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Commons Chamber

Volume 63: debated on Wednesday 17 June 1914

House of Commons

Wednesday, June 17, 1914

Private Business

Butterley Company Bill [ Lords ],

Mexborough Urban District Council Bill [ Lords ],

Ossett Corporation Bill,

As amended, considered; to be read the third time.

Birkenhead Corporation Bill [ Lords ],

Read a second time, and committed.

Midland Railway Bill [ Lords ],

To be read a second time To-morrow.

Railway Clearing System Superannuation Fund Corporation Bill [ Lords ],

Aire and Calder Navigation Bill [ Lords ],

Read a second time, and committed.

Great Northern Railway Bill [ Lords ],

To be read a second time To-morrow.

Hightown Gas and Electricity Bill [ Lords ],

Read a second time, and committed.

North Eastern Railway Bill [ Lords ],

To be read a second time To-morrow.

Cavan and Leitrim Railway Bill (by Order),

Order for Second Reading read, and discharged. Bill withdrawn.

Manchester Corporation Bill [ Lords ] (by Order),

Second Reading deferred till Tomorrow, at a quarter-past Eight of the clock.

Commons Regulation (Gosford Green) Provisional Order Bill,

Lords Amendment considered, and agreed to.

Local Government Provisional Order (No. 14) Bill,

Local Government Provisional Orders (No. 16) Bill,

Local (Government Provisional Orders (No. 17) Bill,

Read the third time, and passed.

Gas and Water Provisional Orders (No. 2) Bill,

Local Government Provisional Orders (No. 15) Bill,

As amended, considered; to be read the third time To-morrow.

Local Government Provisional Order (No. 11) Bill (by Order),

Second Reading deferred till Monday next.

Chile (Proposed New Customs Tariff)

Copy presented of Translation of a Bill containing a Proposed New Customs Tariff for Chile, with Comparison of the Present and Proposed New Rates of Duty [by Command]; to lie upon the Table.

Trade Boards Act, 1909

Copy presented of Regulations, dated 12th June, 1914, made by the Board of Trade under Section 11 of The Trade Boards Act, 1909, with respect to the Constitution and Proceedings of the Trade Board for the Tin Box Trade (Great Britain) [by Act]; to lie upon the Table.

Pharmacy Act (Ireland), 1875

Copy presented of Regulation with regard to the Date of Meetings of the Council of the Pharmaceutical Society of Ireland [by Act]; to lie upon the Table.

Pauperism (England and Wales)

Return presented relative thereto [ordered 10th June; Mr. Herbert Lewis ]; to lie upon the Table, and to be printed. [No. 278.]

Revenue (Collection of Taxes)

Return presented relative thereto [ordered 19th May; Mr. Murray Macdonald ]; to lie upon the Table, and to be printed. [No. 279.)

Trade Reports (Annual Series)

Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5291 to 5296 [by Command]; to lie upon the Table.

Bankruptcy and Deeds of Arrangement Act, 1913

Paper laid upon the Table by the Clerk of the House:—Copy of the Order as to Fees for Duties in connection with Deeds of Arrangement, dated 26th May, 1914 [by Act].

Poor Law Institutions (Subordinate Officers)

Return ordered, "showing, as regards Subordinate Officers employed in Poor Law institutions, (1) office held; (2) number of officers of each class and whether resident; (3) number of days on duty per week; (4) number of hours on duty per week (exclusive of meal times); (5) occasional leave (hours per month); (6) annual leave (in days)."—[ Mr. Herbert Lewis. ]

Oral Answers to Questions

Questions

Persian Oil Fields

asked whether the Burma Oil Company has paid the dividend on the preference shares of the Anglo-Persian Oil Company; how much they have paid; what is their liability still outstanding for payment of the preference dividend; whether the Burma Oil Company charge the Anglo-Persian interest on payments for preference dividend; is the interest compound interest; and have the Burma Oil Company a charge on all future profits for the repayment of the interest advanced and the interest on the same prior to any dividend being paid on the ordinary shares?

The answer to the first part of the question is in the affirmative. The Burma Oil Company has already advanced £144,848 6s. 11d. for this purpose, and their outstanding liability is £31,438 7s. 1d. They are entitled to claim repayment of such advances with compound interest at 5 per cent. per annum out of the first surplus shown after the Anglo-Persian Oil Company has fully met its debenture stock interest, has paid 8 per cent. dividend on its preference shares and 6 per cent. dividend on its ordinary shares, in addition to making proper provision for depreciation and other charges, and carrying a suitable sum to reserve. This obligation and method of repayment of preference dividend were set forth in the original prospectus of the Anglo-Persian Oil Company in 1909, and no variation of that arrangement is now being made. No part of this repayment will therefore be made from the amount subscribed by Government either for ordinary shares or debentures. As explained in one of my replies on Monday to the hon. Member's questions, the money advanced by the Government on debenture security will be partly used for the repayment of certain other loans. Those repayments are to the Burma Company, Lord Strathcona's executors, and Mr. D'Arcy, and are for sums of money advanced during the last few months for development work, and have no connection with the preference share dividend. Instead of the company exercising its existing power of raising further money from the public on debentures, His Majesty's Government considered it preferable to provide the money, and so to obtain a standing as first debenture holders, and, as will be seen from the agreement, His Majesty's Government have also an option to strengthen their financial position in the company by redeeming the whole of the existing debentures in 1920.

Arising out of that rather long and complicated answer, can the right hon. Gentleman tell us the amounts of the loans to the Burma Oil Company, Lord Strathcona and Mr. D'Arcy, which are to be repaid, and also whether the prospectus just referred to will be presented to Parliament?

My answer must necessarily be rather long, as the hon. Gentleman asked me something like six questions.

I was doing my best to give the desired information. Speaking from memory, the repayment of loans to Mr. D'Arcy is £25,000, to the executors of Lord Strathcona £25,000, and to the Burma Oil Company on account of moneys advanced for carrying on development work £86,000. But I should like notice of questions affecting this complicated matter.

I was not criticising the right hon. Gentleman. I was apologising because I had not quite followed his lengthy answer.

Was Lord Strathcona's interest in ordinary shares or in preference?

Did the right hon. Gentleman say that the preference shares bore 8 per cent. or 6 per cent.?

Eight per cent. Before this compound interest loan has to be repaid to the Burma Oil Company, the company must have paid 8 per cent. on its preference and 6 per cent. on its ordinary shares, in addition to having made proper provision for reserve.

Is it not 6 per cent. on the preference and 8 per cent.—that is, plus 2 per cent. out of extra profits—under certain circumstances?

asked whether, in view of the proposed financial interest of the Government in the Anglo-Persian Oil Company, it is the intention of His Majesty's Ministers to include in the agreement a clause stipulating that so far as possible the purchase of machinery and plant by that company should be restricted to that of British manufacture?

The agreement is already concluded, and as the Noble Lord will have seen from the Blue Book, no such clause has been included. It would not have been desirable to impose restricttions on the company which would hamper their commercial freedom and to which Government Departments themselves are not subjected.

asked the Under-Secretary of State for India whether the Burma Oil Company, with the subsidiary of which the Anglo-Persian Oil Company the Government proposes to enter into partnership, has any official connection with his Department; and whether Sir Hugh Barnes, who is now actively identified with this company, was ever associated in an official capacity with India or Burma?

The answer to the first part of the question is in the negative. Sir Hugh Barnes was formerly Lieutenant-Governor of Burma. He re- tired in 1905, and was appointed a member of the Council of India. When the Anglo-Persian Oil Company was formed in 1909, under the chairmanship of Lord Strathcona, he was permitted by the Secretary of State for India to accept a seat on the board of directors. The company at that time had no connection with His Majesty's Government or with the Indian Government. He resigned the India Council in the autumn of last year, in view of the possibility that the company might enter into business relations with the Government.

Was not the company in business relations with the Government of India or Burma at the time when Sir Hugh Barnes was Lieutenant-Governor?

No, Sir; Sir Hugh Barnes retired from his post in Burma in 1905; the company was not formed till 1909.

asked what is the amount of protection by tariff which is given to the Burma Oil Company (the parent company of the Anglo-Persian Oil Company, with which the Government suggest going into partnership) in respect of the Indian market?

The hon. Member presumably refers to the import duty on petroleum under the Indian tariff. The duty is at the rate of 1½ annas per gallon. Like all other duties under the Indian tariff it is imposed for revenue purposes.

Was not Sir Hugh Barnes in control of the finances of India at the time this tariff was given to the Burma Oil Company?

I am not quite certain of the date: perhaps the hon. Member would give notice of that question.

Government of Ireland Bill

Ulster (Destroyer Flotilla)

asked the First Lord of the Admiralty how many thousand tons of oil have been consumed in the last two months by the destroyer flotilla patrolling the coast of Ulster; and what has been the total expenditure on oil in this connection?

I have nothing to add to the reply I gave the hon. and gallant Member for Evesham on the 25th. of last month.

Can the hon. Gentleman tell us what has been the net result of this very large expenditure of public money?

Agricultural Grant

asked the Chancellor of the Exchequer whether it is intended that the agricultural Grant of £727,655 should be included in the Transferred Sum under the Government of Ireland Bill; and whether it is intended that the provisions of the Local Government (Ireland) Act, 1898, for the distribution of this Grant among county councils in aid of rates should be repealed by the Finance Bill or the Government of Ireland Bill?

The answer to the first part of the question is in the affirmative, and to the second part in the negative.

Why is this subsidy under the Agricultural Rates Act withdrawn in the case of England and Scotland and not withdrawn in the case of Ireland?

It is to be handed over to the Parliament in Ireland with full powers to deal with it.

Is the right hon. Gentleman aware that at present it is the Imperial Parliament that is legislating for the United Kingdom?

Rifle Ammunition at Kingstown

asked the Postmaster-General (1) if Mr. Hood is an overseer in the employment of the Post Office in Ireland, Dublin District, or, if not, what are his duties and at what salary; and (2) if, on the morning of Monday, 7th June, a man called Hood, in the employment of the Post Office in Dublin, was detected at Kingstown, on the arrival of the mail boat from Holyhead, as endeavouring to bring into Ireland 3,000 rounds of rifle ammunition then in his possession; if the said Hood gave the Customs authorities a false name and address; if the said Hood is a member of the said National Volunteers; and if the postal authorities are going to take any and, if so, what action in the matter?

I am making inquiry in this matter, and will communicate with the hon. Member in due course.

Royal Navy

Carpenters' Crew Ratings

asked the Secretary to the Admiralty if he will consider the lack of opportunity for advancement in carpenters' crew ratings; and if he would open some higher ratings for them so that they may have further opportunities for advancement in their own branch of the service.

I do not understand what further opportunities for advancement the hon. Gentleman has in mind. Carpenters' crew ratings have opportunities of rising eventually to both warrant and commissioned rank through the regulated channels. As regards immediate advancement of such ratings, I can add nothing to the reply I gave him on 5th March last.

Greece and Turkey

asked the Secretary of State for Foreign Affairs, if, in view of the threatened renewal of hostilities by the Hellenic Government against Turkey, His Majesty's Government will consider the possibility of offering its friendly services to the two Governments concerned?

His Majesty's Government in common with other Powers will take advantage of any opportunity that may present itself to endeavour to preserve peace between Greece and Turkey, but as a rule friendly offices are only effective when desired by both parties to a dispute.

Will the hon. Gentleman consider what steps it might be necessary to take to protect our very great commercial interest in Smyrna, and also at the mouth of the Dardanelles if, unfortunately, these friendly offices are not accepted?

Tibet

asked whether, as a result of the Simla Conference, the Chinese Government has recognised the claims of Tibet as to the complete autonomy of Tibet; and whether any and, if so, what Chinese officials are now stationed in Tibet?

Can the hon. Gentleman tell us when he will be able to lay further Papers in regard to Tibet; they are long overdue?

I am afraid I cannot answer that at present. We should, naturally, not lay Papers till matters have come to a conclusion.

Can we, at any rate, have some more information about Tibet before the questions of Supply relating thereto come up for discussion?

The hon. Member knows that the question of debating Foreign Office Votes lies with his side of the House as well as with us.

Tangier

asked what progress is being made regarding the international Statutes affecting the administration of Tangier; whether, pending the production of these Statutes, Great Britain is obtaining, in common with France and others concerned, an equal share in the administration of the affairs of Tangier?

The details of the future regime at Tangier are still under discussion with the foreign Powers interested. Pending the definite establishment of the projected autonomous municipality, the status quo is being maintained.

International Harbour Board (Basra)

asked the Secretary of State for Foreign Affairs whether an international harbour board is about to be created at Basra; and whether he can state what the composition of that board is likely to be?

An Ottoman Commission is to be instituted to improve the conservancy of the Shatt-el-Arab; full particulars of this Commission will be furnished in the Papers, which I hope to lay at an early date.

Smyrna-Aidin Railway Company

asked the Secretary of State for Foreign Affairs whether he can state the final nature of the arrangements come to between the Smyrna-Aidin Railway Company and the Porte in regard to the application made by the Italian Government for a railway front Adalia?

The arrangement between the Smyrna-Aidin Railway Company and the Ottoman Government, to which the agreement between that company and an Italian syndicate is subsidiary, is still forming the subject of negotiation.

Can we have some assurance that the Smyrna-Aidin Railway, who are in possession of the full concession, will get some compensation under the terms which will be arranged for it in regard to Adalia?

Albania

asked if we have any forces at present in Albania; and, if so, whether they are to take any part in the present commotion in that country?

A British detachment is included in the international force now in occupation of Scutari. The duties of the force are limited to the preservation of order in the town and its immediate neighbourhood, and it is not proposed to extend the scope of those duties so far as the British detachment is concerned.

Can the hon. Gentleman say the number of these men and the admiral; are any there now?

The force present is eight officers and 383 men of the Warwickshire Regiment. The only ship is the "Defence," in command of Rear-Admiral Troubridge, which has just gone to Durazzo.

Colombia (Arrest of British Subjects)

asked the Secretary of State for Foreign Affairs whether, in August, 1913, thirty-eight British subjects, natives of the West Indies, were arrested at Santa Marta, in the Republic of Colombia, by order of the port captain, an official of the said Republic, upon a charge of assaulting an official of the Colombian Custom service; whether the port captain ordered their arrest without first attempting to identify any one of them as having committed, or being a party to, the said alleged assault; whether they were, by order of the port captain, kept in prison for three days without any evidence of their guilt being offered and without the semblance of a trial; whether this prison is wholly unfit for human habitation and without any sanitary conveniences; under what legal authority the port captain ordered the arrest and imprisonment; whether the Vice-Consul at Santa Marta, the Governor of Jamaica, and His Majesty's Minister at Bogota have reported that, after making searching inquiry, each of them is satisfied that there was no justification for the said arrest and imprisonment; whether the British Minister at Bogota, having been informed of these facts early in September, 1913, drew the attention of the Colombian Minister of Foreign Affairs to the matter; whether any explanation has yet been given, and what steps, if any, have been or will be taken to secure compensation for these men and protection for British subjects in the said Republic?

The answer to the first, second, third, and sixth parts of the question is in the affirmative. I have no information as to the condition of the prison in which the men were detained. With regard to the fifth part of the question, it would appear that the port captain exceeded his authority in ordering the arrest of these men, as they were at the time not employed on the wharves and were consequently outside the captain's summary jurisdiction. In a dispatch dated 28th March last, His Majesty's Minister at Bogota reported that on the receipt of information from the Governor of Jamaica, the British Consul at Barranquilla and the British Vice-Consul at Santa Marta, he had addressed a note to the Colombian Minister for Foreign Affairs drawing his attention to the facts, stating that the men had filed a claim for compensation and damage with the British Vice-Consul at Santa Marta, and requesting His Excellency to cause a careful inquiry to be made into the circumstances of the case. I propose, for the present, to await a reply to this communication before considering whether the claim put forward should be supported diplomatically.

India

British Officers (Pay)

asked the Under-Secretary of State for India whether it is proposed to increase the pay of British officers serving in India commensurate with the increase recently granted to officers serving in this country; and, if so, when?

The subject is under consideration by the Secretary of State and the Government of India, but the Secretary of State is not at present in a position to make any definite statement.

Punjab

asked the Under-Secretary of State for India, whether he has any figures to show the total sum which a peasant of the Punjab, working an average holding under the existing system of State ownership of land, must not exceed as cost of living for himself and his family; and does it exceed 6s. a month?

I have no data which would enable me either to confirm or to dispute the hon. Member's figures.

Is any fair-rent Act in India, or any fixity of tenure acting there?

I think the hon. Member had better give me notice of a definite question; there is legislation bearing on the subject.

asked the Under-Secretary of State for India whether he has any documents or records showing that the amount of land revenue, i.e., rent, collected in India in pre-British times amounted to 50 per cent. of the gross produce of the land; whether the amount now collected does not exceed from 7 per cent. to 11 per cent. of the total gross produce; and has the Government of India made any estimate of the amount which will be extracted from the new Punjab irrigation colonists by the purchasing landlords and the Revenue authorities combined?

As far as I am aware, no general standard for the land revenue based on a fixed proportion of the gross produce has ever prevailed in India. In pre-British times as large a proportion as one-half has on occasions been enforced. In British India the lower ratios mentioned by the hon. Member are not of infrequent occurence. With regard to the last question, I am not aware that any such estimate has been made.

Bengal (Landlord System)

asked whether the Government of India is satisfied with its experience of the landlord system in Bengal, especially in connection with the existing condition and future prospects of the peasantry?

The conditions and prospects of the peasantry in Bengal are safeguarded by tenancy laws which are generally regarded as being adequate for their protection.

Is it not a fact that the Revenue authorities looked with great disapproval and regret upon this system?

I think on the point to which the question refers that the tenancy laws are regarded as satisfactory.

asked the Under-Secretary of State for India whether the Government of India has received any remonstrances against its departure, in the case of the Punjab irrigation colonies, from its established practice, outside of Bengal, of the State ownership of land; whether he is aware of the alarm in India at the possibility of the Punjab irrigation colonists becoming the rack-rented tenants of the land speculators to whom the irrigation lands are being sold or the usurers who find the money for these speculations; whether this alteration of policy is due to the pressure of a general demand for funds to be expended upon education and upon the carrying out of sanitation schemes; and whether this pressure can be met in some other way?

The Secretary of State is not aware of any representations of the nature referred to, which would seem to him to be based on an incorrect view of the facts. The policy of alloting a part of the area of an irrigation colony for estates larger than the ordinary holding of a peasant proprietor has not the novel character ascribed to it in the hon. Member's question.

Does my hon. Friend suggest that the ordinary peasant of the Punjab is able to pay 270 rupees per acre for his small holding?

Some part of the area has been allotted to the peasant proprietor, and some will be sold in larger blocks.

Are these larger blocks not to be let or cultivated at all by the peasant proprietors; is that decided?

The policy of selling the larger blocks outright has been decided upon.

Can the hon. Gentleman say why the Government are giving up the policy in the case of this particular parcel of land in view of the traditional policy that the State should own all the land it can in India?

The hon. Member is, as I think I have previously informed him, under a misapprehension in supposing that this is a novel departure. The object is to test the price of land, and to recover some of the large capital expenditure of the scheme.

Bank Failures

asked the Under-Secretary of State for India whether, in view of the fact that the recent bank failures in India have aroused alarm in the minds of thrifty Indians, the Government of India is considering the urgent necessity of demonstrating and extending facilities for investment in sound securities other than those in connection with land?

The Government of India, as has been already stated, are considering proposals for enabling investments in their rupee loans to be made in the shape of bearer bonds. They will also issue this year a loan of considerably larger amount than in recent years. They have also enlarged considerably the facilities for depositing in their savings banks.

Delhi (New Capital)

asked the Under-Secretary of State for India if he can say whether the Government received a report on the new Delhi from the architect sent out to India by the Government for the purpose; and, if so, will he have it placed upon the Table of the House so that Members may have the privilege of reading it and learning exactly what this report contained?

The reports of the Town Planning Committee of which one of the selected architects was a member, have been presented to Parliament. No separate report has been received from the architect in question.

Was not a separate report on the building of the Delhi received a considerable time ago from Mr. Lanchester; was he not sent out at the cost of the India Office to make a special report upon it?

I think I have answered the question, if the hon. Member desires to ask another one will he please put it down.

Will the hon. Gentleman refer to the answer which has been given to me on this subject by his predecessor?

asked the Under-Secretary of State for India whether any architect who was a member of the body of persons officially sent to India by the Government to report upon the town-planning of the new Delhi has sent in plans or drawings for the principal buildings of State in his own town-planning scheme; and, if so, if the Government intend to accept these plans without competition and without reference to any other distinguished architects?

Mr. Lutyens, the architect to whom the hon. Member refers, was appointed in the early part of 1913 by the Secretary of State to prepare plans in conjunction with Mr. Herbert Baker for Government House and the Secretariat buildings, which are the principal State buildings concerned. The Secretary of State has received their designs, and they are about to be exhibited in the Tea Room of the House. As the hon. Member has been informed, there will be no competition in respect of the designs of these buildings.

May I ask my hon. Friend whether he will consider the question of exhibiting a scale with the model?

The Tea Room at present is a very congested district. I have not been able yet to get the exhibition of those promised some time ago.

Will it be possible to have an exhibition somewhere of the scale model, so that hon. Members can form some opinion on the subject?

May I ask whether plans, in addition to the scale such as now exhibited in the Academy, are to be put into the Tea Room with the actual framed plan?

I think what is proposed to be put into the Tea Room is practically a copy of the plan exhibited in the Academy.

Is the hon. Gentleman aware that there was some time ago exhibited in one of the rooms of this House a plan of the National Museum in Wales, which was very largely visited?

asked the Under-Secretary of State for India how many architects and how many surveyors went out officially to India at the request of the Government to report upon the town-planning of the new Delhi; if he will give their names and ascertain whether any of their number had special qualifications to report upon planning and architecture in India; if any of them were nominated by present or past Viceroys or other high officials in India;, and if any of them are in any way related or connected with any past or present Viceroy or high official?

The Delhi Town-Planning Committee consisted of Captain Swinton, formerly Chairman of the London County Council, Mr. John Brodie, City Engineer to the Liverpool Corporation, and Mr. Edwin Lutyens, the well-known architect. They were selected by the Secretary of State after careful inquiries in various quarters as to their special qualifications for the work. The answer to the penultimate question is in the negative, and in view of this fact the relevancy of the last question is not apparent.

Old Age Pensions

asked the Chancellor of the Exchequer what are the reasons why Philip Goltard, of Llanellen, Abergavenny, Monmouthshire, aged seventy-four, has been refused an old age pension; and whether he will inquire into the case?

I understand that Philip Goltard is of German nationality, and is therefore ineligible for the receipt of an old age pension.

Has he not been resident in this country for the last sixteen years, and does not that qualify him?

Income Tax Exemptions (British Chaplains Abroad)

asked the Chancellor of the Exchequer why British chaplains resident abroad are not exempted from Income Tax on their salaries, seeing that they discharge abroad many of the duties of public officials, who are so exempted?

British chaplains resident abroad are charged Income Tax only in respect of any stipends payable to them out of the public funds of the United Kingdom, and in this respect no differentiation is made between them and other public officials abroad deriving their salaries from the same source.

Legacy Duty Exemptions (Ireland)

asked the Chancellor of the Exchequer if legacies to hospitals in Ireland are exempt from legacy duty, whereas English hospitals have to pay; and, if so, whether he can see his way to give to English hospitals the same treatment?

The answer to the first part of the question is in the affirmative, subject to the proviso that the exemption in Ireland applies only where the testator was domiciled in that country. As has already been stated in this House on several occasions, the Government cannot see their way to extend an exemption which, if the question were now being considered for the first time, would probably not be granted.

Has the right hon. Gentleman had any representation from the Scottish people on this matter, and will he say why Scottish institutions do not receive the same treatment as Irish?

As a matter of fact, I have nothing whatever to do with the matter, which is a very old one. If proposals are to be made they ought to be made not to me but to the House of Commons.

Stamp Duty Exemptions (Scotland)

asked the Chancellor of the Exchequer whether, under the Public Health (Scotland) Act, 1897, all bonds, conveyances, agreement, etc., made or granted by or to or in favour of the local authority under that Act are exempt from all stamp duties; whether the same councils in England have to pay stamp duty; and, if so, whether, in dealing with the relationship between Imperial and local taxation, he will make provision that the same provision should apply to England?

The answer to the first two parts of the question is in the affirmative. I will consider the suggestion made in the last part of the question.

Budget Proposals

Grants to Training Colleges and Secondary Schools

asked the Chancellor of the Exchequer whether it is intended by the Finance Bill to do away with existing Grants to training colleges, secondary schools which are not under the control of local authorities, and universities; and whether this would be the effect of the Bill as drawn?

My right hon. Friend has asked me to answer this question. It is not proposed to deprive institutions for higher education, which are not under the control of local education authorities, of financial assistance. Grants will continue to be paid direct to the responsible bodies.

Would the right hon. Gentleman answer the latter part of the question: Whether it would be the effect of the Bill as drawn to deprive those authorities of their existing Grants or fresh Grants made?

I am advised, as a matter of fact, it is not correct to assume that, and, if it should be found so, it will be altered in the Committee stage of the Bill.

Grants to Local Authorities (Public Health Officers)

asked the Chancellor of the Exchequer if he can say which public health officers are included in the list of authorities to receive Grants under the Finance Bill, 1914, under the Second Schedule, Part I, England and Wales, line 25, et seq., where medical officers of health and other public health officers are specially mentioned; and whether the definition, other public health officers, includes all such officers as well as surveyors and analysts?

My right hon. Friend has asked me to reply to this question. The intention is to pay to local authorities one-half of the salaries of medical officers of health and their assistants, medical officers of hospitals, sanitary inspectors and their assistants, inspectors of foods, including milk, health visitors, veterinary officers, and any other health officers. It is not intended to make a Grant in respect of the salaries of surveyors and analysts.

Questions

Ox-Warble Fly

asked the President of the Board of Agriculture if the Board have received any information as to the harm done by the ox-warble fly; and whether any steps are being taken to counteract the evil?

The Board are aware of the harm done by this pest, and experiments have been made with a view to discovering some practicable and effective means of dealing with it, but without, I am sorry to say, any very satisfactory results up to the present. A leaflet of the Board deals with the matter by way of advice. Experiments are proceeding at Ballyhaise, in county Cavan, and the Irish Department are to give us the benefit of the research conducted there.

Buckinghamshire Education Authority (Medical Grant)

asked the President of the Board of Education whether his attention has been called to the fact that the Board reduced the proportion of the Grant payable under the Medical Grant Regulations to the local education authority of the Buckinghamshire County Council partly on the ground that their school dental service was inadequate and its working inefficient; whether he is aware that in that county, in spite of the admitted difficulties, the authority have made arrangements to deal completely with the children in the six to eight age group and also with other urgent cases in all the public elementary schools; and whether, in view of these facts, he will consider the possibility of paying the Grant at a higher rate for the year ending. 31st July, 1914?

I am aware that the Grant paid to the Buckinghamshire local education authority under Part I. of the Medical Grant Regulations during the financial year 1913–14 in respect of work done during the year which ended on the 31st July, 1913, was assessed at a rate of somewhat less than one-half of the authority's expenditure, one reason for this being that the arrangements made by the authority in connection with their scheme of dental treatment were unsatisfactory in certain respects. I understand that since July, 1913, the scheme of dental treatment has been extended to cover the whole county. In assessing the Grant payable during the current financial year in respect of work done during the year which ended on the 31st March, 1914, regard will be had to all the circumstances of the case, including the extension of the scheme of dental treatment, and in particular to the extent to which the defects in the authority's arrangements, to which their attention has been directed by the Board, were remedied during the period in question.

Necessitous School Areas (Grant)

asked the President of the Board of Education if a local authority which has previously participated in the necessitous areas Grant of £350,000, but by reason of the growing claims on that sum has not received the full amount represented by three-fourths of the expenditure in excess of the rate of Is. 6d. in the £, may expect to receive for the current financial year an amount equal to the expenditure in excess of the produce of a rate of 1s. 9d. in the £, and also an amount equal to a full three-fourths of the expenditure exceeding the produce of a rate of 1s. 6d. but not exceeding 1s. 9d., both amounts being reckoned on the basis of expenditure for the year 1912–13?

No, Sir, the proposal is that such an authority shall receive in the first instance the same amount of special Grant as it received last year; and that if this Grant does not suffice to bring the expenditure on which it was paid—namely, the expenditure of the year 1912–13—down to the level of a rate of 1s. 9d., it shall receive a further Grant sufficient to do so.

National Insurance Act

Sanatorium Patients Without Dependants

asked the Chancellor of the Exchequer whether his attention has been called to a resolution passed at the last annual conference of the Association of Approved Societies, to the effect that Section 12 of the National Insurance Act, 1911, as amended by the National Insurance Act, 1913, operates an injustice in the case of an insured person who is an inmate of a sanatorium and has no dependants, by providing that the whole of the sickness benefits must in such cases be paid to the insurance committee, seeing that many such persons have expenses running on while they are receiving sanatorium benefit which they ultimately have to pay; and, if so, whether it is proposed to take steps by amendment of the above Act to remove the injustice?

My right hon. Friend has seen the resolution referred to, and will consider the hon. Member's suggestion when, occasion arises. I cannot, however, agree that an insured person who has no dependants to keep, and who is himself receiving board and lodging and professional attendance and treatment in a residential institution at the expense of the insurance funds, suffers any hardship under the existing law.

State-Managed Society

asked the Chancellor of the Exchequer of the Insurance Commissioners are proposing to form a new society to be State managed; whether such scheme will be submitted to Parliament this Session; and will he ascertain the views of the approved societies before subjecting them to such competition?

Any proposals for dealing with deposit contributors must require legislation, and any such proposals will be formulated in consultation with representatives of approved societies.

Approved Societies and Licensed Premises

asked the hon. Member for St. George's-in-the-East, as representing the Insurance Commissioners, if his attention has been called to the notification by the Welsh Insurance Commissioners that approved societies under Part I. of the National Insurance Act shall not hold their meetings on licensed premises; how many societies in Wales were in the habit of holding their meetings on such premises; what notice was given to enable them to make other arrangements; and if a similar Regulation has been made by any other of the Insurance Commissions?

The Regulations to which the hon. Member refers were made in accordance with Section 27 (2) of the National Insurance Act, 1911. My right hon. Friend is informed that about 1,200 societies and branches in Wales previously met on licensed premises; in all cases they are being allowed whatever time is necessary to terminate their existing arrangements. Regulations under the Sub-section have also been made by the Scottish and Irish Insurance Commissioners

May I ask the hon. Gentleman is there sufficient time to make the new arrangements, and if the societies are not desirous of altering, will they be allowed to remain in the same position as before?

Is the hon. Gentleman aware that many of these licensed houses offered facilities for these societies when the temperance people were boycotting them?

Questions

Town-Planning Schemes

asked the President of the Local Government Board how many town-planning schemes have been finally sanctioned by the Board, in accordance with the Act of 1909, since the Act came into operation up to the present date?

The Local Government Board have information as to 232 town-planning schemes. Of these, two have been finally approved by the Board, four have been submitted for such approval, sixty-two have been authorised by the Board to be prepeared, and in twenty-two other cases application has been made to the Board for authority to prepare the scheme.

Housing Accommodation (Postmen)

asked the President of the Local Government Board whether his attention has been drawn to the recent discussion as to the difficulty which postmen experience in finding accommodation in the parish of Coulsdon, in the Croydon rural district; and whether his Department is proposing to take any action in the matter?

My right hon. Friend has received a letter from the Town Clerk of Croydon stating that a committee of the council have had their attention drawn to the discussion referred to, and that they propose to recommend the town council to provide any necessary houses under Part III. of the Housing of the Working Classes Act, 1890, if the urban part of Coulsdon is adedd to the Borough of Croydon, as proposed under the Local Government Board's Provisional Order Confirmation Bill of this Session.

London County Council Tramways and Improvements Bill

asked the Chairman of Ways and Means whether his attention has been called to the proceedings before the Select Committee on the London County Council Tramways and Improvements Bill, where it was admitted by the counsel for certain frontage petitioners that the expense of the petition was defrayed by the London omnibus owners; and whether such procedure is in accordance with the Rules of the House?

My attention was not called to the matter referred to by the hon. Member before I saw his question. There is nothing in the Standing Orders or Rules of the House to say that petitioners shall only be heard if they pay their own costs; but I am quite sure that the hon. Members, to whom we are indebted for such careful and conscientious work upstairs on Private Bill Committees, know the proper weight to give to any petition when they are in possession of all the facts connected with it.

Cruelty Charge (Dr. Yorke)

asked the Secretary of State for the Home Department whether his attention has been called to the case of Dr. Warrington Yorke, who was charged before the magistrates at Runcorn, on the 1st September last, with cruelty to a donkey upon which he had been experimenting sunder a Home Office certificate, and was acquitted; whether he is aware that part of the experiment in question was conducted in a place not licensed for that purpose under the Cruelty to Animals Act, 1876, namely, in the field where the donkey was left lying for upwards of seven days; whether Dr. Yorke thereby became liable to a penalty under that Act; and whether he proposes to take proceedings to recover such penalty, or what action he has taken or proposes to take in the matter?

I am aware of the case, and caused very careful inquiries to be made at the time. Two irregularities were committed by Dr. Yorke, one in keeping the animal in a field which, though attached to the registered premises, was not specifically included in the registration; the other, in injecting a drug which, though included in his general certificate, had not been specifically mentioned in the special certificate required for experiments on donkeys. I was, however, satisfied that the irregularities were committed through oversight and not deliberately, and were not in fact harmful, and that it was not a case for taking proceedings under the Act; but I have warned Dr. Yorke as to the necessity of strict compliance with the law on his part if his licence is to be continued.

Are all irregularities under the Act overlooked by the Home Secretary as a matter of course?

I think, if the hon. Member refers to my answer, he will see-that that is not the case.

Omnibus Time Tables

asked the Secretary of State for the Home Department if it is with his knowledge that time tables and other information relating to the services of the London General Omnibus Company are furnished to the Metropolitan Police to enable them to assist the public; if this arrangement was made at the suggestion of the company or on the initiative of the Commissioner of Police; if any extra payment is made to the men for performing this duty; and if any similar arrangement exists as regards the tramways?

In accordance with the promise I gave in reply to a question by the hon. Member for the Isle of Wight on the 17th of March, I directed the Commissioner of Police to inquire of the various tramway authorities and motor omnibus companies whether they would be willing to submit their time tables to him. The Commissioner informs me that they have all declined to do so.

If time tables are furnished to the Metropolitan Police by the London General Omnibus Company and the London County Council inform the Government that they are desirous of the same facilities being granted, will the right hon. Gentleman do the same?

Women's Social and Political Union (Proceedings against Subscribers)

asked the Home Secretary if he is yet in a position to say whether he proposes, under the existing law, to take proceedings, either civil or criminal, against subscribers to the funds of the Women's Social and Political Union and other organisations supporting the militant suffrage movement; and, if not, whether the Government proposes, during the present Session, to introduce legislation for an extension of its powers in the matter?

At present I can add nothing to what I said on Thursday last upon this subject.

Mines (Baths and Clothes-drying Accommodation)

asked the Home Secretary at how many mines accommodation and facilities for taking baths and drying clothes have been provided under Section 77 of the Coal Mines Act of 1911?

I have not heard of any case So far in which baths have been provided under Section 77, but I understand that in some cases they have been provided by the owners voluntarily.

Legal Delays (Royal Commission)

asked the Prime Minister when he proposes to intro duce legislation to carry into effect certain of the recommendations of the Royal Commission, which was appointed to inquire into the delay in the administration of justice in the King's Bench Division, which require the concurrence of Parliament?

As I stated yesterday, I doubt whether it will be possible to introduce legislation for this purpose this Session.

In view of the fact that this Commission recommended a retiring age for judges, is the right hon. Gentleman taking into consideration in present-day appointments the advisability of appointing younger men to these judgeships?

Irish National Volunteers (Inspection by Captain Bellingham)

asked the Prime Minister whether he is aware that Captain Bellingham, aide-de-camp to the Lord Lieutenant of Ireland, inspected and addressed a body of Irish National Volunteers at Castle Bellingham on 10th June and exhorted them to ensure the triumph of Home Rule; whether Captain Bellingham acted with the knowledge or approval of the Lord Lieutenant or of the Chief Secretary; and, if not, whether he has since been officially reprimanded?

Before the Prime Minister answers this question, may I ask whether his attention has been called to the fact that the Ulster Volunteers have been addressed by two aides-de-camp to the King—Colonel the Marquess of Londonderry and Colonel the Earl of Kilmorey—and whether any action is to be taken in respect of those two officers?

I will answer the question on the Paper first. The answer to the first paragraph of the question is in the affirmative, and to the second in the negative. The Lord Lieutenant, when his attention was called to the newspaper report of the incident, asked for an explanation from Captain Bellingham, who admitted frankly that, as a member of the Viceregal staff, he had been guilty of an error of judgment. In these circumstances it is unnecessary to take further notice of the incident.

Can the right hon. Gentleman say whether any similar demand was made on Lord Londonderry?

Now that attention has been called to them, will Lord Londonderry be called upon for an explanation, or is it a crime for Captain Bellingham (aide-de-camp to the Lord Lieutenant) to inspect the Irish Volunteers, and a virtue in the King's aides-de-camp to own the Ulster Volunteers'?

It is not a question of crime or virtue. It is simply whether this was a wise or a foolish action.

What is the offence that Captain Bellingham committed for which he was asked for an explanation? What was the ground on which he was asked for this explanation? Is there to be one law for Captain Bellingham and another for Lord Londonderry?

I have already stated that the Lord Lieutenant—this young gentleman being attached to his Viceregal staff—having his attention called to these observations, asked him for an explanation of them, and told him it was not customary for members of his staff to make speeches of that sort, and he withdrew his speech.

I beg to ask the Prime Minister whether now that attention has been called to the action of these two aides-de-camp to His Majesty the King, they will be called upon to make an explanation on similar lines to that demanded from Captain Bellingham?

There is nothing whatever about Lord Londonderry or Lord Kilmorey in this question. If hon. Members wish to ask these questions they should give notice. [An HON. MEMBER: "We will."]

Does not the Lord Lieutenant of Ireland represent His Majesty the King, and, if so, is not an aide-de-camp to the Lord Lieutenant in the same position as an aide-de-camp to the King?

That may well be, but there is nothing whatever about it in this question.

Will the same facilities be offered to the rank and file of the Irish Volunteers as has been afforded to the Ulster Volunteers; and may I ask whether men who inspect these forces will be put in a position of equality whether they are aides-de-camp to the Lord Lieutenant or to the King; or is there one law for the rich and another for the poor?

Of course there ought to be absolute equality in these matters. Perhaps my hon. Friend will put down a question. I do not know to what special remarks of Lord Londonderry he refers.

Revenue Bill

asked the Prime Minister whether he is aware that more than a month has now elapsed since the Revenue Bill was ordered to be brought in; and when it is proposed to circulate the Bill?

Is the right hon. Gentleman aware that the Chancellor of the Exchequer promised the House that this Bill would be circulated early this week, and is it not the case that it will be utterly impossible adequately to discuss the Finance Bill on Monday if we only get a week-end view of this complicated Bill?

I hope the hon. Member will find four days sufficient to enable him to master it.

House of Lords

asked the Prime Minister when he proposes to introduce his Resolutions on the reform of the House of Lords?

Does he propose to introduce a Bill founded on these Resolutions this Session?

May I ask whether these Resolutions are to have precedence over Scottish Home Rule?

Government Property

asked the Prime Minister if he will consider as to taking measures to prevent the use of Government property by Members of the Government for other than strictly official purposes?

Government Departments (Conditions of Labour)

aked the Prime Minister if he will consider the question of following the precedent established in the case of the postal workers and establishing Committees, including representatives of the employés affected, for the purpose of reviewing the conditions of labour in the Navy and other Government Departments?

I would refer the hon. Member to the speech of the Postmaster-General of 10th June, from which he will see that the Government intend to set up a body to inquire as to the future relations of the State with its employés generally.

British Army

Special Reserve

asked the Secretary of State for War whether the height, chest measurements, and weight of recruits taken for the Special Reserve are entered on the attestation sheets which are kept at the depots of the Special Reserve units?

The answer is in the affirmative.

asked several supplementary questions which, with the answers of Mr. Tennant, were quite inaudible in the Reporters' Gallery.

Military Bands (Downing Street)

asked the Secretary of State for War if any orders were issued within the last few days to bands of the Brigade of Guards forbidding them to play before 9 a.m. when marching with troops to the Horse Guards Parade; if so, for what reason were the orders issued; and if there is any precedent for this action?

asked if instructions have been given to prevent the playing of military bands in the vicinity of Downing Street before 9.30 a.m.?

There has been no change in this matter. There is a long-standing practice by which troops are not so employed before 9 o'clock. There was recently an unauthorised departure from this practice, which led to the issue of the order referred to.

Tidworth Barracks

asked the Secretary of State for War whether any ambulance van is in existence at Tidworth barracks; and, if so, why a motor lorry was sent for an injured officer who was lying at Andover?

There is a motor ambulance wagon at Bulford, but not at Tidworth Barracks. Unfortunately at the time of the accident in question it was under repair. As the case was urgent it was judged best to send a motor lorry rather than incur the delay that would have been involved in sending a horsed ambulance.

Spontaneous Combustion (Committee)

asked the Home Secretary whether the Committee on Spontaneous Combustion, appointed by the Home Office, is now considering the question of hydraulic stowage and packing of the waste, so as to fill up old workings in mines and to support the roof; and whether evidence will be taken by the Committee as to the system of hydraulic stowage so successfully carried out at present in France and Germany with a view to its introduction into this country?

Yes, Sir. The chairman informs me that the Committee on Spontaneous Combustion in Mines has gone very thoroughly into the question of hydraulic stowage of wastes in mines from the point of view of the prevention of gob fires. Evidence has been taken from a German mining official, having special knowledge of the subject, who has visited and reported to the Committee on the practicability of adopting this process in. different British coal mines, and one member of the Committee, my hon. Friend the Member for the Mansfield Division, recently visited the mines in the Pas-de-Calais, Westphalia, and Galicia where the process is in operation, and provided the Committee with a valuable Report thereon. The subject will be dealt with in the Report of the Committee.

Can the right hon. Gentleman tell us when the Report will be issued?

Post Office

Holt Committee's Report

asked the Postmaster-General how it is proposed to select the two members to represent the staff on the proposed Committee to deal with the questions of wages and conditions affecting the postal services?

asked the Postmaster-General whether, in appointing the Committee to deal with the Holt Report, he will consider the desirability of appointing three to represent the Post Office employés, namely, one each for postal, telegraph, and telephone employés, with of course a corresponding three on behalf of the Post Office and Treasury?

asked the Postmaster-General when the Government proposes to set up the Committee to consider the Holt Report on the conditions of employment of postal servants; who will be members of the Committee; and whether they will be instructed to accelerate their inquiry and report at an early date?

I do not consider it advisable to increase the numbers of the Committee. I am in correspondence with the Treasury and the Board of Trade as to the members to be nominated by them. As soon as the staff can select their representatives I will announce the composition of the Committee to the House.

May I ask the right hon. Gentleman whether he has realised that the transferred telephone staff are in an exceptional position and have quite special claims, apart altogether from the rise in the cost of living?

The undertaking I gave to the House was that there should be two representatives of the postal service upon the Committee. The transferred telephone staff, although an important body, is in itself numerically not a very large part of the staff—about one-sixth or one-seventh—and they cannot be considered apart from the other postal workers.

Will there be separate Committees for dealing with the Regulations as regards each separate and distinct part of the service—one for the Army, one for the Post Office, and one for each of the other Departments?

It may or may not be necessary, but it has nothing to do with the question on the Paper.

Will the right hon. Gentleman please answer the last part of question No. 62?

As I pointed out in the Debate, I think that the Committee may be relied upon, if so large a proportion of its members desire to get any increase of wages at the earliest possible-moment, to accelerate the Report as much as possible.

Would the right hon. Gentleman state more fully how he proposes to ask the men to appoint representatives?

I agree that is rather a difficult question, but there is a considerable section of the postal servants who are represented on what is called the National Joint Committee, and I shall probably, amongst other people, have some communications with them.

The supervising staff is part of the postal staff, and therefore it will be represented as such, but not separately.

Telephone Service

asked the Postmaster-General whether he is aware that although the telephone line, which he had promised, has been laid to Messrs. James Howarth's works at Earlestown, Lancashire, no telephone instruments have yet been fitted; whether he is able to state the reason for this delay; and when it will be remedied?

The completion of the telephone circuit is delayed pending the provision of a section of underground wires. The contractor expects that these wires will soon be available, and no time will then be lost in completing Messrs. Howarth's installation.

Territorial Force (Military Duties)

asked the Postmaster-General whether his attention has been called to the fact that official per mission for part-time postmen to attend drills in the Territorial Army is sometimes withheld, unless the man himself provides and pays for a substitute to perform his duties as postman during his absence at drill; and whether he will see that every facility is provided for those engaged by the Post Office to perform their military duties in the Territorial Army?

The Treasury Regulations do not admit of the grant of leave at the public expense for the purpose of attending drill, but every endeavour is made to permit officers who are members of the Territorial Force to do so without loss of emoluments.

H.M. S. "Monarch" (Post Office Inspection)

asked the Postmaster-General whether the chartering of the "Teleconia," during the time he was using the "Monarch," caused any extra expense to the public; whether she, or some other ship, was specially chartered to lay a short cable, owing to the "Monarch" being unable to do the work on account of the passengers present on board; whether the "Monarch" was taken from her ordinary duties in order to convey him and his friends to London; and whether the "Monarch" was with drawn from her duty of repairing an important cable on account of having to proceed to London with him and his friends?

Medical Service

asked the Postmaster-General whether Mr. W. J. Bidwell, late telegraphist at the Central Telegraph Office, was under treatment for a cold at the hands of the Departmental medical officers practically continuously from last midsummer; that, at the instance of his colleagues, he sought the advice of a specialist in March last, who informed him that he was suffering from, pleurisy of long standing and ordered him to bed; that his subsequent decline was rapid; and that, early in May, pulmonary tuberculosis of a rapid type having supervened, he died in hospital; whether this and other similar cases have occasioned doubts among the staff of the Central Telegraph Office as to the value and reliability of the treatment they receive from the official doctors; and whether he will give an assurance that there shall be nothing, either in the nature of official intimation of the undesirability of granting sick leave or by reason of lack of sufficient medical staff, to prevent careful attention being given to those who may consult the medical officers of the Department?

I am making inquiry into the case, and will communicate further with the hon. Member.

Hanwell (Postal Facilities)

asked the-Postmaster-General whether he is aware that Hanwell is a town of 23,000 people, growing at the rate of 1,000 a year, and that the principal post office is at the back of a grocer's shop, 50 feet from the front door, and that all postal customers have to penetrate down a passage not more than 4 feet wide between bales of merchandise before they can get to the postal counter; and whether he will take steps to have a proper post office built commensurate with the importance of this town?

The volume of business transacted at the three existing post offices in Hanwell is insufficient to warrant the large additional expense of providing an office devoted solely to post-office work. The accommodation at the post office to which the hon. Member refers is at the back of the sub-postmaster's premises, but I am assured that no difficulty or inconvenience is experienced in-obtaining access thereto.

Would the right hon. Gentleman, with his invariable courtesy, receive a deputation from the district council, who are very worried about the matter?

This matter was very fully gone into by my predecessor about four or five months ago, and reports were taken in the neighbourhood as to the-amount of business done. It is quite evident that a very large proportion of the inhabitants do their correspondence and send their telegrams from London, and the telegraphic and postal business in the district is insignificant compared with the population living in the locality.

Merchandise Marks Acts (Shetland Goods)

asked the President of the Board of Trade if he is aware that quantities of articles of wear are sold as "Shetland" and "Real Shetland," and that in consequence of such frauds the knitters in the islands get practically no remuneration for their labour; and if he will consider the advisability of prosecuting all persons selling goods as Shetland which are neither made of wool nor made in Shetland?

This matter has been under the consideration of the Board of Trade in the past, and if my hon. Friend is in a position to furnish evidence of the Commission of an offence under the Merchandise Marks Acts in respect of the use of the words "Shetland" or "Real Shetland" on goods, the Board of Trade will be prepared to consider it with a view to instituting proceedings if so advised.

Foot-and-Mouth Disease

asked the Vice-President of the Department of Agriculture (Ireland) whether it is intended that English county councils should be urged by the Board of Agriculture to secure the exclusion of Irish store cattle, on the ground that Ireland has never been free from disease?

There is no reason to suppose that the Board have any such intention They are aware that apart from outbreaks of foot - and - mouth disease this year and in 1912, Ireland's normal condition is one of remarkable freedom from cattle disease, and it was indicated only yesterday by my right hon. Friend the President of the Board that the advice given to English county councils is in the opposite direction to that indicated in this question.

May I ask whether there is the slightest foundation for the statement made in the question?

No Sir. Apart from the two districts in Cork and Tipperary, there has been no foot-and-mouth disease in the country. I noticed these statements that foot-and-mouth disease is rampant in Ireland, and all I can say is that the Department have taken the greatest pains to test them, and they are not true.

British Museum

asked the Secretary to the Treasury if his attention has been invited to the warping of the cases in the print room at the top of the new building of the British Museum; if these defects are due to the faulty system of heating or to the use of unsuitable wood; and what steps are being taken to minimise the inconveniences caused by the defective lighting and bad planning of the new buildings?

The warping of doors in question is not serious, but they will not be finally accepted from the contractors until further tested.

Orders of the Day

Anglo-Persian Oil Company

Acquisition of Capital.—[Money.]

Considered in Committee.

[Mr. WHITLEY in the Chair.]

I beg to move, "That it is expedient to authorise the issue, out of the Consolidated Fund, of such sums, not exceeding in the whole two million two hundred thousand pounds, as are required for the acquisition of share or loan capital of the Anglo-Persian Oil Company."

To-day we are not engaged in considering whether it was or was not a good thing to lay down and adapt nearly 250 warships of different classes of the Fleet, partly or wholly dependent on oil. At the proper time, if we were challenged, I should be very glad to discuss that, but now we are concerned solely with the best means of securing at a reasonable price an abundant and sure supply of oil for vessels which have already been built or begun. No one is justified because he thinks oil-driven warships are a mistake—if such a person there be—in trying to prevent these oil-driven warships that have been built from being made use of. On the Naval Estimates the wisdom of what has been done can be debated and voted on, and the House can award its censure or its approval to the Minister responsible. But this afternoon we have to deal, not with the policy of building oil-driven ships or of using oil as an ancillary fuel in coal-driven ships, but with the consequence of that policy, so far as it has been adopted. We have to deal with the methods of providing these ships with oil after they have been irrevocably built. I am not attempting this afternoon to argue this part of the question, not because I have not got something to say upon it, but because I consider it irrelevant, and I am sure the Chairman would consider it disorderly, so I hope that anyone who has adverse opinions on this point will reserve his opinions on the general question without prejudice, and will address himself to these specific propositions: Granted that the Navy must buy a certain large quantity of oil every year for a great many years to come, is this a good economical way of getting some of it? Is this a legitimate method for a Government, a modern Government, to adopt? Is the bargain which we have made sound on its merits? Are there any special reasons which, even if these other questions are answered satisfactorily, should debar us from taking such a course? These are the questions before us this afternoon.

Let me at the outset make it plain that we do not intend to make ourselves wholly dependent on this Anglo-Persian oil supply, or, indeed, upon any oil supply from any particular quarter. We shall continue to depend upon coal as the main motive power of our Fleet for many years to come. We shall continue to purchase a large portion of our supplies of oil from other parts of the world, from private companies of different character, some independent and some not, some in British territory and some in foreign countries, some under British control and some under foreign control. We shall continue to develop by all practical means our home supply of shale oil, so far as it can be got at reasonable prices. We shall continue scientific experiments with shale and with clay, and above all with coal, and we shall do our utmost to encourage the extraction of liquid fuel from all these substances. There is a great deal of scientific work going on in regard to the extraction of liquid fuel from coal by independent effort in many parts of the country. The Government will make inquiries among the leaders of the coal trade, and if it is thought useful, if it is thought it will stimulate inquiries, we shall be prepared to offer a substantial prize or prizes for the purpose of encouraging and stimulating the development of processes which will yield at economic prices liquid fuel from coal.

We shall also support, as far as is financially justifiable, the search for oil-fields and their development in the British Empire. All these lines will be pursued, and the acceptance of the proposal we now put before the Committee would in no wise exclude any of these courses, or indicate that they will not be vigorously and carefully developed. If the Anglo-Persian field were to be the only source of our supply we could not feel that the position would be wholly satisfactory, although we believe that the development of that field will be such as to enable us to obtain our whole supply of oil from that quarter, and probably more than we shall need for many years. Yet if we were to rely entirely and solely upon it, we should not be carrying out the policy I ventured to indicate to the House last year and the year before, of varying and spreading the sources from which we can purchase and on which we can rely. Therefore, I put this proposal forward, not as the sole source of the naval oil supply, but only as an important contributory source as regards quantity and as a powerful controlling influence as regards price. It is one of several sources, one of several methods, one of several companies, one of several fields with which we are concerned, and it is only one of them, but it will be the chief one, and it will exercise a dominating influence over our relations with all the others. At this point let me clear out of the way the military argument—the great military argument. There never has been, and there never will be, any shortage of oil for the British Navy in peace or war, provided you do not mind how much you pay for it, and provided you retain the power to protect it in transit on the high seas. The supply of oil in peace depends on the price. In war the supply depends on prices, plus force.

I am coming to that. If the Government are ready, as undoubtedly any Government would be in war, to pay any price for oil, to pay a price for oil which would dominate the world's market, it would unquestionably be offered abundant supplies of oil from all parts of the globe, except those portions which are either the enemy's territory or under the military control of his forces, and if we had the command of the sea, which is vital to us in this, as in other matters, we should unquestionably bring that oil into these islands at our convenience. The volume of oil required by the Admiralty, even in time of war, is only a very small part of the world's supply, and no one can doubt that the overriding temptation of the British market and the price prevailing there in time of war would be irresistible to the oil producers of every country with which we were not at war, or which was not under the domination of the country with which we were at war. The hon. Gentleman opposite (Sir Fortescue Flannery) interjected the word "contraband" and asked, "What about contraband?" It would not make any difference whether the enemy declared oil to be contraband or not. His declaration would remain a dead-letter unless or until he was able to make it effective by force. Unless he were able to stop on the seas oil ships attracted to this country by high prices, his calling oil contraband would make absolutely no difference to us or to it. The oil would come just the same and it would burn just as well.

Would it not make a difference to the neutral parties who supplied the oil?

Not at all. If, on the other hand, he were able to stop the oil ships and enforce his doctrine of contraband, he could also stop the grain ships, the meat ships, and the ships bringing cotton and all other varieties of raw material to this country, and, of course, he could very quickly bring the war to an end by that means.

May I ask the right hon. Gentleman if his declaration with regard to contraband applies only to oil or to all contraband of war?

I am unfolding my case on this particular point, and the view which I put forward is the view which the Admiralty take in regard to contraband. Unreasonable definitions of contraband by the enemy have to be made good by force, and they only acquire validity in so far as they can be made good by force. [An HON. MEMBER: "What about the Declaration of London?"] We are not discussing the Declaration of London this afternoon, and I hope we shall not have to complicate what is an extremely simple matter by the recurrence of that complicated and elaborate discussion. As I say, if we cannot secure the access to this island of oil ships, we cannot secure the access to this island of the whole of the great volume of our trade on which we shall depend in war as in peace, if we are to maintain ourselves effectively. The proposition that the Navy should be able to keep our ports open and to keep our trade routes safe in time of war for all the vast merchant fleets which traffic with this island, and yet should lack the power to bring in the comparatively few but, from our point of view, specially interesting oil cargoes, is a proposition which is naturally, inherently and, if need be, demonstrably absurd. In war our policy is to protect our trade by destroying the armed force of the enemy, wherever found. If we cannot do that, we cannot do anything, and there is no use arguing about the military aspect except on the basis that we have that power. If we have that power, if we can destroy the armed force of the enemy menacing our trade in every sea—that is the arrangement on which we are now proceeding—then the greater covers the less, and all vital supplies may be assumed to reach this country with tolerable regularity.

Any difficulties we may experience on our trade routes will occur at the very beginning of a war, particularly if it began by surprise. Every day the war continues we shall become stronger on every trade route, and our opponents will become weaker. Here let me remind the Committee—I am assuming that the difficulties, if any, will occur in the early days—that we have already built up a large oil reserve sufficient for all war purposes for months to come—I mean for many months from the beginning of a war. Therefore, there are no grounds, in the opinion of the Admiralty, for misgiving on the score of an oil famine in this country in time of war, and I hope we shall not hear in this Debate any of the nonsense I have read in some of the newspapers, about the British Empire becoming dependent upon a slender pipe line running through 150 miles of mountainous country and barbarous tribesmen. I hope we shall not have any more of that. The British Empire will depend hereafter, as it has depended heretofore, upon the wealth of this country and upon the power of its Fleet. The main basis of our power will not be altered in any respect by anything which is connected with the proposals we now put before the Committee. So much for the general military argument, which I hope may be carefully studied and considered, for although I think it is simple, I think it will be found to be complete.

4.0 P.M.

I turn to the special difficulties. Are there any special difficulties in regard to the sea route from Persia to this country? We have, of course, the choice of going through the Suez Canal or going round the Cape, a choice in which we should, of course, be influenced by circumstances. It takes about fourteen days longer to go round the Cape, and the Suez Canal dues are about equal to the extra cost in maintenance and fuel. It is quite possible that ships will, from the beginning, go round the Cape. At any rate, they would round the Cape if there were any special reason to deflect them there. The only real difference to us would be that there would be two or three more cargoes afloat at any one moment. Along the Cape route we find it would be exceptionally easy to protect trade because of the disposition of our squadrons and bases, and the enemy's vessels would find it exceptionally difficult to maintain themselves on that route for the purpose of attacking our trade. We have got the control of this Cape route anyhow, and our arrangements are made with that intention, and we believe they will have that effect. There will, therefore, be no additional expense, and no new dispositions will be required in consequence of oil ships occasionally traversing this route, either in peace or in war. The problem of oil supplies for the Fleet is not primarily a problem of war; it is a problem of peace and a problem of price. Nobody cares in war time how much they pay for a vital commodity, but in peace—that is the period to which I wish to direct the attention of the Committee—price is rather an important matter, and as it takes many years, and as we hope there will be many years of peace to every week of war, I cannot feel that we are not fully justified in taking up the time of the Committee in considering how, in years of peace and in a long period of peace, we may acquire proper bargaining power and facilities with regard to the purchase of oil. The price of oil does not depend wholly or even mainly on the ordinary workings of supply and demand. The demand for oil is steady and it is growing. There is a great potential demand behind that which has already manifested itself. Although I think the demand for oil has been severely checked by the high prices, the demand cannot subside, certainly it cannot suddenly subside, because once people are committed to the use of oil for an engine or for a steamship, or for an industry of any kind, it is not easy, and frequently it is not possible, for them to go back to coal or some other fuel substitute. This is particularly true, of course, of warships. We must have no illusions on this point. Warships which have been built to be driven by oil only can never be driven by coal, and can never be adapted to be driven by coal. So the oil consumer is in rather an unusually weak position in regard to purchasing oil, because he is so easily liable to be made a forced purchaser at an artificial price. This is, of course, particularly true of a Government oil purchaser. The oil consumer has not got freedom of choice in regard to other alternative fuels, but neither has he freedom of choice in regard to the sources of supply from which he can purchase. Look out upon the wide expanse of the oil regions of the world! Two gigantic corporations—one in either hemisphere—stand out predominantly. In the New World there is the Standard Oil, against which the Cowdray interests maintain by war and by negotiation a very powerful but semi-independent life. In the Old World the great combination of the Shell and the Royal Dutch, with all their subsidiary and ancillary branches, has practically covered the whole ground, and has even reached out into the New World. Against this, amongst British companies who have maintained an independent existence, the Burma Oil Company, with its offshoot, the Anglo-Persian Oil Company, is almost the only noticeable feature.

May I ask the right hon. Gentleman if he has forgotten the Guthrie Oil Company—with which, I believe, the Admiralty has had contracts for Texas oil—the Trinidad companies, the Roumanian companies, and other numerous companies which belong to British subjects?

Two out of the three sources of supply the hon. Member has referred to are already in the hands of the Shell Company or companies associated with it.

I must contradict that, and say that in Trinidad there are at least half a dozen companies who will be very glad to get the assistance of the Government outside the Shell Company.

I recognise the hon. Member's special knowledge on this subject, and I am sure we shall listen with great interest to the views which he will put forward in the Debate, but he must allow me to state the case. I am afraid we do not look at it from the same point of view. He must allow me to state the case from the point of view of the British Government. I do not say for a moment that that is the only point of view which is to be considered. I do not say it is for the House to decide whether that point of view should prevail or not, but that is the only point of view with which I am concerned this afternoon. When I first assumed office at the Admiralty I made very careful inquiries into the price of oil and into the comparison of that price with coal for use in warships. I found that after making allowance for its greater energy, the Admiralty were able, and have been for a long time able, to buy oil on terms which worked out approximately equal to the cost of coal. In addition to that, there were a great many advantages which have been set out in the Memorandum of Lord Fisher, which were issued in the name of the Royal Commission and which I have laid as a Parliamentary Paper. I will not go back on all these advantages because I have several times explained them. It was on this basis that oil worked out about as good as coal for the purpose of driving warships, that my predecessors for the last nine or ten years had acted, and it was on this basis that, with the full agreement of the Admiralty Board, I became responsible for substantial additions to our oil-burning fleet. Since then we have experienced, in common with private consumers, a long steady squeeze by the oil trusts all over the world, and we have found prices and freights raised steadily against us until we have been pressed to pay more than double what a few years before we were accustomed to pay, yielding a good profit to the producers for the oil which was required. It is quite true that these price movements arose largely out of an increased demand by the world which is eager to use such an extraordinarily convenient fuel.

Mr. SAMUEL SAMUEL rose—

The hon. Member had better reserve what he has to say for a more convenient opportunity.

The hon. Member has got knowledge of the question and great interests in it, and the House will readily hear what he has to say, but he had better hear the case for the prosecution before he offers an argument for the defence. It is quite true that part of this greater price movement has been due to the increased demand for oil by the world, and that the artificial inflation has come partly as a consequence and partly as a concomitant of national movements. It is also true that the consumption has been checked in its expansion and supplies, and freights have been stimulated and have responded to the high price prevailing. The situation and the outlook for the consumer at the moment are better than they were in both respects; but this again will bring with it a revival of demand, and the expansion of demand will again afford to the best combination of purchasers, who have entrenched and are entrenching themselves on all the available sources of supply, the conditions which they require in order to alleviate prices. Our feeling is that after the experience of the last few years, we ought without delay to put ourselves in a better position in regard to the future. I can assure the Committee that we have not acted with precipitancy in this matter. For many years it has been the policy of the Foreign Office, the Admiralty, and the Indian Government to preserve the independent British oil interests of the Persian oil-field, to help that field to develop as well as we could and, above all, to prevent it being swallowed up by the Shell or by any foreign or cosmopolitan companies. Ever since the days of Lord Selborne and the hon. Member (Mr. Pretyman at the Admiralty, the Admiralty have looked to Persia as a promising source of naval fuel. Indeed, it was at the instance of the hon. Member and, considering the length of time which has elapsed, by his remarkable foresight, that Lord Strathcona was induced to come forward and become Chairman of the Anglo-Persian Company, and then, by his influence, ensure the maintenance of the commercial independence and the British character of that company. The hon. Member was in those days Chairman of the Admiralty Oil Committee, and the only criticism which I feel can be directed against myself is that we have not earlier followed up the indications which his Committee so markedly displayed. I am talking of a period of ten or eleven years ago.

Nearly two years ago we made a fresh study of the Persian field with a view to negotiations, which we felt to be necessary for a large supply contract covering a period of twenty years. The contract was submitted to Lord Fisher's Royal Commission on Fuel and Oil Engines, and that Commission recommended its adoption, giving special consideration to the quality and price of the oil and to the capacity of the field to supply the quantity. It was the negotiation of this supply contract which led us gradually to the bolder and, I have no doubt, much better scheme which we now put before Parliament. We recognise in the Persian field a necessary source of supply for a long period of time. We recognise in it the best source from which we could obtain the best kind of oil. We knew that it was in constant danger of being absorbed by some other combination and welded into an ever-widening price ring. We knew that by our contract we should confer upon the Anglo-Persian Company an immense advantage which, added to their concession, would enormously strengthen the company and increase the value of their property. If this consequence arose from the necessary action of the State, why should not the State share in the advantage which we created? If, in any case, we had to go so far, why should we not go a step further? Was it not wiser, was it not more profitable on every ground, naval, financial, and indeed equitable, to acquire control of an enterprise which we were bound to help and bound to enrich, which we alone could sustain, and on which, to a large extent, we must rely? That was the process of reasoning by which the Admiralty and the Cabinet were drawn from the making of a simple supply contract to the definite acquisition and control of the company and its concessions. It is a year since I foreshadowed this policy to the House, not, indeed, by name, but in principle. We then had ample information on which we could have acted, and, if we had been a private company, we should have acted then as we now ask Parliament to authorise us to act.

But the action of a Government Department is necessarily more circumscribed than that of a private company. When a case has to be presented to Parliament, every inch of the ground has to be made good, so we therefore said, you have to have authority that can be quoted for all the cardinal points—not merely authority on which you can act, but authority which can be cited—so we sent a Special Commission to Persia to make a new independent examination on the spot of the whole of the properties of the company and the general character of the Persian oil-field. The Commission was headed by Admiral Slade, who had been previously commander in the East Indies, and whose work in various directions outside purely naval matters is well known, and it comprised two of the best oil and geological experts that we could find who had no previous connection of any kind with the Anglo-Persian oil-field—Professor Cadman and Professor Blundstone. The Report has been presented to the House, and is contained in the Blue Book which has been laid, and I submit to the Committee that it constitutes a complete case for action. I may say that I am not going to repeat any of the matters contained in this book, but I trust that hon. Members who may be interested in this question will not only do me the honour of listening to what I say, but also study the documentary case as presented in this publication. Let us look at the essentials of the Report. It appears that the northern field, in the neighbourhood of Shustar, will alone be sufficient to meet the Admiralty requirements for a long period, but it must be remembered that besides that field we obtain control for nearly fifty years of the oil potentialities of a petroliferous area of about half a million square miles in extent—that is to say, roughly speaking, nearly as big as France and Germany put together.

The extent and variety of the oil-shales, or seapages, as they are called, that is to say, the oozings of oil to the surface over the whole of that region is fully described in that Report. They abound, not only in the neutral, but over the British zone. Some of them are not inland, but close to the sea. Others are close to the Indian border, and quite apart from the proved value of the oils now working, which are themselves sufficient to meet the definite needs of the Admiralty contract, we are entitled to look with reasonable confidence to the development of this vast region of oil territory in the future of a character which must exercise a most important influence upon the general oil situation. On this the Committee expressed the opinion that the whole concession, judiciously worked, would probably safeguard the fuel supply of His Majesty's Navy. That is a cautious and conservative expression of opinion publicly made by responsible persons of expert knowledge. In view of that opinion, and of all the other facts which I have submitted, surely we are justified in relying upon the Persian oil-field, not for the whole, not for the greater part, not even for half, but for a portion something less than half of our necessary supplies.

It cannot be argued that the acquisition by Great Britain of legitimate commercial interests in this quarter of the world will produce any untoward effect on our foreign relations, nor can it be asserted that it has led to any bargaining or entanglement, nor can it be argued that the solution of any of the difficulties which exist in Persia—and no one can deny that many difficulties exist in Persia—will be aggravated or complicated in consequence of the transaction set forth in this Blue Book. My right hon. Friend the Secretary of State for Foreign Affairs, who will speak later on in the Debate, will, of course, deal authoritatively with this aspect of the question, but I am bound to address myself to one particular aspect of it, namely, a criticism which has not yet been made, and I dare say will not be made, but which must be faced. This is the criticism: Are you not putting yourself in the hands of a great military Power in regard to a vital supply for the British Navy? Let us see what is the answer to that. First, as I have said, the main dependence of the British Navy will be for many years on coal; second, that portion of the Navy—a most important portion, I fully admit—which depends upon oil will be only partially dependent upon Persian supplies of oil, and only so dependent on those supplies for the purpose of price bargaining in time of peace; third, between us and even this partial dependence, we have in peace and war the shield and buffer of the great oil fuel reserve, in itself sufficient to carry us through a long period of war, probably the whole duration of a modern war, and certainly the whole of the critical and initial period of a war. The worst that could happen to us from a national point of view would be the attack of a great military Power, not upon our territory, nor even upon our sphere of influence, but upon a British commercial company in a foreign country in which we had a governing interest. There is no reason to assume any such contingency, but if such a contingency did occur, then it would not occur out of anything connected with oil, or rather out of anything connected with this bill or this transaction. It would only occur as an incident in a world-wide war, and as an incident which would in no way cripple our power of carrying on that war. You cannot try and condemn the Admiralty scheme for getting oil by reference to those remote, speculative, and, I hope I have proved, non-vital contingencies.

From the naval point of view, the only consequence of the wiping out of the Persian oil-field as a field upon which we could draw, would be that we should have to pay a higher price for the rest of our oil than is fair, or than we hope to pay. That is to say, we should only in the worst extreme, from the Admiralty point of view, suffer consequences which will be our ordinary and normal condition unless this measure, or some such measure, is taken. What applies to a great Power in the cataclysm of a general war applies with even more force to minor disturbances by the local tribes, and the security of life and property in the oil-fields of Northern Persia and along the line from the Shustar district to Abadeh is to be maintained by Persian guards who are to be supplied by the local authorities in return for annual subsidies. The result has been satisfactory, and instead of a wild disturbed country, as there was before the oil company began its operations, the district is now, and has for some time been, settled and quiet. We propose to rely upon the police of the tribesmen and the gendarmerie of the Persian Government for the protection of the pipe lines. We are told that the tribesmen are wild, and that the Persian Government are weak. The investment of capital, the development of roads, railways, and industries in which the tribesmen and the Persian Government are both interested, and from which both profit ought to tend to make the Persian Government strong and the tribesmen tame. At any rate, it is a perfectly healthy, legitimate, and moral process.

How else is the country to progress except by the development of its resources and the gradual civilisation of its areas? Let me repeat—and I am trying so far as I have gone in the chain of a connected argument to deal with the most difficult criticism I have seen in various quarters since the publication of our contract, and I think it will be found that I am dealing with all of them; I do not say that I shall deal with all of them in a way which will convince the hon. Member who spoke on the back benches or some other Members, but I hope to state the Government case on all points as a watertight case—let me repeat, before I leave the subject of local disorders, that our Admiralty plans for the supply of oil to the Fleet would not be frustrated by the temporary cessation even for a long period of supplies from Persia or any other individual source, and our contract and our interest in Persia will long outlive any temporary disturbance or dislocation. The Admiralty must have power to control an oil-field somewhere, and where else should we go in practice at the present moment? There is absolutely no other practical alternative at the present time. Neither Trinidad nor Egypt, to which the hon. Member for Wandsworth (Mr. Samuel Samuel) referred, could ever bear, so far as we now know, the weight of our demand, and many years must pass before the Scottish shales can produce the quantities at the price we need, although they do make a very valuable contribution to our oil supplies. All sorts of schemes for extracting oil from coal will be tried, and also for extracting oil from clay. I believe that is another activity of the hon. Member for Wandsworth.

Well, there are other Gentlemen who are engaged in extracting oil from clay.

I was interested in Dorsetshire shale, but when I entered this House I retired.

I am not entirely up to date in regard to the hon. Member's activities. We shall see that these methods of extracting oil from shale and coal are tried, but all that is in the future. What we want now is a proved proposition, a going concern, an immediate supply, and a definite prospect with the potentialities of development over which we can ourselves preside. These we find in Persia. We find them nowhere else in the world at present. We find them in a region where we already have great interests. We find them in a region where our relations with great Powers are already regulated by agreement, where it is our interest and policy to sustain the native inhabitants and the native Government, and where neither the native Government nor the native inhabitants are capable of pursuing a prolonged or formidable policy of hostility towards us. We find them in a region whence we can easily transport our oil to this country in peace or war, and that without the need of adding a single ship for that purpose to our foreign squadron. These are a combination which, I think, it will be very difficult to equal in regard to any alternative area of oil supply.

Now I come to the actual bargain. The business of the financial negotiation has been conducted by Sir Francis Hopwood, who was formerly Permanent Secretary to the Board of Trade, and by Sir Francis Black, who is at the head of the Admiralty Contract Department. I am very much obliged to the hon. Member for Brentford (Mr. Joynson-Hicks) for asking me several questions of detail, because I am confident that the more the detail of this transaction is examined the more it would be found to stand the test of close scrutiny. The finance is extremely simple, as anyone can see reading the agreement set out in the Blue Book. It is fully explained in the Blue Book, and I am not going to add anything to the explanation given there. But the money we pay gives us control, so far as Admiralty interests require, of the Anglo-Persian Company and its concessions. We can appoint ex-officio directors with a power of veto, or in the alternative, if we like, we can appoint an actual numerical majority of individuals as directors on the board. Apart from the £200,000 of debentures which are paid to give us a holding in the debenture stock, which will be devoted to the repayment of loans, a large proportion of which has been contracted quite recently for development work and for the general purposes, the £2,000,000 which we advance will be used not in buying out the existing holders or in paying for goodwill, or in paying commissions of any kind. I was asked a question on that two days ago, the drift of which I am bound to say I did not quite appreciate; but none of the money will be used in paying for goodwill or commission. It will all be used in the actual development of the oil supply by the payment in cash on approved estimates for actual plant and work, and it will all fall into the economic life of the company in reference to new purposes and the development of new assets. Over the whole of these enormous regions we obtain the power to regulate developments according to naval and national interests, and to conserve and safeguard the supply of existing wells pending further development. Coupled with this agreement is, of course, a supply contract, and the supply contract is secret.

I think that the supply contract has not actually been signed yet, but there is a supply contract as a counterpart of this agreement. We are not only, of course, proposing to be the largest shareholder and the predominant partner in this concern, but we are also its principal and most regular customer. What we do not gain at one end of the process we recover at the other. My right hon. Friend the Chancellor of the Exchequer will not allow the Admiralty to reap the profits of this transaction. We have to pay for the oil, but the Treasury will recover the profits. Whatever we lose in price we gain in profits by the advantageous position which we hold. The quantities and prices of the supply contract are, of course, secret, like everything else connected with our oil-fuel supply, but I can tell the House, as I have already indicated, that the quantities will embrace less than half of our total requirements of oil, and the prices will be fixed on a sliding scale in relation to profits. How is the money to be found? It will be issued from the Consolidated Fund. Let me hasten to relieve the natural anxiety of the hon. Member (Mr. Joynson-Hicks). There will be no Super-tax and no Supplementary Estimate or Loan will be required in consequence of this. As the State is acquiring a revenue-producing asset, the ordinary procedure would be—as, for instance, in the case of the telephones—to borrow the moneys required by the issue of terminable annuities. But, in the present instance, my right hon. Friend has still in his strong box £1,500,000, which was diverted from the Old Sinking Fund by the Finance Act of 1912, which was reserved for belated naval payments, and he has also afforded £750,000, making £2,250,000, which represents the Old Sinking Fund for 1913–14. Accordingly, it is proposed to meet the expenditure on the acquisition of this new capital asset out of these accumulations without any new borrowing of any kind.

In that respect we follow the general rule of sound finance, that it is better to meet new liabilities out of existing resources than to engage in the operation of borrowing on the one hand while paying off old debt on the other. As soon as the House approves of this Resolution to provide the necessary funds steps will be taken to apply for shares, and the payment of about £100,000, out of the first instalment of £500,000, will be made to the company on account of the first instalment, which becomes payable when the application for shares is made. We shall then secure our voting power and be able to appoint ex-officio directors, and the company will proceed at once to order the necessary plant. The provision of a new pipe line and storage is of great urgency, as a waste of oil to a very large extent is now unavoidable in the field. We believe that this investment of State funds, for which we are asking Parliamentary authority, although no doubt there is a speculative element in it, is a prudent, thrifty, and profitable measure in itself. Viewed out of all relation to the vital interests of the Navy in being able to develop, if necessary, oil-driven vessels, and viewed out of all relation to the general aspect of the oil market—as to which I shall have a few words to say—but viewed simply as a financial proposition, it is a good, sound, business enterprise in our opinion. It is an enterprise which, on its own isolated merits, would be well worth going in for, in our view. But we cannot confine our view, and nobody can confine his view, of this subject, to the business or financial aspect of it alone, or to the narrow point of whether there will be a financial loss or gain so far as this £2,250,000 is concerned. We must look at the naval interests and at the peculiar conditions of the general oil market.

The Navy must have oil for the ships which are already built or building. We must have a steady supply, we must be able to know beforehand, within certain limits, and with proper elasticity, where we can get it from. We must be able to spread out and vary the sources of our supply, and we must safeguard and regulate some at least of the existing sources. Further, if in the opinion of naval experts in the future it is still necessary to use oil in fast capital ships and in small ships of great speed and in torpedo craft and submarines of all kinds, if it is found that better war vessels of these types can be built for the Fleet on an oil basis than on any other, if it is found that there are high and unequalled military advantages to be derived therefrom, we must not let ourselves be deprived, of oil. We must not be forced to content ourselves with less efficient war machines because of the difficulties, perfectly super-able difficulties, attendant on obtaining a supply of oil, provided that this can be achieved with reasonable economy by the exercise of forethought and care. We must continue to make efforts to give our sailors the finest and most suitable weapons of war which science can devise or money can buy. We cannot allow these great advantages to pass to other nations, to whom naval strength is of so much less consequence than it is to us. We must develop our Fleet along lines which lead to the highest possible efficiency, and, although, as I have said, the regular line of battleships—that is, the main part of the Fleet—can quite well be maintained on a coal basis—and that is still our policy—we cannot build destroyers or light cruisers or fast battleships or battle cruisers to do the work which we require of them satisfactorily on a coal basis, and we cannot build submarines at all except on a basis of liquid fuel. And anyhow, quite apart from future developments, we must provide for these oil ships, which we have already got, and, therefore, I reinforce what we believe to be a good proposition, a good financial operation in itself—which, of course, we recognise the State would not commit itself to merely on financial grounds and as a money-making proposition—I reinforce that enterprise and the arguments in favour of this by naval necessities of the highest order.

But, quite apart from the intrinsic merits of this proposal and the naval necessities which reinforce it, I ask the Committee, in passing from my statement on this subject, to consider our position as a great consumer in the existing conditions of the oil market. The proposal we have made has been well received on the whole over a very wide circle, and the value of the concession is admitted. None of our critics, not even the most interested of them, have thrown any doubts upon the oil-bearing fertility of the concession. Indeed, their anxiety as to the effect which it will produce on prices is eloquent testimony to their view of the value of this proposition so far as they are judges, and they are extremely good judges. The financial and commercial arrangements have been wisely considered, and the naval argument has not seriously been disputed. The general principle of partial State ownership has not been impugned and I do not expect that it will be impugned in this discussion. After all, it is only what we do in regard to the shipbuilding trade of the country by the competition of Royal dockyards, the general manufacture of cordite, which is a very complicated operation, and the Whitehead torpedoes, and in regard to the general purposes of the Navy. It is only what you are often asked to do, and frequently consider the advantage of doing, in regard to the supply of armour. I do not think that there is any question of principle at stake, and in so far as principle is at stake I suspect that the House of Commons and the Committee will be generally favourable to the principle on which we are now acting. All the criticisms, so far, have flowed from one fountain. They have all come, so far, from Sir Marcus Samuel, one of the heads of the "Shell" Company, and his spokesman, Dr. Dvorkovitz, of the "Petroleum Review."

On a point of Order. Sir Marcus Samuel simply wrote a letter to the "Telegraph."

That is not a point of Order. It is an argument which, no doubt, the hon. Member can bring forward later in the day.

These gentlemen urged, if I may judge by the public statements which have been made, that a competition by the Government in the oil market will tend to lower prices, and is unfair to the oil trusts; and, secondly, they urge that it would be more patriotic for us to develop an oil-field within the British Empire, like Trinidad, in which Sir Marcus Samuel is interested, or Egypt, where we encounter him again. It is interesting to notice that the American Admiralty also come under the condemnation of Dr. Dvorkovitz, so that we are both in trouble at the same time, and for the same kind of misconduct. I would venture to read to the House a short quotation from the "Petroleum Review" on this subject. I will read two paragraphs, one of which is a criticism of the British Admiralty and the other of the American Admiralty. They are very instructive. This is the first quotation:—

"The numerous letters which we have received during the present week from oil men protesting against the action of the British Government in regard to its gigantic subsidy for the Anglo-Persian Oil Company, eloquently point to the great interest which those associated with the petroleum industry are taking in the important question. That the matter will not be allowed to remain where it is at present is evident, and already, we understand, several Members of Parliament have expressed their determination to insist upon a close investigation of the circumstances which have led the Government to take such a step. As Sir Marcus Samuel stated at last week's meeting of the 'Flower' Motor Ship Company, it is amazing that the Admiralty and their advisers should have selected an enterprise in Persia for their support, just at the very moment when supplies in British territory, and under British jurisdiction, are making rapid and most satisfactory progress. There is no doubt that had Egypt or Trinidad been chosen for Government support by the Government, their action would not have aroused the slightest adverse criticism."

The second paragraph is as follows:—

"The proposal of the United States Government to construct a pipe-line and erect a refinery in order to assure itself of a supply of oil fuel for its requirements has called forth considerable indignation from the independent refiners of Kansas and Oklahoma, who not unnaturally strongly object to the Government entering the petroleum industry. As in the case of the British Government, so with the Government of the States—it has suggested a proposal which not only savours of the absurd, but which cannot be productive of the slightest good if carried into effect. With the enormous output of fuel oils in America, the Government can without any difficulty secure at rock-bottom prices all the fuel oils it requires. And yet, in the face of this fact—which is quite common knowledge—it proposes to construct a line from the Oklahoma fields so as to be in a position to transport its own fuel. But it proposes to do more, for the Oklahoma oils are of a high grade, and therefore, before they can be suitable as fuel, the more volatile contents have to be removed, a necessity which will mean the Government becoming a refiner. The Western Petroleum Refiners' Association have made a strong protest, and their letter, which is introduced on other pages in this issue, is well worth perusal. It puts forward the strong case which the refiners undoubtedly have, and should cause the Government to drop the proposition altogether."

I do not wish to make any attack upon the Shell or the Royal Dutch Company.

The hon. Member has not yet learnt that when the Chairman rises he must resume his seat. I have already explained to him that he must reserve his reply to any of the statements which have been made until he is called on to speak by the Chair.

I am stating the case. The hon. Gentleman has not had to pay the prices which we have had to pay on behalf of the Admiralty. Some of their directors dissociate themselves from the criticism which has been made, and Mr. Deterding in particular, has rendered, and no doubt will continue to render, important services to the Admiralty in respect of their oil supply. These gentlemen are conducting their business with the utmost efficiency, and I do not at all criticise them from their point of view on the course they are adopting. I am only stating the facts as they present themselves to the Admiralty's mind. They have combined gigantic oil properties all over the world. Some of their directors are on the boards of as many as twenty oil companies. In the Dutch East Indies, Sarawak, Borneo, Brunei, New Zealand, Russia, Egypt, Mexico, California, Trinidad—in all those quarters they have already established a control or partial control of the oil supply, and it is their policy—what is the good of blinking at it—to acquire control of the sources and means of supply, and then to regulate the production and the market price. They have long looked towards the Persian field, which is the only large uncompromised area of supply we can discover at present outside America, and, if this Bill and this policy were to fail, there is no doubt whatever in my mind or in the minds of those on whose advice I rely, that amalgamation or merger of the Anglo-Persian with the Shell, on some terms or other agreeable to both parties, under some name very prominently associated with this country, would probably take place in a very little while. We have no quarrel with the "Shell." We have always found them courteous, considerate, ready to oblige, anxious to serve the Admiralty, and to promote the interests of the British Navy and the British Empire—at a price. The only difficulty has been price. On that point, of course, we have been treated with the full rigour of the game. But it seems to me that our relations might become, from our point of view, even more pleasant, if, instead of being compelled, as we might easily be, to accept whatever price they might think it right to charge, we had an independent position.

I say we do not propose to rely entirely on the Persian field. Something less than half our supply from that quarter will probably suffice. We shall, therefore, let me assure the hon. Gentleman, be able to encourage the development of oil-fields within the Empire as Sir Marcus Samuel and Dr. Dvorkovitz desire, and we shall continue to buy from various and widely separated quarters, spreading our custom as we think will best serve the public interest. But there will be this difference—I cannot conceal it—we shall not run any risk of getting into the hands of these very good people. We shall, undoubtedly, be able to reduce our demands on their oil resources if at any time we consider the prices ruling in the market are excessive. We shall be able to do this by simply increasing the quantity of naval oil drawn from the Persian field, and by developing new wells in that field, with—and this is a very important point—the consequent increase in the supply of the by-products of the oil, among which we reserve, in the prime place, petrol. With this leverage at our disposal, we do not think we shall be treated with less courtesy, or less consideration, or shall we find these gentlemen less obliging, less public spirited, or less patriotic than before. On the contrary, if that slight difference of opinion which has hitherto existed about prices—I am obliged to return to that vicious and sordid matter of prices—were removed, our relations would be better; they would become, to use words that have been used in another connection, the sweeter, because no longer leavened with the sense of injustice. That is what I have to say on the subject which is now before the Committee, and which, I must remind the Committee, has to go through all the prolonged discussion of a Bill. But let me say, before I sit down, that I do not think I ought to be scolded for this piece of work. I think we ought to be praised for it.

There is no very great inducement for a Minister or a public Department to embark on a project of this kind. It involves a lot of very difficult work, a good deal of anxiety, and the certainty of being reproached and criticised in many quarters. If there is a failure it is the kind of failure which can be glaringly exposed and definitely condemned. If there is success it is the kind of success which only manifests itself gradually, long after everybody has ceased to care about the original controversy. From my point of view, and from the point of view of the Board of Admiralty, if we took a narrow view of the subject it would be much easier and pleasanter for us simply to sit still, and loll with supine ease, while we watched the absorption of every independent oilfield—to sit still and observe the whole world being woven into one or two great combinations—to treat those combinations with the utmost consideration, to buy from hand to mouth in the so-called open market what we wanted from time to time, to pay the great oil trusts what they would consider an encouraging price, and to present the bill to the Treasury and the House of Commons year by year. It is for Parliament to decide. It is for Parliament to balance the modem element of fair commercial risk which is inseparable from business enterprise of all kinds, against the certainty of overcharge which follows on monopoly. It is for Parliament to balance the trouble and mental exertion unquestionably required from its Members in the process of securing an independent oil supply against the extortion of which the taxpayer would otherwise be the victim. We are confident that Parliament, in facing the difficulty and making the exertion, will only be doing its duty to the State, and we are confident that we have only done our duty in placing these carefully considered proposals before it at the earliest possible date.

5.0 P.M.

I must say that many of us think, with due respect, that the personal imputation with regard to hon. Members' interests in oil companies in the latter part of the right hon. Gentleman's speech comes very badly indeed from the other side. [An HON. MEMBER: "Marconi!"] I think everybody on this side of the House will readily agree with the right hon. Gentleman as to the vital importance of the Admiralty of this country getting independent reserves, free from all combines or trusts in any part of the world. I shall not for a moment conceal that it is not from that point of view that I am going to criticise the contract which has been explained by the right hon. Gentleman. I make no criticism of the Government for desiring to enter into a contract, or for seeking out any part of the world in which they think there is a probable source of oil supply to be used for the all-important purposes of the Navy. I do not propose either to discuss for the moment the question of oil fuel, because, as the right hon. Gentleman has said, that appertains to an entirely different Debate. I am going to take as the basis for the criticism, or rather the queries I am going to put forward, the speech made by the right hon. Gentleman himself on the 17th July, and which is quoted in the Blue Book, on page 11. He said there that in framing his proposition he had taken three governing principles:—

"First, a wide geographical distribution to guard against local failure of supplies, and to avoid undue reliance on any particular source, so as to preserve [and this is the point] as much security and as much expansive power or elasticity in regard to each source as possible. Thirdly, to draw our oil supplies so far as possible from sources under British control or British influence, and along those sea or ocean routes which the Navy can most easily and most surely protect."

I would like to ask are these proposals for the acquisition of these properties in accordance with the proposition which he laid down? I do not believe they harmonise for a single moment with any one of them. He opened his speech by referring to "newspaper nonsense," as he was glad to call it, and by which I suppose he means the newspaper criticism which has been put forward in the last few days by newspapers in this country. I am afraid it is quite obvious from the speech of the First Lord that he has absolutely failed to appreciate the position in Persia, where he is going to sink two millions of money. I am going to direct a few observations to the military side of the question, which the right hon. Gentleman swept out of the way without dealing with at all, merely referring to the general principle if you hold command of the sea, about which he held a great deal of doubt as to the Mediterranean, because he suggested that the oil supplied might have to go round by the Cape. He swept away the whole military question and the whole central Persian difficulty by referring to the fact that if you hold command of the sea nothing else matters. That is absolutely untrue with regard to this proposition. Are you going to be able to defend your properties in Persia by means of the Navy, or, if not, how do you propose to defend them? I happen to know the districts very well. I was sent down there by this very Government to make a report on the trade of that country some years ago. If hon. Members will refer to their maps it will be observed that the only actual oil bearing wells which the Government are going to acquire are at Shustar and Kasr-i-Shirin. All the other green marks on the map, which are very numerous, are of unproved areas, and, therefore, must be taken as purely hypothetical. They may, or may not, be developed, though I think there is very good reason to believe that there is oil there.

Yes, but they are absolutely unproved. I am not going to suppose that oil is not there, but I am going to suggest that you are going to spend two millions of money and you have only got two producing wells, the one at Kasr-i-Shirin and the other at Shustar. The proposition really amounts to this: You are going to invest two millions for the acquisition of those properties which do not coincide for the moment with the First Lord's own principles, which were that they should be entirely under British control or influence, and along those sea routes which the Navy could most easily protect. They are remote from either. They are not under British influence, and they are not under British control. They are not under Persian control, and they are under no control whatever. That is the position with regard to Kasr-i-Shirin and Shustar. What is the position in Central Persia today, and in case of those attacks which the First Lord refers to so jauntily, what is he going to do to protect two millions of the taxpayers' money. The position is that at present those places are situated in a country which has no central control whatever as every hon. Member knows, and in a country which is surrounded by war-like tribes such as the Bakhtiari and others whom we have never been able regularly to control in spite of having treaties and other friendly relations with them, and which is in the hands of turbulent tribesmen whose influence is proportionate locally for their capacity to terrorise and raid, and whose policy is directed by no respect for foreign undertakings or treaties. Even Admiral Slade in his report, which I notice the right hon. Gentleman never referred to, and I am not criticising but simply making the statement, by no means agreed with the rosy view which the right hon. Gentleman took. If you refer to the Blue Book you will find that in his report he says that those difficulties and dangers may be serious, not insurmountable, but serious.

What has the right hon. Gentleman told us as to how he is going to protect the two millions worth of property which Admiral Slade, the man he sent down there himself, says is open to very serious attacks. The right hon. Gentleman smiles. He sketched and passed over rapidly this very important point by making a long speech relative to oil interests, and other matters which do not concern me a rap. I want to get free of them, and so do we all in this House. We do, however, want to know how is he going to defend the money he is going to spend on the proposition now before the House. I would like to point out what is the position in Central Persia. In the West what have you got? You have got a Turkish Army Corps, the 6th Army Corps, a Regular Army Corps, regularly resident in Bagdad and Irak, and on the East of these wells and quite close to them you have got the fierce and turbulent Bakhtiari tribes, favourable at times and very formidable at other times, and very difficult to deal with, and not at all the kind of gentlemen the right hon. Gentleman alludes to in his very easy way. You have got on the North a force of Russian Cossacks who are likely to remain there some time, and Russian control, and you have got these wells within range of the most turbulent of all the Arab tribes, who do not regularly cross into Persia, but when they do everybody knows about it—the Munteph Arabs. Yet the right hon. Gentleman obviously knows nothing whatever about those matters, because he could not have concealed it if he did, and he has made no mention of the great danger in which this investment is going to be placed, and I really think that we ought to have been told something about it.

May I remind the right hon. Gentleman that within recent memory of every hon. Member in this Committee, we tried to send a force of native Cavalry to protect British trade on traditional British trade routes in Persia, over the Kotals to Shiraz. They were shot at, and were compelled to retire by the orders of the Foreign Secretary, or of the Indian Government, or of both, because if we had retaliated on this attack on our trade route it might have involved such an expedition to Southern Persia, that it was a greater business than the right hon. Gentleman cared to undertake. Though we are not allowed to protect or fire a shot in retaliation when our caravans are attacked along a route which has been traditional for centuries, we are gaily going to spend two millions of money in a still more remote and turbulent area, and the right hon. Gentleman comes down and never ventures a word about the matter at all. Let me repeat that I do not, and I cannot answer for anybody else but myself, and I do not imagine many Members on this-side for a moment doubt that the oil is-there. I have seen it in many areas. Nobody denies that the properties are valuable, but what if the property is afterwards shattered and harried, the whole of that country and the whole of your properties is surrounded by material which is far more inflammable than the oil which you seek. What I want to know, and I hope the Foreign Secretary will tell us a little later on, is whether the Foreign Office themselves have considered what they mean to do when they have acquiesced in the purchase of these properties. I think it is right that we should consider this question now before we spend the money, and not "when we have to send an expedition to try and recover it.

It is a perfectly simple proposition. Nobody denies, not even Admiral Slade, that these properties may be attacked, and severely damaged, and put out of action. How are you going to protect them? You cannot appeal to Persia for help. She cannot help you. She has not got anybody to help you with. You cannot and you would not and you could not appeal to Russia to send Cossacks to look after your interests. She would reply, "It is in a neutral zone, which you gave away, and therefore "why should we protect it?" You cannot ask Turkey to send her Sixth Army Corps from Bagdad to protect your interests. Remember what you are doing. You must protect them yourselves. I have only named some of the interests. No imagination is needed to remember many other big interests all around those areas, because it is a very important part of the world. If you cannot defend your property, you are offering a leverage to many other interests, foreign interests, for the harrying and worrying of an industry which they know you are bound to protect if you possibly can. You are giving a hostage, as it were, to Turkey, and you may be giving it to Russia or to Persia, and which you will find it very hard to recover unless you have a scheme, and unless you mean clearly to defend the properties you are acquiring. Is it going to be by the Navy, which you are going to send round through the Mediterranean, which you have recently abandoned, or largely abandoned, for the control of France? The French Press in the last six months has been more interesting reading with regard to the right hon. Gentleman's policy as to the Mediterranean than it has often been, so long as I have read it. Is it the Navy you are going to send out from Northern waters to protect this "vitally important area," as the right hon. Gentleman said, from attack? If not, are you going to disembark a large landing party to protect this oil industry, or who is going to protect it?

You do not deny the possibility of attack. You know that these properties may be attacked, and are in a turbulent area, and who are you going to send to protect them? It must be the duty of the Indian Government to defend these properties; it cannot be the Navy. I have looked in vain in the Blue Book for any report as to their view of the new responsibilities which they are going to be called on to undertake with regard to these important areas. I think we have a right to know what are the views of the Viceroy and Government of India with regard to this matter. Is the Indian Government in a position to undertake new and immense responsibilities—and, remember, by undertaking this that you are actually altering your strategic scheme in the Middle East? That is perfectly true. Is the Indian Government really prepared to undertake defensive operations in an important area thus far north of the area to which they sent British troops in 1856, and which is still further north of the territory which only five years ago Lord Kitchener said he could not possibly hold or defend with the existing forces at his disposal? Is India in a better condition now than she was at the time of the Anglo-Russian Convention to send an expedition or a body of men to defend these areas in Persia?

I do not think that the situation internally in India is so very promising that they can do any more now than they could then. It should be noted by the Committee that none of these wells, except perhaps two, lie within the British zone of influence in Persia. Does the right hon. Gentleman deny that? They all lie in a neutral zone. It is very possible that that is only partly appreciated by many people in this country. It is necessary that we should realise that practically all the wells lie in a neutral zone in which we have from force of circumstances at the present moment less influence than some others who are concerned. It has been said over and over again that at the time when the Anglo-Russian Convention was being drafted, Lord Kitchener's advice was sought in the delimitation of the particular zones of influence in Persia, and he was asked what area he could possibly defend. It has been over and over again stated, and I have never seen it denied—I have every reason to believe that it is true—that Lord Kitchener said, with the forces at his disposal, he could not possibly hope to defend a greater area than that which was incorporated as the Southern British zone in the Anglo-Russian Convention. A great many of us criticised the terms of that Convention in this House. Never have we been more abundantly justified than to-day, when we have the Admiralty for the vital needs of the Navy having recourse to the investment of a very large sum of money, which I have no doubt will be followed by still larger sums of money —there is no doubt that that must be the case, and very properly so, if it is a fair business—in an area the virtual control of which we held for 150 years before this Government came into office, but which we have since abandoned.

I am absolutely in favour of our seeking an oil supply independent of all trusts, in any part of the world, outside or inside the British Empire, where it can be found and properly controlled. I say "properly controlled," which this cannot be, or, at any rate, it has not been shown that it can be. I believe, furthermore, that the Government are hoping to find large supplies nearer India than Shustar or Kasr-i-Shirin. Show us the oil well or the oil spring which you can control by the Fleet from the coast of the Persian Gulf, and you will certainly have my support for what it is worth in the Division Lobby. I believe that you can find such springs. You do not need £2,000,000 to prove a couple or more springs near the coast. £50,000 would do that. Would it not have been more business-like to have first proved these properties which are capable of defence before coming to the House? If you had proved these properties and found that you could acquire an invaluable source of oil supply which you could properly control with the means at your disposal, you could have had in case of need not £5,000,000, but £50,000,000, because the defence of India is worth fifty or many more millions. I think that we ought to ask, not only the First Lord of the Admiralty, but the Foreign Secretary, for a great deal more information in regard to the means and measures which he feels capable of taking with regard to the Central Persia situation. The right hon. Gentleman has said nothing. The First Lord of the Admiralty has said nothing. If they fan give us no assurance whatever that they are not going to embark, as we believe they are embarking, quite lightly upon a new and dangerous precedent in a very turbulent area, if they cannot show us that they have adequate means of defence for the £2,000,000 which they are going to spend, all I can say is that I think this matter ought to be de- layed until they can give us that information, or until they prove some other area.

I imagine that the course of the Debate will very largely follow the lines taken by the hon. Member opposite (Mr. G. Lloyd), who has just contributed an exceedingly interesting speech. He is in the advantageous position of having gone over the country. Very few Members of the House are in that position, and we have to express our doubt in a more tentative way than he has expressed his. But whatever our experience and knowledge may be, the whole Committee will support the hon. Member in his request for further information from the Foreign Office. I am bound to confess that, so far as I am concerned, I would be willing to give the Government great powers indeed if they could guarantee a supply of oil which would free the Admiralty from the squeezing of the oil trust. Probably the whole Committee would agree to that. We will take a certain amount of risk; we will take a good deal of risk; we will supply the money; we will do whatever is necessary, provided the Admiralty is going to be free from the squeezing of this oil trust, which has been forcing up prices to such an unfair and abnormal degree recently. Therefore, I want to say quite clearly that, so far as we are concerned in the various statements regarding the oil trust and the responsibilities of the Government, we accept those statements, and we support them quite frankly. For instance, the right hon. Gentleman said that if the Government made the fortunes of the company, they ought to share in them. We agree. That carries us a good long way. I should be in an exceedingly weak position in this House in even trying to resist such a proposition as that, and I shall not do it.

Another proposition was something to this effect, that it was the duty of the Government to do everything it could to break monopolies. I agree. I should like to say, in connection with this particular agreement and the intention to break the monopoly, that I hope the Government will not hamper the Anglo-Persian Company in putting upon the market as liberally as it possibly can every species of by-product produced as the result of its operations. I have read everything I could lay my hands on that has been produced on this subject in connection with this controversy, and one of the conclusions to which I have come is that the letters and speeches, interviews and pronouncements, made by Sir Marcus Samuel and his friends seem to indicate that they are not so much opposed to the Government going in for making itself directly responsible for the production of pure oil, but that they are far more concerned with the marketing of the by-products. I hope that the Government will give them no mercy. The Government will certainly not do its duty to the country and to the consumers of these by-products if it shows the least mercy in that respect. It has been stated that the same objection would not be taken to this agreement if the oilfields were within British territory. I doubt that very much indeed. It is said that the Shell Company, which is doing its best to control Trinidad, which has got the only promising field in Egypt under its control, and which owns that factory which one sees at Suez, would have offered no objection when this agreement was made if the Government had gone into British territory. The extract which the right hon. Gentleman read from an oil paper complaining of the American Admiralty's scheme shows that if the action of the Government or of the Admiralty had been inimical to the interests of the oil monopolists, it would have made no matter whatever whether they went to Trinidad, to Egypt, to Persia, to Borneo, or to Burma; it would have been all the same: the magnates would have opposed any action that the Government had been compelled to take. The Empire and the Union Jack are usually dragged into this controversy, not for patriotic purposes, but for the sake of profits and business arrangements.

I have not been chary in my criticisms of the First Lord in days gone by, and if he had said that to-day—

I should have applied these remarks to him in the same way as I have applied them to those who have been saying that recently. The fact is exceedingly simple. If we are going to protect ourselves in the purchase of a commodity by becoming the owners of that commodity, we must go where the commodity is to be found. We cannot get out of that. If it is true, as the First Lord says, that the available oil-fields of Trinidad, Egypt, and so on are all in the hands of the monopoly companies—[An HON. MEMBER: "They are not!"]—practically in the hands of the monopoly companies [An HON. MEMBER: "That is absolutely false!"] That statement has been made, and I have never seen it contradicted with any sort of reason. It remains true to-day that these monopoly companies have sufficient economic and marketing power to force up prices to levels that are not economic except upon a monopoly basis.

I shall be exceedingly interested to hear the hon. Member try to prove the impossible, as I have heard him try to do in previous Debates. As a matter of fact, no one who knows anything whatever about the price of oil will get up here or in any other assembly and say that the prices of oil are at the economic level they would be if there was no monopoly pressure on the market.

I shall have the greatest pleasure in doing my best to listen to the hon. Member in his impossible task. So much for the economic side. We come back to the points of interest and the considerations raised by the hon. Member opposite (Mr. G. Lloyd). This contract is far more political than economic in its significance. Whoever has read the articles which have appeared in the "Times" since this Agreement was issued must have a suspicion as to what will happen. We must assume that there will be a certain section of politicians in this country who will do their best to use this economic Agreement to bring about a repartition of Persia. That would be most disastrous. I am perfectly certain that if that result were the inevitable consequence of this Agreement, the Committee would not give the right hon. Gentleman the money for which he asks at the present moment. I should like to ask the Foreign Secretary in that connection: Has he approached Russia at all in reference to this Agreement? I think we had better know. Before this Agreement was settled, did the Russian Government know about it I Was it submitted to the Russian Government? Did the Russian Government consent? Have there been, any negotiations with the Russian Government regarding this Agreement? I do not merely mean has there been a quid pro quo; I mean has there been a simple consent, a statement by the Russian Government that they have no objection, or rather, have not any opposition to the British Government taking up those £2,200,000 shares of one kind and another. Suppose there is no agreement with Russia at all, suppose Russia has not been recognised at all in the transaction, it is perfectly clear that if anything were to happen such as was indicated as possible by the hon. Member who preceded me, and which compelled us to put troops into this neutral zone in Persia, it would completely upset the Agreement. Russia would undoubtedly move in her own interest, and advance her own aims, whatever they may be. If there is any risk of that, and of our having to protect our property by the use of troops, or by the use of military police sent from India, or by the use of any force in our employment and subject to our control, then the whole condition and the whole balance of Persia is upset.

Suppose the right hon. Gentleman the Foreign Secretary could even assure us on that point, there is a residuum of reasonable suspicion—I will not put it higher than that—that must remain in our minds regarding the Russian counter-move to this move of ours. A country that is establishing post offices in a country where she has no business to establish post offices, who is collecting Customs where she has no business to collect Customs, who is assuming protection over Persians who are not her subjects, who is drafting in soldiers contrary to her pledge, and keeping them in contrary to her promises—when that sort of thing is going on just over the border of the mountains that are the most northern mountains of the Himalayas—nobody who sits down and considers the possibility of the situation can rise from that consideration without having a very considerable residuum of suspicion left in their minds regarding the whole transaction. Undoubtedly, the Government, I think, ought to make the thing clear, so that we may understand exactly where we are if the Committee implement this Agreement, which gives Russia a new opportunity of making new and important moves in Persia. Take the situation in Persia itself. This is a commercial transaction. I can quite conceive one of the answers that might be made by the hon. Member who preceded me would be this: "If the Anglo-Persian Oil Company were not controlled by the British Government—because the British Government is putting in a controlling interest in the capital—if that company has a substantial contract to supply oil to the British Navy, and those things happened which we think likely, even then political consequences might follow." In the event of the Anglo-Persian Company's property and wells being attacked by the Bakhtiari, or any other of those troublesome tribes, and in consequence the company not being able to fulfil the substantial contracts which it had with the Admiralty for the supply of oil, I think a good many hon. Members opposite would begin to pester and pepper right hon. Gentlemen on this side, and ask why they were not interfering to protect the property of the Anglo-Persian Oil Company, more particularly as it had contractual relations with us. So I think, as a matter of fact, that the problem of dangers is one of degree.

I admit, and I think it is a serious matter, that the Government, as a Government, should take the controlling financial interest in this company, but I am bound to admit at the same time, looking all around the question, even if it did not put a single brass farthing into the capital of this company that the things which hon. Members fear might happen would probably happen under similar circumstances. All commercial concessions, especially with Government money in them, have a very unhappy knack, in the course of time, of becoming territorial acquisitions. So far as I am concerned we should certainly resist that as strongly as we possibly could. The unsettled state of the country is admitted. The hon. Member gave a very black picture of the outlook, and in paragraph 38 of Admiral Slade's report, and in various other parts where the subject is referred to, but particularly in paragraph 38, it is quite clearly stated by Admiral Slade and his coadjutors—who have submitted an exceedingly interesting report of the country, both geologically and politically:— is admitted that the pipe-line now has got to be policed by two sections of the tribes, the upper end by the Bakhtiari and at the end of their boundary by another tribe, which is responsible for it ought down to its outlet at the refinery. A question which I should like to put to the Foreign Secretary is this: Is this situation likely to weaken or strengthen Persia? I am all for the strengthening of Persia, not on sentimental grounds, but because everyone who has studied the strategy of Indian defence must see that the moment that Persia goes as a buffer State—as an independent buffer State—then that moment the whole of our arrangements for the defence of India go by the board, and we have got to start them afresh, at an enormous increase in men, at. an enormous increase of expense, and, what is worse than both of these, at an enormous increase of risk. Therefore I am in favour of the strengthening of Persia. I think, as a matter of fact, this arrangement might do one or other of two things. I can imagine that if the Foreign Office, and the India Office working with it, had a clear policy in their minds that they were going to strengthen the influence of the Persian Government and develop its resisting power, and so on, that this concession is going to give them the necessary leverage in order to do it. What has been the policy of the company up till now, so far as it is revealed in these Blue Books? It has policed and protected its property by subsidies to the local and neighbouring tribes. It has not dealt with the Persian Government. [An HON. MEMBER: "Yes!"] I have read the Blue Book. If I am wrong, I shall be very glad to be corrected, but that is the impression I have taken from my reading, that the whole of the policing and protecting functions that the Anglo-Persian Oil Company has asked of Persia have been confined to the local tribes, and that they have done nothing to strengthen the central Government in this matter. If I am right, "I think it is a very wrong policy.

I think that the Government in now assuming responsibility for the company should try to supplement it by the other policy of strengthening the hands of the Persian Government itself; because what is going to happen? Supposing the pipeline in the Bakhtiari district is broken, supposing some of the Bakhtiari tribes break their agreement to protect the pipeline, under blackmailing conditions, what happens then? The company immediately fines them, and imposes a punishment in some form or other on that section of the tribe that is responsible for the policing and care of that particular part of the line that has been broken. What does that mean? That the Government has got control of that company, and that means an expedition. You can call it what you like; it means a military expedition. It may mean an expedition of police, it may mean an expedition of special levies, but it is in the nature of the thing which we call a military expedition. If the Persian Government is responsible for the policing of that line, then the expedition and the punishment would not be inflicted by the British Government acting through a commercial company, but by the Persian Government itself acting as a Persian Government and responsible for law and order throughout the whole of Persia. I know the conditions there. That is the strength of the arguments of the hon. Member to which we have just listened.

What I mean is this: If this policy of strengthening the central Government is really the policy of our Foreign Office and India Office, then the concession might be used for that purpose, and I think we ought to have a declaration in respect of that before we vote this money. What is the view of the Foreign Office regarding the functions of the Persian Government in maintaining law and order in this particular part of the neutral zone where the oil-fields are, and what steps are they going to take in order to carry out their policy and give it a fair chance of affecting the position of the whole of Persia? A help to their policy, if they are in favour of it, would undoubtedly be the employment of the Persian gendarmerie, generally known as the Swedish gendarmerie. If that is going to be done, if as a consequence of this, the gendarmerie are going to be supported, and if the British Government is going to stand behind the Persian Government in developing the gendarmerie, if it is going to do what Mr. Schuster appealed to it to do in days which are now apparently very far behind us, and Mr. Morney is now trying to get it to do—then if we get a statement to that effect, that will go very far to reconcile me, at any rate, to accepting the risks which will still remain—which are bound to remain after this agreement has been come to.

There is one further consideration which I must mention before I sit down, and that is that we must insist upon the Government fulfilling the pledge which the right hon. Gentleman gave to-day, that this Persian experiment is not going to mean that the Government is going to draw all its oil from the Persian fields. I would have preferred that this experiment had been made on a home coal-field, but the reasons against that, I suppose, are that the Government cannot wait. I think that is quite made out. Action must be taken immediately, because simply as an oil-field—quite apart from those political difficulties—as an oil-field Persia gives a very special security for the investment of the money that the Government propose to put in. I do not want now to develop that. Hon. Members may dispute it, but I assume it, and I accept it for the purpose of my argument.

At the present moment everybody who is interested in this subject knows that there are at least three or four very promising experiments being conducted. One of them has gone beyond the laboratory stage—in the production of oil fuel from coal under distillation at low temperature. Indeed, the increase which is going to take place in the consumption of oil fuel is undoubtedly going to give a great impetus to the perfection of this process, and the coal-field will begin to assume two characteristics. The first will be the characteristic of the mining of coal to supply the coal market, and the other will be that on every coal-field, more particularly, I am told, in South Wales and Yorkshire, there will be enormous manufactures for the production by this distillation process of oil fuel and the various cognate and consequential products from coal brought up from the earth. I think the Government will be very well advised to keep its eye upon this process, not merely for the purpose of stimulating them by buying some of the products, but for the purpose of actually acquiring possession of substantial coal-fields, erecting the necessary plant for the production of fuel and for the production of oil fuel and the laying of the necessary pipe line to bring the oil to the various depots where storage takes place, and also, I think, in the interests of the country, the Government will be well advised in this way to enter the competitive market with the monopolists for the by-products like petrol and so on, in order to protect the consumer against the further operations of these gentlemen, from whom we have experienced so much bitterness and loss during the last five or six years.

I hope we will also have a clear statement that if we consent to this agreement being entered upon, and if we vote this money, we shall get a pledge from the Government that they, at any rate, are going to acquire property in the British coal-fields, which, after all, in time-of war are the only absolutely secure source of supply when oil supply is to be so vital. Therefore my position is this, that from the business side and from the supply side I agree with this. It is exactly upon the lines that the Labour party will go. It is breaking monopoly, acquiring your own supply, working it yourself, and is not intended to squeeze the consumer, but is in the interests of the consumer, including ourselves. I hesitate with regard to the political consequences. I think they could be avoided: if the Foreign Office and the India Office-would take the trouble to devise a policy and to follow that policy steadily and consistently, which will avoid them. I am. bound to confess, from our point of view, that the action of the Foreign Office, up to now in this direction, is not very encouraging. It is now brought face to face with a new aspect, and if it would face it firmly and with far more determination than it has shown in Persian affairs up to' now, it would avoid much, and although the risks will never be got over, they would be reduced very substantially. I want now, in this very first stage of the Government's action in acquiring property in the production of oil, to ask for a statement as to what the Government's intention is as regards the supply of oil from our own coal-fields, and to supplement that by the expression of opinion that if the Government is wise it will apply precisely the same economic doctrine to our Home coal supply that it is applying to the oil-fields. of Persia.

Perhaps it would be convenient if I inform the Committee now that the Amendments placed upon the Paper are not in order. I sent word to the hon. Member for Rutland two days ago with regard to his Amendment. The hon. Member will, of course, carry out his purpose by voting against the question now before the Committee.

Of course, I accept your ruling, Mr. Whitley, and I am fully aware I cannot move the reasoned Amendment that stands in my name. I propose to offer the Committee some considerations why they should weigh very seriously and carefully the step they are asked to take this afternoon. I do not intend to speak on this question from the party point of view and I do not propose to try and make any party points whatever in connection with the question. It is primarily a naval question, and I propose to deal with it on those lines and no other. As to the remarks made by the hon. Member for Leicester, I will not go into the subject. I conceive that the only reason for this arrangement upon which it can be justified to the Committee is a great and vital urgency that oil should be provided somewhere, that the Admiralty are driven into a corner and cannot get their oil unless they make this arrangement, and that, in the circumstances, it is the best arrangement they are able to make. That is not the way the proposal was put before the Committee by the First Lord. He came before the Committee and said he was being squeezed by the producers. He said that was the ground and the only ground. I do not believe that is the fact. It is well known in this House that the Admiralty proceeded, twelve or fourteen years ago, to investigate the whole subject of oil for driving warships, and that they allowed this investigation to lapse.

I am not, as I say, trying to make a party point, and do not intend to pursue the subject upon any such lines, but about the year 1907 they commenced again to lay down oil-driven vessels, and there was a great hurry in building oil ships between 1909 and the present day. Any business concern that would lay down plant or machinery, or build railways, would take care to provide power for driving them. That is exactly what the Admiralty have not done. They have not had the foresight to see that they were making a greater demand upon the development and resources of the oil companies than the oil companies could meet and supply, and instead of anticipating and making their contracts so that the oil companies could put down the plant necessary to produce the oil at the standard required by the Admiralty, they proceeded to squeeze them, of course, with the inevitable result that supplies did not expand and prices increased; the process has been very considerably helped by the constantly rising shipping freights. I know nothing about oil, but I do know something about freights from California to this country. Some years ago I could get such freights at 24s. and 27s. 6d. and £8s. During the last two years we have had great difficulty in getting freights under 50s. for the same service. The freights very nearly doubled, but they have now fallen very considerably. It is not the action of any shipping ring or oil. ring, but it has been the demand upon the shipping world which enabled the owners, working one against another, to get those, prices. The ships were not there, and you had to offer those prices to get those-services.

The Admiralty have laid down these ships, and here I make a complaint which has been made before. Parliament has not been consulted, and has not been allowed any expression of opinion upon the subject. There has been too great secrecy over the whole business. The Board of Admiralty laid down battleships and light cruisers, and. so forth, as if they were doing some great and clever stroke, and we found ourselves saddled with an expenditure of £15,000,000 in this direction without the people of this country being informed, and now we have to face the difficulty of providing oil to drive these vessels. That is the position in which the Government find themselves to-day, and in that sense the First Lord is justified in saying this is a pressing question. We have got to find the oil, but we have never been consulted as to whether this policy was wise, and we have never been given an opportunity of expressing an opinion upon it until the country heard it through the Committee. I say, also, there has been far too great secrecy about this dealing in oil. I do not like it. If business is done in a business-like manner, it appears to me, there is nothing which need be concealed from this House. There has been a Royal Commission to inquire into oil fuel. Their Report is to be squashed and not submitted to this House. We are not to see it. The First Lord has made complaint about the price he has to pay for oil fuel. He never told us about it. We are absolutely without knowledge of the facts. He has not told us at what price he could get his contracts from the oil ring. He comes down and says, "I am squeezed by the monopolists," but he gives no price and no facts whatever. I am quite certain if any director went to a meeting of shareholders he would find himself in a very difficult position if he treated the meeting in the same way that the First Lord has treated the House to-day. We are asked to consent to the ratification of this contract, which probably is according to the terms of the contract, but it is expressly stated in the contract that the Agreement is subject to the consent of Parliaments, and that Parliament is perfectly free in the matter. But we are not told at what price the Admiralty is going to get its supply from the Anglo-Persian Company. Some other great nations, at any rate, deal with these matters in a far more business-like manner. I believe that the Italian and Japanese Governments are considerable consumers of oil, and both Governments called for public tenders, and after they had come to a decision they announced to Parliament that they had made contracts at certain prices. The Government are asking us to enter into this contract absolutely blindly. They are giving us no details or information whatsoever, and I certainly, for one, could not advise any person to enter into any contract without having far more information as to what he is going to get.

6.0 P.M.

I ask the Committee to consider what they are undertaking in this matter. They are going to expend under this Resolution a very large sum of money in a very precarious region. There are other facts connected with this matter which have not been mentioned by my hon. Friend. There is the difficulty of navigation on this river, which is barred by very formidable shoals, and only vessels of comparatively light draught can get across it even at high water. Twice a month the entrance to the river is barred even to the comparatively small ships which now use it, and if great quantities of oil are brought down the river and a great business is to be done from that source, there will have to be considerable expenditure upon improving the navigation of the river. You will have to have considerable dredging, or else some other new site will have to be found, a port constructed, new piers built, and so forth. The First Lord of the Admiralty has not told us anything as to what this money is to be expended upon. The right hon. Gentleman did not tell us where the company in which he wants us to invest this money is going to spend any portion of it, or whether they are going to spend it upon any other matter except the laying down of another pipe-line. The right hon. Gentleman points vaguely to a great region reaching nearly to the Russian zone and right down to the south entrance of the Persian Gulf. We do not know where this expenditure is going to be made, and such a proposal as this ought not to be sanctioned by the Committee.

I ask hon. Members to consider what we are rendering ourselves liable to by this Resolution. It was stated at Question time to-day that there was a large sum owing to the Burma Company on account of a loan of preference dividend to the shareholders, and that the Anglo-Persian Oil Company still owes preference dividends to the amount of upwards of £30,000. That money will have to be found, and also the liability stated in the Blue Book. Until those debentures are redeemed the British Government as the controlling partner will be responsible for the management of the property of the debenture holders, or otherwise they would oust the Government. But is this going to be the end of the expenditure? I ask the Committee to look for a moment at another side of the question. We are asked to-day to embark upon an undertaking by the Government which has never been assented to before in this country and which is quite new. The Blue Book states that this is only carrying out the precedent of the Government manufacturing its own cordite and munitions of war because they have factories for this purpose and invest money in them to supply the Government and no one else, but this proposal is something very different. The Government are going to acquire shares in a commercial undertaking, and the consideration is that they are to have a contract for certain quantities of the oil produced by this company. The control given by the agreement with the Government over the company is a control of policy and not a commercial one, and so long as the finances of the company are adequately managed and do not infringe the agreement as regards general policy; so long as they do not part with their concern to any other concern of which the Admiralty does not approve, there will be no power of veto.

What does that mean? It does not mean that the Anglo-Persian Oil Company is going into the oil market as a philanthropist to deal in oil in order to bring prices down. If the Government have made a proper contract, the company will have to get the full market price for all else it produces, in order to pay dividends to their shareholders and make their financial position more satisfactory, because it is now very far from being sound. This company must earn what it can out of the conditions of the market, and the agreement does not give the Government any power to veto that arrangement. Therefore we are being asked to invest enormous sums of public money in a commercial speculation. That is what this arrangement amounts to. I contend on these grounds that we ought not to give our consent to the proposal which has been laid before the Committee. And least of all should we give consent to this proposal when vast sums of public money are to be invested in a district so precarious as that where the oil wells of the Anglo-Persian Oil Company are situated. If the Admiralty were proposing a scheme to supply all their oil needs within British territory, I believe this Committee would go far in supporting them, but I do object to this enormous expenditure upon a speculative commercial undertaking when that expenditure is to be made in the Persian Gulf, and we have no evidence or knowledge whatsoever before this proposal is put before the Committee that every effort has been made to develop the oil supplies of the Navy within the boundaries of the British Empire. The First Lord of the Admiralty has avoided that point. He has talked about certain wells connected with the great oil concerns in various regions, but he has not attempted to convince the Committee that there is not oil still left in those regions which has not been developed.

The First Lord does not say to-day "the urgency is so great that I must ask you to make this arrangement." He thinks he can get the oil he requires, and in spite of the arrangement which is now proposed he will still have to go to these trusts and big oil companies; in fact he says that he intends to do so. What will be his position with those companies in an emergency? I think this is a point which is well worthy of the consideration of the Committee. The right hon. Gentleman is now treating these companies in anything but a conciliatory manner, and his gibes and jeers will only make his position very difficult. The right hon. Gentleman complains that the oil companies are already too powerful. But what will be the First Lord's position when he has to fall back upon these very men whom he has been flouting to-day? He will have to go to these men who control the oil supply, and then what will these oil companies do? Of course they are going to make what profit they can. They are going to sell their oil, and they will be under contracts in many other quarters. They will develop their supplies to meet their contracts, and the right hon. Gentleman will have to take the leavings. Would it not be much better for the First Lord to deal with these things as any commercial man would deal with them, by making a contract far enough ahead to enable those with whom he contracts to lay down a plant and machinery and develop their resources to supply the Admiralty, and he should make it worth their while to do so. What has been proposed appears to me to be one of the most unbusinesslike, unsound and unthrifty arrangements which has ever been proposed to the Committee of this House. If the First Lord would say "I am in a difficulty and in a hole, and delay has landed us in an emergency, and this is the best way out of it," then, little as I like it, and opposed as I am to the principle of this proposal, I would not withhold my consent. But as the matter has been placed before the Committee I much regret that I shall have to give my vote against this Resolution.

The hon Member who has just spoken has dealt with the business or financial side of this question, and although I do not quite follow his arguments, I judge by his conclusions that he takes a very different view of this proposal than I do. So far as the business side of this question is concerned, I consider that the Government have made a good bargain and as a businesslike proposition I regard it with favour. But there are other points of view to take into account. In addition to the financial side there is the strategic point of view, and the point of view of foreign policy. Whatever may be said on the financial question and the business side, those considerations pale in significance compared with the very grave proposition with regard to our foreign policy. I do not say that the First Lord of the Admiralty had a complete open choice if he were to secure a sufficient supply of oil for the Navy, but as the facts present themselves to-day he has hit upon a centre of supply which really can be said to be the danger zone of the whole world. That seems to be exceedingly unfortunate. It is as if he had stored his gunpowder near some furnace. The furnace for the present moment is smouldering and does not show any signs of activity, but at any moment it may blaze up, and then I think we shall find ourselves in a very unfortunate position.

I listened to the hon. Member for Staffordshire (Mr. G. A. Lloyd), who is familiar with that part of the world, with very great interest, and with a considerable amount of agreement, and I am very glad that he at once brought forward that view of the question, because I was very much afraid that we should occupy our time in discussing the various complicated, financial and business points which are really of very little account when one is confronted with such a grave case as we have in the region of our foreign policy. The map which accompanies this Blue Book has a very grave omission. It really does not delineate the various spheres of influence, and, therefore, it does not show us exactly where these oil-fields and prospective oil-fields lie, but the majority, I think, will be found to be in the neutral zone, and some of them actually in the Russian zone of interest. The extent of the area covered is 500,000 square miles, and the point that the hon. Member for Staffordshire raised, which is really the crux of the whole question, is how we are going to defend this huge area. Will there be any necessity for defending it more by policing than at present? We know what the state of Persia is at present. We know that ever since the Anglo-Russian Convention of 1907 we have been weakening the Government of Persia. My hon. Friend the Member for Leicester (Mr. Ramsay Macdonald) said that he would like to know whether conceivably this subsidising of the Persian Oil Company might not somehow be utilised with a view to strengthening the Persian Government. I entirely fail to see how that can be done. Even if it had been our intention during the last six or seven years to strengthen the Persian Government we have dismally failed, and to-day they are in a very parlous state.

This region may have to be defended against outbreaks and attacks by the various tribes which inhabit that part of Persia. Those tribal attacks have been made the excuse in the North for a gradual increase of Russian troops. We do not exactly know how many troops there are in Northern Persia, but we know that any ostentatious withdrawal of troops from one corner is followed or accompanied by a surreptitious increase of troops in another, and, in spite of the statement of the Russian Minister at Teheran, to which I called the attention of my right hon. Friend the Foreign Secretary in a question yesterday, that the policy of the Czar and the Russian authorities to withdraw the entire Russian Army from Northern Persia, we know quite well that it is the policy of Russia to remain there and to make the tribal attacks and the want of good government in Persia a sufficient excuse for strengthening her hold. We are confronted with that in Northern Persia. We have had no particular reason to strengthen our position in Southern Persia, and we have been watching this process going on. Now we are taking a plunge. We are taking a leaf out of the book of Russia. My hon. Friend the Member for Leicester asked whether the Russian Government has been consulted. I suppose that they have been. Most probably they have given their consent, and most probably they have asked for a quid pro quo, whatever that may be. There is a curious silence in the Russian Press at the present time with regard to this move on the part of His Majesty's Government—a rather suspicious silence. They do not dare to express any opinion until they have leave from official quarters. There can, however, be no manner of doubt that we are working towards a partition of Persia. We are now going to have such strong interests in the neutral zone, as well as in that south-eastern corner which is in our sphere, that we shall find ourselves gradually forced forward to bring in troops from India, and possibly to bring in troops from this country, in order to defend the great financial interests, and what the First Lord of the Admiralty called the supply of a vital commodity for our national defence.

I do not think that this ought to be done lightly, and the First Lord of the Admiralty, in his eagerness to conclude such a bargain on the business side, has evidently disregarded entirely the side from the view of foreign politics. I should have rather left this matter primarily in the hands of the Foreign Secretary, because I think he would have seen what dangers may arise from the position we are taking up. We all know that financial pressure is the mainspring of discord throughout the world, and that very financial pressure which has been non-existent in Persia, so far as British influence is concerned, is now supplied, and whether the right hon. Gentleman the First Lord of the Admiralty can find sufficient supplies of oil for the Navy elsewhere in case of disturbance, in Southern Persia he will find that the financial pressure behind this enterprise will be so great and so strong, that we shall be forced to send troops of some sort or another into disturbed regions where we have property which is so costly and valuable. We have not got to look forward to any sudden formal attack from Russia. That is not the point. That may not be in the least probable. No war has arisen in that way. It is by just all these little disturbances which we find it exceedingly difficult to put down, and which cannot be dismissed negligibly that the greater issues are eventually brought about.

Then, although it may perhaps be regarded as somewhat absurd, I cannot help saying just one word from the point of view of Persia. It is almost amusing the way the great Powers, when discussing a matter of this sort, consider that they are conferring an untold benefit on the country in question, and the interests of that country so far as its population is concerned are entirely disregarded. I suppose that the Persian Government has been consulted, although I daresay that would be considered an unnecessary formality. It has been the policy of the British Government too often to concentrate attention on the material development of a country without sufficient regard to the welfare and the liberties of the inhabitants to whom that country belongs. That has been too often our policy. It is a matter of small moment to any hon. Member in this House how the Persians will fare. We think in our arrogance that, of course, British capital and British enterprise can do nothing but confer an immediate benefit and advantage on a country in such a backward state as the Persian Empire. That may or may not be the case. Persia had a complete civilisation when we were walking about in skins. [HON. MEMBERS: "Woad!"] Persia is not destined to be crushed between the upper grindstone of Russia and the nether grindstone of Great Britain. This unfortunate country has had very little chance of asserting itself, of recovering, and of getting a good Government established, because there has been perpetual interference and intervention from these two Powers by way of defending and strengthening her. I only say that in establishing ourselves in 500,000 square miles of territory in another country we might just give a passing thought to the interests of the inhabitants of that country. We find ourselves to-day, as usual, on a foreign question, having a purely academic Debate. Nothing we can do can alter what has been done.

It may be subject to ratification, but I cannot myself see this House protesting against a business arrangement which has been so far practically concluded. I am not making any complaint against the Government. I only say that it is the practice of the House on foreign questions to present the accomplished fact. They do not come down here and say, "It is our intention to do this. What is the opinion of the House?" They come down here and say to us, "We have done this, and we are waiting your sanction." However that may be, and however that may be altered in future years, personally, I find myself torn in two, because, while approving of the business part of the arrangement, I consider that the First Lord of the Admiralty has taken absolutely no account of the importance of the political situation, and I cannot help feeling that those who are watching matters in this part of the world will consider that it is most unfortunate that of all the regions which could have been chosen this particular part of Persia should have been chosen, where any additional complication may at any moment produce a grave and complicated situation so far as this country is concerned.

The hon. Member who has just sat down really went astray in the last part of his speech by suggesting that this matter comes before the House in its present advanced stage because it is connected with foreign politics. That is not so at all. It comes before the House as a contract in precisely the same stage and in the same way as if it had not been connected with the Foreign Office at all and if it had been purely a Home thing. It would have been the same if I had not been in the House. Foreign policy is merely incidental to it. It is not the determining factor in the form in which it comes before the House, and, had it not been concerned with any foreign country at all, it would have come before the House in exactly the same way. The Foreign Office has plenty of burdens to bear—more, I suppose, than any other Foreign Office in the world—and I do not think that the hon. Gentleman ought to add to them this particular burden. Really the queston of foreign policy has nothing to do with that particular point, and I should deprecate this question which, only incidentally, is one of foreign policy being made an opportunity for discussion of the whole question of British policy towards Persia, which is a very large field, though I perfectly admit that a discussion on the question of policy, as far as it bears on this particular contract, is not only justifiable but essential to a proper debate on this question. I do not propose to attempt to cover the ground of the whole question of British foreign policy with regard to Persia, and if I confine my remarks as far as Persia is concerned to the declarations quoted by the hon. Member for West Stafford (Mr. George A. Lloyd), and other hon. Members which bear closely on this particular question, I hope no complaint will be made afterwards that I have not dealt with the larger aspects of the Persian question, and have turned the question into one of Persian policy rather than one on the merits of this particular policy.

I will take the speech of the hon. Member for West Staffordshire first. It was a double speech—I do not mean in the sense of being disingenuous—but it seemed to be in two separate parts. The first part of the speech was founded on the assumption that there are only two oil wells on which we can count in this particular contract, and therefore it is a contract on the expectation of a supply of oil from certain wells 150 miles from the coast. In that part of his speech he said, "Consider how difficult it would be to protect the pipes, and how serious a matter it would be if there were local disturbances!" He was perfectly justified in saying that this is a part of the world which is liable to local disturbances. Some parts of Persia are even worse than this part, but it is no doubt liable to local disturbances, and it is inhabited by tribes which have been turbulent in the past and may be turbulent again. But I do not think, so far as local disturbances are concerned, that, if the worst came to the worst, the task of protecting 150 miles of pipe would be so serious as the hon. Member made out. He took as an analogy the difficulty our troops experienced in protecting the Bushire-Shiraz trade route. But our troops never attempted to protect that trade route—indeed, they were ordered not to do so. They were sent to Shiraz solely because of the reports of actual danger in the town, which rendered it necessary to protect British life and property there, but they were told not to attempt to control the trade route, and we never endeavoured to do so.

I was aware of that fact. The point I was trying to make was that we have not been able to protect British merchandise on the main trade route for many years past, and I instanced the fact that the Cavalry regiment was shot at on its way to Shiraz.

The impression conveyed by the hon. Member's speech to the mind of anyone who heard his statement just now must have been that we have not been able to protect the trade route, and that the two regiments sent to do it were unable to. I want to make it clear that the force was ordered not to attempt to do it, and my answer to the statement that we had not been able to do it is simply that we have never tried. We have preferred to rely on helping the Persian Government, and on the "work of the gendarmerie. We have not tried because we have preferred to try other methods which were purely Persian methods taken by the Persian Government. The point is not whether we have done right or wrong in not protecting the trade route, but whether, if we were put to it, we could have done so, and that is a very different point. We have never tried, because we have been most reluctant to undertake operations in Persia, and because we did not want to do anything which would have the appearance of weakening the Persian Government. Then too, we have not wanted to commit ourselves to operations which might be small in the beginning, but might become large later on. If you are dealing solely with the point whether we could, in an emergency, protect 150 miles of pipe by British troops, I say it would not be such a very formidable operation, it would involve perhaps the use of two brigades if the worst came to the worst.

But the worst could only arise under certain conditions, some of which I regard as impossible. One of the conditions, of course, would be that every method of protecting the pipes through the tribes themselves, or through the Persian Government had failed. That is not an impossible condition, but I think it is an improbable one. Another condition would have to be that the emergency was so great, and that the necessity of getting oil supplies and preserving them uninterrupted for the Admiralty at this particular place, was so great that there was no time to deal with the matter by other methods. But my right hon. Friend has said that the Admiralty does not propose to put itself in the position of, in any emergency, being dependent on this source of supply alone. He wants it in time of peace so as to be able to control prices. It is not as if this is proposed as the source of supply upon which the Admiralty is going to be absolutely dependent, so that at no moment could it allow it to be interrupted. My right hon. Friend said that even in war this supply and others would still be reserved, and never at any time could he imagine an emergency arise under which it would be positively necessary to take sudden measures. It would mean, of course, in that case, that the Admiralty reserves were exhausted in other parts of the world, and that they would not be able to get supplies to carry on with. I do not think we could be con fronted with a sudden emergency rendering it necessary in the interests of national safety, to immediately send two brigades for the purpose of protecting this line of pipes, because all other means of protecting it had broken down. Suppose there was a disturbance which necessitated protection by force, even then I regard the method of protecting it by a British force from India as the least desirable, and also as the most remote contingency.

I would rather see it protected by Persian forces—a Persian force under British officers than by a British force. There is no infringement of the independence and integrity of Persia in that, because if British officers are lent to the Persian Government to organise Persian forces it is no more than the lending of Swedish officers. The position of Persia has been for a long time such, that it has been recognised that her country cannot be developed without employing foreign officers, and it is no more infringement of her integrity and independence to employ British Officers than it is to employ officers from any other country. But I think rather than have a foreign gendarmerie under foreign officers to do this work, the tribes themselves should protect the line of pipes, and I believe that is the most probable course. Since these oil wells have been opened, the tribes have shown a very intelligible desire to protect the pipe-line, because they have a considerable pecuniary interest in seeing that the wells are kept going, and whatever may have happened on the Bushire-Shiraz route, where the interests of the tribes have been rather in the direction of looting goods which are going up or down to the wells, it has now become apparent to the tribes that their interest lies in protecting the oil wells, in order that they may get some pecuniary benefit.

The hon. Member for Leicester (Mr. Ramsay Macdonald) has suggested that this arrangement is calculated to make our occupation more costly, and that we should have to take some action by the use of British troops or something of that kind, in order to strengthen our interests in Southern Persia. Of course with every strengthening of our interests in the South of Persia, you increase, I will not say the obligation but the interest you have in protecting the trade route. Every increase of British trade does that naturally. We have already had a suggestion from an hon. and gallant Member on the opposite side, who has great knowledge of Persian trade, that we ought to have been more active on the Bushire-Shiraz route in the interests of British trade, and that we ought to have secured the employment of British officers sooner than we did. It is because the position in Persia has not been satisfactory that Russia has protected the trade routes in the North, and its trade has consequently gone on uninterruptedly in the North. In the South, British trade has suffered by the insecurity of the trade routes, and we have to see that affairs do not get so bad that British trade is entirely excluded from the South of Persia and is replaced by Russian trade coming in from the North. That I regard as our major interest and obligation in the matter, and, if you consider that, I do not think it can fairly be said that the particular interest we are acquiring in this part of Persia, although it is no doubt a strengthening of our interests, is really a very serious addition to our obligations, considering what our obligations and interests already are. We should still have some obligation for this country even if we had not invested anything in this quarter. The Anglo-Persian Oil Company think the British Government, although under no direct obligation to it, has, in view of the way it has encouraged it in previous years, given it a right to assert it has a claim at least as strong as the claim of any other British trade interest to ask for protection if its property is in danger of being destroyed.

I do not think, therefore, that we are really incurring serious greater obligations. The additional obligation we are incurring, if any, is an obligation to ourselves, but I do not think that that is very much stronger than the moral obligations we were under to British traders generally and this oil company in particular, even if we had no interest of our own in it. Bearing in mind what my right hon. Friend has said as to the degree in which the Admiralty will be dependent on this supply—it is a very slight degree—that is an additional reason why we should have this supply. I am arguing that the statement of the hon. Member for West Staffordshire ought to be largely discounted. Admitting that in what we do now we give certain hostages in a disturbed district, and that by acquiring interests, however remote or slight they may be, we do increase the interest which we may have in giving protection to this particular district. I would ask what part of the world is there outside the British Empire where we could have acquired an interest of this kind in oil without giving less hostages, and where we could become less interested in giving protection than we are in this particular case? I come to the other part of the speech of the hon. Member for West Staffordshire. The end of his speech was this: That there were other places not yet proved, but where he thought the chance was good of acquiring oil, such as Kishm, for instance, or places nearer to the coast in the British sphere in Persia. He said that if we got our supplies from those places, then his vote would be given for us. He said, "Why do you not delay until you can come before the House having proved your oil supply in Kishm or nearer to the coast of Persia and in the British sphere?"

I beg the hon. Member's pardon; he said other places near the coast. I take Kishm because it is an island. I am told that the prospects of oil occurring on Kishm are as good as they are in regard to many places on the mainland. If we had delayed a year even, and within that year the very best hopes with regard to the Island of Kishm and the other places near the coast had been realised, he would never have had the chance of giving his vote for this proposal, because it could never have come forward. All these places near the coast and the island of Kishm are within the Anglo-Persian Oil Company's concession. The hon. Member for Stirling Burghs (Mr. Ponsonby) seemed to be under the impression that this was a new concession. There is nothing new in this concession at all. The only thing new is the arrangement between the British Government and the company. The concession is thirteen or fourteen years old. It is not altered in any way. We have asked for nothing else from the Persian Government. We could not have got a separate concession for the island of Kishm, or the other places, because they were all included in this concession. If the British Government had not come forward now, I believe even within so short a time as a year the Anglo-Persian Oil Company and all its concessions would have been absorbed by one of the interests which are now opposing this particular contract. That is why we could not have delayed it. We would much rather have come forward with a proposition for the supply of oil on an island than anywhere on the mainland, if it was definitely proved. The prospects of the company are very good, as the hon. Member knows. So far as prospects are concerned, the question whether the British Government was to have an interest in those prospects, as dealt with in this contract, had to be decided now or it would have disappeared for ever, and the supply would not have been available to this Government or to any other British Government. That is my real answer to the question in regard to delay.

I take the other point the hon. Member raised as to the danger of the supply being threatened by neighbours with powerful armies—Russia and Turkey were the two that were named. I trust that our relations with those Powers may always be good relations. It is most important that we should retain good relations with the Turkish Government, and it is also vitally important, in the interests of peace, and in the interests of everything that is desirable, that we should retain the best relations with the Russian Government. The two great nations which touch so nearly in Asia and over so large an extent as Great Britain and Russia do, have a choice of only two sets of relations. Their relations may be cordial, or they may be strained. They cannot be indifferent. The friction which must arise between them, with their meeting interests in a place like Persia and with their approaching frontiers—and those frontiers are in the neighbourhood of loosely organised countries, some of them countries little civilised—when that is the geographical situation with which they have to deal, the friction between them arising out of the number of small incidents is such as is bound to make strained relations between them, unless their relations are kept so cordial that in the cordial, genial atmosphere of really good relations between them the friction which must arise from these inevitable incidents will disappear. It has been my object to keep those relations cordial, and that has been the object of the Russian Government. We have had great difficulties to discuss. It is exceedingly difficult to adjust certain incidents, but the more the difficulty the more I feel—and I believe it is felt on both sides—the necessity that we should keep our relations cordial, so that we may be able to discuss these incidents in a friendly manner. Supposing we did have great difficulties with Turkey, supposing that by some unfortunate change of policy on either side our relations with Russia became less good than they are, the oil supply being in the South of Persia, though that is a considerable distance from the Russian frontier and over a very difficult country, no doubt the actual protection of that would become a source of anxiety, as the protection of our British trade and the protection of a great many other things would be sources of anxiety.

But that applies to any other part where we might get oil concessions outside the British Empire where those risks would be less. Can anybody point to any other part where we might get oil concessions outside the British Empire where those risks would be less? Take the difficulty of protecting these oil wells, and, even at the worst, 150 miles of pipe-line from the coast of Persia. Would you rather have oil wells in Mexico? Would it be easier to send a British force there to protect them? People talk of the danger of the concession being threatened by Russia or by Turkey. Would you rather have the oil wells actually in Russia or Turkish territory? Of course, the objection would apply with still more force. Would you rather have the oil wells in a country with whom we are on the best of relations and with whom we have I would say almost no possible cause of friction, such as the United States. We hold, and it is a sound international doctrine, that though oil is contraband of war, if intended for oil-ships, there is no obligation on a neutral, and, indeed, it is contrary to the proper application of international law for a neutral to interfere with the export of contraband, providing, of course, it is not on a scale which makes the port a military or naval base. Can you be quite sure that a Government such as that of the United States would take that view? International law is something with no sanction behind it, but in this particular case it is not the least likely that the Persian Government, either now or in future years, will raise intricate points of international law of that kind. I suppose it is not impossible, but it is not very likely. At any rate, it is much less likely than if we had this oil supply in some great civilised country well posted in all these intricacies of international law, about which unexpected points might arise.

7.0 P.M.

Therefore, as the Debate continues, I would suggest that if I have removed from the minds of the Committee the idea that there is some risk involved in this arrangement, admitting as I do that Southern Persia has many drawbacks, that hon. Members should name any source of supply adequate to serve the purpose of the Admiralty, which is to be able to control prices, in any other part of the world where any of these objections, political or strategical, which are brought against this particular contract, would not apply with tenfold more force than in this particular case. That is my answer as regards the hon. Member for West Staffordshire. There are many other sources of supply, in Mexico, for instance, large sources in the United States, and large sources in Russia. [An HON. MEMBER: "Egypt!"] I am talking of other countries. Egypt is not sufficient to serve your purposes. And there are large sources of supply in some of the Balkan States and in Roumania. Not one of these would have been available for Admiralty purposes without objections of the very same sort that are brought against this particular contract being brought with tenfold more force against them, and objections much more difficult to answer. I want to deal with one or two points made by the hon. Member for Leicester. He asked what the effect would be on our relations with Russia. First of all, he asked whether the Russian Government had been approached on this matter. My hon. Friend the Member for Stirling Burghs assumed that the Russian Government had been approached. It has never been discussed with the Russian Government, and what they know about this matter they know from the public Press in exactly the same way as it is known to hon. Members of this Committee and the public here. We have never discussed it, and for this reason: This particular concession of the Anglo-Persian Oil Company existed before the Anglo-Russian Agreement was made. We have not altered the concession in any way. My hon. Friend said that we were treating the Persian Government with some discourtesy if we had not informed them about it. There has been no need to consult them. They gave the concession thirteen or fourteen years ago. We have been dealing with the concession exactly as they gave it, without asking for any other concession, and the Russian Government knew all about it long ago. The concession is purely one to be dealt with between the British Government and the Anglo-Persian Oil Company. We have not had to ask anything from any foreign Government about it. The hon. Member's (Mr. Ponsonby) assumption that we must have given some quid pro quo to Russia really shows what wild apprehensions are about, that nothing can be done without some sort of bargain, and shows an entire misapprehension of the fact that nothing new as regards the Russian Government is being done in this case at all. The concession was there before the Anglo-Russian Agreement. Then the hon Member (Mr. Ramsay Macdonald) says, "While you are acquiring this interest, suppose you had to take steps to protect it, would not that encourage a Russian advance in the North of Persia?" That is an argument which applies to the protection of our British trade generally in the South of Persia, but I cannot think that we are likely to prevent a Russian advance in the North of Persia by refusing to acquire British interests or to support British trade in the South of Persia. Surely, the logical conclusion of the hon. Member's argument is that, for fear less Russia should be encouraged to take further steps in the North of Persia, we ought to do nothing to protect British trade in the South of Persia generally; however much it may be threatened or injured, we ought to remain passive for fear that a Russian advance should be encouraged. You cannot remain entirely passive to the disappearance of British trade in the South of Persia, and I am quite sure that if we were to state definitely that as far as British commercial aims, for we have no political aims in the South of Persia, were concerned, we were ready to abdicate and see them disappear, the result would not be in any way to discourage the interest which Russia, or other Powers than Russia, would be likely to take in Persia or the steps which they might take there.

I should like the hon. Member, when we have the Foreign Office Vote, to develop his point as to what he means by saying we ought to have shown more determination in our policy. I think he used that with regard to our support of the Swedish gendarmerie. I can tell him what more determination would mean. It would mean asking the House to vote more money for the Swedish gendarmerie. That is a large point which we can discuss on general foreign policy. It is an instance of the things which it is rather difficult to develop in this particular Debate without entirely changing the character of the Debate itself. I cannot believe for a moment that this would create any difficulty between us and the Russian Government. Part of the concession is actually in the British sphere of Persia, and even if the new concession were in the neutral zone, that neutral zone is open to concessions to either country. We are not excluded from acquiring new concessions, but it is not a new concession: it is an old concession, acquired thirteen or fourteen years ago and well known to the Russian Government for a long time, and I cannot suppose that out dealings with the Anglo-Persian Company will be regarded as anything more than a matter which concerns ourselves.

May I ask the right hon. Gentleman this question: Whether he sees no difference between a huge company, which is practically a Government company now, and the ordinary operations of private British traders?

I think there is difference really in this case which concerns the House and the British Government. So long as the concession remains, being a concession, amongst other things, which it is perfectly well known the British Government have encouraged and supported previously, I really think it is a concession which we have a perfect right to deal with in the particular manner which is now proposed, more so as part of the concession relates to islands in the Persian Gulf and part of it relates to the British sphere itself. I would only answer one more point. The hon. Member (Mr. Ramsay Macdonald) asked for a pledge that the Admiralty would not draw all its supplies from this source. I think my right hon. Friend gave such a pledge in his speech. He said it was not the intention to draw all their supplies from this source, and with regard to the intention as to getting oil from the Home-fields, I am not sure he dealt with it in his speech, but I believe I am correct in saying that the Admiralty are not only prepared to take the fullest possible advantage of any discoveries that are made which will ensure a supply of oil from the Home-fields, but they are prepared to go further and do everything in their power to encourage research to make those supplies available.

Will the right hon. Gentleman say what is the exact political position at the present moment on the Island of Kishm? It is not so long ago that our flag flew on that island. Have we abandoned all our rights there?

No, Sir. The rights remain as they were. There is a British coaling station on the Island of Kishm. That remains just as it was. It did not cover the whole of the island by any means.

I think as reference was made by the First Lord in his speech to the part taken by the late Board of Admiralty, of which I was a member, after promoting this transaction in a very early stage, it would be desirable that I should give the House some statement showing exactly what the position was then. It was in the time of the late Board of Admiralty that it first became evident that oil fuel would be necessary for the British Navy. We had always hitherto enjoyed the enormous advantage of having within the British Islands an unrivalled supply of first-class naval fuel, and, naturally, the Admiralty have always looked with regret upon any change in that respect. It was not at the desire of the British Admiralty that oil fuel was adopted in the Navy, but when it became apparent that oil had advantages over coal we were obviously forced to experiment and, in fact, to introduce oil fuel into the Navy. That being so, it became obviously a question of the greatest import as to whence our supplies were to be drawn, how they could best be safeguarded, and how the financial and the business side could best be undertaken. With that object in view a Committee was appointed by the First Lord of the Admiralty, Lord Selborne, to take charge of that particular question. I was a member of that Committee, and on the Committee was Sir Boverton Redwood, to whom the country owes a great debt of gratitude for the information and advice which he has given to successive Governments upon this most important matter, on which his knowledge is, perhaps, unrivalled. Through Sir Boverton Redwood's knowledge, the Committee, under his advice, investigated the possibilities of oil from a purely business standpoint. I think everyone will agree that from a business standpoint, when you are approaching an industry like that as a customer, you do not desire to quarrel with anyone. What you want is an independent source of supply which is, as far as possible, uncontrolled by any agency which can exact undue prices or what the customer considers to be undue prices. When we surveyed the whole of the oil-fields, it appeared, as far as progress had then gone, that practically the whole area was covered by certain large concessions, and it was desirable, obviously, to obtain some independent supply. It was not only a question of the magnitude of those concerns, it was also a question of whether they were under British control or foreign or cosmopolitan control.

It came to our knowledge that Mr. Darcy had obtained, entirely independently, with or without the support of the Government, of which I know nothing, this very valuable concession which is referred to in this Blue Book. It was still in his hands, but he was desiring to dispose of it, and it came to our knowledge that he was actually at the time negotiating with a large foreign syndicate for the disposal of his concession. The Admiralty approached Mr. Darcy, and asked him whether he would defer for some period any further negotiations with the foreign syndicate, and give the Admiralty an opportunity of seeing whether some independent British interest would not be prepared to take the matter up with a view of finding supplies for the Navy. He agreed to do that, and it was then, at the request of the Admiralty, that the Burma Oil Company and Lord Strathcona came forward and undertook to form an exploration company. It is only due to them to point out that this enterprise originated at the request of the Admiralty, and not from a purely commercial purpose. Lord Strathcona, whom I saw personally—I think it was characteristic of him—only asked me one question. He asked, is it in the interest of the British Navy that that this enterprise should go forward, and that I should take part in it? I said, "It is," and Lord Strathcona, without any further questions, agreed to do what he had been asked. On these lines, by these two interests, Lord Strathcona and the Burma Oil Company, the exploration company was formed, and, of course, that was a necessary stage, because it was impossible to form a company for the final exploitation of the oil until the oil had been proved and sufficient wells had been bored. It was during that stage that there came a change of Government. The hon. Member (Mr. George Lloyd) asked a very pertinent question. Why had not wells, which were in a position more accessible and more defensible, been explored before this arrangement was made? I think that a very sound and a very pertinent criticism. The answer of the Foreign Secretary was, that unless they had made this arrangement now, the whole concession would have passed out of their reach. I agree that that would have been so, and I think probably in a period very much less than a year. But I think there is a very pregnant comment to be made upon that reply of the Foreign Secretary. Had the Government which succeeded us continued their interest in the oil question they would have had ample time to take their own steps, and we should never have been put into the position we are in to-day of having to make a bargain at the last moment. Really, the gratitude of the House, if this concession does turn out a valuable asset to the Navy, is due not so much to the Government and not so much to us who originated the idea, but to Lord Strathcona, to Mr. Wallace, who is the vice-chairman of the company, and to the directors of the Persian Oil Company who, knowing the origin of the formation of that company to have been national and not commercial, have, in spite of the total neglect of the Admiralty of this question for some six years, stuck to the concession and finally held on to it long enough to give the Government an opportunity to get it in the end.

Had it not been for their action, it would have gone into the hands of larger interests very long ago, and I think it is only due to them to make it perfectly clear to the House that, so far as my information goes, had they done so, they would have derived much greater pecuniary benefit than they can do under the arrangement which has now been made by the Government. That is my information according to the fact which I know. The First Lord of the Admiralty said that the people at the Admiralty do not loll in inglorious and independent ease. The First Lord never speaks without giving us some interesting and valuable phrases. I think some of his colleagues must be credited with lolling in inglorious and independent ease, for it is only within the last year or two that the question has been forced upon them by circumstances. I think the Liberal Government is open to most severe criticism in that respect. We of the Unionist party do not claim any special prescience, but it was in 1903, eleven years ago, that the Admiralty Board of the Unionist Administration foresaw the necessity of taking up the matter of oil fuel, and we were most anxious that it should be continued on the lines on which it was begun. When the Liberal Government came into office the Committee which was dealing with that subject was dissolved, and it is only in the last year or two that the Government has taken up the matter again, and the commercial difficulties are mainly due to that unnecessary delay. Now you have to act in a hurry at the last moment.

The hon Member did not ask for more delay at all. He made the observation that it would have been better to make these investigations first. The hon. Member for Staffordshire was quite unaware of the urgency of which the House was subsequently informed by the Secretary of State for Foreign Affairs. All these things are questions of balance and of the expediency of doing the best you can under the circumstances. I am sure that everyone who heard the speech of the Secretary of State for Foreign Affairs will feel that we have no absolute security whatever that we shall be able, certainly in war time, to ensure any large supply of oil from this source, but it does not follow that because of that disability it is not worth doing. This is a business proposition. Under the whole conditions, both commercial and political, attending this enterprise, is it or is it not worth our while to undertake it? First of all, we have to see what the disabilities are. It is obvious to everyone that the commercial disability is that it is certainly undesirable for a Government Department to enter into partnership with a private company if that can be avoided. It is not a course which any Government would desire to take. There is the question as to the disposal of residual products, and, as hon. Gentlemen will see, it is wrong for a Government Department to enter the market and compete with ordinary private enterprise. As to the sale of residual products, some Gentlemen will say exactly the opposite. They will say, "We are delighted to see the Government entering the market, and we hope that they will put the residual products on the market so as to knock down prices." I think it is undesirable that this question should arise in connection with an enterprise in which the Government are involved. There is the objection also that it is not desirable for the Government to be in any oil enterprise which is, to a certain extent, hazardous and risky.

When you come to the political side, I think the objections have been fully and ably stated by the hon. Member for Staffordshire (Mr. George Lloyd) and the hon. Member for Leicester (Mr. Ramsay Macdonald). I need not repeat them, for I could not put them as well as they did. Taking all these points into consideration, and bearing in mind that if you are going to get anything really worth having, you have to take some risk. In this case, from the information I then had, and have now, I believe this is worth having. I believe the amount of oil in this very large concession is enormous. I do not go upon any optimistic statements, because so far as observation goes the richness of the field is very great, and the area is very large indeed, and it must be a thing worth taking some risk for, if this country is going to have the commercial control, not only of the immediate supply of oil, but of a vast potential supply which may provide, and ought to provide, for the prospective needs of the Navy for a very long period of years indeed. Although the form of agreement between the Government and the company is not one I would necessarily seek for, there again I do not quite see what better alternative could be found. One does not wish to see the Government acting with a company, but where the Government is acting with a company it is clearly desirable that the Government should have control. If the Government is to have control in this case, it must hold a majority of the ordinary shares in order to get that control. Some may say that the Government might have taken it and worked it direct. I do not think it would have been wise to do that, because the Government would have been directly selling its products in the open market, and I think that should be left to the directors of the company. Therefore I think that, on the whole, the advantages which we shall obtain from a business point of view, and for the fuel supply of the Navy, make this worth doing, and I, for one, shall certainly vote in favour of the Resolution for granting this money. The House may think that I have taken a rather too favourable view of a project which was started by a Board of which I was a member. I hope the House will make allowances for that, for I do not wish to put the thing too high at all.

There is another point of view which I think has been touched upon by the Secretary of State for Foreign Affairs, and that is that this supply has got to be obtained at a reasonable price. Personally, having at that time obtained from information given on purely official grounds some insight into the conditions of the oil trade, and having continued to keep up my information, I do not know where a supply of equal magnitude, or one so likely to keep the price within reasonable bounds, is likely to be obtained. I wish to say a word or two about the information given by the First Lord of the Admiralty as to the source from which the money was to be obtained. I think it must have been rather startling to the Committee to be informed that the Chancellor of the Exchequer had got locked away somewhere £1,500,000 of the New Sinking Fund and £750,000 of the Old Sinking Fund.

The right hon. Gentleman the Chancellor of the Exchequer had £2,250,000—apparently the sum required for this purpose—removed from the authority of the House altogether which he, as Chancellor of the Exchequer, was ready to deal out for any purpose which the Government might think desirable.

These are sums of money which have been transferred under the Finance Act through Exchequer balances. They have been held there with the full assent and authority of the House.

These sums have been transferred with the assent of the House with certain definitions as to their purposes. Can anyone remember that when these proposals were made, anything was said about buying a concession in Persia? We are getting a long way from constitutional practice, and in the discussion which we shall have next week we shall be able to deal with this subject. I only wish to point out the kind of finance we are going in for now, and this has nothing to do with the wisdom or the unwisdom of the concession. I think it would have been more agreeable to the House of Commons if, instead of saying, "We have this money in our hands, and we will not charge you for what is proposed," the Government had said, "This is worth £2,000,000, and we will ask you to allow us to get it." It would have been an ordinary financial transaction if the Chancellor of the Exchequer had come to the House and said, "I wish the sanction of the House to raise this money." Now we have a modern system of finance by which the Chancellor of the Exchequer produces money when he likes to pay for such purposes as he chooses. When we begin to part from the principle that no money should be raised except for definite objects approved by the House, we arrive at a dangerous practice indeed.

I have no doubt it is going to be regularised now. I am not complaining of the way the money is going to be spent, but I complain of the way it has been concealed and put aside apparently, and is not going to be applied to the purposes to which the House was going to apply it. Speaking from the national point of view, I think this is purely a question of business, and it is somewhat refreshing to be able to discuss a question from the business point of view, without party spirit. I think the First Lord of the Admiralty, considering that he is the biggest consumer of oil in the world, would have been better not to make any attack upon any particular interest. I do not think it was necessary, nor do I think politics need be introduced into this matter at all. A great deal of what the First Lord said was rather nearer politics than business.

I merely criticised comments which had been made. When I am criticised I do feel very much inclined to reply.

I sympathise very much with the First Lord, but I say also that when a man is out for business he has sometimes to control his emotions. When the right hon. Gentleman goes out for business he would be wise to control his emotions and keep his politics in the background. I look at this matter from a purely business standpoint. I believe that although it has risks and disabilities, on the whole it is worth the money, and that it may be in future a very great asset of the Navy. I certainly propose to vote for the Resolution if the Committee go to a Division.

The hon. Gentleman who has just spoken strongly deprecated raising the general question of Persia in this Debate. That is an illustration of the difficulty of dealing with this concession, because one side at least of the value of the concession depends entirely on the political position of Persia. If the Anglo-Russian agreement had been honestly observed, if Persia were now an independent integral Power, if it were in the position of Afghanistan, then I do not think that there would be much difference of opinion, perhaps there would be no difference of opinion in the House as to the wisdom of the British Government entering into this speculation. I noticed with considerable anxiety and alarm that the Secretary of State for Foreign Affairs when pressed upon the subject did address himself to the question as to what measures would be necessary to protect these wells in case of attack, and he spoke of the possible emergency which might lead to the necessity of sending two British brigades to protect the pipe line and the wells. He said, indeed, that the Government would first of all look to subsidising the local tribes, and the second line of defence he said would be to apply to the Persian Government, and to my amazement he seemed to indicate that it was within the contemplation of the British Government with a view to the protection of the present oil-fields, to suggest to the Persian Government that they should borrow British officers in order to organise gendarmerie forces, because, as all of us who take an interest in this question of Persia know, when the Persian Government did borrow a British officer five years ago—and probably the British officer in all the world best qualified—to organise a Persian force of gendarmes, this Government threw over that British officer, and ordered him to leave the service of the Persian Government simply because Russia raised some objection.

After all, Captain Stokes was withdrawn by the British Foreign Office from the service of the Persian Government, and now they are going to build all their hopes of protecting these oil wells in future on a force of Persian gendarmes organised by a British officer. The Secretary of State for Foreign Affairs hinted that it ought to be organised by the Persian Government. He went on to say that in his opinion—and he argued his point at considerable length—it was so unilkely as to be almost fit to be left out of calculation, that any emergency will arise which would call upon the Government of England to protect these oil wells in case of attack. He pointed out that the supply of oil was only wanted in time of peace, and that even if interrupted in time of war, it would not inflict any serious injury on the British Fleet, and that the British Fleet could go on independently of the supply from Persia. I listened to that statement with amazement. Does any Member of this House believe that this Government, after acquiring a controlling interest in a great enterprise of this character, and investing £2,000,000 of the taxpayers' money in that enterprise, will at any time, either in peace or in war, if it is at all able to prevent it, allow that enterprise to be destroyed or wrecked by any people whatsoever? The idea is ridiculous. I saw that the other day, at a meeting of this company, the chairman of the company, speaking to the shareholders, said:— schemes considered by the Foreign Secretary as to the possibility of protecting the oil-field he appeared to give the go-by altogether to the Swedish gendarmerie. This appeared to me all the more sinister because of an article which appeared in the "Times" on Friday last. I have long studied the "Times" in connection with this question. I have not the smallest doubt that these leaders on the Persian question in the "Times" are inspired by the Foreign Office, because one can always know what the Foreign Office policy is going to be a long way ahead by reading the leading articles in the "Times." In that article they say:— of the Government, following on the lead of the "Times"—of course the article was inspired—to throw over the Swedish gendarmerie and declare that they have failed, and substitute some other new system of maintaining order in Persia. The article winds up with a most sinister passage:—

I have always said in the Debates that have taken place from time to time here, whenever one could get any interest aroused in this question, that the moment you allow this country to acquiesce in the seizure of Northern Persia by Russia as an evitable consequence you will lead to the seizure of Southern Persia by this country, which is a fatal policy in my opinion, and a policy calculated to cast upon the finance of this country an enormous and incalculable burden. My objection to this scheme of acquiring a Government controlling interest in this great oil-field, is not based upon economic considerations, nor upon any doubt as to the soundness of the strategical reasons which have influenced the Government. I believe that those reasons are sound, and that it would be a very valuable thing for the British Government to have possession of this oil-field, if they could defend that possession without incurring other and still greater risks and burdens which might more than counterbalance the advantages obtained from the possession of the oil-field. That is the feeling which I still have, and I am convinced that if this scheme goes through, as of course it will go through, by an irresistible chain of cause and effect, you will see that British troops and the British flag will follow the enterprise, and that all public opinion in this country will be compelled to recognise the necessity of protecting this great enterprise. What will be the result? You will be an active party in partitioning this ancient empire of Persia. I view this question from a purely national point of view; I am a Nationalist, and I sympathise with these people. I do not expect to obtain much sympathy or interest in this House on this ground, because, with the exception of ten or twelve Members of the House, not the smallest interest in the Persian question is manifested here, and the interests, honour, and pride of Persia have not the weight of the smallest feather in the balance.

It is all very fine for the Foreign Secretary to speak of the present alliance with Russia in the way he does. During the first twenty years I was in this House Russia was its bugbear, and until ten years ago France was the chief reason held before us for increasing our armaments. Most unfortunately, as I have always believed, this country has drifted into a close alliance with Russia, and not only an alliance, but it seems to me that the Foreign Secretary apparently bases his policy on the expectation that the alliance will be perpetual, or ought to be perpetual. I do not believe that it will be perpetual, and I hope it will not. In giving this great hostage to Russia, so that she can at any time threaten to destroy or take possession of this great interest, you are adding another link to the chain which I think has most shamefully bound this country in servility to Russia during the last five or six years. This policy is justified on the ground that alliance with Russia is essential to England. You are adding another link to the chain—indeed, you are placing the great interest and prestige of this country at the mercy of Russia, because if any difference of opinion arose with Russia it is the idlest folly to pretend that you can defend our interests in Persia. If this leads, as I believe it will, to the inevitable step of the partition of Persia, to the occupation of this district by English troops, to the handing over to Russia of Teheran and the so-called neutral sphere, and the final division of the country, then I fear that all the strategic advantages to which the First Lord has alluded to-night will in the future be more than counterbalanced by the evils which will result.

It is with some diffidence I interpose in this Debate, but there are two points on which I perhaps look at the matter from a different standpoint. I cannot help realising that there are tens of thousands outside this House who are looking at these two points in connection with this new enterprise—first, the question of investing a large sum of money in, so to speak, an outside industry, and, secondly, that the large country where it is to be invested in a country which they only know through the Press as a country of constant disturbance. Yet I am prepared to back the Government in this proposal, and my reasons are these: First of all, with regard to going into an enterprise of this kind, an enterprise that may not be successful for some years, I hold that just as it is legitimate for a private business to have a small portion of its capital invested in an enterprise which looks to the future rather than to the immediate present, so I believe it is perfectly legitimate for the Government of a great country to have a small portion of its capital invested in an industry that may not be altogether successful at first, and about which there is a certain amount of risk, though I venture to think in this case it is a fair industrial risk. I cannot forget that, in 1893, I supported the Government of that day in the great enterprise of the Uganda Railway. In a certain sense there is an analogy even between that railway which is in the centre of Africa and this enterprise in Persia. I recollect very well I went down immediately into my Constituency, after I had taken that position, and at the Chamber of Commerce meeting, where the subject was discussed, I gave my reasons for doing so. Some time after I was told by one of my leading Constituents that they were extremely surprised at my having taken that view, but, having given my reasons for doing so, they felt that they would not raise the least opposition, but would support me. That is my first reason, having no interest whatever in oil, and knowing nothing about Persia except what one knows from ordinary reading, for supporting the Government in this movement.

My second reason is this. Many will say, "Why do you choose a country of this disturbed character for such an investment?" My feeling is that this very investment of money in Persia will lead to its becoming less disturbed, and when you start this new enterprise, and consequently are constantly drawing, which the company will do, into its circle of employment and trade in different ways, a large number of people, you will give them a new reason for being less disturbed or against raising such difficulties in the future as they have done in the past. I will give an illustration in connection with what occurred in South Africa. I am not going to raise the old question, but we know perfectly well that one of the main reasons advanced for the justification of bringing outside labour into South Africa was the question of irregularity of employment. It was said, and said perfectly truly, that the natives came and worked for a short time, and then went back again to their homes, and that consequently great enterprises were left with much irregularity of labour. Anyone who has watched the increasing employment of natives during the last few years knows that difficulty has practically been largely got over. Why? For the reason that as the natives did better and earned larger wages, they went back to their homes with more wants, after looking on at the white men, and, do whatever you like, they are going to imitate the white men in many of their daily habits. Consequently, those new wants have been created and taken to by the natives, and the very creation of those wants has led to their being required to work more regularly to raise the money necessary to continue to supply them. I maintain that it is this, and very largely this, that has led to the more regular working which we know from the figures is going on at the present time. Therefore I say with regard to this question, that the starting and working of a great enterprise of this description will lead gradually to the diminution of many of these disturbing difficulties that are connected with Persia at the present time. I am glad that the Admiralty, in conjunction with the Indian Office and the Foreign Office, have gone into this matter, and personally I only wish they had shown the same enterprise and the same unity of action in regard to another great enterprise which was before them recently.

8.0 P.M.

The Committee has listened with great interest, I have no doubt, to the speech of the hon. Baronet who has just sat down. I sympathise with his idea that employment may be increased as civilisation advances in those wild and barbarous regions. I confess I should have been more impressed by his observations if a greater number of persons had been employed than seventy-five, who are engaged for the purpose of controlling this pipe-line. I have risen chiefly to compliment my hon. Friend the Member for Chelmsford (Mr. Pretyman) for the chivalry displayed in his speech. He was a member of the Board of Admiralty at the time this contract was first originated, and he has taken upon himself responsibility in regard to the position in which we find ourselves to-day. What might have been wise nine years ago is not necessarily wise to-day. There has been no sphere of development in connection with science or manufacture where the progress has been more rapid, the changes more complete, than in the case of the use of oil as a means of power and of marine propulsion. That being so, it follows that with the development and discovery of new sources of supply, the situation is so changed that what was considered right nine or ten years ago may be quite different to-day. The changes to which I refer are mainly by reason of the discovery of new fields of supply, and those are so promising that they might be placed in competition, not for the purpose of subsidy and Government shareholding as in this case, but as other means of securing continuity of supply. For instance, the Foreign Secretary was challenged from both sides as to what he would say with regard to Egypt. With that skill on which the hon. Member for East Mayo (Mr. John Dillon) complimented him, he easily escaped from the dilemma in which he had been put. According to this Blue Book, the production, as reported by Admiral Slade, amounts to 800 tons per day, whereas I believe I am speaking with good authority when I say that the production in Egypt has been recently as much as 2,000 and over 2,000 tons per day, which is an extraordinary development. Why then, even now, at the eleventh hour, should not the situation be reviewed?

The First Lord spoke for an hour with that lucidity and power of graphic description and explanation which has always characterised his utterances on naval affairs. I deeply regret that the latter portion of his speech should have been spoiled by the squalid personalities which he thought right to include. I wish to pass away from those personalities, and to say that the difficulties which the right hon. Gentleman may have had in his bargaining ought not to embitter him in the way they appear to have embittered him. He has still to do business with all those firms to whom he has referred, and who, I do not doubt, will be tempted to resent what he has said about them. Because the right hon. Gentleman has a grievance against some people in the oil trade is not a good reason for rejecting any possibility of dealing with oil in Egypt. If Egypt fulfils the conditions which the First Lord has laid down, then it is right, and is his duty, to consider how far he may adapt Egypt to Admiralty requirements. The conditions for a suitable oil-field for the British Admiralty are laid down by the right hon. Gentleman as follows:— Americans would say, to see properly protected that which they have fathered and adopted. The Government could not, in the future, treat with the same indifference difficulties which might arise, and which those who have the best knowledge of Persia believe will arise, as if this investment had not been made. It is, therefore, not only a question of the risk of 2¼ millions of money which may never be productive, but it is also the fact that we are committing ourselves more deeply to a portion of the world which is dangerous and increasing our responsibilities and the burden upon us there.

For my part, I regard this contract as full of danger to the country in possible political complications in the future. I regard it as wrong from an economic standpoint, in so far that it is an investment of public funds for giving encouragement to the employment of the natives of a foreign country. The hon. Member for Leicester (Mr. Ramsay Macdonald) in the course of his speech, in which the right hon. Gentleman the First Lord made an interjection, asked, Why do you not make this experiment or give this subsidy to the coal industry at home? He might have added also the shale industry. To a foreign industry and to the development, of foreign employment 2¼ millions are given, and to the development of home industry a prize for a laboratory experiment. I think that is what the record is. If the right hon. Gentleman would take into full cognisance the Scottish shale production, and in Dorsetshire and elsewhere, and if he would develop the production from coal of oil suitable for internal combustion engines, and if he would invest money with some British producer or some British owner, in that way he would, in my opinion, be doing more good for employment at home than he is doing by giving employment to those people in this debatable territory. If there be a Division I, for one, unhappily for myself, will go into the opposite Lobby from that of my colleague the hon. Member for Chelmsford, but I will do so with the utmost confidence that I shall be voting against a proposal which is wrong in principle, which is dangerous to the future peace of the country, and which will not be able, in the end, to effect that continuity of supply which is so vital a necessity to the Navy, and which is the object, not only of the First Lord, but of every patriotic, intelligent Member of this House.

I do not propose to follow the hon. Gentleman who has just spoken into the economic or commercial effects of the proposal before us. As far as the commercial side of the matter is concerned, although I believe there are many serious arguments that could be raised against the proposal of the First Lord, I think one can feel no doubt, in view of the outcry of the Press controlled by those trusts which are concerned in this matter, that the First Lord has certainly "struck oil" in obtaining this concession. But I venture to think that the price which he has paid for this is too great. If this purchase had been made inside the British Empire the matter would have been on an entirely different footing, but I believe there are many on this side who feel very real anxiety as to the ultimate effect of this great venture. The Foreign Secretary said, in his most impressive speech, that this matter only incidentally affected foreign affairs. But I think that that same remark might have been made possibly years ago, when Mr. Disraeli made his famous purchase of Suez Canal shares. That was a fortunate speculation, but it was even then a dangerous one. We cannot be sure that ventures of this kind will always turn out as fortunate. There have been already speeches made this afternoon which have shown very clearly the great and peculiar dangers which attach to an investment of this kind in this particular quarter. I think the hon. Member for East Mayo (Mr. Dillon) unconsciously wronged the policy of the Foreign Office and the feelings and convictions of many Members on both sides of the House—certainly of many Members on this side—in representing Persia as being left without care or thought from this country or from this House. There are many of us who ardently desire to see Persia free and independent, and who wish well to that small nation. If we have not always the opportunity of expressing our feelings, it is not fair that the hon. Member should assume that the House of Commons is indifferent on the matter.

I was very glad to hear the Foreign Secretary say that whatever happened he believed that this would involve no further burden upon the Indian Government. Because, on the face of it, it looks as if a great danger would be incurred by India, that military responsibilities would be placed upon that country, and a heavy financial burden laid upon the Indian taxpayer on account of a matter which, after all, is Imperial or British and not primarily Indian at all. If that had been the case, it would have been a great injustice to India as well as a danger to the Empire. The right hon. Gentleman went on to indicate the possibility that British officers might be employed to command Persian troops in a neutral zone, and he said that, from the point of view of the Persian Government, there could be no more objection to that than to the employment of Swedish officers. I think there is a very great difference from the Persian point of view. There never has been any question of Sweden wishing to annex any part of Persia. But when British or Russian officers are employed in the Persian service, it surely must be a very different matter, because everyone knows that there is, at any rate, a possibility of portions, at least, of Persia being annexed gradually by either or both of those Powers. Therefore, I think that the Foreign Secretary, if he considers the matter, will feel that, from the point of view of Persian nationality, there is a great difference between our giving an increased subvention to the Persian gendarmerie with Swedish officers, and ourselves assuming the very grave responsibility of providing officers for the Persian forces. The almost inevitable consequence would be a desire on the part of Russia, which one can quite understand to provide additional Russian officers in the Northern part of Persia. It would be another step towards the dismemberment of this little nation, whose integrity Russia and Great Britain have jointly solemnly guaranteed. Therefore I very much hope that the Foreign Office will hesitate very long before taking that step.

I trust that if in future this policy upon which the Government have entered should involve trouble along the lines of the oil pipes, if it should involve the protection of British property from tribesmen or rebels, the Government will not hesitate to pursue the policy of asking Parliament for a further subvention to the Persian gendarmerie, and doing their utmost to strengthen the Persian police force, in the interests of Persian nationality, and ultimately also in the interests of the British Empire. Our world interests will be far better served by keeping Persia a strong, and, if possible, an independent State, rather than having it divided between Great Britain and Russia. I very much hope that in future that may be the alternative chosen from among those suggested by the Foreign Secretary should this danger unhappily arise. In conclusion, I want to say how much I regret that the House of Commons should be asked solemnly to give its sanction now to what has already been irrevocably decided upon in the name of the nation. It surely ought to have been possible for the Government to have secured an option, leaving its hands free to proceed with it or not after discussion in this House, rather than to have taken the step which has been taken in the Agreement, practically committing the House of Commons in advance, whatever Members may feel, and many of us feel strongly, as to the wisdom of the step.

This has been a most interesting Debate, principally because some most astounding statements have been made. My hon. Friend below me (Mr. Pretyman) made one of them, and several hon. Gentlemen opposite have made remarks of a parallel description. They have described this as a businesslike transaction. There is in it no business whatever of any sort, kind, or description. The hon. Member for Stirling Burghs (Mr. Ponsonby) said that it was a very good business transaction, but that there was no security whatever in it. That surely is not a businesslike transaction. No details whatever have been given. The House of Commons is asked to vote over £2,500,000, which, if the debentures are not taken up, must grow to over £3,500,000, without any details being given, without any information from the strategic point of view, or as to the storage of oil, or even as to the supply of oil. We are all in the dark. We know nothing. Why all this secrecy? Because the Admiralty are at their wit's end to get hold of oil anywhere and anyhow; because they have built ships before they had the oil in store. That is what has occurred, and now we are asked to undertake this most unbusinesslike proposal. It places me in a very awkward position, because if the First Lord tells us that we want oil for these ships, I do not see how I can avoid voting for it. But I have every right to call attention to the unbusinesslike proceeding that has enveloped the whole of this matter, and the criminal neglect of the Admiralty in building large numbers of vessels without having anything in the nature of a reserve of oil for them.

I do not want to enter into the commercial and financial question; that has been done pretty well already. I wish to enter into the questions of supply, strategy, and storage. I think that the theory of the oil question is taken much too easily. There is no doubt that the advantages of oil are enormous if you can get the oil, but I maintain that we cannot get it, and that we have not got it. I am not going to believe the statement of the First Lord. Why should we believe the statements of a man like that, whose statements have been so contradictory during the whole of his public career? I do not believe anybody's statements on a matter of this description concerning the safety of the country. Why should not the House of Commons and the country know the price that they are paying for oil? Why should not the House of Commons know what storage we have got? Why all this secrecy? Because the Admiralty have not got it. It is proved that they have not got it, because they have thrown the whole Fleet up since last October. Battleships are only to be thirty days at sea. Since 26th October the torpedo-boat destroyers have had hardly any drill whatever, although they ought to be at sea four days a week. It is fatal to the men in these small ships; and that is because the Admiralty are short of oil. In the big ships you can look after the health and contentment of the men in many ways. In the small ships, with a deck the size of half the table in front of me—if you lay them up in harbour, and give them nothing to do, that is fatal to the morale, fatal to the health, and fatal to the contentment of the men. That is what the Admiralty are doing now because they have not got oil in stock. Why do they not tell the truth? What the Admiralty are trying to do is to get enough storage, but the difficulty they now have to face is that they have not got the tanks. They ought to have had over 2,000,000 tons of oil in this country in storage before they laid down these heavy ships at all. At any moment, if we go to war, we may have the main artery of the oil cut, and that would affect the campaign enormously. This Blue Book is full of scientific investigations, but there is nothing whatever about the question of supply or the question of strategy. The whole question really is as to how you can get the oil into the tanks for storage or in to the pumps if you want to fight.

What is the use of coming to this House and saying, "This is a magnificent oil- field"? First of all, it is not proved. Only part of it has been proved. What is the use of saying you have got this magnificent oil-field unless you can get the oil home and have it any time in case you are called upon for warlike operations? The whole thing is taking in the House of Commons and the country. I am amazed that the business men of which this House is full should have such an unbusinesslike proposal made to them as is made in this matter. The House of Commons is asked for this enormous sum of money on some problematic theory, with no details, and the House knows nothing whatever as to how the money is to be spent. We know the price of coal. We know the price of guns. We know the price of armaments. We know that other countries—I think all the other countries—have publicly tendered for oil. Why should not this country be allowed to know what they are paying for oil? Where they are going to get it? If they have got it? Everything is done in a hurry, and has been done in a hurry, because of the unbusinesslike proceeding—which I cannot repeat too often—of laying down ships before oil was in stock for them. Look at the whole of this oil business! Look how very badly it has been managed! Look at the friction that was produced in the United States, and in Germany, because the Admiralty backed up the Cowdray Concession! Look at what happened in Mexico! The United States and Germany would not have minded if we had gone in for tendering with the rest of the nations, but for us to undertake a monopoly—as that was intended to be—of course produced irritation. The result of it will be that in a short time Lord Cowdray will have to give up a great deal of his concession. Speaking as to the command and defence of the oil supply, look what has happened in Mexico, and in Roumania, where we got 100,000 tons of oil for naval purposes. That was cut off at once directly the Balkan war commenced. Look at the Mexican supply! It was cut off at once.

The Government are now going into a country which is the focus of disturbance in the whole of the East. The hon. Member for Leicester suggested that the Persian Government should be applied to for the defence of the pipe-line. The hon. Member for Leicester is quite wrong there. We have the tribes so much stronger than the Persian Government that if we went to the Persian Government, the tribes would soon cut the pipe. The only possible way to defend it is in the way which has been suggested—by paying these tribes enough to defend the pipe. In regard to the supply, the right hon. Gentleman told this House that he is going to have the oil necessary for a fleet of 166 ships. The right hon. Gentleman (Sir Stanley Buckmaster) raises his eyebrows, but I will give him the names of the ships if he likes. How is the First Lord of the Admiralty going to get that oil? If he is going to get it out of the Persian Gulf, it will take him six years to do it. The place is not proved. The pipe-line there is no use. There will have to be a new pipe. There will have to be dredging to an enormous extent by the Government. Both the departure and the entrance of that harbour will have to be improved at an enormous expense. We cannot get any ships in there with a draught of 17 feet, and twice a month you can only get ships of that size over the bar. None of these things have been told to the House. Yet the Government are asking the House blindly to vote this money because the Admiralty, wholly through their own negligence and their want of ordinary foresight, have not the supply of oil necessary for the ships that are building.

I would like to ask the right hon. Gentleman as to the question of supply. The Admiralty have not got nearly enough tank vessels yet laid down, built or building, for the supply. Is the Admiralty going to take these 15,000-ton steamers of Lord Cowdray's? If they are, they will be no use whatever for this particular port of supply in the Persian Gulf. A great number of these dangers would have been counteracted if the Government could have got the oil in British territory, but if the Government were in the position of being squeezed by the oil companies there is no doubt that they ought to have done something in the nature of what they have done, but they should have done it in a businesslike way; and they ought to have told us, and let us know the price, and everything connected with the expenditure of that money. So far as they are making arrangements of this character in order to avoid their being squeezed, I agree with them, but I deplore the language of the First Lord of the Admiralty. I suppose he cannot help it. For some extraordinary reason he has forgotten the doctrine that "it is not what you say, but it is the way you say it." He always seeks the opportunity of annoying everybody on either side of the House. I must, Mr. Maclean, ask about the contract. No contract ought to have been made with any company, or any contract in the nature of the one that we are asked to ratify, unless the oil is in the tanks above-ground. Otherwise you run the risk of the oil petering out. You should have immense tanks to pump the oil straight from the ground through the pipes into the sea. The oil ought to be stored in all places on the same principle as the Shell and other companies of that description have done it. It ought to be stored in tanks either at the place of embarkation or in this country ready for use; otherwise the contract might fail at the critical moment. I said just now to the right hon. Gentleman that there were 166 vessels for oil at this minute built or building. In March there were only 104. We have got a large number since. To give the Committee some sort of idea of how much oil these vessels require, let me say that in three days two flotillas of torpedo-boat destroyers will burn 5,000 tons. I believe, at this moment, off the coast of Ireland, they are burning at the rate of 1,000 tons per week merely for doing duty there.

The expenditure of oil now, I believe, is only kept going. So far as the reserve goes, the Admiralty may be getting some oil into reserve by having laid the whole Fleet up. Surely, that is a very dangerous position to be in! I again repeat this is a position entirely due to the recklessness of the Admiralty in coming forward with these ships without having their storage ready. Will the right hon. Gentleman tell us, and he ought to tell us, what he has got? Has he got a considerable amount of storage at Gibraltar, Malta, the Cape, Singapore, and Hong Kong, because it is essential that at these points, as we are to have an oil Fleet, of which I am entirely in favour, but if you cannot get the oil and if you run yourself into a shortage in war you are running the country into the most serious danger, because you cannot turn one single ship built for oil back again into a coal ship, unless you rebuild the whole ship. There is the question of strategy, on which we heard nothing. The whole point of effectiveness with regard to oil fuel is, Can you defend it? Now, we have no assurance that we can do that! In fact, at this moment, we have no method of securing and defending our sources of supply. The ships are not there, and can- not be there for years, for defending the sources of supply. The defences of the Mediterranean and the Suez Canal and the Persian Gulf are rendered a thousand times more necessary if the First Lord is to get half the requirements of his oil from the Persian Gulf. There is the extra risk and the longer time, and the present tank ships are not suitable for that. The Cow-dray ships would be, but certainly not many of the oil tanks.

The Mediterranean is the most important highway for this country, and always has been. It accounts for 64 per cent. of our food and a great deal of our raw material, and now we are going to add to that by making it one of the greatest oil routes in the world. It is liable to attack if defended, and it is certain of attack without defence, and we have to take into consideration the shipbuilding programme of Italy and Austria, though we are always told by the other side that they are only on paper; we must take them into consideration, because we have not only the danger of our food and raw material artery being cut, but there is the additional danger as a fuel artery of its being cut. I think this country is being committed to an appalling expenditure. You do not know where it is going to end. We are being committed to this expenditure in a most unbusinesslike way. First, because the requirements of the case were not made out before we entered into this oil fuel programme which I again say I am entirely in favour of, but the difficulties are so enormous that you cannot get it. That is the point. Can you get it? I say we cannot get it at present, and I say we have not got it, and I do not see why the House of Commons should accept statements and theories without any proof whatever being given in detail of any sort or kind. I think these things ought to be enough to make the House of Commons look very seriously into this question, and not allow itself to be carried away by rhetoric and broad statements and unsound theories such as we heard to-day from the First Lord of the Admiralty.

The Unionist party started the oil theory. We were quite right to do it. That was eleven years ago, and circumstances were very different then from what they are now. There were all sorts of places where we could get the oil, but I do not believe—and I am not particular as to any party, because I believe they have all political ideas and intrigues on both sides—but the Unionist party would not have committed the cardinal mistake of laying down a large number of ships without seeing that they had the fuel necessary before they launched them. I object to subsidise a company upon foreign territory. I think it ought to have been upon British territory. That would have been a more sound thing to do. If we are going to spend this money, why does not the First Lord of the Admiralty practice what he preaches. He made the other day, what I thought was a most sensible suggestion, that he was going to spend money in seeing how far he could help the invention with regard to getting oil. We know they are going to get oil out of coal. Why not spend £50,000 or £500,000 upon a commodity of which we have greater supply than any other country? I would sooner see this money spent in that way, than see this £2,000,000 being spent in what I regard as Government company promotions. If the Government did spend this money in some invention which would get oil out of the coal areas, or, as the First Lord said, out of clay—and all these things are coming—it would be far wiser, and I believe we would get oil quicker, because I defy him to get the supplies necessary from Persia in six or seven years. He will not have the pipelines laid nor the refiners. And consider all that time you are to have all this accomplished in a country more disturbed than any other part of the world.

Then there is the point in regard to secrecy. Why is the House of Commons deprived of the Report of the Commission? Because the Report of the Commission shows how badly managed all this thing has been. Why should not the House of Commons demand this? To say that it is not in the public interest to publish it is pure nonsense. It is in the public interests that this country should know how its money is being spent, and it is not in the public interest to have these enormous sums of money spent in what is nothing more or less than a gamble, because the right hon. Gentleman the Secretary of State for Foreign Affairs and the First Lord of the Admiralty told us it is not certain they can defend it. They had much better have told the truth, and say they could not defend it in any way whatever, because we all know what it would mean to send a large army into Persia. Circumstances might occur that you would irritate Russia and our lines of communication by sea would be undefended. That is the only reason, and the First Lord acknowledged it by all the cruisers being scrapped, and he acknowledged it by arming the merchant ships. If the right hon. Gentleman opposite is correct in saying that the oil could be brought lay the Cape that would mean 12,000 miles, and by the Suez 6,000 miles. These are matters of defence. They ought to be thought out beforehand and not after. This is purely a speculative gamble because the Admiralty are hard up for oil and they will turn any way to get it. All these difficulties we have been told about that we could not get oil anywhere else is all a blind for the House of Commons.

What we want is a detailed account of how you are going to spend this money, how much is going for dredging and how much for pipe-lines. None of those things have been told to the House of Commons. I am sure Mr. Gladstone would not have stood this for one moment, and he would have demanded details before he would have allowed such a large sum to be taken somewhere and spent without the House of Commons being consulted at all. Hon. Members will recollect that they were never consulted about the oil type of battleship being laid down at all This is like a bad debt. You have to keep on paying more to keep the man's head above water in the hope that he will be able to pay you some time. The Admiralty began in a wrong direction, and they have gone on in that way ever since. Now they come here asking for these millions, which will grow, and they are doing this without the House of Commons having any details whatever. I cannot say how I shall vote, because I do not want to hamper the First Lord, and if he really wants the oil he must have it somehow, bad business man as he is. Looking to this enormous expenditure, I am certain Parliament should not vote this money without further details. There ought to be an explanation given of how this money is going to be spent. I call it a hazardous gamble, and the House of Commons should not vote this money without a fuller and clearer explanation with regard to price, supply, means of defence, and lines of communication.

I cannot follow the Noble Lord opposite in all the technical details which he has so much at his command, but no one can have listened to his Debate to-day without feeling that the Government and the House of Commons are entering upon this great business in a very light-hearted way. The speech of the First Lord of the Admiralty gave me the impression of a man who was greatly gratified because he had just successfully done some one in negotiations. I know he has been engaged in a hard bargain and my sympathies are entirely with the First Lord, because he was trying to defend the pockets of the taxpayers against the grasping demands of the monopolist. To that extent I am entirely with the First Lord, and I am with his policy, because it is a good thing, on the whole, that we should have our own dockyards and our own national armament building places to check the demands of the monopolist in that direction. But when I turn from that to the actual policy on which we are embarking to-day, I am not at all satisfied with this Debate. I listened with great interest to the Noble Lord's speech, and I thought he made some very shrewd points against the Government. My interest is entirely on the political side of this question, and I want to consider for a moment what the Foreign Secretary told us on that side. The right hon. Gentleman came down to the House in a very reassuring mood, and he told us that he did not think that this proposal would be any very serious addition to our obligations, and he gave us various reasons for thinking that we were on such good terms with Russia that we need have no fear as to what would happen if after entering into this obligation we might be called upon to defend what will now practically become a national oil-field.

How far had the First Lord considered the actual facts of the situation to-day in Persia and the recent history of Persian affairs when he came and made that speech this afternoon? The actual facts are too well known, and when we have a Debate on foreign affairs I am sure the position will be exposed. I would like the Committee to consider what has been the history of our relations with Persia during the last seven years. We have been told to-day that we are on excellent terms with Russia, but we have not always been. Seven years ago, in 1907, we felt the friction so strongly that we felt it necessary and desirable to enter into the Anglo-Russian Convention in order to protect our interests in Persia and save the friction that was then going on, and we then established the relations which the Foreign Secretary says exist now. What has happened since? Anyone who follows the affairs of Persia knows that since that time the state of things in Persia has steadily been growing worse. It has been getting more unsettled, and continually we have had difficulty, and we have only been saved from actual friction with Russia, and from very dangerous relations with her, by the fact that on every occasion we have done exactly what the Russian Government has demanded. Mr. Shuster may have been a tactless man, who may not have had great experience, but no one who met him could doubt that at that time he was, on the whole, serving the interest of Persia, and he had recovered the Persian financial situation in a way that no man had done before, and certainly in a way no one has done since. What happened? We had, first of all, one ultimatum and then a second ultimatum, and the first was against our protest. Finally, Mr. Shuster was practically driven out at the point of the Russian bayonet. I am only giving this as an instance of the sort of thing that happened before, and it might happen again.

I have only given this as an illustration of the sort of thing that has happened between ourselves and the Russian Government in Persia. We were told that as soon as order was restored the Russian troops would be withdrawn, but order has been restored and the Russian troops are there to this day. Considering that that is so, it is rather too much to ask us to simply accept the existence of the Anglo-Russian Convention—this piece of paper containing a contract made between ourselves and Russia—as sufficient security for us in the case of there being trouble in Persia. We have now, if this goes through, oil-fields right on the boundary of what is, in effect, Russian territory. Will anyone say, if those oil-fields are attacked by unfriendly tribes, that we shall not then feel it our duty in some way to attempt to defend them. Of course, we shall feel bound to do it.

I want to consider what this contract will commit us to. There is this point of view to be borne in mind. We have never, in all this, consulted the Russian Government in any way. The Foreign Secretary said that it was unnecessary to do so. Supposing a difficulty arises, we shall have at once to send troops, as I take it, or there will be a great demand to send troops, in order to protect our interests in Persia. I should have thought that anyone could see that the position of this country would be seriously endangered by a contract of this sort, which commits us to quite undefined liabilities in this way. There is only one condition on which this contract would be advisable and desirable, and, if that could be found, I think it would be very advisable and desirable, and that is if we were sure that the integrity of Persia could and would be maintained as an independent country. We are, by this Agreement, practically bringing ourselves up with a frontier straight against Russia. At present, we are on good terms with Russia, and I am delighted to know it. Russia made a mistake in regard to Mr. Shuster, but I am delighted to know that is all over, and that we are now on good terms with Russia. You cannot, however, depend upon the Russian Government in a matter of this sort. One never knows what may happen in Russia. It is an enormous country. There might be revolutions there, and a complete change of policy, and we might, at any moment, find ourselves in immense difficulties simply in consequence of these oil-fields on which we are now embarking with, as I think, a very light heart. If the Government wants to get support for this contract, I think that they ought to give us more assurance than we have had today that some further steps will be taken to maintain the integrity of Persia, which, I believe, is seriously threatened by a contract of this sort. How can that integrity and independence be best preserved? If we do that we must do more than we have done at present to recover the financial position in Persia. Persia is at present in financial difficulties, as I think, owing to the departure of Mr. Shuster.

It would not be in order to go into the case of Mr. Shuster on this Resolution.

I will not mention Mr. Shuster again, but I would suggest to the Government that this contract would be looked at with much greater confidence on this side of the House if we could be assured that it would be accompanied by a serious attempt to maintain the integrity of this country, for which we have made ourselves responsible.

I did not want to intervene in this Debate at all, because I felt it would be said that I was interested in this oil question. I have been connected with the oil industry for forty years, and I should not have attempted to address the House had it not been for the very unjustifiable attack that the First Lord of the Admiralty made upon my company and that of my brother, Sir Marcus Samuel. I claim that we have rendered—especially Sir Marcus—the very greatest service to the country and to the Admiralty in the introduction of liquid fuel for use in marine engines. We were the pioneers of that commodity as liquid fuel, and it was on board our steamers that the Admiralty, nearly twenty-five years ago, made their first experiments. About twenty or eighteen years ago engineering officers were making trips on board the Shell Company's steamers from Hong Kong to this country to study the use of liquid fuel for the Navy. There were many engineering officers who took trips in our steamers between this country and the Black Sea, and I claim that we have never received any recognition. On the contrary, we have always received the greatest hostility from the British Government in spite of the services we have rendered. I am not going to criticise the contracts, and I am not going to criticise the oil-fields. I believe, that so far as they have been proved, they are good oil-fields, but I do protest most strongly on behalf of one of the greatest British commercial industrial companies, that the attacks that have been made are wholly unjustifiable.

I represent no fewer than 12,000 registered British shareholders in the Shell Transport and Trading Company, whose names and addresses are to be seen at Somerset House. There are some foreigners—about 500, I should think—and there are probably a great many other British shareholders we know nothing about, because they have converted their script into bearer warrants. I protest, on their behalf, against the attack on the directors of the Shell Company, and I say we have not in any way done anything to justify the First Lord in accusing us of having exploited the Admiralty, or the country, or of having neglected the interests of this country. I go further. I am not at liberty to mention anything about the contracts. The Admiralty have chosen to call them secret, and we are bound to be ruled by their decision, but I have no hesitation in saying that, so far as my directors are concerned, they would not object in any shape or form to the Admiralty publishing the prices that my companies have charged. I contend, that if we are accused of having exploited the Government, and the nation through the Government, we are entitled to ask the Government to justify that accusation.

We contend, and I am certain of my facts, that for what the Government have had from us they have paid no dearer, but in many instances cheaper, than for the supplies they have been able to secure from other countries. We have deliberately, in late years, gone in for the development of liquid fuel, because we know perfectly well it would be necessary for the Navy of this country. We called the attention of the Admiralty, at the time of the China-Japanese War, to the use that was being made of liquid fuel, and that was long before they ever contemplated adopting it for British ships. We knew perfectly well it would have to come for naval purposes, because the advantages were so overwhelmingly in its favour. It was on the assumption that that demand would be brought about that we went in for the development of the resources of the world. The hon. Member for Chelmsford (Mr. Pretyman) has told us that it was in 1903 that the Government of the day first contemplated the absorption of the Anglo-Persian Oil Company. I am sorry to have to refer to matters which I should have liked to have avoided, but, in consequence of the attacks which have been made in this House by the First Lord, I feel compelled to bring back to the memory of those who were in office then, and also to bring to the attention of those who are in office now, certain facts—I am making no attack upon anybody; I believe that both the past and the present Government have been sincere in their action—but I am also convinced that they have been grossly and purposely deceived, and that they have adopted a course which, had they taken the trouble to ascertain the facts, they would never have entered upon.

If we go back to 1903, at which time the hon. Member for Chelmsford tells us he contemplated the absorption of the Anglo-Persian Oil Company, we find there was raging a war of rates in the East at that time, and when the hon. Member says he took a certain course for the purpose of crushing monopolies, I say, and I say it without fear of contradiction, that when the facts are known it will be found there is no such thing as a monopoly in the oil trade in any part of the world. I say absolutely that nobody can prove there is not an open market, but that dozens of companies have not the means at their disposal to sufficiently develop their resources. I go back to 1903 at the time when there were no less than eight oil companies competing in the Indian markets for the trade. They were the Standard Oil Company, the Shell Transport and Trading Company, the Royal Dutch Company, Maritaschaef and Company, Société de Naphte, Caspienne and de la Mer Noir, Siderides and Company, Richner and Company, and the Burma Oil Company. These companies were all competing with each other, and the prices had been reduced to ruinous figures. The Burma Oil Company went to the Indian Government, and led it to believe that there was a combination between the Standard Oil Company and the Shell Company to crush them out of existence. The Indian Government of the day, believing that this state of affairs existed, went to the assistance of the Burma Oil Company and put a duty on the importation of petroleum into British India, which created the first monopoly that was created in the oil trade. I am a Protectionist myself—a strong Tariff Reformer—and I admire the Government of India for having protected that industry, and thereby being the means of creating a strong and powerful company.

I am desirous not to interrupt the hon. Member, as I understood he was giving a more or less personal explanation. I think he is going rather far from the subject before the Committee. For the guidance of the hon. Member, I had better say at once he cannot give a dissertation on history; he must confine himself to much more recent events.

I must apologise, but I thought as the beginning of this business had been traced back to 1903, and as an attempt had been made to show there was then monopolies or attempted monopolies, I was justified in showing that no such thing existed. If I am wrong in so doing, I apologise and, of course, at once obey.

There is no objection to general references, but the hon. Gentleman is going rather deeply into matters which deal with a totally different question.

I will leave that subject. I simply desire to repudiate, in the most formal manner, the suggestion that at the present time there is any monopoly in the oil trade. I wish also to say that so far as the companies I represent are concerned, we have no objection whatever to the Admiralty publishing the prices which they pay us, because it will prove that they are able to obtain their supplies at equal prices and on terms equally advantageous to the tax-payers, as they are about to do under the contract with the Anglo-Persian Oil Company, the terms of which they, of course, refuse to disclose. As regards supplies, the Admiralty are evidently unaware of the developments which have taken place in Egypt. They are probably unaware that the Anglo-Egyptian Company, in which the Egyptian Government are shareholders and upon the board of directors of which the Egyptian Government have a representative in the person of the Hon. Hugo Baring, is thoroughly British, and is in a position, if it had been approached by the Admiralty, to have given larger supplies than have been secured by the contract with the Anglo-Persian Company now under consideration. There are also a large number of British companies—in Roumania and Trinidad—and there are hundreds of British companies in other parts of the world who, if the Government were to ask them to submit tenders, would be able to give them their supply equally as well, but in a much better geographical position in the event of this country being engaged in hostilities. I do not intend to keep the Committee any longer, as I am not allowed to deal with the question into which I wanted to go.

I do not propose to follow the hon. Member who has just sat down, who speaks with authority as to the various supplies of oil that exist in the world. His speech was certainly a fair and temperate one so far as his facts were concerned. It was admirably borne out as to the world's sources of supply by the speech of the First Lord of the Admiralty, who stated very specifically that there was no question, in entering into this proposition, of there being any shortage in the oil supply and that there were ample supplies throughout the world, but that it was simply a question of having one contributing source of supply for the sake of helping the Admiralty to make better bargains in regard to the price. That is the crux of the whole question: If there is an ample supply of oil to be had throughout the world—

Of course, at a price. Although, perhaps, oil lends itself to a corner more than any other article, you cannot corner the supply of the whole world, and one expert told me, not long ago, that the immense stimulus of the demand for oil which now exists is increasing that supply, and that new sources are being found in various parts of the world. We all agree with the First Lord of the Admiralty that there is an ample oil supply throughout the world—I am quite prepared to add, at a price. Then the question we have to consider is, what is the real price we should pay; what does this deal involve to the British taxpayer, and what is the price he will have to pay in order to indemnify us in going into this proposition? I have listened attentively to the speech of the First Lord of the Admiralty. and to the weighty and most interesting speech made by the Secretary of State for Foreign Affairs. I came down to this Debate with an open mind, and I submit that they have not made out that there is any necessity for us to take the great risks which they themselves have admitted, and which are admitted on all sides. The Noble Lord the Member for Portsmouth (Lord Charles Beresford) admitted the risk from the strategical point of view, and said that it would involve an increase in armaments and the protective forces to look after our property. That is part of the price we shall have to pay for this proposition. Therefore, we must survey it as a whole. It is admitted, and has been demonstrated from the speeches on both sides, that it will be an enormous price, a much greater price than the mere higher price of the actual commodity itself. The whole basis of argument has demonstrated, unquestionably, that there is no vital necessity for us to rush into this proposition. It is not as if our existence vitally depends upon it. The First Lord himself has admitted that we might yet depend on coal for our ships. Then why should we rush into a proposition of this sort involving unknown liabilities, and possibly complications in many directions? No case at all has been made out for entering into this proposition.

The hon. Member for Chelmsford (Mr. Pretyman), in a pointed speech, drew attention to the finance of this proposal, and I find myself in entire agreement with him. I have never heard a more extraordinary proposal than that made by the First Lord of the Admiralty, namely, that this matter should be financed by balances remaining from the Old Sinking Fund. What right have the Government to attach those balances? According to the conditions of the Old Sinking Fund they should automatically go in reduction of Debt. They are really borrowing for this proposition, because they are taking £2,000,000 which ought to go in reduction of Debt, and which has been hypothecated for that purpose. When the matter came before the House we were not asked to agree to a proposal to buy a concession in Persia, but to hypothecate certain balances to be used for the Navy and other purposes. They have not been used for those purposes, and should have gone in the reduction of Debt. I cannot see how they can be brought back again this year. You cannot transfer a balance. If I understand the basis of British finance, at the end of the year all the balances are surrendered by the Treasury, and automatically, according to the Sinking Fund conditions, go to the redemption of Debt. We have had a speech from the Secretary of State for Foreign Affairs and another from the First Lord of the Admiralty, and we are entitled to have another from the Chancellor of the Exchequer to explain the finance of this deal and to justify his taking these balances for this purpose. I know that the balances under naval administration may be transferred from one Department to another, but they are all automatically surrendered at the end of the year. The Chancellor of the Exchequer has no right to take those balances without coming to the House of Commons for authority to do so. If he wishes to get authority for this advance, he ought to come down with another Supplementary Estimate. This is really a Supplementary Estimate adding another £2,000,000 to the £51,000,000 for naval expenditure. It is a mere subterfuge and a deception. We are getting very tired, not only on the benches opposite but on this side also, of the way in which the control of the House of Commons over finance is defied by the Administration, who are supposed to be the trustees for it.

I pass from that to another point. The hon. Member for West Staffordshire (Mr. George Lloyd) made a most interesting and valuable contribution to this Debate. He spoke with great knowledge of the country in a very convincing manner, and did not take a partisan view in his most statesmanlike speech, which did him great credit, and those who listened to it appreciated his well-pointed and ably spoken sentences. He showed the unquestionable and enormous risks that we were 0running by going into this proposition. The right hon. Gentleman (Sir E. Grey) in a most extraordinary speech, when the hon. Member (Mr. Lloyd) attacked him for not defending British interest in Persia and not protecting those caravan trade routes, said we had not attempted to do that. He admitted that if we had attempted to do it it would have involved a very much greater undertaking on the part of the British Government. He seemed to be illogical in his defence of this proposition. He attacked the hon. Member for his statement that the British Government failed in defending our commercial interests in Persia because we had not made a proper defence of these caravan routes and the mercantile transactions which were involved. The defence of the Secretary of State was that if we had taken any action it would have meant that we should have had to send an expeditionary force into that territory to punish those tribes, and he showed that we could not enter into this in a tentative manner, and that if we took it up at all we should have to do it in a very thorough and workmanlike way. Therefore, he admitted that if we wanted to protect our interests there it would involve very considerable expense, and a very large undertaking would have come out of such action. Surely that is to admit what we are contending, not only on that side, but on this, because it would also follow that it would involve a very large Expeditionary Force, and other military and naval measures, to protect our interests in the central and in the neutral zone involved in this proposal. The very argument of the Secretary of State is, to my mind, a most convincing one, that this is an undesirable proposal, as involving unknown possibilities and liabilities. If you study the speeches tomorrow you will find that if you want to get the view that there is no risk, you will find that in one part of the speech, and if you want to get the view that there are great and contingent risks, and that is the reason why he did not take any action in the past with regard to the trade routes, you will find that in another part of the speech. But we have to look at the facts, and the facts are surely that there is an ample supply of oil from various parts of the world which we can get, possibly at a price, but everything goes up in time of war. You cannot protect yourself in the matter of all commodities. If I am going to buy mules in time of war, and the Noble Lord has mules to sell, he will put up the price against me. If you want to buy anything, you have to take risks as an Empire, and we cannot control all sources of supply. I admit that if this were the sole source of supply there might be some justification for taking the risk. If the existence of this Empire depended upon it, this House would not seek party advantages, but would look at the proposition as a matter of our vital existence. If we can prove, out of the mouths of Ministers themselves, that there are ample supplies in other quarters, there is no case for this proposal.

There was some reference made by the hon. Member (Mr. Gretton) to finance. He pointed out that although, in this proposition, we are buying the ordinary shares, and therefore the control of the company, as we had not got the majority of debentures, and as the debentures, of course, carry foreclosure rights, if the company were not a financial success and there was a failure to pay the debenture interest, the debenture holders would foreclose and the British Government would be left outside. I think there, again, this proposition really looked at, either from a political point of view or from the financial or commercial point of view, is really not quite what the First Lord would have us believe. If that is the case, it is our bounden duty to say so, and I have endeavoured to put it in as temperate and as fair a manner as possible. The hon. Member (Mr. Dillon) drew attention to the question of Persia, and I agree with him that we should not lose sight of the position of Persia in this proposal. My hon. Friend (Mr. Snowden) also referred to that, and although the hon. Member (Mr. Dillon) said there were very few of us in the House who took that into their consideration, still there is a considerable number who, I think, do not look at this fairly, even from the material or the strategical point of view, or from the point of view of the advantage of the British Government only. We have regard to the spirit of nationality to the rights of those smaller nations and to the position of Persia. I think there, also, what is morally right is very seldom politically wrong, and if we give more support to the integrity of Persia, and to the creation of that buffer State for the restoration of good government there, and the Persians would look after the property, we should also be doing what was morally right and what was politically right. The idea, as the right hon. Gentleman suggested, that we should expect Persian troops, officered by British officers, to protect our oil-fields, was an astounding statement to come from a Minister of the Crown. I cannot conceive of any reason, under international law, which would justify us in expecting it of Persia. We might, of course, at the point of the bayonet, try to bully Persia into protecting our oil-fields.

I do not think that justifies us in doing it. I hope we have not yet come to the point that we advocate it as a first principle of British policy that we should attempt to compel a small nationality to protect our property in a zone where we have particular interests. I think our case against this proposal is a complete one, and that on all grounds we ought to oppose it. In the first place, in its essence, I do not think financially it is altogether a very attractive proposal. I have not audited the accounts of the company, and I do not know the value of these reports. I think there is some justification for the remark, that before we are asked to vote the taxpayers' money we should see these reports and we should know the value of the property. We have to pay the taxes, and we represent those who pay them. I think we are entitled in their interest to ask what we are paying our money into. I think that is a business proposal which would appeal to any business body of men, such as we are. Therefore, I submit from that point of view, it falls to the ground. Then I think it falls to the ground for another reason mentioned by the hon. and gallant Member for Chelmsford (Mr. Pretyman), namely, that this Resolution does not deserve our support because it is irregular in regard to the method of finance—I refer to the drawing of the money from the sinking fund balances. I think also that on the higher ground of political advantage—on the ground that we are here to look at the question, not from the narrow point of view that we are able to get a comparatively small source of oil which we are able to control, but from the point of view of the benefits and advantages given to our great Empire and to this country—if we sincerely believe that the price we are paying, having regard to the fact that there are vast sources of supply in other parts of the world, may involve us in liabilities, difficulties, and dangers, which will complicate matters and increase the price to the taxpayers, then I submit we are not entitled to support the Resolution.

I make no apology to the Committee for taking part in this very important Debate, because it happens that for a considerable number of years I have been giving some of my life to the study of this question. I come here to this Debate without any interest, direct or indirect, with regard to the particular matter before the Committee. We are asked to-day to pass a Money Resolution which will authorise the Government to acquire a controlling interest in the Anglo-Persian Oil Company, Limited. I think it is a very great pity that the First Lord of the Admiralty in the very interesting speech in which he introduced the Resolution should have gone out of his way to attack the Shell Company, or Sir Marcus Samuel, or the hon. Member for Wandsworth (Mr. Samuel Samuel). I listened to the manly speech of the hon. Member for Wandsworth with very great sympathy, because it is a very unfortunate thing, when a matter of business like this comes before the Committee, that any Minister of the Crown should consider it his duty, or that it should come in any way within the purview of the Motion, to deliver an attack upon a private company, much less any company with which any Member of the House is associated. This attack which we have heard had nothing on earth to do with the question before the Committee, and I was at first at a loss to understand why it had been made, but as I listened to the right hon. Gentleman I found the reason why he introduced this attack into an otherwise excellent speech was that he knew in advance, what has been proved during the last two hours, that he would have very great difficulty with some of his own followers in getting them to support the proposition he was bringing forward, and that the best course of action to get them to support it was to raise the question of monopoly and to do a little bit of Jew-baiting. In order to get the Labour Members to support him he spoke on the same lines. I am very sorry these elements were introduced in this Debate, for they really have nothing to do with the actual question before the Committee.

In considering the merits of the question itself, I think that as business men we have got to put one proposition to ourselves, and it is this: Has liquid fuel now become a necessary for the purposes of the Fleet? I think the House of Commons and the country generally have already come to the conclusion that it is a necessary. A large number of reasons have teen given at various times by Committees of the House on this subject. I think it is only necessary to quote very shortly two of them which really dispose of that part of the subject. One Report states that oil fuel increases the effective power of war vessels by at least 50 per cent. That is one reason why oil fuel today has become a necessary. The other, and perhaps even most important matter, is that it can be put on board a vessel at sea, whereas coaling at sea, as everybody knows, is practically impossible. The result is that a war vessel engaged, we will say, defending one of the trade routes of this country has not got to return to port for the purpose of coaling, but can be recharged with fuel while doing her duty in the position in which she is placed. That is a most important matter. What is the position at which we have arrived in connection with the evolution of this question? We have to-day over 100 vessels in the Fleet using oil fuel, and in addition to the utilising of oil for the purposes of steam there is another, and even more important, factor lurking behind, and that is the evolution of the internal-combustion engine of the Diesel type by which the fuel produces power directly without the intervention of steam. This evolution has made enormous progress. Large-sized boats are being propelled in this manner, and there is no doubt that within the very near future oil fuel, which to-day has become a necessary, will become even more so.

The next question with which we are faced in considering this important Resolution is, How can this necessary be secured in time of peace and in time of war? Although I agree in the result, I differ entirely from the speech of the First Lord with regard to the reasons which have led up to the present position. In times of peace the answer to the question, "How are we to get oil fuel? "was no later than two years ago a perfectly simple one, but to-day it is far otherwise, and that difference arises from the new uses which have been discovered to which is applied, not petroleum, but liquid fuel, which consists of the residual oils from the refineries engaged in refining petroleum. A suggestion was made by the right hon. Gentleman in his speech conveying with it a particularly nasty insinuation against the "Shell" and other companies. The suggestion was that the difficulty of getting oil to-day at a low price was caused by the machinations of some trust or ring. The right hon. Gentleman has said that an open market is an open mockery in this respect. The hon. Member for Leicester repeated this unfounded charge. The truth is that until quite lately there was no market whatever for residual oils outside the country where, at the refineries, they were being produced. The markets were in petrol or benzine, and also lamp oil, and to a small extent in lubricating oil, but there was no market whatever for export for mere residual oil for liquid fuel. That market has almost entirely arisen during the last two or three years, in consequence of these new uses which have been found for this oil.

A very cursory glance at the question of the amount of production all over the world of residual oil is of interest. The total world's production of crude petroleum last year, 1913, was just over 50,000,000 tons. I have got here details showing where that petroleum was produced. Questions have arisen as to the supplies in the British Empire, and where this petroleum can be got, and the figures which I have here answer the whole of these questions. But my point at the moment is simply that the total world's production last year was 50,000,000 tons, as compared with a total production of 28,000.000 tons in 1906. To that figure requires to be added, for the purpose of our calculation to-night, the production of oil from shale, which is going on in Scotland. The total output of the five Scottish companies in 1911 was 3,116,000 tons of shale. The average yield per ton was twenty-five gallons of oil. This quantity of oil would not, of course, be a great factor in the problem, but no doubt—and this is what I would like to impress on the right hon. Gentleman—the mining and the distillation of shale could be greatly increased, and also extended to England, where there are even larger and richer beds of shale waiting for development than in Scotland, and I, for one, would look forward with great satisfaction to increased efforts on the part of the Admiralty to develop the production of liquid fuel from the sources which exist in the United Kingdom itself. On the other hand, when we are considering the shortage of supply of this article, we have got to take into account the fact that out of 50,000,000 tons of petroleum, more than half is made into benzine, into the petrol that runs all our motor cars, the oil that is burnt in the millions of lamps that are lit all over the world, all the lubricating oil for machinery, the oil that is used in gasworks, and the oil for varnishes and paints, and that only about 20,000,000 tons of residual oil are left for the purpose of supplying the liquid fuel requirements of the whole world.

Yes, of any oil. The total Scottish production is only 300,000 tons of oil from all the shale, and therefore that is hardly a factor in these figures. Twenty-five million tons spread over a year would give half a million tons a week. A large proportion of it is forestalled for the consumption of railways in oil-producing countries and a variety of other industries, and the proportion remaining available for sale to the fleets of those countries which have just wakened up to the use of oil fuel, and want to get that oil fuel for their purposes, is inadequate for the navies of the world, without making any allowance whatever for the requirements of the mercantile marine. The problem, therefore, of securing a supply of what is necessary is already very difficult in time of peace and will become much more difficult in the near future. It has nothing whatever to do with the Shell Company or the Standard Oil Company, or any other evil magnate which is designing to obtain a monopoly and raise prices. Those companies to which the right hon. Gentleman has referred never meet, except in conflict and for putting the prices down in competition with one another. I ant speaking now as a director of the largest purely British oil company which there is in existence, and I know something about the subject and the prices, and I have no hesitation in telling the right hon. Gentleman that the statements in the Press in this respect and his own speech are based on prejudice, instead of a knowledge of the actual facts, and on an entire ignorance of the true position of this matter, which is that there is a world shortage of an article which the world has only lately begun to see is required for certain special purposes. That is the reason why prices have gone up, and not because some evilly disposed gentlemen of the Hebraic pursuasion—[HoN. MEMBERS: "NO!"]—I mean cosmopolitan gentlemen—have put their heads together in order to try and force prices up.

I will prove my point. It is very important, because it will show the right hon. Gentleman that he has been proceeding upon a misconception of this subject. The chief producer in Europe is Roumania. The difficulty of the problem which we have to study, is illustrated by the Roumanian experience of the last two years. The Roumanian Railways belong to the Sate, and they use partly liquid fuel and partly Cardiff coal, and they have had prepared for the last five or six years a carefully analysed examination of the actual cost of running the railways, comparing the calorific value per ton of the residual oil with that of the Cardiff coal. I will not give the figures, because they would not be understood by the Committee, and they would take some time to give. All I want to point out is, that the low price of petroleum residues down to 1912 caused a large accumulation of stocks in Roumania. One of the largest companies in Roumania made a contract with the Admiralty—I take the figures from the "Roumanian Official Gazette," with regard to petroleum—for a large quantity of liquid fuel at sixteen francs a ton, in Roumania. The Committee will hardly believe me, when I say that within two years, that material is today worth sixty-six francs—an increase from sixteen francs to sixty-six francs. That is an increase in price which has to be accounted for, find it causes anyone seriously to think when they hear these figures. Even at the enhanced price of to-day, I suppose that the residue could hardly be bought in Roumania. Variations in price like this show what a com- plex problem it is that we have to deal with. I will only give a further illustration of this point. France, which has no petroleum of its own in 1893, imported 215,000 tons of crude oil and 44,000 tons of refined. I can give the figures from 1904, but I will only give them for 1912, when they were 174,000 tons of crude oil and 433,000 tons of refined.

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What does that mean? In that short period from 1893 down to date the whole French importation of petroleum has completely-altered its character. Formerly, they imported 83 per cent. of crude, and 17 per cent. of refined; and last year they imported 28 per cent. of crude and 72 per cent. of refined, thus making an entirely volte face of the whole position. These are the things, these are the extraordinary points in connection with the petroleum trade, and these are the points which a Government Department which is becoming a large customer, has got to face. I have here, also, the exact figures with regard to Germany, but I will not detain the House by quoting them. I would point out, however, that Germany has on its border, Galicia, an oil-producing country, and it has been asked why Germany does not get her oil from Galicia, and why did she get 70 per cent. of it from the United States of America? The answer is that the total output in 1912 in Galicia was 1,187,000 tons, but in 1913 there were 123,000 tons less, showing that the total production in Galicia is most seriously falling off. Under these circumstances, what do I suggest is the problem which the Admiralty are called upon to face, and how can they meet it? It is this: First of all, I may be allowed to point out that I do not treat this as a political matter, because I am going to vote with the right hon. Gentleman and support his proposition. I am looking at this subject as a business man. In the first place, I think it is the duty of the Admiralty to do all in their power to foster the production of suitable liquid fuel in Great Britain. The right hon. Gentleman has told us something about it, but in the interests of the United Kingdom there are many of us who would like to hear a good deal more on that particular aspect of the subject. Secondly, we ought to have, and I think the right hon. Gentleman has indicated that steps are being taken to provide it, storage in suitable ports and of sufficient capacity to last our Fleet during the probable con- tinuance of a war. If a war were raging, it would be absurd as everybody in this Committee knows, to try and bring petroleum from Persia, if a war were raging at the time. There should be suitable tankage accommodation, and the tankage costs about twelve shillings a ton to erect. I can only give the right hon. Gentleman the figures that I have obtained myself, and if he is not satisfied with the figures upon which I have put the cost of 5.000 tons of storage, I cannot help it.

Yes. You can erect a 5,000 ton tank for about £3,200 or £3,300. I should like to see reservoirs holding some millions of tons erected in suitable places, and stocked, with the best oil, get it where you will. There is a third very interesting point, namely, about oil within the Empire. There are numerous places where oil is being got to-day within the Empire, and there are many more places where it could be got with a little research and money being spent upon it. I should like, next to the development of the supply in. the United Kingdom, to see some real and bonâ-fide effort on the part of the Government to develop the production of oil within the Empire, particularly in Canada, Newfoundland, Trinidad, Barbadoes, and a variety of other places. Fourthly, I think it was wise and proper, at this stage of the evolution of this complex and difficult question, to acquire a controlling hand in reference to crude petroleum. It is not enough to say we are going to be squeezed by cosmopolitan financiers and by trusts. The real fact is that the squeezing is the-consequence of the enormous demand and the unelasticity of the supply. The demand has arisen. You have only to look at the streets of London to see how horses, have disappeared, and how petroleum is doing their work. Motor boats are now being driven through the water by petroleum, and to-day petroleum is doing not a little towards the conquest of the air.

All these things have told upon this business within the last two or, three years, and the amount of oil that is produced, as I have shown, has not been increased in any way in proportion. That is the reason why the right hon. Gentleman finds himself so short of oil fuel that he cannot properly exercise portions of his Fleet, and that he has cut down the amount of sea service of this, that, and the other portion of the Fleet, which portions are deprived of proper exercise. It is perfectly futile for him and his Department to imagine that it is in consequence of cosmopolitan finance—it is in consequence of the inevitable law of supply and demand. Still I am in favour of the proposal before us to-day, and I am in favour of the Report that has been embodied in the Blue Book. I have reason to believe that Mr. Blund-stone, Professor Cadman, and Mr. Pascoe, whose names are appended to the Report, are reliable gentlemen of the highest possible reputation and expert knowledge. I do not think they would have put their names to that Report if they were not satisfied that it was correct. I do not come to this Committee with any prejudices in favour of any proposition brought forward by the Government, but on this ocassion I feel bound as a business man, and I hope a patriotic man, to support the proposal which the Government is putting before us.

On a point of Order. May I ask whether the passing of this Resolution in any way commits the House to the particular method of providing the money, and whether it will not be necessary at some later stage to introduce a Bill covering the provisions of the money upon which the House will be free to give its verdict?

I understand it is proposed that a main part, at any rate, of this money is to come from Exchequer balances. In that case it would, of course, have to be authorised by Parliament, either by a Clause in the Bill arising from this Resolution or by a Clause in the Finance Bill. The House on that occasion would be able to consider the method in which the money is to be provided.

I am not going to discuss the finance or the diplomatic or military aspects of this question. I am one of those who believe that oil will soon be as essential in modern warfare as ammunition itself. I believe that it is the right policy of the Government to make sure of an ample supply of oil, but when I say that I do not agree that this is the right way of carrying out that policy. One could understand the Government making some arrangement with the Burma Oil Company for a supply of oil. That is one of the best-managed commercial concerns to be found anywhere. What one cannot understand is why the Government should use the Burma Oil Company as the channel for investing enormous sums of money in a foreign country, and in such a foreign country. If public money is to be spent, and public money should not be grudgingly spent, in either getting or safeguarding our oil supplies, I submit it should be spent in British Possessions. There is no reason why it should not be spent there, and there is every reason why it should be spent there, because in almost every portion of our British Empire we have undeveloped sources of supply which only require direct encouragement and a little assistance from the Government to make them unfailing. I recollect asking a question of the First Lord upon this subject as far back as the 2nd of April, 1913. A portion of that question was:— that. The situation is a good one and there is no difficulty about the labour market. That is in Newfoundland, our nearest Colony, where so long as we had a fleet at all the supply could not be interfered with. Then there is New Brunswick and other places in Canada. In New Brunswick there are large deposits of shale which are in danger at the present time of going into foreign hands. In Nigeria and the Gold Coast there are oil-fields within a few days distance of Gibraltar, and from three to four weeks nearer than this oil-field in Persia, and in a situation where they cannot be interfered with.

We heard some sneers—I thought they were cheap sneers—at Trinidad, one of our own Possessions, to-day, and where undoubtedly there are great oil-fields which only await development. From the public point of view the West Indies ought to be developed by British capital for this reason: The opening of the Panama Canal is going to work a revolution in the carrying trade from the great Californian and great Mexican oilfields to this country. In Australia you have large deposits of shale, and oil has been proved both there and in North Borneo. In New Zealand important oil resources have been known for half a century. Every Governor-General and every official in New Zealand has testified to their value. I take, for example, Sir J. G. Ward, the Premier at the time, who visited one of the fields in 1911, and said, "It was an industry full of great possibilities for the Dominion." And there is the impartial testimony of the American Vice-Consul, "who at the same time said, "This looks as if New Zealand would be a great oil-producing country in time." During the past two years tremendous strides have been made in the development of its vast oil resources. Unfortunately, every one of those companies has been handicapped through want of capital, as is the case in nearly every young and struggling industry in the Colonies. It may be interesting to know that there is one company there, with nearly 5,000 local shareholders, which during the last twelve months has erected a first-class up-to-date refinery. My point is this, that if each of those companies—promising companies—in our different Colonies, had a fraction of this colossal sum that is going to this foreign country placed at its disposal It would give not only a first-class investment in every way, but would be a good investment for this country. It would, first of all, ensure all the oil supplies required for the Navy, and it would do more: it would show the Colonies that the Mother Country takes at least some practical interest in their development, and, apart from sentiment, it would bind those Colonies with the Mother Country in the strong links of a common industry and interest. We all know the patriotic conduct of the Colonies during the South African war, and since then of their supplying ships for the Navy. I submit that there would be a very much stronger connection if we invested our public money in our own Empire. In view of the strategic importance of New Zealand and Australia, we cannot afford to neglect those Colonies. I sometimes think it is a pity that in connection with a matter of business, such as this is, our Colonies are not, in some way, directly represented in this House. The First Lord suggested that there was not enough oil in British possessions for naval purposes. I do not think that is true. If it is open to a difference of opinion, I do not think that there is any disputing the assertion that it would be better, from a national point of view, if this huge sum were invested judiciously in either of two ways: First, in helping existing promising companies in British possessions where oil-fields have been proved, but which companies have not sufficient capital to develop those oil-fields properly; or, secondly, in securing oil-bearing areas within British possessions and developing them as purely Government properties. For these reasons, if the Committee goes to a Division, I shall be compelled to vote against this proposal.

Everyone must have been impressed, in the course of this Debate, by the extreme moderation of the speeches which have been delivered. I hope that I shall not deliver a speech which is immoderate. One conclusion to which I have come, is that the First Lord's charge that private consumers and the Government were being squeezed by trusts, has been exploded. I think that in an otherwise broad-minded speech, the First Lord made a very serious mistake in allowing personal feeling to permit him to make the charges, which he made this afternoon, against men who were not here to defend themselves. But a representative of the company to which Sir Marcus Samuel belongs was here, and he very effectively disposed of the charges which have been made. The speech of my hon. Friend who spoke just now, was just as effective, although he supported the First Lord in his general claim, for this resolution to be assented to by the Committee. He pointed out that the fluctuations in price were not due entirely to pressure resulting from any combination. The First Lord is assured that in developing this field in Persia he is going to be able to control prices. I would point out that if these companies, whom he is setting himself up to curb in their attempts to squeeze the public, choose to combine in opposition to. the First Lord and to the company to which he is committing this country, you may have a war of prices which, of course, will bring profit in one sense to the Government, because it will buy its oil cheaper from itself, but will also damage the fortunes of the company into which this country is putting two millions of money. I think I have shown pretty clearly that the argument in regard to price is not all on one side. The First Lord is committing this country to a commercial adventure which may prove successful. But it may not prove successful, and if the right hon. Gentleman is not successful in the partnership into which he has entered, a very severe blow will have been struck at what might be called legitimate State trading.

This Motion is supported to-day by the Labour party. That was to be expected. I say this with all sincerity, as in this House I have unremittingly supported both parties in their naval policy: that any proposal for State trading in connection with oil-production ought to be started in a country where you have absolute control by the military or by the police, and by your own indefeasible right, territorial and Sovereign. This experiment, to my mind, has been started under very dangerous conditions, in a very dangerous community or country—dangerous in this respect: that you will have to land your own troops to control the country in possible disorder, or you must call upon the troops of the country where your oil wells exist. That country has practically no control of its own troops, and cannot send the necessary help. I should like to say this, concerning this proposition, that the country may presently find itself, in a partnership into which it has entered, in very serious difficulties. There were three alternatives. First, there was the alternative that the Government should do as the Indian Government did, and the Indian Government after all is under the direction of this House. The Indian Government has enormously subsidised the Burma Oil Company. Every year an immense sum of money goes from the Indian Treasury to subsidise the Burma Oil Company. It has produced a vast amount of light products, but in spite of that enormous subsidy of the Indian Government to the Burma Oil Company, the product which the right hon. Gentleman wants—that is, the oil-fuel—have not been forthcoming. As I understand it, the Burma Oil Company only produce at this time about 240,000 tons, while Trinidad, which has been despised, produces over 250,000 tons.

In spite of the great subsidy, the products of the Burma Oil Company have not been satisfactory in that respect, though it has been very successful. I would point out that the Government were not obliged to take this course. There was another course which might have been taken. The other proposition is this: If this were to be undertaken at all, I should have infinitely preferred to see it undertaken by the Government direct—that they should have assumed supreme control and have made this experiment in a different way. As I understand it, the proposition of the Government now is to put two directors on the board or a number of directors who can control the others. This strikes me as a peculiarly difficult commercial proposal, and if it were to be considered desirable to enter upon this State trading, I venture to say the Government should have asserted complete control, and, if necessary, sell the management, or lease it, for a number of years, as the great municipalities lease their tramways to other companies. I say this because the First Lord made it appear this afternoon there was only one thing to do. Let me say this: I think the greatest credit was due to Lord Strath-cona, who, at the intimation of my hon. Friend the Member for Chelmsford, first proposed to enter into an arrangement with Mr. Darcy, in order to develop these fields. These fields have been developed and, as I believe, developed in the interests of the Empire, and in the interests of this country, and I think the Government did well to encourage that early effort, because it was not known at that time how large the supply for national purposes and for private and commercial purposes would be. I believe, as my hon. Friend pointed out this afternoon, that the Government have been remiss, and I think the First Lord was frank enough to take the responsibility upon his shoulders in not continuing the policy of the late Government, of preserving that oil committee and of pushing this matter forward five or six years ago. In that case, I rather fancy, the large sum of £2,000,000 now being paid would not have been necessary in order to secure the control which is now secured at so large a price.

I want to be perfectly fair and to say this, that commercially, I think, the Government have done, so far as the present prices are concerned, good business, because I think they could sell their shares to-day for 75 per cent. more than they gave. But that is not the chief object of this House or of the Government—to become purely a trading concern—and to make money. But I would like to point out that the Government have made a curious contract in one sense. They have stated to this oil company, "We guarantee to take from you so much oil." But the Government does not compel this company, which is itself, to provide this oil product. I ask the Committee to examine that carefully. If the Government had made an agreement immediately for the production of oil and for oil products, it is absolutely certain there would have been a clause which would compel the Egyptian Company to produce so much under penalty for which the Government had contracted. In this way, if the company could not provide it in Egypt, they would have to get it from other sources. I point out to the Committee the position in which we are placed as a partner in this concern. We say, "We will agree to take so much oil fuel but we do not compel you to furnish that oil fuel because you are ourselves." I think the position paradoxical, and not only is it paradoxical but it may work very badly for the interests of this country. We could have made such an arrangement with a British company, where the carriage of the oil fuel would have been 3,150 miles less but for the antipathy of the Government to the Shell Company. I mean from Egypt.

I dispute that materials now exist for making any adequate arrangement with regard to Egypt.

I understand from statements made by the Shell Company that opportunities were given, but I understand the right hon. Gentleman now says that that is not the case. But has the Government with all the talents exhausted all its powers, and could it not make such an arrangement in a country which would be under our own control? I do not say the right hon. Gentleman should not have followed the policy of the late Government, but this arrangement has come rather late, and I am certain it is not a bargain which we ought to have made by a partnership in a country where the security of production and the security of transportation is not sufficient. While I recognise the patriotism which the Government has shown in endeavouring to secure a fuel supply, I entirely repudiate the suggestion which the Government has made through the First Lord, that great companies which have never been proved to be trusts, should be attacked through a suggestion that they were not patriotic but were merely selfish. I assert that the right hon Gentleman has received information from these companies, and advantages for which the Government did not pay. Sir Marcus Samuel and his friends are Britishers, and theirs is not a cosmopolitan company any more than Lord Cowdray's company. I deprecate very strongly the turn which the right hon. Gentleman's argument took. It is the duty of Governments to fight tendencies, and this Government have been fighting tendencies, but the weapon with which they they are fighting is double-edged, and we may have reason not to rue, but to regard with greater seriousness than we are regarding to-day, this kind of State trading, which is not a security, which I am certain the hon. Member for Stoke wishes, that is, complete control by the Government in times of industrial or other difficulties, so that State trading shall have its fair chance. Under this arrangement, State trading has no real chance, because it is controlled by other influences.

The hon. Member opposite has argued that this contract would have received more hearty support if the Government had had more control over the shares. One great advantage of this contract is that the Government by holding just half the shares of the company are able to retain the present successful management. The hon. Baronet argued that by this contract the company were not forced to deliver so many tons of oil per year. You could not expect any oil company to guarantee to deliver a fixed quantity of oil per year if the price was fixed at a moderate figure; and I think, if he had taken the point into consideration, he would have altered his criticism accordingly. We find ourselves this evening asked to support this contract, although the House of Commons has not yet been told the one vital factor which would have enabled it to come to a correct and full understanding of the position. We have not been told the price which the Admiralty has paid in the past for oil, although the First Lord of the Admiralty this afternoon told us that the price paid by the Admiralty for oil had been communicated to the Fisher Committee. Neither are we told the price to be paid by the Admiralty for oil to this company. I venture to say that unless we have these particulars we cannot come to a correct understanding and a true judgment of this contract. Neither are we informed as to the percentage of oil which this company will supply to the Admiralty. I shall no doubt be told it is not wise in the public interest that these facts should be disclosed, but there is an Estimates Committee, and it seems to me that a contract of this nature—and no doubt there will be many such contracts in the near future—should be referred to the Estimates Committee where questions could be asked and details examined, so that a report might be presented to this House, and it might come to a clear and definite understanding on the whole position. I hope that in the near future some change in our Parliamentary method of control will be adopted in this matter. I may not be quite in order in raising the subject of oil fuel. Personally, I think the First Lord of the Admiralty has pushed forward with undue haste in this matter, but, having started oil fuel for the larger ships afloat, and having adopted the policy of oil fuel, I quite agree that the Admiralty should press forward and take every available step and precaution to safeguard their supply of raw material for the Fleet in future years. For this reason, I shall support the Government in this matter.

While I am sorry to differ with my hon. Friend on this side of the House who has just addressed the Committee, I hope I shall be in order in agreeing with my own Front Bench. The question is not whether the Admiralty will at present do well to invest some British money in Trinidad, Egypt, or anywhere else, but whether the Admiralty do well in entering into this particular Agreement at this particular time, and under the circumstances obtaining, and I submit that that case is amply proved. I was very much surprised to hear doubts thrown upon the character of the oil concessions which the Admiralty have acquired. A study of the Papers will show that it is extraordinarily rich, and for my part I believe that the Admiralty would have been guilty of a dereliction of duty if they had not had the courage to come forward and conclude this contract. My hon. Friend the Member for West Staffordshire who, like myself, has had the advantage of having been over the ground and knows something of the country, expressed a good deal of doubt, which I should like to dispel, as to whether the pipe-lines of this company can be properly safeguarded in Persia. The Bakhtiari tribes are a turbulent and troublesome lot, but there is one thing they very much prefer to making a disturbance, and that is, getting money; I know them personally, and although years ago they may not have-been above cutting anybody's throat for a few krans, I believe they would much: rather get money than resort to the disagreeable and disgusting necessity of blood-letting. I know that they have, too, gone through a new experience since they have virtually governed Persia for no inconsiderable period after the abdication of the last Kajar Shah. I do not think much difficulty will be experienced—at any rate, not so much as has been anticipated—in inducing them to let these pipe-lines alone, and for the same reason I am not so apprehensive, at any rate, as some of my hon. Friends, that India will be called upon to send an expedition to this part of Persia for the purpose of protecting the property which the Government now acquires. I was very glad to hear the Foreign Secretary say that if anything was to be done in that way it will be for England to do it and not India. This place is not remote or difficult of access. British ships have-been in the habit of patrolling the Persian Gulf for something like a hundred years. It is not difficult to maintain our position in Southern Persia, although so much was sacrificed by the Anglo-Russian Convention. For my part, I welcome this agreement, because it will lead to the assertion of a position on the northern shores of the Persian Gulf which should never have been given up by the Anglo-Russian Convention. I supported that Convention because I thought it was a good thing to do under the circumstances, but those who support the Convention should also be glad to see British interests so consolidated and so increased in that area that in the future there will be no probability of their being sacrificed as they have been in the past.

The Foreign Secretary received from me some time ago a memorandum, drawn up by the late Sir George Mackenzie and myself, of the steps we considered necessary in order to consolidate and maintain our position on the northern shores of the Persian Gulf. He promised to consider that matter. I do not know if he has done so, but I am perfectly certain if Sir George Mackenzie had lived he would have been heartily in support of this agreement. It has nothing to do with any party matter. If there is another argument to be used in favour of this agreement—and it is, to my mind, a very strong one—it is, that with all the wild and wanton extravagance which prevails at the Exchequer, where money is being thrown with both hands from all the windows at Whitehall every day by the Chancellor of the Exchequer, I rejoice to think that some of the money, at any rate, will go into a British company, for the maintenance of British interests, and of the British Navy.

Something has been said about the supply of the necessary oil from coal. I understand—I submit these calculations with some diffidence; I made them to-day—that twelve and a half tons of coal are required for the production of one ton of oil. At that rate it would take something like 5,000,000 tons of coal to supply 400,000 or 500,000 tons of oil for the Navy. Therefore the First Lord of the Admiralty was thoroughly justified in saying that at the present time the prospects of obtaining a supply from coal are not such as to justify the Admiralty in relying upon it, and that they were justified in looking about for another source of supply such as this is.

It is very unfortunate that this supply should be situated in a neutral zone in Persia. Nevertheless, that position is past praying for. At any rate, the parties to the Convention, Russia and Great Britain, are bound by it not to interfere with each other's concessions, therefore this concession is safe from Russian opposition, supposing that Russia would be likely to oppose it at any time, although there is no probability of that. I understand that as long as they observe the terms of the Convention the British position in the Bakhtiari country of the points where oil has been proved to exist will be safe from any serious opposition on their part. The matter has been fully discussed by other hon. Members who have addressed the Committee. I sympathise very much with what was said from the other side, even by the hon. Member for Stirling Burghs (Mr. Ponsonby), as to the. Persian susceptibilities and feelings in this matter. But Persia is to benefit, not lose, by this contract. I hope the Committee will realise that Northern Persia has become a Russian preserve and that it is incumbent on us to maintain our position on the northern shore of the Persian Gulf, for political reasons as well as for reasons connected with the Admiralty, and for other reasons connected with the merits of this proposal. There is no other supply at present available either within or without the British Empire which offers such-facilities. The Admiralty have done good business, and, for my part, I heartily support them.

I wish to impress upon the First Lord of the Admiralty the desirability of considering between now and the introduction of the Bill whether he ought not to go much further than he has done in regard to the sources of supply at home. His action is going to have very serious consequences indeed, not at the present time, but, perhaps, ten or twelve years hence. There is a duty resting upon him, as he is the person in Europe at the head of the Admiralty who is really forcing the pace in this matter and creating a new situation, to lead the way here at home. I am with him as to the good of this contract, and the breaking of a monopoly, in helping other purchasers at home to bring down the prices of the monopoly, and in securing efficiency and economy at the Admiralty, but he is taking very great risks. He recognises that. I do not complain of risks. I am not afraid myself of taking great risks, but they are very considerable in this case. There are the risks of the unknown in Persia, what the matter may lead us into with regard to international complications, the risk of even losing his money, because oil wells are very uncertain, and the risk that this oil fuel will not work out at all. It is admitted in the Blue Book that the five large ships now using oil are only an experiment, and even that experiment may fail. I have it from shipowners who have tried oil fuel in big ships that they have abandoned the use of it, and have not yet solved the problem.

I read the phrase in your own Blue Book that it was merely an experiment, but it will be still worse if this is a great success in your big ships. You are really creating a very serious situation for some of the industries here at home, because other navies will be forced to follow your example. We may have another scare and panic like that created by the "Dreadnought." You will find navies more or less wanting to scrap super-"Dreadnoughts" that have coal and wanting new ships in a hurry and a lot more money in order that they may be abreast of us in the faster and more efficient ships having oil fuel. That will have this effect. I am not here to speak very specifically for South Wales coal, but South Wales as a whole stands in a unique position in the whole world, because South Wales coal does not merely supply the British Navy but all efficient navies of the world, and once you set a new example and set all the navies taking to oil fuel, it will reduce that coal from its high position, and a drop of 1s. 6d. or 2s. a ton will be a very calamitous consequence to the wages and conditions of life there. Therefore, taking all these risks, with such consequences involved, it ought to lie with the Admiralty to initiate experiments for the extraction of the volatile matter from the coal in this country. If the Admiralty were to concentrate upon this great achievement half the energy they have exerted in developing the scientific evolution of hydroplanes they would do probably quite as good a work for science and for the development of the country as they could possibly do. The difficulty is to get people who can undertake the work and develop it, and I press upon the First Lord to consider whether he cannot set up an official laboratory and put aside a certain section of his Department to initiate the experiment. It would be a good thing for the Admiralty itself if some of its officials could know all the vagaries of oil and its various possibilities, and will assist industry and relieve great anxieties which are very legitimate.

I think the vulnerability of the pipe-line is very largely exaggerated. The Bakhtiaris will be financially interested in it. Besides, they do not raid for mischief, but to make money. A pipe-line is not a very easy kind of property to destroy, and they are not likely in peace time, at least, to be in possession of the dynamite which would be necessary. Of course in war time we might find that our enemies supplied them with dynamite, so as to destroy it, but I think the First Lord of the Admiralty was quite justified in saying it is really a peace question and not a war question, and in war time, whatever our sources of supply outside these islands, we should have to rely almost entirely upon what can be stored within our own shores. We have interests in the Persian Government which it is difficult to exaggerate, and it is vital to us to prevent any hostile control in that region. I think it is a proposal which will inflict no injustice of any kind upon Persia, but which will rather be enormously to Persia's advantage, because our intentions in Persia are absolutely straightforward and honourable. Persia at present can no more stand alone than can an empty sack, and unless we go in there and make it obvious that no other Power will be allowed to interfere, it is perfectly certain that those great interests, and other interests afterwards, will fall into hostile hands, and if anyone has seen, as I have, the way Russia is penetrating not only Northern Persia, but through the mountains of Kurdestan down to the Persian Gulf, must feel that it is of enormous importance to us to set an obstacle to her progress towards the Gulf. I do not say that it is the Russian Government that is always responsible for this ceaseless penetration, but it is our interest to stop it. It is in the interest of Persia that we should be there rather than anyone else. It is in the interests of the peace of the world that we should be at the head of the Persian Gulf. It is better for the world's peace that we should not be weakened by having a weak Persia on our flank. It is for that reason that I welcome the contract. I welcome the proposal of this arrangement with the company, because I believe that it will avoid the danger to which I have referred.

Question put, "That it is expedient to authorise the issue, out of the Consolidated Fund, of such sums, not exceeding

in the whole two million two hundred thousand pounds, as are required for the acquisition of share or loan capital of the Anglo-Persian Oil Company."

The Committee divided: Ayes, 254; Noes, 18.

Resolution to be reported to-morrow (Thursday).

County and Borough Councils (Qualification) (No. 2) Bill

Order read and discharged, and Bill withdrawn.

The remaining Orders were read and postponed.

Foot-And-Mouth Disease

Motion made and Question proposed, "That this House do now adjourn."—[ Mr. Webb. ]

May I ask the Vice-President of the Board of Agriculture (Ireland) whether he is now in a position to announce the removal of the restrictions against the shipping of cattle from the North of Ireland to this country?

Yes, Sir; I have received a certificate from the chief officer of the Department in Ireland stating that he is satisfied that these animals were not suffering from foot-and-mouth disease, and Orders are ready for issuing, both by the English and the Irish Boards, and I hope that the ports may be opened immediately on the issuing of these Orders. There is one exception. We do not intend to allow any of the fifteen animals belonging to the county of Fermanagh or the twenty-nine animals which were in the same yard to be shipped. We do not propose to allow them to cross. They must be disposed of in some other way.

So far as the Irish Department are concerned the matter simply awaits the issue of the Order here. There is no use of my saying to-night that the Irish ports will be opened to-morrow night if the English ports are not open to receive the cattle, but my right hon. Friend stated that the moment we were ready he would be ready.

Does that apply to the ports all over England—Lancashire, for instance?

Do I understand that there are no local restrictions whatever in any part of Monaghan?

None.

Question put, and agreed to.

Adjourned at a Quarter after Eleven o'clock.