after the end of the military occupation, and one at Denmark in 1926 and two posts in 1927 in Russia on the termination of diplomatic relations. Staffs were reduced in Argentina, Belgium, Brazil, Spain, Turkey, United States, hut all the posts were maintained. These two Russian posts have been restored. I submit that while we have reduced staffs in the Argentine, Brazil, Belgium, Spain, Turkey and the United States, there has been no wiping out of 22 trade commissioners at one fell stroke such as was indicated by the Lord Privy Seal. I want to ask for the justification for this statement of the Lord Privy Seal, who told us that he had examined the figures and found that the Conservative Government at one fell stroke had wiped out trade commissioners in 22 different countries, and had actually sacrificed trade amounting to £2,000,000 or £8,000,000 per year. I heard the speech in which he made that statement and I should like to hear the justification for it. The Lord Privy Seal is a grave and dignified Minister of the Crown and is engaged on a very important task. He is trying to do his work in a dignified way, and but for the fact that I know that he does not talk with his tongue in his cheek or try to bluff anyone, I should say that he was trying to bluff the House when he told us on 20th December that 22 trade commissioners have been wiped out at one fell stroke.

I now pass to what is a much more serious matter—the Report of Lord D'Abernon. It is a lucid, succinct, brave and definite Report, and like everyone else I wish to be allowed to thank the gentlemen who took the trouble to go abroad on the Trade Commission, and who have drawn up such a Report for our benefit. On the cover might be written the slogan which we adopted in the Department of Overseas Trade in my time. It amplifies what we then said, and what the manufacturers and merchants of this country will not fully realise in these changed conditions; that goods do not sell themselves. That was our slogan. There is a great deal to be learned from this Report if we read between the lines. The leitmotiv of the Report is that we must get on our feet, travel abroad and get in personal touch with our customers, and not depend upon agents and overseas exhibitions. We must depend more upon ourselves, as I had to do in my young days, and get face to face with our customers. We can read in this Report that rationalisation does not only mean the rationalisation of production but also of the selling end of your business. It shows how unwise we are not to group our trades and firms and rationalise the selling end instead of having half a dozen overlapping firms filching trade from one another in Argentine or Brazil. They should be grouped under one selling agency, and by this means would be more efficient to capture more trade between these countries and ourselves. As shown in the Report, the personal factor still plays the paramount part in the selling of goods.

I have had a good deal of experience myself and I know something of what exhibitions abroad mean. I also had three years at the Department of Overseas Trade, and had to think out these same problems for myself. Let me give this warning to hon. Members. We often exhibit in foreign exhibitions to please friendly nations. They wish us to help them to make a good show in the exhibition, but from my personal experience as a private trader and as a Minister of the Crown, I do not believe very much in exhibitions abroad as a means of increasing our exports. Merchants and manufacturers would do much better with their time and money if they went abroad themselves on their own account, carrying and exhibiting their own samples. They should visit their overseas customers themselves. The Report also shows the type of man you want in these countries. That is a very valuable section indeed. It hints that while education at a university is all very useful and delightful, and that it is desirable to have a commercial education, to write shorthand and speak Spanish, yet it is the live young man of initiative who sells the goods who is going to capture or create the trade; and the best training for that lad is not in a university or over a text book. There is nothing more fatal to trade than the text book expert on economics. We have seen that recently at Geneva. The President of the Board of Trade has done infinite mischief by his simple text book knowledge of economics and his lack of experience in the export markets. In this Report we can see that it is the man who knows his job, who has started on his job early in life, who is going to succeed as a trade winner. Give me a well-educated, eager boy who goes into trade before he is 18 years of age, not at 22. If you are going to send young men abroad, to Argentine or Brazil, to win back our trade position, the best university you can send them to is to send them out at 17 to learn business in the market places.

Let me now direct the attention of the Committee to the recommendations in the Report concerning Brazil. I am a little timid about Brazil. With all the natural wealth of that great country I cannot divest my mind of the knowledge—I will not press my point too far—that it does not pay to press trade too much with Brazil. We have made many bad debts there recently. The amount of bad debts we have made there in the last few years has probably put the balance on the whole into such a shape that we may sometimes fear we are getting a pound's worth of business for 30s. Therefore, I think we should not take steps to press credit business with Brazil too much. But there is a side which may be developed with considerable advantage. There are three or four products of Brazil which might be developed, and we might finance the purchase of these things in such a way that we might have it harnessed to our selling to Brazil the goods she wants and which we make. We could take a couple of million bales of cotton from Brazil, and more fruit without injuning our trade with our Colonies and Dominions. We could take more of the high grade iron ore of Brazil, which would be very useful for our steel manufacturers. There is a good deal of high grade iron ore deposits in Brazil which could be developed. There is here at the moment a shortage of meat, and prices are rising. We cannot get the same quantity of meat from North America or from South America which we used to get; and if we could finance the improvement of the herds and the refrigerating processes for the production of beef in Brazil we might arrange for a contra sale of our goods to Brazil. This would result in a considerable increase in our mutual trade with that country.

Let me now turn to another page of the Report—and this is something which should be brought to the notice of the Brazilian Government. It is at the root of our trouble. Lord D'Abernon in his Report says:

"Our capital investments in Brazil are estimated at a sum of the order of £300,000,000. … Brazil's need for foreign capital is pressing, and the country which supplies the capital will get the contracts. Naturally the investor will look for a sound and continuous financial policy on the part of the Government. On this point it may he said that although some States and municipalities have overborrowed, and some are still in default, the assets of the nation are so vast that its present liabilities should prove no undue burden."

That is all very well, and all very good, but Brazil must realise that if we are going to lend money, she must treat the confidence of the British investor in an honourable and generous way. There must be no defaults. We have put something like £150,000,000 into Mexico. As we invested our money in that country, in the same way as we are now asked to invest money in Brazil, the exports of Britain to Mexico rose. We lent money to the Mexican Government for the building of Mexican railways. That money enabled them to purchase the goods they needed in Britain. That helped our exports. We received in return paper and bonds, and those bonds to-day are not worth, the paper on which they are written. The net result is that the £150,000,000 worth of exports went to Mexico as a gift. We must be careful how we lend money abroad, lest when we part with our goods, which appear as exports, they are nothing more than gifts to our foreign borrowers. Lord D'Abernon in his Report says:

"In this connection we express the opinion that British trade with other countries will also benefit if our lending is concentrated on the countries where a commercial return is probable and where high tariffs do not constitute an impassable barrier."

I remember, and probably the Secretary for the Overseas Trade Department remembers also, that the Brazilian Tariff of 1900 injured us a great deal. It is no good lending money to Brazil if a tariff like that of 1900 prevents our goods going in. Some fiscal consideration must be given to us if we are to follow out the recommendation of the Commission and help Brazil with the development of her natural wealth. We should be allowed a chance of selling our goods to Brazil. We ought not to be kept out by a tariff which renders it impossible for us to have any trade in return. There is another very interesting paragraph in this report. I hope I am not wearying the Committee, but I have taken a great deal of interest in it; I have read it two or three times. It says:

"The question arises whether it would be expedient to stimulate emigration from this country to South America. … Naturally, emigration to Argentina would contribute, if successful, to future friendship between our two countries. … "We hold that the attempt to discover suitable methods for the promotion of British emigration should not be abandoned. Further experiments should be made on new lines, possibly on the basis of assisted settlement."

I cannot pretend to give any opinion on this matter, but I would rather see emigration to His Majesty's Dominions. So far as the Argentine is concerned, there are £300,000,000 or £400,000,000 of money invested by British subjects in the Argentine railways and other undertakings and, I think, administered from London; and the addition of hard working Englishmen and women in the Argentine would strengthen the good feeling between ourselves and the Argentine, and to that degree would also assist trade between us.

I want to know also what the Government are going to do with this Report. I remember the Balfour Report, which took four years to produce. Everyone felt that he must have the Balfour Report, just as everyone thinks that he must have well-bound volumes of Burns and Shakespeare on his shelves, though they are seldom opened. Many offices had a copy of the Balfour Report. I wonder how many times it is now opened in any office. What are the Government going to do with the D'Abernon Report? I think that the Department; of Overseas Trade and the Board of Trade and the Treasury should each depute one man to sit down and analyse this Report and put into operation some of its recommendations. On page 36 there is a matter which should be dealt with at once. I refer to the very excessive duty upon bunker coal which goes into Brazil. I see that the Customs and bunker duty on a ton of coal is 10s. 10d.—a paralysing figure. With our coal trade needing outlets overseas, here is an occasion when the Minister could get into touch with the Secretary for Mines and the Foreign Office and see what can be done to get the Brazilian Government to reduce this burden on export of the coal to Brazil. There is another thing which might be dealt with by the Treasury, though I do not know off-hand how it could be done. On page 16 of the Report I find this:

"We recommend that these aspects of British taxation should receive further consideration with the definite view of facilitating the participation of South American investors in British enterprises, especially when those enterprises are carried on in the investor's own country."

That means that we should do all that we can to help or induce the Argentinian or Brazilian investor to join their capital with ours.

The hon. Gentleman has himself said that this is a matter for the Treasury. The Secretary of the Department of Overseas Trade, of course, could not deal with it.

I think that you are right, Mr. Chairman. But I fall back on your kindness and say that here is a question of policy laid down in this Report, and I submit that as this recommendation is made it should be carried out. It is true that the Treasury would have to deal with it. Will the Minister consider that paragraph? It is a very important recommendation, and I leave it to the discretion of the Minister to find a way of carrying it out. I hope that the policy of these missions will be continued and that they will be sent not only to South America. I heard what an hon. Member said just now about Ecuador and Venezuela and Colombia, and so on. There are countries on the north-west coast of South America which possibly might be dealt with. There is also a country very much nearer home which might be brought inside this policy. It is a friendly country of whom we are the best customers. I refer to Denmark. I would like to see a mission and policy of this kind extended beyond South America to countries like Denmark.

The hon. Gentleman is now going too far. He says that this policy ought to be extended to other countries, and he must leave it at that.

Again I think you are right, Mr. Chairman. I have perhaps trespassed further than I ought to have done. One other point I wish to raise, and it is a small point. That is the difficulty about the cabling of news to South America. I was shocked to hear yesterday, in reply to a question, that if we wish to send wireless telephonic messages to South America, even news, they have to go through France or Germany. That is a matter which ought to be put right.

That is a Post Office matter, and in any case I do not think that an economic mission has anything to do with it.

I am the last person to wrangle with you over a point of Order. May I respectfully say that as you may not have read the Report, there is on page 50 a reference to cables, wireless and postal communication, and I am surveying the whole Report.

That may be in the Report, but the Minister responsible for this Supplementary Estimate is not responsible for those particular parts of the Report, and I do not see how the matter can come into our discussion. I have admitted a general discussion so far as the Economic Mission is concerned, but it must not be allowed to range too widely.

I obey your ruling and content myself by saying that we must look into this wireless and telegraph question, and I leave it at that. I thank the Committee for having been so patient with me.

I am sure that the House has listened with great interest to the hon. Gentleman who has just spoken. I remember the period when he was at the Department of Overseas Trade, but offhand I cannot remember whether the Balfour Report was issued when he was at the Department. I am told that it was not. At any rate I am sure of this—that no wiser words have ever been spoken by anybody in this Committee than the words as to the waste of time and money in making reports, and the apparent inability to put those reports into the hands of people who really can make use of them. In regard to this Vote there is one question to which I attach a great deal of importance. I believe that this Department is one of the most important departments of the State. I look upon it as a sort of scouting line to enable us to find places where we can develop our trade and so help unemployment here.

We have had many Debates about unemployment in this House, and I am afraid they have been a considerable waste o£ time, but in regard to this Department, if we make it known and make people realise its importance in the development of British trade, we shall do much to enable our people to get skilled work at the class of job to which they are accustomed. These valuable reports are obtained by the Department of Overseas Trade. Whether it is a matter of regulation or of obsession I do not know, but nearly every report has the word "Secret" or "Confidential" printed upon it. Sometimes I think that reports which would be very useful to British traders would be made of greater use if they did not bear those words. The money that we are voting towards this Department would be better used for the trade of the country if these very valuable reports could be used more extensively. Recently, when travelling on the Continent, I visited a country in which I found that there was practically no liaison between the local British Chamber of Commerce and the Department of Overseas Trade. I suggest that one means by which we could develop trade in many countries would be by a closer liaison between the Chambers of Commerce in those places and the Department.

I am rather afraid that the hon. Member for Farnham (Mr. A. M. Samuel) has precluded the hon. and gallant Gentleman from discussing that. We are now confined entirely to discussion of Item C 1 in the Estimate.

I was afraid that that would happen as a result of my hon. Friend moving a reduction of the Vote by £100. I understand that we are now confined entirely to Russia and matters connected with that country?

Not matters connected with that country, but matters connected with these commercial secretaries.

That confines the Debate within very narrow limits. I do not think that that was the intention of my hon. Friend in moving the reduction of the Vote. With regard to Russia and the position occupied by these salaried officials, I would like to know how many reports have so far been made by these gentlemen, and what steps have been taken to make use of the reports, through the Press or otherwise, so that trade with Russia can be encouraged, provided always that the reports of these commercial representatives give some indication to our manufacturers that if they send out their goods they will receive the money.

The hon. and gallant Gentleman was probably not present when the question was raised as to the discussion of these matters. I laid it down that the only thing that we could discuss under Item C 1 was the appointment of these commercial secretaries, their duties, and the cost to the country. We are confined to that. These officers are only an addition to diplomatic service work.

Do I understand that if this reduction can be got out of the way the Debate can go back to the general terms in which it began?

If the reduction is got out of the way the Debate would go back to the whole of the Estimate, but it would not widen the discussion of Russia.

That limits the discussion so much that I shall draw my remarks to a close.

There is one point regarding Item C 1 which has been raised indirectly, and that is as to the salary of a first grade commercial secretary and the sort of man that can be attracted by that salary. It has been suggested both that the salary is too big and that it is too small. The Minister might say that those two arguments cancel one another and that the salary-is correct. I suggest that both statements may be true, because everything depends on the duties that the official has to fulfil in a country of unusual and extraordinary conditions. If his duty is merely one of reporting, I think that a man with a smaller salary could do the job. But probably his duties are much larger and cover a much greater field in Russia than in other countries. I myself have had most valuable service rendered to me by our commercial counsellor in Paris, and I greatly value the activities of this gentleman.

I want to be clear on one point. Is this gentleman who has been sent to Moscow capable of dealing widely, and at the same time closely, with the various industries which may be revived in Russia? Has he a fairly accurate knowledge of engineering? Is he acquainted with the textile trades? If so, with what branches of the textile trade or of engineering? It is obvious that when you get the trade of a whole Empire concentrated in the Government of that Empire, you have to deal with a situation different from that in any country where the trade is in the hands of individuals. In the case of other countries we can send representatives who can deal directly with the purchasers of goods, but in the case of Russia there is only one purchaser, or only one organisation of purchasers, and we ought to be clear that the gentlemen who are sent over there are well able to handle not one branch of trade alone, but the whole of the potential exports of the British nation to Russia.

I do not quite understand what is to be the exact position of these two commercial secretaries. Are they to enjoy what is called full diplomatic immunity? In the past, when the Russian Government sent commercial secretaries to this country, a certain number of them enjoyed diplomatic immunity, and I think we ought to have reciprocity in that matter. If the Soviet Government are going to send commercial agents to this country who enjoy diplomatic immunity, we ought to insist upon the same full diplomatic immunity for the gentlemen whom we send to Russia. I understand that the Foreign Secretary is, at present, negotiating with the Soviet representative some kind of arrangement very similar to the Trade Agreement of 1921 and what is known as the Commercial Treaty of 1924. Under that Treaty, some of the Soviet trade secretaries had full diplomatic immunity. The second question which I want to put to the hon. Gentleman is, has he made arrangements that the messages which these representatives send here from Russia will be uncensored? I was told by the Foreign Secretary in answer to a question the other day, that messages now sent from Russia are heavily censored. It is no good having trade secretaries in Russia if their messages to this country, concerning trade in Russia, are to be heavily censored by the Soviet Government. We should also like to know are they going to use the diplomatic cipher, or some code which is recognised as being outside the machinery of the censorship in Soviet Russia? That is an important point but one which I need not elaborate now.

My third question is, what are the instructions which are being given to these two gentlemen? The hon. Gentleman realises no doubt that a very bitter controversy is going on at present in regard to what are known as the confiscated properties, that is to say the factories, mines, lands and businesses which belonged to British subjects a few years ago and were confiscated after the revolution by the Soviet Government. I do not think it would be at all fair if these two trade secretaries were sent over to Russia to do any bargaining or dealing in respect of those confiscated businesses, until negotiations have been completed over here with the Soviet Government. It is not fair that we should send trade secretaries to Russia to carry out deals concerning businesses which, a few years ago, belonged to British subjects who are now living in this country dispossessed and ruined by those confiscations. I hope these gentlemen will, as far as possible, avoid dealing with these particular confiscated businesses in their trade negotiations, until the negotiations now proceeding between the Soviet representative and the British Foreign Secretary have been completed satisfactorily.

I was about to raise the question which has just been asked by my right hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson), as to how far these trade representatives are going to deal with the question of British claims in Russia, or if they are going to take any interest at all in that matter? Beyond that, however, there is a much wider question, and that is the question of whether we are justified at all, in incurring the cost of this representation in Russia. Before referring further to the larger question, I wish to direct the attention of the hon. Gentleman to the house rent allowances in respect of these Grade I and Grade III officers respectively. The Grade I officer gets a house rent allowance of £250, and the Grade III officer gets £200. If I am correctly informed, they probably live in the same house, and I do not see why their allowances should differ. As to the whole question of whether we are justified in appointing these representatives to Russia or not, I think it would be in order and would help to put the matter in the right perspective to quote some figures concerning the trade which has been done with Russia in recent years compared with the total volume of trade. The Committee will then see how far the salaries which we are now asked to vote are justified.

Exports to Russia in 1927 were 4.5 millions of pounds; in 1928, 2.7 millions, and in 1909 3.7 millions, while the total of our exports to foreign countries were in those years, 382.5 millions in 1927, 396 millions in 1928 and 405 millions in 1929. The total exports to Russia represented less than 1 per cent. of our total exports to all other countries in the world. Possibly the appointment of trade representatives may alter this position. I do not wish to weary the Committee with details, but I may mention also that the total of our imports from Russia represents less than 3 per cent. of the total imports from all the other countries in the world. In these circumstances I think it rather doubtful whether we are justified in an expenditure of, roughly, £4,000 per annum for these two trade secretaries. I should like again to urge on the hon. Gentleman to consider the question of whether they are going to take any interest whatever in the matter of the British claims in Russia.

I understand that the moving of a reduction in this particular item precludes me from replying in this speech to a number of the points which have been raised in the earlier part of the Debate, but, as soon as this Amendment has been disposed of, I hope to be able to deal with those questions. At the moment we are concerned solely with the question of the appointment of the two commercial secretaries in Russia and, in the first instance, I had better explain some of the figures in this connection to which references have been made. An hon. Member has said that I was exceedingly dull and depressing in my last speech but if he had had to sit for nearly five hours, as I had, listening to the endless repetition of his hon. Friends, he would realise that the remarkable thing was not that I made a depressing speech, but that I was able to make any speech at all. The fact and the lateness of the hour on that occasion also partly explains why it was impossible for me in the short time left at my disposal to go into the figures but I am quite prepared to give hon. Members the fullest information which they desire.

The first question raised was in connection with local allowances and representation allowances for these officers. I understand that for officers employed in extra-European countries and in Russia and Turkey, local allowances are payable in order to compensate them for the higher cost of living in those countries as compared with England. Broadly speaking though, it is decided in each case what the amount of the allowance should be, it is practically impossible to say how much extra allowance should be given to a representative in, say, New York, as compared with a representative, say, in Italy, or some other country. There is no fixed scale for these local allowances. What has to be taken into account at the same time is the fact that, in most cases, a bonus is given. Hon. Members will see a reference to the bonus in another part of the Estimate which we are not discussing at the moment but I may be allowed to mention it, because the position as regards these Russian appointments cannot be fully understood without some explanation of that matter. The bonus now paid to those officers is payable in accordance with the Bonar Law Award of 1922 under which overseas officers received part compensation in respect of post-War increase in the cost of living, measured in terms of sterling in the country in which they were stationed. In the case of Russia it was found impossible to give a bonus because of the difference between existing conditions and pre-War conditions. That difference was so extraordinary that there were really no facts upon which to base ordinary calculations and instead of giving any bonus the local allowance in that case has been somewhat increased.

What allowances are these?

I am now dealing with the local allowances and the figure which appears here in the Estimate shows that in the case of Grade I this allowance is £300, and in the case of Grade III it is £250.

Can the hon. Gentleman give the Committee any idea as to the difference in the cost of living as between Russia and Turkey? He will notice the difference between the allowances in those countries.

The right hon. Gentleman will probably find that the representative in Turkey has a bonus but I do not know. That is what I am trying to explain—that in most cases there is a bonus fixed in the manner I have mentioned and in the case of Russia owing to the difficulty of fixing it, the allowance has been increased to compensate for loss of bonus.

May we take it that the total salaries, including allowances, are approximately the same in each case?

That is the intention. It is the desire of the Department to arrange these things so as to make matters equitable as between the different countries which these representatives have to act. The second item about which questions have been asked relates to representation allowances. These are given to cover the necessary expenses of official entertaining, etc., which fall upon a Government representative, and in connection with this allowance there is a definite scale of which I have the figures here. These follow the ordinary scale, and I do not know that the Committee will want the detailed figures.

Are we to understand that the scale is applied to representation allowances in the case of all commercial secretaries?

Yes, I understand that all commercial secretaries, and trade commissioners, according to their grade, receive a definite representation allowance and I can give the right hon. Gentleman the details of the scale if he so desires. In this case, as I have said, the allowances follow the ordinary scale. The next point is as regards house rent allowances and these allowances are also based on a scale. The point was raised by one hon. Member that two officers living in the same house should not have different house rent allowances. As a matter of fact, if the officers are living in the buildings of the Embassy they do not get house rent allowance. I do not actually know what is the position in this respect in Moscow at the present time, but I am under the impression that to a great extent the staff of the Embassy there are living together in buildings which are the property of the Embassy.

Therefore, you will find that the commercial secretary, grade I, starting at the bottom of the scale with £1,200, has a local allowance of £300, a representation allowance of £300, and a house rent allowance of £250, making a total of £2,050. This Vote only covers a certain limited period of time. In the case of the grade I official, the figure works out at £427, because he has been there two and a-half months. In the second case, there is a salary of £600, a local allowance of £250, a representation allowance of £100, and a house rent allowance of £200, making £1,150 altogether, and it is expected that he will have been there three months, which makes the total £288. The right hon. Member asked me how the figure of £810 was made up; that is, the outfit allowance. The grade I representative receives £515 and the grade III man £295. That is all based also on a definite scale; it is a regular calculation based on the scale of pay.

Has it all to be expended on outfit?

It is a contribution made to the officer concerned in order to pay his expenses of moving and all other such expenses, but it is a lump sum.

Have these gentlemen been there three months this year, and is their job finished?

That is up to the end of the financial year. The only other item that concerns us now is the figure of £700 for savings. As a matter of fact, it is impossible to get the figures as to how it is made up. Very careful investigation has been made in my Department, and various headings have been gone into, and I am afraid I should have to read out a list of 20 or 30 countries and give a number of small amounts.

Are there no large amounts in any one country?

None whatever.

Then will the hon. Gentleman tell me what the Lord Privy Seal meant by saying that at one stroke they wiped out trade commissioners in 22 different countries?

I should be out of order in answering that question.

Then where in these figures can we identify the £1,000 here and the £2,000 there which have been saved?

Ministers of other Departments are not responsible for what the Lord Privy Seal says, but in any case the hon. Gentleman cannot give an answer, because we are confined now to Item C 1.

But surely this saving is not confined to Russia, but is a general saving over a number of countries.

As far as this Estimate goes, it appears to be a sawing on Item C 1, because it says, "Savings … under this Subhead," which is C 1, and that is what we are confined to now.

The hon. Gentleman just said that this was an accumulation of some 20 small sums from different nations.

We are confined to Item C I because of the reduction moved of £100.

To continue with regard to Russia, the only point we have to consider in our Department was whether, seeing that an Ambassador was appointed, we should follow the usual custom of having two commercial diplomatic officers connected with the Embassy, and the reason why we appointed two was because all the other great Embassies have two commercial representatives, and we felt that at any rate we should follow the same precedents. I cannot see why any hon. or right hon. Gentleman should think it strange that we should recommend such an appointment when once we had an Ambassador appointed. As a matter of fact, if we had not appointed these two representatives, I can only think that hon. Members opposite would have said, "How illogical it is to have an Ambassador without commercial diplomatic officers." I can well imagine that if that had happened, we should equally have had to face the criticism of hon. Members opposite. The right hon. Member for Sevenoaks has an extraordinary idea that because in Russia they have a new idea of control of industry, the Government should try and compel them to alter their system. To my mind, that is utterly absurd. If any country decides that its trade is to be in the hands of the Government, it is not our business to go and suggest that it should be altered. We have to take things as they are.

If the hon. Member will honour me by consulting my observations, he will see that I expressly disavowed that.

I understood the right hon. Gentleman said that the Russian Government conducted their trade in this way, and that he hoped very much we might assist in bringing about a change.

The hon. Gentleman has said that if he had not appointed the commercial secretaries after the Ambassador had been appointed, we should have made a complaint on that score, but let me remind him that in his own words it was an afterthought with him. It was not because the Ambassador was appointed that they necessarily appointed the commercial secretaries, but, in his own words, he said:

"When there was a resumption of relations with Russia, and an Ambassador had been appointed to Moscow, the question came up as to whether there should be a commercial attaché appointed also."—[OFFICIAL REPORT, 20th February, 1930; col. 1734, Vol. 235.]

It was a second thought.

No, it was not a second thought, because the appointment of an Ambassador does not rest with my Department, but is, as the right hon. Gentleman knows, a matter for the Foreign Office. When the Foreign Office had appointed an Ambassador, then the question came before my Department for consideration whether or not we were to follow the ordinary procedure and appoint commercial attachés connected with the Embassy.

Have the Foreign Office anything to do with the appointment of commercial secretaries?

The right hon. Gentleman knows very well that we are the Department which is responsible for the appointment of these commercial attachés. We decided that it was advisable to have these two men, in order to see how trade could be developed between this country and Russia. In answer to some hon. Members who asked who these officials were—I can say that both of them speak Russian. One of them was nearly nine years at Vladivostok and from there he went into the consular service at Formosa. The other was in Rumania. In both cases, at any rate, they took an interest in Russia, and one has for a number of years lived in a far distant part of the old Russian Empire.

The only other point that finally emerges is as to what has happened as the result of these appointments. They have only been there for a very short time, and during that period one of them has been largely occupied in doing consular work, and has hardly had time to devote himself to the actual work for which he has been sent out; but it is intended to send a consular representative to Moscow, and I hope he will then be able to take up his own work. In view of the peculiar position of trade in Russia, and the difficulty of knowing exactly whether trade will be opened up in the best way by approaching the Government of Russia in Moscow, or by linking up with the representatives of Russia in this country, we are bound at the present time to be in an experimental stage with regard to the work of these two representatives. Naturally, they are under the guidance and direction of our Ambassador in Moscow, as is the case with all those who are attached to any Embassy, and as time goes on they will be able to see to what extent they can open up our trade in Moscow.

Before our present Ambassador went to Moscow, he took the opportunity of seeing a large number of English firms interested in trade with Russia. He interviewed them in my Department, and he gained a large amount of information from them. He has that information with him, which, no doubt, he has passed on to the two commercial representatives, and I hope that when they have had a little longer time in the country, they will be able to find out what is the most effective way of opening up trade there. We shall certainly find that their appointment will be a great advantage to this country, even for no other reason than that we shall be able to get a certain amount of information, which will be of great service to us.

As I said earlier in the Debate, we were asked to appoint those officers by firms in this country having business interests in Russia. Although some people believe there is hardly any trade going on between this country and Russia, as a matter of fact there are a number of firms in London and other parts of the country who have very considerable financial interests in Russia, and there is no reason why those financial interests should not be watched over by our representatives in Russia, just as much as they are watched over by our representatives in any other part of the world. The only logical thing to do was to make these appointments. Whether or not hon. Members opposite agree with the renewal of relations between this country and Russia, it still seems to me that, that event having taken place, the only logical line is the one we have taken. Any other line would have been futile and could only have resulted in hindering a renewal of friendly relations between us and Russia.

May I have an answer—

The answer to the right hon. Gentleman's questions are as follows: Our representatives will have diplomatic immunity—that is the first question. The information will come over in the Foreign Office bag—that is the answer to the second question. As to the third question, the right hon. Gentleman asked me questions which really are hardly within the scope of my Department, and I am afraid it is quite impossible for me to give a definite answer to him on his other question.

The Minister has done his best very courteously, as he always does. He has made the best of a very unsatisfactory case. We do not wish to embarrass him, and I therefore beg leave to withdraw the Amendment.

I rather regret and resent the attitude taken up by the Secretary to the Overseas Trade Department in regard to the speeches which have been made from this side of the House. His reference to the 4½ hours during which be has had to listen to wearisome repetition from these benches seems to me rather discourteous. He seems to have forgotten that he is a Minister of the Crown and that it is his duty to listen to representations from all sides of the House. He has lost sight of the time when we sat on those benches and had to listen, not for 4½ hours, but for 4½ years, to the wearisome reiteration of himself and his friends. I listened very carefully to the Ruling which your predecessor in the Chair gave with regard to the report of the British Economic Mission to South America. You will correct me if I am wrong, but I understand that, in view of the fact that this is entirely a new service, the actual policy which prompted the sending of this mission to South America may be called under review. Tibia mission, for which we are asked to vote money now, is going to cost the taxpayer a very considerable sum, something like £5,000. Unless action is taken on the recommendations which are contained in its report, it is going to be an absolute waste of public money. This report is much too good to be thrown into the waste paper basket or pigeon-holed in some back room of the Board of Trade, but, unless its recommendations are acted upon, it is converting this valuable report into waste paper. I will therefore press the hon. Gentleman to tell us what action he and the Government intend to take with regard to the recommendations in this very valuable report.

I rather regret that this Mission confine themselves solely to the east coast of South America. When they were there, they might have extended their radius of action rather more and, without any increase in the sum spent, they could have spread their activities over a wider area and have visited countries where British trade is more likely to receive benefit than the countries which they visited. The money would have been spent better if they had visited Chile instead of some of the more remote parts of Brazil. They could have crossed by the Trans-Andean railway to Valparaiso in Chile, and there they could have made inquiries into the state of trade and trade relations with this country. Formerly, until a short time ago, our trade relations with Chile were of a substantial character. They might then have proceeded up the west coast of South America and visited the other countries. It is not my intention to dwell unduly long on what this Mission could have done, but, in my opinion, it is almost disastrous that they did not visit Venezuela instead of portions of Brazil. It is perfectly amazing the development which has taken place in that country in the last 20 years, and unfortunately the development has been done almost entirely by the United States and not by this country. If we turn to the report we find throughout constant references to the currency of these South American Republics—

I do not want to conflict with the Ruling given by the Chairman of Ways and Means, but obviously on the lines now followed by the hon. and gallant Member he could wander over a great part of the world. The real question for the Committee is whether this money should have been spent and whether the spending of the money has been justified.

Thank you, I shall not transgress on your Ruling again; at any rate, in that particular respect. I always bow to whatever Ruling you may give. We find constant references to the currency of the Argentine, Brazil, and the other countries. In the Argentine it is what is known as the gold peso. Unfortunately, it is no longer the gold peso, but it has become the paper peso. Part of the effect which that has had on this country is to make goods we sell more expensive and make goods they sell to us cheaper. That has had the effect of restricting our exports to the Argentine and encouraging imports from that country. Of course, it may be questionable whether the hon. Member has any influence with regard to the currency of the Argentine, but I would point out that in the days not so long ago when the currencies of Europe were depreciating to a large extent we were constantly asked by hon. Members opposite, many of whom now sit on the Government bench, to take steps to stabilise these falling currencies. I am sure they would not have suggested that line of action if they had not theories they could have advanced and cures they could have provided for those depreciating currencies. I say now that they have an opportunity of rectifying these currencies—

The hon. and gallant Member cannot discuss questions of currency on the Vote for the Department of Overseas Trade.

No. I was merely pointing out that when hon. Members opposite occupied these benches they expected us to do it.

Possibly they were out of order as the hon. and gallant Member is now.

If we turn to page 6 of the report, we find that a comparison is drawn between the trade we used to do with the Argentine in the old days and the trade we do there now. It states that we have excelled in railway construction and ship building, but that others nave now taken the place which might have been ours, especially in aviation, road construction, and motor transport. It is stated that in the first six months of 1929 the Argentine imported 31,000 motor vehicles. Her agricultural requirements were on a corresponding scale. The report says that no doubt our failure was due to high prices and unsuitability. What steps has the hon. Gentleman taken to get the builders of agricultural machinery in this country to adapt the implements they turn out to Argentine requirements? Everyone knows that fanning in the Argentine is on a very large scale, and consequently their requirements in agricultural machinery are for engines and machines of the very largest kind. Reapers which are suitable in this country for reaping a five or ten-acre field are practically useless in the Argentine where their fields are of 1,000 or 2,000 acres. Has the hon. Gentleman sent particulars of the Argentine agricultural requirements to the well-known builders of agricultural machinery in this country?

Turning to the question of motor vehicles, why have we fallen so hopelessly behind in the race for the markets of South America? There is one reason only, and that is the unsuitability of the engines fitted to British cars. What steps is he taking to represent to motor manufacturers in this country the requirements of South America? That is the direct responsibility of the Government, and the hon. Gentleman represents not only his own Department but the Government as a whole in this case. This unsuitability of motor vehicles sent out from England to the Argentine could be altered by a simple step, the alteration of taxation. I will not dwell on that, lest I be ruled out of order, but I do ask him to make representations to the Chancellor of the Exchequer with regard to the taxation of motor engines, which is at the present time handicapping our manufacturers hopelessly in all the markets not only of South America but of the world.

Further on, we come to a very significant fact under the heading of finance, and it is rather tragic. Whereas prior to the War—or more definitely 20 years ago—practically all the Argentine loans were floated in this country, to-day none of them are floated in this country, and for one reason only. The Government of that day in their wisdom thought fit to place a tax of 2 per cent. upon all foreign loans floated in this country. Could there possibly be a better example of killing the goose that lays the golden eggs? From that day to this not a single Argentine loan has been floated in this country to our great loss in the way of commission, Income Tax, and Super-tax, because Argentine loans floated in this country—

That is a question for the Treasury and not for the Department of Overseas Trade.

I thought the hon. Gentleman represented, not only his Department, but also the Government, and I was asking him to make representations to his Government on the subject. As you do not wish me to enlarge on the question, I will conclude by asking him once more what steps he intends to take to bring into effect the recommendations contained in this very valuable report. Unless it is acted upon, it is valueless; it is a waste of money, and it is the business of this Committee to criticise severely any waste of public money. Unless the hon. Gentleman's Department take action upon the recommendation, this £5,000 which we are asked to vote to-day is absolutely wasted.

I want to ask questions on one or two points. In regard to the additional trade commissioner, grade II, sent to Sydney, is he additional to another commissioner there, or is he additional to the whole staff? The hon. Member for East Wolverhampton (Mr. Mander) rather criticised this appointment. I have heard the hon. Gentleman speak several times in this House, and I have not heard him express any statement with which I cannot agree, but on this point, I disagree with him although we are placed in similar positions in regard to our constituencies. In Wolverhampton, a factory has had to dismiss half its operatives because of the Australian tariff, and in any constituency one firm has had to dismiss 1,400 operatives, partly because of the Australian tariff and partly because of another matter which will be discussed to-morrow.

I feel strongly that it is not only advisable, but essential, that the hon. Gentleman's Department should send trade commissioners to our Dominions, to get into touch with their traders, and to keep in touch with our traders at home. Has the hon. Gentleman given categorical instructions to these commissioners to keep in touch with the centres of industry in this country? Is he accessible to the Leicester Chamber of Commerce, or the Wolverhampton Chamber of Commerce, or the chambers of commerce in the West Riding of Yorkshire if they wish to approach him on any matters concerned with their industries! If we get real live active men in these jobs, they can do more than anything else to open the eyes of the Australian Government to the effect of their tariffs.

On the D'Abernon Report, I take a view at variance with that expressed in some parts of the House. Naturally, we value this Report at its true worth, and, coming from a body of commissioners such as this, it is worth the very closest study. On page 18, after pointing out that we have certain definite and natural advantages in our trade with the Argentine, the Report says that these advantages have

"not prevented a rather high tariff on British goods, which receive the same customs treatment as those of other origin, suffer the same difficulties from anomalies of classification and somewhat harsh system of fines, and are affected rather more detrimentally than others by the incidence of the ad valorem duties."

A little lower down I see a reference to the General Strike and to the coal stoppage which might well be noticed. On the next page come these very significant words:

"But for the large orders for plant placed in England during recent years by British railway and other companies in Argentina for their programmes of extension and development, which fortunately coincided with the worst period of depression in British industry, the falling off in the proportion of British trade would have been far more pronounced."

In the next paragraph, they refer to the very heavy duty of 100 per cent. on artificial silk, which there is classed with silk. That is one side of the picture, one side of the trade exchange, and, when we go on two pages later, we find that

"the Mission discussed with various bodies and interests in Argentina, notably with the authorities of the Buenos Aires Bourse, the possibility of even further development of the export of Argentine products to the United Kingdom."

We find that they all agree that there were no restrictions at all on those exports; they seem to have had a kind of mutual congratulation meeting, and one wonders whether these commissioners fully realise what they had written in their Report. On the one side, we were hampered in every effort we made to import into Argentina, and on the other side, they congratulated that country that we threw open our markets to them entirely. I welcome that on one condition only, and that is that the hon. Gentleman can negotiate in some way to get increased exports from this country to the Argentine. If he cannot do that, I should submit that he should see whether a part of what we import from the Argentine cannot better be imported from one of our Dominions, where we could send our goods, and make employment in this country better.

There are one or two matters which I still have to answer in connection with the Trade Commissioner Service. The question that was specially asked was how the sum of £890 was divided up. This is the outfit allowance for the trade commissioners made up of Singapore £275, and Sydney £315. Then there was an outfit allowance for the three chief clerks of £100 each. On the question of travelling allowance, the first item is quite clear; the second item is the travelling expenses of trade commissioners. One of the new trade commissioners was a chief clerk who was promoted, and was at that time in Melbourne; therefore, he had only to remove from Melbourne to Sydney. The other one was appointed from Tokio, and therefore had to go from Tokio to Singapore. The travelling expenses of these two officials represented £245.

The third item represents, not only the travelling expenses of two new chief clerks coming from London, but also a third chief clerk to take the place of the one who had been promoted a trade commissioner. That rather large sum of £1,155 represents travelling expenses of three of those chief clerks from London to Australia and Singapore. The next point was about the trade commissioner in Australia. The British Economic Commission, which recently visited the Dominions, urged us to strengthen our representation there, and it was finally decided that the best way of helping the two trade commissioners at present in Australia was to put a second one at Sydney to relieve the head trade commissioner, so as to allow him to travel to other parts of Australia. It was purely a matter of whether it was wise to do it in that way, or place a new one in a third city.

I now pass to the question of the D'Abernon Mission. I agree with hon. Members who have stated that we are very much indebted to Lord D'Abernon and the members of the Mission for the work that they have done. We have had an exceedingly useful report, and a number of questions have been asked me as to what is going to be done with it. It has been overlooked by many Members that, although the Report was published by my Department, it is, as a matter of fact, addressed to my right hon. Friend the Secretary of State for Foreign Affairs. Therefore, the answer to many of these questions does not rest in my hands. The Foreign Office, as I understand, are going to take up the various points that have been raised, and will get into communication with the Departments concerned and draw their attention to these matters. Among the Departments which will be concerned will naturally be my own Department, in connection with the strengthening of the oversea representation.

The hon. Gentleman speaks as if the Foreign Office were alien to him. Is he aware that he is Under-Secretary of State for Foreign Affairs?

That is correct, but the Overseas Trade Department is technically an independent body, though it is partly under the Board of Trade and partly under the Foreign Office. I believe that there can be found traces in their organism of what may be termed an independent existence. I will go further into it with the right hon. Gentleman if he likes to take it up in private. To return to the important matter of the D'Abernon Mission. The first points that have been referred to is in connection with the reciprocal credit agreement. This agreement proposes the opening of credits in Buenos Aires and London by the respective Governments in order to purchase materials produced in the United Kingdom by Argentina, whilst the British Government would purchase food supplies from Argentina. The final form of the reciprocal trade agreement is still before the Senate, and we are waiting their final decision. An hon. Member asked me what had happened to the other agreement dealing with artificial silk duties. This proposal was not in the actual Report of the Mission, but resulted from it. The suggestion was that the silk duty should be lowered in Argentina and that against that a declaration should be made by the British Government with regard to duties and restrictions upon the importation of Argentine products. Certain difficulties have arisen on the proposal, and the declaration has never been made, and the matter is still waiting the consideration of Argentina. It is no use my dealing with the other matters connected with this very interesting Report.

The Report has given us a most valuable bird's eye view of the conditions of some of these countries in South America, as well as many valuable suggestions. I was asked whether we contemplate sending another mission to South America. Personally, I cannot say anything definite on the point, but we are certainly considering it, and if we can feel sure that it would be likely to prove as successful as this one has been I think something will be done along those lines. Various other matters connected with the Report will be considered by the different Departments. I do not think I can go into the other points raised by the hon. Member opposite regarding currency and matters of that sort, because it would hardly be suitable for me to deal with them on this occasion. I do feel that we are immensely indebted to the Mission and that we want far more information of that kind, and it is absolutely essential that these Reports should not be allowed to lie on the shelf and no action be taken upon them. They should be followed up. The hon. Member for Farnham (Mr. A. M. Samuel) referred to the Balfour Report. Surely the Balfour Report was presented when his party were in office.

It came out then. I did not object to its coming out, that is not the point. The point is why the people who got it do not use it.

I was going to ask why the hon. Member did not use it?

The hon. Member has no right to say that. I did use it. We could not get the country to use it because it came out at long intervals and became stale; but here we have a small and very concise report and I say that use ought to be made of it.

I will take the advice of the hon. Member, though his example would have been a little more useful and would have given us some idea of how the report could have been used to the best advantage. The hon. Member himself occupied my present position at that time.

I did not. I was at the Treasury at that time, and it did not come within the scope of my duties.

At any rate the Government in which the hon. Member held office could have taken action. I do not think there is any other point except that raised by the hon. Member in regard to the Lord Privy Seal. He spoke of a speech which the Lord Privy Seal made at Manchester—

No, in this House.

It was a speech which referred to the reduction of the number of commercial secretaries and trade commissioners. Whether the speech was reported quite accurately I do not know, but what my right hon. Friend actually referred to was the fact that there had been a reduction in the number of representatives from the peak year. The peak year was 1921, when there were 62 in existence. Between 1921 and 1923 15 of these posts were abolished. When I say "posts," some of them were posts in the technical sense of the word and some of them were officials. I think nine were posts and six were in cases where there were already two such appointments. There was a further reduction of two in 1926, bringing down the number to 45. When relations with Russia were broken off, there was another reduction of two, making the number 43. The last Government created one post and that brought the number up to 44.

Here is the reference in the OFFICIAL REPORT. It is in column 1864 of the Report of the proceedings on 20th December, 1929. The Lord Privy Seal said:

"They wiped out at one fell stroke trade commissioners in 22 different countries."

I do not want to be unkind, but there is not a word of truth in that.

It all depends on whom my right hon. Friend meant. He was no doubt referring to recent Governments. Starting from the year 1921 it will be found that he was not very far wrong, for 19 posts were abolished and one was created, making the net reduction 18.

He said "trade commissioners."

Well, trade commissioners or commercial secretaries. Surely the hon. Member does not wish to press a point of that kind? Many hon. Members in the House hardly realise the difference between a commercial secretary and a trade commissioner, though the distinction would be familiar to the hon. Member, who has held this office. In our Dominions we call these officials trade commissioners, and in foreign countries they are commercial counsellors or commercial secretaries. I will concede the hon. Member this much, that a mass of reductions were made before he occupied this office.

We cannot enter into a prolonged and detailed discussion on this question.

The document has been read so often in the Committee this afternoon that I thought I should be allowed to make an explanation. I will not proceed, as you rule it out of order, and, as a matter of fact, I think I have said all that I wanted to say on the point. The hon. and gallant Member for North-East Bethnal Green (Major Nathan), who opened the discussion, said he very much hoped that we were going to press forward in every way with the work of this Department. That certainly is our intention. The hon. Member for Farnham might have done what we are doing, that is, increasing our representation abroad. We are strengthening the office at home and the representation Overseas, and we are hoping fully to investigate the position of our export trade, and by the use of missions, by our representatives, by consultations with great business interests in this country we are hoping in the Department to make such a systematic study of our export trade as may be of some avail in finding new markets and drawing the attention of the business world to many points of concern to them.

I understand that this Estimate is in respect of the cost of troops in China, and that owing to the system which has been in vogue now for the last three years this is the only opportunity we shall have of discussing the matter. The right hon. Gentleman the Secretary of State for War will correct me if I am wrong, but I understand that the whole cost of these troops in China is provided for in this Supplementary Estimate and not in the ordinary Army Estimates. I have no comments to make on the matter except to say that those who in this House find in the ironic march of events some consolation for the frequent tedium of our proceedings will be delighted to see the present Government and the Secretary of State for War defending a course of policy which they so ferociously criticised when they were out of office. I would like to quote to the Committee, for the benefit of the Government and their supporters, the Resolution on the subject which they supported some three years ago.

On a point of Order. Is it in order to discuss policy on a Supplementary Estimate?

May I point out that this is the only occasion on which the Committee or the House will have an opportunity of discussing the policy of keeping troops in China? The situation is very different from that which arises with an ordinary Supplementary Estimate. It is true that by the custom of the House it is not possible to discuss policy on an ordinary Supplementary Estimate, because the policy has been discussed on the Estimate itself, but although this is described as a Supplementary Estimate it really covers the whole cost of keeping our troops in China, and I submit that in these circumstances we are entitled to discuss that question, because it is the only opportunity we shall have of doing so. It would be out of order to discuss it on the Army Estimates, because no provision is made in the general Army Estimates for the cost of these troops.

I think the Noble Lord is quite entitled to discuss the purpose for which this money is being spent, but I do not know whether he would be entitled to recall all that has happened on this subject in the past. He is entitled to discuss whether this policy was justified or not.

An important point is involved. As an old Member of the House I am always anxious to stick up for the rights of the House, but I must point out, with great respect, that in my submission I am perfectly entitled to raise a question of policy, and I am perfectly entitled to refer to the attitude of Members of the Government in the past. [Interruption.] Oh, yes; and, if there is any dispute, I shall be pleased to put the point to Mr. Speaker. I know—

I have already ruled that the question of this policy could be discussed. The Noble Lord must not threaten the Chair.

I did not catch that remark.

I said the Noble Lord must not threaten the Chair. The Noble Lord must remember that Mr. Speaker does not decide questions of Order in this Committee. I decide them when in the Chair.

That is so, and I have not the least intention of transgressing your Ruling, but I was trying to get your Ruling quite clear. In the course of your Ruling you made some reference to the Opposition, and I submit that you ruled very clearly that I am entitled to discuss policy, and that is the only point with which I am concerned. All I said was that had you ruled that that was not so I should have to consult higher authority. Your Ruling is perfectly clear. [Interruption.] Certainly, I am perfectly entitled to do that. Every Member of the House has a right to consult higher authority, which is Mr. Speaker, and can do so.

If the Noble Lord wishes to challenge the Ruling of the Chair, the method is not to consult Mr. Speaker, who is not responsible for conducting the Debate in Committee, but to table a Motion in the proper way.

I am not in the least challenging the Ruling of the Chair.

I am afraid the Noble Lord is not treating the Chair with respect. I distinctly ruled that on the question of policy the Noble Lord was in Order, but it is perfectly obvious that on a Supplementary Estimate of this kind he cannot discuss the actions of past Governments.

That is so. If I may be permitted to say so, there is really nothing between myself and the Chair. I only wanted to be quite clear that this question of policy could be discussed. [Interruption.] There is not the least need for the hon. Member and his colleagues to jump up on points of Order.

I also wish to be clear with regard to the Ruling that you have given. I think I understand it, but I am doubtful after hearing the comments of the Noble Lord on your Ruling. I take it your Ruling is that on this Supplementary Estimate we can discuss the policy involved in the Supplementary Estimate, but that the general policy previously decided in connection with the matter is outwith our discussion. In the past I have had occasion frequently to discuss Supplementary Estimates with your predecessors in the Chair, and they have always kept us very specifically to a discussion of the amount of money involved in the Supplementary Estimates and any change of policy which had arisen and which called for the expenditure of the supplementary sum of money; but, in so far as there was no change of policy, then the details of a Supplementary Estimate itself were all that we were entitled to discuss. For instance, if the original amount had been so many thousands of pounds and there were now some additional hundreds of pounds, then we could discuss those additional hundreds of pounds but not the original sum.

May I point out that the hon. Member does not seem to realise that this is not an ordinary Supplementary Estimate? This is an Estimate affecting the whole of the troops in China and it would not be in order to discuss it on the main War Office Vote. Consequently, our only opportunity is to discuss it here to-day.

I am quite as anxious as the Noble Lord to protect the rights of hon. Members. I take it that under your Ruling, Mr. Dunnico, the question which the Noble Lord the Member for Horsham was raising cannot be discussed on this Vote?

I think it would suit the convenience of the Committee if the Noble Lord would indicate which aspect of this Estimate he wishes to discuss.

Before the Noble Lord replies to that question I must point out that on a strictly Supplementary Estimate policy cannot be discussed, but where a Vote is a new Vote, a certain amount of latitude is allowed. I am not quite sure that it would be in order to discuss policy on this Vote, because it is not directly a new Vote, but it is something between. I do not want to be too strict in my Ruling, but it is perfectly obvious that I cannot give the Noble Lord the same latitude as he would be entitled to on an entirely new Vote.

I only want to safeguard the situation, because otherwise this, or some subsequent Government, might, by this method, endeavour to avoid the discussion of Supplementary Estimates. My speech can now be compressed into three or four sentences. I wish to congratulate the hon. Member upon his change of view, and to express my pleasure at seeing him in the role of the defender of a most useful method of maintaining our prestige in the Far East, and upon having had the courage to alter his view in regard to what was said in February, 1927, when he was dealing with the question of the troops in China. May I express the hope that he will continue to stand firmly against those who are opposed to this policy, and I hope he will realise that the maintenance of this small body of troops in China, although the cost is very small, stands for a great deal, and probably, among other things, stands for the protection of our nationals in that country and for the prestige of our flag. I congratulate the Financial Secretary upon his change of view.

I understand that the Noble Lord wishes to congratulate my right hon. Friend upon what he regards as a new rule. As a matter of fact, there is no new rule here, and I think it will be possible to explain in as few sentences as the Noble Lord himself has used precisely the position we occupy in this matter. The Noble Lord began his speech by saying that we had reduced considerably the number of extra troops in China. The number of troops on 1st March last year, when the late Government was in office, was 6,469. On 1st June last year, nine days before the present Government assumed office, the number was 4,064. I think that indicates that the late Government regarded the position in China as somewhat easier than it was the year before. I would like to remind the Noble Lord of the fact that the number of extra troops despatched to China in the period regarded as critical by the late Government in the early part of 1927 was between 17,000 and 20,000.

It will be seen that between 1927 and 1929 there was a very considerable reduction. That means that in the opinion of the late Government the position had improved; indeed, it might be said that the position had improved more rapidly than the Noble Lord and his friends had anticipated. Therefore, I think we were justified in our criticism as to the precipitate haste with which the Government despatched so many troops to China. When the present Government assumed office the number of troops in China was approximately 4,000, and the number now in China is 2,620. There are three battalions of extra troops in China, and I think the Noble Lord will agree with me when I say that that indicates an easing of the situation, and it is clear that the position to-day is not the same as it was in 1927. Of course, when we took office it was impossible at one fell swoop to abandon all the commitments which confronted us, and I do not think that even the Noble Lord would expect the Government to adopt that method.

Certainly not.

Then it would be very interesting to know what is the Noble Lord's complaint.

I did not complain. On the contrary, I congratulated the Government upon the policy which they had adopted.

If all the Noble Lord desired to do was to congratulate the Government, then there is ample room for my surprise. The reason for my seeming reluctance to rise to explain this Estimate was due to a very substantial reason. It happens to be a Supplementary Estimate which can excite no undue controversy, and, that being so, I do not think I need detain the Committee by going into details.

There is an item of £263,000 given as the extra cost of troops in (respect of China. There is also another item of £263,000 put down as savings on other Services. I want to know if the Army has any hidden reserves, or is this an example of exceedingly clever budgeting? Because it looks very suspicious to find that on some occasion when you want to raise money you can find it from some hidden source.

The two figures are merely a coincidence. It so happens that the actual expenditure in respect of China is £263,000, and the accumulated savings in respect of the Rhine and other Services amount to £263,000.

In asking the Committee to pass this Supplementary Estimate of £760,000, I should like to explain to hon. Members the main factors which render it necessary. The first important factor to which I should like to refer is the failure of the Indian Appropriation-in-Aid to materialise upon the expected, or at least the desired, basis. This has been for many years a disputed subject. Without going into unnecessary historical detail, I may state the position in a few sentences. Pay, maintenance, and equipment of the Air Force in India come upon the Indian Military Budget, but there are certain home effective charges which involve Air Estimates. Those home effective charges are charges raised by the Air Ministry against the Government of India. As there are no training establishments in India, these charges are intended to cover a proportionate amount of our expenditure on recruiting and training. Provision for this receipt is taken in Vote 1, Subhead H.

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To understand the matter thoroughly it is necessary to refer to the period directly following the War. Some arrangement had then to be made provisionally. It was assumed that training a highly technical force such as that of the Air would be a more costly process than in the case of the Army, but there were no really satisfactory data. War experience itself, under the largely empirical conditions prevailing during the War, could afford no sound comparison for the building of a peace-time force. Accordingly, a provisional "capitation rate" had to be found, and it was necessarily highly conjectural. A rate of £50 per man was agreed upon experimentally, and that rate has been paid by India ever since. It was an interim rate, and in the nature of an advance payment pending final settlement. As a matter of fact, this amount turned out to be totally inadequate, and, when sufficient data had been obtained, the Air Ministry had perforce to put forward a claim for a considerably larger capitation rate—a sum of £80 per man instead of £50.

This higher claim for the training of personnel is still under discussion. It has neither been admitted nor rejected by the Government of India, and certainly it has not been paid. The matter has been involved with, and to some extent delayed by, other claims made by the Army—much larger claims of a similar character—and so the Government have not felt able to carry the matter further at the moment. It is now evident that for the year 1929 payment will again be made at the rate of £50 without arrears, and as, in March of last year, the Estimates budgeted for payment at the rate of £80 plus arrears for three years (the Government of India having undertaken to pay arrears from then when the matter had been finally settled), there is the necessity for this part of the Supplementary Estimate. There is a loss of receipts of £244,000, with a corresponding reduction in spending power. The plain fact of the matter is that, although the claim has been in no sense abandoned, it is necessary in the circumstances to ask the Committee to sanction that part of the Supplementary Estimate which falls under the heading of Appropriations-in-Aid from this source.

The next main factor necessitating this Supplementary Estimate is the overhead deduction known as the "Super-cut," to discount possible under-spending on Votes 3 and 4. This was assumed to be a matter of reasonable expectation for the purposes of the original Estimate in March of last year, and it was put down at no less a sum than £650,000. That figure has been shown to be excessive. Experience has shown that the amount which should have been allowed to represent delays in the fulfilment of contracts should not have been put at more than one-quarter of the figure mentioned. I am not attributing any blame in estimating in this particular matter. It is the object of the "super-cut" to discount the probability that a number of the liabilities for which provision has been taken will fail to mature during the financial year.

On a large programme of works and technical equipment there are bound to be difficulties, and in all sorts of ways those difficulties will impose limitations upon the expenditure. For example, inclement weather may hold up the development of works, or delays in delivery, modifications of designs and so forth may hold up the provision of equipment. This year it has been found possible to adhere to the actual programme more closely than could have been anticipated, and the result is that the "super-cuts" on these Votes have not been realised. In consequence there has been a limitation of spending power, and this part of the Supplementary Estimate is necessary for that reason. I would like to say that it is possible that in preceding years, under the pressure of the demand for economy, the "super-cuts" have been rather drastic, with the result that it has happened, as it was bound to happen sooner or later, that when the element of optimism in estimating coincides with the element of luck in performance, the "super-cut" is bound to fail. So far as this part of the Supplementary Estimate is concerned, it is a matter of restoration to the actually ascertained position, and it is forced upon us by events. I should like, however, to make it quite clear that in this, as in that part of the Estimate which deals with the Indian Appropriations-in-Aid, there is no question of any new policy; there is no question even of unanticipated expenditure except so far as time is concerned. Therefore, I feel sure that the Committee will agree to this part of the Vote.

There are just one or two other matters to which I desire to refer. Hon. Members will notice that the Estimate is confined to Votes 1, 3, and 4, upon which the deficiencies I have mentioned occur, and Vote 8. The remaining Votes are not taken into account, because any variations anticipated are trifling. Vote 8 is included because it shows a saving of £39,000. That, of course, will be utilised to reduce the larger money grant which otherwise would be necessary. The surplus on Vote 3 under Subhead A is almost entirely accounted for by the fact that it has been decided to postpone the formation of two flights of the Fleet Air Arm. This decision also meant a corresponding decrease in Appropriations-in-Aid under that head from the Admiralty. The exact amount is £228,0.00. Hence the decrease in Appropriations-in-Aid under Subhead P. The two factors, however, exactly balance, and make no difference whatever in the total of the Supplementary Estimate. Of the total deficit on Subhead L of Vote 3, £40,000 is due to the rise of 2¼d. per gallon in the price of petrol at home, and the deficit of £90,000 on Subhead M of this Vote is due to payments in respect of three large claims falling unexpectedly upon this year's Votes. I think I have explained the main variations of interest, and I will, of course, answer any questions that may be put, but I would like again to stress the fact that in the main burden of the Supplementary Estimate there is no question whatever of new policy, and there is no question of new commitment; it is entirely owing to the non-receipt of the total Appropriations-in-Aid from India and to the fact that events have shown that the "super-cut" was excessive and has not been realised.

I hope that by this explanation I have made the reasons for this Estimate clear to the Committee.

I have no reason to complain of the way in which the Under-Secretary of State for Air has explained the position to the Committee. Indeed, he has given a very clear exposition of the reasons which have necessitated this Supplementary Estimate. He is quite right in saying that it is due to two causes, and two causes alone—in the first place, to the fact that the Indian contribution to the capitation grant has been less than we expected a year ago, and, secondly, to the fact that there has not been as much under-spending as we expected there would be when the Estimates were actually made up. Let me add this one observation to what the hon. Gentleman has said about the Indian contribution. It is a question that has been discussed between the two Governments for a good many years, and I had hoped, when we drew up the Estimates last year, that as the case of the Air Ministry was so reasonable and just, the justification for the greater demand would be so obvious that the Government of India would have agreed to the higher capitation grant.

So far as I know, there has never been any question that the grant that India is paying to-day is a good deal less than it should be. If there were no British Air Force in India, and the Government of India had to form their own Air Force, they would be paying a much higher amount per head than the actual amount which in recent years they have been paying to the Air Ministry in respect of the Air Force. I hoped a year ago that, as our demand was so reasonable, we should have received this extra amount during the last 12 months, and I am very sorry that the Government of India has not agreed to it. Let me only add that I hope that there will be a settlement very soon, and that one of the outcomes of the inquiries that are now going on into the relations between the two Governments will be to set up some sort of body which can settle these questions quickly. We shall then be spared the necessity for Supplementary Estimates of this kind, and I am quite certain that the relations between the two Governments will be much better as a result of some early settlement of these claims, which at present make those relations more difficult than they should be.

There is one observation that I should like to add to what the Under-Secretary said on the question of under-spending. The Air Ministry is a new Department, the aircraft industry was a new industry, and, in the early days of the history both of the Department and of the industry, it was very difficult to estimate exactly what the expenditure would be for the year. It is very difficult, to take a single instance, to say how long it will take to produce some new type of machine, or some new type of engine. I am glad to think that year by year that state of affairs is improving. I well remember that in 1922 the under-spending on the Air Ministry Vote was no less than £2,000,000, and, in order to bring the expenditure into closer relation with the Estimate, we have adopted in recent years the principle of what is called the "super-cut," namely, an allowance for under-spending. Year by year we made this "super-cut," and until this year we have not needed a Supplementary Estimate; but I own, looking back 12 months to the time when I introduced the Estimates upon which this is a Supplementary Estimate, I was very much afraid that a Supplementary Estimate would be needed, and, indeed, in my speech I warned the House that the "super-cut" was so great, that we had cut the Estimates so fine, that very probably a Supplementary Estimate would be needed in the course of the ensuing 12 months. Therefore, I am not surprised that the Under-Secretary has come to the Committee now to ask for a Supplementary Estimate. He has explained the position, and, so far as I know, there is no criticism that anyone on this side of the Committee would wish to make of his explanation. Accordingly, my advice to my hon. Friends, in view of the position that he has stated and of the observations that I have made, would be that we should let this Estimate go through without undue delay or unnecessary criticism.

While I gladly congratulate the hon. Gentleman on having been able to make certain savings, I am anxious to ascertain exactly why there has been a saving on civil aviation subsidies. I hope it has not been done by starving the development of light aeroplane clubs, because there are a number of towns, including Wolverhampton, which are anxious to start them, and I hope the Ministry has not been holding back money unnecessarily which might have been used for the development of these clubs. It may have had something to do with Imperial Airways not earning all the subsidy that was expected, but my chief anxiety is to urge the hon. Gentleman to spend more, and to blame him for not having spent more, if it could have been spent on the development of light aeroplane clubs.

I should like to thank the hon. Gentleman for the very clear explanation he has given about Appropriations-in-Aid under Subhead H of Vote 1. This question first came up in the Estimates Committee three years ago, and we were told there was a hope that a settlement would be arrived at before long. We pressed the matter on the Air Ministry and the Treasury and they both agreed that it should be taken up. I was very much afraid, when I first saw the Estimate, that a settlement had in fact been arrived at with the Indian Government on terms that were not favourable to the British taxpayer. I am delighted to hear that the reason why the Estimate has not been realised is really that the old difficulties have not been superseded. I sincerely hope the Air Ministry will stand to their ground and will try to get £80 per officer and man out of the Indian Government and that a settlement will be reached in the course of the next year.

While congratulating the Under-Secretary on his clear statement, I should like to ask one question with regard the surplus of £250,000 on Sub-head A of Vote 3. Is that entirely due to the postponement of the two flights of the Fleet Air Arm? Is not the underspending on construction largely due to not taking orders earlier in the financial year? I hope the hon. Gentleman will look into it and next year will place his orders as early as possible, as it is very unfair on the industry to pile them all up at the end of the year. I quite agree with what the hon. Member below me said about the savings on civil aviation. I should have thought, in the backward state of civil aviation, that we should want to develop it all over the Empire and that it would be almost impossible to save £39,000. That ought to be looked into very carefully. Everyone is shouting for money to go on with civil aviation and to develop it all over the Empire, and here we are saving £39,000. With regard to postponing the two flights of the Fleet Air Arm, has the hon. Gentleman looked into the question of the American Fleet Air Arm? I understand they are developing it very rapidly while we are postponing ours.

I was surprised that no statement was made in regard to the two flights that have taken place of R.100 and R.101. I should have thought that would have been one of the principal points in the hon. Gentleman's statement. I notice that in page 6 of the Report we are told a great number of very interesting things without an explanation of them. For instance, we are informed that the actual weight that the two ships were to lift has not been lifted, and we are told on page 7 that the lift has been sacrificed in order to incorporate other experimental features. I should have thought, as they were saving money, with all this work still to do in investigation, some of it might have been spent in that, because it seems to me if the lift of the airships has been sacrificed, we ought to have been told whether or not they are going to be able to lift the weight originally estimated and that additional improvements will take place. There are so many things yet that require investigation, that you cannot afford to have any savings in a matter like this. We are told about unexpected difficulties in the development of the engines of the airships.

On a point of Order. Is the hon. Gentleman reading from the statement of the Secretary of State?

The hon. Member is not reading from the Supplementary Estimate which relates to this Estimate.

I will leave that. Might I ask if there is anything in regard to the two airships that I cannot discuss?

I cannot see any trace in the Estimates of any money spent for that purpose, so that it is out of order.

I want to know why the money was not spent.

The hon. Member is fully entitled to ask why the money was not spent.

I want to know why we have no explanation in regard to the removal of a certain engine from one of these airships, and I should like to know what it cost to take it out and to have these repairs done, and whether it was the responsibility of the maker of the engine. I do not want to press the point further. I will wait until the main Estimate comes on. But I am giving an indication now of the line I will take on that occasion. We are bound to know exactly a whole lot of things that are still under a veil so far as these two airships are concerned.

The statement of the late Secretary of State in reference to the super-cut really bears out the reference I made in my opening speech to the fact that there was no question at all of attributing blame for underestimating, or anything of the kind. I quite appreciate the point the right hon. Baronet put. The question of placing orders earlier in the year was raised. That matter has been raised in a number of Debates upon Air Estimates in the past. I appreciate the value of placing orders as early as possible from the standpoint of the employment of labour as well as the expenditure of money in endeavouring to make an even flow of expenditure and of orders. But I think that the hon. Member will realise that in the case of a highly technical service where a great amount of the work and development of that service is highly experimental there are more difficulties in the way than there might otherwise be. The reason why there are some opportunities for criticism upon this particular point is that it is not always possible to see a year ahead exactly what the technical position of equipment in the Air Force is likely to be, but I can assure the hon. Member that every endeavour is made to secure an even distribution of orders throughout the year.

With regard to the question of saving on airship development there is a surplus of £39,000 due to the postponement of overseas flights. The question of the programme for the flights of R100 and R101, I shall be able to deal with in extenso next Tuesday. The postponement of those flights has resulted in a saving of £70,000, which is offset by increased expenditure on R101 to the extent of £31,000. Therefore, instead of there being a decrease there is an increase in the expenditure upon the airship, but as far as this complete Subhead is concerned the surplus is £39,000.

There is only one other point to which I have to refer and that is the Surplus of £13,000 under Vote 8 Subhead F: "Civil Aviation Subsidies." A sum of £5,000 was included in the original Estimate for preliminary expenses in connection with the projected service to South Africa, which has not been spent. I have to say in reference to that, that it was a covering amount necessary because of the difficulty of knowing precisely what amount would really be required during the year for a projected service of that kind. The remainder of the surplus is due to decreased subsidy to Imperial Airways on the London to India route, which depends on the number of completed journeys, not being fully earned owing to accidents, which hon. Members will remember as unfortunate features of last year. I was asked whether saving represents any reduction of assistance in respect of light aeroplane clubs. That is not the case. If the hon. Member will read the statement of the Secretary of State, he will see that there is no intention whatever of letting light aeroplane clubs down so far as the Estimates for 1930 are concerned. I hope that by these few remarks I have answered adequately the points raised, and that we may now have the Vote.