House of Commons
Monday, May 29, 1916
The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
Imperial Continental Gas Association Bill [Lords],
Read the third time, and passed, with Amendments.
Tynemouth Corporation Bill,
As amended, considered; to be read the third time.
Halifax Corporation Provisional Order Bill, Local Government (Ireland) Provisional Order (Gas) Bill, Local Government Ireland Provisional Orders (No. 2) Bill, Local Government Provisional Orders (No.1) Bill, Marriages Provisional Order Bill,
Read the third time, and passed.
Local Government Provisional Order (No. 6) Bill,
As amended, considered; to be read the third time To-morrow.
Pier and Harbour Provisional Orders Bill,
Read a second time, and committed.
Land Drainage (Welland) Provisional Order Bill,
"To confirm a Provisional Order made by the Board of Agriculture and Fisheries under the Land Drainage Act, 1914, relating to the Rivers Welland and Glen," presented by Mr. ACLAND; read the first time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 52.]
Land Drainage (Lilleshall) Provisional Order Bill, To confirm a Provisional Order made by the Board of Agriculture and Fisheries under the Land Drainage Act, 1861, relating to a proposed drainage district in the county of Salop," presented by Mr. ACLAND; read the first time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 53.]
EAST INDIA (PUNJAB LEGISLATIVE COUNCIL).
Copy presented of Amendments in the Regulations for the nomination and selection of Members of the Punjab Legislative Council [by Act], to lie upon the Table.
RAILWAY ACCIDENTS.
Copy presented of Returns of Accidents and Casualties as reported to the Board of Trade by the several Railway Companies in the United Kingdom during the year 1915 [by Command]; to lie upon the Table.
RAILWAY AND CANAL TRAFFIC ACTS, 1854 TO 1894.
Copy presented of Twenty-seventh Annual Report of the Railway and Canal Commission, with Appendix [by Command]; to lie upon the Table.
CIVIL SERVICE COMMISSION.
Copy presented of Sixtieth Report of His Majesty's Civil Service Commissioners, with Appendices [by Command]; to lie upon the Table.
COMMISSIONS AND COMMITTEES ON QUESTIONS ARISING OUT OF THE WAR.
COMMISSIONS AND COMMITTEES ON QUESTIONS ARISING OUT OF THE WAR.
Copy presented of List of certain Commissions and Committees set up to deal with Public Questions arising out of the War [by Command]; to lie upon the Table.
UNIVERSITIES (SCOTLAND) ACT, 1889 (ORDINANCE).
Copy presented of University Court Ordinance, No. 50 (Edinburgh, No. 18) (Institution of a Degree in the Theory, History, and Practice of Education and relative Regulations) [by Act], to lie upon the Table, and to be printed. [No. 84.]
ORAL ANSWERS TO QUESTIONS.
WAR.
WOUNDED PRISONERS.
asked the Under-Secretary of State for Foreign Affairs whether any wounded military prisoners dying of their wounds have been summarily executed in France since the present War began; and, if so, can he state the reason why they were executed when in that condition?
I really cannot undertake to answer questions of this kind, which I cannot think are seriously put.
SERBIA.
asked the Secretary of State for Foreign Affairs whether he is aware that numbers of the people of Serbia are every day dying of starvation and the remainder becoming so enfeebled from want of food as gravely to diminish the possibility of renewing the population; whether offers of efficient distributing organisations have been made by two sets of neutrals; whether the services of Serbia to the allied cause deserve at least as much recognition by way of aid as those of Belgium; and whether he can now make any statement with regard to the provision by His Majesty's Government of help to Serbia?
I have no official information as to the first part of the question, but I cannot doubt, in view of past experience of the way in which the enemy treats the population of occupied territories, that the state of Serbia is very grave. In regard to the second part of the question, His Majesty's Government have received various proposals, but none which gave any particulars or any guarantee of an effective organisation for distribution and control. The answer to the last part of the question is that His Majesty's Government have demanded from the German and Austrian Governments that the latter shall provide adequately for the civil population of Serbia, Montenegro and Albania in return for facilities for the relief of Poland. That demand has been published, and we await a reply.
If nothing comes of the request to the Austrian Government, does our Government not propose to do anything?
We obviously can do nothing in Serbia without the consent of the Austrian and German Governments.
In Belgium we worked it all right?
Of course, entirely with their consent and by arrangement, not with us but with the American Embassy.
May I ask if the Noble Lord has any hopes that something will be done with the consent of the Austrian Government?
I do not know at all what will be the result of the pourparlers. With respect to the general question of Serbia, I have had an opportunity of seeing representatives of those interested in this question, certainly on one occasion, and I rather think on more than one occasion, and I have always informed them that we are waiting a definite scheme which shall give particulars and a guarantee of an effective organisation for distribution and control, but I have never received such.
FOOD PRICES.
asked the President of the Board of Trade whether he has had his attention drawn to the increase of tea prices by the gambling of certain persons operating in the London tea market; and whether he is taking, or will speedily take, such action as may be necessary to protect the public against such practices?
I have been making careful inquiries into the matter referred to by my hon. Friend, with a view to determining what action may be appropriate in the circumstances. I hope to complete those inquiries very shortly.
Does the right hon. Gentleman see any reason to believe that there has been any withholding of supplies?
I would rather express no opinion upon it at the present time, but if there has been any withholding of foodstuffs we shall exercise the powers we possess.
asked the President of the Board of Trade whether his attention has been drawn to a case in the Lambeth Court in which a milk retailer, who sells milk at 6d. per quart, stated that the price at which he sold milk was fixed by the Dairy Farmers' Association; that the association had asked him to advance the price a penny per quart, and that under the terms of his contract he had no option except to do so; and whether he has yet been able to adopt any policy by which the price of milk can be kept at a more normal level?
My attention had not previously been called to this case. Perhaps the hon. Member will give me some further particulars as to date, etc. As my hon. Friend the Parliamentary Secretary explained on Thursday last, a policy which would make milk production less profitable than the production of meat might endanger the milk supply.
CEMENT.
asked the President of the Board of Trade whether any licences have been granted to import cement into this country from Denmark?
The answer is in the negative.
MERCHANT VESSELS (CHINESE CREWS).
asked the President of the Board of Trade whether he is aware that the Royal Mail steamer "The Danube" engaged a crew of Chinamen in the Port of London during the present week; whether he is aware of the number of British sailors and firemen unemployed; whether it is his intention to take steps to prevent the employment of Chinamen, so as to provide employment for the British sailors and firemen who are out of work; whether he is aware that the steamers "Queen Eugenie" and the "Crown of Seville" have signed on this week at the Mercantile Marine offices, East India Dock Road, full crews of Chinese sailors and firemen, when over 200 British seamen were standing outside waiting employment, many of these men having been torpedoed on two or three occasions; and whether he is aware of the discontent amongst, these British seamen?
A number of Chinese seamen were engaged to serve on the three vessels mentioned last week in London, and the number of Chinese employed on British ships has increased during the War owing to the difficulty of getting other crews and the necessity of keeping our ships going. There is no power to prevent the engagement of a Chinese seaman on a British ship if he passes the language test. The reports I have received do not support the statement that any considerable number of British seamen are unemployed at the present time, but I shall be glad to receive any definite information which my hon. Friend may possess.
DUBLIN PORT AND DOCKS BOARD (WAGES).
asked the President of the Board of Trade if he has seen any of the protests made by the various trade unions against the action of the Dublin Port and Docks Board in reducing the wages of its employés, by stopping trade allowances which they had hitherto paid; if, in the interest of peace and to prevent labour troubles, he will have inquiries made as to the wages paid and the general working affairs of the Dublin Port and Docks; if he is aware that the standard rate of wages paid to labourers, most of them married men with families, is from 20s. to 22s. per week; and if he is aware that the Board of Trade Returns show that the cost of living has increased 50 per cent.?
I was not aware of the protests to which the hon. Member refers. So far as the Board of Trade are concerned, I think they have no authority to hold an inquiry, such as is suggested, except in connection with specific differences between employers and employed which may be referred to them.
Is the right hon. Gentleman aware that a great deal of discontent exists in Dublin among these workmen, and, seeing that the cost of food has increased by 50 per cent. and that the maximum wages earned by the average work- man does not exceed 22s., can he say how they can subsist and maintain their wives and families and educate their children?
RAILWAY COMPANIES (WAGONS).
asked the President of the Board of Trade (1) what railway companies have so far pooled their wagons; what has been the result in diminishing congestion of transport; and whether he is taking further steps in the direction of further pooling; and (2) whether his attention has been called to a memorandum, dated 24th May, from the Traders' Traffic Association, regarding the shortage of railway wagons; and whether, in the absence of a complete system of wagon pooling, he is prepared to take steps, and, if so, what, to meet the difficulty?
Arrangements for the pooling of their wagons have been brought into operation between the Great Central, Great Eastern, and Great Northern Railway Companies, and also between the Great Western, Lancashire and Yorkshire, London and North-Western, Midland, and North-Eastern Companies. I understand that in both cases the result has been satisfactory. I am informed that similar arrangements will shortly be in force between the Caledonian, Glasgow and South-Western, and North British Companies. I have not yet seen the Memorandum referred to by my hon. Friend, but any specific cases of difficulty which may be brought to my notice will receive careful consideration.
Is the right hon. Gentleman taking any steps to pool the whole of the wagons in the United Kingdom, under one committee or authority?
No, Sir; after looking very carefully into the subject I came to the conclusion that there would be no saving or increased efficiency by pooling privately-owned wagons
COMFORTS OF SOLDIERS (INDIA).
asked the Secretary of State for India whether he is aware that soldiers stationed in India are required to pay Customs duties on small quantities of dutiable goods sent to them by friends as comforts; and whether he will ask the Government of India to remit the Customs duties on small quantities of comforts sent to them?
I have ascertained from the Government of India that they now exempt from Customs duty all articles imported by post for Territorials and Garrison regiments and have sanctioned numerous concessions in respect of individual consignments from the Red Cross and similar associations.
Will he say how long these Regulations have been in force, and what steps have been taken to make them generally known?
I am afraid that I cannot say when these changes were made, but the Secretary of State for India no doubt will be able to inform the hon. Member.
May I ask if the exemption will apply to the British and Indian troops in Mesopotamia?
I think that question had better be put down.
BOMBARDMENTS AND AIR RAIDS.
CASUALTIES IN GREAT BRITAIN.
asked the Home Secretary the total number of casualties in Great Britain caused by hostile attacks from the sea and from the air since the outbreak of war up to the present date?
The total casualties caused by hostile attacks from the sea and from the air in Great Britain since the outbreak of war up to the present date are as follows: In the three attacks from the sea 141 persons were killed, including 61 men, 40 women, and 40 children, and 611 persons were injured. In the forty-four air raids 409 persons were killed, including 222 men, 114 women, and 73 children, and 1,005 persons were injured. These figures differ slightly from the totals of those published from time to time, owing to the fact that some persons reported as injured subsequently died and a few additional cases of injury of a minor character not known to the police at the time were afterwards reported.
Can the right hon. Gentleman state the number of civilians on the one hand and of military on the other?
I have not the figures of the number of soldiers and sailors killed, but they were only a comparatively small fraction of the total.
EXCHEQUER BONDS.
asked the Secretary to the Treasury whether he is aware that much dissatisfaction is felt by those engaged in directing and managing banks in the City of London having branches in India, Burma, the Straits Settlements, East Africa, and China, and discouragement as to placing further issues of 5 per Cent. Exchequer Bonds among their customers in those countries, by the fact that the authorities engaged in the collection of Income Tax hold that exemption may not be granted on such bonds issued by the Bank of England on 16th December, 1915, to holders ordinarily resident in such countries for purposes of trade or profession except on declaration of having abandoned all intention of returning to the United Kingdom; and whether, seeing that this strict definition of new domicile did not appear until the issue of Form C, No. 6 Income Tax, some months after and was not in contemplation of the holders at the time that they subscribed to the issue of 16th December, 1915, and seeing that the word "domicile" is ambiguous as a term of law and in regard to acquired domicile is not always so strictly interpreted, he will, in order to give relief in cases of misconception, make inquiry into the circumstances?
My attention has been drawn to this matter and I propose to move an Amendment on the Committee stage of the Finance (No. 2) Bill which will have the effect of giving exemption from Income Tax in respect of 5 per Cent. Exchequer Bonds to persons not ordinarily resident in the United Kingdom, irrespective of the condition of domicile.
MILITARY SERVICE.
EXEMPTION CLAIMS.
asked the President of the Local Government Board whether claims have been put forward for the exemption from military service of certain employés at the Imperial Paper Mills, Limited, Bycliffes, Gravesend, and the Amalgamated Press, Northfleet, Graves-end, both businesses being Harmsworth concerns; whether the manager of the Imperial Paper Mills, Limited, is a member of the local advisory committee; whether he is aware that invitations were sent to members of the local tribunal in Gravesend and the advisory committee to meet some of the directors and to be shown over the works, and that members accepted this invitation and had motor cars provided for them, and were hospitably entertained in the board room on Tuesday, 23rd May; whether this was preparatory to considering the claims for exemption; and, if so, what action he proposes to take?
My right hon. Friend has received a letter from the Imperial Paper Mills, Limited, which does not bear out the suggestion of the hon. Member. It is true that representatives of the local tribunal who had inquired as to the possibility of substituting female labour for male labour recently visited the mills to see things for themselves. No motor cars were provided and no directors were present, and the entertainment consisted of some tea and bread and butter. I am informed that the mills employ approximately 800 men and boys and that there are now only eight single men eligible for the Army, 234 employés having already jointed the Forces. There is, of course, an appeal from the decision of the local tribunal to the Appeal Tribunal, and this appeal may be made by the military representative in any case in which he considers this course right.
asked the Under-Secretary of State for War whether he has received the names of men in attendance at the United Free Church colleges at Edinburgh, Glasgow, and Aberdeen with a request for their exemption; and whether he proposes to accede to the request?
Requests for exemption or other special treatment have been received from a large number of students of various denominations, and the Army Council are preparing new instructions which will shortly be made public. I should be glad if my hon. Friend would possess his soul in patience for a few days.
LOCAL TRIBUNALS.
asked the President of the Local Government Board whether he is aware that the Bridgnorth Tribunal consists of five members, of whom three, including the chairman, are boot and shoe retailers and repairers, whilst another is a director of a local factory; whether he is aware that in the case of two recent applications for exemption made by two master boot and shoe repairers, one being also a retailer, the tribunal merely granted in each case fourteen days' exemption, the term to expire on 23rd May, being six days before the calling up of their group; that in the case of another boot and shoe retailer, although considered entitled to exemption until 30th November by the Advisory Committee and the military representative, the tribunal only granted exemption until the end of July; and whether he will cause inquiry to be made and take steps to prevent any tribunal on which there is a majority of men belonging to one trade adjudicating on the claims for exemption of their trade rivals?
My right hon. Friend has no previous knowledge of the particulars of the cases referred to. I would refer the hon. Member to the answer which he gave him on the 24th instant, in reply to a question on a similar subject.
asked the Under-Secretary for War whether his attention has been called to the remarks of Mr. Hustler Hustler, the military representative of Middlesbrough tribunal, on the 18th instant, to the effect that there was no advantage to be gained by adjourning a case for a man to be examined by the medical board because they were taking every man for something; and whether this is in accordance with instructions from the Army Council?
I have asked for a report on this matter.
MEDICAL EXAMINATIONS.
asked the Under-Secretary for War if he is aware that numbers of men travel daily from all parts of the Houghton-le-Spring Division of Durham to Sunderland for medical examination, many returning, after wasting a day, and in some instances more, unexamined, owing to the medical board being unable to examine the numbers presenting themselves, and, seeing that much annoyance is caused, time lost, earning power sacrificed, and output reduced, will he set up a medical board in Houghton-le-Spring whose decision shall be final; and is he aware that this place is easy of access, and that the above difficulties may be thus avoided?
I have not been aware of the circumstances to which may hon. Friend draws my attention. The difficulties connected with carrying out the medical examination of men are being met, but I have had a note made of the difficulty in this present case. I think it would be wise for persons desiring examination to make an appointment with the medical boards before presenting themselves.
asked the Under-Secretary for War whether circulars have been sent to all the medically rejected in Anlaby, near Hull, asking them to kindly call at the central recruiting office; whether, if this is so, none of them possessed a proper rejection certificate; and whether he proposes to call up all others all over the country?
I am not aware whether circulars have been sent to all the medically rejected in Anlaby, near Hull. I stated last week, in reply to my hon. Friend, what classes of men will not be summoned for medical re-examination.
WAR OFFICE (TEMPORARY COMMISSIONS).
asked the Under-Secretary of State for War if he will state the number of gentlemen of military age engaged in the War Office or in work connected with that Department to whom temporary commissions have been granted but who had no military experience previous to the War and have since not been under military training; and whether steps are being taken to release these gentlemen and to replace them by men not of military age?
My hon. Friend presumably refers to those cases where temporary commissions have been given to gentlemen possessing special qualifications the possession of which renders them of greater value to the country when employed at the War Office, where their special qualifications have scope, than if employed outside it under conditions where their special qualifications will not find scope. My hon. Friend will see that a waste of effort would be involved if the process he recommends in the last paragraph of his question were applied to these gentlemen.
Can a list be published of these gentlemen with special knowledge of value to the State, so that their services might be recognised and known to the public?
I do not see that any object would be gained by that.
ENLISTMENT UNDER AGE.
asked the Under-Secretary for War if he is aware that Private William Alexander Marsh, No. 8,311, 6th Battalion, the Buffs, who enlisted at Folkestone in September, 1915, giving his age as nineteen years, was in fact under eighteen years of age and only attained the age of eighteen on the 6th of April last, and that he enlisted in the absence from home of his mother and without her consent, and is now serving in France; and whether, in view of the fact that Private Marsh is his mother's sole means of support, he will give instructions for him to be transferred to a unit at home until he attains military age?
I am not, of course, acquainted with the circumstances of this case. I would, however, remark that the mother of Private Marsh would not be pecuniarily any better off if her son were serving at home instead of in France.
Will the right hon. Gentleman give an undertaking that he will have this young man retained for Home service until he reaches military age?
Is it not proper that this young man's own wish should be consulted rather than that of his mother?
Of course, there might be a conflict between the two. I cannot give an undertaking of the kind suggested by the hon. Member (Mr. McNeill). I will investigate the case. I cannot say more.
Will the right hon. Gentleman do his best to see that this young man is brought back without making a definite pledge that he will do so, and will he obtain the information more rapidly than he did in a similar case, which took him ten weeks, recently?
I cannot really promise that it will not take ten weeks in this case. We have to refer all such cases abroad to the Commander-in-Chief through the Brigade, Division, and Army Corps. You cannot have these things done in ten minutes.
CONSCIENTIOUS OBJECTORS.
( by Private Notice ) asked the Under - Secretary for War whether sixteen conscientious objectors under detention at Richmond for refusing to obey military orders are ordered to France to-morrow, in spite of the recent Army Council Order, and whether he will take steps to prevent them being sent to France?
My hon. Friend only put this question into my hands as I came into the House. Therefore, I cannot give him what I may call a considered reply. I do not think I ought to say more than that I will investigate the case.
Can the right hon. Gentleman say whether it is the policy of the War Office that men who are under detention for refusing to obey orders should be sent to France?
I should like to disabuse the minds of my hon. Friends in that quarter of the House of the suspicion that persons who are sent out to France are not treated properly. That really is not the case. On the contrary, as I have told the House more than once, these men have been doing very good work and very useful work in the Army, and it is very desirable that that should proceed.
Does the right hon. Gentleman realise that these men are not men who are willing to go to France, of whom there are a considerable number at Richmond, but men who have persistently refused to obey military orders, and that their being sent to France will merely result in bigger penalties?
I will bear that in mind.
Has not an order been issued by the War Office, and published in the "Times" on Saturday, stating that conscientious objectors who are under sentence will be transferred to civil prisons in this country, and is not this action a contravention of that order?
I do not agree that it is a contravention of that order. If it were, it would not be done.
DISTURBANCES IN IRELAND.
ROYAL IRISH CONSTABULARY.
asked the Chief Secretary for Ireland what provision has been made for the widows and dependants of the officers and men of the Royal Irish Constabulary who have been killed in the recent rebellion in Ireland?
( who had been asked by the Prime Minister to answer this and other Questions relating to Ireland ): The manner of dealing with these cases is receiving consideration.
Will the men wounded and disabled also receive special consideration?
I am not sure that is not already provided for by existing Regulations.
ARRESTS.
The following question stood on the Paper in the name of Mr. W. O'BRIEN:
29. To ask the Chief Secretary to the Lord Lieutenant of Ireland whether his attention has been called to the case of Mr. William S. O'Doherty, clerk in the stores office of the General Post Office, Dublin, who has been arrested and deported to the Stafford Detention Barracks; whether he is aware that Mr. O'Doherty spent his Easter holidays in the South and only arrived in Dublin by the mail train on the evening after the day of the rising; that he arrived at his office next day, signed the attendance book, remained there all day on duty, and returned to his lodgings, where he spent the night; that it was only on his way to his office the next morning when, as a member of the St. John's Ambulance Corps, he stopped to render first aid to a little boy who was shot in the neck that he was arrested; and whether the mistake made in Mr. O'Doherty's case will be at once investigated and steps taken to liberate him and reinstate him in his office?
I desire to express the sympathy which we all feel for the right hon. Gentleman the Under-Secretary for War in the accident which has befallen his son.
An application for release was received on 26th May, and was investigated, with the result that Mr. O'Doherty was released on 27th May.
asked the Under-Secretary of State for War whether he is aware that, in the case of young men arrested in Belfast and deported, though no arms, ammunition, or incriminating documents were found in their possession, the parents and other immediate relatives have repeatedly written letters of inquiry to the military authorities, enclosing stamped and addressed envelopes, but have got no reply; and, as these people believe their sons and brothers are being tortured, whether these and all such prisoners will be allowed to communicate immediately with their relatives?
Nothing is known respecting this allegation. All prisoners are allowed to receive and send letters. I should be obliged if hon. Members would contradict such wicked and absurd rumours as are suggested in this question.
Seeing that these so-called rumours come from the relatives of the prisoners and the prisoners themselves, will the right hon. Gentleman say where he gets his information?
From sources which I consider somewhat more reliable than those on which the hon. Member relies.
From the accused persons?
asked on whose information or on what grounds Alderman James Nowlan, of Kilkenny, has been arrested and deported; what offence, if any, he has been charged with; where he now is; and when he will be either released or given an opportunity of meeting in a Civil Court any charge that may be made against him?
This man is at present at Wakefield. All such cases are now being investigated as rapidly as possible, and where no hostile association detrimental to the public safety and the defence of the realm is apparent the military authorities will order release.
asked the Under-Secretary of State for War whether he is aware that Mortimer O'Connor, who is an American citizen, was arrested by the military at the residence of his sister, Mrs. Lovett, on Monday, the 15th May, at Abbeydooney, North Kerry; whether he will state what charge, if any, has been made against Mortimer O'Connor; whether O'Connor has claimed the protection of the American Consul at Queenstown and the Alaskan Delegate at Washington on the grounds that he is an American citizen, and arrested and detained by the military authorities without any charge being preferred against him or any trial given; and whether his release will be ordered?
It is true that Mr. Mortimer O'Connor was arrested on the day at the hour mentioned. It is not known whether he has claimed the protection of the American Consul at Queenstown or the Alaskan Delegate at Washington. His case is now under investigation.
Has the right hon. Gentleman made inquiries? This man, as he knows, telegraphed to the military authorities on the 15th May, but the messages were not allowed to proceed for three days.
I have made investigations about these cases, but my hon. Friend must realise it takes some time. There is only a certain amount of machinery available for the purpose and the more complete the investigation the longer it takes.
Is the right hon. Gentleman aware there was no disturbance in any shape or form at this place? As the man has been in gaol since the 15th, will he deal with the case at once?
I dare say what the hon. Member says is perfectly true, but it does not follow, if there was no disturbance at the place the people were wholly unaffected.
asked the Prime Minister on what charge) Mr. James Kingley, county surveyor of Meath, was arrested and deported to London; whether it is proposed to try him and, if so, where and by what tribunal; and, if not, whether his immediate release will be ordered in view of the testimony of numerous witnesses to his innocence of any connection whatever with the recent outbreak?
James Kingley is charged with taking part in the rebellion. It is proposed to try him before a general court-martial, at Dublin.
asked the Prime Minister whether his attention has been called to the recent arrests in the county of Mayo, including those of Mr. Joseph M'Bride, secretary of the Westport Harbour Board, Mr. Darrell Figgis, a literary man of distinction, and a number of young men in Westport and Castlebar; whether in all these cases the charge is really the ex post facto offence of belonging to the organisation of the Irish Volunteers, which was not proclaimed to be illegal until after their arrests; whether the principal ground of suspicion of Mr. M'Bride is that he is a brother of Major M'Bride, who was executed in Dublin; and whether, considering that no insurrectionary disturbance of any kind has taken place in the county of Mayo, he will put an end to the growing public irritation by ordering the release of these young men?
All these cases are being investigated as rapidly as possible. Prisoners are given forms to fill up, upon which the grounds for their release should be plainly stated, and where no hostile association detrimental to the public safety and the defence of the realm is present the military authorities will in every case order their release.
Do I understand the right hon. Gentleman to admit that there will be no offence in the case of the ex post facto charge of merely belonging to the Irish Volunteers, which is quite as legal as the other unrecognised volunteer associations?
That requires a considered answer. I cannot say definitely.
Is the right hon. Gentleman aware that the Prime Minister made a declaration last week that mere membership of the Irish Volunteers Association was no reason why a person should be kept in prison?
asked the Prime Minister whether he will state on what charge John Brennan, of Ballinasloe, county Cork, a young man eighteen years old, was arrested on the 8th May; whether this young man was compelled to sleep on a plank bed and given food to eat as if he were a convicted felon; whether Brennan was unable to communicate with his people from the 8th to the 18th of May; and, if no definite charge of a treasonable or criminal nature can be made against him, will he have this young fellow released immediately?
I have written to the hon. Member asking him to postpone this question, as I have not been able to get the information.
asked the Prime Minister whether the case of Joseph Sweeney, a prisoner in Stafford Detention Barracks, in connection with the recent rising in Ireland, has yet been investigated; and whether the military authorities are prepared to release him?
This case is now under investigation.
asked the Under-Secretary for War whether Patrick Carmody, Jeremiah Twomey, James Buckley, William Buckley, Jeremiah Riordan, and his son, Michael Riordan, and two sons of Mr. Denis J. Murphy, R.D.C., were arrested at Millstreet, county Cork, on the 3rd instant and following days; whether most, if not all, of these are detained at present in Wakefield Barracks; whether any definite charges have been made against them, and whether any of them had any connection with the recent rebellion; whether he is aware that Patrick Carmody had built up a business by his own energy and industry, that about a year ago he got a motor van to deliver his bread round the country, and that this van was refused a permit, his petrol commandeered, and himself arrested though he had no connection with the Sinn Fein movement; whether he is aware that the local constabulary have been needlessly provocative and offensive when making searches and arrests; and will those men against whom no charge can be made be immediately released?
These men are detained at Wakefield. They were arrested as having been connected with the recent rebellion. No definite charges have been made. Investigations are in progress, and those whose innocence is established will be released.
asked the Prime Minister when the seven prisoners arrested by the military under the Defence of the Realm Act on suspicion at Manorhamilton, county Leitrim, on the 14th instant, without any charge being preferred against them and now detained in Woking Prison, will be tried or released?
One of these men, Peter Goolgan, has, I am told, already been released, and the cases of the others are being inquired into.
Is the right hon. Gentleman aware that some of these men who are now at Woking have not had any charge made against them, and that they never belonged to the Sinn Fein Volunteers, but that some of them belonged to the Nationalist Volunteers?
The hon. Member should give notice of that question.
asked the Under-Secretary for War whether he is aware that Maurice J. Collins, who was arrested in Dublin in connection with the rebellion, and is now in Wandsworth Prison, did not use a rifle on the occasion, but only did Red Cross work; and whether this fact will be brought to the notice of the military authorities on his trial, with the view to have him released?
It is not the present intention of the authorities to try this man. His case is now being investigated with a view to release.
asked the Under-Secretary of State for War whether Maurice J. Collins, who was arrested in Dublin in connection with the rebellion, and is now in Wandsworth Prison, did not use a rifle on the occasion, but only did Red Cross work; and whether this fact will be brought to the notice of the military authorities on his trial, with the view to have him released?
A report has just been received from the War Office on these allegations, and if the hon. Member will be good enough to put his question down to me to-morrow I shall be able to give him an answer.
GAS BOMBS.
asked the Under-Secretary of State for War if he will state the nature of the gas bombs used in the taking of houses in Dublin, followed by the bayonet while the victims were stupefied; and, seeing that non-combatants and women and children would inevitably be slain in this treatment, whether he will explain such treatment?
No such bombs were used.
PERSONAL PROPERTY.
asked the Under-Secretary of State for War what steps, if any, have been taken towards recovering and restoring to Madame O'Rahilly the watch, chain, and ring taken from the body of her husband, The O'Rahilly, who fell in the insurrection; and whether the officer or soldier who took them is allowed by his superiors to keep them?
No report has reached the military authorities of the occurrences alleged in this question prior to the question being received. Any personal property that may have been removed and is not required by the authorities will be reurned in due course.
EXECUTION OF P. H. PEARSE.
asked the Under-Secretary of State for War whether the message to the Irish people, written by P. H. Pearse between sentence and execution, has yet been handed over to any person on his behalf; if so, to whom; and, if not, who holds it and when will it be given to those entitled to it?
No message to the Irish people was received from P. H. Pearse. The letters and other documents addressed to his mother have been delivered.
ST. CLARE'S HALL (MANTORHAMILTON).
asked the Prime Minister whether 200 soldiers of the Sherwood Foresters, under the command of Captain Jackson, without asking permission, which would have been freely granted, took possession of St. Clare's Hall, in Manorhamilton, county Leitrim, last week, and while in possession smashed several musical instruments, tore scene screens, and did other damage to the hall and goods contained therein belonging to the temperance club; whether they will be held responsible for such damage; and, if not, to what source will the club apply for compensation?
Sixty non-commissioned officers and men of Captain Jackson's company, 6th Sherwood Foresters, were billeted in St. Clare's Hall, on 13th and 14th May. The billets were arranged for by the district inspector, R.I. C., and the caretaker opened the hall for the troops. The non-commissioned officers in charge are prepared to state on oath that no such damage as is alleged in the question was done by the troops.
Will any compensation be paid to the troops who were murdered?
That question does not arise.
LOOTING CHARGES.
asked the Prime Minister whether, seeing that in the case of charges against soldiers of looting in houses in Dublin entered by them for the purpose of search, and of taking money, watches, and rings from prisoners, the sufferers could have no confidence in the impartiality of a Military Court, a Civil Court will be constituted to deal with these cases and accused soldiers compelled to appear before it; and whether meanwhile the soldiers who searched houses and those who at any time had charge of prisoners will be searched for small valuables for the possession of which they cannot satisfactorily account?
If there be such cases as these alleged by the hon. Member the offenders are triable by court-martial only. Persons complaining of such acts as are alleged are, however, at liberty to pursue their civil remedy in the ordinary Courts. No new tribunal is necessary. No such search will be made as is suggested in the last part of the question.
Will the right hon. Gentleman give the House the reason why there is to be no such search?
The reason presumably is that this allegation is one of the vague and unfounded allegations which the hon. Member recklessly puts down upon the Order Paper of the House of Commons every day.
In view of that insolent answer—[Interruption]—I beg to ask what other reason there is for not searching the men unless it is that they have got the articles?
IRISH PRISONERS (TREATMENT).
asked the Prime Minister if his attention has been called to the fact that the Irish prisoners detained in the Wandsworth and other military detention barracks, and against whom no criminal charges have been made, are kept twenty-two hours out of the twenty-four in solitary confinement; and if he can see his way to direct that they be allowed to have six hours in the open air each day with liberty to speak to each other and to smoke if they desire to do so?
The Command have been directed to allow as much exercise as possible. The restrictions as to communication have been removed, and it has always been intended to admit communication as soon as circumstances allowed.
Cannot they have six hours' exercise instead of two; and is it right to keep a man, against whom no charge is made, locked up for twenty-two hours in a cell?
It is desired to give them as much exercise as possible, but the accommodation available is not unlimited.
Cannot they be allowed to smoke for half an hour in some remote part of the grounds?
Smoking is allowed in all the prisons except Wandsworth.
I refer to Wandsworth.
I will see if that can be arranged.
asked the Prime Minister why Peter Fox, an American citizen, was arrested at Carrickmore, county Tyrone, and is at present confined in Wandsworth detention barracks, no criminal charge having been made against him; whether a letter which he addressed from prison to the American Consul in London on the subject was delivered to the Consul, no acknowledgment or reply to it having been received by the prisoner; and whether the American citizenship papers taken from him at the time of his arrest will be returned to him or submitted to the American Consul if the prisoner so desires?
Peter Fox was arrested under the Defence of the Realm Act as being of hostile origin and associations. Any papers relating to American citizenship which may have been taken from him will be returned should he so desire. I have no information as to the letter alleged to have been addressed to the American Consul, but I am making inquiries.
Have these papers been sent to the American Consul?
I am making inquiries.
asked the Prime Minister, in view of his statement that the Irish political prisoners are allowed the ordinary facilities extended to prisoners of war, he will give instructions that all political prisoners incarcerated in connection with the late rebellion in Ireland shall be treated on the same terms as the German prisoners of war are treated in England?
The question of the disposal of these prisoners is at present under consideration, and the Prime Minister hopes to make a statement on the subject before the House rises.
asked the Prime Minister if he will lay upon the Table of the House of Commons the reports of the medical officers regarding the sanitary accommodation provided for, and treatment of, prisoners awaiting trial in the various prisons and hospitals under the military authorities in Dublin?
No, Sir. The Prime Minister does not think it desirable to publish these reports, and that his own experience in Ireland leads him to think that the sanitary accommodation of the prisoners is satisfactory.
Did the Prime Minister inspect the sanitary accommodation of what we know as the Black Hole in Dublin?
I cannot answer as to what particular places the Prime Minister went to. I know he visited a large number of places.
CORRESPONDENCE (GENERAL MAXWELL'S ORDER).
asked the Under-Secretary for War whether General Maxwell's recent Order as to correspondence into and out of Ireland makes it illegal for passengers to or from that country to carry with them or have in their possession letters which they have received in the ordinary way and which they may not yet have dealt with or may wish to preserve?
I have not seen the exact terms of the Order referred to, but I understand it does not make it illegal for passengers going into and out of Ireland to carry with them letters which have been received by them personally, the contents of which are for their own personal information and use. The Order is designed to prevent private persons taking upon themselves the functions of the Post Office and thereby aiding in the evasion of censorship.
COURTS-MARTIAL (OFFICIAL RECORDS).
asked the Undersecretary for War whether full official shorthand notes were taken of the proceedings in the field general courts-martial held in Dublin on the rebel leaders who were executed or sentenced to imprisonment; whether similar notes were taken of the proceedings in the general court-martial that tried Mr. John M'Neill; if not, can he state the nature of the official records in these proceedings; and whether such records will be preserved in case it may be later considered desirable to publish them?
The hon. Member may take it that all usual and necessary notes were taken of the proceedings in the field general courts-martial and that they will be preserved; they are not intended for publication.
What are the usual kind of notes in these cases?
They are generally very full notes.
Are they shorthand notes?
Yes
Is it really intended to keep permanently for the knowledge of the public the evidence on which these men were convicted and executed?
I think I should like notice of that question.
SHOOTING OF CITIZENS (INQUIRY).
asked the Prime Minister if the Government will consider the question of ordering a full public inquiry into the circumstances under which fourteen men who did not take any part in the recent revolt in Dublin were shot during the occupation by the military of houses in North King Street; and, if so, whether the relatives of such deceased persons will be entitled to be professionally represented?
Most careful inquiries are now being made into this matter, and until the Prime Minister is in possession of their result he is not in a position to state whether a public inquiry is necessary or desirable.
DESTRUCTION OF FURNITURE (COMPENSATION).
asked the Prime Minister if the Government will consider the question of compensating those working-class families whose furniture has been destroyed as a result of military action during the recent street fighting in North King Street and other areas in Dublin?
The Government are considering the question of the limits of compensation, and a further statement will be made as soon as possible.
Is not the question of compensation for the Sherwood Foresters more urgent, as these men have lost their lives?
That does not arise out of this question.
LORD HARDINGE'S COMMISSION.
asked the Prime Minister if, on the conclusion of the inquiry by Lord Hardinge's Committee, he will publish a verbatim Report of the evidence as a Parliamentary White Paper?
As the Prime Minister has already stated, the question of whether the Commission should sit in public or in private is left entirely to their discretion, and it follows that the question of the publication of their evidence must also be left in their discretion.
PERMANENT WAR DEBT CHARGES.
CONTRIBUTION OF CROWN COLONIES.
asked the Secretary of State for the Colonies whether any of the Crown Colonies or Protectorates, and, if so, which, have offered annual contributions towards permanent war debt charges; and what, if any, are such amounts in each case?
As the answer involves lengthy figures, I propose to circulate it with the Votes.—[ See Written Answers. ]
Will the right hon. Gentleman at the same time state the gifts made by the Colonies and Protectorates?
There is a reference to them in the answer I propose to. circulate.
asked the Secretary of State for the Colonies whether, in the event of financial contributions being offered by any of the Crown Colonies or Protectorates, he will, before accepting such offers, take into consideration the relative weight of such assumed burdens, having regard to the ability of the financial position of any suggested contributor?
I can assure the hon. Member that the ability of every Colonial or Protectorate Government to undertake a contribution for war purposes is always carefully considered before such an offer is accepted.
MINERAL RIGHTS DUTY.
asked the Chancellor of the Exchequer whether his attention has been drawn to a case in which the owner of a coalfield in Scotland whose income there from for the three years 1913 to 1915, inclusive, showed continuous diminution has nevertheless been asked to pay Excess Mineral Rights Duty; whether many cases of this kind exist; if so, whether this was the intended effect of the Statute; or whether an amendment is in contemplation?
The principle of the Excess Mineral Rights Duty is to charge a recipient of mineral royalties who, owing to an increase in the selling price of the minerals in the accounting year, has received, as rent in respect of the right to work minerals, an amount in excess of such rent had it been based on pre-war prices. I am aware that cases of the kind referred to by the hon. Member may arise in consequence of a diminution in the quantity of minerals worked; but I am unable to give any pledge as to an amendment of the Act.
MEAT PRICES.
asked the Prime Minister whether, in view of the rise in the price of meat, His Majesty's Government will consider the advisability of arresting the increase by limiting the sale per head of the population?
The Prime Minister has asked me to reply to this question. The whole situation as regards meat sup- plies and consumption is under review by His Majesty's Government, but I am not yet in a position to make a statement, thereon.
ECONOMY COMMITTEES.
asked the Prime-Minister whether he can make any statement to the House, or will lay Reports upon the Table, as to the economies effected by the committees appointed to prevent wasteful expenditure at the War Office, the Admiralty, and the Ministry of Munitions?
These committees are effecting important economies in the Departments concerned, but I do not think it would be in the public interest to lay detailed reports of their activities.
Shall we have a Paper giving the evidence laid before the committees and the decisions?
No, Sir. These are Cabinet Committees which are carefully-investigating these matters in a confidential fashion.
Will the House of Commons have no opportunity of learning about wasteful expenditure made during the War?
Does the right hon. Gentleman mean that these are Cabinet Committees? Surely they are composed, of people outside.
The hon. Member is not asking a question; he is arguing the matter.
NAVAL AND MILITARY SERVICES (PENSIONS AND GRANTS).
asked the Prime Minister whether the Government have reconsidered the original amount of separation allowances in view of the rise in prices; and whether he is prepared to refer this matter to the original Pensions Committee with a view to an increased allowance?
The Government do not think it necessary to increase the amount of the ordinary separation allowances in view of the provisions which they have made for exceptional cases being dealt with under the new scheme.
When will the new scheme be put in operation?
MANHOOD AND WOMANHOOD SUFFRAGE.
asked the Prime Minister (1) whether, in view of the removals of workmen caused by the pressure of munition and other work, the social and domestic changes involved by millions of men joining the Colours, the service and sacrifice of the womanhood of the country, the toll of suffering now and in the future, and the problems of reconstruction, the Government will consider the desirability of establishing a fully enfranchised democracy based on manhood and womanhood suffrage; and (2) whether it is the intention of the Government to accompany any revision of the Parliamentary register by an extension of the franchise to any class of persons not at present enfranchised; and, if so, whether he will consider the claim to enfranchisement of the women of this country?
All aspects of the question of registration are being considered, but the Prime Minister is not yet in a position to make a statement.
VOLUNTEERS.
asked the Under-Secretary for War whether officers commanding Volunteer regiments should offer the services of those of their officers and men who wish to volunteer for guard or other duties in their own regimental area to the colonel commanding the regimental district in which the area of such Volunteer regiment is situated, or, if not to him, to whom should they make these offers of services?
Such offers of service should be made to General Officers Commanding-in-Chief.
asked the Under secretary for War whether he is aware that Volunteers who are badged munition workers are in doubt as to whether they ought to enrol under the Volunteer Act, 1863, as doing so might render them liable to be called away from their munition work in case of mobilisation of the Volunteers; and will he there fore see if arrangements can be made so that Volunteers who are also badged munition workers will not be called up in case of mobilisation if their services are required on their munition work?
The hon. and gallant. Gentleman may be assured that munition workers who are enrolled under the Volunteer Act, 1863, will be allowed to continue their services as munition workers unless some emergency should arise which would require their services elsewhere.
Is the right hon. Gentleman aware that some very large munition works are prohibiting their men enrolling because they are afraid they will be called up if the Volunteers are mobilised and will be unable to continue their munition work, and can the War Office issue some regulation which will satisfy them?
I will consult with the Minister of Munitions and see if we cannot arrive at some arrangement.
asked the Under-Secretary for War whether he is aware that railway companies are refusing permission to their employés to enrol in the Volunteer forces of the United Kingdom; and whether, seeing that a large number of railwaymen are already in the Volunteer Corps and are desirous to be enrolled under the provisions of the Volunteer Act of 1863, so as to be able, if necessary, to fight in defence of their country, he will see if arrangements can be made so that railwaymen will not be called up in case of mobilisation if their services are required on the railways?
This matter is under consideration between the War Office and the Railway Executive Committee, but the hon. and gallant Gentleman may be assured that in any case railwaymen will not be taken away from the railways in case of emergency.
STEEL HELMETS.
asked the Under-Secretary for War whether steel helmets have now been provided for all the troops on the Western front; and, if not, whether instructions will be given that when troops leave the trenches they shall leave the helmets for the incoming troops?
The supply of steel helmets has very nearly reached the number asked for up to the present, and it is believed that sufficient have been issued for the needs of all the British troops within the zone of shell fire in France, As regards the latter part of the question, I think we may safely leave the issue of any such instructions to the General Officer Commanding-in-Chief, in whom we all have the highest confidence, rather than attempt to dictate to him from this House on matters obviously within his purview.
asked the Under-Secretary for War, whether the use of steel helmets has diminished and, if so, to what extent the percentage of head wounds in British hospitals which about six months ago were 15 per cent.?
The percentage of head wounds to total wounds in British hospitals in France, from 13th February, 1916, to 15th May, 1916, is 12.35 per cent
MEN CALLED TO COLOURS.
CIVIL LIABILITIES.
asked the Financial Secretary to the War Office whether, under the new arrangements for the relief of soldiers from certain financial liabilities, a soldier who, after having been allotted a Grant-in-Aid, secures promotion to commissioned rank for good service in the field, will be required to relinquish the grant; and, if so, how such a man is supposed to be able to choose between declining his promotion on the one hand and sacrificing his wife and family on the other?
If a man who has joined the Forces in the ranks since the 4th August, 1914, is granted an allowance under the scheme and subsequently receives a commission he will not necessarily forfeit the allowance. It will, however, be necessary to consider whether the change in the man's circumstances should involve any revision of the allowance.
China Town, Poplar (Gambling Dens).
asked the Secretary of State for the Home Department whether his attention has been called to the scene which occurred in China Town, Poplar, on Tuesday evening, 23rd May last, whilst the police were raiding Chinese gambling-dens in Pennyfields, and to the statement made by Superintendent Boxhall with regard to the continuous raids that the police have to make on the Chinese boarding-houses in the Pennyfield district; whether he can state how many licensed Chinese boarding-houses have been licensed by the London County Council; how many licences there are in existence now for such boarding-houses, and what was the number of licensed Chinese boarding-houses in the year 1900 in the East-End district; and whether he will take steps to secure the withdrawal of licences from all Chinese boarding-houses where the proprietors have been convicted, and to prevent the issue of any further licences to Chinamen?
There is no reason to believe that the scene which occurred in Pennyfields, Poplar, on the evening of 23rd May, had any connection with the raid on a gaming-house there earlier in the day. I am informed that Superintendent Boxhall's remarks were not accurately reported, the fact being that though the Chinese in London are much given to gambling, and several gaming-houses have been raided in the Chinese quarter during the past few years, they are, as a rule, inoffensive and law-abiding. There are at present in this district seven Chinese seamen's lodging-houses, these being licensed by the London County Council to accommodate in all 151 lodgers. The figures for earlier years could not be obtained without special search. The drastic measures suggested by my hon. Friend are not considered necessary by the authorities.
Ceylon.
asked the Secretary of State for the Colonies whether he has read the affidavit sworn before a magistrate at Ratnapura, Ceylon, by Manannalage Rankira, aged sixty-five, setting forth how on the 3rd June, 1915, some Englishmen drove up in a motor car and, without warning or question, shot her husband, Juwanis Fernando, aged over seventy, who died an hour and a half later; how she was forced to sell or mortgage all she possessed in order to pay a ransom for her two sons; and whether Sir Robert Chalmers, then Governor of Ceylon, now Under-Secretary for Ireland, found such occurrences conducive to affection?
I have read what purports to be a reprint of the affidavit in question, but I have no reason to believe that it accurately represents the facts.
Does the right hon. Gentleman expect his answer to be believed in Ceylon?
Yes, Sir.
Barrow Drainage.
asked what steps the Government intend taking to have the River Barrow drained; whether they are aware of the damage and loss of property caused by the frequent overflowing of this river; and whether they intend taking immediate steps to carry out this work, in accordance with the scheme of drainage promised by the late Chief Secretary for Ireland some years ago?
I regret that under existing financial conditions there is no prospect of funds being available for this purpose.
NEW MEMBER SWORN.
Denis Stanislaus Henry, esquire, K.C., for the County of Londonderry (South Derry Division).
CONSOLIDATED FUND (No. 3) BILL.
Considered in Committee.
[Mr. WHITLEY in the Chair.]
CLAUSE 1.—(Issue of £300,000,000 Out of the Consolidated Fund for the Service of the Year ending 31st March, 1917.)
The Treasury may issue out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland, and apply towards making good the Supply granted to His Majesty for the service of the year ending on the thirty-first day of March, one thousand nine hundred and seventeen, the sum of three hundred million pounds.
Ordered to stand part of the Bill.
CLAUSE 2.—(Power for the Treasury to Borrow.)
(1) The Treasury may borrow from any person, by the issue of Treasury Bills or otherwise, and the Bank of England and the Bank of Ireland may advance to the Treasury on the credit of the said sum, any sum or sums not exceeding in the whole three hundred million pounds.
(2) The date of payment of any Treasury Bills issued under this Section shall be a date not later than the thirty-first day of March, one thousand nine hundred and seventeen, and Section six of the Treasury Bills Act, 1877 (which relates to the renewal of bills), shall not apply with respect to those bills.
(3) Any money borrowed otherwise than on Treasury Bills shall be repaid, with interest not exceeding five pounds per cent. per annum, out of the growing produce of the Consolidated Fund, at any period not later than the next succeeding quarter to that in which the money was borrowed.
(4) Any money borrowed under this Section shall be placed to the credit of the account of the Exchequer, and shall form part of the said Consolidated Fund, and be available in any manner in which such Fund is available.
Motion made, and Question proposed, "That the Clause stand part of the Bill."
On Thursday I called attention on the Second Reading of the Bill to the great want of confidence in the commercial world in reference to the Government's system of finance by short Bills. Unfortunately it was late and there was nobody on the Government Bench to give a reply to my criticism. I put down a Motion to-day to leave out Clause 2, not with the object of pressing it to a Division, because I know perfectly well that such a step would be futile, but with the sole purpose of trying to elicit from the Government what their plans are for financing this great War. I mentioned on the Second Reading that the rate of interest had been advanced from 3½ to 5 per cent. during the period of the War on Treasury Bills, and the consequence was that the country was paying a great deal more for the accommodation than was necessary. No doubt the Chancellor of the Exchequer has seen the comments I have made, and will have been in a position to make his own inquiries. We were told that the reason for the issue of Treasury Bills over the counter was originally for the purpose of fixing or helping the exchange. We knew in the City that the issue of Treasury Bills does not have any such effect as that. We saw with alarm that we were being made all the time to pay more and more for the money we were borrowing. As a proof that it was unnecessary to raise the rate of interest on these Treasury Bills, only lately the Government have considered it advisable to—
I desire to ask, Mr. Whitley, whether the hon. Member is in order? It opens up a field of argument which will not be open to me to answer within the limits of order.
I was listening to the opening of the hon. Member. It appears to me that it would be beyond the limits of what is proper on the Committee stage to enter into a general discussion on the means of raising the money. I understood that the hon. Member's point—having heard something of what he said on the previous occasion—was devoted solely to the question of the additional £300,000,000 of Treasury Bills provided for in this Clause. He should confine himself to that point.
The only thing I have to say in regard to the method of raising this £300,000,000 at the present time is that we have the strongest objection in the City to increasing the number of Treasury Bills in circulation. We consider that it is not sound finance, and that it would be far better in the interests of the country, and in the interests of getting our money on better terms, if some more permanent way of raising this £300,000,000 were adopted by the Chancellor of the Exchequer and the Treasury.
I also desire to raise the question of the unwisdom of pursuing the policy of raising money by Treasury Bills to practically an unlimited extent, and the increased expense that it might entail upon the nation if this £300,000,000 is to be added to the £660,000,000 already issued. The hon. Gentleman who spoke last, I think, spoke under a misapprehension when he said that the interest paid on Treasury Bills for twelve months is 5 per cent. It is 5¼ per cent. I would ask the right hon. Gentleman the Chancellor of the Exchequer to take seriously into consideration the question that when the end of the War appears to be in sight these Treasury Bills will not be renewed, and if we had the huge total of £960,000,000 then in existence it would increase the difficulty of raising by a permanent measure this huge sum of money. It seems to me that the Chancellor of the Exchequer will be well advised if he raises this money by permanent loan instead of depending upon this temporary borrowing to this enormous extent.
My hon. Friend asked me to raise the money under this Bill by permanent loan. He points out that Treasury Bills for one year raise the equivalent rate of interest to 5¼ per cent., and he asks for an assurance that none of the Treasury Bills authorised by this Bill shall be renewed.
If the end of the War is in sight.
May I explain to my hon. Friend that this Bill authorises the issue of no Treasury Bills for one year. Therefore no question can be initiated between us as to the rate of interest on Treasury Bills for one year. In the second place, no Bill issued under the authority of this Bill can be renewed. That disposes of my hon. Friend's second point. In reference to his third point that we should raise the necessary amount by permanent loan, I would remind my hon. Friend that the purpose of this Bill is to authorise the Treasury to raise money by loan in anticipation of revenue, and as the Bills cannot be renewed, and as they must be for less than one year, how is it possible to raise this money by permanent loan?
That does not apply to the £660,000,000.
I can only deal in this Debate with this Bill and what this Bill authorises. I can assure my hon. Friend that every point which he has made, however valuable these points may be on another' occasion, have no relevance whatever to this Bill. It simply authorises the Treasury to raise by Bills, in anticipation of revenue, the amount that we are authorised to spend under the Vote of Credit. The issues under this Bill are so limited, being strictly confined to what I have stated, that it is quite impossible for me to enter into the larger question that has been raised by the hon. Member opposite (Mr. S. Samuel). My hon. Friend behind me (Sir J. Walton) speaks as a Member of the House of Commons, but, as I understand, the hon. Member opposite speaks on behalf of the City.
I did not speak as the representative of the City at all. I spoke as a man in business in the City of London who comes daily into contact with the financial and commercial interests of the City and who knows their opinions.
I am not disputing that. I only distinguish between the character in which my hon. Friend opposite spoke and that in which my hon. Friend behind me spoke.
Have I not an interest in the City too?
When the hon. Gentleman speaks of himself as representing a body of opinion in the City, I can only assure him that I take every measure in my power to inform myself of City opinion. I am in constant communication not only with the Governor of the Bank of England, but with the representatives of the great banks of London and the provinces, and I should be very glad if they would include the hon. Member opposite among those whom they send to represent them to speak to me on behalf of City opinion. I should be always most anxious to conform in my action to the needs of the City, but I would deprecate the attitude taken by hon. Members in the House of Commons that they speak on behalf of the City when the City itself has given me no indication of the views which are put forward here in its name. I am afraid that it is not open to me to answer the larger question raised by the hon. Gentleman, but on a suitable occasion I shall be most anxious to do so.
I do not think that I quite understand the statement of the right hon. Gentleman that this Bill does not permit him to borrow money under Treasury Bills.
It does not enable me to borrow under yearly Treasury Bills. It does not enable me to renew a Treasury Bill which would extend beyond the period of the financial year.
Section 2 says that the Treasury may borrow by the issue of Treasury Bills or otherwise. There is nothing about time; and it says that the Bank of England and the Bank of Ireland may advance to the Treasury on the credit of the said sum, any sum or sums not exceeding in the whole £300,000,000.
Go on!
"That date of payment of any Treasury Bills issued under this Section shall be a date not later than the 31st day of March, 1917." That is ten months instead of a year. The principle remains the same. My hon. Friend is not discussing whether the right hon. Gentleman should issue three months, six months, nine months, or yearly bills. He says that the principle of too many Treasury Bills is bad. Though I happen to be a Member for the City, I do not pretend for a moment to speak for the City, as I have not consulted anyone on this special question, but having spent forty years of my life in the City I would imagine that opinion in the City would always be that it was fatal to have a large amount of floating debt which might become renewable in a time of panic or at a time when it might not be possible to renew it. That is as I understand the point of my hon. Friend, and it is not really worthy of the right hon. Gentleman to try to ride off on whether or not the bills are renewable for three months, six months, or ten months. I think that my hon. Friend is quite right. I think that we are approaching perilously near the point—
I submit that the general question of the amount of Treasury Bills outstanding and the policy of issuing Treasury Bills is not in order on this question.
This is a Clause empowering the Government to raise £300,000,000 by Treasury Bills. My hon. Friend has moved to omit the Clause. If we think it advisable to support my hon. Friend and vote against the Clause, I submit that we are entitled to advance reasons why we object to the raising of the £300,000,000 by Treasury Bills, and to urge that one of those reasons is that there are already too many Treasury Bills.
I support the right hon. Gentleman opposite on the point of Order, and submit that it would be better to raise this money by permanent loan than by this particular method' of raising the sum of money required, and I think we should be able to discuss, the various methods by which it should be done.
I think that would be going too far. This is a proposal which merely authorises the drawing on the Consolidated Fund to the amount of the Vote in Supply. The Clause now under discussion, if I am not mistaken, is exactly the usual form of Clause, no more and no less, than is usually put in the Consolidated Fund Bill, namely, to authorise the Treasury during the period of the year, not going over the end of the current financial year, to temporarily raise sums by means of Treasury Bills. I am of opinion that it would be out of order to go into the whole question of raising money by loan. But, of course, it is in order to argue or to refuse the power to raise any of this £300,000,000, even temporarily, by means of Treasury Bills. That is clearly within the competence of the Committee, but a general Debate on methods of finance will not be in order.
Would it not be in order to discuss this particular £300,000,000 in regard to whether it should be raised by loan or by Treasury Bills?
I submit that the general question by which the money should be raised is a question which is proper on a discussion on a Loan Bill. Under this Bill we take power to borrow this sum up to the total of £300,000,000 in order to make good the supply which has already been authorised. We have only taken powers, following the ordinary precedent in connection with the Consolidated Fund Bill, to raise that money by the usual method within the financial year, that is to say, we are taking power to get the sum necessary to meet the expenditure which has been authorised to be spent within the financial year. But when we get to the larger question of the general powers of borrowing, whether it is £300,000,000 or any other sum voted in Supply, that is a question which should be raised upon a Loan Bill. We have already under the Loan Act authorised by the House got an authority, which we have not yet exceeded, for raising money, and the House has given an unfettered discretion to the Treasury as to the method of raising the money within the Loan Act, but we have not gone outside that authority, and I submit to you, Sir, that what the right hon. Gentleman opposite and what my right hon. Friend behind me are intending to do is to raise questions which were settled under the Loan Act, and are not facing this mere question of authority under the Consolidated Fund Bill.
Before you decide the point of Order, Sir, I wish to refer to what the Chancellor of the Exchequer said, that the question can only be discussed on a Loan Bill. I wonder under what rule of order we are to be able to stop the indefinite issue of Treasury Bills. It appears to me that the right hon. Gentleman the Member for Spen Valley (Sir T. Whittaker) and the right hon. Member for the City (Sir F. Banbury) are perfectly right in contending, with regard to this particular £300,000,000, that under your ruling, Sir, we can refuse this method which is proposed, and if that be so, surely we must be able to discuss other methods.
I really do not think there is any difficulty in understanding what the point is. The Committee will remember that the form of the Vote of Credit is that of all other Votes in Supply, namely, for the current financial year, the year ending the 31st day of March, 1917, and this Bill is necessarily confined to that year; so that, obviously, a general discussion of a loan policy could not arise. The only thing we can discuss is this particular point as to how, during this current financial year, this money can be temporarily raised.
I do not wish to raise any point except that this particular Clause gives powers to issue Treasury Bills for a brief period. In my opinion, that is a wrong provision. I do not want to argue, however, what we should do in place of it, but I have a right to give reasons why I object to this particular form of borrowing which is proposed in Clause 2. It will be evident that, unless we can do that, the whole of our proceedings would be merely a farce, and the Government could at any moment put into the Consolidated Fund Bill power to borrow for a short period any sum of money they liked.
dissented.
My argument has already been advanced, and I do not want, to take up the time of the Committee by repeating it too often; but I will just emphasise my objection to this particular Clause, and it is. that, in my opinion, it is fatal to borrow a very large sum of money on Treasury Bills. What the exact sum at which you ought to stop may be I do not say, but I consider that the Government have very nearly approached, if they have not passed, that sum. I would say, further, that this is really a very serious and important question, and, with, all due deference to the Chancellor of the Exchequer, I think that he might at any rate consider seriously the point raised by my hon. Friend (Mr. S. Samuel), who has very great experience in the City, who does not speak often in this House, and who, when he does speak, does not speak lightly. His point was also emphasised by right hon. and hon. Gentlemen opposite. The right hon. Gentleman apparently thinks that the right hon. Gentleman behind him has nothing to do with the City.
I did not say that.
Then I withdraw that. Two Members sitting on different sides of the House, the hon. Member below the Gangway and the right hon. Gentleman behind the Chancellor of the Exchequer, have spoken, and there has at any rate been a consensus of opinion, among those who watch these matters for themselves, and who have some knowledge of finance, that this method has been pursued too long, and I really hope that the right hon. Gentleman will consider the statements that have been made in all seriousness.
I am very sorry that this Debate is to be so limited, though I fully recognise, Sir, that your ruling must be followed. I do, however, express the opinion that it is undesirable to issue more Treasury Bills. There is the fear of their going abroad, and I have heard that a number of them have gone abroad. If that be so, that is a point of danger. To have so large an amount of floating debt is, in my judgment, undesirable, and I submit to the Chancellor that is a reason why these bills should not be issued under this power and in this way. As to the wider subject, I would only say that it would be well if the right hon. Gentleman would enable us to have an opportunity of discussing this subject.
4.0 P.M.
I should like to add one word to what has been said by my right hon. Friend near me (Sir F. Banbury) and my right hon. Friend on the other side (Sir T. Whittaker). The amount of Treasury Bills is very large already, and this is a very substantial addition to it. Will not the right hon. Gentleman take the House into his confidence and say if it is necessary to go any further in this direction and thus meet the criticisms which have been offered?
I shall be quite prepared to do so on an appropriate occasion. If I were to attempt to do so now I should be hopelessly out of order, but on a suitable occasion I shall be perfectly willing to defend the financial policy of the Government, for which there is a defence which has not even been suggested by hon. Members who have spoken. I am sure that the Chairman would call me to order at once if I attempted to deal with the matter generally.
An hon. Member asked just now whether there was any occasion on which the use by the Treasury of its powers in these matters could be criticised. It may help the Committee to state that that can be done when the right hon. Gentleman's salary is put down.
Certainly.
There could then be a discussion as to how he has used the powers which the House has given to him.
We had no difficulty in keeping within order, and I do not think the right hon. Gentleman would have had the slightest difficulty either. If we are to have a discussion on the salary, perhaps he will state when that discussion will take place.
There is the Motion for the Adjournment on Thursday.
We never can catch Cabinet Ministers on those days.
If the right hon. Gentleman will take the question on the Motion for the Adjournment I will undertake to be here. I cannot raise the whole Debate on the subject without saying things which must be out of order now.
I do not want to attack the right hon. Gentleman's conduct in detail. I think this method of procedure is wrong and that we ought to have an answer now. This Clause only takes us to next July, and what is he going to do after that? Are we to have more Treasury Bills? The right hon. Gentleman says "Yes," and that emphasises the necessity of dealing with the question now. I do hope the right hon. Gentleman will endeavour to keep in order.
You have ruled, Sir, that it is in order now to raise the question of the advisability of adding three hundred millions to the existing amount of Treasury Bills. Surely that would give the Chancellor of the Exchequer ample opportunity. The Chancellor shakes his head, but if he will not accept the authority of the Chairman of Committees, what authority will he accept? It is all very well to consult the Financial Secretary to the Treasury beside him, but he is not an infallible guide. I hope the right hon. Gentleman will give us some reasons why he cannot accept the suggestions which have come from hon. Members.
It seems to me that the analogy between this Bill and an ordinary Consolidated Fund Bill is one that is completely misleading. Under an ordinary Consolidated Fund Bill the Treasury borrow on Treasury Bills in anticipation of revenue. Already on the existing financial year Treasury Bills are in existence far exceeding the revenue which can be collected.
This is under a Loan Bill.
I am pointing out that the analogy between this and an ordinary Consolidated Bill does not apply. This is becoming the method of general borrowing rather than anticipation of revenue. Under those circumstances I think that my right hon. Friend would have been well advised to meet the criticisms which have been levelled against his methods of finance. It is inconvenient that he cannot do here what he does outside and take the House completely into his confidence. He takes up this narrow point of order; but why should he not deal with the House of Commons as he has dealt with editors of newspapers, and tell them precisely what the financial position is?
I only wish to enter a protest against what I gathered to be the intention of the Chancellor of the Exchequer, that is to mortgage the Debate on the Adjournment Motion on Thursday to a discussion on these Treasury Bills. That is a very important matter no doubt, but I think the present condition of affairs in this country is much more important. I certainly can be no party to any understanding or agreement for the mortgaging of the whole or the main portion of the Debate on the Adjournment to the question raised here to-day.
I quite realise that it would be inexpedient to mortgage the Adjournment Debate on Thursday to this somewhat technical subject. I suggest as an alternative raising it on an Amendment to the Finance Bill in Committee. It is quite possible in that way to raise the whole subject, and that would be a convenient time. Of course, on the next Loan Bill would be another convenient time.
When?
Would it be proper for me to give that information in reply to a question of that sort—information which might be misused to the great financial advantage of a number of enemies of this country?
HON. MEMBERS rose—
If I may say so, this is evidence that the Chairman was right in holding that those wide considerations cannot arise in Committee on a Clause in this Bill.
The right hon. Gentleman says that we can discuss this question on an Amendment to the Finance Bill. Can we do that?
Yes, there is a borrowing Clause in the Bill.
I cannot give any opinion in advance on that matter.
Question put, and agreed to.
CLAUSE 3 ( Short Title )ordered to stand, part of the Bill.
Bill reported, without Amendment; to be read the third time to-morrow (Tuesday).
WAYS AND MEANS.
Considered in Committee.
[Mr. WHITLEY in the Chair.]
I beg to move, "That there shall be charged for the year beginning the sixth day of April, nineteen hundred and sixteen, and for any subsequent year for which Income Tax is charged on the income derived from any stocks, shares, or other securities which, the Treasury have declared that they are willing to purchase in connection with any arrangements for the regulation and maintenance of the foreign exchanges an additional duty of Income Tax at the rate of two shillings in the £, and that no per-son shall be entitled to any exemption abatement, or relief under the Income Tax Acts in respect of such additional Income Tax, and it is declared that it is expedient in the public interests that this Resolution, shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
This is a Resolution which is, I think, entirely novel in the financial history of our country. Unfortunately, however, there are other circumstances of the time which are equally novel. One of those circumstances is that we have to finance a great war in the course of which we have found it necessary to make enormous purchases abroad, not only on our own behalf, but on behalf of our Allies. The Committee will readily understand that when this country enters into those huge liabilities, which, in the main, are undertaken in the United States, the difficulty of meeting the liabilities at the time they fall due is exceedingly great. Our means of payment are, it is quite obvious, limited to three or four sources. We pay for our huge expenditure, both for our own and Allies' account, in the United States primarily by the goods which we send to that country. Unfortunately, however, the balance of trade between us and the United States at the present time is considerably against us. Therefore, we have to find a large margin over and above the value of the goods which we export to the United States in order to meet our payments in that country. Our most obvious next resource is to pay for what we buy in gold. We have to a very large extent resorted to that power, but obviously there is a limit to the amount of gold we can export to the United States, or, indeed, in the long run, to the amount of gold which the United States would be willing to receive. Thirdly, we have endeavoured to meet our liabilities by obtaining credit or raising loans in the United States. As the Committee knows, we have raised, in conjunction with our Allies, the French, one loan to the nominal amount of one hundred millions sterling. Those three methods of payment we have used, but those three methods of payment combined are insufficient to enable us to meet the whole of our liability.
We have, therefore, for many months organised a scheme whereby we should make good the balance of our liabilities by means of the sale of American securities owned over here which we ship back to the United States and sold upon their market. This is a scheme which has been carried out with a great deal of care, otherwise we might have influenced to our detriment the United States market in securities. Hitherto we have been able to carry on our transactions without serious or, indeed, any injury to the American market. Our system includes also the power to receive American securities on deposit, the owner retaining his property in the security, lending them to the Treasury, who in their turn ship them to America, where they are used by the representatives of the Government on that side of the water as collateral security in raising credits. For many months past this system has operated with complete success. We have been able to pay our way during the whole period and to preserve a substantial balance in New York to enable us to meet any liabilities or any charges which might become due. I would like to say that the British public, the owners of the American securities, have in the main come forward with great patriotism, and have been willing to allow their resources to be used in this way in the best interests of the country. For some weeks, however, the supply of American securities has dwindled until what at one time was a steady flow reaching at moments almost the character of a torrent has of late become little more than a trickle.
That is quite natural.
Various suggestions are made by hon. Gentlemen—that the stream is running dry, and that it is quite natural. The underlying assumption is, I suppose, that we have in the main exhausted the American securities held in this country. I do not think that that is the case. While a very large number of holders have been active in their desire to help the State, a great many others have been, I will not say negligent, but inert, shy, and, while conscious of what their duty may be, have allowed that consciousness to remain inactive, and possibly now require a spur to remind them of their true duty to their country. I cannot overestimate the value to the State of organising our financial resources to the full of our power. Every holder of American securities ought to realise that by the fortune of holding those securities we have an instrument which enables us to carry on the War, and enables us to pay our way in the American market. Without that instrument we should be in the same position as our Allies, who would find, but for our help, the greatest difficulty in meeting their recurring liabilities in the United States. With this power in our hands, with this capacity to pay, ought we to allow ourselves to be crippled because the individual holders of this power are negligent or inert, or require a stimulus in order to bring home to their minds the real needs of the State? It is for this reason that, while we ought to, and do, express our great gratitude to those who have come forward hitherto, we ought at the same time to bring home to the minds of those holders of American stocks who have not come forward that it is their direct and immediate duty to do so. If any hon. Gentleman tells me that it is natural that the stream should become a trickle, and suggests that there is no more to be had, I can only say that during this last week we have had six times the amount of American securities which we received a fortnight ago. I have no doubt that during the current week we shall maintain the strong flow which has been our happy experience for the last couple of days. I hope that we shall be able to secure all that we need without going any further than this proposal to subject the owners of these securities who do not come forward to an additional tax of 2s. in the £. But I am bound to tell the Committee that if this tax proves inoperative it will be my duty to come and ask the House to give me further powers. I shall have to ask the Committee to make this 2s. in the £ 5s., 10s., or 20s. in the £.
Why not enact it at once?
There are great difficulties about that. I believe it will be entirely operative. We have found during now some six months that the purely voluntary method has been completely satisfactory. However, I do not wish to argue the question now, but I could give the Committee very good reasons—very good practical reasons—why the compulsion proposal of the right hon. Gentleman would be inadvisable.
Yours is a compulsion proposal.
Of a different kind. Sir E. CARSON: Of a worse kind.
Of a worse kind, the right hon. Gentleman says. It is not of a worse kind from the practical point of view. It was pressed on me very strongly six months ago that we should have compulsion. What would have been the effect? I should have been flooded with hundreds of millions of dollars in securities which I should have had to pay for, and which I should have been utterly unable to sell. By the method we have adopted, we have had a steady stream which has been quite sufficient for our purposes, which has enabled us to accumulate a reservoir quite adequate to meet all our liabilities, and I have never had to pay in advance for those securities before I could realise them in America With a compulsion proposal which would have placed at my disposal perhaps a thousand million dollars in one block, first of all, think of having to handle those securities in the mass at one time. Secondly, think of the liability to the State. I should have had to pay for all those securities at the price of the day, and all the time should have had to run the risk of a fall in the securities.
You could have taken them on the group system.
My hon. Friend is, as usual, humourous, but I am endeavouring to treat the subject seriously. When we have done well, when we have been able to handle our securities without risk and without loss as and when we required them, when this proposal will still produce the same stream which will enable us to obtain securities without risk and without loss, is it in the name of some fantastical logic a desirable thing to say, "Let us go the whole hog at once and take them all by compulsion?" That is one practical objection to compulsion. There are a great many others, but I do not wish to enlarge on the question now. This scheme, I believe, is going to prove effective. It is sufficient, I believe, for the purpose. If it does not prove sufficient it will be time enough to come back to the extreme proposal of the right hon. Gentleman, when, at any rate, I shall not have such a vast bulk of securities to deal with as I should have had in the first instance or even as I should have now. I hope the Committee will allow me this Resolution, which will enable us to levy a charge of 2s. in the £ in respect of the interest on securities which the Treasury offer to buy We propose that the tax shall run from 1st July. It will be for the year, but it will not become operative until 1st July. There will be in the Bill various safeguards and exceptions, but any person who disposes of or lends his securities before 1st July will not become liable to the tax.
Will the tax be inflicted on trustees who hold the securities, but are not able to dispose of them?
Undoubtedly.
How will you deal with the case of securities trusted in America, under the domination of American trustees, who, however willing the owner of them might be, have no power to hand them over, and therefore, although not in a position to do what the Government want them to do, are penalised to the extent of 2s. in the £?
I understand the case to be of American trustees for British beneficiaries over here. When we get to the Bill, which alone will be operative— the Resolution is not operative—we shall have to take into account all the various exceptions of that kind. As regards a British trustee of a British beneficiary, of course it is the duty of the British trustee to sell, and he is entitled to do so.
Is he entitled if he has no power?
We have passed a Bill that authorises him to do so. I am a trustee myself of some American securities, and I have done it, authorised to do so under the Act. Any trustee may use American securities, and it is not only his duty to use them for the beneficiary, whom he will be mulcting 2s. in the £ if he does not, but it is his duty to the State, and he is entitled to do so under the Act. I am bound to say that in the case of American securities held in America, either by Americans domiciled here or by American trustees for British beneficiaries, that is a case which will have to be made the subject of exceptional treatment in the Bill.
Unfortunately the Resolution has not been placed on the Paper. Therefore it is rather difficult to know exactly what its powers are. I remember that the right hon. Gentleman, when in opposition, was in the habit of attacking the Unionist Government for not putting these Resolutions on the Paper. Therefore when he comes down and introduces what he himself says is a very novel. procedure, I think he might have put it on the Paper. Am I correct in thinking that the Resolution goes much beyond American securities? As I understand it, it is for the purpose of regulating any exchange. There might be an exchange with another country besides America and the power might be used for other securities. I am not sure whether I am right, as I have not seen the Resolution, but it seems to be drawn so widely that it might include any securities which the Government thought it necessary to obtain to regulate the exchange with any country in the world.
The Resolution is in the widest form possible. The limitation is that the Treasury must offer to buy.
The right hon. Gentleman says that the Treasury must offer to buy the securities. Who fixes the price? The Treasury. If the holder does not sell, then the Treasury penalises him. Whoever heard of the Government purchasing property under these conditions before? In the purchase of property by any Government, even by the present Government, it has always been held that the price must not be fixed by the Government itself. The purchaser must not fix his own price; the price must be fixed by an impartial arbitrator. We are going back to the days of Isaac of York, when the King went to that gentleman—it was the King then, but the Government is equally tyrannical now—and said, "If you do not advance me a certain sum of money, I shall take out so many of your teeth." The right hon. Gentleman does not go quite so far as that, but he uses a tax which has nothing to do with penal clauses or penalties, and says, "If you do not sell your securities at the price I name I shall put this tax upon you." The Income Tax is a very bad tax. The only justification for it, ever since it was first imposed, as far as I know, has been that it is an easy method of raising revenue. The right hon. Gentleman does not say, "I want more revenue, therefore I am putting on more Income Tax." He does not justify the putting on of this penalty at all—for it is a penalty. He merely says that the Government have been obliged to buy certain articles in America, and that as the imports exceeds the exports, the purchases in America cost rather more than they would have done if the exchange had kept up. That is quite true. Personally, I am very glad to see that at the last moment the Government are noting the fact They did not think so when they entered into contracts, and paid contractors a percentage on the cost—the most extravagant way possible of executing the work. They did not think of the taxpayers' money then; now they do. It may be true that the fall in the exchange will cost a larger sum to the taxpayer. Why should these in particular be picked out in order to save the taxpayers' money? The burden should fall upon everyone. If it is necessary to do something to preserve the American exchange everybody in the country ought to be penalised to assist in this work. Why should the Government take certain men who happened in the years gone by to have invested money in this particular way, and say to those persons, "You are to be penalised for the people; they are receiving the benefit, and themselves pay nothing." That seems to me to be an argument which is perfectly unanswerable First of all, there is the reason which has been advanced by the right hon. Gentleman. He also advanced the argument—at least, I think he did— though he did not say very much about it—as to the gold. We all know that there are two reasons for this. I think, by the way, that the cost of the fall in the exchange has been very much exaggerated.
I never mentioned it.
Then I am right, and there is a still greater reason for not instituting this very novel procedure.
I do not on that ground.
Then on what ground is it? I only know two grounds— but I dare say I am wrong. The one is the cost, and the other is the fear that if we have to pay in gold for these articles that we buy in America we may deplete the country of gold, and that is no doubt a very serious thing. This country, as everyone knows, is the only country in the world that has free trade in gold. That is one of the penalties we pay for our Free Trade. Anyone can go to the Bank of England and get what gold they like by presenting certain documents. That is one reason why this proposal is necessary. It is supposed that, unless the exchange is kept up, that if it goes to the gold point, that gold will leave the Bank of England and go abroad. That, I quite agree, is a very serious thing. But again I say, why should these particular people be singled out in order to save the situation? We ought all to bear our share of the burden. Why should not all take what steps are necessary to preserve the situation? Then there comes the question of purchase or borrowing. The right hon. Gentleman did not defend this proposal except oil the grounds of expediency. It would not be expedient, the right hon. Gentleman said, to indicate at once that you wished to take these securities, because we should have had too large an amount all at once. Does the right hon. Gentleman think that this particular Bill, and the further threat of these additional penalties, is going to be a corrective? If he is correct in saying that there is a large stream which has not yet commenced to run, then he will have a larger amount than he anticipates, and he will be in a position which, as he said just now, he does not want to be in. The amount may not be quite so much as he anticipates, but it would certainly be large, and there, again, I think his argument falls to the ground. What I should have liked to hear from the right hon. Gentleman would have been an argument justifying his proposal upon the grounds of justice and procedure, and not upon expediency. The right hon. Gentleman did not for a moment advance any argument showing that his proposal was just. We have never been told the result of the last effort; we do not know how many millions the right hon. Gentleman holds of American securities. We do mot know how many he has sold, or what is his chance to sell. I am not quite sure that if all the American securities in this country are suddenly thrown into the hands of the Government that there would not be a considerable loss that way. That point appears never to have occurred to the right hon. Gentleman.
We come to the question of borrowing, which, after all, would, at any rate, be a fair way of dealing with the question. I think it would have been quite fair for the right hon. Gentleman to say to the holders of American securities, "Gentlemen, you have these securities; they are useful to the State; we will borrow these securities from you, and give you a small sum for doing so, and we will return to you these securities when we have done with them." That, it seems to me, would have been a fair and reasonable proposal. It would never have involved all these threats of using the Income Tax for a purpose for which it was never intended. The right hon. Gentleman did not do that. He put in his borrowing proposals a stipulation which I ventured to say at the time, and which I still think, was quite unnecessary. The right hon. Gentleman has to some extent modified it now. The proposal to which I allude was that the right hon. Gentleman should have the power of sale. The only argument advanced in favour of that power of sale was that the person to whom the right hon. Gentleman applied for his securities might say, "I am going to realise them." He could only do that if the Government could not pay their debt. I did not contemplate that then, and I do not contemplate that now. Supposing, however, that for the moment the Government could not pay their debts. No one can contemplate that within a short period of that time they would not be able to do it, and there would have been nothing whatever to have prevented the right hon. Gentleman, if the borrower had sold the securities, from buying other securities in the market. If the right hon. Gentleman now at the last moment were to say, "I will either borrow these securities of you and pay whatever it is proposed to pay, say, a ½ per cent. per annum, and I will give you a Treasury note or whatever it might be, as security to show that you have some security for your securities, and I will return these securities within a given time, one, two, or three years," he would get all the securities he wanted, and he need not bring in what I venture to say is a very bad precedent, quite irrespective of this particular object. Neither Income Tax nor any other tax should be used as a penalty or as a punishment. No tax ought to be used except for its correct purpose. What is the Free Trade doctrine? What did the right hon. Gentleman say when he proposed to impose duties? He said duties ought not to be imposed except for what? For the purposes of revenue. The right hon. Gentleman is not proposing to devote this to the purposes of revenue, but for something quite different, and it is a burden which ought to be borne by the people as a whole, and not by any individual portion.
I should like to address two questions to the right hon. Gentleman. What is to happen to Americans domiciled in this country? It is not quite the same case, I think, as the hon. Gentleman behind me asked, as to what is to happen to Americans living in England whose securities were in trust for them. No doubt a certain number of Americans are domiciled here; these hold American securities. Are these to be taken, or not? That is an important point which, I think, ought to be met. It must be remembered that at the present time we are desirous of attracting foreign money. The right hon. Gentleman sooner or later will have to bring up a permanent loan, and if we then can get foreigners to invest in our securities and the right hon. Gentleman's loan, all the better. But the right hon. Gentleman has already been to America. I ventured to say at the time that he paid too much for the money. We want to attract the foreigner to invest his money here. It may be said, "Oh, but this does not apply to foreigners, and therefore it does not matter." There is nothing, however, more sensitive than capital, and people are very shy of investing their money in the securities of any State where they think Income Tax and a variety of other taxes are to be put upon them. The right hon. Gentleman, in doing this, is penalising or injuring his prospect of obtaining money from abroad. The second question has been handed to me by someone whom I do not know, to this effect: Will Mr. McKenna, supposing I lend my securities to the Treasury, and the Treasury decide to sell, the borrower having exercised his right of sale, having gone to the Treasury and bought my securities back, which I have the power to do under the altered provisions, will I still be subjected to the 2s.? That is a riddle I cannot myself answer, but I would put it to the right hon. Gentleman, and I think that there ought to be something in the Bill to prevent this. I sincerely trust that the right hon. Gentleman will reconsider the whole matter. I suppose it is too much to ask him not to proceed with his Resolution to-day, but I hope, before he brings in a Bill founded on the Resolution, he will really seriously consider whether it is not possible to amend his borrowing powers in the way I have suggested, or, at any rate, to give a trial to the thing, say, for a month, and to see whether during the next month sufficient securities will not come in in regard to this particular scheme, which I think is particularly bad. It will be a shocking precedent. It is flying in the face of all the precedents which have hitherto actuated the British Government when, they have imposed taxation.
I had the honour of sitting on a Committee which was in consultation with the right hon. Gentleman when this scheme was originally formed. I realised, as all who were there must have done, that it was extremely possible that the necessity would arise for some such step as this. It is perfectly clear that there was a large block of American securities in this country that would not readily come to the Government. There had to be pressure of some kind to bring them, but I need not go into detail or the reason for that. It was obvious. The right hon. Baronet who has just spoken says that this is a shocking precedent. Really, we are at war! We are commandeering works, taking over whole establishments and the people, and it is to be a shocking precedent to ask people to sell their securities at the market price! What harm is there done, if they are not prepared to sell them or lend them to the Government? The right hon. Baronet says the Treasury fixes the price. Yes, but you are not bound to sell to the Treasury. If there is a better price to be had in the market you can sell anywhere else you like, either on the Stock Exchange or in New York.
Supposing you do not want to sell?
I will deal with that point directly. This is a question of fixing the price. It means, if it means anything, that the Treasury is going to fix a price less than the market price. If it does, you sell in the market, so there is nothing in that allegation. The right hon. Baronet says, "Supposing you do not want to sell," well, then, they will borrow them of you; you can lend them. Then the next point is the extraordinary suggestion which was made that, if the Government borrows, it must undertake to replace the same securities. If the right hon. Baronet, say, lends American securities to the Government, and then those securities go down in value, and the Government have to sell them at that reduced value, they are to buy in again, or to pay the right hon. Baronet the price of those securities when they were lent. The Government might be placed in this difficulty. They are bound to have the power to sell. Nobody in America will lend on the securities unless they can be sold. Now there is this possibility, that the lenders might think they had this Government in a tight place, and might say, "When we lent you six or twelve months ago, we lent at such a rate, and we must have so much." Now the Government must have power to sell such securities to pay off such loan. If they do that, how are they going to buy them back again? They have got to raise the additional money in order to buy those securities back again. That might come at a very awkward time indeed. The lender can buy back again. The Government gives 2½ per cent. more than the market price. The lender can go into the market and buy back again, and he has 2½ per cent. margin to play with.
That only applies in the case of there being a free market. If my right hon. Friend has had to do with these things, as I have, he must know perfectly well that in many of these American bonds there is no market at all.
He can buy other similar bonds. [An HON. MEMBER: "No!"] Oh, yes he can. He has got his money. He has got 2½ per cent. margin, and he can go in and buy again. Some such arrangement as this is necessary if you are to draw a very considerable amount of those securities that, for various reasons, are being withheld. The only alternative suggestion is the compulsory taking of them all. That does not seem to me a very desirable arrangement. It is suggested that under this arrangement the Treasury will be flooded with these bonds now, but I do not understand that they intend taking them all at once if a great mass is offered. I imagine they will take them as they require them. The holder of those securities. I imagine, will not be taxed if he has offered them to the Government, but the Government will take them as they require them, and therefore they will not be flooded. What I do suggest as very essential to be done is that the Treasury should make widely known what are the securities that they will take. Now, in the City it is known, although some uncertainty is existing there; but in the country private investors holding those securities know very little about this kind of thing. Therefore, at once full and complete lists, as far as possible, of the securities that they are willing to take should be issued, and I do not think you ought to tax any person the additional tax for not giving in their securities if their securities are not in the list of those which it has been announced you will take, or else you may be taxing people for securities which would have been taken had it been known, and those people do not precisely know what they had to do. It is very important that lists should be published, and also that it should be advertised in the papers where the lists can be got, and the attention of the private investor throughout the country should be very distinctly called to this arrangement, or else private holders will be penalised when they know nothing whatever about the matter. It is also very essential that, where offers have been made, that should, as I imagine it will, relieve the person of tax, because, as a matter of fact —I am not making any complaint whatever; it is not a ground of complaint— offers have been sent to the department in the City months ago, and they did not know whether they would take the securities or not. Consequently, anybody who made that offer months ago should not now be penalised if the Treasury has not taken their securities, although there are in those lists securities they will take, which were offered months ago and were not taken. As to the method, I do not see any better method, and none better has been suggested. There will have to be some pressure put to get those securities, which exist in considerable quantities here, and I think this method will bring them in.
I think of all the financial proposals that I have had the privilege of hearing during the fourteen years I have been in the House of Commons this itself, as a matter of principle, is the most objectionable. I confess that I am scarcely surprised at the present Government bringing forward such a proposition, but I am grieved to say that I am greatly surprised that it has come from the present Chancellor of the Exchequer. It is frankly and openly admitted to-day by the Chancellor of the Exchequer that he seeks to put on a special extra 2s. Income Tax for the purpose of mere coercion and not to get the money. It is admitted that there is no object involved from a financial point point of view. There is no necessity on the part of the Exchequer to collect so much taxes; in fact, the Chancellor of the Exchequer tells us, in so many words, "I do not want the taxes; that is not my object; but my object is to coerce a certain number of people resident in this country who happened, quite innocently, and not having committed any crime, to have invested a portion of their savings in American securities." And the right hon. Baronet who has just addressed the Committee said, in reply to my right hon. Friend: "Oh, there is one answer: We are at war." Now, the War has been an excuse for a variety of things, and I have no doubt at all that it is going to be an excuse for a lot more things before it is over, but that it should he taken, not merely as an excuse, but a reason, why the British Government should single out a class of people and seek to inflict upon them a hardship by means of a tax which they do not want to collect, and which it is not intended to collect, in order to coerce them to do something, is, I think, an exceedingly bad precedent, and it is nothing else in itself but sheer robbery.
My objection to this proposition that is now before the Committee is that a tax is being put on as a mere penalty and not for the purpose of collecting revenue. The ulterior purpose of course is admitted. People who have got those American securities are to be forced to sell them, whether they like it or not, or they are to be forced to lend them to the Government. And we do not quite know—it has not been explained—what they are to have to show in the meantime in respect of their loans. I can understand—in fact, I know—cases of elderly people who have securities of this kind to whom it would be difficult to explain the matter. I know cases of securities of this sort which are deposited as definite cover for certain arrangements being carried out in the future and certain things done. There are thousands of cases of that kind in the City where undertakings and guarantees have been given, and securities deposited against their being carried out, and in thousands of those cases some of the securities are within this particular category. The idea of picking out people who happen to own a certain class of securities and saying, "You are to pay an extra Income Tax; we do not want the tax, but you are to have this imposed upon you for the purpose of making you do something else," is, to my mind, outrageous. If in the national interests—and I think you may take it it is so— it is very desirable to get hold of these securities, then let the Government be asked, and let us have a Bill saying that people who hold these securities are to bring them in. They will receive a Government acknowledgment with the responsibility of the British Government for the full value and a certain percentage beyond. They can please themselves whether they sell them or whether they loan them, and if required they will be replaced some day, and if they do not bring them in there is a penalty. Although it would be very coercive and very discriminating, it would at all events be honest, and it would not be mean. But I think this proposition is both dishonest and mean.
5.0 P.M.
I will also, before I sit down, call attention to a very serious danger. I think the evil is done by this proposition being brought in. But it is a terribly bad example. There are Governments and States all over the world who have not hesitated to adopt all kinds of discriminating disabilities when they got the chance against English people who happen to have invested their money in some of those countries and colonies, I am sorry to say, in some cases. Now here is a bad example. Supposing one of these —I hesitate to mention the name of a State in any part of the world—but supposing such a State said, "Oh, we are a bit hard up," or, "We want to do this, that, or the other, and we will double the Income Tax upon every Englishman's securities in our dominions." Look what a fearfully bad example that would be, and they would be able to go to our proceedings to-day and quote them as their authority for adopting such an unfair course.
I remember the case only five years ago of the Companies Act when we were told that that was a mere consolidation, and there was a Clause in that Act which escaped attention dealing with foreign securities. What was the consequence? Our companies which were doing an immense amount of trade in several countries were immediately penalised by those countries who had not got a company at all doing any business in England, and the mere fact that we discriminate against a given country or a given set of security holders or people holding securities of that country is simply inviting the whole world to discriminate some day in their taxation against British holders, and the excuse they will have will be that it is very desirable that their own citizens should own their securities, and that they should not be held abroad, and any excuse of that kind would be good enough. Look at the millions of money we have lost in this country already by imposing the light dues —a thing which no other country imposes but Turkey. I oppose this Resolution on two grounds. Firstly, that it is not intended to tax people 2s. in the £ at all; and secondly, because the Resolution is dishonest. Therefore I oppose this Resolution as a matter of principle, and also on the ground that it will invite reprisals by foreign countries which would be greatly to the detriment of British investors in all parts of the world.
The two previous speakers have indicated so many strong points that I do not consider it necessary to discuss the main aspect of the question any further. I agree with what has been said as to the effect of this Resolution on the action of other countries. I think the Chancellor of the Exchequer would get over the difficulty under which he labours if he would withdraw the limit for the deposit of securities. There are vast numbers of the smaller amounts of these foreign securities, and the flow has largely ceased because the right hon. Gentleman has not yet tapped to any large extent the small holder. There are vast numbers of small holders of American securities, and they have been unwilling to deposit them because they think it would disturb the whole constitution of their property. They have been unable to help the Chancellor of the Exchequer by depositing their securities, because they were not large enough. If the right hon. Gentleman would carry out my proposal he would not suffer and would not be overwhelmed. At the same time he would attain his object if he would offer to take any security in his list down to the smallest amount. He will find that there are vast amounts of securities in small sums rang- ing from £200 to £1,800 which would at once come in under his deposit scheme, if he adopted the smaller amount. I recommend to the Chancellor of the Exchequer, if he does not see fit to adopt my suggestion to withdraw his Resolution and provide some other means of meeting this difficulty. I would recommend him, and my recommendation is based upon the opinion of some very powerful and competent people in the City, to consider very seriously whether he could not at any rate withdraw the limit on the amount of the deposit. If he does I do not think he will find that he would be overwhelmed, and he will be able to get through the work. I would point out in addition that the time allowed "for the deposit of securities is extremely short for the Chancellor of the Exchequer to get in the amount he proposes if injustice is to be avoided. The right hon. Gentleman the Member for Spen Valley (Sir T. Whittaker) suggested that so long as the Chancellor of the Exchequer received an offer he should not deduct the tax. Supposing an offer is made before the 30th June, and the Chancellor of the Exchequer does not take the stock until after the 30th of June, in that case will there be a repayment of the tax?
I think that is a very reasonable suggestion, and it is a fair proposal. If the stock is offered to the Treasury, and the Treasury is unable to take it within the limits of the time the actual taking should date back to the making of the offer, and there should be a repayment of the tax accordingly.
I do not see how the machinery at the disposal of the unfortunate buyer or the Treasury will meet that difficulty, and if it is not met it will clearly be impossible in the course of a month to get through the amount of business which is likely to be offered. The right hon. Gentleman would have exactly the same overwhelming rush of securities which he deprecates under a compulsory Bill. If he were to adopt the idea of taking any stock that was offered on deposit down to the smallest amount, I think he would largely get over the difficulty which at present faces him.
I venture to think that the proposal which has been made by the Chancellor of the Exchequer is a very modest request, and I have listened with some surprise to the strong language about it by some of my right hon. and hon. Friends on both sides of the House who have spoken in this Debate. The one reason which justifies these measures was interjected by an hon. Member during the speech of my right hon. Friend, and it is the War. The general financial position of this country is in every respect sound, and the idea that we should have to bring the War to a close because we could not carry on through finance is a delusion. The financial situation is governed in the main by the economic situation, and the economic situation has been less seriously affected than the financial situation. The one vital part of the financial situation is the foreign exchange, and particularly the American Exchange, and the holders of American securities are in the fortunate position of being able to render a special service to the State at the present time. I understand the force of the arguments put forward, and if addressed to us in time of peace they would justly deserve the attention and concern of the House. Why should a man who holds American securities suffer when if he bought any other he would escape unscathed in this special manner?
These are times when it is not possible or salutary to draw too nice distinctions about equality of sacrifice, particularly in money matters. After all, there are many trades in this country which have suffered acutely by the War. There are many businesses whose whole business has been overturned by the War, and there are others which are going to be overturned. Conversely there are many trades and businesses which have profited extraordinarily by the War. You are not dealing at all with a situation where there is an even flow of supply and demand under recognised laws and customs governing the accretion or diminution of the fortunes of individuals, but you are proceeding on a basis constantly interrupted by external artificial events. Take the licensed holders- Throughout the country in these cases they have been most seriously affected, although I know that in some cases great profits have come to particular localities. Take the case of the East Coast towns, all of which are suffering extraordinarily through purely military conditions, from the fear of naval or aerial raids, and there is no equality of sacrifice there, although we know that the South Coast towns are benefiting by the very conditions which are inflicting such hardships on the East Coast towns. Then again, in regard to compulsory service, some are benefiting by compulsion on the basis of the age limit and other conditions. Some men go continuously to the trenches and are wounded repeatedly and very often killed, while the overwhelming number remain away from the trenches on good rations and better pay. There is no equality of sacrifice. Everything is invidious, and unless we take every measure necessary to secure the vigorous prosecution of the War, the only equality will be the equality of ruin for all.
If these much more serious cases where homes are broken up and businesses are overturned are not governed by the principle of equality, surely, in the region of finance, the question of financial loss or gain and other financial circumstances is altogether on a lower level to the more serious demands to which I have referred. The hon. Member for Liverpool (Mr. Watson Rutherford) invoked the sacred principle of taxation for revenue only. This is about the first time I have heard the hon. Gentleman invoke that principle-That is a very good and respectable principle in time of peace, but peace finance has no relation whatever to war finance, and measures are necessary in time of war —and principles may be adopted usefully and soundly in time of war—which would be considered vicious and unsound in time of peace. As to the particular method which the Chancellor of the Exchequer has proposed, it seems to me a very reasonable, economical, and unobjectionable method, and it induces a certain movement of securities towards the Exchequer by means of penal taxation. Of course, he could, if necessary, pay a high price or pay a high premium, but he prefers, and I think rightly, to induce them by penal tax. It is said that the future possibilities of these shares will have to be sacrificed by their holders whether they like it or not. If the future possibilities are so brilliant that they exceed the burden of the Income Tax, then it cannot at any rate make the difference between ruin and prosperity to the holders of these shares. As I understand the market price, there will be nothing to prevent the holder of American securities from selling at the market price. He can sell in the open market at any time that he likes.
If there is a market.
If the market price is higher than the Government price. Therefore, the Government will not be buying below the market price unless the holder of the security wishes.
There may not be a market for the shares.
There will be a market; the Government will be the market; and the Government will obtain the securities if the seller cannot sell them in the open market. It seems to me that the right hon. Gentleman has been extremely considerate to the holders of these particular classes of securities. He is merely operating by means of a penal tax which induces a movement of securities towards the Exchequer. In particularly hard cases, no doubt, that penal tax will not be sufficient to induce the movement. If the right hon. Gentleman had come down to the House and had said, "We must commandeer all the American securities and fix the price at below their market value," and had shown that here were no other means of the State meeting its difficulties, he would have been entitled to the absolute support of the House. After all, these are the days when the Government have a right to ask for everything, and when they are pressed by Parliament to ask for everything they need for the prosecution of the War—our property, our securities (American or otherwise), our lives—and I earnestly hope that the course and current of this Debate will not be such as to give the impression in the country that the House of Commons is in any way reluctant to give the Government everything necessary for carrying on the War.
I have no quarrel with the suggestion that you ought to take all the American securities in the country, but I do quarrel with the method by which you are doing it. You are doing exactly what you did with the men. You refused to adopt the system of compulsion until you were forced to do so, and you are more or less doing the same with this money. In September last year, when this question was being discussed, my hon. and gallant Friend the Member for Colchester (Major Worthington Evans) pointed out the necessity for compulsion in regard to American securities. He stated: If necessity demands compulsion for the defence of the Empire, I suppose it would be applied to men, and, if necessity demands it, it should also he applied to capital. Some forms of capital are already subject to compulsion. Engineering firms are controlled, land and buildings may be taken under the Defence of the Realm Act, war profits are taxed by this Budget, and exports are controlled. now, in my judgment, the necessity does compel it. and the steps should be taken now. The first step is to constitute a National Register. Owners of foreign securities should be called upon to register so that the Government may know exactly what securities there are."— [OFFICIAL REPORT, 23rd September, 1915, col. 623.] The hon. Member for North-West Lanarkshire (Mr. Pringle) just now suggested that we ought to have the group system here. I entirely agree with him. You ought to have your securities organised so that you can call them up more or less on the Derby group system. You want the Derby grouping in finance. I venture to say that, from a business point of view, it would be a sensible policy.
May I ask the hon. Gentleman, if I adopt the Derby group system, what I am to do?
You would have to call them up.
It is no advantage to me to call them up under the group system. What am I to do, for instance, when I have called up all the securities of a particular group, say, all the railway securities? The American market would not be able to absorb all the shares in a particular group.
I venture to differ from the right hon. Gentleman. You would be able to negotiate your American securities as and when you pleased without interfering in the slightest degree with your market. Money, as in the case of men, will fail you unless you organise, and I suggest that by adopting the principle of compulsion, instead of the expedient of this 2s. extra tax, you would be doing a good turn to the State. If you had these securities properly tabulated and at your command, you would know exactly where you were, and you could organise your finance certainly to the tune of £1,000,000,000 or £1,500,000,000. On the other hand, I must say that I welcome the first sign I have ever witnessed in my right hon. Friend the Member for Dundee (Colonel Churchill) that he approves of a system of preference, for indeed you are giving the Dominions a preference over and above the holders of American securities. This is more than two bites at a cherry; you are going to have a dozen bites, and then you will come to compulsion at the end. Indeed, your very proposal now is nothing short of compulsion, because you are compelling by taxation the holders of these securities to give them up. If the right hon. Gentleman had directly said, "I am going to take your securities by compulsion," I am sure we should have all followed him as one man. We are all willing to dip our hands into our pockets. Speaking for myself, you can have all I possess for this War; to use a phrase more often heard outside this House than in it: you can have even my shirt. That is the feeling in the country. Do not play at finance. Do not take two bites at a cherry. The country will give you all you want, if you will only call for all American securities and make it compulsory by law.
There is one point to which I would strongly direct the attention of my right hon. Friend and the Committee. What are you going to do in order to pay for your American imports into this country when you have realised all these securities? A large amount of our imports in pre-war times was paid out of the dividends on these very stocks with which we are now parting, and, believe me, the result must be that after the War your exchanges will be infinitely worse than they are at the present moment. That is a point which, I think, is very well worth considering. The right hon. Gentleman the Member for Dundee (Colonel Churchill) is evidently master of a good many things, but I do not think he is a master of finance. He says, "You could sell in the open market. If the Government did not offer you enough you could sell in the open market." And the next moment he said, "The Government is the market," and he was quite right. "Take the Government price or the market price." You are taking the same thing; it is the market price. There is no desire on the part of holders of these stocks to withhold them provided that justice is done to them. Let us see what is the position, I take the case of a man who holds $4,000 worth of Indianapolis 4 per Cent. Gold Bonds. I will make it personal to himself. Supposing the right hon. Gentleman holds these bonds which he has bought at £100, and he has now to sell them to the Chancellor of the Exchequer at £89, is he not entitled to say, "I will keep them until after the War when I have no doubt that they will get back to £95?
made an observation which was inaudible.
Can he deposit and lend them to you, and will you hand them back at the end?
My hon. Friend knows the terms of the Deposit Scheme. There is nothing new in it.
I do not know whether you are going to amend it or not, but at the present time, as I understand it, the shares are endorsed, and therefore it is in the power of the lender to sell if you do not pay. Then the man's shares have gone and you give him the price at which they were sold plus 2½ per cent. Supposing you have got with the American Banks hundreds of thousands of these securities and there comes a panic or something of that sort; bonds which now stand at 89 or 90 would be sold at £70, and you would give him 2½ per cent. addition. The holder says, "I would gladly lend them, but I want to keep them until they recover." You cannot expect having that bulk of securities and knowing that you are a vendor, that the market price in America is going to keep up. The right, hon. Gentleman the Member for Dundee spoke about there being no equality of sacrifice. There cannot be in a great many cases, but you can do justice to a man. Why should not a man who holds Great Northern Debenture Stock or Great Eastern Debenture Stock, or any other stock, contribute towards this loss, if there is any? All we ask is this: "Guarantee that we shall not be personal losers, and you can have all our stocks; we will lend them you willingly." That is what the public are saying. If you will undertake to replace it at the end of the War, or within two or three years, undertaking at the same time if there is a loss it should be shared equally by the whole community, that would be a fair proposal, and it seems to me the right way to go about it. All I ask is that you should deal fairly with these people. They say: "Here are the securities; you can keep them this year, and next year, or as long as is necessary. We want no more than the interest upon them, and an undertaking to give them back to us at the end of the War." If you make a proposal on those lines, you will find more come in probably than you can absorb. Take the case of the shares which hitherto you have not bought— those I have already mentioned.
May I say we have always sold through a broker, and we pay the commission. There is no loss to the seller. But we do not buy direct. It is always done through a broker.
Under the present minimum nominal amount, not one security has been accepted.
That is for deposit, but my hon. Friend is speaking of sales.
Let me ask this. If securities for 4,000 dollars are not accepted, are you going to put the 2s. tax upon them?
I have already stated that an offer will be reasonable ground for exemption from the tax.
I presume that will apply to any amount.
I do not wish to argue the point now. No doubt the question will come up on the Committee stage. But there will have to be a limitation. Otherwise the holder may split up his holding into any number of small lots, each less than the amount we can accept, and then proceed to offer them one by one, thereby securing exemption from the tax.
That is the trouble. When one raises a point like this the answer is that it is a Committee point, but when an attempt is made to raise it in a speech in Committee, then it is suggested that it is a Second Reading speech. I am quite sure if the right hon. Gentleman will frame his measure in such a way as that it will be acceptable to those people who would deposit rather than sell—and it is the depositor about whom I am now concerned—if the right hon. Gentleman will arrange that the depositor will get back his stock or its equivalent in price at any time within three years after the War, then there will be no difficulty in the matter. But the point I raised at the beginning is a very serious one for the Government, namely, as to the effect on the rate of exchange in years to come when we shall have very little interest due to us every half-year in America out of which to pay for our imports.
I think the Committee would have been glad if the Chancellor of the Exchequer had given us some of the figures on which he bases this very novel proposal. But we are quite in the dark as to what he has got and what he really wants. I do not wish to repeat what has teen said by other hon. Members, but I must say I do not think the right hon. Gentleman has made out a very good case for selecting these particular securities. I do not know how America will like to see certain of her securities black-listed. They will not like to be told that the Government do not wish the British people to invest their money in the United States.
How can my hon. Friend say that? We require to sell the securities now in order to meet our liabilities. But ever since America has borrowed abroad, we have been the main country in which she has borrowed, and I hope that after the War we shall resume that position. But this is a time of war.
I do not wish to misrepresent the right hon. Gentleman at all, but, listening to the Resolution he has proposed, one must conclude that the Chancellor of the Exchequer does not wish British money to be invested in America.
Does the hon. Gentleman mean during the War or permanently? It is very important it should not go forth that the Chancellor of the Exchequer is recommending British subjects for all time not to invest in American securities. But it is notorious our money should not be invested in America now; in fact, it cannot be.
I am only speaking about this particular time. If people hand over their securities now, what guarantee have they that they will be able to get them back again? Listening as I did the other night to the right hon. Gentleman's speech on financial morality, I must say I have not been convinced that this proceeding comes up to the high standard he then laid down. I freely agree people would prefer to have a certain proportion of their capital fairly and squarely taken away from them rather than be subjected to this peculiar and indirect way of collecting revenue from all sources. What the hon. Member for Aberdeenshire (Mr. J. M. Henderson) said was perfectly true. If a loss is made in exchange it should be borne by the whole community, whereas now you are asking individual members to bear it, because they happen to have invested their money in a friendly country. When talking about dollar investments and when beginning to penalise the American investment, you are getting very near the Dominion of Canada. Is the right hon. Gentleman going to call upon English holders in Canadian Pacific Railway stock to dispose of their shares? [An HON. MEMBER: "They are doing it!"] Then I venture to say the right hon. Gentleman is driving money outside the British Empire. These shares must be bought, by Americans; probably they will be purchased by German Americans, and I would like to know how Canada will feel in that event. How will Canada like to see her Six per Cent Preferred Stock, the cream of her investments, going into foreign hands? I want the right hon. "Gentleman to consider seriously this proposal, and see whether he cannot amend it in a way the Committee will view more favourably. If you force people to sell American securities you have no guarantee that they will put the money into Government War Loan, and it seems to me you are doing your best to keep that money outside the British Empire. They will not put it in Australian stock, because you are going to double-tax them on any money they may put there. I hope the right hon. Gentleman will see his way to modify this proposal. If he cannot, let him advertise it more freely than he has done, because the people in the country do not know what securities they are asked for, or what they are expected to send in. I know some who have sent in with the observation—" This is all I have, do what you like with it." And the answer has come back, "Thank you very much; they do not come up to what we require either in quantity or quality." How are you going to treat these people? Let the right hon. Gentleman lay down quite clearly what securities he wants people to send in. I hope, too, he will make it clear that he is not going to deduct the Income Tax of 7s. from these securities at the source and leave it to the holders to claim the 2s. back, as that will mean that they will have to wait a long time to get their money back. I am sorry I cannot give the right hon. Gentleman more support. He has entered upon a very thorny road. He has a very difficult task. I sent him a letter the other day — perhaps he has not yet seen it—embodying some questions asked by a constituent of mine who has had a great deal to do with American investments, and I hope in due course I may get an answer.
I have, almost invariably, been able to support the taxation proposals of the Chancellor of the Exchequer. I am quite aware that in a great war such as we are now engaged in, one cannot expect altogether to preserve the just principle of the equal incidence of taxation. I have, indeed, supported many proposals recently by the Chancellor of the Exchequer which have made a very serious breach in that principle, but in none has the breach been, so serious and so flagrant as in the particular one now under consideration. I yield to no one in. my willingness to make every sacrifice, financial and otherwise, to enable us to win this War, and I do feel that the response to every request the Chancellor of the Exchequer has made, especially with regard to dollar securities, has been so splendid that it would seem to be too early to seek, by penal legislation, to exercise this coercive power. Still I think the holders of these securities throughout the country have some reason to complain. I hold in my hand a list of American dollar securities which the Treasury are willing to take, and in it I read the words: His Majesty's Treasury are prepared to purchase or accept on loan any of the undermentioned securities except common American railway stock, suitable for deposit, which will not at present be purchased. Many months ago I realised all my American bonds and lent the money to the Government willingly. On the other hand, I had certain common stock in Amercian railways, and I offered it at Old Jewry. I offered to put the stock on deposit, and I was told, in reply, the Treasury were not yet prepared to take such securities on deposit. I have renewed that offer twice, and in the last six months I have made it an open offer without any limitation as to date, but up to the present moment I have had no reply.
You will get one.
If this is the way in which hundreds of holders of dollar securities have been treated, it is no wonder that the flow has dropped down to a trickle. They could have had my American railway stock on deposit last month or last week, but I could get no reply. That is not managing the business in that thorough fashion which we have a right to expect. It is perfectly true that practically every holder of these dollar securities would be willing, if they rightly understood the alternatives, to give their securities to the Government, either on deposit or sale, but what about all those American dollar securities which are deposited with bankers in this country as security for overdraws? I should like to know from the Chancellor of the Exchequer whether the holder of American dollar securities who has deposited them with a bank as security for an overdraw, will have to pay 2s. in the £extra on the Income Tax because he is in the unfortunate position that he has not command of his American dollar securities? I believe there are hundreds of people in the country who are in that position. An hon. Friend of mine says that they can sell. Perhaps his banker might take another view of the matter. At any rate, what we require is that everybody should be treated fairly and justly, and that, as far as possible, the true principle of the equal incidence of taxation should be preserved.
My hon. Friend the Member for West Aberdeenshire (Mr. J. M. Henderson) made the suggestion that if eventually there is a loss, the Government should make good that loss to the holder of securities who has deposited them with the Government, if they find it necessary to sell. That is only justice. In that case the whole of the taxpayers would bear a share of that loss. Personally I do not attach so much importance to the question of the Government having to make a forced sale of American dollar securities deposited with them. That is a very remote contingency. I am sure we all appreciate the way in which the Chancellor of the Exchequer has fulfilled the onerous duties of the position he occupies in this great War. We know that he has every wish to act fairly all round, and I am sure that in Committee the various suggestions that, have been made will receive from him careful consideration. I do not for a moment say that he should withdraw the Resolution. I propose to vote for the Resolution, believing that in Committee changes will be made, that will make it more equitable. Looking to the future, I am bound to say I agree with what my hon. Friend the Member for West Aberdeenshire said about the loss of annual income derivable from foreign investments, and what it will mean in the matter of foreign exchanges and the balancing of imports and exports, namely, that it is a very serious question. We cannot help that. We are spending huge amounts of money upon this War. We must raise that money. We cannot lave a Debt of £3,440,000,000 next March without having to deplete our financial resources and utilising our pre-war capital. That has to be faced. So long as it is faced on lines that endeavour to do justice all round and places an equal burden on all shoulders, I am sure the Chancellor of the Exchequer will have the support of the House of Commons and the country in all his endeavours and proposals, however drastic they may be.
I intervene in this Debate in order that we might have it clearly stated by the Chancellor of the Exchequer what is the extent of the allocation of the taxation which he proposes. In his deliverance he referred throughout the whole duration of his speech to American securities. If I rightly read the Resolution before us, it applies not merely to American securities, but to other securities as well. I understand from some nod that he gave during the discussion that it applies to Colonial, Canadian, Australian, and other securities.
All securities.
If that is so, it seems to me to be a most unfair and un-justifiable tax. There are many people from our Dominions Overseas in this country at this time who are intimately connected with the War and who have come here in connection with it, who hold these investments and who have taken up their residence here. Is it fair that these people, who make their contributions in the Dominions Overseas, should have this additional impost put upon them in this country?
They will not.
Surely they will. Take my own case and that of many others whom I know. This tax will be applied to every Colonial holding these securities.
Only if the Treasury offers to buy the securities. The Treasury might offer to buy South American securities as well as North American securities, provided that in their opinion it was necessary in order to deal with the exchange. It will not apply to Canadian, Australian, or South American securities unless the Treasury have offered to buy the securities in order to finance the exchange.
I am very glad to hear that, because Canadian Pacifies are largely held in this country by English people as well as Colonials. I understand that the right hon. Gentleman says that it, will only apply to them provided the Treasury require them for the purposes of sale. What can be more desirable than the purchase of Canadian Pacifies? The right hon. Gentleman knows that it is a prime article of financial commerce on the New York Stock Exchange, and nothing could be more desirable than that the shares of that company should be held for the purpose of raising money on the American market. I understand he has already offered to purchase them. Now, in addition to that, there is to be a tax of 2s. in the £ placed upon holders of those securities in the event of his desiring to acquire them. That is most unfair, and may have injurious effects. I am not sure whether the right hon. Gentleman is aware of the fact, but in Canada the fear is that this great railway will pass into the hands of Americans, who will acquire the shares and thereby get control of it. That might have a very injurious effect in Canada as well as from an Imperial point of view.
It is so unnecessary to enter into this question. I undertook, when this subject was discussed before, not to include any Canadian shares in our purchase scheme except with the approval of the Canadian Government. We are not buying these Canadian ordinary shares because the Canadian Government at the present moment do not wish us to do so. I think it is quite safe to leave the matter in their hands.
I thank the right hon. Gentleman for having made that statement. It might be quite safe, but I can tell the right hon. Gentleman that the Canadian Government is not the only guardian of Canadian finance, and that there are people there quite competent to judge of their own affairs and who do not care to leave their affairs in the hands of any Government. I object to this tax because it is unfair and discriminating, and because it is an unequal and unprecedented tax. The right hon. Gentleman the Member for Dundee (Colonel Churchill) said, "Oh, this is a time of inequality. This is a time of war, and we must all suffer inequality." Only two or three days ago I heard a very eloquent speech from the same right hon. Gentleman in which he pointed out and condemned inequality in the service of our troops in France, but now from a financial point of view he sees no inequality in this taxation of a special character. If a discriminating Englishman —I take the larger point of view—chooses to put his money in Canadian, American, or Australian investments, why should he be put under the disability of having to sell his shares unless he is willing to submit to the 2s. extra penalty? It will not do to say that we will give you back your shares at the end of one or two years, or to say we will take your shares now and at the end of the War we will give them, back to you. It might happen that the shares will have become greatly enhanced in value, but by having his hands tied in. the meantime the holder of the shares is deprived of the benefit of selling them. The only thing that can justify the action of the Government is necessity, and that they require to provide money in the principal markets of the world where they are buying supplies for the War. If necessity compels them to provide the money there, it should not be at the expense of penalising any particular holder of securities in this country or elsewhere. It should be done by means of a tax equally borne all round, undiscriminating and equally applied. In my opinion this tax is most unfair.
6.0. P.M.
I regret I did not have the pleasure of hearing the speech of the right hon. Gentleman in proposing this Resolution, because I happened to be engaged in a conference at the Local Government Board. Therefore I do not feel very competent to discuss the matter from the point of view from which he placed it before the Commtitee. I have heard a good many of the speeches made since, and I generally agree in the condemnation of the proposal. I remember distinctly that when the suggestion of lending bonds on conditions was made, and the right hon. Gentleman said that he was going to borrow the bonds, it was brought to the notice of financiers in the City. I went to the Treasury specially and told them that the scheme was bound not to-succeed, because it Was thought then, and I still think it to be not perfectly fair to-holders of these securities. I did not see the right hon. Gentleman, but I saw a very prominent official at the Treasury, and asked him to convey to the right hon. Gentleman the views of this rather important group of financiers The right hon. Gentleman, when he did introduce the scheme, deprecated the idea of in any kind of way using compulsory measures. I felt it was "bound to come to something of the kind in the end, unless he altered the terms upon which he borrowed the securities. That he does not propose to-do. Now he comes forward with a proposal which is certainly unfair. I agree with my hon. Friend (Mr. Rutherford) that it is a mean thing to treat people in this kind of way and to put a kind of tax upon them, instead of taking over the securities, at cost if you like, but on fairer conditions than you offered before. The right hon. Gentleman turns his head away and p apparently does not propose to listen to what I am saying. I am only talking into one ear, but I tell the right hon. Gentleman that the position of people who hold large quantities of bonds "which are redeemable at a certain date at par is a much more serious one than has yet been placed before the Committee. I know a case in which a company holds a very large number of these dollar bonds. They have already sold enormous quantities for the benefit of the Government which have a due date varying from ten to twenty and thirty years ahead, and the difference between the market price of those securities at the present moment and the value which they will have at the given date— and they do not require to sell one before the due date—is £850,000. The right hon. Gentleman said they can pay the 2s. tax and keep them. That is a very nice discrimination.
What is the amount on which £850,000 is the difference?
I cannot tell the amount, but it is many millions.
It must be.
How could the difference exist unless it was millions?
The hon. Gentleman startles me by this figure. Can he tell the Committee what interest, including appreciation of value till the due date, they pay —that is to say, the net interest which they now pay plus the yearly increment of value due to the appreciation till the due date—is the total 5 per cent.?
I am not in a position to say what the interest is. My position is this. The valuation of those securities at present, in a depressed market—the market value takes no consideration of the tax that they are repay able at par in a certain time—
made an observation which was inaudible in the Reporters' Gallery.
The right hon. Gentleman does not know what he is talking about.
May I interrupt?
I think there is too much interruption. The hon. Member must be allowed to make his own speech.
I will tell the right hon. Gentleman privately the name of the company. I know that a valuation was made quite recently, and the difference between the valuation to-day and the sum of money due upon those securities when repayable is £850,000, and I pledge myself to that figure. What about equality of sacrifice in a case of that sort? I do not suppose all these securities are on the right hon. Gentleman's list. Why should they suffer by selling them? They are looking forward to receiving that money for a special purpose. They have obligations to meet which the money is intended for.
That is all I want to say on that point. But I should like to ask a question or two. I have a letter from the manager of a very large insurance company asking me this question: Take a case which applies to ourselves. We borrowed from a bank in New York a considerable sum, leaving with the bank dollar bonds as security. We brought home the money, thus producing the same result from the exchange point of view as if we had gold those dollar securities, and thereby benefited the exchange. Does Mr. McKenna mean that the interest on those bonds, which are lodged as security with the bank in New York, is to be taxed 7s. in the £ because the bonds are not deposited with the Treasury here? I do not know whether the right hon. Gentleman is in a position to answer that question. It would be a monstrous injustice if anything of the kind were to happen. I cannot conceive any Finance Minister suggesting anything of the kind, and I should hope the right hon. Gentleman will be able to assure me that in circumstances of that kind the holder will certainly not be penalised by being charged more than the ordinary rate.
How could the charge be made?
I am glad to hear it. I thought anything could be done nowadays because we are at war. That is usually the answer. I am glad something cannot be done. Take the case of banks which are holding large quantities of securities of this kind, but very much below the figure which the right hon Gentleman accepts. What is to happen in the case of those securities which belong to people abroad, and which belong in some cases to prisoners of war who cannot be got at? What are they to do with these? Are these people to be penalised because they can get no authority to sell or to deposit or to do anything? Again, if you force all the small holders on to the market now to sell or to be penalised, what is to become of the market? These people will be bound to sell upon a very badly depressed market.
Where?
Here.
We buy them.
But you buy at the price of the day.
At the American price.
Surely that all reflects. Surely the American price will be to some extent affected by the quantity of bonds sold here. Anyhow, perhaps the right hon. Gentleman will make some provision in regard to that point. It is very unfair that these people should be penalised if by any chance the banker who holds the securities is not able in time to give notice that they will be lent, or in the other case to get authority to sell. I think the right hon. Gentleman would have been much better advised if he had gone straightforwardly to work in attempting to get these securities and had not attempted to do it by imposing a penal tax of this kind, which seems to me to be a most unfair way of doing it.
I am not personally the holder of any of these American or Canadian securities, but I should like to say a word on the point raised by my hon. Friend (Mr. J. M. Henderson). The Chancellor of the Exchequer admitted that up to date, at all events, nothing of the face value of less than £1,000 sterling, or 5,000 dollars, is accepted on deposit, and several people who are holders of securities of a less value than 5,000 dollars and who have been quite willing to deposit have asked me whether in the circumstances named they will be penalised by this tax. I think it would be grossly unfair to the holders of these stocks if they were penalised on account of the Chancellor of the Exchequer himself having made a regulation which prevents them having an opportunity of depositing their stock. The Chancellor of the Exchequer said this was a Committee point. It may be a Committee point. I think he went so far as to say that any offer of the kind would be taken as a guarantee of good faith and therefore they would not be taxed. But there must be thousands of people in that position who have not made any offer to the Treasury, but who went to their broker or to their banker and said, "I propose to deposit these," and the answer given by the broker or banker would be, "It is no use-offering them to the Chancellor of the Exchequer because he will not take them." Really before this tax is imposed I think every holder of such securities, of whatever nominal value, ought to have an opportunity to deposit them before he is subjected to this tax. It would ease the situation. I do not think it would be derogatory to the dignity of the Chancellor of the Exchequer if, in a case like this, he says, "It is a fair case that you put before-me, and I will see that it is given effect to," and not put it off by saying, "This; is a matter for Committee stage and not. for Second Reading." If it is a case that ought to be met the Chancellor of the Exchequer or the Financial Secretary should get up and say it will be attended to.
From the moment my right hon. Friend announced his intention of making this proposal I felt that it was a very strong step to take. He has rightly admitted that it is a precedent. An offence is being created. We are carrying the principle of penal taxation further than we have ever done before, and I think the-Government ought to hesitate before they put this proposal into operation. It looks to me like something that might have been excusable at the commencement of the War, but to-day, in the twentieth month of the War, when the country has responded so splendidly to every financial appeal that has been made to it, it seems to me a. cruel thing to make this invidious distinction and to create a new offence of this kind, and label a large number of people who, it is admitted, may know nothing about it, as unpatriotic and not discharging their duty to the State. It seems tome a great pity that this should be done. I think the arguments we have had from my right hon. Friend do not go the whole length of the case. For instance, he said he has arranged with the Canadian Government not to include the common stock of any railway. I find that Canadian Pacific Railway common stock is included in the list, and here is a list of a considerable number of large Canadian securities which are included as well as American securities. Then my right hon. Friend almost alarmed the House by the extension that he gave to-the principle, in an interruption a few minutes ago. We thought it was confined to American dollar securities, but my right hon. Friend has widened it now.
made an observation which was inaudible in the Reporters' Gallery.
That is at the moment. He said, "To-morrow I may claim South American securities, another day any other foreign and Colonial securities," and the principle that we are adopting, rather hurriedly and without any great necessity, may be extended a great deal further than anyone in this Committee at present realises. The Secretary to the Treasury is a man of very great intelligence. The only fault I find with him is that instead of using it in a free and independent way, he abuses—I was going to use a stronger word—his great powers by simply upholding in a slavish way anything the Government bring forward. As Secretary to the Treasury he occupies an independent position to a large extent, and he ought not to do anything which will be injurious to great interests in the State. I want to ask him one or two questions which have not been answered. Would it not be fair, before this proposal is adopted, before this House gives the Government the right of fining, punishing, and branding as unpatriotic, that the terms should be plainly stated in a circular which these wicked people are refusing? I was very glad to get a letter from the Chancellor of the Exchequer this morning on this very subject. There is no attack made against anyone in that letter. The offence which we are going to punish so severely this afternoon is not stated. On the contrary, it is a letter of thanks—I have not done anything to deserve it—addressed to the people of the country. It says: The thanks of the nation are due to the very large number of holders who have already placed their securities, and so on. My right hon. Friend is overflowing with gratitude, and yet he has expressed that gratitude by making the most stinging proposition about branding us as unpatriotic and punishing in a very severe way a large number of the people of the country. The Government ought to make out a better case than they have done before they take that step, and they ought to state the exact terms on which the securities may be bought. For example, this point has been taken. There may be a large number of people in the country holding these securities who know nothing at all about what is going on. The mistake we make in this House is that we come here with difficult problems and then we think everyone understands them. People do not understand them. There are all sorts of curious people with a little money in remote parts of this country and we ought to think once or twice before we take a step which may do a much larger injury than we think to these important interests.
That is the point of the people who may-know nothing about it. But I want to take another point. There may be other people who are thinking about it and find great difficulty in selling. The securities-may have cost them a great deal more than the present market price. We say in a grand way, "They must cut their loss." But people who have got only a little, de not like cutting their loss. I do think that some provision should be made for meeting hard cases, and that they should get the cost price of their securities or the loss should be made up to them. An hon. Member laughs. I would not do such a thing myself, but I do not make the proposal; it is the Government which is responsible. If you make a bad and doubtful proposal you ought to guard it all round and try to fence it round with protection for innocent people. The Chancellor of the Exchequer has put forward the case in this way: He said that the exchange is against us and that we can only deal with the exchange in this way. I maintain that there are several other ways, of dealing with the exchange. The trouble is that the problem is much wider, and you may find, even when you have done this, that you have not put the exchange right. I will tell the Committee one way of dealing with it, and that is by buying less from America and producing more ourselves. If we are putting up all these tremendous factories in this country, and we hear glowing accounts of the progress that is being made, why should we buy more than we can pay for? It is a great mistake. By a little restraint in the way of buying we might avoid dealing with the question in this drastic way.
By killing our soldiers for want of munitions.
I said nothing of the kind.
That is the outcome of your remarks.
No I do not think the hon. Member can deal with it very well in an interruption of that kind; it is not successful. I am as reluctant to kill a soldier or anybody else as the hon. Member. If he wants to make a charge like that, let him stand up in a few minutes when I have done and put it in an intelligent way to the Committee, instead of making an interruption of that kind. I do not want to kill our soldiers. I say that we ought to increase our own output. Are we not doing it in every part of the country now? If we do increase out output, it would not be necessary to bring in such a proposal as this. The Chancellor of the Exchequer said he can only deal with this matter in the Income Tax, and that if he adopts the suggestions flung across the floor of the House, brings in a Bill to buy these securities, that would force him to take too many, and he would have to buy everything that was offered. There is no necessity to do that. A Bill could be brought in to enable him to buy what securities he likes, to buy a certain number and to make selection. The argument of the alternative course has not been worked out in the careful way that I think we might expect before a principle so great as this is agreed to.
It broke down.
Quite so, I think it did break down. We are asked to-day to break with all our traditions. We are asked to act in a way that may be injurious to many people. Before the Committee does that it ought to inquire about. all the alternative policies, and if it can find any other way of dealing with the. situation it ought to do so. I think the Government has a great deal of information which it has not given to the Committee, and which it ought to disclose to make the case good- I suspect the Government because it is keeping so dark; it is saying so little. In introducing a large and novel principle like this the Government ought to treat the Committee with candour. I believe there are statistics of the number of these securities that are held in the country. At first everybody came forward. The Chancellor of the Exchequer said that at first there was a torrent, and then it began to trickle. Torrents do begin to trickle when the water runs out. How do we know that as many of these securities are available now as there were at first? I think the Government ought to give us the whole of the information. I believe they have got in- formation about the quantity of these stocks available in the country, and I think the number is a much larger one than some hon. Members may be inclined to think. I do not think there is any hurry about it. One very curious thing was said by the Chancellor of the Exchequer. He said there was a torrent, then a trickle, and then within the last week the torrent has come again. If that be so, perhaps this Debate, this appeal that we have made, the Government's own violent proposal, and the wise suggestions we have made, may have the desired effect in the country and the Government may get as many of these securities as they want without having resort to this rather doubtful experiment.
I think every hon. Member of this House is agreed that the Government should get, by purchase or by loan, such foreign securities as are necessary to maintain the exchange. What there is difference of opinion about, and what I very much doubt, is whether the proposal that the Government have now brought forward is necessary. The reason I think it is not necessary is that they have not yet put forward what, in my opinion, is a fair proposal to the holders of a great quantity of foreign investments. The original proposal to buy foreign investments was quite fair for those owners who could afford to sell their investments without much loss at the present market price, but many owners of these investments could not face the heavy loss they would sustain, many of them under trust, by selling their investments at the market price of the day, which is very much reduced. Therefore the Chancellor of the Exchequer and the Treasury put forward an alternative proposal to allow them to deposit their securities with the Government and to receive for two years ½ per cent. per annum over and above their present interest. That proposal was a very fair one, had it not been coupled with another condition which, in my opinion, was grossly unfair. The other condition was that in case of a crisis the Government should have power to sell these securities on the American market at the price of the day of that crisis, simply returning the money they obtain for their sale to the wretched holders, who would help the Government by lending them, plus 2½ per cent. on the heavy loss which they may have sustained.
I personally own no securities that come under this proposal, but I am trustee for a very large number, and I would like to tell the Committee how I have dealt with them so far as I am a trustee. In every case where we could sell without a heavy loss to the Trust these securities have been sold to His Majesty's Government. But when there is a loss, as in a trust that I was looking at this morning, of 20 per cent., if they were sold at the present market price to the Government—and the trustees were absolutly certain that if they did not sell them but held them for five years they would have realised no loss upon them—the trustees naturally cannot see their way to sell them at the present heavy 20 per cent. loss. They are quite willing to lend them to the Government. They do not want the Government to pay per cent. to them for lending them. They are only too pleased to lend them to the Government without any charge of any kind, and all they ask is that if the Government for any cause is forced to sell these securities for the good of the British nation, that they should repay to the Trust the sum of money that these investments have cost the Trust. I think that is a fair and reasonable thing to ask. If the Government came forward with some well-thought-out scheme to meet that practical difficulty, I do not think they would have to come down to the House with this revolutionary proposal.
I am in agreement with most of the hon. Members who have spoken. I am in favour of the Government doing anything they think fit for the prosecution of the War. I have been in favour of compulsory service. One of the reasons why I was in favour of compulsory service was because I did not believe that those who had voluntarily enlisted should be placed in a danger that others were shirking. I do not quite see the difference between compulsory service— that is, making a man go and fight—and making people who have these American securities sell them compulsorily. When first the Government asked people to sell their American securities or to lend them, a great many people thought it was their duty to help the Government in every possible way so that the country could get more munitions from America, and more food from America, than would be the case if the exchange went down. But there are a great many people who say: "We will not sell. We will keep them. "We do not want to help the Government in this way. It does not pay us to sell them." I cannot understand why anybody who is in favour of compulsory service for the Army is against compulsion in making people sell their American securities when other people have sold theirs willingly for the benefit of the country. I do not see why they should be opposed to people being compelled to sell their American securities to help the British nation to get more for their money from' America than they would otherwise do if these securities were not commandeered. I think that is a fair way of putting it.
Some people who hold American securities are complaining a good deal without cause. After all, American securities have depreciated less than any other securities. English gilt-edged securities, railway debentures, and all kinds of industrial debentures have gone down, but American bonds have not gone down at all, or scarcely at all. American 4½ per cent. bonds can be sold so that the money can be invested to bring in more income than the investor is making at the present time. Therefore, I do not see very much hardship. When the hon. Baronet (Sir G. Younger) talks about bonds that are going to mature in a few years, I can only say that I have not the share list before me, but I think I am right in saying that a great many of the bonds that mature in a few years are now about par.
I did not say in a few years. I said in about twenty or thirty years.
Even those that mature in twenty or thirty years are at a fairly high price, and I think if the hon. Baronet will go into the question he will find that he can sell these bonds to-day and invest the money in Treasury Bills or Exchequer Bonds to bring in a bigger percentage than he gets to-day.
No.
It is so.
In some cases, not in all.
Not in all, but in a great many cases. Amongst all the best bonds it is the case. There are certainly a good many inferior bonds, but I do not think the Government want to buy them. The best bonds I believe can be sold PO that the money can be invested in English Government securities to bring in a greater interest than at present. So where is the hardship? In these times, when we are compelling people to serve their country, the least we can do is to see that those people who have American bonds should sell them to the Government for the benefit of the country, so that the country can get more munitions of war and more food supplies from America. I think it is not unfair to ask these people to sell their bonds, particularly when they can invest their money to bring in quite as much interest as they are getting now.
When the great novel of David Greig was first criticised its distinguished authoress consoled herself with the reflection that she might neglect most of the criticisms that were cast upon it as they destroyed one another. On the same principle I hope that the Chancellor of the Exchequer will derive some consolation from the fact that most of the criticisms cast upon his scheme really destroy each other. He seems to be assailed impartially for going in for too much coercion on the one hand, and for going in for too little on the other. The Bill has been denounced as tyranny, robbery, and so forth. With charges of that kind I have no sympathy whatever. It is obvious that if we are to win this War we have to pay for it. One obvious source of money to pay for it is the recall of money abroad wherever it may be. It appears to me that if a great corporation holding three, four, or five millions sterling of these 4 per cent. bonds thinks that it is its interest to retain these bonds and not to give them to the Chancellor, the impost which the Chancellor is proposing to place upon them is not really an excessive amount. I do not think it fair to say that a tax of this kind is of such a coercive degree as to amount to confiscation. I hope particularly that the Chancellor will not listen to the suggestion—1 do not think there is much chance that he will—that any sort of guarantee should be given to people that in certain contingencies the Government will relieve them of the capital loss on investments which they make. If the House of Commons advises the Chancellor to do that it will, I think, lose its reputation altogether, and will deserve to lose the confidence of the great mass of the people. We have recently, very rightly I think, been engaged in coercing people into military service. I think that the question as to what the difference consists in between coercion into military service and the present degree of compulsion as applied to money is one that can be fairly easily answered. Where you are dealing with men, you are dealing with a subject matter which is under your own control. In dealing with money you are dealing with a subject matter which is only partly under your control. In the case of American bonds you are dealing with American parties also. That is sufficient explanation of the different treatment which the Government are proposing to extend to men on the one hand, and to money on the other.
The right hon. Gentleman the Member for Islington read a letter telling us what a good result there had been from the appeal made by the Chancellor of the Exchequer to the public, and how many million dollars worth of securities had been offered. I cannot quite understand whether when the Treasury buy those securities they sell them at once or keep them. If they kept those, at any rate, which they acquired six or eight months ago there must be a substantial profit, because the trend of the American market has been steadily up in the course of the last six or eight months. If that is the case, they can afford to be more generous to those who are left, and to offer them rather more tempting terms to deposit their securities with the Government. The general idea of the public at the moment is to deposit and not to sell. I only rose to get a couple of opinions from the Government. It was only on Friday that I went to my bankers about this very question. They are a very leading firm of private bankers. I found them very much perturbed on this very question. The first complaint which they had was that the list of securities which the Treasury would take and would not take as varied from month to month and varies now almost from day to day. The original start, as we all know, was the dollar bond securities and gold bonds. Now there have been a great many other securities included, and I would remind the Secretary to the Treasury that Canadian Pacific 6 per cents. are taken.
I would direct attention to a list of American shares not mobilised. It is from the "Financial News" of last Saturday, and I was surprised to see that whereas the Government will buy Reading American Railway Second Preference Stock which stands at 48, practically a rubbish price, which I would not hold, and I am sure the Secretary to the Treasury would not hold, the Treasury, just because it is ordinary stock, will not touch Northern Pacific, which is a splendid railway now standing at over 120. Or again, though they will buy Reading Second Preference at 48½, they will not buy Erie First Preference at 56, nor will they buy Mercantile Marine Preference, which are in good demand at the present moment at 98⅞. Surely that cannot be common sense. That is the one thing, of course, about which these bankers complained to me. They say, "The list will change in the course of a few days. Then what is going to happen? Some of our customers do not follow things very carefully, and will not come to us to sell, and eventually they will be cast for 2s. extra Income Tax." And they ask me to represent to the Treasury very strongly that there ought to be something in the nature of a complete list, or at any rate a list which will be brought before the notice of the general public in some very emphatic way, which should be some guide to those who have not got a financial guide alongside of them as to what they should do or should not do. I would suggest to the Treasury that they ought to enlarge this list. Surely, Union Pacific is a good collateral. Lima Central is a good collateral. These are all considered to be very good securities. Mobolise all these big American stocks.
I would like the Financial Secretary to imagine a very common case—the man who lives over here, but who holds his securities for the moment—American securities—over in America, the interest on which is sent over to him here from there. The Income Tax is not deducted at the source by the bankers over here, and he makes a declaration of how much he receives from America for these bonds on which he has to pay Income Tax. Suppose that he is a dishonest man, what is he going to do? He has not sold his securities. It is impracticable. Is he going to declare to pay 7s. in the £? If he is honest he will, but if he is dishonest he will not. There is here a direct inducement to transfer holdings from a bank here, and send them across to America and have the interest sent to him personally from America, and not deducted at the source. If a man is of a dishonest turn of mind, all that he has got to do is to declare at 5s. and not at 7s. That may be a means of taking a certain amount of business from bankers in the City of London and transferring it across to America, and also of putting a premium on dishonesty. I would like to have that point dealt with, and I would also like to urge on the Treasury the extension of this list of American securities.
I would like to refer to the position of the large insurance companies doing business in America. These insurance companies have, as the Secretary knows, to keep a minimum amount in American investments in America. Perhaps I was not in the House when something was said about it, but I was going to ask that the amount which is allowed free of this tax to be kept in America should be much larger than the statutory limit, which is a comparatively moderate amount. The insurance companies who have already, as the Secretary knows, very largely sold their securities to the Government, and have come forward very patriotically in this matter, feel a great difficulty in being free of this tax only upon the statutory limits which they keep in America. They assure me that the statutory limit is far too small, and if it is the case that they have to give to the Government in deposit all these securities above the statutory limit, they are then faced with the risk that the American insurance canvassers will go round and say: "Give this business to American companies, because the British companies that we used to trust through holding all these securities lodged in America have now only the statutory limit. The rest are all pledged to the British Government." This is a very serious prospect for the English insurance companies in America. I want the Chancellor to understand that the statutory limit will not be sufficient to keep as the available fund in America for these big insurance companies, and that they will be very greatly handicapped in their business if canvassers for rival companies can go about the country saying: "Give your insurance to American companies; British companies are no longer what they used to be."
I hope that the Government will reconsider their position in this matter. I desire to look at it from a broad point of view. It is rather a startling proposition that you are to penalise people who hold shares on this list, mostly American securities, and that you are not going to penalise people who hold shares even in hostile countries, such as Austria - Hungary and Germany. What is the reason for desiring to carry this matter through? So far as I under stand, it is because we want to stop the flow of gold from England to America, and therefore it is necessary to take some step The hon. Member for Prestwich (Sir F. Cawley) has told us that he is in favour of compulsion. If it is necessary that a price should be paid to prevent English gold going to America and to keep up the exchange, why should not all of us have to pay it? Why should the people who have invested their money in American securities—fortunately or un fortunately I am not one of those people—have the loss fall upon them more than it falls upon people who happen to hold securities in other countries? This tax of 2s. in the £—
It is only problematical.
It may be problematical at the present moment, but we are now voting that it shall be 2s. Whatever may be the case for compulsion, certainly it does not come in now. Further, I do not believe that it is the best way to regulate exchange with America, but I do not wish to discuss that subject to-day. Whatever may be. the best way, I have a feeling of the greatest distrust of this system of trying to equalise exchanges by giving the Government so many stocks and shares to play with on the New York Stock Exchange. The other night we had an attack on gambling by the Chancellor of the Exchequer, when my hon. and learned Friend the Member for Bassetlaw (Mr. Hume-Williams) made a most eloquent and literary speech on the blessings of chance. If I could only repeat some of the eloquent language which was used on that occasion by my hon. and learned Friend, I think some of it would come perilously near being true about this transaction which the Chancellor now proposes. We are taking the shares of people who believe that they are on the rise at the present time. We are taking them over, and. we are either buying them right out and reselling them—and I am not so absolutely certain that if the Government had done that before it would not have been better—or we are having a deposit of these shares with the Government, and they are to be carried over. If they should go down in value, or if a panic occurs, the unfortunate holders of the deposited shares will only get 2½ per cent., which will not recoup them for their loss.
I submit that such a proposition as this has never been put before any assembly in the world, and, when we have done this, or exhausted these securities by taxation or in other ways, what is to happen? They will buy in other securities so as to level existing rights. I think the House ought to consider very carefully before they authorise this penalising measure or join in what appears to be a very serious financial transaction which is perilously like a gamble. What are we doing now? The Committee is going into this matter absolutely blindfold. I am second to none in the respect and confidence I have in the Chancellor of the Exchequer and the right hon. Gentleman the Financial Secretary to the Treasury as financial experts in the-House of Commons, and who have done their work so splendidly. But what is the case? We have not a single figure before us. We do not know how much they have sold, and we do not know how much they hold at the present time. Are they speculating for a rise or a fall; are they holding a large number of these shares that we-have heard so much about? If so, I think that, after all, this sort of thing is better done by private individuals than by the Government.
What is your alternative?
The hon. Gentleman is quite right to ask what is the alternative? I have one. But is that any justification for our admittedly going into a deal of which we do not know the particulars? Would any business man do it? If the hon. Gentleman (Sir F. Cawley) were a trustee, would he allow any trust money to be used for this purpose; would he go to the banker and say, "Do what you think fit; I have great confidence in you, do as you like; I ask no particulars, do what you please"? I know the hon. Member would do nothing of the kind. He would want to know exactly what was to be done, and I think that before we do these things we ought to know something about them, even if we are at war.
The hon. Gentleman said he had an alternative. He has not given it yet.
I am afraid I said in the early part of my speech that I was not going into the question of the alternatives raised by the right hon. Member for Islington. If necessary, I could go into the question of alternatives, but there is one I may state—tax luxuries that come from America. I need not elaborate that point, but it would be a very useful way of stopping people from buying things from America at the present time, and it ought to have been done long ago. I am sorry I have been drawn away into that question; it was dragged out of me.
Munitions and food.
I do not wish to go into that point. I wish, before the Committee do this, to at all events enter my protest. I cannot submit to it in silence, however much we are at war, without any substantial facts on which a business man could form a real opinion. Supposing the Government do go on with this—I hope they will not—they are not bound to take these things upon loan at all. They could buy them, but they are not bound to take them upon loan. If they give no remission it will be exceedingly hard on trustees who wish to deposit securities with the Government. Should the Government refuse them, they will be mulcted in the tax of two shillngs. I am sure that that is not intended, but that is the Bill. Under the conditions of the original loan, the Government are not bound to take them unless they wish to do it. Unless some Clause is put in the Bill, these persons may be immediately mulcted in the two shillings Income Tax. The other point is that at present the Government will not accept sums under £1,000, and I think that is a point which should be reconsidered. These are minor details, but if the Government go on with this they certainly should receive attention.
This afternoon we have heard a discussion in which a number of speakers objected to this proposal of the Chancellor of the Exchequer, and I have heard nothing from these conscientious objectors to this financial proposal in the way of an alternative proposal except the one to prevent luxuries coming into this country from America. That is in no way a solution. The non-purchase of food and munitions is suggested by the right hon. Member for Islington, but there is no other way by which to place the balance in our favour except by the purchase of these things which are required for the maintenance of the lives of our soldiers.
I said nothing about the purchase of food.
The right hon. Gentleman was speaking of purchases from America, which must include food.
No!
I do not see how you can avoid purchasing these things, for if that were not done the exchange would go against us. I am very sorry we have had the position put to us as it has been put in regard to this question of finance. We can commandeer hay, straw, horses, and other things, but when it comes to the commandeering of American shares, then we have a discussion such as that we have heard this afternoon. I think the Debate we have had in regard to this taking over of American shares will leave an exceedingly bad impression amongst the masses of the people of this country.
The hon. Member has apparently not followed the objections raised to this scheme. The objection raised is not to commandeering these shares, but to the use of the machinery of the Income Tax for the novel purpose of forcing people to do something which they would not otherwise do.
Is not that commandeering?
It is using the power of taxation in an extremely injudicious manner—with no offence to the Chancellor of the Exchequer at all. The objection which the right hon. Gentleman put forward was that if the Government had gone straightforwardly to work and compelled the people to hand over their bonds, which they wanted at a given price, he would have been flooded with those securities before he wanted them, and would have to pay before he wanted them. Therefore nominally the securities would be produced at the same interest as the Exchequer Bonds, and he would lose nothing, but, on the other hand, I think, if he had adopted that course, he would have had a profitable balance on the transaction. That was not a good argument. I think you are quite entitled to say in war-time, "I must have these products for the benefit of the country," but I do not think you are entitled to say, "I will not take them over now, because I am afraid of making a loss on them; you may make the loss on them, and then, when it suits me, I will take them over." That, no doubt, is a very good Treasury argument, but it does not seem a good argument on the general principle of taking people's goods even in war-time. That was one of the chief arguments of the right hon. Gentleman in favour of his scheme, and against the more straightforward and more simple plan which ought to have been adopted at the beginning.
7.0 P.M.
You place the holders of these American securities—amongst whom I do not rank myself, and therefore I approach the subject with an unbiassed mind—in an unfortunate position by ordering them to sell them at an unfavourable time and at a great hurry. If at the beginning everybody had known that these securities were going to be bought, a limited amount of them could have been supplied at certain times, and I think that would have put the securities in a better and more advantageous position than at the present time. To what extent you are going to continue to finance by the method of selling American securities is, of course, a matter of speculation. Surely that is not the only method left. The right hon. Gentleman said with a certain amount of force that we were purchasing for our Allies. Have the French Government brought any pressure to bear on the holders of American securities, of which a very large number are held in France? I cannot understand why English holders of American securities should be penalised in order to enable the English Government to buy things from America for France, whereas the French holders of American securities are apparently entitled to retain them without any pressure being brought upon them. I think the Committee is entitled to some kind of explanation of the transaction. I have nothing to say against our financing our Allies, but I think sometimes that perhaps we are apt to have all the pressure put upon us, and that it is not quite sufficiently made clear to some of our friends that, after all, they could arrange a certain amount of finance themselves. That is one of the points which occurred to me on this subject. There is another one, and that is the question of how far we can obtain further credit in America. We have raised one very successful Loan and, in spite of what the right hon. Baronet the Member for the City has said, on what I consider to be very good terms indeed. I do not know why it should be impossible, and I think it is quite possible from what I have been told, to arrange further credits in America on a very much larger scale, if we merely give them a sufficiently attractive proposition. The right hon. Gentleman's alternatives did not include the question of raising further credits by way of loan, and I do not think that that alternative has been exhausted. From that point of view I will not say it is a great hardship, but there is some hardship, until other sources of credit are exhausted, in asking that this extraordinary procedure should be adopted. It seems to be difficult from a technical point of view to differentiate the amount of Income Tax people are to pay on particular kinds of income. The right hon. Gentleman is creating, I do not know whether he is aware of it, an extremely dangerous precedent, and laying down a principle which is not going to stop here, because there are already a large number of people agitating-the idea that for investments bought abroad there should be a higher rate of taxation than for investments in this country. This is showing them how" that is going to be done, but whether it is a good idea I do not express any opinion. I do feel that the case made out for adopting this machinery is not a strong one, and I think the feeling of the House and outside is very strongly against it.
Question put, and agreed to.
Resolved, "That there shall be charged for the year beginning the sixth day of April, nineteen hundred and sixteen, and for any subsequent year for which Income Tax is charged on the income derived from any stocks, shares, or other securities-which the Treasury have declared that they are willing to purchase in connection with any arrangements for the regulation and maintenance of the foreign exchanges an additional duty of Income Tax at the rate of 2s. in the £, and that no person shall be entitled to any exemption, abatement, or relief under the Income Tax Acts in respect of such additional Income Tax, and it is declared that it is expedient in the public interests that this. Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
Resolution to be reported to-morrow (Tuesday). Committee to sit again tomorrow.
NAVAL DISCIPLINE (DELEGATION OF POWERS) BILL.
Order for Second Reading read.
Motion made, and Question proposed, "That the Bill be now read a second time."
The purpose this little Bill seeks to achieve is one with which everybody in this House and out of it would, I am quite sure, be glad to be associated. It is to lighten the labours of the Commander-in-Chief Grand Fleet. Section 58, Sub-section (10), of the Naval Discipline Act reads as follows:
"An officer holding a commission from the Admiralty to order courts-martial shall not be empowered to do so if there is present at the place where such court-martial is to be held any officer superior in rank to himself on full pay, and in command of one or more of His Majesty's ships, or vessels, although such last-mentioned officer may not hold a commission to order courts-martial, and in such a case such last-mentioned officer may order a court-martial, although he does not hold any commission for the purpose."
Sound as it is, that law never contemplated the situation which the War has created. The effect of it is this, that if a court-martial has to be held on any person in any ship of the Grand Fleet present with the Commander-in-Chief, all the work of convening the court and so on falls on the Commander-in-Chief. The Commander-in-Chief Grand Fleet has with him members of one Fleet, officers who hold the Admiralty warrant authorising them to order and convene a court-martial. In their time they have so ordered them, and in due course will do so again no doubt as and when occasion arises. Nevertheless, there is only one senior officer present, and therefore all their functions in this respect are set aside and vested in him. He alone can order, convene, and generally supervise court-martial proceedings in the great Fleet over which he rules. That widely-extended jurisdiction imposes upon him routine work never contemplated. I should make it perfectly clear here that it is the aggregation of ships in one Fleet that has made this Bill necessary, and by no means any increase in crime among the blue- jackets. It would be extremely ungracious, and extremely ungrateful if that were imagined. In proportion to the numbers borne courts-martial are less frequent than in times of peace.
Having said that, there are one or two other facts which reflect the character generally of the British bluejacket. It is, I admit, quite unnecessary in connection with this Bill to rehearse them, but I confess that they have always impressed me so much that I cannot resist the temptation to refer to them, and I am quite sure the House and the country would be glad to know them. I see that at the present time the non-commissioned officers and the men of the Fleet are sending home from their pay to their wives and other relatives through the machinery of official allotment and remittance, roughly about £680,000 a month. Beyond that, of course, they no doubt send through the Post Office private remittances in the form of postal orders and treasury notes. I observe that postal orders sold to officers and men of the Fleet by naval paymasters amount to £15,000 a month. I see, further, that the men of the Fleet are investing in the Naval Savings Bank, out of their pay, something like £40,000 a month. Beyond this, of course, no doubt some of them are investing in the Post Office Savings Bank. I see further that the sums invested from their pay by the sailors in the Naval Savings Bank exceed at the present time, a million of money, as compared with less than £300,000 before the War. Finally I see that over and beyond all this all ranks of the Fleet, officers, non-commissioned officers and men, have already taken up over £70,000 in War Loan. When we talk about delegating powers to hold courts-martial it is rather nice, I think, though no doubt quite unnecessary, to recall to what sort of man the British bluejacket really is.
As regards this Bill, observe what the law as it stands imposes upon the Commander-in-Chief. When the commanding officer of a ship present with the Commander-in-Chief considers that a charge against any of his ship's company is serious enough for a court-martial, he reports the circumstances to the Commander-in-Chief. The Commander-in-Chief must satisfy himself that the charges are correct and sufficient, that the documents are all in order, and that there is sufficient evidence to justify placing the accused on his trial. He must then issue a warrant to the officer whom he selects to preside, directing him to assemble a court-martial. At least twenty-four hours before the court-martial assembles the Commander-in-Chief gives notice of the trial by signal, and notifies the names of the president and of the other officers whose presence will be required. On the morning of the trial the Commander-in-Chief sends to the president a list of the officers present, who may be required to sit as members of the Court, and notifies him of any whose attendance is not attainable by reason of the exigencies of the public service. After sentence is pronounced it is the duty of the Commander-in-Chief to point out to the Admiralty anything of doubtful legality in the proceedings. The Commander-in-Chief must also, if imprisonment or detention is awarded, issue a warrant for the accused to be committed to prison, or subsequently for the accused to be transferred from one place of confinement to another. In a proper case the Commander-in-Chief must at his discretion issue an order suspending the sentence, and subsequently must decide at intervals of three months whether the sentence shall remain suspended, be enforced, or be remitted.
Obviously all that is a quite unnecessary tax upon the Commander-in-Chief, and the purpose of this Bill is to enable him to delegate his functions in relation to courts-martial to the several vice-admirals under his orders. The procedure will be, broadly, that each vice-admiral will convene courts-martial in his own squadron in exactly the same way as he would do if there were no other ships present. And not only courts-martial but disciplinary courts. A disciplinary court, I may explain to the House, represents a minor court-martial with power to inflict punishment inferior to detention. Provision for it was introduced in the amending Naval Discipline Bill, passed on the 29th of July last year. I ought, perhaps, to explain the purpose of Clause 1, Subsection (1) ( b ), of this Bill. Under the existing Act all officers present, next in seniority to the President, must sit as members of the court-martial, "until the number of nine or such number, not less than five, as is attainable is complete." That is provided under Section 58, Subsection (16), of the original Act. The effect of this Clause 1, Sub-section (1) ( b )will be that for the purpose of constituting the court the officers of ships present, which are not under the command of the particular vice-admiral convening the court, will be treated as though they did not exist. I should make it clear that the vice-admirals to whom these powers and duties are now proposed to be delegated are, of course, flag officers of a rank to which the Admiralty has issued, does issue, and will issue, under the existing law, authority to hold courts-martial. In that particular case, that is, when the Commander-in-Chief is present, they are not authorised to convene the court, and so on, because the Commander-in-Chief is senior to them. For the purpose of freeing the hands of the Commander-in-Chief we wish to remove the disability in this respect which his presence imposes on them, and, therefore, when two or more of the vice-admirals are together at a place where the Commander-in-Chief is not present, the new Bill will similarly prevent the whole of the court-martial work falling on the senior officer.
I venture to say that the only surprising thing about this Bill is that it was not introduced many months ago instead of after a lapse of twenty-two months of war, because this pressure of work on the Commander-in-Chief has gone on all the time, and this House would naturally desire to relieve the Commander-in-Chief of all possible work of a routine character which could be done otherwise. The present Commander-in-Chief commands a Fleet which is probably ten or twelve, or thirteen times as big as any admiral has commanded in peace time since the Crimean War. It comprises many tens of thousands of men, and that pressure naturally all reacts, not only on the Commander-in-Chief, but, I venture to say, on all those on board the flagship itself. You have to crowd officers and men into that flagship, the "Iron Duke," and the wonder is how they manage, crowded there, to carry out that routine work on board the flagship. I welcome this Bill, because it will relieve the Commander-in-Chief of these routine duties which can very well be performed by others. The authority in this Bill will merely be delegated by the Admiralty and Sir John Jellicoe, and they will not therefore lose an atom of their authority by delegating those powers.
Question put, and agreed to.
Bill read a second time, and committed to a Committee of the Whole House for To-morrow.— [ Mr. Rea. ]
ANGLO-PORTUGUESE COMMERCIAL TREATY BILL.
Order for Second Reading read.
Motion made, and Question proposed, "That the Bill be now read a second time."
This is a small measure arising out of the Portuguese Commercial Treaty which was signed at Lisbon on the 12th of August, 1914. That Treaty gave considerable commercial advantages to both countries, and part of that Treaty was a Clause to the effect that: the description 'port' or 'madeira,' applied to any wine or other liquor, other than wine the produce of Portugal and the Island of Madeira respectively, shall be deemed to be a false trade description within the meaning of the Merchandise Marks Act, 1887. That meant to say, that to satisfy the natural desire of the Portuguese Government and their subjects in Madeira that there should be no counterfeit wine sold here, that Clause was inserted, and the Act was passed on the 23rd of November, 1914. The Treaty was signed on the 12th of August, 1914, and the Act approving the Treaty and having the Clause I have just. read was passed in this House on the 23rd of November, 1914. That was in cluded in Article 6 of the Treaty. Then the Treaty was introduced into the Portuguese Legislature for approval and the representatives of the Oporto wine producers expressed dissatisfaction with Article 6, which they wished to be so modified that the description "port" should apply only to wine shipped from Oporto, and at their instance a sentence was introduced into the Portuguese Act approving the Treaty of 23rd January, 1915,to this effect: It is however, understood as regards Article 6 of the said Treaty, that according to our internal legislation the Portuguese wine to which the denomination 'port' is applied is solely the full-bodied wine produced in the Douro region, as demarcated by law and exported through the Bar of Oporto. That, as the House will see, did not amount to legislation. There was no legislative effect to that, it was declaratory. The Portuguese Government changed just at that time, and the new Government decided that they could not ratify the Treaty unless the United Kingdom was prepared to give effect to that proviso. The British Government were then asked to modify that Clause of the Treaty, and further, of course, of the Act by which this House approved the Treaty, in that sense. The Government were not very anxious in the first instance to accept that proposal which has some restrictive effect, possibly, on British trade, but after several communications had passed between the Government it was finally decided that it was better to accept the principle, and this Bill, therefore, enacts that: The description 'port' applied to wine the produce of Portugal, imported into the United Kingdom after the commencement of this Act, shall be deemed to be a false trade description within the meaning of the Merchandise Harks Act, 1887, if the wine on importation into the United Kingdom was not accompanied by a certificate issued by the competent Portuguese authorities to the effect that it was a wine to which by the law of Portugal the description 'port' may be applied. So the effect of this Bill is to enact that no wine may be sold as "port" in this country unless it has been certified as "port" by the Portuguese Government when it was imported here from Portugal. That is really the whole effect of the Bill, and obviously it is very desirable if we can to obtain the very considerable benefit wihich the other Clauses of that Commercial Treaty gives us. Unless this Act is passed, the Portuguese Government do not find it possible, under the conditions prevailing in that country, to ratify that Treaty, and the whole gain of the numerous advantages of the Treaty will be lost. Also the House will feel, and everyone will feel, that our present relations with Portugal, and the way Portugal has supported the Allies in this War, will incline the House to do everything that is possible to meet the wishes of Portugal, provided it inflicts no injury on British trade. I do not think this Bill will inflict any injury on British trade, or that the drinkers or consumers of port will suffer any injury. I hope, therefore, that the House will see it sway to give this Bill a Second Reading.
There are one or two questions I should like to ask my right hon. Friend about this Bill if he will be so good as to answer them. In the first place, I feel that I am not very satisfied with the change in the Clause which is proposed by this Bill. I think you are not only restricting British trade, but that you are also taking a step which, in principle, is not satisfactory. You are taking away from yourselves the power of defining what is "port," and are leaving it in the hands of Portugal. Of course, I am not going to reflect in any way on our Portugal Allies, but at the same time I do not think that is a wise principle, and it is on that ground that I take exception to it. I can only express my regret that the Government have gone so far as they have in that respect. Then we have to look not only at this new Clause but at what we are getting for it. My hon. Friend just pointed out that we are getting many advantages. I do not want to make a speech upon that, and in fact I do not wish to detain the House for more than two or three minutes, but I shall be glad if my hon. Friend could set out more in detail what are the ad vantages we are getting. I have tried to make it out myself. The Portuguese have something like twenty most-favoured- nation treaties at the present time. Most of these treaties in respect to the concessions they make or receive are highly conditional, and it is very, very difficult to make out what we do get for the concessions we have made. There is this further point, and here I do take strong exception, that taking all the other Portuguese treaties, they are all treaties which can be denounced at twelve months' notice. Some of them were concluded for longer periods of years—
Denounced at twelve months' notice?
Yes; many of them are terminable on quite easy terms. I think there was one that was for a period of ten years, but that period has gone by and that particular treaty can be denounced at shorter notice. It seems to me, if I may say so, extremely unwise at this period that in exchange for this somewhat nebulous sort of concession we should tie our hands for a period of ten years. The reason is this. My hon. Friend says we get certain advantages, chiefly under the most-favoured-nation treaties, but all the other treaties Portugal has can be terminated. We shall not be in a position to terminate it, and as everyone knows who understands these matters there are plenty of means available to whittle away the advantages of most-favoured-nation treaties to us. I take strong exception to that point, and I think it extremely unwise. Further, the hon. Gentleman knows that all our most-favoured-nation treaties are under consideration. Approaches have been made to the foreign Powers with whom we have these treaties to get them altered. Why are we at this stage, when all that policy is, so to speak, in the melting pot, embarking on new engagements in return for this Clause which in itself is not very satisfactory? Then, with regard to the provisions which turn upon the relation of our action on that of the Dominions. We are bound for a period of ten years, but any of the Dominions which becomes a party to this Treaty is bound only for twelve months, and you will get in consequence of that, and of war conditions which will affect everything of this kind, a difference of conditions of policy set up in the Empire by this Treaty which I contend is extremely unsatisfactory. In these circumstances I do not wish to go into any lengthy criticism, but the points I put forward are extremely important, and I do think the House is entitled to some more detailed explanation than we have had as to what we are getting by this Treaty. We have merely got this vague Clause, and no man can say precisely what advantage we gain by passing it. The Treaty is not yet ratified. I would suggest to my right hon. Friend that before we get to the next stage of the Bill he should look into the points I have mentioned, and, if possible, give us a satisfactory assurance in respect to them. I should also like to know whether the arrangement he is now proposing in this Bill, and the Treaty itself, have been considered by the Cabinet in connection with all the othei1 branches of policy bearing upon our treaty system, which are, as a matter of fact, subject to consideration by this House. I am not going to oppose the Second Reading of the Bill, but I do wish, before we reach the later stage of the Bill, that my hon. Friend will take counsel and look into these very important points —the most-favoured-nation Clause is one of the most important—in the relations of the Empire at the present time. It is highly inexpedient to complete a new treaty embodying simply the old-fashioned regulations in the old-fashioned way at the very moment when all these various relations are the subject of consideration.
The hon. Member speaks with great weight and knowledge. I wish my right hon. Friend the Undersecretary for Foreign Affairs had been here to reply on the general question of the Treaty. Nevertheless, we shall be glad to take into account what the hon. Gentleman has said before the next stage of the Bill, which will probably be taken tomorrow.
To-morrow?
I think probably tomorrow. But I can say what is within my own knowledge, that a great many of the points raised by my hon. Friend were very much in the mind of the Government. I can tell the House that very considerable hesitation was felt in accepting this Clause and introducing this Bill for these very reasons. It was after considering the reasons I have given to the House that it was felt that the advantages would outweigh the disadvantage.
That is what I am not sure about.
Quite; I thoroughly understand my hon. Friend. The Government were not sure for a considerable time as to the relative advantages and disadvantages, but I may point out that the Treaty itself and the Clauses were considered and approved by the House.
Before the War!
Yes, that is quite true. We had the measure up, and it was approved by the House before the War— no, on 27th November, 1914!
These negotiations date back before that. As a matter of fact conditions have absolutely altered since 27th November.
I think my right hon. Friend is really right, and I do not wish to take refuge in a technical point. We did not appreciate then, as we do now, the whole effect of the War. But I do not wish to labour that point. I shall be glad to confer with my hon. Friend and to take his advice before the next stage of the Bill.
Question put, and agreed to.
Bill read a second time, and committed to a Committee of the Whole House for To-morrow.— [ Mr. Rea. ]
OUTPUT OF BEER (RESTRICTION) BILL.
Order for Second Reading read.
Motion made, and Question proposed, "That the Bill be now read a second time."
We now proceed from port wine to beer. I suppose it is rather the wrong way round. It should be port wine after beer; but I hope the House will forgive that order of precedence.
It is a funny mixture whatever it is.
This Bill is one of the many Bills of a temporary character which have had to be introduced to deal with the special circumstances created by the War. They are all objectionable, and none of them are economic. They all inflict injury upon somebody. The only excuse for that is that they are absolutely necessary in the national interest; that we have to put national interest first; and that in passing Bills of this kind we should do as little injury as we possibly can to any individual trader or interest. That is the point of view from which this Bill is introduced. I can only say that any suggestions that are made to amend or to improve it will be welcome. I am sure, however, the House will understand that no Bill of this kind, for the reasons I have given, can be regarded as economically watertight, nor can it be subjected to the same kind of criticism as may fairly be directed against ordinary legislation of a permanent character. There is no ulterior object whatever in the Bill. For instance, it has nothing to do with temperance legislation or with revenue, for, as a matter of fact, there will be a loss to the revenue nor has it any connection with any fiscal purpose. The Bill has one object only, and that object is the same kind of restriction as has been applied to many other articles. The sole object is to reduce the calls upon the reduced amount of tonnage available for bringing articles of consumption to this country.
A considerable portion of the imports of this country consists of materials used in the manufacture of beer. I suppose I shall be told, naturally, that the simplest way to deal with that would be simply to restrict the importation of these materials, and thereby to leave trade to adjust itself. I need hardly say that, quite obviously, this was the method which first presented itself to us, as it naturally would to anyone taking up this matter. But we found it was impracticable to deal with it in that way, for this reason, that the materials which, are used in brewing are—except, perhaps, for certain classes of sugar—not exclusively used for that purpose. Barley, maize, and rice, all of which are used in brewing, are articles which are also used both for foodstuffs and feeding-stuffs— that is to say, both for food for man and food for animals. These articles are all used for these purposes. It is impossible to differentiate between a particular cargo-of barley, maize, and rice which has been brought to this country. You cannot say as to whether it may be used for brewing, or food stuffs or feeding stuffs. If you attempt to differentiate and restrict the importation of barley, maize, or rice to the extent of that used for brewing, the necessary effect would be that you would reduce the quantity coming into this country, and so effect your direct object, But you would not in any way reduce the competition for the articles when they had. arrived here.
What about hops?
Perhaps my hon. Friend will allow me to deal with the matter in the way I am proceeding. It is quite obvious that, however much you might by the reduction of the quantity effect your direct object, the competition at home would not be reduced. Everybody who wanted to use any of these articles for any of the three purposes I have named would equally want them, and the consequence would be that with the reduced supply and the maintenance of the full demand there would be an unnatural inflation of prices. Prices are already quite high enough, and we do not want to drive them any higher by artificial means. It is, therefore, quite clear that this consideration precludes us adopting the method of direct prohibition of imported brewing materials. The further suggestion was made that we might arrive at our object by restricting the amount of the materials which a brewer should use in his mash tub. That really would give us no advantage at all, because it would involve a great deal of interference and considerable administrative expenditure. We therefore, after a good deal of consideration and much conference with the brewers, came to the conclusion that the only satisfactory method, and the only practical method, of dealing with the problem was to limit the output of beer to a certain quantity; and there by you would deal with the trouble at the source. By limiting the output of beer you limit the amount of the materials used, and you maintain the same proportion of competition that there is now for all these various articles.
There are three matters arising out of this Bill which, I think, naturally will be raised. There is the question of import and export, because, naturally, imports and exports have exactly the same effect. They take up tonnage space. When we introduce a Bill to limit the importation of brewing materials, my hon. Friend opposite naturally asks, "Well, what about hops? "which are imported in large quantities into this country, and which are very bulky articles, in, I believe, something like a proportion of three to one to grain. They occupy tonnage space several times over that occupied by grain. Therefore, I need hardly say we could not possibly introduce a Bill of this kind without prohibiting the import of hops. It is, therefore, proposed immediately to prohibit the importation of foreign hops into this country as being part of the principle of reducing tonnage which is carried out by this Bill. There is a further import which is similarly affected. I think several of my hon. Friends have asked, "Are you going to restrict the British brewer, and at the same time allow foreign beer to be imported into this country?" I immediately reply to that, "We propose to at once prohibit the import of foreign beers." There is the further question of export. Some of my hon. Friends will say, "Are you going to restrict the importation of barley by the brewer and to allow malt made in this country to be exported?" We feel there is great strength in that argument as to the export of malt. I have no doubt everyone in the House knows that the export of malt is already restricted. It is on Prohibited List B, and can only be exported with a licence. The export, I say, has been already very largely restricted. That restriction will be so tightened up as practically to prohibit the export altogether. We must send a little to Italy for the present. But the export will be, as far as possible, reduced to a negligible quantity, or stopped altogether.
Going back a little to hops, will there need to be a licence for their import?
It is not intended that there should be a licence. Supposing there was a very bad hop crop in this country, and it became absolutely necessary to have hops, and we had not enough hops in this country to satisfy requirements, we should have to issue a licence.
Of course, you will not have nearly enough.
That remains to be seen. Of course, there is power to issue licences, but those licences can only be issued when it becomes necessary to do so. I have stated the object of the Bill, and, further, the restrictions on imports and exports that are proposed in connection with the same subject. It is obvious that, having decided to adopt this principle of restricting the output, it was necessary to find a basis for that restriction, and it was originally proposed to take the basis of the year ending 30th September, 1914. The trading year ends on 30th September, which is the date up to which all traders' returns are made, and up to which all statistics are calculated for the year. Therefore it is almost necessary, from the point of view of accountancy, to take a complete brewing year as our standard of comparison, and it was originally proposed, at the suggestion of one of the brewers' organisations, to take the year 1914, and when I say the year 1914, I mean the year ended 30th September, 1914, and when I say the year 1915, I mean the year ending 30th September, 1915. But we found that, taking the basis of 1914, it would put us in very great difficulties with the consumer, and representations were made by the Army Council that they would find it practically impossible to get the beer supplied to the military centres, where the troops are now congregated, under that system. I think the House will probably support the view which the Board of Trade took in approaching this, that we must take three considerations, or three interests, in order — the national interest first, that is the ground on which the Bill is proposed; secondly, the interest of the consumers at large; and thirdly, the interest of the trade, and we must take them in that order.
It was originally proposed, in the interest of the trade, to take the year 1914, and in the interest of the trade there was something to be said for that, because there were many brewers who, owing to the movement of the beer-drinking class from the peace distribution to the war distribution, have lost a great deal of that trade, and they naturally would have been glad to have a basis taken which would have given them an opportunity of getting some of it back again, because some brewers had lost from 40 per cent. to 50 per cent. of that trade between 1914 and 1915, and taking, as we should have had to take, a 28 per cent. reduction on 1914, those brewers would be able to increase their production, whereas brewers in other parts of the country, where there are munition or military centres, would have had their production enormously cut down, and the result would have been that the railways would have been congested with the beer sent from one end of the country to the other. The Army Council made strong representations on the subject, and we came to the conclusion that, in the interest of the consumers, it was absolutely necessary to take the most recent date we could, and, as far as possible, follow the new distribution of the population, rather than the pre-war distribution, and, therefore, we must take the 1915 basis rather than the 1914 basis. Taking the 1915 basis, as the consumption was considerably less in that year, instead of having to take off 28 per cent., as we should in 1914, we only had to take off 14 per cent. Then it was represented that to certain small brewers, who have lost anything up to 40 per cent. or 50 per cent., or even more, of their trade, the taking off of a further 14 per cent. might be a great hardship, and might in some cases practically amount to their ruin. In order to meet that hardship, we introduced an. alternative, which will be found in Clause 2 of the Bill, allowing any brewer in that position—probably it would only cover a few cases of comparatively small brewers —to take 30 per cent. off the year 1914, instead of 15 per cent. off 1915. and the 14 per cent. was increased to 15 per cent. to allow the small advantage that would be given to the 1914 brewers on that account, so that we penalise the main trade by 1 per cent. as between 1914 and 1915, in order to afford some relief in regard to the special hardship which was inflicted upon small brewers, particularly in rural districts and in Ireland, because large numbers of men from rural districts and small towns, and Ireland, are now congregated at munition and military centres, and it is necessary, in order to save transport as much as possible, that the beer should be brewed as near as possible where it is now required.
The other important Clause which I must mention is Clause 5. It was feared that, when the restriction upon output was imposed upon the brewer, there would be a tendency on his part to give a full supply to the tied house with which he was bound by contract, and that the free house would find itself, not only with the reduction of 15 per cent., but possibly a very much larger reduction indeed, and we were asked by the representatives of the free houses, and also, I may say, by the representatives of the canteen—that is, by the Central Board of Control—to give them the right to a supply of beer equal in amount, less the 15 per cent., to that which they had previously had. Clause 5 is drawn for that purpose. Since that Clause was drawn representations have been made that off-licence holders are in exactly the same position as some on-licence holders in being tied, and that the off-licence holder who is not tied would be placed in an invidious position if not given the same right as the on-licence holder. There is another class of off-licence holders known, I think, as beer dealers, or bottlers, and they are, of course, included among the off-licence holders. I propose in Committee, if the Committee assents to that course, and the House gives the Bill a Second Reading, to introduce words into Sub-section (3) of Clause 5 which will give the same right. I do not know whether the House would like me to read the words now. Perhaps it is hardly necessary, as the words will be on the Paper for the Committee stage; but I may say the proposal gives the widest effect to the principle of giving all off-licences, whether grocers' licences, bottlers, or beer dealers, the same rights as given under this Clause to on-licence holders.
Are you including wholesale dealers?
Yes, all licences.
What about clubs?
I have not introduced any words about clubs in the Bill. I am prepared to consider the matter if it is brought forward in Committee. The words I have drawn would not include clubs, and it is rather a question of whether clubs come in the same category as private consumers, or whether they come in the same category as licences. The feeling, I think, in the House, and certainly our opinion, is that clubs come under the same category as private consumers. But if it is the wish of the House that clubs should be included, I should be perfectly prepared in Committee to consider suggestions.
After the holidays?
My hon. Friend is one of those who are most anxious to get legislation for war purposes, and it is not as if this is a Bill of a permanent character. We are at war. The Bill, of course, is entirely in the hands of the House, but war legislation has to be rapid, and, fortunately, this kind of legislation is not permanent, and leaves no permanent mark of any kind on the Statute Book. What we have to do now is to try to put ourselves in the best possible position from day to day as circumstances arise, and to get this quickly through will give us a certain advantage. We can say no more, but leave it in the hands of the House whether they will give this advantage or not. Clause 5 has been redrafted in regard to a few words, because the Clause as it stands in the Bill says:,
Where a licence holder who is not bound by any covenant, agreement, or undertaking, and is not otherwise under any direct or indirect obligation of any kind to obtain a supply of beer from any particular brewer, was, on the thirtieth day of September, nineteen hundred and fifteen, obtaining a supply of beer from any brewer—
That is a little vague as to whether he was obtaining a supply from any brewer, and it would make it very difficult to determine what his rights were, and what they were not, and it is proposed to amend it so as to read, after the words "particular brewer,"
"has at any time during the year ending on the thirty-first day of March, nineteen hundred and sixteen, been supplied with beer by any brewer, he shall be entitled to obtain from that brewer under reasonable conditions a similar supply at the same annual rate, but reduced by fifteen per cent."
8.0 P.M.
The effect of that will be that, wherever any free licence holder, on or off, has at any time during the year ending 31st March, 1916, obtained a supply of beer for a week, a fortnight, a month, or twelve months, from any brewer, he will have the right to go to that brewer and get that quantity, but reduced by 15 per cent. That makes the Clause quite definite and we have brought it up to date. The period does not coincide with the previous period of the Bill, and it is not necessary that it should. The great difficulty about Clause 5 is where a brewer and his customer have ceased trading one with the other. Then it is very invidious and very unpleasant to have to come to the Board of Trade and be transferred. That cannot be entirely avoided, but what we can do is to bring it as near up to date as possible, so that there shall be much less likelihood of the brewer and customer differing one from the other. That is the object, and we are indebted to the suggestion made by the right hon. Gentleman the Member for Spen Valley who is administering the Act that was passed for restricting paper, and the same difficulties crop up there. On his advice we have taken the latest date we possibly can to avoid those difficulties. With regard to Sub-section (2) of Clause (2), it has been pointed out by the Brewers' Society that it is a mistake to provide for the change "taking place after the 30th day of September, 1915, and before the 15th day of May, 1916." Of course, it should be 1914. Obviously any change that has taken place during the standard year must be taken into account, and we intend to alter the words to read "taking place after the 30th day of September, 1914, and before the date of the passing of this Act." I think those words will be satisfactory.
It would be much better to leave the words out altogether.
We will consider that suggestion. In proviso ( c ) it is provided that a brewer must give notice to the Commissioners before the 1st day of June, and we shall have to put that date back to the 1st day of July. In Clause 1 it is provided that "a brewer shall not brew at his brewery during the first two quarters to which this Act applies." Each quarter is to be dealt with separately, and it is necessary to have a period of adjustment, and therefore the two quarters are put together. It has been represented to the Government that two quarters is not long enough. We desire to meet the wishes of the trade in that respect, and I propose to accept an Amendment in Committee to alter the two quarters to three quarters. The Clause will be dealt with on that basis. I think I have now dealt with all the points, and I hope it will be possible to get this Bill through all its stages tomorrow in order that it may become law before the Recess, otherwise several weeks will pass before it becomes law, and that will be inconvenient both to the trade and to the country.
I beg to move, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."
This is one of the most remarkable small Bills that has yet been brought before the House. It deals with a restriction on the output of the trade. It is a measure of some six Clauses extending over four and a half pages, and even the Bill which is now printed, and to which we are being asked to give a Second Reading, does not accurately or entirely contain the proposals of the Government. The Bill which has been outlined as the one which the Government accept in Committee is in many respects a very different one from that which has been printed. With the object of the Bill no one in the licensed trade objects. No one will make the slightest objection to restrictions upon the import of brewing materials to the extent provided in this Bill, or even more if it is necessary in the national interests; but there arises the question as to which is the best way to achieve this object. The hon. Gentleman to some extent led the House to believe that this was in the nature of an agreed Bill, but I do hot think that is altogether the case. I am sure he did not wish to misrepresent anybody. When the representatives of the brewing trade sent a deputation to the Board of Trade on this subject they were met by the statement that the principle of this was the only method to which the President would agree, and therefore they were obliged to have this Bill or nothing, and any other way of carrying out restrictions on the imports was put out of the question. There are other ways of doing it, and the hon. Member who proposed the Second Reading has adopted one of the other ways in the case of hops. I may say that nothing in regard to that matter has been mentioned to the members of the brewing trade who have been interviewing the President, and the announcement he has made will come as a very great surprise, because it will be entirely unexpected by those gentlemen who have been negotiating these Amendments. I do not think the Board of Trade have been quite candid or straightforward in that matter in dealing with these Amendments.
There are other ways of dealing with, the question. Why did the Government not restrict the use of imported materials in the breweries themselves? The question was simply pushed on one side, not because there was any difficulty, but because the Government and their officials were wedded to this proposal to restrict the percentage as outlined in this Bill. As a matter of fact, the Government have all the machinery for dealing with the materials which are used. All those materials have to be entered in the brewing books, and they know exactly what has been used. Foreign barley has been taken for the purpose of arriving at what percentage has been taken. They have all the information and the stock and everything on the spot, and yet they have adopted this proposal for some reason which has never been explained, although what I have suggested would have been much less injurious to the licensed trade and much less irksome to the public. I find in looking through the latest returns over a period of years that the quantities of barley grown in this country average somewhere about 8,000,000 quarters, and of that only 3,000,000 quarters on an average are brought to market, the rest being presumably consumed or else dealt with by private contract. It is obvious in dealing with quantities like that everything must depend upon the season. The difference between a good and a bad season is quite 500,000. The Government for some reason or other wish to restrict the output of beer to 26,000,000 barrels, and they have determined to do it by one means or another.
There is a suspicion that the object of this Bill is to limit the consumption of beer through the action of the Board of Trade in order to help the Board of Control and to support the views on this question held by some members of the Cabinet. As a matter of fact the production of beer in this country is very largely decreasing. A very large number of beer drinkers have joined the Army and have gone abroad. There was a reduction of 350,000 barrels shown in the returns for April, very largely due to the increase of the price of beer, and the price of beer must go up because of the increased cost of malt which some years ago could be purchased at 32s. or 35s. and it now costs 75s., representing an increase of 8s. a barrel in malt alone, without taking into account the largely increased cost entailed by war conditions. Nearly all the breweries have had to put up the price of beer and the consumption has been considerably less. The Under-Secretary for the Board of Trade said that the public was the only consideration, but in my opinion the only persons who are not considered by this Bill are the public. The Bill deals with the licensed victuallers, the bottler, the hop grower, and the Army canteens, and the only people who are not dealt with are the public.
There has been a great fear that the Army will not get the beer which it requires and that the Government are taking strenuous measures to see that the Army will not have to go without its beer. They have expressed themselves satisfied with the provisions of the Bill so far as the supply to the Army is concerned, and they have issued a circular letter to brewers saying that the supply to the Army must be kept up. They ask the brewers on patriotic grounds to see that the supply does not fall short, and they say further that if it should they will have to take measures to ensure that the Army has its beer. I quite agree that the British soldier ought to have his beer, and they evidently look upon these restrictions, even as they stand in the Bill, as in danger of depriving the British soldier at home of the beer he wants. There is no provision in the Bill for the munition worker or for the British public at large, although the munition worker is doing work essential to the country for the prosecution of the War. This Bill carries out a preconceived policy and is ill-considered That is proved by the number of Amendments which the hon. Member has announced his intention of introducing. There is no certainty that it will reduce the importation of brewing materials, except in the case of hops, which they intend to prohibit altogether or to allow to be imported later only by licence. I should have thought that they had had enough of prohibition by licence. It has landed them in various forms into endless trouble, and every time the Government issue a licence to import a prohibited article they break some fifty-four commercial treaties with other countries whom the licence outrages, because it gives a favour to one nation and leaves out of account all the other treaties. It is landing them into numerous difficulties.
I do not want to go into Committee points, but they are numerous, and, so far as I am concerned, I am afraid that with these very large and sweeping alterations which the hon. Gentleman has proposed in the Bill he must not expect to get his Bill to-morrow night. He may not get it at all—I am not a prophet—but at any rate he must not expect to get it to-morrow night. The Bill will want looking at again. It will probably be found that some of these Amendments bring in other Amendments, because the Government by the course they are taking are involving themselves into an endless series of difficulties. The licence trade is one of the most complicated, restricted, and over-legislated trades in the whole Kingdom, and the structure is now so complex and over-regulated that when you touch one thing in it you upset the whole structure and lead to a whole series of Clauses and Regulations and laws in order to deal with a very simple problem. I contend that the Government have taken the most clumsy and the most futile way of dealing with this matter. They want to restrict imports, but there is nothing in the Bill to restrict imports, though they assume that it will do so. They have no guarantee that it will restrict imports except in the case of hops. With regard to restricting the output of beer I have every reason to believe that the natural increase in price, and the departure of a large proportion of the beer-drinking public, will bring about a considerable reduction in the consumption of beer, probably 7,000,000 barrels, or nearly the amount which the Government desires. If they do wish to restrict imports, let them adopt the same policy as they do in regard to all other trades, and prohibit the imports and issue licences. If that is not satisfactory for any reason, and I do not think it is, then let them deal with the whole problem in the breweries themselves, with the least measure of inconvenience, both to the trade and the public. For these reasons, I contend that this Bill should not be given a Second Reading today.
I beg to second the Amendment.
The hon. Gentleman introduced the Bill in so clear and conciliatory a speech, and announced such important concessions in regard to off-licence holders, that I suffer from some slight infirmity of purpose in seconding my hon. Friend's Amendment. At the same time, the very fact that the hon. Gentleman has had to make these extremely important alterations shows that the matter has not been properly thought out, and I must join my hon. Friend in protesting that it really will not be fair to endeavour to rush this through without giving the important interests concerned an opportunity of thinking the matter out and putting down Amendments which they may desire. They will only know to-morrow morning how the Bill will have passed the Second Reading. How are they to prepare Amendments which they may wish to put forward? How are they to consult the different organisations, and so on? Where is the very great urgency? My hon. Friend rightly said that any well-conducted Member would be prepared to help forward any legislation necessary for the conduct of the War, but I do not see the immediate necessity, from the point of view of tonnage for pressing on with this Bill. Could not the hon. Gentleman, while this matter is being considered, arrange for the importation of barley and other brewing materials upon licence given by the Board of Trade? It is done in regard to other things, and why not in regard to this matter? I submit that it would be a satisfactory solution of the whole problem for all time. Certainly such a temporary arrangement might be made which would prevent the rushing through of a Bill of the very greatest importance, which hits hard an industry already the object of so many severe blows. My hon. Friend is now prohibiting the importation of foreign beer, and I am glad he is, although it is very good stuff, and I hope we may drink it again. At the same time that no more foreign beer is to be imported, the production of British beer is also to be reduced Where is the beer coming from for the people to drink? My hon. Friend the Mover said, and said rightly, that the public were not considered. Are these reductions to be pressed and continued? My hon. Friend the Parliamentary Secretary expressed a preference for port wine, and it is the last thing that I should wish to deprecate, but beer, after all, is a more important drink. Some poet has said: Wine is but a single broth, But beer is meat, and drink and cloth. It is a good liquor; it is required by the public of this country, and, if the Board of Trade has to make special arrangements in order to ensure that the supply to the troops does not fall short, why does it not also consider the public? I will not say the animosity shown to beer, but the preference shown to temperance, has already resulted in the wholesome, excellent drink of beer being replaced by spirits. Now comes another severe blow. I like to acknowledge to the full the excellent speech of the hon. Gentleman, and the conciliatory tone of it, but I do protest against the Bill being proceeded with in this manner and in this new form without those concerned having time to put down their Amendments and having them fairly considered. The hon. Gentleman says that the Bill entails a small loss of revenue. That is all the more reason for putting off its operation, so as to give an opportunity to those concerned to make their representations. It would not be right now to put forward Committee points, but it is not everybody who is able to attend here every day and sit right on. It is not fair to Members of the House, as well as to the trade interests, to press the Bill through to-morrow at the end of the day's business. After what the hon. Gentleman has said, I do not feel inclined to deal with the different points of objection which I had meant to submit. But this point of putting off the Committee stage appears to me to be absolutely all important. I do not know whether, under the concession as regards Clause 5 which the hon. Gentleman has announced, beer dealers and their customers come within the operation of the Clause.
Beer dealers come under that Clause.
There are those who have communicated with me who would like to have time in order to see whether they are satisfied with the important alterations in the Bill that have been announced to-day. My hon. Friend who moved that the Bill be read a second time this day six months spoke with an authority which nobody can surpass and which few can equal for brewing firms and large interests. But all of us are more or less interested, some personally it may be, but mostly as representing large numbers of off-licensed holders; and perhaps I may be allowed—speaking more particularly for those off-licensed holders, although I believe their interests are now going to receive that attention which was going to be denied to them when the Bill was brought in—to say I am dissatisfied that the matter should be disposed of to-morrow. I am not clear about the supply of beer. Will there be enough for those who are in the habit of getting certain quantities and who are not to be able to get more without a certificate from the Board of Trade? That in itself is a very serious interference with the liberties of the subject, and it is a point upon which one would like further information.
Perhaps I may correct the hon. Member upon that point of fact. There is no question of getting a certificate unless there is a disagreement. Any licensed holder has a right to ask the brewer for the same quantity, less 15 per cent., as he had in the comparative period, and it is only if there is a dispute between the two as to the quantity the licensed holder ought to have, that the matter is referred to the Board of Trade for the grant of a certificate.
Brewers disagree, and so do beer drinkers, and my hon. Friend's explanation does not altogether relieve me of the difficulty I feel in the matter. I again urge that the hon. Gentleman should not attempt to rush this Bill through to- morrow, but that he should give the great interests concerned a proper opportunity of considering the position.
The only reason why I wish to say a word on this Bill is because I have had some practical experience in another direction—in dealing with the restriction of imports of paper—and I do suggest that when an attempt is made to deal with a trade through the restrictions of imports very great difficulties are likely to arise. There is difficulty, for instance, in following up the imports to the various people who have to deal with them, and very great practical difficulties were met with in connection with paper in that respect. That may possibly be the reason why the Board of Trade has adopted the method it has done. With regard to the liability to restriction, having been engaged in restricting the import of paper and knowing the inconvenience that that caused, knowing also that the import of many articles is being restricted, I feel public opinion would require that there should be restrictions in this direction. It is essential for the well-being of this country that more shipping tonnage should be set at liberty. It is essential, too, that we should restrict the importation of those articles which are bulky and heavy, and when one looks through the list it is impossible not to come to the conclusion that among those articles are those used in making beer.
My hon. Friend referred to a suggestion as to dates which I had made to him as a result of my practical experience in dealing with paper. If you fix a standard year, ending on 30th September, 1915, and say that people now are to go back to their supplier in that standard year, you may have cases—and in the paper trade there were a good many—I am not acquainted with the details of the trade in beer to say if they would be as numerous there—but you may have cases where men are now obtaining their supply from a different brewer to the one from whom they obtained them in the year ending 30th September, 1915. They may be under a contract with a brewer now, and if they are to go back to the supplier during the standard year, it may require them to break their present contracts, or, if they are able to continue their present contracts, they may place the brewer who is under contract to supply them in a difficulty, because his 1915 customer may come down on him for a supply. It does not seem to be quite clear whether the Clause which deals with contracts gives power to cancel contracts altogether. If a brewer is under a contract to supply a customer now, and another customer whom he previously supplied can come down on him also for a supply, then he is between the devil and the deep sea, and the matter will require a good deal of aljustment unless the Clause really cancels contracts. The hon. Gentleman has done a good deal to limit that difficulty by altering the date from 30th September to 31st March, and I would suggest he would do better to bring it down to 31st May, because the nearer he brings it down to the present time the less conflict will there be between existing contracts and the rights given under this Bill. I can assure the House that, as a result of the experience we have had in connection with paper, if the changes in supply in the beer trade are Anything like as numerous as in the paper trade, the difficulties will be considerable. I recognise that the hon. Gentleman has made a great step in advance in dealing with these difficulties, but I suggest he would remove stilll more difficulties if he would fix the date two months later.
The hon. Gentleman in his speech certainly disarmed me of much that I desire to say. I most gratefully thank him for having at last, on behalf of the Board of Trade, admitted that the importation of foreign hops should be put an end to in connection with this special legislation. I have had to bring the subject before the House on more than one occasion, and I regret that the Board of Trade did not take this course earlier. The hon. Gentleman now allows the extremely bulky nature of the import. Something like 70,000 tons of hops have been imported since the War began, and it would have been just as well if hops had been picked out for treatment before ivory, upon which the Board of Trade have had to go back. I am very glad the hon. Gentleman speaks of the prohibition of hop imports, and as that is not dependent upon legislation, I hope it will be carried out at an early date. The hon. Gentleman spoke of licences. I hope this question may be treated very carefully.
We do not grow enough hops.
There are plenty here, at all events, still in storage. A great amount of hops is being exported from enemy countries into America at the present time, and in connection with the question of licences it is very desirable that great care should be exercised in taking hops from there, because it may be that they are only sending their hops to us in order to supply enemy countries, which is practically trading with the enemy. An hon. Friend of mine said it was unnecessary to legislate because it could be dealt with quite easily, and was actually being dealt with at the present time. I heartily agree with him in that, because we all know that whereas the consumption of beer has been decreasing very largely during the last few months it is not a fact that the importation of hops has decreased? In fact, during the first three months of the past year there was a very considerable increase in the importation of hops, and therefore of the taking up of tonnage. Taking the first three months in each year we find that in 1914, 29,000 cwts. were imported; in 1915, 50,000, and in 1916, 66,000. That alone, although there are many other things I could adduce, shows that some other steps were necessary. The hon. Gentleman has met the view I have had chiefly at heart, and I would conclude by thanking him and asking him to make the prohibition from as early a date as possible.
I do not propose to follow the right hon. Gentleman (Mr. L. Hardy) in his discussion of the question of hops. Looking at the Bill as it is now before the House I recognise that we must have emergency legislation. I sympathise very much with the hon. Gentleman in charge of the Bill and the Government Departments in charge of other Bills dealing with special circumstances arising out of the War, and I agree that we must not be too critical with regard to the framing of these measures. In ordinary times, of course, they would not pass. If it can be shown at a time like this that it would be in the national interest and would help the country through this crisis, it is the duty and the desire of the House and the country to support any Bill proposed. While recognising that the aim and object of the Board of Trade in regard to this Bill is to promote the national interests in every way, yet the measure does seem to be a very cumbersome piece of machinery and a very difficult Bill to work. The speech of the hon. Gentleman in charge of the Bill rather went to prove that. It was a very able, clear and conciliatory speech, but it went to show what difficulties the Board of Trade would have to deal with and which they are almost creating by this Bill. The reduction in the consumption of beer by 15 per cent. would hurt nobody. If that were the only sacrifice we had to make it would not matter whether it were a reduction of 15 or 20 per cent., because everybody would say "aye" at once to any proposal of the Government to reduce consumption of anything which would help the country. Everybody will agree that it would be a good thing to save tonnage when we are so scarce of ships. When, however, we ask ourselves what this saving of tonnage amounts to, I think an hon. Member opposite mentioned 160,000 tons. That is equal to 500,000 quarters of barley.
Much more than that.
I do not claim to have any special knowledge, but so far as my information goes it is in the neighbourhood of 150,000 tons of barley in a year. That is the extent to which tonnage space will be saved. What does that represent? Supposing we were on the Terrace and we saw one barge come up on Monday and another on Thursday, and asked ourselves what those barges represented, we should say: "Oh! that is the quantity of tonnage space which the Output of Beer (Restriction) Act, 1916, prevents coming into this country.'
It is far more than that.
I am thinking of two good big bargeloads a week. That is the tonnage space which this Bill saves. I am not against saving even that space. If the only way the Government can do that is to have this Bill, so far as I am concerned I shall vote for the Bill. It seems to me, however, that they are creating many more difficulties than they need create in order to arrive at the same object. That is my general criticism on the machinery. I quite recognise that when the hon. Gentleman and his advisers have to consider what is best to be done, the best machinery to provide for it, they are up against many difficulties and they have my complete sympathy in that respect. I rise mainly to deal with the provision made in Clause 5, namely, giving tied houses, off licence holders and beer dealers the power to claim 85 per cent. of delivery. It is well for the House to remember that, although we are dealing with beer, it is not a temperance measure, because one might call it tea, sugar, or any other article. It is not restricted because it is beer. If you limit the output of the article to 85 per cent., it is only fair that those who are trading in the article should have the right to the 85 per cent. of their previous supplies. Clause 5 is put into the Bill to meet the point of the tied houses, but there is no provision here to safeguard the position of the clubs. There is a large number of clubs up and down the country, and they are entitled to the 85 per cent. of their requirements on the basis of what they purchased before the proper date fixed in the Act, and I only wish to impress upon the hon. Gentleman the point that he partially agreed to, that he would consider the matter on Committee stage. I and other Members have been approached by organisers, pointing out the serious position which many clubs would be in if there was not some safeguard in the Bill for them, because in some cases they might be prevented from getting the article they had been in the habit of buying at all, and I think the House would not wish to put them in a different or a wrong position. I had a letter the other day stating that the position is that the amount of beer allowed to be brewed being reduced, the brewers propose to supply their tied houses only, and will not supply free houses and free purchasers. That is being met in the Bill. The letter goes on: Several brewers have already intimated that they will not supply their old club customers. That has been intimated to some of the clubs already. I think we all agree that it is not desirable to leave clubs under the influence and power of brewers. We want to leave them as free as the free houses, and those who might be in a little greater difficulty than others might find themselves in a very difficult position if they did not have the same safeguard in Clause 5 as is given to other purchasers. I hope my hon. Friend will concede that point and settle the matter as far as the clubs are concerned. Whether a Bill of this magnitude, so far as machinery is concerned—it is not a Bill of any magnitude so far as what is attainable is concerned—can go through in the short time which can be given to-morrow, is a matter for the House to decide, but whenever it does go through I hope the question of clubs will be conceded.
I desire to associate myself with what the hon. Gentleman has said with regard to clubs. I asked a question of the hon. Gentleman (Mr. Pretyman) with regard to whether clubs were to be given the same protection as the free houses and no definite reply was given, neither was an encouraging reply given. There are over 9,000 clubs in the United Kingdom with over 2,000,000 members, and it appears to those who are interested in the club side of our life that many of those members will run a great risk under the Bill on the ground that the brewers will prefer to sell their commodities to their own people rather than to clubs. I think there is a great deal of strength in that suggestion too. I think in London the brewers own something like 95 per cent. of the houses, that is, they have the control, and if that be so it shows at what a great disadvantage the clubs might be placed unless there is some provision inserted in the Bill. There is not, so far as I know, a very agreeable feeling between publicans and the clubs as a rule. I cannot tell what the feeling is between the brewers. It may not affect them to the same extent, as all they want is to sell their commodity. But there is a very strong feeling on the part of the clubs that protection has been purposely omitted from this Bill. In the case of the restriction of paper imports there has been very great difficulty. In that case the Board of Trade set up a special Committee for the purpose of seeing that justice was done as between the various printers, large and small, in other words, to see that no man was deprived of that which was necessary for his trade on the ground of a larger supply being given to another in the same trade. It is on that ground that I appeal to the Board of Trade on behalf of the clubs. I suppose they drink a great quantity of beer, as distinct from the wine which was referred to in a previous Bill, but it is certainly essential that the clubs should have the same proportion as they have been having up to the present time. It is only fair and just that they should be protected, and I hope an Amendment will be put down to give the clubs the necessary protection and that the hon. Gentleman on behalf of the Board of Trade will give the matter his favourable consideration.
One other point. I do not know about the price of beer. Hon Gentlemen opposite with great interests are able to bring pressure upon the Board of Trade or any other Department when their particular interests are concerned. There is to be a restriction. Foreign beer is to be kept out of the country by the restriction so far as the importation of hops is concerned. It may give those gentlemen an opportunity of increasing the price of the commodity to the consumer. There is nothing in this Bill to protect the consumer against that, and I take it that is one of the matters which must be left to those who provide this particular commodity, and we must expect them to be as reasonable as they can. It seems to me that the Bill may give them that opportunity. If it does, I hope they will not take advantage of it. I hope the hon. Gentleman will give the clubs some encouragement and embody in the Bill a few words which will place the clubs on precisely the same footing as the tied houses are placed under Clause 5.
I desire to emphasise that there has never been the smallest question between the Board of Trade and the traders concerned with regard to their immediate acquiescence in the policy of the Board of Trade in restricting the tonnage of materials used in the manufacture of beer. The only question that has arisen at all is as to the method in which that ought to be enforced. There are many points in the Bill which will require very careful consideration. There are some new points which rather surprised me, coming from the hon. Gentleman, in particular the fact that he proposes to stop entirely the import of foreign hops. That would be perfectly sound policy, no doubt, if a sufficient quantity of hops was grown in this country to produce the restricted quantity of beer which the Board of Trade has now specified. But there are not enough hops, and if the hon. Gentleman that the military' as they ought to do' should get their beer he will have to give some kind of licence for the import of Californian hops, otherwise it cannot be produced. There is no other known method of producing sound beer except by the use of malt, hops, and sugar. I should be sorry to think that brewers would be driven to using quassia, which long ago we heard they did. I never saw it, but I should be very sorry to think its use might be necessitated now. I think the suggestion made by the right hon. Gentleman (Sir T. Whittaker) was a very valuable one—it goes even a little further than that of the hon. Member—to restrict the trade till 31st March. The right hon. Gentleman suggested 31st October. I dare say the nearer we get to dealing with the regular customers of the brewer the better.
It begins to act on 1st April.
I dare say it does. It is certainly an improvement on the Bill as it stands. It brings in the regular customer. There is one thing in this Bill which is not protected at all, and that is the contract made with a new customer before this restriction was proposed. I mean a contract for supplying a new customer before this Bill was heard of, and which the brewer, now that he has to restrict his output, will not be able to carry out.
See Clause 4. That protects him.
I do not think so. I do not think that protects the brewer under those circumstances.
I think so.
Take the case of a man who in February made a contract for a new supply of 10,000 barrels.
He is covered in Clause 4.
If he is protected, I do not need to press my argument; but I do not think he is protected. If he is not protected, he will be bound to carry out his contract, although the Bill will prevent him from producing the quantity of beer to enable him to carry out that contract.
I think the hon. Baronet will find that that case is met.
If that is so, I need say nothing more about it. I do not intend to go into the question of method to-night. I do not think any Amendments are going to be moved upon the method of the Government in granting 30 per cent. or 15 per cent. option on 1914–15, but I am bound to say that I do not think that this is the most desirable way of meeting the case. The real difficulty arises in connection with the supply of military beer. The hon. Gentleman (Mr. Pretyman) has explained how the difficulty arose. The suggestion I made to him and to the Board of Trade is one which, I think, would be the best way of dealing with it, namely, to make the military supply the first charge upon the limited quantity, and then put a higher percentage upon the 1914 figure than is proposed in the Bill, leaving the military in a position to get their beer from any brewer they like, and not leaving them tied as they are in this Bill to the brewers who have supplied them. Nobody can supply them except the man who has supplied them, and you take 50 per cent. off his output. Nobody who has not supplied them can come in, therefore you may have difficulties arising such as those which the hon. Member suggested, of the difficulty of having to go to a brewer at some distance from the new camp, for the soldiers are constantly changing camp, though that beer could be got quite easily in the neighbourhood. In this connection there is also the chance of risk and congestion on the railways. I know that the object of the Government is to prevent that, and if they had made the military supply of beer as the first charge it would have prevented that possibility. The transfers of troops have been very considerable. Take the case of the Scottish troops who have been sent to Ripon. They number about one hundred thousand, and were scattered all over Scotland. These troops have to get their beer somehow. Are they going to go to Edinburgh for it? They ought to be able to get it at some place near the camp. I think the Government's proposal in this connection is a mistake, but I do not intend to oppose the Clause, although I think there will be difficulties arising from it which they do not anticipate.
I do trust that, in view of the changes the hon. Member has made in the Bill, he will not press the Committee stage to-morrow. There is no intention to obstruct the Bill and there is really no objection in pushing it unduly. Nobody knows that better than the hon. Gentleman. He is not going to save a pound of tonnage by this Bill for the next six or eight months.
9.0 P.M.
Every quarter of barley, every pound of sugar, and every pound of hops that the brewers are going to use during the next six, ten, or it may be twelve months, in some cases, are either in this country now or are floating on the high seas at the moment. There will be no saving of tonnage in pushing this Bill through tomorrow. This restriction will not really come into effect for at least nine or ten months. What is the good of saying that a few days is going to make all the difference. The brewers are now working on restricted quantities. They know that the House will pass this Bill, and they are restricting their quantities accordingly. If the Bill is not pressed forward it would give us an opportunity of considering the new points and seeing what Amendments, if any, are necessary, and in particular of seeing that the drafting of some of these very difficult Clauses, such as Clause 5 and Clause 4, is such as to protect every interest. While I quite agree with hon. Members who are very anxious to protect the interests of the consumer and the dealer, the interests of those who are producing the article must also be protected, and we must see that we are not imposing upon them an obligation which is not just.
I hope the Parliamentary Secretary to the Board of Trade will not proceed with the Committee stage of this Bill to-morrow. I think it is very desirable that those connected with the industry should have an opportunity of seeing in print the new proposals of the Government. The hon. Member has assured us that the only object of this Bill is to secure tonnage which is at present used for the importation of barley and other brewing materials. I have no hesitation in associating myself with what has been said by the hon. Baronet (Sir G. Younger) that this restriction will not affect the tonnage for the next six or nine months. Anyone who has any experience of the barley market, and I have some slight knowledge of it, knows that the brewers cover their supplies many months ahead. Contracts have been made as much as twelve months ahead. These supplies are on the high seas in transit to this country and may not be here for another four or five months. Barley comes from all parts of the world, Oregon, California, Chile, India, and other places, and it takes many months for it to reach this country owing to the state of war. Therefore, this Bill will not affect tonnage to the slightest extent for months ahead. I think this Bill is not very necessary. Judging by the figures that the Chancellor of the Exchequer gave to the hon. and learned Member for Rutland (Mr. Gretton), I see that there is a great decrease in the number of barrels brewed in the month of April, compared with April of last year. I think the decrease is some-think like 351,000 barrels. If this decrease continues, as I understand it is continuing—because I have some figures from a very large London brewer showing that during the first three weeks of this month the falling off has been over 8,000 barrels — the Government could get their tonnage without any legislation, and without throwing the industry out of gear or doing injustice to anyone. Whether they will secure the extra tonnage which they think they will secure by means of this Bill I cannot say, but I am sure that they will not get it until the turn of the year. The brewing materials are now en route to this country, and whatever we do in the way of restricting output it will not affect the tonnage during the next six or nine months. If the trade is falling off, as the figures show, surely there will be falling off in tonnage after the turn of the year, but not until then. Therefore, there is no hurry to press forward the Committee stage. In the Committee stage various Amendments will have to be inserted, and I hope that the hon. Gentleman will give us time to consider them.
From the speeches already delivered we have seen that all experts have joined in recognising that time should be afforded before this Bill goes into Committee. I join in that appeal, because it has been conveyed to me, though I am utterly ignorant of the technical side of these matters, that it is absolutely necessary that reasonable time should be given for the Amendments to appear upon the Order Paper, in order that they may have full consideration by those who are interested. Very often these Amendments have proved, since I have been a Member of this House during the last ten years, of very material assistance to the Government, and not infrequently Bills have been turned inside out by suggestions which have appeared on the Order Paper for Amendments in Committee. For those reasons I hope that the appeal will be acceded to. No one desires a lame Bill, especially after what has fallen from the last two speakers. I was surprised to hear the Parliamentary Secretary, in his concluding remarks, remind the House that we were at war. I thought that it was the Back Benches generally which had to remind the Front Bench of this fact, and to supply what is now popularly known as a considerable amount of ginger. It is we who desire, no less than the hon. Gentleman, to take every possible step we can to incommode our enemy, and to preserve our own tonnage and our own mercantile marine, as far as possible, and, therefore, it was not necessary to remind us of so patent a fact, which we are always insisting upon, that we are at present engaged in warfare of a very desperate description.
I desire to call attention to some hardship which will be inflicted, unless an Amendment is made which would include the clubs, upon those clubs which are free and not tied. Clubs get tied in the same way as licensed houses. The hon. Member for Bethnal Green (Sir E. Cornwall) and the hon. Member for Deptford (Mr. Bowerman) could probably tell us a great deal about it. It is very undesirable to have legislation that does not give equal facility to the free club, which has managed to put itself on a firm basis and is independent of its profits, and can say, "We will buy our beer from the man who serves us best." It is very undesirable that a Bill of this sort, which in its working may materially affect these places, should at any rate give the opportunity of distinguishing between those which are free and those which are tied, or which, for many reasons, have got used to a particular firm. It is desirable to give an absolute meed of justice so that clubs should be on the same footing as the licensed holder, and should be given the same facilities. I had wondered whether or not the ingredients which are forbidden, or limited, by this Bill are found in the liquor which is reputed to be put on the market by the Board of Control. I shall be glad to have information on that point, because I may hear that that liquor has also to some extent been handicapped in this way. My hon. Friends tell me that that liquor is free from the ingredients which are imported into this country. I have not tried it, I have not considered it desirable to try it, and I hope that if that new liquor, supplying the place of what has hitherto been known as a good old English drink, is to come into use by the recommendation of the Government, it will suffer the same disadvantage as the ordinary drink of the nation.
We have had a very striking example to-night of the great difficulty of legislation when it interferes with a particular industry. We had a statement by the Parliamentary Secretary that this Bill was brought in with one object only, the liberation of some of the tonnage now used for bringing the products of brewing into this country. In common with nearly every other speaker, I endorse the object that the Board of Trade have in introducing this Bill. We want to liberate tonnage, as far as we possibly can, for purposes of the utmost utility in connection with the War; but judging from some of the speeches which we have heard, like those of the hon. Baronet opposite (Sir G. Younger) and the hon. Member for Southwark (Mr. Strauss), there is no chance of having the benefit of this Bill for some considerable time. I think, therefore, that the Parliamentary Secretary might give those persons who are interested in the trade a fair opportunity of considering what will virtually be a new Bill when it comes to be on the Paper to-morrow, on account of the Amendments to the various Clauses which, as he has already enumerated to the House, he intends to put down.
With respect to the liberation of tonnage, it seems to me that there is only one practical step in this Bill, and it is the only way to liberate your tonnage. That is by prohibition, as the Parliamentary Secretary has said the Department intend to do, in connection with hops. I do not think, as far as I could get any information, that there need be any fear that there will be a shortage of hops. I speak with some temerity, but, so far as I have been informed by some of those interested in the industry, there will be no shortage of hops for some considerable time, but as the figures quoted show you have had a continual increase in the quantity of hops imported into this country during the last three years. If that was to go on in the same ratio you would have had a still large quantity of tonnage taken up. Therefore, so far as the liberation of tonnage is concerned, by the direct action of the Board of Trade in prohibiting the importation of hops, I would ask the hon. Gentleman whether it is necessary to introduce a Bill for this purpose, or whether under one of the existing Acts of Parliament the Department have the power to prohibit the importation?
One other question. I am glad, personally, that this action has been taken by the Board of Trade, because I think it is the only real solution in any direction. In our part of the country, where they are interested in fruit as well as in hops, they view with a great deal of disapproval the reduction of the importation of sugar while hops are being brought in. There is all the evidence of a good season, and the fruit of this country may possibly be wasted because of the want of sugar, which is much more important than hops, as it is used for the making of jam and the preservation of fruit, which is of such benefit to the community. In conclusion, I want the Parliamentary Secretary to the Board of Trade to consider the question of clubs. In his opening speech the hon. Gentleman said that the question arose in the minds of some of them—I take it he meant the Board—whether clubs did not come within the same position as the private consumer. I think a little consideration will show him that clubs cannot be regarded as occupying the same position as the ordinary private consumer, who goes to the off-licensed house or sends to the local public-house. The clubs have to purchase direct from the brewery, and unless they come within this Act, where their position would be the same as that of the off-licence holder, they would be put in a very invidious position. I hope the hon. Gentleman will give the Amendment which is to be proposed his consideration, or probably he may himself put down an Amendment to meet the case. I would like him to give an answer to the question which I have already asked, whether legislation is required for the purpose of prohibiting the importation of hops, or whether action can be taken under existing Acts of Parliament.
Everybody who has spoken in this Debate has agreed that it is very desirable that tonnage should be released, and, if I followed the hon. Member who is in charge of the Bill correctly, the whole basis of the measure rests upon that point. It is alleged that this is not an attempt of some portion of the trade to take advantage of some other portion. It is also not an attempt on the part of the teetotalers, or fanatical section, to try and damage the trade. The object is, I gather—as I think we ought to endeavour—to look at the matter wholly from the point of view of releasing tonnage, now that we are so short of tonnage, and using that tonnage for absolutely essential purposes. I can see one or two grave objections to this proposed method of dealing with the question. I have read through this Bill, and I see a lot of complications in it. In the first place, it seems to me that, if you are going to take a sort of standard year, and say that everybody is going to be as far as possible placed in the same position as to the standard year in regard to the amount you are entitled to buy, there is simply to be 15 per cent. taken off in order to apportion it. When you do that you ignore all kinds of different circumstances that have arisen, and will arise in future, as compared with last year. You entirely ignore the fact that vast bodies of men who are stationed in one part of the country have now moved to another. You entirely ignore the fact that businesses, both as regards the manufacture and consumption of the article, have changed hands, and that interests have arisen that are inconsistent with the same thing being done in future exactly as it was done in the past. I confess I see every complication that is likely to arise out of the enforcement of this restriction upon trade, which is made in order to make it equitable with regard to all kinds of special circumstances which may very easily arise.
For instance, a member of the trade, the other day, brought to my attention the fact that a brewer who owns licensed houses had been in the habit of giving a long pull—that is to say that in his licensed houses a person was served with considerably more than the pint measure would be able to give out. This would give him solid advantage in the future, because by restricting the amount to the exact measurement he will be receiving money for considerably less beer. If we are going to pass an Act of Parliament to give that particular individual a solid advantage in the future over his more scrupulous and exact competitor, then I do not think you have picked up exactly the best way to do it. Then attention has been called to the difficulties arising in regard to clubs. It is assumed in this Bill that every customer of a brewer is a licence holder. Hon. Members stand up and say, "Oh, but you have forgotten the clubs, which are not licence holders but merely registered." May I very respectfully suggest that they have also forgotten the consumers? Why should not every bottle customer who has been on the books of the brewery be entitled to his 85 per cent. next year or some standard year? I cannot see why you should pick out the licence holder or the club, and it seems to me that if we were discussing this matter in Committee four or five lines of complication might be left out of the Clause of the Bill and simply say "every customer."
My next objection is that it seems to me that if we are really honest in trying to carry out the admittedly real reason for this measure, there are two ways of doing it which would be better than the one adopted in the Bill. One is that it would be perfectly simple—in spite of the speech of the right hon. Member for Spen Valley (Sir T. Whittaker)—to prohibit, for a certain period, the import of these foreign materials. I cannot see why it would not be infinitely more likely to get you the tonage that you want, if you stop the ships from bringing these materials for a certain period altogether. If that period is not going to arrive until four or five months after the present date, at all events, if the War goes on, it will arrive, and will give the only corresponding amount of advantage which you could possibly get. That is one way to carry out the object of the Bill. Another way would be for a certain period to prohibit the use of imported materials in the breweries. These are two obvious ways of carrying out the admitted object that we have in view. Both of these are ignored.
This Bill is left to interfere with the conduct of a business which has been made more and more difficult during the past eight or nine years than any other business—a business which I am free to say is one in which I have no interest whatever of any kind or description, a business which is admittedly required to-day in the interests of the country to be well conducted; in fact, it is the only business in the world which Acts of Parliament say nobody shall engage in unless he is of good character. And we are to set to work now to carry out the object that we all want to see carried out, but we set to work to do it in a manner which is provided in this Clause, a Clause which I have read through several times, and am still uttery incapable of understanding what it can possibly mean. That is the sort of way in which we are going to interfere with an important trade already harassed and taxed almost out of possibility of being respectably carried on. I do not think it is a right thing to do, and I am very sorry to see this Bill in this shape. I am exceedingly anxious about this question of tonnage, and I think there are two simple ways of carrying it out, and I regret that the Board of Trade have ignored both those simple ways and have adopted one which causes so much difficulty and which is bound to cause infinitely more difficulty before it is finished. I, for one, join with all those who have spoken in saying that we must have, under the circumstances, ample time to thoroughly study and see that the very minimum of injustice and unfairness is done in the way in which this Bill is going to be worked.
I have sat throughout this Debate and listened with very great interest. With regard to what the hon. Member has just said, I may point out that the simplest way of all would be the prohibition of the manufacture of intoxicating liquors altogether during the War. This discussion has shown the difficulties you at once enter upon by arranging or endeavouring to arrange in the manner in which the Bill prescribes. The hon. Member has said quite truthfully that it is not a Bill in which the fanatical section of teetotalers have had any hand whatever. The Bill is an arrangement between the brewers and the Board of Trade, and I very much regret that the brewing interest should to-night have taken exception to provisions to which they themselves have been a party. There is a growing feeling in the country, as the Parliamentary Secretary so ably stated to-night, that there is great shortage in tonnage. There is also a growing feeling that when we are passing through a time of war and through a great national crisis, and conscripting the lives of the people, that we should not jib at conscripting the appetites of the people in the interests of the country and the Empire. Hon. Members in various parts of the House no doubt have heard with some satisfaction of the growing spirit of prohibition in our Colonies. The greater portion of Canada is under prohibition, and there is prohibition of the camps. In America at the present time 45,000,000 of people are living under prohibition. If we are to have that efficiency and that sobriety and that supply of tonnage which everyone agrees is necessary, there does not seem to be any solution so good as calling upon the people to sacrifice their appetites in the interests of the welfare of the country. By the operation of the Bill, according to a reply given by the President of the Board of Trade, 200,000 tons would be affected, and the figure has been put at 150,000 to-night. That has been stated to be a third, which would mean that prohibition would release 600,000 tons of tonnage. In other words, it would release the use of shipping every week to-the amount of 30,000 tons. It would release, according to the advocates in connection with the trade, 500,000 men and women. It would release 5,000 miners who are busy getting coal by which the breweries can be kept going. It would release judges and juries and policemen and reduce distress, and relieve a very large amount of poverty, misery and un-happiness. The prohibition of the drink traffic would carry a message of hope to the thousands in the trenches who under the present temptations feel exceedingly uncomfortable at the front as to what is happening at home. While I shall support this Bill as it is towards that aim and has a reducing principle in view, I would rather, for simplicity purposes, that prohibition had been adopted. I believe this country would not under those circumstances have dealt meanly or ungenerously with the brewing interest or with the publican and his family. I believe if we had risen to the full height of our responsibility that the brewer and the publican and all connected would not have suffered, and that we ourselves should have risen higher in the estimation of the world, and that our efficiency would have been largely increased, and we should have stood a stronger nation to-day under prohibition than under the rule of the public-house.
I do not desire to follow the hon. Member (Mr. Wing) in his argument that this Bill should have been the exact opposite of what the Parliamentary Secretary to the Board of Trade has told us it is. I do think that the figures which the hon. Member quoted are not at all the figures which were given by the Parliamentary Secretary on 13th April, when he introduced this Bill. He then said that the object of the Bill was to reduce the importation of foreign barley, which was estimated at 1,500,000 quarters, by about one-third. That being so, apparently the Bill is going to do all that the hon. Member hoped from prohibition in the flights of his fancy. The hon. Member for the Everton Division (Mr. Rutherford) advocated another method of restricting the importation of barley with which I find myself equally in disagreement. In spite of the speech of the Parliamentary Secretary, he advocated the prohibition of the import of foreign material. I cannot see how it is possible, as the Parliamentary Secretary said, to distinguish the ultimate destination of foreign barley, which is absolutely essential for the production of meat in this country, from the importation of barley which is consumed in breweries, and I do not believe it is possible. The other method which has been suggested and which amounted to confining the brewers to the consumption of homegrown barley would, I think, absolutely upset the whole course of the brewing trade, because there is practically none available now, and there will be very little until the next harvest. It would be equally disastrous to the agricultural industry in the production of meat.
I do not find myself either in complete agreement with the speech in which the Bill was introduced. I have never since I have had the honour of coming here heard a Bill introduced with such faint praise. The Parliamentary Secretary said that all these emergency Bills were bound to injure somebody, and the only object he had in view, or could hope to accomplish, was to do as little injury as possible. He also said that they were all objectionable, particularly this Bill, and none were economic. I think that that is a very fair description of the Bill. The question we have to consider is whether it is so designed as to do as little injury as possible. I do not think it is. What has been the actual operation of the rules made by the Central Control Board as far as the agricultural districts are concerned? They have practically destroyed the business of one section only of the brewing trade, namely, that of the brewer who collects orders for his own goods which are delivered direct to the home and not to the public-house at all. What happens under this Bill? The hon. Gentleman said that it had been found necessary to introduce the provision giving to the brewer whose business had not increased but decreased owing to the movement of the population towards the military centre an option as to the period to be taken as the standard period. It may be that I am unusually dense, but I cannot see how, if a country brewer, say, in Somerset, far removed from any camps, finds the population from which his customers were drawn greatly reduced because they have removed to the great military centres, how he is materially helped by being told that he may take the year ending September,. 1914, when his business was more or less normal, and reduce it by 30 per cent., while another brewer, in a district to which the population happens to have moved, and whose business has enormously increased, takes as the basis of the year ending September, 1915, including a whole year during which he was doing a roaring trade such as he had never done before, and he is asked to reduce it by only 15 per cent. That is not doing equal justice or anything approaching it. If a man's business has very largely gone away from him, the object of the Bill has already been accomplished, and I do not see why there should be any further reduction at all. In many cases the business has been already diminished by more than the total diminution hoped for under the Bill.
With regard to hops, I was glad to hear that by a side-wind we have at last got something promised which ought to have been promised in the early days of the War, namely, that the prohibition of something that we can perfectly well do without, which occupies a gigantic amount of shipping space, and in respect of which there is a very strong argument, even in peace time, against allowing importations absolutely duty free. The Board of Trade now see that, as a necessary corollary of this Bill, they must prohibit that. But I rather gather from an interruption of the hon. Member for Ayr Burghs, that the Board of Trade have not calculated exactly what will be the result of the complete and sudden prohibition of the importation of hops, and how it will fit in with the 15 per cent. reduction that they want to make in the total output of beer. That ought to have been one of the very first things decided upon. I hope it will be gone into a little more closely, because I am certain that, whether tariffs are the right way to regulate imports or not, if you are going to enter on the prohibition of the importation of something, it ought to be prohibition or as near prohibition as you can get it. A prohibition in name, with endless licences granted, means a most unsatisfactory state of affairs from the point of view of the manufacturing industry, and must involve the maximum amount of labour to the Board of Trade and other Departments concerned.
With regard to another incidental benefit to agriculture, of the proposals that are to accompany this Bill, the Parliamentary Secretary said that it would not be reasonable to allow the export of malt as it had been allowed in the past; but he mentioned that they ware still going to allow a certain amount to be exported to Italy, I suppose, in order not to introduce too sudden a revolution in the beer-drinking habits of that part of Europe. What I am interested in is the enormous export of malt which, in spite of the pro- hibition, has been allowed to Denmark and Holland, at a time when our farmers cannot get barley enough to feed their pigs, and other animals, at anything approaching reasonable prices. While we have seen the price of meat going up, because of the shipping difficulty and the great cost of bringing feeding-stuffs to this country, we have allowed our barley to be turned into malt and exported, and the only excuse I have been able to get from the Board of Agriculture is that we get some bacon in return. If we want bacon, let us feed it here, and not send out our barley in the form of malt to neighbouring countries. Why should we subsist by preference on Dutch and Danish bacon rather than upon Irish bacon, in regard to which there is a shorter and safer sea-passage to this country? I hope we shall hear that the prohibition of the export of malt is to be a reality and not the sham that it has been so far during the War.
The Parliamentary Secretary said that the best argument he could make in favour of this Bill was that it was not going to make any permanent mark on the Statute Book. He evidently thought that legislation of this kind would make a very undesirable mark if it made any at all. I am sure the House would be in general agreement on that point. As the Bill is drafted, if it makes no mark on the Statute Book, it will make a mark, and a very unfair one, upon the bank books of individual brewers. Some will get fat under this Bill, while others will have their already diminished trade diminished still further. I hope the hon. Gentleman will allow time for the consideration of the Bill and not attempt to rush it through, as I am sure that, even in emergency legislation the object of the Board of Trade is to do approximate justice all round, and not to do the greater injury which the hon. Member opposite would do to the trade as a whole. That would be intolerable; but it is even more intolerable that while some brewers who have been farsighted enough to take huge Government contracts for the supply of canteens are allowed to keep the bulk of their trade you should take away from smaller and poorer brewers who have already lost much of their trade a large proportion of that which remains.
Although I am in agreement with a great deal of what has been said on both sides of the House in respect of this Bill, I wish to point out to the right hon. Gentleman in charge of it that the Amendments he proposes to make involve considerations which make some prolonged Committee stage almost essential. If one follows the Bill as it stands, Clause 5, which proposes to investigate the agreement of the licence holder and the brewer contains a period—I think it is 31st March, 1916. If that period is given, it must be remembered that you have to some extent to see what was the amount of beer required and which was being delivered between the licensee and the brewer down to that period, 31st March, 1916. For that purpose you will not be much assisted if you take into account the standard which is fixed by Clause (2), which is a standard carried down to a a period in 1915. The answer to that is that in paragraph ( c ) there is power of taking into account, by the Commissioners, of the transference of a brewing business or any other change of circumstances taking place after 30th September, 1915, and before the 15th of May, 1916. The result is you have two standards, the one standard or relation between the brewer and the owner of the house, which is down to March, 1916, and the other standard that of the output of the brewery, which is a standard in 1915. It is quite obvious that there ought to be a co-relation and balancing between these two portions of the Bill. It seems to be very necessary, and for this reason: While you are dealing with a direct sale of liquor it must not be forgotten that a great deal of distress can be caused by persons having their property interfered with. The property of licensees by no means concerns only the brewer and the licensee. There are a large number of mortgages upon these licensed houses, out of which quite honest and respectable people live and receive their annual payments. You must not overlook the rights of those persons. While you are dealing with the brewer and the tied houses, do not overlook the individual interests of particular houses—of free houses, and other houses which have to be dealt with, and in respect of which you are measuring both the limits of the restriction you put upon the brewers and the rights which belong to those persons who are licensees, and other persons who are interested in the house. In order that the question of the difference of these two periods and the co-relation of them should be considered, I have put the point before the House.
I can only speak again by leave of the House. Dealing with the point raised by my hon. Friend, I can quite understand his raising it, and I think he was quite right so to do. I did not, as I ought to have done, explain it in my original explanation. Paragraph ( c ) of Clause (2) does not, as he points out, really deal with the point at all. If it so happened that there was any difference in the gross output of the beer between the two standard periods taken, his criticism would be perfectly justified. I ought to have explained to the House that the output is practically the same. Therefore we took this standard period of the Bill. We must take a full given year. Therefore, the least difference you can take is the year up to the 20th September, 1915. The other period taken under Clause 5 is merely taken for the purpose of comparison between the brewer and his customer. It is natural that we have to consider that, as without you might not get the balance between these two. It happened that the output is almost identical—just over 30,000,000 gallons in the period ended 30th September, 1915, the same as for the twelve months ending 1st March, 1916. Therefore, that difference and result does not arise, and the matter adjusts itself, though my hon. Friend was just justified in pointing it out. The House will see that the Bill, as I should have explained, really begins operation on the first quarter in which it can—that is, the quarter beginning 1st April, 1916. Therefore the latest date we possibly can take is 31st March. My right hon. Friend the Member for Spen Valley suggested that we might take 31st May. We might have done so if the first quarter had begun on 1st June, but we cannot take a later date than 31st March. We have taken it at the very latest that we can.
Other points have been raised on the Bill. There is that of the question of alternative methods. It has been pressed upon us. The hon. Member for Devizes and other speakers have suggested that we should have adopted either direct prohibition or a restriction of the use by brewers of imported materials. I tried to make it quite clear in my former speech that we could not do that for reasons which I gave. If we reduced the quantity of importation without reducing the output of beer, which is the product of those materials, we should leave the full proportionate competition between the brewers. Everyone would desire to brew the same quantity as before, and the competition would force up the prices. Those who wanted barley, maize, and rice for foodstuffs or feeding-stuffs would suffer. Prices would go up, and the whole thing would produce far greater injury than we should do ourselves good by the restriction of the tonnage space. It is quite obvious that this alternative is no alternative at all. If you simply restrict the amount of foreign material which the brewer uses, you simply send him to buy the home material, and you leave the consumer of food and feeding-stuffs to go and buy the foreign material, and you do not reduce your competition by one iota. I am sure the House will see that before deciding upon this particular method of reducing import that these alternatives were naturally first considered. They are, however, not alternatives to the primary object of the Bill, which is to reduce all these imports. It would not have been done without practically inflicting greater injury upon the public than in any other way. If my hon. Friends had considered the matter as closely as we have done, they would have come to exactly the same conclusion as we have done. There was another point put forward, and that was that the Bill was not necessary. Hon. Members pointed out the Chancellor of the Exchequer, in an answer he gave the other day said that the output of beer for the month of April had been less by about 350,000 barrels. Neither of those hon. Members, curiously enough, could, I am sure, have read the whole answer given by the Chancellor of the Exchequer, which showed that the output of beer for the first three months of the year had been greater by something like 750,000 barrels than in the corresponding quarter of 1915. It is quite obvious that the real reason of the reduction in the month of April was this Bill. It was announced about that time, and it is as a matter of fact working now. Excise is being worked with this Bill in the quarter beginning the 1st of April. Matters are adjusting themselves to the procedure which will have to be adopted under the Bill, and by the regulations of the Bill, and, of course, actually it is this Bill which has caused the reduction. I think if any justification is required for the Bill, those are the figures which provide it, instead of being the figures which show there is no necessity for it. I must congratulate my hon. Friend (Sir E. Cornwall) on the capacity of his barges, because he told us the reduction we should obtain by 150,000 tons represented two of his barges, one going up the river on Monday and the other on Thursday, and those two barges doing that once a week would represent that reduction of tonnage. I have worked out the sum, and I find my hon. Friend's barges between them must contain no less than 30,000 tons of material. I do not think that any barges I have seen from the Terrace when I have been there carry as much as 15,000 tons. It is a very simple calculation—150,000 tons represent about 30,000 tons a week, and therefore those two barges would each carry about 15,000 tons.
Three thousand tons—not 30,000 tons!
The fact is, we are both wrong.
I am sorry my arithmetic is so bad. I should have said 1,500 tons, but the barges I have usually seen carry about 150 tons at the most. As to hops, my hon. Friend the Member for Devizes (Mr. Peto) suggested that hops may be necessary, and we have to give licences. I said that, but we are prohibiting hops, and we do not desire to give licences for their importation unless it is really necessary. My hon. Friend suggested that the whole licensing system is objectionable. It is. We do not like it; but no other system is possible under our present conditions.
Tariffs are much more effective.
In war?
Yes.
Not as war legislation. I am afraid that is not a point we can debate on this Bill, but, whatever may be the merits of tariffs under ordinary legislation, I am afraid that to arrive at exactly what we desire for the restriction of imports in war, a tariff would prove rather an insufficient restriction.
It depends on the tariff.
We have to have definite quantities that we can allow, and definite quantities we must stop, and a tariff would never give definite quantities. There is one more point raised by the hon. Member for Devizes. He considered that what I may call the small 1914 brewer was grievously hit, but I do not think he realised that that 1914 small rural brewer, of whom he very properly spoke, and for whose benefit the alternative has been inserted, has already lost more than 30 per cent. of trade by the movement of population, and therefore, by allowing him that alternative, we do not get anything more from him at all, but even allow him to increase his trade. If some small rural brewers have lost 40 per cent., as I am told they have, between 1914 and 1915, because of the movement of people to military or munition centres, then we give him this alternative, and we only take off 30 per cent. of his 1914 output, and, as he has already lost 40 per cent., it allows him to increase the output by 10 per cent.
Forty per cent. loss is a very extreme case; but take the case of a man whose business has gone down, say, 15 per cent. There you would certainly take more off, because you take 30 per cent. off on that standard, although the more prosperous brewer in the vicinity of large canteens may have increased his business by 15 per cent.
If he has lost 15 per cent. of his trade, then he can take the 1915 basis, and he will be left exactly where he was. He has the alternative. It is only those who have suffered very severely through the change of population who require the benefit of this alternative, and the more they have suffered the better the alternative will be for them, and they need only take it if they gain an advantage from it. They are not obliged to take the 30 per cent. off the 1914 basis, but they can take 15 per cent. off the 1915 basis, and the difference is not to give advantage to the big brewer or the military brewer over the little brewer. It is to obtain the reduction to 26,000,000 gallons that we are only obliged to take off 15 per cent. of the total production of 1915, whereas we should be obliged to take off 28 per cent. or 30 per cent. from 1914. That is the sole reason. It is to bring us back to that figure.
Of the two final points touched upon, the more important is the question of clubs, and every hon. Member, I think, who has spoken has asked that clubs should be included. I came down, as I said, with an open mind on that question, prepared to see what views were put forward and with a desire to defer the points until the Committee stage. But as every hon. Member who has spoken has pressed for clubs to be included, and nobody has opposed it, I am perfectly willing to say we will include clubs in the provision of Clause 5. The final point is as to the Committee stage. I did ask that we might take the Committee stage to-morrow and the remaining stages of the Bill because I thought it was the kind of legislation that should be carried as rapidly as possible. Hon. Members, particularly those who are interested in the trade, will realise that the Bill operates from the 1st April, that is to say the first quarter begins on the 1st April, and, as it is already being set to work largely without any legislative compulsion, it does seem in the interest of the trade itself very desirable indeed that the clear provisions of the Bill should be upon the Statute Book and everybody should know exactly how he stands. There are questions of doubt and alterations, and I believe both the trade and its customers will suffer more from delay than they will from the carrying of the Bill in its remaining stages to-morrow.
It has been suggested that the fact of my mentioning so many changes in the Bill shows that the Bill was not properly considered. I would rather say that I have endeavoured to anticipate the Committee stage as much as possible after consultation with many concerned, and it shows that we have considered these points beforehand. I have tried to use, as far as I could, the Second Reading for announcing these changes in Committee so that for the convenience of all concerned we might take the remaining stages of the Bill to-morrow; but as every hon. Member who has spoken on this point has considered that the Committee stage should be deferred, I am bound to assent to the wishes of the House. I do, however, point out to those hon. Members representing the trade who have pressed that view that the responsibility lies with them and not with me. I hope there will not be any inconvenience. We will do our very best to minimise it. The Committee stage will not, therefore, be taken to-morrow, but as early as possible after the Recess. We cannot take it on Wednesday because it is a Supply day, and on Thursday there is the Motion for the Adjournment. I must thank the House for the indulgence they have shown in their criticism of a very difficult Bill, and I hope when we do get to the Committee stage we may find some means of alleviating any difficulties. I can only assure the House that the spirit in which we shall approach it will be to do the least injury possible.
I am very much obliged to the hon. Gentleman for consenting to postpone the Committee stage. I hope, however, that the Government Amendments will be put down to-morrow, because this is now to a very large extent a new Bill.
We will put them down to-morrow.
10.0 P.M.
The hon. Gentleman has consented to include clubs. We did not get up and protest at the time because I understood he was going to refer the matter to the Committee. I hope that that Amendment will be left in such a position that we shall know exactly where we are. With regard to the question of price there must be a tremendous increase. Prohibition of the import of hops will send up the price of hops, and we know certain people who will be pleased at that. That is another great feature of this Bill. Then you have the brewers who have to supply their people under contract, and you now propose to add clubs, which are very large consumers. I believe it has been stated that there are 2,000 clubs and 2,000,000 members. They are very large consumers of spirits as well, and this question will make a tremendous difference to the Bill. How is the question of price to be dealt with between the clubs and the breweries? Those are all points which require most careful consideration, because the brewer is bound to supply any club which he has been supplying before as well as the tied houses. The Member for Spen Valley did not say anything about temperance, but the hon. Member for Durham threw off the mask entirely and gave his real reason for supporting this Bill, and that was not reassuring.
I ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Question put, and agreed to.
Bill read a second time, and committed to a Committee of the Whole House.—[ Mr. Rea. ]
COURTS (EMERGENCY POWERS—AMENDMENT, No. 2) BILL.
Order for Second Reading, read.
Motion made, and Question proposed, "That the Bill be now read a second time."
The object of this Bill is to deal with certain difficulties which have arisen in working the Courts Emergency Powers Act, and this Amendment Bill only raises four points. The first is this: The existing Act deals with mortgages, and provides that they shall not be foreclosed except with the leave of the Court. It has been established that although mortgagees cannot foreclose they can take preparatory proceedings for foreclosure, take all the accounts, and incur great expense, and that imposes great hardship upon the mortgagor, and is of no use to the mortgagee. We propose that foreclosing shall include taking proceedings for foreclosure. The second point deals with the exemption of mortgagees in possession. That exemption was generally thought to apply only to a mortgagee in possession of land, and on that footing an arrangement was made with the Stock Exchange; but it has since been held to include mortgagees of stock. We must keep faith with the Stock Exchange, and we propose here to limit the exemption to mortgagees of land. With regard to the third point, the House will remember that under the Increase of Rent Act recently passed there is a provision that no premium shall be paid upon the granting of a lease. That has been found to work very unsatisfactorily. In a recent case where the owner of small houses had sold to the sitting tenants a long lease of the houses at a low rent and at a premium, very much to the advantage of the tenants themselves, it was decided by the Court that that was prevented by the existing Statute. Therefore we propose in cases where the Court is satisfied that that kind of arrangement is for the benefit of the tenant the Court may pass such a grant of a lease at a premium.
The fourth point is that the Treasury are very unwilling to see so much money spent in building at the present time. The result is that in some cases a man cannot prevent the acquisition of rights for light by his neighbour. That is rather hard for the man who, in the public interest, refrains from building. Therefore we propose to enact that the Court may extend the period of twenty years for the abolition of light for a period to be fixed under this Act, so that a man may refrain from building without finding himself subject to an action for right of light. Those are the four points of pressing importance. They are all practical points which have arisen in practice, and have to be dealt with in some way. I shall be glad to deal with other points in Committee, and I hope the House will give a Second Reading to this Bill.
Would it be possible to introduce into this amending Bill a provision applying to loans to public bodies the same principle as this Bill establishes with reference to private loans? The Solicitor-General will realise that it would be extremely inconvenient for public bodies to have loans called in or interest increased during the War. I am aware that a good many of the loans to public bodies are Government loans, and therefore the difficulty would not occur, but there are a good many private loans, and it would be extremely inconvenient for public bodies, consequent on the War and on the appeal which is very generally and properly made to public bodies to avoid expense to pay off these loans, and to renew them outside would mean a very considerable increase of interest. I would ask the Government to consider the point. It would be extremely undesirable that public bodies should be embarrassed by the calling in of money. We know, as a result of the pressure of the War and financial pressure, that there is already a curtailment on expenditure of roads and in sanitary matters. It would be unfortunate if in their endeavour to maintain a fair amount of efficiency, and to do so with economy, they were to be embarrassed by the calling in of the loans. I would ask the Solicitor-General to consider whether it would be possible in Committee to have a proviso or Clause extending the application of this amending Bill to loans advanced to public bodies.
I want to express satisfaction with the provisions of this Bill, and particularly with that extending to the winding up of companies the principle—an exceedingly necessary principle—which has previously existed in regard to individuals and to which nobody is likely to raise any objection or with which they are likely to express any dissatisfaction. I am concerned, however, with the memorandum explaining the objects and reasons of the Bill, placed in front of the Bill, a practice which obtains in legislative bodies elsewhere, but which is too often neglected by the legislative drafts of this body, which is commonly called "The Mother of Parliaments." I sincerely hope that the practice will become more general. Members who may have an interest in a Bill may not even recognise it in the mere drafting, but, if this practice were followed, they would be able to see exactly what was the necessity for the Bill before the House and what the Bill proposed to effect.
I know the right hon. Gentleman introduced a Bill before dealing with the question of mortgages and that it was abandoned, but I should like to know if the present amending Bill gives a banker power to sell stocks or shares deposited with him by way of security or loan without leave of the Court. This legislation is done entirely by reference, and it is wholly different from the Bill introduced before.
I desire to congratulate the Government on introducing this Bill. My only surprise is that it was not brought in a long time ago. It is very much needed in commercial and financial circles, and I hope that it will receive a Second Reading. The point just raised by my hon. and learned Friend (Mr. Rawlinson), I believe, is perfectly clearly set out in Section 1. As I understand the Bill, it does not give a bank the opportunity or the right to sell securities that have been deposited with them as security without the sanction of the Court. I do not believe that there is any bank in London to-day which is desirous of selling securities under conditions of which the Court would not approve. I welcome this addition to the Act, and I hope sincerely that the Second Reading will be passed without any objection whatever.
I am very glad the House has given the Bill such a friendly reception. There are really only two points to deal with. One was brought forward by the hon. Member for Tavistock (Sir J. Spear), who asked that the Bill should be made to apply to loans by private persons to public bodies. I think it very unlikely that public bodies would desire to postpone payment of loans, but if the hon. Member will examine the existing Act he will find that it covers cases of that kind. It prevents the execution of judgments and the realisation of securities without the leave of the Court. If those public bodies which he has in mind have any doubt they can, if they so desire, make any suggestion in Committee. With regard to the point raised by my hon. and learned Friend (Mr. Rawlinson), it is true that a Bill was introduced last year to deal with it. Some kind of arrangement was arrived at between the Stock Exchange and the bankers of the City of London, but I had indication from many quarters of the House that they were not satisfied with a Bill limited in accordance with that arrangement, and it was thought inadvisable to proceed with the Bill. But the Stock Exchange are satisfied with this Bill as it stands. I have had communications from bankers in the City, and with possibly some small change in Committee their views will be met.
Have they the power to sell without the leave of Court?
They have power to sell without leave of the Court so far as they are mortgagees in possession. I quite agree that the exemption of mortgagees in possession does give bankers very considerable powers of dealing with their securities, and that must be remedied by limitations in the Bill to which they will not, I imagine, object.
Question put, and agreed to.
Bill read a second time, and committed to a Committee of the Whole House for To-morrow.—[ Mr. Rea. ]
RELIGIOUS ORDERS RELIEF BILL.
Order for Second Reading read, and discharged; Bill withdrawn.
The remaining Orders were read, and postponed.
Whereupon Mr. SPEAKER, pursuant to the Order of the House of the 22nd February, proposed the Question, "That this House do now adjourn."
Question put, and agreed to.
Adjourned accordingly at Twenty-three minutes after Ten o'clock.