I desire to raise a preliminary point of Order. I understand a Bill that is likely to create a public charge must always be accompanied by a financial Resolution. I will direct your attention particularly to Clause 2, Sub-section (5). It was admitted, I understand, by the President of the Board of Trade that he was not quite able to estimate the amount of expense which was likely to be entailed upon the public Exchequer by this Bill, but that it was possible that it might create a public charge over and above the revenue obtained from the issue of licences. I think he said there was a risk of a public charge, but he was prepared to take it. Further, since the Bill was introduced provision for the setting up of another committee has been inserted which is likely to create a still further expense. The point I wish to raise is, should not this Bill be accompanied by a Financial Resolution, and is it not improper and incompetent for us to proceed with it until we have had a Financial Resolution which will provide for the additional charge which is likely to be put upon the public exchequer.

May I on this point read the words used in Committee by the President of the Board of Trade? He said:

" We have endeavoured to arrive at some sort of estimate as to what the expenses of working this Act would be. I am informed that they cannot be expected under any circumstances whatsoever to exceed £5,000. The question as to what amount of fee ought to be charged upon the licence in order to meet these expenses is one which it is impossible to answer, and the fee which we have put down here is a mere matter of guess—I tell the Committee that quite candidly. Nobody can say how many applications for licences may be made nor how many will be granted. If, for example, there should be an arrangement by which bodies arrange together to bring in large quantities at a time, it is obvious that only one licence would be required for the whole, and therefore the £5 fee would cover a very large quantity. If that course were followed to any wide extent, it is plain that there might be very small revenue from this altogether. Should that turn out to be so, then the amount of expenses in operating this Act will fall upon the Estimates of the Board of Trade."—[OFFICIAL REPORT, Standing Committee, 15th December, 1920. col. 236.]

Those were the right hon. Gentleman's words in dealing with this Bill as it was presented. Since the Bill was presented another Committee has been added which means increasing the administrative expenses. In dealing with the recent Bill setting up the Department of Mines a Financial Resolution was introduced. Here we have another department, the Department of Dyes being set up, and it appears to me that the same course should be followed.

If there be anything in this contention, could not the point be met by some variation of the fee which now stands at £5.

I have consulted with the Chairman of Ways and Means about the question of administration fees, and we came to the conclusion that, wherever a fee not exceeding £5 is charged, we could not consider that that was a charge upon the subject. We also came to the decision, which I think is sound, that fees which are charged for administrative purposes solely cannot be considered as charges upon the subject. If the Bill proposed to do anything else, it would be necessary to have a Financial Resolution, but on the face of this Bill, there is no provision of that sort. I do not know, and I do not care, what the Minister said in Committee. It does not seem to me to matter—for this purpose. What I am concerned with is what the Bill says, and what the Act will say when it is passed. If any expense be incurred beyond what is entitled to be incurred, there is the Controller and Auditor-General, who will at once surcharge the Department, and it would be brought before the Public Accounts Committee. That is the way to deal with it.

If it is quite evident that the amount obtained in licences cannot cover the expenses of the department, are we not entitled to ask that they should proceed in the ordinary way by putting down a Financial Resolution?

How can we say that the amount will not be sufficient to cover expenses? Until the Act has been at work, it is impossible to say. Supposing that there were only one or two applications, and the sum of £10 obtained was not sufficient, it would then become the duty of the Department to come to this House, and ask for moneys sufficient to carry on the work which they had to carry on. They could not do it under this Act.

NEW CLAUSE.— (Prohibition to cease under certain conditions.)

The prohibition of the import of any specified class or description of goods under this Act may be terminated by order of the Board when it has been proved to the satisfaction of the Board that goods of such specified class or description manufactured in the United Kingdom are being sold by the manufacturers thereof for exportation at a price lower than the market price of similar goods in the United Kingdom at the time of such sale.— [ Major Barnes. ]

Brought up, and read the First time.

I beg to move, " That the Clause be read a Second time."

This Amendment was brought up in Committee, and we have modified it in order to meet the criticism brought against it by the President of the Board of Trade, and I hope that in its present form he will be able to accept it. As originally proposed, the Amendment imposed duties upon the Board of Trade, but the Amendment in its present form simply asks that the President of the Board of Trade should accept powers for dealing with a situation which we think it is possible may arise. There is nothing obligatory in the Amendment. It is merely permissive. It does not say that the Board of Trade shall do anything, but that the Board of Trade may have power to do certain things if circumstances arise in which we think those powers could be usefully employed. The object of the Amendment is to deal with this situation. It may be that in the development of the dye industry a policy may be followed which we understand has been followed to a very large extent by industries developed in other countries. That is, You get a mass production, and in dealing with the sale of your products you put a certain qauntity on the home market, and you send the remainder abroad to be sold at prices below the cost of production. In other words, you sell at a price under which you suffer a loss.

It is perfectly clear that no industry can carry on at a loss. It has to make up that loss from some source or other, and in the ordinary way the loss is made up by charging a higher price in the home market, with the result that the foreign market enjoys a cheap supply at the expense of the home market. When that is developed to a great extent and with the definite object of destroying industry where the goods are dumped, it is generally known as dumping. What we want to guard against is that in the development of the dye industry that that policy is not followed, and that people in this country who use dyes are not to have to pay higher prices for their dyes in order that the export trade of that industry may increase by reason of their being able to send their goods abroad at low prices. This Amendment makes provision for meeting such a situation, and if in the opinion of the President of the Board of Trade the home market is being charged more for the same goods than the foreign market, he can relieve the prohibition on that particular class of goods. I think the Amendment will commend itself to the whole House, and that those hon. Members who support the President of the Board of Trade on this Bill are equaly desirous with us that the dangers that are bound to arise in a policy of the kind I have indicated, where by the prohibition of imports and the elimination of competition you may get an undue charge upon the home consumers, should be dealt with. This Amendment imposes no obligation upon the Board of Trade. It simply gives power to protect the home consumer. If the right hon. Gentleman refuses to accept it, the implication would seem to be that the Government contemplates such a development of the dye industry without migiving, and is not prepared to take steps to protect the consumer from that result. I cannot believe that that is the policy of the Government.

I beg to second the Motion. This Clause should commend itself to the Government. We are establishing under this Bill a dye trade in England which, however much the Government may deny it, is going to lead to high prices, and the consumer is entitled to some protection against these prices. A favourite modus operandi in a matter of this sort is to make the home market pay excessive prices, there being no other market available for the home consumer, and then to make the profit of the trust by increasing largely the amount of goods that are exported. We have had a development of this sort in German trade. The iron and steel trust charged very high prices for the steel used in Germany, and rebates or subsidies were given to various members of the export of steel rails.

I would beg my hon. Friends not to assume that when the Government reject Amendments which they propose, the Government therefore desire the opposite policy to be imposed. A good many of the Amendments are of a class which seek to set up powers that are in the circumstances entirely unnecessary. This is one of them. There are two obvious reasons why the Amendment should be rejected. First, if British dye makers were to take the course, which my hon. Friend has suggested they might take, of selling goods cheaper abroad than at home, there are already ample powers to check that condition of things. The Board of Trade has now, in connection with the British Dyestuffs Corporation, and some other of the leading dye-making concerns of this country to which loans have been granted, the right to state what are reasonable prices at which goods should be sold. If it is found that they are being sold abroad at a less price than at home, they could immediately put in force that right to state to the world at large, and to the British public in particular, what reasonable prices are. But that is not the only power. Under this Bill the Board of Trade will have power to grant or refuse a licence, and if they find that goods are being sold here by the British dye-making industry at higher prices than abroad, there is an obvious remedy open. It is for this Committee, a majority of which is composed of dye users, to recommend the Board of Trade to grant licences with regard to the particular class of commodity, and even if the idea which my hon. Friend wishes to meet were well founded, what is proposed here is a very inadequate way of meeting the situation. Does this Amendment mean that if one manufacturer does this it would be sufficient, or how many manufacturers should do it before the Board of Trade intervene?

The Board of Trade should be satisfied.

Satisfied of what? Does it mean all the manufacturers or some, or would one manufacturer be sufficient? A Clause could scarcely be put down of less use to my hon. Friend's purpose, but in truth the Clause is entirely unnecessary.

I support the Clause My only regret is that it does not go far enough. It merely prohibits the sale of dyes abroad at a less price than in the home market. I would have preferred a Clause that there shall be no prohibition of the import of any kind of which there is an export from this country. I would call attention to the right hon. Gentleman to the fact that this Committee has not the power to refuse a licence or grant it. The right hon. Gentleman refers continually to the powers of the Committee. Under the Bill those powers are not given. All that the Committee can do is to advise the Board of Trade. The power is with the Board of Trade. This Clause asks that the only authority that has the power shall exercise it. What will be the use of putting it in the Clause that the Committee shall do certain things when under the Bill the Committee has no such power? It is against common sense. Is there anything wrong in asking that so long as there is an export-able surplus of dye in this country there shall be no prohibition of the entry of that dye? Is it not equivalent to handing over too much of the interests of the consumer and of the textile trade, for the dye industry is a very small portion of the textile trade. It is said that the majority of the Committee will be dye users, but they will not find their interests quite so compatible with the interests of the general public as I would like them to be. I support the Clause, but would like to emphasise the two points that so long as there is an exportable surplus there ought not to be prohibition, and that it is contrary to fact to say that this Committee has any power to grant or refuse licences.

This particular Clause deals only with dumping in the ordinary meaning of that word. It is a suggestion that we should live up to our own principles, and that if we desire to disallow foreign countries from dumping in the ordinary sense of the word, we should at the same time put every obstacle in the way of our own people dumping goods in foreign countries. I think the President of the Board of Trade was trying to convey to us the idea that he was in sympathy with what is stated in this new Clause. He said he must not be understood, if he opposed the Clause, to be necessarily against the principles which have been followed, but he added that the Clause is entirely unnecessary. He gave two reasons for that, but relied mainly on one, which was that the Board of Trade, by reason of the Government being shareholders in the British Dye-stuffs Corporation, would have the right to amend anything of the nature which is suggested in this Amendment.

Not because we are shareholders, although that, of course, will give us a large say, but by reason of the Articles of Association, which give us an opportunity to say what a reasonable price is.

I do not mean to misstate the case. As a matter of fact, I intend to deal with the Articles of Association of the British Dyestuffs Corporation, Limited. This is the Article: man gave as a reason for rejecting the Clause that there was a majority of the dye consumers upon the Licensing Committee, and that that majority would always see that the licences were given only to those who were making a reasonable profit here. It appears to me that he has erroneously stated that the dye consumers have a majority on the Committee. There are to be five representatives of the dye consumers, three representatives of the dye makers, and three neutral Members, so that if the three neutral Members and the three dye makers voted together they would be in a majority against the five representatives of the consumers. There again the same argument will come in with reference to the Article of Association I have read.

One can well imagine that the dye-maker would point out to the Committee that he was making a profit of only £2 on the sale of his dyes in this country, and that the underselling of his dyes to Germany was not so much an attempt to carry out a policy of reprisals as an endeavour to increase trade. An appeal would thus be made to the patriotic feelings of members of the Licencing Committee, and no doubt the dye manufacturer would be allowed to continue his practice. Therefore, the safeguards suggested by the President of the Board of Trade are not sufficient. If we are honest in our endeavour to stop dumping by foreign countries, we must be equally honest in our desire to prevent our people from dumping in foreign countries.

This Clause and one or two other Clauses are put down in entire ignorance of the present world position of the industry. It is suggested that we might be able to dump dyes into Germany. Before the War the plant in Germany was sufficient to supply the whole of the world's requirements of dyes. To-day, not only ourselves, but America, Belgium and France, are busily engaged in putting up dye plant, and there is no doubt whatever that within the next few years there will be a great deal more dye plant generally than is required. The next point was that an enormous stock of dyes was held in this country. I have had an opportunity of consulting the people who know best, and it is unanimously put at from six to nine month's supply. There is, first, no chance of dumping, except in the neutral market, and, secondly, the dye industry is confronted with- the enormous difficulty of falling consumption and heavy stocks. If there is a chance in the neutral market of getting rid of the stock not now required in this country, surely it is, financially, of sound policy. To put in the Bill a Clause which will handicap the business of the dye-producing companies which for the next six months have to meet enormous difficulties, may be very good in the way of political propaganda, but it is commercial folly.

It seems to me that if there be a possibility of selling these commodities in this way, you are giving a preference to the foreigner. You produce articles here, but do not forget you often export to countries which are dyers and producers of those articles. If under this prohibition, as is probable, there are very stiff prices for dye stuffs in this country, and if it is permissible to send them abroad and sell them at lower prices you are handicapping trade and employment in this country. I confess as the Amendment reads I realise that the right hon. Gentleman could not accept it, because there is the loophole that a merchant might buy a case of a particular colour, send it abroad, sell at a lower price, and prohibition would have to cease. I am glad to know that the President realises that the circumstances dealt with in the Amendment are relevant in this matter.

I regard it as very satisfactory that the right hon. Gentleman has not accepted this Amendment, but in one respect I think the right hon. Gentleman's answer was not wholly satisfactory. He appeared to me to accept the idea of the hon. Member that the process he anticipates was in itself an objectionable one, and he was satisfied to point out that he had sufficient powers to deal with it.

I made no pronouncement at all on the principle.

The right hon. Gentleman did not express the opinion that it was unobjectionable.

I am not expressing an opinion either way.

1.0 P.M.

I wish to express my opinion. I think the process anticipated by the Mover of the Amendment is entirely unobjectionable. The hon. Member was inconsistent. He said towards the end of his speech that the object of the Amendment was to relieve the home consumer. Earlier in his speech he said that the danger which he anticipated was the selling abroad at less than cost price. It is perfectly obvious in that case that the prohibition would have no effect whatever in relieving the home consumer if he was only being charged a reasonable profit on the cost of production. The hon. Member went on to say this was an anti-dumping Amendment, and that we ought to be consistent with our own principles. I have never heard we had any principle in the matter of dumping. It is not a matter of principle, but of policy and expediency. He said that if we objected to people dumping in this country we could not consistently oppose this Amendment. I am against allowing dumping to take place here, not because it is immoral or economically unsound, but because it inflicts injury on our own trade. It is perfectly consistent, and, in fact, consistency requires that, while we object to other people dumping in this country, we should do our best to dump in other countries. As to there being any danger of giving a preference in that way to the foreigner, I cannot imagine how anybody can take that view, because the foreigner is very well able to take care of himself. If any of our goods, are sold in any large quantity abroad at less than cost; or, in other words, dumping, you may be certain that foreigners will take care to prevent that either by prohibition or a stiff tariff, which is their ordinary method of preventing dumping. What objection has the hon. Member to the sale of these goods at less than cost price? Obviously, if you want to build up trade, and the object of this legislation is to build up the dye-making industry, you want to get as much business as you can. In order to do that you want to build up, not merely home, but export trade. The experience of foreign countries, from which we have ourselves suffered, goes to show that there is no such effective method of building up foreign trade as if you can sell large quantities at less than cost price without thereby destroying the total profits of the total production. The effect of that is to build up a large foreign export trade, which in itself is a very desirable thing. If hon. Gentlemen come along and say, " We have no desire to build up the dye-making trade in this country," that is an intelligible proposition, and those who oppose this Bill root and branch must, I imagine, take that attitude. (HON. MEMBERS: " No, No."] They do not want to do it by any system of protection or any system of Government assistance. They do not want to help it by legislation. [HON. MEMBERS: "Yes."] Those who are anxious that this industry should grow and prosper and should be perfectly independent of the German dye industry, on which we were so dependent, cannot, I think, consistently object if it can be done consistently with the interests of the industry, by selling the products of that industry abroad at less than cost price. Not being so cautious or reticent as the President of the Board of Trade, I have no hesitation in saying that this Amendment should be rejected not merely on the ground that the Government have ample power without it, but also that the process in itself, so far from being objectionable, is one to be encouraged.

The amenities between my right hon. Friend the President of the Board of Trade and my hon. Friend (Mr. McNeill), are certainly not devoid of interest. As I understood the speech of the Minister in charge, he was in favour of the principle which lay beneath the proposal, although he did not like the form in which it was passed, and in any event he thought it was unnecessary.

My right hon. Friend must not try to commit me to what I do not accept. What I said was that I must be assumed as believing the opposite of the Amendment because I rejected the Amendment. I was very careful in what I said.

Coming from the North as I do, I quite appreciate my right hon. Friend's caution,' but what is our position? It is that the whole of our trade shall not be penalised by this great undertaking endeavouring to secure foreign trade at the home trade expense, and I challenge my right hon. Friend to dissent from that. My hon. Friend below the Gangway rejoices in it.

No

Yes. He says, " Let us go into the world and get a big trade there, no matter what it costs the home consumer, so long as you build up your dye-making monopoly."

My right hon. Friend has no right to misrepresent me. I never suggested, and I do not hold, the view that it shall be done at the expense of the home industry.

We say you cannot possibly do it without, and in these circumstances I shall certainly vote for the Amendment.

As a free trader, I am very glad that this Amendment has been moved. It illustrates in a perfect manner the complete hollowness of the agitation which is being conducted on the Benches opposite against those of us who support the Bill. They pretend to be Free Traders, and this is a pretended Free Trade Amendment, but their attitude is wholly factious and is demonstrably bogus in two respects, because their own leader, the right hon. Member for Paisley (Mr. Asquith), on the Second Reading of this Bill, speaking in this House, refused to adopt their attitude and told the House that the principle of Free Trade was not challenged in the Bill. But not only out of the mouth of their leader are they convicted of a bogus agitation, but out of their own mouths in this Amendment, for what is it that the Amendment professes to do? It may be paraphrased in this way—that if dyes are sold cheaper abroad than they are sold at home, then the Board of Trade shall have power to exercise the powers which it already has under the Bill. That is literally and absolutely the effect of the Amendment. It is purely permissive, and it merely permits the Board of Trade to do the things which it is already permitted to do. There is no end to this kind of thing. One might go through all the different reasons whereby the Board of Trade might be actuated to exercise its powers, and one might adopt a separate Amendment in favour of each of them.

It might be proposed that the Board of Trade might exercise its powers if we were unable to manufacture the dyes in this country which were manufactured in Germany, or if it were proved that the dyes manufactured here were not fast, or if it were proved that the dyes could only be manufactured here at a price which would handicap our dyers in this country in markets abroad. It might specify all the infinite reasons whereby conceivably these powers might be exercised, but it does not add a single thing to the meaning of the Bill. It is purely obstructive, and the whole thing is done with the tongue in the cheek. They disgrace the name of Free Traders. This bogus agitation in the name of Free Trade is doing the greatest harm to Free Trade and Free Trade principles. If you persuade the people of this country by means of this kind of conduct and agitation that Free Trade is not a real, sound, economic doctrine and principle, but that it is merely a stick to beat the Government with, not on economic principles but as a mere twopenny-halfpenny " stunt," you will have done the very greatest wrong and injury to Free Trade in this country. Therefore I say, as a Free Trader and as a follower in this matter of the right hon. Member for Paisley, who has been attacked as much as anybody else by this kind of agitation, I welcome the putting down of this Amendment at the very first stage, because it is an illustration to the House and to the country of the lack of bona fides of the Opposition in this matter.

The hon. Member who has just sat down has told us that he is a Free Trader, and he seems to have his own special way of understanding the Free Trade doctrine. He has also declared himself to be a follower of the right hon. Member for Paisley, but if he had said he used to be a follower of the right hon. Member for Paisley, one could have agreed with him. He has also said that this Amendment does not add anything to what is in the Bill, but I venture to think that that is an entire mistake, because it does add a very definite warning to the manufacturers that exporting abroad at a price lower than they are selling at home will be considered a reason for stopping their monopoly. That is a very important addition to the Bill, and is one the importance of which has been shown by the discussion which we have had to-day. It is vital that we should know whether the dyestuff manufacturers in this country are to be encouraged to export goods at a lower price than they are selling them in this country. The Minister in charge of the Bill has declined to commit himself on that point. He will not tell us whether he considers it to be good or evil, but we very much suspect that this Government, or possibly some future Government, when once this system is established, will then declare their hand, and let the country know that they do not consider exportation below the home price to be a reason for abolishing the monopoly. We have had to-day a fine illustration of the pressure that can be put upon Ministers in this way. The Minister certainly began by telling us that such exportation would be a reason which his Department would take into account as a ground for allowing import.

It is simply a matter for consideration in each case.

I think all who heard the right hon. Gentleman understood that it would be a sufficient reason for allowing dyes to be imported, but when two, at any rate, of his followers talked of exporting these dyes below the home price—one hon. Gentleman, the hon. Member for Limehouse (Sir W. Pearce), said in certain circumstances it might be a good commercial proceeding, and the other hon. Gentleman, the hon. Member for Canterbury (Mr. R. McNeill), said it was the very essence of building up a foreign trade—the Minister modified, or, at any rate, qualified his statement, and told us that, although it would be taken into account, it might not be a sufficient reason. I think the whole history of British trade proves that we depend on getting things in this country cheaply for the use of our people and our manufacturers, and any slight temporary injury which is done to the manufacture of any particular article by the import from abroad of the article at a cheaper price is repaid to us hundreds of times over by the stimulus which it gives to every other kind of trade. When I was in trade I was interested in the making of crude iron. It would have been very profitable to myself and others interested in the trade if the Government had put on protection to keep out foreign competition. It was a serious thing for us whenever foreigners sent iron into this country at prices lower than we could make it in this country. It did not happen often, but it did sometimes happen, and it was of immense import- ance to all other trades in this country to get crude iron at a cheap price. It might give a check to pig-iron makers, but they had to put their brains into the business to compete, and meanwhile the consumers of iron and steel in every form were benefited. Our export trade was benefited, and employment and trade in this country were increased far out of proportion to any loss that might be in flicted by a temporary injury to pig-iron making, in which I myself was interested. What is true of that trade is true of other trades equally, and if it were not for the question of a possible future war, I do not think any of us would consider the proposition of protecting this dye industry. But it is evident we may have another war upon us, and therefore we may be dependent again upon our home supplies of these dyes, and the hon. Member for Canterbury was entirely wrong when he said that we on these Benches were against any form of Government assistance to the dye trade. We recognise that, in view of a future war, it is necessary to give Government assistance in some form, but we say that to give it in the form of a monopoly or protection is the very worst form in which it can be done.

What do you suggest?

If I were in order in discussing that, I should suggest

Government expenditure on technical colleges and classes and processes, as the Germans did to build up the dye industry, and multiply skilled chemists all over the country by giving ample Government teaching and encouragement. That is one, and perhaps the chief, way in which it could be done, but giving a monopoly to dye-users in this country is simply encouraging them to go asleep behind the wall of Protection. And if, at the same time, you are going to reject a Clause like this new Clause, and say you will not give warning now that selling abroad below the home price is an injury to the country, but, on the contrary, a number of people get up and say, " I am a Free Trader, but I see no harm in this," or, "I am a Tariff Reformer, and I think it is the most splendid thing to sell abroad cheaper than you sell at home"—if you are going to do that, then I think you are going to do a very serious damage to the country, and introduce your help to this trade in a way which may be disastrous to the other trades of the country.

rose in his place, and claimed to move, " That the Question be now put."

Question put, " That the Question be now put."

The House divided: Ayes, 149; Noes, 31.

Question put accordingly, " That the Clause be read a Second time."

The House divided: Ayes, 31; Noes, 158.

The next new Clause on the Paper ( Necessity for obtaining licence to cease under certain conditions ) raises a similar question to that which has just been disposed of. The next new Clause ( Method of fixing prices of dyestuffs ) is beyond the scope of the Bill.

NEW CLAUSE.— (Limitation of dividends and profits distributed.)

No manufacturer of synthetic organic dye-stuffs shall pay a dividend or distribute profits amounting to more than eight per cent. upon the amount in the case of a company of the total share capital paid up, or unless the Board of Trade otherwise determine on that issue as fully-paid capital, or on the effective capital calculated in the same manner as for the purposes of the excess profits duty whichever is the greater, and in the case of a firm or private manufacturer upon the effective capital as described aforesaid as long as the importation of any synthetic organic dyestuff manufactured by such company is prohibited.— [ Major M. Wood. ]

Brought up, and read the First time.

I beg to move, " That the Clause be read a Second time."

This Amnedment raises a question of the greatest importance which, I think, ought to be stated, because it is continually being repeated that on this side we object to state a system for the dye-making industry. What we are objecting to is the method adopted by this Bill, but as it has been adopted all we can do now is to do our best to press for Amendments and safeguards being inserted in the Bill. The hon. Member for the Bridgeton Division of Glasgow (Mr. MacCallum Scott) said the right hon. Gentleman the Member for Paisley (Mr. Asquith) supported this Bill. I remember that the right hon. Gentleman the Member for Paisley, on the Second Reading, particularly said that there would have to be imported a number of safeguards in the system which was being set up. We are now directing our attention to the setting up of those safeguards, and I hope we shall not have it thrown in our teeth again that because we do try to introduce safeguards we are out to kill the Bill.

What we are proposing is not inconsistent with the policy of the Bill. This Amendment will not kill this measure, nor would the one that has just been rejected. This proposal has been put down, in the first place, as a result of a pledge which was given by the Prime Minister in dealing with this matter. This measure has been introduced, we are told, to redeme a pledge given to the dye-making industry. We say that another pledge was given to this industry on the same occasion, and it was a pledge to the general public, and that also should be carried out. I will read a few of the words which were used by the Prime Minister in August last year. Dealing with the whole question of dyes, the right hon. Gentleman said: setting up of the Dyestuffs Corporation, cannot be said to redeem this particular pledge. Under this scheme no care is taken that undue profits shall not be made at the expense of the community, and no care is taken that the Dyestuffs Corporation shall carry out the particular object for which it was set up, that is to say the development of the dye-making industry. It was said that we did not wish to help the dye-making industry, but let the Government themselves take this question in hand. They were responsible for the seting up of a company called British Dyes. That company could never have been set up without State assistance, and we say that the constitution of that particular company, and the whole scheme underlying it was a proper scheme which would have caried out the end we have in view.

As a result of persistent efforts of the Board of Trade that particular company was killed, and there has been set up in its place another corporation, on a purely commercial basis, and that being so it can never possibly achieve the objects which it had in view when it was set up. To develop this industry requires a sustained effort of research over a long period, and if any company is set that task, and at the same time is expected to find large dividends for its shareholders, it is bound to fail in its task from the very first, and it can never possibly succeed. We say that British Dyes had a good constitution. It would not have produced large dividends probably for some years, but it would have tackled the question we wanted it to tackle, and it has been killed by the action of the Government, and it will further be prevented from doing any good by this particular Bill.

You had two great organisations in the country making dyes, namely, the British Dyes and Levinsteins. The latter has all along been a purely commercial company, and I wish to direct the attention of the House to what happened between Levinsteins and the Government in regard to the plant of synthetic indigo dyes. That plant was acquired from the Government by Levinsteins. I believe -the British Dyes were not even allowed to tender, and immediately it was acquired by Levinsteins, what did they do? It was acquired in the belief that it would be used for the benefit of this country and for that purpose alone. The processes of manufacture would be a secret used for our particular benefit. The whole plant and the processes were bought for something like £75,000. Immediately afterwards they were sold by Levinsteins to an American company for £250,000. That is an example of the commercial instincts that we are up against in dealing with Levinsteins, and that is the sort of company that we are expecting under the Government's scheme to develop the dye industry and go in for reseach, setting aside for the moment dividends, as they are bound to do if they are going to achieve anything in this matter.

When the amalgamation took place we had a tremendous inflation of capital. Levinsteins' nominal capital was £9,000, and for some considerable time before the War they had paid no dividends on their ordinary shares and they were in arrears with their dividends on their preference shares. When the amalgamation took place the value of their assets was put in the prospectus at about £900,000. Surely, that is one of the greatest instances of profiteering that we can find. No one can suggest that the assets of the company were properly valued at that amount. I do not say that they were not more than £90,000, because they had had a good run of the War. For some reason which I cannot fathom, Levinsteins were allowed to work for some considerable time without being subject to the Munitions Levy, whereas their competitors, the British Dyes, were not exempted." It was said, and it is still said, in favour of the forcing on of that amalgamation, that British Dyes could not do so well as Levinsteins. Naturally, they could not when one was subjected to the Munitions Levy and the other was not. I should like to know why it is that differentiation was made between the two companies. As a result of this great inflation of capital, profits amounting to £700,000 are required in order to pay the dividends and interest held out by the prospectus of the British Dyestuffs Corporation. Is it expected that they can really earn these dividends and at the same time go in for research and produce new dyes? I suggest that it is quite impossible.

May I ask my hon. and gallant Friend to explain what is to be done with the surplus profits, after 10 per cent. has been paid?

It is 8 per cent.

What is to be done with the surplus, after 8 per cent.?

If you limit the dividends in the way that I have suggested there will be a fund for development. You cannot develop this industry unless you go in for a long period of research, and, if you allow this company to pay dividends unrestricted in amount, they will go on doing so. Their instinct is commercial from first to last, and they will go in for the cheaper dyes which are more easily made. If you impose a limitation of that kind, then you will get a fund for research work. Unless you make some provision of that kind nothing will ever be done. All along, for some reason which I cannot fathom, and I have given some attention to this question, there seems to have been hostility on the part of the Board of Trade to British Dyes, Limited. They have pressed on the amalgamation, and at last they have succeeded, with the result that they have commercialised that which was going to be a real and great experiment to capture the German dye trade. We all know that the German dye trade has not been set up by protective tariffs or unfair methods of that kind. They have done it in a fair way. They realised what was to be got out of this particular industry, and they set themselves to get it. They entered upon a long period of research, and they have secured their reward. That is the only way that we too can get our reward. You will never get it by the method which has been adopted by the Government, and that is why I suggest it is necessary to put a limitation on the dividend. The Amendment opens up a very wide field, and there is a great deal more than one could say, but I do ask the right hon. Gentleman to say something by way of defence of the methods which have been adopted by the Board of Trade in connection with this matter. I realise that the present President of the Board is not personally responsible. All this took place before he was there, but his Department is responsible, and they have a great deal to answer for in this matter. I hope, if he is not prepared to adopt the wording of my Amendment, that he will be able to give us an assurance that his Department will be able to control this great Dyestuffs Corporation which is being set up with Government backing and that he will be able to compel them to find these new dyes and to develop them in a scientific way so as to set up the dye-making industry in this country.

I beg to second the Amendment.

2.0 P.M.

This Amendment, it seems to me, is the acid test of the sincerity of the Government and those who support them in this Bill. We have been told in the House, in the Press, and on the platform that the motive inspiring this Bill is patriotic and is not commercial at all, and it is incumbent upon the Government, in order to prove to the House and the country that such is the case, to accept, at any rate, the principle of this Amendment. If this industry is to be protected, let it be protected for a patriotic purpose. Do not let this Bill be a shield to provide a sordid scramble for dividends. Let patriotism be the real power in this Bill and not a scramble for the almightly dividend. I feel quite certain, from what we know of licensing work during the War and the opportunity then given for profiteers to build up vast fortunes in quick time, that the same sinister consequences will arise from this Bill, if it becomes an Act of Parliament, which I hope it will not, unless some Amendment of this sort be adopted. I am quite sure that my right hon. Friend would like to accept an Amendment of this sort if it were not for reactionaries such as my hon. Friend the Member for Bridgeton (Mr. M. Scott). When the Government do not like to use reactionary words themselves, they get my hon. Friend to do so, and he abuses his former colleagues in speeches modelled on best traditions of Limehouse. I am not anxious to destroy the Bill, but it is one that requires very great consideration. It introduces new principles into industry and commerce, and on the Report stage we require at least 14 days. This Amendment is the acid test of the sincerity of the Government. Are they out for securing this industry for the country in connection with the defence of the country, or are they out for giving an opportunity for profiteers to make vast profits? The commercial and industrial undertakings of this country are still, like the Government, obsessed by the War mind. They have been demoralised by the profits made during and since the War. They are not contented with the modest profits made before the War, and unless an Amendment of this kind is inserted into this Bill their predatory instincts will find expression when the Act is in full operation, and the Board of Trade will not, without some power of this sort, be able to control them. I have therefore much pleasure in seconding this Amendment. We were told the other day that Arabs will not work. I venture to think that if the dye industry is to be protected in this way, those engaged in it will not work to promote the welfare either of the industry or of the country. They will not go in for research, but they will simply, like the Arabs, pick the dates from off the tree. In fact, in my opinion, this Bill is going to kill research in this country. It will no nothing to promote the dye industry, but it will simply enable this Corporation, having secured unlimited profits, to rest upon its oars and be thankful for the dividends that are dropped into its mouth. I have a lot more to say, but I want to give my hon. Friend the Member for the Bridgeton Division of Glasgow an opportunity of speaking. He seems to suggest that we are out for obstruction. I like to see my hon. Friend getting angry in this matter, because it shows that, after all, a Scotsman cannot divest himself entirely of his conscience. It is the working of my hon. Friend's conscience that makes him shout loud enough to blow the roof off.

I have listened with as close attention as I could command to the speeches made by the Mover and the Seconder of the new Clause, and I confess I am still in a state of doubt and confusion as to what the precise argument is upon which their proposal is supported. The hon. Member who moved the Clause started by giving a historical account of the British Dyestuffs Corporation from the time when Levinsteins and British Dyes, Ltd., were started until untimately they were merged into the British Dyestuffs Corporation. He has a quite erroneous notion in his mind which I should like to clear away as to the attitude of the Board of Trade with regard to that particular operation. He stated, upon what information I do not know, that the Board of Trade has always shown itself hostile to British Dyes, Ltd., and it was because of their action that British Dyes, Ltd., was subsequently merged in the British Dyestuffs Corporation. Nothing really could be further from the fact. It was the colour users of this country who urged on the Board of Trade the necessity of amalgamating Levinsteins with British Dyes, Ltd. They pointed out that they were not being properly served, and that nothing could be done until the chief dye-makers in the country had their operations co-ordinated.

Did not the Board of Trade ask them to pass a Resolution to" that effect?

The resolution was passed by the Colour Users' Association entirely upon their own initiative My hon. and gallant Friend shakes his head. If he has any evidence whatsoever to support the assertion he has made, I shall be very glad to hear it. The contrary is the fact, and the colour-users of this country went so far as to approve in the most definite language of the amalgamation of Messrs. Levinstein, Limited, with British Dyes, Limited, for the purpose of serving the interests of the colour-users.

And to get higher dividends.

My hon. and gallant Friend has dividends on the brain.

But not in my pocket.

He would be better employed in getting them into his pocket than in thinking so much about them. He must admit that the colour-users were the people who were chiefly instrumental in bringing about this amalgamation, because they thought that they were not properly served; and they passed this resolution without any interference from anyone, urging upon their own members the necessity of supporting the proposed amalgamation of these two firms into the British Dyestuffs Corporation. So much for the part of the Board of Trade in this matter.

Before the right hon. Gentleman leaves that, will he kindly say whether the occasion on which the colour-users pressed the Board of Trade was that of the meeting at Manchester, when Sir Albert Stanley was present?

No; the meeting with Sir Albert Stanley was in 1918. It was much earlier than that, according to my recollection, that the proposal was made that British Dyestuffs, Ltd., and Messrs. Levinstein, Ltd., should be incorporated. In an entirely private circular which was sent round to all the members of their association they said:

" We are convinced that the scheme for the amalgamation of British Dyes, Ltd., and Messrs. Levinstein, Ltd., is a most important and critical step towards freeing this country within a reasonable time from dependence on Germany for synthetic dye-stuffs, and we strongly urge the shareholders to accept it."

That was supported by every leading firm of dye-users in this country. Accordingly, it is idle to start, as my hon. and gallant Friend did, by saying that it all arose out of the hostility of the Board of Trade towards British Dyes, Ltd., and then, when he is faced with the evidence, to say that the colour-users took the attitude they did because of their interest in getting bigger dividends. There was one part of my hon. and gallant Friend's speech which, I confess, I did not understand. He indicated his views that the British Dyestuffs Corporation was much over-capitalised, by reason of the fact that far too large a sum had been paid to Messrs. Levinstein for the property taken over.

And to British Dyes, Limited.

And to British Dyes, Limited; the result being that you had a bigger shareholding than you ought properly to have had. My hon. and gallant Friend added that he could not imagine how the British Dyestuffs Corporation could, in these circumstances, continue to pay the amount which he said would be required to pay dividends at a certain ratio. If that is his attitude, why is he now anxious to restrict the dividend to eight per cent.? His point of view really is that the capital of this corporation is such that they could never hope to pay a respectable dividend.

I said it would be very difficult.

Now we are being asked by my hon. and gallant Friend to legislate in order to meet a situation which, he says, is so very difficult that, looking at the capitalisation of this company, it cannot reasonably hope to pay.

May I explain? My point was that, on account of the difficulty of realising these, so to speak, minimum profits, the corporation will be compelled to go in for the cheaper dyes, and not to go in for scientific research. They will be compelled to take the shortest avenue to getting dividends.

With all courtesy, I think my hon. and gallant Friend's explanation is as obscure as his original argument. His main proposition was that they would never be able, and could not reasonably hope, to' pay a respectable dividend upon a capital that was so much watered, and I think it is not treating the House with very much respect, upon an argument of that kind, to ask us, during a period when we are going to have so much difficulty, to pass legislation which is going to limit the dividend which he never expects to be able to obtain. There is one very good and sound reason why this proposed Clause must be rejected. At the time when the British Dyestuffs Corporation was formed, British Dyes, Limited, had been restricted to the payment of 6 per cent. in respect of the large loan which the Government had made to that company. When the British Dyestuffs Corporation was formed, it was necessary to get a large amount of financial support from the public, as the Government was not prepared to advance any more money at that time. What they really got was something between £4,000,000 and £5,000,000. It was realised that to ask the public for money at that time with a prospect of a limited dividend, in the case of a business which was risky, was not a very hopeful proposition, and, accordingly, in the prospectus there is no suggestion that there would be any limitation of profits. That was in the year 1919. We are now in the year 1920, and I submit with complete confidence to the House that, when there was issued with the acquiescence, knowledge and consent of the Government, a prospectus which asked for money from the public with no suggestion of limitation of profits, it would be nothing short of a gross breach of faith if to-day you sought to impose such a restriction. Further, all public confidence in respect of companies formed for the assistance of our country would be destroyed if we once began to deal in that way with what, after all, are matters of public faith. It is further true that more money will be required in the future for the support of this dye industry, and your chances of getting any from a public which you have once cheated and deceived would be very slight indeed. Upon that ground, if upon no other, this Clause should be rejected.

I should like to deal first with the last point which the President of the Board of Trade has raised. He has spoken of breaking faith with the public, and he held in his hand the prospectus of the British Dyestuffs Corporation, Limited, in which certain statements were made, and, as he said, certain statements were left out. One statement left out was that there would be any limitation of profits, and his argument was that, as there was nothing in the prospectus to say that profits would be limited, and as it was stated in the prospectus that His Majesty's Government were going to do certain things to safeguard the dye industry, it would be breaking faith if the House now imposed a limitation on profits. I should like to remind him that the words in the prospectus are the words of the promoters of the company. They incorporated in it what they considered it to be wise to say concerning the promise of the Government; but this House and the Government itself are only bound by what the members of the Government themselves have said. The Prime Minister has given a pledge on this matter, and his statement was this:

"It is proposed that the Board of Trade shall have power to prohibit the import of these goods [that is, synthetic dyes] except under licence, and, in order to prevent excessive imports, a fee will be charged for the licence. It may even be necessary for some time to continue the assistance given to these industries, but care will be taken that no undue profits shall be made."— [OFFICIAL REPORT, 18th August, 1919, col. 2013; Vol. 119.]

That is with reference to what is steadily going on at present, namely, loans to other dye-making firms, which are made strictly upon the condition that there shall be a restriction of profits.

Why differentiate?

Because the two are totally different things.

I cannot see why small firms—

It is on the condition of taking the loan.

I do not mind what condition it is on. If you are saying, not to companies with a capital of millions, but to small firms, " We will lend you money, but we limit your profits," I can see no reason why the same thing should not be said to this corporation which has nearly £10,000,000 of capital. It really is necessary to get this point quite clear. With the unanimous assent of the Government at the beginning of 1915, a company called British Dyes, Ltd., was formed. It had an authorised capital of £2,000,000, and the Government agreed that for every £l put up as share capital they would lend £l of debentures up to £1,000,000, and then beyond the £1,000,000 they would lend another £1 for every £4 put up by the shareholders. That meant that if the shareholders of the company put up £3,000,000 the Government would put up £1,500,000, but they would put up the first £1,000,000 as against the £1,000,000 subscribed by the shareholders. The Government asked for 4 per cent. on the debentures, but the interest for five years was to be non-cumulative and was to be contingent on profits, and after that it was to be cumulative, but was only to be paid out of net profits. In return for that generous assistance from the Government British Dyes, Ltd., agreed that the dividends to their shareholders should be limited to 6 per cent. so long as that money was outstanding to the Government. Such was the desire of people interested in the dye industry to make this a success that even with that restricted yield at a time when high profits were being earned out of industry, they put up £1,000,000 by way of subscription to the shares of the company. There was obviously something beyond mere dividend seeking, and it was really in the interest of the persons who put the money up in the general dye industry and in their own business that dye users were prepared to put the money up in order to obtain dye making in this country.

The only other firm who were making dyes in this country to any extent was the firm of Levinstein, but Levinstein's before the war had paid no dividend for years, and were considerably in arrear with their Preference dividends, and their Ordinary shares had in August, 1914, probably no market value at all. What happened after British Dyes, Ltd., was promoted with Government support in March, 1915? There was undoubtedly continuous pressure, for some reason or other, exercised through the Board of Trade for the amalgamation of these two companies. I quite agree that evidence can be brought that the colour users eventually—I use that word advisedly— passed a resolution urging the amalgamation of these two businesses; but long before this resolution was passed considerable pressure was put upon the British Dyes Company to amalgamate with Levinstein's, and the opposition to this amalgamation came from the British Dyes Company, and not from Levinstein's. Eventually this amalgamation took place. In 1919 the British Dyestuffs Corporation, Ltd, was formed. Let us look at the two companies separately. British Dyes, Ltd., whose shareholders had put up £1,000,000, and had agreed to a limited dividend of 6 per cent. so long as any of the Government money was outstanding, which probably meant 6 per cent. for a generation, as the result of this amalgamation were given for their shares, amounting to 969574 Ordinary shares, 1,500,000 £1 shares in the British Dye-stuffs Corporation, part of it at 7 per cent. and part given them in Preferred and Ordinary Deferred shares on which there was no limitation of dividend at all. So the British Dyes, Ltd., shareholders, who could not possibly have expected any appreciation of their shares, who had put their money in solely from the point of view of their own businesses outside, and not from the point of view of earning dividends here, were given £500,000 appreciation of capital, or rather one may call it goodwill, when that amalgamation took place. Now let us look at Levinstein, Ltd. Their capital was £60,000, £30,000 in Ordinary shares and £30,000 in Preference shares, and they were given £30,000 of Preference shares in the British Dyestuffs Corporation, Ltd., to pay for their 30,000 Preference shares. But for their £30,000 worth of Ordinary shares, which had not paid a dividend for years before the war, and practically were of no market value, they were paid in shares in this new company to the value of £900,000.

): The hon. Member is making a great many statements about this company, none of which are particularly relevant to the subject we are discussing. If we are to follow this up, I think the statements ought to bear some relation to the facts. He will, perhaps, inform the House, what I am informed is the fact, that when Levinstein's, Limited, and British Dyes, Limited, were amalgamated, the amount allotted in preferred, ordinary, and preference shares was upon an independent valuation of tangible assets in excess of liabilities, and as made by an independent firm of accountants, I understand.

That statement does not in the slightest degree alter what I am going to say.

I am quite sure of that, but on the whole it is as well that it should be stated.

I am only too glad for it to be stated. I was rather afraid I was wearying the House with figures, but apparently I have not given quite as many as the hon. Gentleman desires. But the point I think is obvious from what the Parliamentary Secretary has just said, that this increase in assets, let us call it, over liabilities was the result of war trade, and these people did not expect this inflation of their capital when they put their money in. What is the fact so far as this new company is concerned? The hon. Gentleman is asking the House to limit the dividends to 8 per cent. Levinstein's original capital was £30,000. They actually got in the new company for that £30,000 £900,000 worth of shares. Therefore if they get 8 per cent. on their £900,000 it is in effect getting multiplied many times over the dividends on their original capital in Levinstein's, Limited. What I would have liked my hon. Friend to have done, if it had been possible, would have been to have had a specific Amendment in regard to this particular company, and while possibly giving an un-limited dividend to the public who subscribed on the strength of the prospectus, to limit severely the dividend paid to the old shareholders of Levinstein, Limited, and the old shareholders of British Dyes, Limited, in order to keep within reasonable limits the yield in the case of Levinstein's on the pre-War capital value, and in the case of British Dyes on their original capital value which was subscribed in March, 1915. We are seeing that these capitalisations on war profits and war results are now causing great losses to the people who were unwise enough to buy shares at a high premium on that basis. Undoubtedly the people who went into the British Dyestuffs Corporation, Limited, would, in the ordinary way to-day, if this was an ordinary company, suffer considerable depreciation of capital, but the Government comes along with this Bill, and while people in ordinary trading concerns are losing money by capital depreciation, this particular company is going to be bolstered up by means of legislation. It is being given a monopoly.

No.

That is a matter of opinion.

It is a matter of fact.

I do not want to hurt the feelings of the Parliamentary Secretary. So I will modify my statement to this effect, that the company is being given practically a monopoly, and will, consequently, be able by the exercise of that practical monopoly, to earn profits and maintain its capital position, which the ordinary business of the country cannot do at the present time. The main object of this Bill is to safeguard the dyestuffs industry here. The dye industry can only be safeguarded if it can be built up on a highly scientific basis. The German nation gained a monopoly in the dye industry before the war, not by Government assistance of the dye industry, but by the setting aside of a great deal of capital every year for the purpose of research, for the training of chemists and the development of their science. That is why the Germans were able to bring their dye industry up to a point which no other country can touch. If we are to get on level terms with the Germans and if our dye industry is to succeed, the only way is for us to train chemists, and to give them an opportunity of exercising their brains, in order to bring us up to the standard or even better than that attained by Germany before the War.

They are doing that now.

We say that this company supported by the Government, and almost guaranteed by this House as to its future success, should be compelled to set aside a certain sum every year out of profits for the purpose of research work. There is nothing in the prospectus, and there is nothing in the Bill to prevent the directors of the company distributing every year, every penny of profit and keeping in hand nothing for future years. There is nothing to compel them to devote any money to research work. What we ask in this Amendment is that when 8 per cent. has been earned upon the capital—in the case of Levinstein's shareholders and the British Dyes shareholders, it would really be far more—the rest of the profit should be set aside each year for the purpose of being devoted to research work, so that in due course the dye industry in this country may by the ability of the chemists employed reach the standard which Germany attained before the War.

This Amendment differs considerably from the previous Amendment. It raises a substantial and an important point, and a point in which there is nothing hostile to the principle of the Bill. The right hon. Member for Paisley was not unfriendly to the Bill, and laid great stress upon this point, which he supported with what seemed to me to be very strong and very sound reasons. I have a recollection also that the same principle has been expressed and supported not only by the right hon. Member for Paisley, but by the Prime Minister. One quotation has been made from a declaration of the Prime Minister. I am not sure what document the hon. Member was quoting from, but I have a recollection that in certain other declarations there was a distinct support of this principle. The principle is very simple and reasonable. If owing to any exceptional restrictive and prohibitive action which the State takes certain firms are enabled to make excessive profits, the State should be entitled to share to some degree in those excessive profits which have been earned through its protective action. Reference has been made to the finance of British Dyes, Limited, and of Levinsteins, and the relations between them and the action of the Board of Trade, but it does not seem to me that that is a matter which affects the point.

It is very unpalatable.

I do not understand what is meant by the word "unpalatable" in this case.

It is very unpalatable to be told that a company has had thirty times what it originally paid, and that it cannot even have its profits limited on that.

I repeat that I do not know what is meant by " unpalatable " in this case. There can be nothing in it unpalatable to me in view of the line I have taken.

Notice taken that 40 Members were not present; House counted; and 40 Members being found present —

So far as I can gather, there has been only one direct reply, and it is not hostile to the principle. It might almost be made by people who accept the principle. I am not sure whether my right hon. Friend does not accept it. The reply was really that owing to the unfortunate accident that British Dyes isued a prospectus some time ago on which a considerable amount of capital was raised, and in which no mention was made of such a possibility as this; therefore we are bound not to do it. I do not understand that. The right hon. Gentleman used strong language. He spoke as if doing this would be a breach of faith, and we never could be trusted again. That does not seem to me to be germane to the matter at all. How could the issue of a prospectus make any intimation as to the intentions of Parliament? Take a parallel case: There was a great company—the Anglo-Persian Oil Company—in which the country invested millions before the War. This company issued a prospectus on the faith of which large sums of money were raised from the public and from other companies. There was nothing said in the prospectus about the Excess Profits Duty, and yet, in spite of that, there was no hesitation on the part of the Government, or of this House, in passing the Excess Profits Duty. If this would be a breach of faith, then that was a breach of faith. The only conceivable answer to that would be that the Excess Profits Duty was a duty imposed upon all industries all over the country. As a fact, it was not. It was only imposed on some. This only refers to the particular trade, but it is just as universal in its way as the other. It applies to the whole trade—to all who benefit by this prohibition—and it is suggested that because one company issued a prospectus we are bound in our action with all other companies which did not issue a prospectus. On the broad question of principle we have heard nothing contrary to the Amendment from the Government, only an appeal to this act of issuing a prospectus. Leaving principle now and coming to the Amendment itself, I think that in its present form it is impracticable.

May I point out that the words are the words actually used by the Board of Trade when applying this principle to companies to which they grant loans.

This is rather different, and I think it would be impracticable. I do not think the limitation of profits to 8 per cent. is reasonable.

Is not that a matter which must be examined in Committee if the Clause be read a Second time? We are at present on the broad principle of the Clause and cannot go into details.

I do not propose to enter into details. I have merely mentioned the matter up to the present, but if you enforce that ruling drastically you will practically rule out any discussion at all. My attitude towards the Second Reading of the Clause is undoubtedly affected by my view with regard to some of the details. I do not propose to argue the matter out fully in detail, but to make my case I will have to refer to the details in somewhat greater length than I have yet done.

It will be open to the hon. Member to refer to them in broad outline, but he could not be allowed to argue details.

The proposal to limit the dividend to 8 per cent. is unreasonable at a time when preference shares are being raised to 10 per cent. What is to be done with the surplus profits'? There is no provision that the State should share in them. If this Clause passes the Second Beading I could not support its going into the Bill unless it were very seriously modified; but for the purpose of a Second Reading and for sending it to Committee to see whether it can be put into a reasonable form I am bound to say that I think the principle of it so just and reasonable, and so in accordance with the previous declarations of the Prime Minister and of the Government, that I am bound to support the principle.

When this Bill was introduced we had certain statements made as to what was the intention of it and the highest possible grounds were adduced in its favour. The evident desire of the Government to see that the shareholders of this concern, who by Government intervention are now practically guaranteed against loss, shall be able to get everything they can out of the public, leads me to doubt absolutely the bona fides of the Government and the good faith of the statements about patriotism, made when the Bill was introduced. That is my perfectly frank opinion. Here is one example, the most astonishing example that could be quoted—£30,000 of capital for which £900,000 has been given, and the Government is not even prepared to recognise that no more than 8 per cent. should be paid on the £900,000. A more monstrous piece of jobbery will never have been perpetrated if through the action of the prohibition of imports this £900,000 pays a higher dividend than 8 per cent., at the expense of the people of this country, who obviously will pay a higher price for their goods than otherwise they would pay. The hon. Member who spoke last said that in the Clause there was nothing about the confiscation of a share of the surplus profit. If the hon. Gentleman would look at the Paper he would see that there is a definite proposal, not only for a limitation of the dividends but for a share of the excess profits to go directly to the country for a specified purpose. This Clause is a very moderate attempt to see that the public gets fair play. If the public really got fair play, as a result of the concession made to the companies that prohibition should safeguard them, the public would be able to say to the companies, " Every fraction of profit you make above 8 per cent. shall be devoted to the real intentions of the promoters of this Bill." The intention was that this industry should be safeguarded, very largely because it was essential to the country in time of war. This Clause would not do that, but in Committee it could be modified to do it, and we of the Labour party are certainly prepared to take every possible step that will ensure that that intention is carried out, and that instead of private individuals reaping the profit under a State-safeguarded scheme, that profit shall go to research, to the development of our chemical industry and to making us safer than we were in time of war.

I want to reply to one or two arguments advanced from the Treasury Bench. First as to the synthetic indigo plant at Port Ellesmere.

How does that arise?

We have to look at the question of the total capital on which we are to pay this 8 per cent. The total capital is made up of the assets that have been bought from Messrs. Levinstein and the British Dyes, which assets form the capital of the British Dyestuffs Corporation.

This is a perfectly general Amendment in its terms, and I suggest that particular details of this kind, as to what may or may not be the assets of a particular company, are not strictly in order.

What we are dealing with is the capital engaged in the dye industry. The capital engaged in that part of the industry which comprises 75 to 80 per cent. of the whole industry, and towards which the Government has made a contribution equal to 20 per cent. of the amount, appears to be a very material consideration.

This subject was discussed in the speech of the Mover of the Amendment, and was allowed by Mr. Speaker. I was going to make merely a passing reference to it.

If the Mover of the Amendment made the statement, there is no need to repeat it.

I was not going to repeat it. It has been stated with truth that Messrs. Levinstein paid the Government £70,000 for this synthetic indigo plant, originally German property. They bought with it certain processes and the services of a French chemist. They then sold to America for £250,000 the services of the French chemist and certain processes, but retained the indigo plant at Port Ellesmere. The Government then bought it from Messrs Levinstein at the inflated value of £250,000, and British Dyes, Limited, were not allowed to tender in the first instance for the purchase of the plant.

I remember hearing all about that. It is not relevant to this Clause, which proposes that a general principle should be applied to the dye industry, on the supposition that the Bill becomes law. It will be quite out of order to go into that point.

Of course I accept your ruling. I know the Government dare not face an inquiry into this subject. The President of the Board of Trade has told us that British Dyes, Limited, were at the end of their power to raise capital. I put this question to the Parliamentary Secretary whether the British Dyes, Limited, were refused permission by the Treasury to accept a capital advance of £100,000 from the British Colour Users' Association.

I have not the remotest idea whether it be true or not, and it is quite irrelevant.

The President said that British Dyes were liable to pay interest at six per cent. on the money advanced to them, but that is not so as they are only liable to pay that interest out of profits, and unless there is a profit the Government get no interest. Our objection to that is that we believe that this capital is in the first place unduly watered and that the British Government have not got value for their purchase. We request that a full inquiry should be made into the question as to what value the British public have got in this purchase from Messrs, Levinstein's and the British Dyes Corporation. We propose that the rate of dividend should be limited to 8 per cent., and the remaining profit put back into the industry for research work, and that the period of limitation should synchronise with the period of protection which the industry is given from outside importation. The Parliamentary Secretary stated with deadly effect in reply to our arguments that an independent valuation of the asset had been made. I asked him the name of the firm. He did not give it, but said it was a firm of high repute, and I accept that. In the articles of association of the British Dyestuffs Corporation there is a paragraph which states that no objection to this agreement shall be taken on sundry grounds, and one of them is that consideration has not been determined as the result of an independent inquiry of the valuation or by any other means on behalf of the company.

That is rather wide on a Debate on Second Beading of the proposed new Clause which is to apply to the whole of the industry.

I was replying to the statement of the Parliamentary Secretary who said an independent valuation had been made, but I leave the point. The whole difference between us and the Government on this Bill is that if you are going to protect the dye industry the whole of the profit except a reasonable return both on capital value and on the profits should accrue to the community and not to private individuals. We are prepared to protect the dye industry, but if we do the advantages must go to the community and not to the shareholders of any corporation.

3.0 P.M.

I do not think in the present position with the large stocks in hand there is any great prospect of the making of large profits. I think the proposers of the Clause cannot substantiate their case against the ordinary manufacture of dyes. They are confining their arguments to the instance of the British Dye Corporation. A limitation of dividend to 8 per cent. would be absolutely certain to prevent the proper development of the industry. There was most remarkable evidence some time ago with regard to the establishment of aniline dyes in this country in which a managing director of a particular firm said that one of the reasons why the dye industry had gone to Germany was the insufficient protection in this country so that it was impossible to make anything approaching high profits here. With regard to British dyes, the Government have a very large share, and I understand the whole policy of the Government in putting money in the firm is to retain a good deal of control over it. They have again the big stick of being able to control licences, and I cannot understand how under those circumstances it can be thought that they would allow the general public to be skinned by a charge of outrageous prices for dyestuffs. I submit that under all the circumstances there is little that requires further safeguarding.

This matter was discussed upstairs and we were informed that it was impossible to agree to a limitation because when the prospectus was issued there was no limitation there and investors put their money in on the definite pledge or understanding that they would be allowed to receive whatever profits were possible. I agree that it is extremely desirable—nothing could be more desirable—that the Government should redeem the pledge they made but in this matter there is a pledge which is more important even than that pledge, and that is the pledge which was given to the people of this country by the Prime Minister who, speaking on the 18th August last year, said in the course of a review of various matters:

" The two best illustrations, although they are not comprehensive, are synthetic dyes and optical glasses and lenses. They may represent a small percentage of the whole industry of the country, but their importance is quite out of proportion to their quantity. It is proposed that the Board of Trade shall have power to prohibit the import of these goods except under licence and in order to prevent excessive imports a fee will be charged for the licence. It may even be necessary for some time to continue the assistance given to these industries, but care will be taken that no undue profits shall be made at the expense of the community."—[OFFICIAL REPORT, 18th August, 1919, cols. 2012 and 2013; Vol. 119.]

Hear, hear.

I am extremely glad to gather that the Prime Minister has not changed his view with regard to that matter, and that on this question at any rate his opinions of 1920 are still the opinions he held in 1919. That being so, I am sure the House will be extremely glad to hear from the Prime Minister in what way he proposes to redeem this pledge. It is not redeemed in the Bill as it stands. On the contrary, as the hon. Member for Preston (Mr. T. Shaw) showed in an extremely powerful speech which I am afraid the Prime Minister had not the privilege of hearing, it will not only be possible but it will, indeed, be almost certain that if this Bill passes through in its present form, interest will be paid on watered capital which will mean that not only will 8 per cent. be paid to investors, but that to the original investors who are now in possession of the watered capital interest will be paid running up to 30, 40, and perhaps even 50 per cent. My hon. Friends say "much more," but at any rate it is quite clear that those who made that investment will be able under this Bill to reap upon the capital this interest running up to 50 per cent. That cannot be disputed. I do not often ask for the attention of the Prime Minister nowadays, but I should like for a moment respectfully and very sincerely to ask if he will give us an answer on this matter. He stated last year that care would be taken to protect the community against undue profits being made by this industry, and he still adheres to that. Might I ask him whether, in his view, if investors are able to obtain 50 per cent. year by year as a return upon the capital they have invested, that is not an undue charge at the expense of the community? It is obvious that without the protection of this Bill it would be utterly impossible for them to obtain these profits.

Of course, our objection to legislation of this kind throughout has been that it is very important to prevent legislation being utilised to enable huge profits to go into the pockets of those who are able to manipulate the legislation. We view this legislation with great concern because we believe it is the beginning of a system of log-rolling and protection which will reduce this country to the position of protectionist countries where lobbying takes place for the purpose of assisting private interests, from which, happily, we have for so long been free in the history of this nation. I wish especially to point out that unless this Clause is passed, or some other limitation is put in the Bill, it is obvious that the pledges given by the Prime Minister to the House of Commons and the country cannot be carried out. I am sure my hon. Friends who framed this Amendment are not enamoured of their particular language, and if the Prime Minister will assure us that if this is not pressed he is prepared in some other way to carry out his pledge, and if he will show us that that can be done effectually, we shall not spend five minutes more on this Amendment, but I think we are entitled to a reply from him on that matter.

rose in his place, and claimed to move, " That the Question be now put."

Question put, " That the Question be now put."

The House divided: Ayes, 160; Noes, 33.

Question put accordingly, " That the Clause be read a Second time."

The House divided: Ayes, 34; Noes, 158.

On a point of Order, Mr. Speaker, I have just come from the "'Aye " lobby, and there was no teller at the door.

Then how have they arrived at the figures?

Yes, that is just the point. I was waiting in the " Aye " lobby, and then came through, and there was no teller. Therefore—

I myself was telling when the hon. Member came through.

Then the hon. Member must have turned a blind eye on the hon. Member for East Edinburgh.

Let us have it quite accurately, please. When you go through the lobby, there are two tellers, and neither teller is entitled to leave until somebody announces that everybody is out of the lobby. I do not mind so long as my vote is recorded in the " Aye " lobby, and added to the 34.

What does the "No" teller say about it?

What occurred on this occasion was this: I was in the " No " lobby. Very often no one calls, " All out," as should be the custom, and we nearly always have to find out from the clerks. The clerk said that the lobby was clear, and I understood that it was clear.

I daresay the House will have no objection to adding the name of the hon. Member for East Edinburgh to the " Ayes," so that the figures will read:

Ayes, 35; Noes, 158.

NEW CLAUSE.— (Currency of licences.)

Any licence to import granted by the Board of Trade under this Act shall continue in force until it is proved to the satisfaction of the Committee constituted under Section two, Sub-section (2), of this Act that goods of the same class or description or of the same quality are manufactured in the United Kingdom, and on such proof being given, notice shall be given to the holder of the licence to terminate the licence at the expiration of four weeks from the date of such notice.— [Colonel P. Williams.]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time."

I propose to move this very briefly so as not to take up unnecessarily the time of the House. My friends and I believe there is a point of substance in the proposed new Clause to which perhaps we are entitled to a reply on from the Government. It is obvious what the object of the proposed new Clause is. Let us take the one notable instance of Rhodamine 6 (six) G. That is not, I believe, manufactured in this country, but imported from Germany or Switzerland. Similarly dyes not made in this country ought to be licensed by means of a general licence until such times as it is proved to the satisfaction of the Committee that the dye-makers of this country wish, and are in a position, to make that particular class of dye. Of course, it would not affect the dyes which are now being made by the British Dyestuffs Corporation in England. It is very well known what dyes can be supplied by British makers and what dyes cannot be supplied, but it would give security to textile dyeing trades to know that they can depend upon getting a supply of these dyes anywhere until notice is given to them and for four weeks afterwards. That would enable them to get on with their work and arrange their contracts, and generally it would be a great facility to the dye-using trade. It would inflict no hardship on the dye-maker, because all the dye-maker has to do is to go to this Committee and say, " I am now in a position to supply this particular dye." Thereupon notice is given that in four weeks' time all licences will be terminated, and that those concerned will supply what is required. It is a very reasonable new Clause. The principle, I believe, is sound, and I commend it to the consideration of the Government.

I beg to second the Amendment. I think it will commend it-self to the sporting sense of the House. It is essentially a fair-play Amendment. The position created by this Bill is that at one swoop all these dyes are prohibited, and anybody who wants a dye outside the country has got to go to the Licensing Committee and fight his case out there. He has got to prove that that dye cannot be got in the United Kingdom. The onus is put upon the dye-user to fight his case and get his licence. He goes to the Committee, fights his case, establishes it, and gets his licence. What we say by this Amendment is, that having fought his case and got his licence, in spite of the opposition of the dye-maker, that if the dye-maker wants to stop that licence he ought to go and fight the case, and not put the onus back again upon the dye-user.

What we really want is to put in a time-limit for the granting of the licence. For what may happen is this: the dye-user comes and establishes his case, gets his licence, but the dye-maker says: " Oh, well, I think I ought to have this dye ready in four, five or six weeks, grant a licence for that time, and then make this fellow come back and fight me again." We say that is not fair. There ought not to be a time-limit of this sort hampering the dye-user. What we ought to say to the dye-maker is: " We are giving a licence to this fellow, and he has to have it until you prove your case. If you come back in four, five or six weeks and say: ' Here is a dye, we can make it,' very well, if you prove it, we will stop the licence, we will give the user four weeks supply." We say that is a sporting sort of arrangement that has been made. We appeal to the Parliamentary Secretary who, I am sure, will respond to the appeal made.

I am afraid in this case the hon. Member for Newcastle has not backed the winner. It would be a very unfortunate Clause to insert, and it is not at all well designed, if I may say so, for the purpose sought by hon. Members opposite, unless it is wholly to wreck the Bill. [HON. MEMBERS: No.] Well, if that be not so, I hope they will not press this Amendment, because it undoubtedly can be used to defeat the object of the Bill. The conception apparently in the mind of hon. Members is that in any case a licence should be given to a person to import any quantity of a particular dye. It would thus be perfectly open to establish a system that would remain in force until it was abrogated for supplying dyes, and an enormous quantity might be brought in; and any single person applying for a licence might get enough dyes to last for years.

This new Clause does not deal with quantity at all, but simply with dyes.

It does not deal with quantities, and that is the whole danger of it. If what my hon. Friend means is that a licence should be given for a particular person to import and stock a limited quantity of dyes, it is a perfectly unnecessary Amendment. Once he has got his licence for a limited quantity he would be able to import it. The way in which this Committee will work would be that it will hear the application for the licence. It will be a businesslike Committee. It has been repeatedly explained that the dye-using interests are in a large majority over the producers of dyes, and it will be open to the Committee to make any recommendations to the Board of Trade and say what particular licences are required. I submit that the present Amendment would hamper this work. It is quite unnecessary, and it would be fatal to the working of the Bill.

I regret that my hon. and gallant friend has not seen his way to accept at any rate the principle of this Amendment. It is the principle to which we attach most importance. That principle has been embodied in several dif- ferent ways. There is an Amendment later on in these terms:

" A licence authorising the importation of any of the goods prohibited to be imported by virtue of this Act shall in no case be refused unless the Committee is satisfied that an adequate quantity of British-made dyestuffs of kind and quality equal to those in respect of which a licence has been applied for is actually available at a reasonable price."

Throughout the Order Paper we have seen it necessary to put the same point in different ways because it goes to the very root of this Bill. The words of some very practical people who feel this peril may appeal to hon. Members opposite. Here is a letter from the greatest firm of woollen spinners in this country. They say:

" We are not a member of the Colour Users' Association. This proposal will mean that the onus of proving that the British-made dye is not equal in quality to the foreign production will rest upon us, and we think that is a most unfair way to place the onus. This would involve no end of delay before a licence could be obtained, which in the case of seasonal colours would be fatal to business, and there is not a scrap of safeguard against that in this Bill. This procedure should be reversed. There should be no restriction on the import of dyes except in cases where there are equal qualities at equal prices being manufactured in this country."

Further, this great firm says:

"It is obvious that unless the British textile manufacturer can get the very best dyestuffs it will be absolutely fatal to the industry in the neutral markets of the world."

Many of us have received this morning a communication written, after far more prolonged consideration of this Bill, by the Scottish Woollen Trade Marks Association:

" The Scottish tweed industry owes a good part of its reputation at home and abroad to the fine colourings and non-fading qualities of its products, and about three-quarters of it finds its market abroad. Since the Armistice serious difficulty has been experienced in obtaining satisfactory dyes."

I am told that people now have to label goods that they cannot guarantee, and that ought to be a red light to the right hon. Gentleman. This firm further states:

" It is clear that the British dye industry is not in a position to supply the requirement."

This Amendment asks for a free market for the best quality of dyes, and unless it be established the woollen trade and the cotton and textile industries will be severely hit in the neutral markets of the world by having dumped upon them by the Board of Trade dyes of an inferior quality at probably a higher price. These great industries do not mind paying a little more for their dyes. In all except the cheapest qualities of cotton textiles, that does not make very much difference; but they do want to be absolutely sure that there shall be in the home market dyes of a quality which will enable them to maintain their position in competition with the world. It is because I feel so strongly that this cardinal point is imperilled by the Bill, and will be saved by this Amendment, that I intend to support it in the division lobby.

An Amendment of this kind coming from the so-called Free Trade party in this House is most extraordinary. A licence to import is free trade as far as we can get it. The Clause proposes that when a licence has been granted, it shall exist until goods of the same class or description or quality are manufactured in this country. Suppose a manufacturer be importing under licence large quantities of foreign dyes. Another dye manufacturer happens to have a capable chemist in his laboratory, who produces three or four pounds of this dye. This Clause would enable that manufacturer to go to the Board of Trade, and stop that licence, and that is called Free Trade.

I am not a lawyer, but even a layman can see that the hon. Member opposite (Colonel Greig) is at sea on this Amendment. I cannot resist the appeal which has been made with regard to the tweed industry in the constituency which I represent. I am afraid that this Bill will result in a very serious blow to the success of an industry which is providing work for thousands of people in their own homes in the Highlands of Scotland. Since these dyes came into use, the home tweed trade has developed to an enormous extent, and for many years it was almost confined to providing Lewis and Harris tweeds for sportsmen. Certain people in Scotland, instead of enrolling their figures in armour, use to enrol them in Lewis and Harris tweed. It is this industry that the Bill is going to affect in a very serious manner. Since the synthetic dye came into use this industry has developed enormously, to the great benefit of the people in these rural parts. Patterns are produced in which the people have great pride; ladies wear these tweeds, and they are exported to America, Africa, the Continent, and to almost every part of the world. The effect of this Bill, and especially of this Clause, upon the industry in these tweeds is a matter which demands the very serious attention of this House. If the people, after fighting for a licence, have to come to the Board of Trade and travel as I have to travel, 720 miles by land and sea, to lay their case before this Committee and prove that it is necessary they should have access to these foreign dyes instead of the manufacturer having to come and prove that they can provide exactly similar dyes in sufficient quantities, it will make the work in the home tweed industry absolutely prohibitive, or, at any rate, it will be a very terrible tax upon that industry. The Government ought to encourage these home industries, because without these auxiliary industries in these districts you cannot prevail upon people to remain upon the land. This tweed industry is the great handmaiden of land settlement in the Highlands. Land settlement is not sufficient in itself. You must have the tweed industry, afforestry in some parts, and fishing in others as well; and if the Government are not careful, having already damaged the trades in these parts because they cannot provide sufficient steamers to carry the trade across—

Will the hon. Member kindly confine himself to the subject matter of this Clause, instead of wandering all over the map?

We think imperially in those parts although occasionally we have to talk about the parish pump. Unless this Clause be adopted, the Government are going to impose upon a very great industry, which has shown very remarkable growth and development during the last twenty years, owing to the help of many people in high social position and otherwise, the trouble of coming to London to prove their case, instead of the dye makers coming and proving their case, and, instead of developing industries in this country at a time when employment is short, they will inflict very serious hardship upon a very deserving portion of the population.

I earnestly urge the Government to accept this Clause. The hon. and gallant Member for Renfrewshire (Colonel Greig) has twitted us who take up the strictly Free Trade position in reference to this Bill with the fact that license to import is Free Trade as far as you can get it. Our first complaint against the Bill is that there ought to be Free Trade instead of licences. Trade ought not to be hampered by licences being necessary to use any dye from any part of the world. Since it has been laid down, however, that the Government are going to proceed in this matter by licences, surely it is right to stabilise the position of users of dyes by passing this Clause. Under this Clause the user having a majority on the committee is protected by exercising that majority to determine whether the British dye manufacturer has yet produced the dye which he wishes to supply in substitution for the dye coming from a foreign country. Surely the user is entitled to that protection. If this Clause be not admitted, how will the user be protected? If the Government think that they are making some concession to us with reference to the granting of licences, it is only a poor concession and unsatisfactory, and I do beg them to go a little further and see to it that the onus of proof of the possibility of substitution of British for foreign imported dyes rests upon the manufacturer of British dyes and not upon the trade, who, otherwise, will be heavily handicapped.

This Clause embodies an important principle, and I desire very heartily to support it. It would place a premium on efficiency of production. It would place the onus where it ought to be. A man or firm having a licence to import dyestuffs will go on importing them as long as he can do so to his own satisfaction, but it might fairly be contended that on the whole it is in the interests of the Licensing Committee and the producer to end the importation and to have home production, and that, after all, is the principle underlying the Bill. Under these circumstances it is surely right to put the onus where it ought to be, namely, on the producer. I think the effect of that would be that there would be a constant pressing forward on the part of dye-makers to as speedily as possible produce a commodity equal to or better than that imported from abroad. The purpose of this Bill is to build up the dye industry, and I know of no better way in which to do that than to give the producer of the home commodity a real incentive as quickly as possible to get his commodity up to the quality of or even better than the imported article. I am not sure that the words of this Clause are the best words that can be used, nor can I suggest better ones, but I do think there is involved a principle which might very well be embodied in the Bill. I can assure the Board of Trade that the real feeling of this country as regards this Bill so far as users of colours are concerned is not a fear of having to pay a little more or less in price. There is really a common desire that the industry should be carried on in this country, but there is a fear that we may not be able to maintain such a high standard of production as we have done in the past. Surely a desire to secure that end must be common ground with the Board of Trade, and I ask the Ministry if not in these words in some other form of words to accept this principle of setting up a premium with the object of improving production.

This Amendment entirely fetters the freedom of action of the Licensing Committee, whose duty it will be to do exactly what the movers of the Clause suggest. But there are a number of other objects equally desirable for the Licensing Committee to carry into effect, and if all of them are to be embodied in this measure it would mean increasing the size of the Bill very considerably. To my mind the Amendment merely indicates a want of confidence in the ability of the Licensing Committee, whose object should be to withdraw the licences if the circumstances were such as to render it advisable. It is wholly unnecessary that a Clause like this should be added to the Bill.

The dyes made abroad, which are vital to the efficiency of the textile industry of this country, and which are not made at home, will come in just as usual under this Bill. Licences will be granted immediately, orders will be placed in the usual way, and delivery will not be interfered with in any sense. The only difference will be that a licence must be granted, and for the licence a small fee will have to be paid. As a consumer of dye stuffs, I cannot allow any producer of dyes to decide for me whether his product is equal in quality to that which I have been in the habit of using. If a man comes to me and says, " I can supply you with 10 X under licence, which is equal in quality to the dye you are importing from abroad," my reply is, "I am very glad to hear it; it is very refreshing, but I must claim to foe allowed to test it for myself and to say whether the product is equal to the one I have been using for years past." I should object to having forced upon me a dye, notwithstanding that the producer of it might say, and indeed honestly believe, that it is equal to the one I am importing from abroad. All I want to do is to test it for myself. I do not think my hon. Friend who spoke just now (Dr. Murray) now need worry about the Scottish industries. The fast colours required for them will come in as usual. All he and his friends will need to do will be to place the orders in the usual manner. They will not be subject to any tariff or any restrictions, nor will this Bill interfere with the efficiency of those particular industries.

4.0 P.M.

The hon. and gallant Member who moved the Clause is, I believe, a sportsman, and he endeavoured to persuade the Committee that he is a

business man. The hon. Member who seconded tried to persuade us that we should accept this Clause from a purely sporting point of view. The Wee Free Party never yet have produced arguments, and this is in fact the nearest approach to any form of life we have had from them in the last two years. As regards this particular Clause, if you are going to adopt a system of licences, there is only one thing necessary. I do not think licences are necessary, but if you have them, it is absolutely essential that you should be able to get them put on or taken off as quickly as possible in the interests of trade. That is the essential thing. Nothing else matters. These would-be business men who unfortunately, as far as we have heard to-day, know very little indeed of business, and particularly as regards this special trade, think in their Clause they are simply setting up a method of taking off these licences. I say the essential thing is to get these licences put on easily, and taken off with equal ease. That is the one thing which is necessary.

Question put, " That the Clause be read a Second time."

The House divided: Ayes, 38; Noes, 164.