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Commons Chamber

Volume 139: debated on Wednesday 9 March 1921

House of Commons

Wednesday, March 9, 1921

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Private Business

Lee Conservancy Bill (by Order),

Metropolitan Water Board (Charges) Bill (by Order),

Metropolitan Water Board (Various Powers) Bill (by Order),

Second Reading deferred till Wednesday next.

Read a Second time, and referred to the Examiners of Petitions for Private Bills.

Thames Conservancy Bill (by Order),

Second Reading deferred till Wednesday next.

British Museum

I beg to present a petition from the Trustees of the British Museum that this Honourable House may grant such further support as may enable them to carry on the execution of the trusts devolved upon them by Parliament for the general well-being of learning and of useful knowledge.—[ King's Recommendation signified. ]—Referred to the Committee of Supply.

Oral Answers to Questions

India

Police Pay

asked the Secretary of State for India what is the pay per mensem of a police-constable in the different provinces of India; and whether that pay is considered sufficient to obtain a contented and loyal police service?

I regret that I have not complete particulars to enable me to reply fully to my hon. and gallant Friend's question, but I have asked the Government of India to send me the latest figures. I may say that considerable increases of pay have been granted during the last few years.

I will try to get particulars as soon as I can, but local governments, as my hon. and gallant Friend is aware, have considerable discretion in raising police pay, and I am anxious to give him figures up to date. I will let him know as soon as I get the information.

Army Reserve, War Medal

asked the Secretary of State for India whether he is aware that, under existing regulations, officers of the Indian Army Reserve get no medal for service in India during the great War, and, that if they relinquish their volunteer commissions on joining the Indian Army Reserve of Officers, do not count such service as double for Volunteer officers' decoration; and whether, seeing that this may have an injurious effect on that force which the institution of a long-service decoration would remove, and that Indian Volunteers who were actually mobilised with the Territorials on 5th August, 1914, have been refused the Territorial war medal on the ground that they were not Territorials, he will consider the desirability of arranging that service by Europeans in different parts of India, either with the Volunteers or with the Indian Army, shall give the same claim to the 1914–18 medal as that rendered by a Regular soldier of the British Army who never changed his station in India during the whole of the War, and was in India prior to its outbreak?

Officers of the Indian Army Reserve of Officers do not qualify for a medal by service in India during the War unless they were not ordinarily resident in India before the War. I am consulting the Government of India on the question of allowing a Volunteer officer whose name was removed from the roll of a Volunteer unit on his joining the Indian Army Reserve of Officers to count his Indian Army Reserve of Officers service as double service for the Volunteer Long Service Medal. I do not understand how an officer can have been mobilised with Territorials on 5th August, 1914, unless he was a Territorial officer, but if my hon. and gallant Friend has any particular case in mind I will look into it if he will give me particulars. I regret that I cannot consider that service in India by an Indian Service officer resident in India before the War should qualify for a medal on different lines from the rules applying to service in the United Kingdom of a British Service officer.

Pensions, Public Works and Forest Officers

asked the Secretary of State for India whether he will take steps to obtain information as regards the percentage of public works and forest officers with less than 20 years' service who refused to accept the new scheme for pensions; if he will say what is the difference in the purchasing power of a pension of Rs. 4,000 in England, taking Income Tax into account, in 1884 and at the present time; and whether, in view of the increase in the cost of living in England during the last 25 years, he is prepared to sanction a considerable increase in pensions fixed before 1894, and to allow the three years' probationary period formerly passed at Cooper's Hill by officers of the Forest Department to count for pension?

The Government of India have been asked whether they can supply the information referred to in the first part of the question. A retired officer drawing a pension of Rs. 4,000 a year in this country, and possessing no other means would, at the present time, after deduction of Income Tax, receive, if single or a widower, £3 2s. 6d., and if married £16 12s. 6d. more per annum than in 1884. That is exclusive of any rebates for children or dependants to which he might be entitled under the present Finance Act. The purchasing power of his pension is no doubt less. I am not aware of arguments which would justify the suggestion in the last part of the question.

Opium

asked the Secretary of State for India whether there is any arrangement in operation whereby the Indian Government supplies opium to Hong Kong; and what are the terms and duration of such arrangement?

The agreement formerly existing for the supply by the Government of India of opium to the Government of Hong Kong has been renewed for a further period of five years, with certain modifications. Under the new agreement, which has effect for five years from the 1st January, 1921, Hong Kong will be supplied with ten chests of opium a month, at a fixed price. No obligation rests on the Government of Hong Kong to take any prescribed minimum quantity of opium.

asked the Secretary of State for India the amount of opium shipped from India to Hong Kong and the Straits Settlements, respectively, in 1920; whether such opium is for local consumption only; whether, if the amount shipped is in excess of local requirements, what steps, if any, are taken to prevent the surplus being smuggled into China; and whether any opium was shipped direct from India to Macao and the Dutch East Indies and, if so, how much?

I regret that complete information regarding the question asked by my hon. Friend is not available at present. I have asked the Government of India to supply it. As regards the prevention of smuggling from Hong Kong and the Straits Settlements into China, I will ask my right hon. Friend the Secretary of State for the Colonies if he can furnish the information.

Will the right hon. Gentleman also ask whether the amount of opium grown in South China is not so large as to make the disposal of this small surplus a matter of no account whatever?

Is there any limit to the amount that may be sent into the Dutch East Indies?

I am not familiar with this question in detail. I would ask my hon. Friend to give me notice of his question.

Is the right hon. Gentleman aware that last year he informed me that the export of opium from India was very heavy indeed, and that the opium is very largely bought by Japanese merchants and taken into China under their different treaties? Will the sending of this opium from India be stopped?

Will the right hon. Gentleman inquire whether the cultivation of opium in China is not great; and whether that is not really the overriding fact of the situation, and not these details?

I should like to get my hon. Friend any information he desires, but I find difficulty in getting information in China. Perhaps he will address his question to the Secretary of State for Foreign Affairs?

Is it not a fact that there is no poppy growing in China, except to a very limited extent which is strictly regulated?

Dangerous Drugs

asked the Secretary of State for India whether there are any Pharmacy Acts in operation in India similar to those in this country; and whether it is proposed to introduce legislation in India similar to that of the Dangerous Drugs Act with a view to limit the use of such drugs to legitimate medical and scientific purposes?

There are no Pharmacy Acts in operation in India similar to those in this country. It is not proposed to introduce legislation in India similar to the Dangerous Drugs Act, as the regulation of the traffic in and use of such drugs is already strictly controlled under a variety of Local and Imperial Acts. I may add for the information of the hon. Member that it is believed that the law and the practice in India in respect of all such drugs are entirely in accord with the provisions of The Hague Convention; the Government of India were, however, requested some time ago to examine the whole body of law and regulations on this subject, and to effect such amendments, if any, as might be required in order to bring their law and practice into precise conformity with the provisions of the Convention.

Army Pay and Allowances

asked the Secretary of State for India if he can now state what steps have been taken to carry into effect the recommendations in Part V of the Esher Report in regard to the improvements in the conditions of service of the personnel of the Army in India, which are so long overdue.

As a result of the recommendations in Pant V of the Esher Committee Report the following measures have now been sanctioned:

British officers, both of the British and Indian Services will receive free forage and saddlery, an allowance of Rs.15 per mensem for a syce, and will be able to buy chargers at concessional rates. British Service officers will cease to receive horse allowance. Indian Army officers, on the introduction of these measures, will be liable to have the number of authorised chargers reduced and the pay of cavalry assimilated to that of infantry as recommended in the Report. The sum of 19 lakhs has, in addition, been provided for pay concessions for British officers of the Indian Army, but it has not yet been decided how far the precise proposals in Section II of Part V of the Report will be followed.

As regards Indian officers, increases of pay, pension, family pension, and travelling allowances have been sanctioned and equipment will be issued free on promotion.

As regards Indian other ranks, improved scales of pay, good service, and good conduct pay have been approved.

The main proposals for improved family pensions have been accepted in principle, but the details are not yet settled. The same applies as regards disability pensions, both for Indian officers and other Indian ranks.

The pay of religious teachers will be raised as recommended.

A grant will be given in respect of Hindustani clothing, but in what form has not yet been settled.

Charpoys and kit boxes will be provided free, and also free lighting.

The contract allowance system in regimental offices will be abolished. An establishment of enlisted clerks has been sanctioned, and Government will supply stationery, etc.

Seven lakhs will be provided for the improvement of Indian Army schools.

Does the right hon. Gentleman state that chargers are not to be provided by the Government? Will officers still have to purchase their own chargers?

I think that the proposals I have read out were in the precise form of the Esher Committee's recommendations.

Troops (Service Outside India)

asked the Secretary of State for India whether it was one of the terms of recruitment for Indian troops that they should not be employed outside the Indian Empire; how many such troops are at present serving outside India; and in what theatres they are employed.

No, Sir. Indian troops are enlisted for "general service." On February 1st there were 121,800 Indian troops serving outside the Indian Empire—this excludes followers. These numbers are fast being reduced and it is anticipated that they will be reduced to less than half by the end of the present month. The theatres of employment are:—

Army Organisation

had given notice of the following question: To ask the Secretary of State for India whether he is yet in a position to make a full statement as to the Army position in India?

This question has been postponed, but I would like my right hon. Friend to continue his undertaking that there shall be no further reductions in the meantime.

Lord Rawlinson (Council of State Speech)

asked the Secretary of State for India whether he can state the nature of the proposals made to the Council of State on the 3rd instant by Sir William Vincent which were opposed by Lord Rawlinson?

The hon. Baronet's question is evidently based on a Press message which appeared in Monday's newspapers, in which Lord Rawlinson is reported as having stated in the Council of State that the Government would be extremely lucky if the country escaped sporadic disorders in the next month, that he strongly objected to certain proposals of Sir William Vincent, and that owing to attacks made upon them officers were already showing signs of losing their initiative. I felt sure, when I saw this message, that Lord Rawlinson must have been misreported, and I at once telegraphed to India for the facts. I am informed, in reply, that there is no truth in any of the allegations, that none of the subjects referred to were even mentioned in the Commander-in-Chief's speech, and the Commander-in-Chief asks, that a categorical denial should be made. Sir William Vincent, in a speech in the course of the Debate reported, alluded to possible sporadic disorders and to the possible effect on officers of such proposals as those put forward by Mr. Sastri, the mover of the resolution under discussion. I find that the Press report is correct that six out of the eight proposals made by Mr. Sastri were rejected by the Council, and I gather that the two that were accepted were not regarded by the Government of India as unreasonable. I would add that Reuter's, to whom I think we are greatly indebted for the information sent from, and conveyed to, India with general accuracy, have expressed to me their regrets for the unfortunate mistakes connected with this telegram.

Is there nothing that can be done in India to prevent these wicked reports being sent over here? Can my right hon. Friend ask the Indian Government to take any steps to see that Reuter does not telegraph absurd misstatements of this kind?

I know that nobody regrets these mistakes more than Reuter themselves. Of course, we have no control over private messages sent by Press agencies from one to the other, but in the bulk of telegrams which Reuter receives the general accuracy is highly to be commended, and I am quite sure that Reuter will take steps to try to avoid by every means the possibility of an important mistake of this kind occurring again.

I do not know that. It is a matter between Reuter and their representatives in India.

Cost of Living, Statistics

asked the Secretary of State for India whether he has any statistics corresponding to the statistics issued monthly by the Board of Trade in this country to show the rise in the cost of living in India due to the War and the present variations in such cost of living; and, if not, will he, with a view to diminishing labour unrest in India, have such statistics prepared?

The Government of India have for some time been publishing a monthly statement of the "percentage increase of retail food prices in Calcutta since July, 1914." The Indian Statistical Department is now examining the possibility of publishing weighted comparative figures of the cost of living for the main towns of India on the model of the Board of Trade figures.

Is the right hon. Gentleman aware that food prices are not the only element in the cost of living, and that the cost of clothing has gone up more than the cost of food?

Yes. That is why the Indian Statistical Department is considering the publication of figures comparable with the Board of Trade returns.

Has the collection of statistics ever anywhere had any effect in allaying unrest?

Fiscal Commission

asked the Secretary of State for India whether the personnel of the Committee which will inquire into the fiscal arrangements in India has been settled; what will be the proportion of the Indian representatives; whether the Legislative Assembly or any other Indian body will be able to nominate one or more representatives on that body; whether the proposals made by that Committee will be embodied in a Bill and voted by the Legislative Assembly before any action will be taken; and will he assure the House that in no case action will be taken over the head of the Legislative Assembly?

Nothing has yet been decided regarding the personnel of the Indian Fiscal Commission. Effect cannot be given to the proposals of the Commission without the introduction of a Bill in the Legislative Assembly. I will send my hon. and gallant Friend a copy of the announcement made on this subject by the Finance Member.

If there is to be a Committee or Commission appointed to inquire into the fiscal arrangements of India, would it not be possible to make it a Committee of the Legislative Assembly and the Council of State joint—an Indian Commission rather than an English Commission?

The hon. Member will remember that there was a Committee, of the old Legislative Council last year, which recommended to the Government the appointment of an expert Commission, and it is in following that advice that the Government of India propose to appoint a Committee.

Royal Navy

Reserves, Reorganisation

asked the First Lord of the Admiralty whether the scheme for the reconstruction of the Royal Naval Reserves is as yet complete; whether recruiting has as yet commenced; and, if not, when it will commence?

The scheme for the re-organisation of the Royal Naval Reserve has received approval, and it is expected that the revised conditions of service will be promulgated to-day. As my Noble and gallant Friend is no doubt aware, limited recruiting for the Royal Naval Reserve from amongst men who served either in that Force or in the Royal Navy for the period of hostilities has been in progress since March, 1919; general recruiting will commence on 1st April next.

Did not the hon. Gentleman make an absolutely identical announcement on 14th December, 1920, and is it not also true that absolutely nothing has been done since then?

I am glad that I am able to confirm what I said so long ago. My hon. and gallant Friend must recognise that the limited amount of money at our disposal in the Estimates this year necessitates our going very cautiously, and I think it better to spend the money in a way that in the long run would be more beneficial to the Royal Naval Reserve and the Royal Naval Volunteer Reserve.

May I take it that recruiting for all classes of Naval Reserves will take place as soon as possible?

Foreign Navies (Strength)

asked the First Lord of the Admiralty whether, before the Navy Estimates are introduced, a table can be made available to Members showing the comparative strength of the navies of the United States of America, Japan, and the British Empire, to-day, in 1924, and 1925, in ships of all kinds, sub-divided into the various classes and distinguishing be- tween ships embodying the lessons of the War and those built or designed prior to this period?

A table showing the comparative strength of the navies of the principal Naval Powers at the present time is being prepared, and if my Noble and gallant Friend will kindly put down a further unstarred question for Monday next the information will then be available. It is not possible to forecast the relative strength in 1924–1925, as this depends not only on the progress made in the respective building programme, but also upon the removal of older ships from the effective list.

Will the table show the number of ships in commission among the various Powers?

Schoolmasters

asked the Parliamentary Secretary to the Admiralty, inasmuch as vacancies for appointments to senior master have been caused by the recent promotion of four officers of the schoolmaster branch of the Royal Navy to the rank of headmaster, lieutenant, and observing that the percentage of senior masters is still considerably below the normal percentage for that rank, if he is in a position to state that those vacancies will now be filled and the percentage of senior masters brought up to the normal?

Further promotions to the rank of senior master are under consideration.

asked the Secretary to the Admiralty whether he can hold out any hopes that a certain percentage of promotions to the rank of headmaster (lieutenant) on the active list will be given to schoolmasters, Royal Navy, of ripe age and experience, other than senior masters, holding commissioned rank, observing that such promotions to lieutenant rank obtain in other branches of the naval service

Pay (Officers and Men)

asked the Parliamentary Secretary to the Admiralty whether the present rate of pay of officers and men of the Royal Navy are sufficient to meet the increased cost of living and increased rate of income tax since they were fixed; and, if not, whether it is proposed to raise the scale?

I regret I am unable to add anything to the reply given to a similar question by my Noble and gallant Friend on the 24th November last.

Questions

General Accident Assurance Corporation

asked the Minister of Labour whether he has succeeded in settling the dispute between the employés and manager of the General Accident Corporation, Limited; why did the Ministry agree to the suggestion of the manager to ask each individual to send in a personal statement as to why they were dismissed; will he state whether this is the practice of the Ministry when dealing with matters of this kind; and if he will use the powers conferred upon him by the Industrial Courts Act, 1920, to enforce a settlement?

asked the Minister of Labour whether, in view of the failure to bring about a settlement between the General Accident Corporation and the members of the Guild of Insurance officials, he will institute a Court of Inquiry under the Industrial Courts Act of 1919?

asked the Minister of Labour whether, in view of the conflict in the statements made to him by the General Accident Fire and Life Assurance Corporation, Limited, and the Guild of Insurance Officials with regard to the strike of some of the corporation's employés which has been in existence since 8th November, he can now see his way to accede to the request of the guild, made so far back as 8th December, 1920, that he should hold a court of inquiry into this dispute as provided for by the Industrial Courts Act of 1919?

I will answer these three questions together. The difference between the parties to this dispute has not yet been settled. As regards thee question of my hon. Friend the Member for the Bedwelty Division, I adopted the suggestion of the general manager in order that I might inform myself as fully as possible of the facts of the case. I had already seen representatives of the employés. I may say that the Guild has accepted the suggestion, and I have now received from both parties certain information regarding the individuals in question. I have no powers, contrary to the supposition of my hon. Friend the Member for the Bedwelty Division, to enforce a settlement.

Naval and Military Pensions and Grants

Civil Liabilities Department

asked the Minister of Labour whether he is aware that the Regulations of the Civil Liabilities Department do not admit of grants other than resettlement grants being made except to disabled men who are prevented from resuming their pre-war occupation and for whom no suitable employment is available; that this very severe limitation is further contracted by the refusal of the Department to make grants to men who applied originally to the King's Fund and who were at the time of application so disabled, but who have since, in the course of many delays, ceased to draw disablement pension; and whether this lays the Department open to the charge of purposely delaying grants in order that men may become ineligible?

In addition to Resettlement Grants (for which, let me say, ex-service men not disabled are eligible) and grants to disabled men referred to in my hon. and gallant Friend's question, grants are also made to disabled men who do not draw a disability pension, for the purpose of assisting such men to meet contractual obligations such as rent, rates, taxes, etc. A lump sum grant, however, cannot be given to a disabled man who was an employé prior to enlistment, whether he originally applied to the King's Fund or not, unless he is in receipt of a disability pension. Provided the applicant is in receipt of a disability pension when his application is received, and he is otherwise eligible for a grant, the same is paid without any further inquiry as to pension. It has never been the practice of the Military Service (Civil Liability) Department to penalise the applicant because of undue delay on their part in dealing with an application.

Am I to understand that a man who, when he applied to the King's Fund, was disabled and his application for some reason or other was delayed or refused, is now eligible for a grant?

That, I think, was the point made in the last part of my hon. Friend's original question—that there have been delays purposely, in order that men shall not be eligible. I want to deny that at once. If there has been such a case let the hon. Member tell me at once.

Unemployment

Domestic Servants

asked the Minister of Labour whether, under existing laws, rules, and regulations, a female domestic employé who throws up her job can obtain 16s. a week out-of-work pay and 12s. 6d. from the unemployment insurance fund, in addition to a pension of 20s. a week on account of a deceased demobilised husband?

Domestic servants are not ordinarily entitled to Unemployment Benefit or Out-of-Work Donation, inasmuch as private domestic service is not an insurable occupation under the Unemployment Insurance Acts, and donation is only payable to women who have served as mobile members of one of the Women's Service Corps. Any person who leaves his or her employment voluntarily without just cause, is thereby disqualified for benefit. Benefit and donation cannot be drawn concurrently. The amount of any benefit or donation otherwise due is not reduced by reason of a pension drawn on account of a deceased demobilised husband.

I accepted the expression used in the question. I suppose the reference is to the widow who receives a widow's pension because of the death of a soldier husband.

That is in reference to the Women's Service Corps; it is a definition in regard to their service. No women can get a donation unless they were at the time mobile members of the Women's Service Corps.

If a woman was employed in an ordinary factory, would she be in mobile employment?

I think the hon. Gentleman misunderstands me. No civilian woman is entitled to donation. It is only women who served in one of the service corps who are now entitled to donation, and only in those cases where they were mobile.

Questions

Cost of Living

asked the Minister of Labour whether he can give the total number of those whose wages or salaries are varied according to the index figure of the cost of living supplied by his Department?

The total number of persons whose wages or salaries are regulated directly in accordance with the movements of the index number relating to cost of living, which is prepared by the Ministry of Labour, is estimated to be nearly 1,500,000. Particulars of the industries and services affected, and of the arrangements in operation in each case, were given in the Labour Gazette for December last, a copy of which was sent to my hon. and gallant Friend.

asked the Minister of Labour whether, owing to the variations in the prices of different commodities, it is the case that as a result of war conditions economies or readjustments of expenditure have been effected in many households, especially in those cases where incomes have not increased so much as prices, whilst the standard of living has been raised in those families in which wages have been increased in a greater proportion than the official rise in prices; whether any allowance is made for such alterations in the standard of living; and, if not, is he aware that the food index figures supplied monthly by his Department are unreliable?

As my hon. and gallant Friend is aware, the index number prepared by the Ministry of Labour is designed to indicate the cost of maintaining unchanged the pre-War standard of living of working-class families. The fact that in some families the standard of living has been lowered, whilst in others it has been raised, does not affect the validity of the index number for the particular purpose which it serves.

Does not the right hon. Gentleman see that a great many families are affected who are not working-class families at all?

That may be, but the index number is designed to indicate the cost of maintaining unchanged the pre-War standard.

Employment Exchanges

asked the Minister of Labour whether, since the Treasury have removed their embargo, it is the intention to spend more public money by the erection of new employment exchanges; and how much it is proposed to expend on the new exchange at Hounslow?

It is not the intention to erect any new permanent buildings for employment exchanges within the next financial year, except in a very small number of cases where new accommodation is absolutely necessary and cannot be provided otherwise. The cases in question are Newcastle-on-Tyne, Leeds, Govan, and Partick, there being very exceptional reasons why these four cases should be dealt with without delay. The office at Hounslow is a branch employment office situated in hired premises, and there is at present no intention of expending money on new premises.

Can the right hon. Gentleman state what is the amount involved in these building operations?

I think there is provision in the Estimates for 1921–22 for four cases only, but I cannot carry the figures in my mind, and I will let my hon. Friend know what these four cases involve.

Trade Dispute, Darlaston

asked the Minister of Labour whether he is aware that the employers at Darlaston, arising out of a small sectional industrial dispute, have closed their works, and that benefit under the Unemployment Insurance Act is not being paid to those locked out; and, if so, whether he will take steps to cause an inquiry to be held into the employers' conduct under the Industrial Courts Act?

With regard to the first part of the question, I would refer my hon. Friend to the answer which I gave to him on 2nd March. In reply to the latter part of the question, the Labour Department is in touch with the parties to this dispute and is endeavouring to bring about a settlement.

Ex-Service Men

Training (Cinema Films)

asked the Minister of Labour whether, in view of the exhibition of work done by disabled men in the Government factories and of the fact that the success of the work done by disabled men in these factories is very little known, he will consider having a cinema film made of operations being conducted and of work being done in engineering, building, and other Government instructional factories by disabled men, and of having that film exhibited in the House of Commons, or some adjacent spot, to Members, and subsequently exhibited all over the country?

I am glad to be able to inform my hon. and gallant Friend that arrangements are now being made for the production of cinema films showing the training of disabled men in the various trades, and I have reason to hope this can be arranged without any cost to the taxpayer. We shall certainly consider the suggestion that these films should be exhibited in some suitable place where Members of this House can conveniently witness them.

Cottage Building

asked the Minister of Labour whether, in view of the number of men trained in the building trades in Government instructional factories, he will consider the possibility of arranging that after they leave the factories they should be put direct on to building cottages; and whether, if necessary, a cooperative society might be instituted to enable them to do this effectively?

Many disabled ex-service men who are in training under the Ministry of Labour in the building trades are already employed on cottage building during their period of institutional training. I would view with great pleasure the establishment of co-operative societies such as my hon. and gallant Friend suggests, and I understand that in one instance active steps are being taken by the trainees themselves to form such a society.

Is the right hon. Gentleman in touch with any organisation of ex-service men on this matter?

I have received several communications from organisations of ex-service men on this matter.

Is there any hope of these communications having some result, as a large number of ex-service men are still unemployed?

Yes. As a matter of fact, the large and general question of our negotiations to secure the training of very large bodies of ex-service men is engaging our attention at this moment, and I hope it will have a successful issue without delay; that has rather set aside the proposals of a smaller character, but I have had communications on this very point with one or two bodies of ex-service men.

Instructional Factories

asked the Minister of Labour whether considerable difficulty is experienced in finding improvers' vacancies for disabled men who have been trained in the Government instructional factories; and whether, under these circumstances, he will consider furnishing to Members of Parliament in whose constituencies Government instructional factories are placed a list of trainees from time to time who are seeking improvers' vacancies with a view to such Members of Parliament assisting to find them places?

It is unfortunately true that on account of the present state of employment, great difficulty is being experienced at the present moment in finding improvership vacancies for disabled ex-service men who have been trained in the Government instructional factories, and I shall be only too glad to forward to any Members who are willing to help in this way a list of men in their constituencies for whom no vacancies can be found.

Trade Boards (Ministry of Labour)

asked the Prime Minister if he is aware of the fact that on 28th February all ex-officers acting as investigators for the Ministry of Labour received official notice that after the 31st March their services would not be required in view of the fact that the present sanction for investigation work for the establishment of trade boards is due to expire on the 31st March, 1921, and that, as no decision has yet been reached by His Majesty's Government with regard to the future activities of the Department in this direction, the Minister of Labour gave one month's notice of the termination of their appointment; and whether, in view of these facts, a decision is likely to be reached by His Majesty's Government before the 31st March in order that these ex-officers may not be added to the list of unemployed, and, if not, can he explain why the Government cannot come to a decision in this matter?

I have been asked to reply. Parliament, in passing the original Trade Boards Act, 1909, adopted the principle of instituting trade boards in trades where wages were exceptionally low; and in a later Act, 1918, authorised the Minister to apply the Acts if he is of opinion that no adequate machinery exists for the effective regulation of wages throughout a trade, and that accordingly, having regard to the rates of wages prevailing in the trade, or any part of the trade, it is expedient that the principal Act should apply to that trade. In deciding to apply the Trade Boards Acts to a trade, we are bound to have regard to the general industrial situation. That, at present, is such as to make it necessary to proceed with caution. It is quite true that these considerations will lead for the time being to our dispensing with the services of a number of ex- officers who would otherwise have proceeded with the work of investigation. But on the day that notices were issued, the Joint Substitution Board were notified, and I need not assure my hon. Friend that every endeavour will be made to find them other employment.

Is it not a fact that if the Trade Boards Act of 1918 is repealed this work must be done by someone, and can the right hon. Gentleman assure us that at any rate these efficient and experienced men will not be discharged, to be replaced at a later date by others with less claim upon the State?

The Trade Boards Act will be administered by the Ministry of Labour. It is not a good thing to put on full canvas when you are going into a bad gale, and therefore I am going cautiously. My hon. and gallant Friend needs no assurance from me that every endeavour will be made to supply these officers with other work.

Are we to understand that it is the policy of the Government to suspend the operation of the Trade Boards Act in the period of very low wages that is coming?

No. What I have been endeavouring to point out is that we cannot quite move at the same pace during a time of great depression as we might in a time of great prosperity, and therefore we have to move with great caution.

Is it not the case that the kind of trade depression which may lead to a fall in wages is just the time when the Trade Boards policy ought to be enforced?

There is no question of affecting existing Trade Boards. The real question at issue here is the establishment of new boards, and in that matter we have to move with a certain amount of caution.

Is it not a fact that trade boards or trade unions have no control over wages?

Questions

Local Inquiry, Bearsted

asked the Minister of Health whether he is aware that his Department ordered an inquiry by one of their inspectors at Bearsted for 20th January, and ordered notices to be sent out; that numbers of officials and inhabitants assembled and waited for an hour, in accordance with the Health Ministry's own printed notices; and whether, seeing that great inconvenience was caused by the fact that no inspector arrived, he will cause an explanation and an expression of regret to be sent to the rural district council of Bearsted, seeing that this has not yet been done in spite of the telegram of protest which was sent in from those who assembled?

I am aware of the facts, and on the 9th of February I sent a letter to the rural district council of Maidstone, expressing my great regret that, through a failure to notify alteration of date, inconvenience and annoyance was caused to the various persons who attended the inquiry. I have taken steps to prevent the recurrence of such an incident.

Tuberculosis Treatment

asked the Minister of Health whether, in connection with the proposed transfer of tuberculosis treatment from the health insurance committees to county and borough councils, he will make provision to secure adequate and permanent representation for the members of health insurance committees upon the new committees to be appointed?

I am hoping to introduce legislation on this subject shortly, and the point to which the hon. and gallant Member refers will be borne in mind.

asked the Minister of Health whether, in view of the interest among the many sufferers from the disease in this country, he has sent an expert to inquire at first hand into the Spahlinger serum for the treatment of consumption; and, if not, whether he will consider the advisability of sending an expert immediately?

This question has already been carefully explored, and was before the Medical Research Committee in 1914. There would be no advantage in the adoption of the course suggested, as much of the work has been done in London. Perhaps I may refer my hon. Friend to the answers which I gave on this subject on the 23rd February and the 2nd March, of which I will send him copies.

Will the right hon. Gentleman publish as much as possible about the researches into this treatment, so that those who are suffering from tuberculosis may know whether it is worth their while to pursue any further investigations on these lines or not?

I will give all the information I have, but the preparation of this material is a secret, and it is quite impossible further to explore such suggestions and give any advice on the subject without proper clinical inquiry and other experiments. Until that material is available, it is quite impossible to express any opinion.

Can the right hon. Gentleman say whether the treatment is really successful or not?

I have already said that the material is not sufficient to express any proper opinion. I am sure hon. Members will recognise how important it is not to mislead thousands of sufferers from tuberculosis by holding out any hope which might not be justified.

Will the right hon. Gentleman communicate with the editor of the "News of the World"?

Infant Welfare

asked the Minister of Health how the death rate of infants under one year of age during 1920 compares with the recent preceding years; and whether, as a part of promoting public economy, he proposes to reduce the number of infant welfare centres and maternity beds available for this service?

The death rate of infants under one year of age per 1,000 births during the years 1914 to 1920 is as follows:

In view of the extremely satisfactory results achieved by the Ministry, will the right hon. Gentleman consider the desirability of circulating the information among local authorities so that they may continue this good work?

I am preparing a statement which I hope to issue to the local authorities on this matter.

Housing

Dagenham Scheme

asked the Minister of Health if, when the Government gave its approval to the London County Council housing scheme at Dagenham, it had before it the Council's proposals for dealing with the questions of transport, water supply, and drainage in connection with the scheme; if arrangements have been made with the railway companies concerned which ensure adequate transport facilities to and from the new estate; and if he will state what is the estimated total cost of the whole scheme on the basis of accommodating 250,000 persons, and what will be the charge on the rates when the scheme is completed with the rents fixed by the Council and assuming that all the houses erected are taken up?

All the matters referred to in the first part of my hon. Friend's question were considered in detail before approval was given, and the question of transport was also considered at length before approval of the site was given, including representations from the Ministry of Transport. There was not at any time, so far as I am aware, any intention of providing for as many as 250,000 persons on the estate; and the present proposal of the London County Council, if the scheme is fully carried out, is to build about 18,000 houses sufficient for 80,000 or 90,000 persons. Owing to the extreme difficulty of obtaining skilled labour, progress at present is lamentably slow, and any estimate either of the total number of houses to be built or of the ultimate cost would be conjectural. In any event, the limit of a 1d. rate will not be exceeded as the burden on London rates.

I may have to correct this figure, but I think it is 4,000 houses, but as to how many have actually been completed, I will ask my hon. Friend to give me notice.

Is it not a fact that the building of these houses is being held up entirely owing to the action of the trade unions, and will my right hon. Friend take further steps if possible to enable these houses to be constructed, owing to the enormous requirements there are in this district?

This case, I think, exhibits in a remarkable degree the very unsatisfactory attitude of the unions concerned. I regard it as a very sad fact. We have endeavoured to get bricklayers in all sorts of places, but all kinds of difficulties are being made by the existing bricklayers on the job, and we are now endeavouring to get an increased proportion of houses made of concrete and other alternative materials, but I am sorry to say that still the difficulties of demarcation and such like have arisen. It is a very lamentable case altogether.

Does that not mean that the action of these various unions is keeping these working class people from getting the proper houses to live in?

Will my right hon. Friend tell me whether it is a fact that the prevention of the building of many of these houses is due to the fact that some of the local authorities have taken exception to the room space and air space provided by the Ministry of Health in many of the houses? May I quote a case? [HON. MEMBERS: "No!"]

There are all kinds of objections, I dare say. We have had many more objections than we have had helpful suggestions all through. At the same time, there is no doubt that in this case the statement I have made with regard to the workmen concerned is true.

Building Materials Supply Department

asked the Minister of Health whether the Building Materials Supply Department charge a commission of 2½ per cent. on the invoice value of all building material supplied for approved housing schemes; whether, in addition to this commission, the Department solicits and obtains orders for the supply of the goods, and in such cases retains the 5 per cent. profit which in the ordinary course of events would go to the merchants whose business it is to supply such materials; whether these charges consequently increase the cost of the houses to be constructed; whether the Ministry of Health has obtained Parliamentary sanction for the establishment of what is to all intents and purposes a commission agency and trading Department; and why the Government exercise such powers as they may have for the purpose of influencing the sale of such materials through their own Department, instead of such purchases going through merchants who are recognised as the proper channels?

The Department of Building Materials Supply was originally established as a Department of the Ministry of Munitions with the object of ensuring a sufficient supply of materials for State-aided housing schemes. The Department was able by bulk purchase, and on a basis of costings, to acquire materials at a lower price than that which building contractors would be obliged to pay in the open market. In accordance with the usual practice, it was provided in the Estimates, which were laid before Parliament, that the whole of the cost of supplying the materials to local authorities should be recovered from the local authorities to whom the materials were sold. In order, therefore, to comply with these conditions, a charge is made to cover the expenses (including interest) of carrying out the service. These expenses are estimated at 2½ per cent. of the sales. I may add that some time ago I gave instructions that no further orders for materials should be given by the Department unless some public necessity arose which required instructions from myself

Does my right hon. Friend think it is advisable that the Government should take upon themselves duties of commercial travellers and go round soliciting orders, taking them out of the hands of ordinary merchants? [HON. MEMBERS: "Why not?"]

Building Guild

asked the Minister of Health if he has received a resolution from the Heywood Housing Committee protesting against the decision of the Housing Commissioner not to accept the tender of the building guild for the erection of houses for the committee, and by such refusal compelling the committee to accept higher tenders and by so doing considerably increasing the cost of the houses?

For reasons which I have already given, I have felt it necessary to limit the number of guild contracts until further experience is gained of the results of building by this method; but, in the particular case mentioned by the hon. Member, no tenders have in fact been accepted from any builders, and I can assure him that none will be approved unless the price is strictly reasonable.

Can the right hon. Gentleman say whether these building guilds are successful?

I have answered that question several times. The houses which these guilds are building are not yet completed, and I cannot give any information until they are.

Is it not a fact that the building guilds, especially in Yorkshire, have built houses at £200 less than most builders in the same district with the same type of house?

I will inquire, but, under the contracts, no houses have been finished to any considerable degree, so that we are not able to give any figures.

Is it not also a fact that workers in these building guilds are generally wicked trade unionists?

The workers throughout the building trade are generally trade unionists, but I have never said they were wicked. Like other human beings, they are sometimes a little selfish.

41 and 42.

asked the Minister of Health (1) the comparative cost to local authorities of building schemes and of houses of a similar type, where they have been built by building guilds and where they have been built by private contractors; what the difference means to the ratepayers and occupiers in the shape of rent;

(2) what is the lowest cost per house that has so far been completed by local authorities with direct labour; and what is the highest cost per house by private contract to local authorities?

I am unable at present to state the comparative costs of houses built under the various methods referred to by the hon. Member. The hon. Member will understand that until the contract for the whole of a local authority's scheme is finished, it is not possible to ascertain the final cost.

When there is such difference in statements, is it not only fair that the Minister of Health ought to have this knowledge, so that he might encourage that which is most efficient, and discourage that which is least efficient?

As soon as we have got the information I shall be glad to give it to the House, but reliable information as to what we have experienced is often quite different from the sanguine expectations.

Are the fees and expenses of surveyors and so on provided by the Office of Works, by the local authorities or by the guilds building these houses?

Will the right hon. Gentleman make an effort to supply us with all the contracts which have been completed by guilds, and make a statement to the House, so that we may be able to judge in contrast with that accomplished by the ordinary private contractor?

I shall always be happy to give all the information I can. I will see if I can give any more. It is quite useless to give scrappy information.

Is there not a tendency to hide the virtues of the building guilds and bring forth all their vices?

I am sure I try to be perfectly fair in this matter. I have no desire to conceal or make misleading statements. I only give the facts, and until they build the houses, I cannot give the facts.

Questions

Boards of Guardians (Compensation for Injuries)

asked the Minister of Health how many boards of guardians are making payments to persons in receipt of compensation for injuries received in the course of their employment and the amount of such payments; and what steps he proposes to take to reimburse these boards for that expenditure?

I have no information as regards the first part of the question. With regard to the second part, the guardians are empowered to recover the cost of maintenance where the circumstances appear to justify such a course, and no further steps are contemplated for reimbursing them their expenditure in these cases.

Is it not possible for the right hon. Gentleman to give information to this House as to the amount that is being paid by boards of guardians because of the inadequacy of the compensation allowance? Boards of guardians in industrial areas feel this very heavily, and does not the right hon. Gentleman think it ought to be a national charge?

There are more than 600 boards of guardians, and it is quite impossible at short notice to give details of this kind.

National Health Insurance (Medical Record Cards)

asked the Minister of Health whether he has received any representation from insurance committees with regard to the new medical record cards in use for insured persons?

I have received representations with regard to the medical record cards from four only of the insurance committees, which, as my hon. Friend is no doubt aware, administer medical benefit in every county and county borough. In three cases the representations are on matters of detail, and in the fourth case the committee have sent me a resolution that the keeping of the records is desirable for securing a proper medical service for the insured population. I have also received a letter from the chairman of the National Association of Insurance Committees, stating that the opinion of the executive council of that body is that the keeping of the medical records is unquestionably in the interest of the insured persons.

Wellhouse Hospital, Barnet

asked the Minister of Health the cost to the public of the erection of the Wellhouse Hospital, Barnet; the latest figures available as to the cost of maintenance and treatment; the proportion of such cost attributable to paying patients; the amount of fees received; the number of staff engaged; and the numbers, respectively, of Poor Law patients and paying patients treated?

A loan of £40,000 was sanctioned for the erection of this infirmary, and £38,505 was raised by the guardians. The infirmary was only opened recently and no figures of the running costs or of the amounts recovered from persons relieved in the infirmary have as yet been returned. According to a return made by the clerk to the guardians, the staff numbers 36, and there are also two consultants. I am obtaining from the guardians the further particulars required, so far as they may be available, and I will send my hon. and gallant Friend these particulars as soon as I receive them.

Nigeria, Kenya, and Uganda

asked the Prime Minister whether he is aware of the urgent need of development in Nigeria, Kenya, and Uganda; and will he take action to effect more speedy development than is yet proposed, having regard to the employment which will be created in this country and the known advantages from the development of these colonies since 1901 when their revenue was only £193,000, while in 1919 the revenue was £5,864,000?

Every endeavour is being made to promote the development of the countries mentioned. A large programme for the construction of new railways, roads, and harbour works is in contemplation and, in part, actually in hand.

Channel Train Ferry

asked the Prime Minister whether His Majesty's Government have considered the project of a train ferry across the English Channel as an alternative to a tunnel under the Channel; and whether any consultations have taken place with the Government of the French Republic on this subject?

I have been asked to reply to this question. The project of a train ferry across the English Channel has not been considered as an alternative to a tunnel. My right hon. Friend, the Minister of Transport, carefully considered the use, for commercial purposes, of the train ferry steamers constructed during the War. He came to the conclusion, on the advice received, that the use of train ferries for goods traffic between this country and the Continent did not promise commercial success, as the difference in the character of the rolling stock on Continental and British railways rendered the free interchange of railway wagons impossible. I have no knowledge of any consultations with the Government of the French Republic on this subject.

Would not the objection about the rolling stock apply to the tunnel, and would not the objection to the tunnel, which is largely naval, apply also to a train ferry?

Trade and Commerce

German Goods (Imports)

asked the Prime Minister whether he is aware of the great unemployment which is being caused by the importation of manufactured goods from Germany; and if he is now in a position to state definitely when the Bill to counteract collapsed exchanges and safeguard key industries will be introduced?

I have been asked to reply. This Bill will be introduced and proceeded with immedately after Easter.

Is the hon. and gallant Gentleman aware that a very definite pledge and undertaking was given by the Government that this Bill would be the first measure of the Session, and as we were promised that the Bill would be introduced before Easter, will he reconsider the position?

It is quite true that the Prime Minister said that he hoped it might be possible to introduce the measure before Easter, but no pledge was given to that effect. The Bill will necessitate a Financial Resolution, and, as my hon. Friend is aware, the time of the House is fully occupied up to Easter, and it will be impossible to take that Financial Resolution before Easter. It will, however, be taken immediately after Easter and the Bill will be proceeded with.

Is my hon. Friend aware that a very definite undertaking was given by the Government last Session by the President of the Board of Trade, with the approval of the Leader of the House, that this Bill would be the first measure of the present Session, and is it proposed to carry out that undertaking?

I am afraid that my hon. Friend is not assisting the cause which I know he desires to support. My hon. Friend is as well aware as anybody in this House of the condition of Parliamentary business in this House. The only Bills which have been given precedence are those in which time is essential, that is the Unemployment Insurance Bill and the Coal Mines (Decontrol) Bill. If it is suggested that the Bill is being postponed because the Government wish to avoid it, there is no truth whatever in that suggestion.

Russia

Chinese Troops

asked the Prime Minister whether he can afford any information as to the extent Chinese troops are being employed by the Soviet Government in Russia; and whether these Chinese troops are being used to suppress the rising of Russian workers which has for its aim the setting up of constitutional government?

His Majesty's Government have no information as to the extent to which or the purpose for which Chinese troops are being employed by the Soviet Government.

Can the hon. Gentleman say why it is commendable for Chinese troops to be employed to kill workmen and improper to use them in mines?

Questions

Criminal Law Amendment Bill

asked the Prime Minister whether the Criminal Law Amendment Bill, as amended last Session by a Standing Committee, will be introduced this year, or whether facilities will be given for the Bill on this subject recently introduced in another place; and whether he is aware of the strong feeling expressed by women's organisations throughout the country that considerable changes ought to be made from the proposals incorporated in the Criminal Law Amendment (No. 2) Bill of the last Session?

It has been decided not to reintroduce the Criminal Law Amendment (No. 2) Bill of last Session, but if the Bill which has been introduced in another place, and which contains some of the less controversial provisions of the Government Measure, reaches this House, the Government will then give it consideration and see what action may be possible. I am aware that some of the Clauses in the Bill of last Session meet with strong opposition from certain women's organisations.

Ireland

Murders (Compensation)

asked the Prime Minister if he is aware that in the case of an Irishman being murdered by a policeman, as in the case of the late Canon Magner, compensation has to be paid out of the local rates; and whether he will introduce legislation to alter this state of affairs?

My right hon. Friend the Prime Minister has asked me to answer this question. Under the existing law in Ireland, as in this country, no obligation rests on the Government to pay compensation for the wrongful or felonious acts of its servants acts which it condemns and does everything in its power to punish. If the action is "malicious" within the meaning of the Malicious Injuries Acts in force in Ireland, a legal liability to pay compensation is imposed upon the ratepayers. The general question whether anything further can be done to relieve the many hard cases of persons who have obtained awards in the courts, but have been unable to secure any payment from the local authorities, on account of the refusal of those bodies to recognise the British Parliament or the British Government, is at present under consideration. Any such measure would require legislation. I hope to be in a position to make a further statement on this matter at an early date; but it should be clearly understood that no question of any readjustment of the ultimate burden can be entertained until peaceful conditions have been restored throughout Ireland.

When there are cases of real hardship is it not possible to make some donation as an act of grace, and how can the Government disclaim responsibility for the acts of their own servants in Ireland?

I have done my best to answer the second part of the hon. and gallant Member's question. As to the first part, I have already made some small payments, but I have no large sum of money at my disposal.

When does the right hon. Gentleman propose to introduce legislation to redress financial wrongs for outrages committed by the servants of the Government?

Is it not a fact that General Crozier compensated a lady whose place was looted for the loss of her chickens?

( by Private Notice ) asked the Chief Secretary whether, in view of the circumstances surrounding the murder of three men in Limerick, including the Mayor, the Government will take every step to make the inquiry public, and re-establish the coroner's court as the proper court for dealing with such cases?

These murders occurred in the martial law area, and I am informed by the Commander-in-Chief that he has given instructions for the military inquiry into the circumstances attending these murders to be held in public.

Auxiliary Cadets (Looting Charges)

( by Private Notice ) asked the Chief Secretary whether the five cadets who were placed under close arrest by General Crozier on account of the Trim looting were subsequently placed under open arrest, and, if so, on whose authority and when; whether these five men broke their open arrest, and attempted to cash a cheque for £50 in the City of Dublin; whether they were recaptured after an exciting incident; and where they are now?

I am informed that, owing to the number of cadets under close arrest and to the absence of sufficient prison accommodation for them at Beggars Bush Barracks, it was decided on the 28th ultimo by the Acting Commandant of the Auxiliary Division, after consultation with the office of the Chief of Police, to place the five cadets in question under open arrest. I regret to say that two of them broke from arrest on the 1st inst., and, I understand, attempted to cash a cheque for £50. They were re-arrested. All five were transferred on the 4th inst. to Mountjoy Prison, where they now are awaiting trial.

Is there any precedent for putting men charged with a capital offence under open arrest? Is that a proper method of discipline?

These men are charged with looting and not with a capital offence. I must say, in relation to this question, that the new Commandant of the Auxiliary Force—General Wood—has just taken office, and I hope the House will give him an opportunity to carry on the discipline in his own way.

Does not the right hon. Gentleman's reply point to the advisability of not having these men under military law?

( by Private Notice ) asked the Chief Secretary for Ireland whether a full pardon, restoration to their companies and duties, and an undertaking for payment of back pay, have been granted to the Auxiliary Cadets who were recently dismissed for looting by General Crozier when commanding the Auxiliary Division; and whether this is the result of the pledge given to the House that these cadets would be court-martialled and punished for their participation in the looting at Robinstown, Trim?

( by Private Notice ) asked the Chief Secretary whether the 26 men dismissed by General Crozier were paraded on 7th March, and informed that they were released from suspension and posted to companies to be paid up from the date of reinstatement; whether this has been done as the result of the inquiry; and whether General Crozier was called as a witness?

It is not the case that the cadets in question have received a full pardon or have been released from suspension from police duties and reinstated to their companies. Seven cadets against whom there is a primâ facie case are now in Mountjoy Prison, and are receiving no pay. The remaining 25 were suspended from police duty on their return from England, and are still suspended from duty; but while they are awaiting the result of the inquiry, they are receiving pay, as there is at present no primâ facie case against them. If and when a primâ facie case is made against them, they will at once suffer a reduction of pay, or, if imprisoned, will receive no pay at all.

When will this inquiry be held, and will General Crozier and Captain Macfie be asked to attend?

Will the right hon. Gentleman kindly explain what the fatigue duties are for men charged with looting?

Questions

German Propaganda

asked the Prime Minister if he is aware that libellous propaganda is being sent into this country from Germany, bearing the signature of the German League of Patriots; and, in view of the false and insulting references to the King and to the Foreign Secretary at the date of the outbreak of war, whether the Government are taking any steps to prevent the distribution of these libels?

asked the Prime Minister whether his attention has been called to German propaganda now being distributed in this country by post and purporting to emanate from a body called the League of German Patriots, but bearing no imprint of the name and address of the printers; if he is aware that the papers referred to, enclosed in envelopes bearing German stamps and postmark, are of a character grossly insulting to the British nation and Government and also to the people of Australia, who are declared to be morally unfit to act as a mandatory power; that forged documents, which are pretended to have been discovered in official archives in Russia, are quoted for the purpose of throwing discredit on His Majesty and of fixing on Sir Edward Grey and this country the responsibility for the War; that reference is made to bogus revelations which, it is said, would alone furnish the most damning proof of Britain's guilt and hypocrisy; and that with these libels is an appeal addressed to churchmen, who are exhorted, as followers of Christ, to recover something of England's vanished prestige and honour by purging this country of the poison of the great lie that Germany and not the Entente was guilty of plunging Europe into war; whether the Government possess powers enabling them to prevent these libels on the King and the nation from being distributed through the Post Office; and, if not, whether he will introduce legislation for the purpose?

The Prime Minister has asked me to answer these questions. I have given instructions for the interception, as far as possible, of postal packets containing the pamphlets referred to.

Costa Rica and Panama

asked the Prime Minister whether there has recently been a conflict between the republics of Costa Rica and Panama; whether these two republics are both members of the League of Nations; and whether the Council of the League of Nations has taken any steps whatsoever to intervene or summon the disputants to submit their quarrel to arbitration.

asked the Undersecretary of State for Foreign Affairs if he will inform the House regarding the threatened outbreak of war between the republics of Panama and Costa Rica, both subscribers to the League of Nations; whether the former republic has appealed to the Government of the United States for assistance; and whether the interven- tion of a third republic, which is not a subscriber to the League, will be a contravention of the Covenant of that institution.

I will with the permission of the House answer these two questions together. Friction has recently arisen between the republics of Panama and Costa Rica, both of which are members of the League of Nations, respecting the boundary between the two countries. According to the most recent information which has reached me, the United States Government have offered their mediation in the dispute, and it seems probable that it will be accepted. I do not think there is anything in the Covenant of the League to preclude mediation between members of the League by a nation which is not a member. I understand that the Council of the League of Nations had already sent telegrams to the two Governments reminding them of their obligations under the Covenant when they learned that the Government of the United States had offered mediation.

If the League of Nations cannot put a stop to war between Costa Rica and Panama, what war does the hon. Gentleman think it can stop?

Working Men's Clubs, Police Inspection

asked the Prime Minister whether he is aware of the annoyance that is felt in working men's clubs by the right of entry of the police for inspection of their premises; whether this Regulation was made as a War measure; and whether, under the circumstances, instructions can at once be given to discontinue this Regulation without waiting for the new Liquor Bill to be presented?

I do not see how this particular item can properly be dealt with by itself in advance of the consideration by Parliament of the subject as a whole.

Could not this be done with a stroke of the pen? Can the right hon. Gentleman say what advantage there can be in leaving this restriction, which is absolutely loathed by the whole of these clubs right throughout the country?

National Expenditure (Committees)

asked the Prime Minister what Committees have been set up to check and control national expenditure; and will a Report of their work be made to the House?

The Reports of the Select Committees on National Expenditure of past Sessions have been regularly presented to the House. With regard to the future, I would refer the hon. and gallant Member to the answer I gave yesterday to the hon. and gallant Member for the Henley Division.

Ministry of Munitions (Committee of Inquiry)

asked the Lord Privy Seal when the Committee is to be appointed to investigate the charges made in connection with working papers of the Ministry of Munitions; whether the personnel has yet been selected; what will be the terms of reference; and whether the proceedings will be open to the public?

My right hon. Friend (Mr. Bonar Law) regrets he is unable to be present to answer this question. My right hon. Friend has been in communication with Lord Cave, Lord Inchcape and Sir William Plender, who have kindly consented to form a Committee with Lord Cave in the Chair. The terms of reference are as follow:

"To inquire into and report upon the allegation that on a recent occasion an official of the Ministry of Munitions instructed certain persons employed in the service of the Ministry to destroy material documents or to conceal them from the Exchequer and Audit Department; and to inquire whether such instructions, if given, were acted upon, and, if so, to what extent and with what consequences."

As regards the last part of the question, I think this should be left to the discretion of the Committee.

Is the right hon. Gentleman aware that these terms of reference do not cover all, the allegations, and are not sufficiently full? Will he be prepared to consult two or three Members of this House, in order that the allegations made may be entirely covered by the terms of reference?

I am speaking on behalf of my right hon. Friend the Leader of the House, who has the matter in hand. I am quite certain he intended the terms of reference to cover all the allegations. As soon as he returns to London I am sure he will be prepared to meet my hon. and gallant Friend, and other Members interested in this matter, in order to consider whether the terms of reference are wide enough to cover the allegations, and will amend them if they are not.

Is it not expedient to add to the personnel of the Committee by putting on it a Member of this House—some one acquainted with the Civil Service and its working?

As the Committee includes two representatives of another place can the right hon. Gentleman explain why this House has no representation on it?

The object was to get a Committee which will examine the matter judicially and give a verdict which will carry the assent of the public at large. I think the names selected are sufficient evidence that this purpose guided my right hon. Friend in the selection. I see no advantage in adding a Member of this House merely because he happens to be a Member. If administrative experience is required my Noble Friend (Lord Cave) certainly possesses that in the highest degree.

I imagined it would have sat at once, but my hon. and gallant Friend (Captain Loseby) has raised a question whether the terms of reference are wide enough to cover all the allegations, and that, of course, will delay its sitting.

Canadian Ex-Soldier (Conviction)

( by Private Notice ) asked the Secretary of State for the Home Department whether, having regard to the representations from the Attorney-General of Canada, the Commissioner of Parks, Toronto, and the ex-service men of Woolwich, he is in a position to state his final judgment on the case of Charles Tellett, a Woolwich Arsenal worker and former member of the Canadian Expeditionary Force, which has been referred to him by the Court of Criminal Appeal?

No, Sir, I am not in a position to make any statement.

Business of the House

May I ask the Joint Parliamentary Secretary to the Treasury what business he proposes to take to-night after the first Order is disposed of?

The Vote for the Reformatory Schools and the Committee stage of the Financial Resolution of the Children Bill.

Motion made, and Question put,

"That, on this day, notwithstanding anything in Standing Order No. 15, Supplementary Estimates may be considered in Committee of Supply, either before or after Eleven of the Clock."—[ Mr. Bonar Law. ]

The House divided: Ayes, 233; Noes, 68.

Bellairs, Commander Carlyon W.

Holbrook, Sir Arthur Richard

Pearce, Sir William

Bennett, Sir Thomas Jewell

Hope, James F. (Sheffield, Central)

Pease, Rt. Hon. Herbert Pike

Bentinck, Lord Henry Cavendish

Hope, Lt.-Col. Sir J. A. (Midlothian)

Perring, William George

Betterton, Henry B.

Hope, J. D. (Berwick & Haddington)

Pickering, Lieut.-Colonel Emil W.

Bigland, Alfred

Hopkins, John W. W.

Pratt, John William

Birchall, Major J. Dearman

Hopkinson, A. (Lancaster, Mossley)

Purchase, H. G.

Bird, Sir A. (Wolverhampton, West)

Horne, Sir R. S. (Glasgow, Hillhead)

Ramsden, G. T.

Boles, Lieut.-Colonel D. F.

Hotchkin, Captain Stafford Vere

Randles, Sir John S.

Borwick, Major G. O.

Hunter, General Sir A. (Lancaster)

Rankin, Captain James S.

Bowyer, Captain G. E. W.

Hurd, Percy A.

Ratcliffe, Henry Butler

Boyd-Carpenter, Major A.

Jackson, Lieut.-Colonel Hon. F. S.

Rawlinson, John Frederick Pee.

Breese, Major Charles E.

James, Lieut.-Colonel Hon. Cuthbert

Rees, Sir J. D. (Nottingham, East)

Bridgeman, Rt. Hon. William Clive

Jephcott, A. R.

Rees, Capt. J. Tudor-(Barnstaple)

Broad, Thomas Tucker

Johnstone, Joseph

Remer, J. R.

Campbell, J. D. G.

Jones, Henry Haydn (Merioneth)

Remnant, Sir James

Carew, Charles Robert S.

Jones, J. T. (Carmarthen, Llanelly)

Roberts, Rt. Hon. G. H. (Norwich)

Carson, Rt. Hon. Sir Edward H.

Jones, William Kennedy (Hornsey)

Roberts, Sir S. (Sheffield, Ecclesall)

Carter, R. A. D. (Man., Withington)

Kellaway, Rt. Hon. Fredk. George

Robinson, Sir T. (Lancs., Stretford)

Casey, T. W.

Kenyon, Barnet

Rodger, A. K.

Cecil, Rt. Hon. Evelyn (Birm., Aston)

Kidd, James

Roundell, Colonel R. F.

Chamberlain, N. (Birm., Ladywood)

King, Captain Henry Douglas

Rutherford, Sir W. W. (Edge Hill)

Clay, Lieut.-Colonel H. H. Spender

Kinloch-Cooke, Sir Clement

Samuel, A. M. (Surrey, Farnham)

Clough, Robert

Law, Alfred J. (Rochdale)

Sanders, Colonel Sir Robert A.

Cohen, Major J. Brunei

Lewis, Rt. Hon. J. H. (Univ., Wales)

Seddon, J. A.

Coote, Colin Reith (Isle of Ely)

Lewis, T. A. (Glam., Pontypridd)

Shaw, Hon. Alex. (Kilmarnock)

Cowan, D. M. (Scottish Universities)

Lindsay, William Arthur

Shortt, Rt. Hon. E. (N'castle-on-T.)

Craig, Colonel Sir J. (Down, Mid)

Lister, Sir R. Ashton

Simm, M. T.

Craik, Rt. Hon. Sir Henry

Lloyd, George Butler

Sprot, Colonel Sir Alexander

Davidson, J. C. C.(Hemel Hempstead)

Lloyd-Greame, Sir P.

Stanley, Major Hon. G. (Preston)

Davies, Thomas (Cirencester)

Locker-Lampson, Com. O. (H'tingd'n)

Stanton, Charles B.

Davies, Sir William H. (Bristol, S.)

Loseby, Captain C. E.

Steel, Major S. Strang

Davison, Sir W. H. (Kensington, S.)

Lyle, C. E. Leonard

Stephenson, Lieut.-Colonel H. K.

Dawes, James Arthur

Lynn, R. J.

Stewart, Gershom

Denniss, Edmund R. B. (Oldham)

M'Curdy, Rt. Hon. C. A.

Sturrock, J. Leng

Dewhurst, Lieut.-Commander Harry

M'Donald, Dr. Bouverie F. P.

Surtees, Brigadier-General H. C.

Dockrell, Sir Maurice

Macdonald, Rt. Hon. John Murray

Sutherland, Sir William

Doyle, N. Grattan

M'Guffin, Samuel

Sykes, Sir Charles (Huddersfield)

Edwards, Major J. (Aberavon)

Mackinder, Sir H. J. (Camlachle)

Taylor, J.

Edwards, Hugh (Glam., Neath)

McLaren, Robert (Lanark, Northern)

Terrell, George (Wilts, Chippenham)

Elliot, Capt. Walter E. (Lanark)

M'Lean, Lieut.-Col. Charles W. W.

Terrell, Captain R. (Oxford, Henley)

Eyres-Monsell, Commander B. M.

McMicking, Major Gilbert

Thomas-Stanford, Charles

Fade, Major Sir Bertram G.

Macnamara, Rt. Hon. Dr. T. J.

Thomson, F. c. (Aberdeen, South)

Fisher, Rt. Hon. Herbert A. L.

Macpherson, Rt. Hon. James I.

Thomson, Sir W. Mitchell-(Maryhill)

FitzRoy, Captain Hon. E. A.

Macquisten, F. A.

Thorpe, Captain John Henry

Ford, Patrick Johnston

Magnus, Sir Philip

Townley, Maximilian G.

France, Gerald Ashburner

Manville, Edward

Townshend, Sir Charles Vere Ferrers

Fraser, Major Sir Keith

Marriott, John Arthur Ransome

Turton, E. R.

Fremantle, Lieut.-Colonel Francis E.

Mason, Robert

Wallace, J.

Gange, E. Stanley

Matthews, David

Ward-Jackson, Major C. L.

Ganzoni, Captain Sir F. J. C.

Mildmay, Colonel Rt. Hon. F. B.

Ward, William Dudley (Southampton)

Gardiner, James

Mitchell, William Lane

Warner, Sir T. Courtenay T.

Gibbs, Colonel George Abraham

Moles, Thomas

Warren, Lieut.-Col. Sir Alfred H.

Gilbert James Daniel

Molson, Major John Elsdale

Watson, Captain John Bertrand

Gilmour, Lieut.-Colonel John

Moore, Major-General Sir Newton I.

Weston, Colonel John W.

Glyn, Major Ralph

Moreing, Captain Algernon H.

Wheler, Lieut.-Colonel C. H.

Gould, James C.

Morison, Rt. Hon. Thomas Brash

Willey, Lieut.-Colonel F. V.

Green, Joseph F. (Leicester, W.)

Munro, Rt. Hon. Robert

Williams, Lt.-Com. C. (Tavistock)

Greig, Colonel James William

Murchison, C. K.

Williamson, Rt. Hon. Sir Archibald

Gretton, Colonel John

Murray, Lieut.-Colonel A. (Aberdeen)

Wills, Lieut.-Colonel Sir Gilbert

Guinness, Lieut.-Col. Hon. W. E.

Murray, C. D. (Edinburgh)

Wilson, Rt. Hon. J. W. (Stourbridge)

Hallwood, Augustine

Murray, John (Leeds, West)

Wilson, Lieut.-Col. M. J. (Richmond)

Hall, Rr-Adml Sir W. (Liv'p'l, W. D'by)

Murray, Major William (Dumfries)

Wilson-Fox, Henry

Hambro, Captain Angus Valdemar

Nail, Major Joseph

Winfrey, Sir Richard

Hancock, John George

Neal, Arthur

Wise, Frederick

Hannon, Patrick Joseph Henry

Newman, Colonel J. R. P. (Finchley)

Wood, Sir H. K. (Woolwich, West)

Harmsworth, C. B. (Bedford, Luton)

Nicholl, Commander Sir Edward

Yate, Colonel Sir Charles Edward

Harmsworth, Hon. E. C. (Kent)

Nicholson, Reginald (Doncaster)

Yeo, Sir Alfred William

Hennessy, Major J. R. G.

Norton-Griffiths, Lieut.-Col. Sir John

Young, Lieut.-Com. E. H. (Norwich)

Henry, Denis S. (Londonderry, S.)

O'Neill, Major Hon. Robert W. H.

Young, W. (Perth & Kinross, Perth)

Hewart, Rt. Hon. Sir Gordon

Ormsby-Gore, Hon. W.

Hills, Major John Waller

Parker, James

TELLERS FOR THE AYES. ——

Hinds, John

Parkinson, Albert L. (Blackpool)

Lord E. Talbot and Captain Guest.

Hoare, Lieut.-Colonel Sir S. J. G.

Parry, Lieut.-Colonel Thomas Henry

NOES.

Adamson, Rt. Hon. William

Carter, W. (Nottingham, Mansfield)

Graham, R. (Nelson and Colne)

Asquith, Rt. Hon. Herbert Henry

Clynes, Rt. Hon. J. R.

Graham, W. (Edinburgh, Central)

Banbury, Rt. Hon. Sir Frederick G.

Davies, A. (Lancaster, Clitheroe)

Grundy, T. W.

Barker, G. (Monmouth, Abertillery)

Davison, J. E. (Smethwick)

Guest, J. (York, W. R., Hemsworth)

Benn, Captain Wedgwood (Leith)

Devlin, Joseph

Hall, F. (York, W. R., Normanton)

Bramsdon, Sir Thomas

Edwards, C. (Monmouth, Bedwellty)

Hartshorn, Vernon

Bromfield, William

Edwards, G. (Norfolk, South)

Henderson, Rt. Hon. A. (Widnes)

Brown, James (Ayr and Bute)

Finney, Samuel

Hirst, G. H.

Cairns, John

Galbraith, Samuel

Holmes, J. Stanley

Cape, Thomas

Glanville, Harold James

Irving, Dan

John, William (Rhondda, West)

O'Connor, Thomas P.

Thomson, T. (Middlesbrough, West)

Jones, J. J. (West Ham, Silvertown)

Parkinson, John Allen (Wigan)

Thorne, G. R. (Wolverhampton, E.)

Kelley, Major Fred (Rotherham)

Rendall, Athelstan

Tootill, Robert

Kennedy, Tom (Kirkcaldy)

Richardson, R. (Houghton-le-Spring)

Walsh, Stephen (Lancaster, Ince)

Kenworthy, Lieut.-Commander J. M.

Robertson, John

Wedgwood, Colonel J. C.

Kiley, James D.

Rose, Frank H.

White, Charles F. (Derby, Western)

Lowther, Major C. (Cumberland, N.)

Royce, William Stapleton

Wignall, James

Lunn, William

Sexton, James

Williams, Aneurin (Durham, Consettt)

Maclean, Neil (Glasgow, Govan)

Shaw, Thomas (Preston)

Wilson, J.

Maclean, Rt. Hon. Sir D. (Midlothian)

Short, Alfred (Wednesbury)

Wilson, W. Tyson (Westhoughton)

Mills, John Edmund

Smith, W. R. (Wellingborough)

Wood, Major M. M. (Aberdeen, C.)

Morgan, Major D. Watts

Spencer, George A.

Myers, Thomas

Swan, J. E.

TELLERS FOR THE NOES .—Mr. Hogge and Mr. T. Griffiths..—Mr. Hogge and Mr. T. Griffiths.

Newbould, Alfred Ernest

Thomas, Rt. Hon. James H. (Derby)

New Member Sworn

THOMAS KENNEDY, Esquire, for the Kirkcaldy District of Burghs.

Bills Presented

House of Commons and Municipal Corporations (Qualification of Clergymen) Bill,

"to remove the disqualification of clerks in holy orders and other ministers of religion as Members of the House of Commons and as municipal councillors," presented by Mr. FREDERICK GREEN; supported by Lieut.-Colonel Burgoyne, Mr. Forestier-Walker, Captain Moreing, Mr. Reginald Nicholson, and Colonel Sir C. Yate; to be read a Second time upon Tuesday, 26th April, and to be printed. [Bill 37.]

Protection of Animals Act (1911) Amendment Bill,

"to amend the Protection of Animals Act, 1911," presented by Lieut.-Colonel ARTHUR MURRAY; supported by Sir Frederick Banbury, Colonel Burn, Sir John Butcher, Mr. Lindsay, Mr. Newbould, Mr. Spoor, Major Mackenzie Wood, and Sir Alfred Yeo; to be read a Second time upon Tuesday, 22nd March, and to be printed. [Bill 38.]

Diseases of Animals (Scotland) Bill,

"to transfer the powers and duties of the Ministry of Agriculture under the Diseases of Animals Act, 1894 to 1914, so far as they relate to Scotland, to the Board of Agriculture for Scotland," presented by Lieut.-Colonel ARTHUR MURRAY; supported by Major Mackenzie Wood; to be read a Second time upon Wednesday, 6th April, and to be printed. [Bill 39.]

IMPORTATION OF PLUMAGE (PROHIBITION) (No. 3) BILL,

"to prohibit the importation of Plumage," presented by Mr. TREVELYAN THOMSON; supported by Viscountess Astor, Colonel Sir C. Yate, Mr. Ormsby-Gore, Captain Wedgwood Benn, Captain Brown, Mr. Frederick Green, Sir John Butcher, Mr. Cairns, Mr. Bromfield, Mr. Thomas Davies, and Mr. Aneurin Williams; to be read a Second time upon Friday, 1st April, and to be printed. [Bill 40.]

Standing Committees

Ordered, That all Standing Committees have leave to print and circulate with the Votes the Minutes of their Proceedings and any amended Clauses of Bills committed to them.—[ Mr. John William Wilson. ]

Standing Committees (Chairmen's Panel)

MR. JOHN WILLIAM WILSON reported from the Chairmen's Panel; That they had appointed Mr. Turton to act as Chairman of Standing Committee A (in respect of the Coal Mines (Decontrol) Bill).

Mr. JOHN WILLIAM WILSON further reported from the Chairmen's Panel; That they had agreed to the following Resolutions:—

That any Member of the Chairmen's Panel may be and he is hereby empowered to ask any other Member of the Chairmen's Panel to take his place temporarily in case of necessity.

That, in the absence of the Chairman of the Chairmen's Panel, the Panel may be convened at the request of any two Members of the Panel.

Reports to lie upon the Table.

Message from the Lords

That they have passed a Bill, intituled, "An Act to enable the Liverpool Mineral and Metal Storage Company, Limited, to issue transferable certificates and warrants for the delivery of goods; and for other purposes." [Liverpool Mineral and Metal Storage Company (Delivery Warrants) Bill [ Lords. ]

Indian Affairs:—That they have appointed a Committee consisting of Eleven Lords, to join with a Committee of this House on Indian Affairs, and request this House to appoint an equal number of their Members to be joined with the said Lords.

LIVERPOOL MINERAL AND METAL STORAGE COMPANY (DELIVERY WARRANTS) BILL [Lords]

Read the First time; and referred to the Examiners of Petitions for Private Bills.

Selection (Standing Committees)

Standing Committee A

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had added the following Fifteen Members to Standing Committee A (in respect of the Coal Mines (Decontrol) Bill): Mr. Adamson, Sir John Harmood-Banner, Mr. Bridgeman, Mr. William Carter, Sir Clifford Cory, Mr. Gould, Mr. Holmes, Sir Edgar Jones, Sir Philip Lloyd-Greame, Mr. Robert McLaren, Mr. Samuel Roberts, Mr. Simm, Mr. Frederick Thomson, Mr. Stephen Walsh, and Major Wheler.

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Members from Standing Committee A: Major Berwick and Sir Ashton Lister; and had appointed in substitution; Colonel Roundell and Sir Alfred Yeo.

Reports to lie upon the Table.

Standing Orders

Resolution reported from the Select Committee:

1. "That, in the case of the Durham County Transport, Petition for Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill, on the condition that the powers to construct so much of Tramway No. 8 as is proposed to be laid upon highways in the parish of Boldon Colliery, and so much thereof as is proposed to be laid in the parishes of Boldon and Whitburn, be struck out of the Bill, and that the powers to construct Tramways Nos. 8b, 9 and 10 be struck out of the Bill:—That the Committee on the Bill do report how far such Order has been complied with."

Resolution agreed to.

Orders of the Day

Supply

[FIRST ALLOTTED DAY.]

Considered in Committee.

Civil Services and Revenue Departments Estimates, 1921–22. [Vote an Account.]

[Mr. WHITLEY in the Chair.]

Motion made, and Question proposed,

"That a sum, not exceeding £197,000,000, be granted to His Majesty, on account, for or towards defraying the Charges for certain Civil Services and Revenue Departments for the year ending on the 31st day of March, 1922, namely:—

£

Colonial Office

325,000

India Office

100,000

Privy Council Office

7,000

Department of Overseas Trade

235,000

Mercantile Marine Services

220,000

Bankruptcy Department of the Board of Trade

12,000

Mines Department of the Board of Trade

98,000

Ministry of Agriculture and Fisheries

1,500,000

Ministry of Transport

228,000

Charity Commission

25,000

Government Chemist

22,000

Civil Service Commission

35,000

Civil Service and Arbitration Board

1,200

Exchequer and Audit Department

72,000

Friendly Societies Registry

23,000

Government Actuary

20,000

Board of Control

250,000

Mint (including Coinage)

4

National Debt Office

11,000

Public Record Office

19,000

Public Works Loan Commission

4

Registrar General's Office

325,000

Stationery and Printing

2,050,000

Woods, Forests etc., Office of

16,000

Works and Public Buildings, Office of

275,000

Privy Seal Office

3,000

Secret Service

150,000

Scotland:—

Secretary for Scotland, Office of

25,000

Board of Agriculture

230,000

Fishery Board

30,000

General Board of Control

30,000

Registrar General's Office

64,000

Ireland:—

Lord Lieutenant's Household

2,000

Chief Secretary's Offices and Subordinate Departments

45,000

Department of Agriculture and Technical Instruction

190,000

Charitable Donations and Bequests Office

1,500

Congested Districts Board

160,000

Public Record Office

5,500

Public Works Office

40,000

Registrar General's Office

80,000

Valuation and Boundary Survey

26,000

CLASS III.

United Kingdom and England:—

Law Charges

150,000

Miscellaneous Legal Expenses

40,000

Supreme Court of Judicature, etc.

250,000

Land Registry

50,000

Public Trustee

4

County Courts

140,000

Police, England and Wales

3,500,000

Prisons, England and Wales

900,000

Reformatory and Industrial Schools, England and Wales

325,000

Broadmoor Criminal Lunatic Asylum

35,000

£

Scotland:—

Law Charges and Courts of Law

70,000

Scottish Land Court

6,000

Register House, Edinburgh

40,000

Police

428,000

Prisons

92,000

Reformatory and Industrial Schools

80,000

Ireland:—

Law Charges and Criminal Prosecutions

30,000

Supreme Court of Judicature, and other Legal Departments

80,000

Irish Land Commission

520,000

County Court Officers, etc.

75,000

Dublin Metropolitan Police

200,000

Royal Irish Constabulary

3,500,000

Prisons

120,000

Reformatory and Industrial Schools

70,000

Dundrum Criminal Lunatic Asylum

10,000

CLASS IV.

United Kingdom and England:—

Board of Education

23,000,000

British Museum

140,000

National Gallery

17,000

National Portrait Gallery

5,000

Wallace Collection

7,000

London Museum

2,500

Imperial War Museum

15,000

Scientific Investigation, etc.

82,000

Scientific and Industrial Research

230,000

Universities and Colleges, United Kingdom, and Intermediate Education, Wales

750,000

Serbian Relief Fund

9,000

Scotland:—

Public Education

3,600,000

National Galleries

6,000

Ireland:—

Public Education

2,250,000

Intermediate Education

53,000

Endowed Schools Commissioners

500

National Gallery

3,000

Science and Art

40,000

Universities and Colleges

95,000

CLASS V.

Diplomatic and Consular Services

1,000,000

Colonial Services

725,000

Middle Eastern Services

6,000

Telegraph Subsidies

4,000

League of Nations

40,000

CLASS VI.

Superannuation and Retired Allowances

495,000

Old Age Pensions

11,000,000

Ministry of Pensions

44,000,000

Merchant Seamen's War Pensions

250,000

Miscellaneous Expenses

11,788

Hospitals and Charities, Ireland

16,000

£

Temporary Commissions

20,000

National Savings Committee

40,000

Imperial War Graves Commission

50,000

Ireland Development Grant

290,000

Expenses under the Representation of the People Act

170,000

Emergency Services

20,000

CLASS VII.

National Health Insurance Joint Committee

200,000

Ministry of Health

9,000,000

Scottish Board of Health

1,500,000

Local Government Board, Ireland

750,000

National Health Insurance Commission (Ireland)

262,000

Ministry of Labour

7,500,000

National Insurance Audit Department

85,000

UNCLASSIFIED SERVICES.

SERVICES ARISING OUT OF WAR.

Disposal and Liquidation Commissions

4,000,000

Shipping Liquidation Commission

1,000,000

Central Control Board (Liquor Traffic)

45,000

Loans to Allies, etc.

2,000,000

Railway and Canal Agreements

18,000,000

Treasury Securities Deposit Scheme

400,000

Property Losses (Ireland) Compensation

100,000

Miscellaneous War Services (Foreign Office)

200,000

Coal Mines Deficiency

1,500,000

Export Credits

2,000,000

Prize Claims

25,000

Road Grants Unemployment Relief

1,000,000

Unemployment Grants

1,700,000

REVENUE DEPARTMENTS.

Customs and Excise

3,000,000

Inland Revenue

3,250,000

Post Office

27,000,000

Total for Civil Services and Revenue Departments (including Services arising out of the War)

£197,000,000"

International Trade

I beg to move, that Item class II ( Board of Trade ) be reduced by £100.

4.0 P.M.

I respectfully ask the indulgence of the House this afternoon in drawing attention to one or two problems of international trade from the point of view of their bearing upon unemployment in this country. Probably the great majority of the Members of the House Will agree that pro- vided we are prepared to make constructive suggestions, there is no more valuable course which the Debate can take on the present occasion. All that I am going to attempt, in order to leave the largest possible opportunity for other better qualified Members of the House, is to ask one or two questions, first of all, with reference to the position of the proposed trade agreement with Russia; secondly, with reference to the exports credits scheme in so far as that affects Central Europe in particular; and, thirdly, with reference to that mass of information regarding overseas trade which, I am afraid, all of us in this country at the present time only insufficiently use.

On the first point, I think I am entitled to claim that British labour from the very beginning of this controversy has consistently advocated the adoption of an agreement with Russia at the earliest possible moment. We have taken the view, rightly or wrongly, that the policy of the Government in connection with Russia has not merely gathered together very large sections of people in that country under the Bolshevik banner, but has unfortunately penalised and hindered the recovery of European trade. I desire to make it perfectly clear that for my part I do not agree with the critics who suggest that we are going to solve the whole problem of unemployment in this country by the mere conclusion of a trade agreement with Russia. The economic facts regarding Russia are too impressive, and the economic paralysis of that country is too great for any agreement to have more than a limited measure of success in the matter of restoration as far as our unemployment problem in Great Britain is concerned. Recent investigations of the most impartial kind have indicated that not only is there a very great fall in productive power in Russia, but there is terrible financial, social, and economic chaos, which makes it very improbable indeed, from many points of view, that with the best will in the world a large part of Russia will be able to exercise effective demand for British goods. If that statement is correct, it would seem to follow that we must not rely too strongly on this agreement.

That does not relieve us of the duty of pressing very urgently indeed for an early conclusion of a trade agreement, which is none the less necessary and desirable, not merely from the point of view of the material advantages which it would almost immediately bring, however limited in extent, but also from the moral and psychological point of view in the restoration of European economic conditions. The indirect effects of the present position in Russia are in many ways remarkable. They are found in China and in Japan. They are found in practically every country in the world, and it is a rather interesting commentary on those indirect effects, as far as we are concerned in Great Britain, that they are really penalising employment from that point of view as well as from the point of view of our more direct associations with Russian trade and commerce. I therefore respectfully ask the President of the Board of Trade whether he is in a position to make any statement at all regarding the Russian trade agreement, and whether he can hold out any hope that die conclusion of that agreement will influence the employment of a much larger number of people in this country who depend primarily or indirectly upon Russian trade.

The second point, and the one to which I desire far more particularly to draw attention, is the question of the exports credits scheme. Many of us on these benches have been frankly disappointed by the course of this controversy. We realised that at the earliest possible moment it was not merely in the interests of Central Europe, but, from a quite selfish point of view, in the interests of this country, that Germany, the Central Powers, and other parts of Europe should recover without delay. We wanted to see an exports credits scheme which would be wide and comprehensive. We wanted to see the terms made as generous and as fair as we could possibly make them. Instead of that, the Government embarked upon a very limited proposal, amounting in the aggregate, if I remember rightly, to £26,000,000, under very restricted conditions, which I think I am correct in saying have caused the scheme largely to break down in application. That state of affairs cannot possibly be allowed to continue. One has only to make the very slightest inquiry into European conditions in order to ascertain that their inability to trade with us and their difficulty in finding credit is resulting in serious un- employment within these shores. The question we are therefore compelled to ask is whether at the stage it is possible to embark upon a much wider and more comprehensive scheme than we have yet devised. At the moment, as far as we can ascertain, though no doubt my right hon. Friend in replying to the Debate will make it clear, only two proposals hold the field.

The first proposal is that associated with the name of Sir Edward Mountain and other leading men, financiers and others, in the City. If I understand it correctly it amounts to this, that they propose to ask for one-half of the £26,000,000 set aside by the Government as a kind of basic guarantee or security. They are then prepared to form a syndicate and embark upon some enterprise, more or less comprehensive, in the provision of export credits. I make no comment at all upon the good faith or the good intentions of the promoters of such a scheme. Quite apart from economic or party bias, I should like almost any effort of any kind which is going to restore, or help to restore, European trade; but we are compelled to ask ourselves in this connection whether this is the best proposal which can be made, and whether, in the second place, it is one to which the Government and the people of this country should give support. It seems to me to contain a central danger which is certainly very strongly emphasised in the Labour movement of this country. Certain people have proposed to give a very large sum of public money to this enterprise, and there cannot be the slightest doubt that the enterprise is undertaken in the hope of gain. As far as I have been able to make out, the promoters do not profess to be philanthropists. They do not suggest for a moment that they are undertaking at their own cost a duty which should fall upon the State, and if they hope for gain or reward we are bound to face the issue as to whether it is desirable to make any contribution of public money to that end. It would be different if the circumstances were otherwise, if this was some very small or doubtful or restricted enterprise, although then most of us on these Benches would question the suggestion, but here is a matter which concerns the whole of the trade of this country, which, above all, is a duty for Great Britain, and which beyond question falls to us, because I think we still possess one of the best financial systems in the world, and we have survived the War with far greater strength and stability than many of our competitors.

My very strong appeal therefore is to the President of the Board of Trade to adopt the second of the two proposals, not to give any grant of public money large or small, to this enterprise, but to embark upon the extension and development of our own export credit scheme in the hope, I might almost say in the certain hope, that while it appears risky and venturesome at the moment it will in due course bring its reward. I am moved to make this very strong appeal because of certain circumstances which are recorded by quite impartial investigators of the European economic situation. Suppose for a moment that we failed to enter into a large comprehensive scheme of export credit we may rest assured, and we have ample proof already for making the suggestion, that where we fail other countries will succeed, and those other countries may be in effect or in practice the competitors whom we have most reason to fear in the near future. Within recent times, according to economic and other journals, certain agreements were concluded between Dutch merchants and German traders, the purport of which was to give certain credit on more or less generous terms to the German traders in return for a substantial interest which the Dutch merchants acquired in the German commercial and industrial undertakings. That seems to me to be a very significant development in European trade and one of the very highest importance from the point of view of manufacturers in this country and from the point of view of the regular and remunerative employment of the great masses of British workers.

That is only one of numerous tendencies of the same kind. But those agreements seem to indicate that as they work out in practice over the years they are going to tend to make trade between those countries flow in more or less restricted channels. Certain requests are made, considerations are preferred and it is urged that preferences of one kind and another may be exacted, and then, as we shall I think commonly recognize, there must be a certain measure of gratitude, to put it no higher, between those who have come to the assistance one of another in European conditions at the present time. If that is going to restrict trade, if these agreements are going to have the effect of binding more closely together certain European countries in trade and commerce, what is going to be the result for an island community like our own which depends for the employment of the overwhelming majority of its people upon the freest possible intercourse in oversea commercial relations? I am very much afraid, to push the argument a little further, that the tendency which is represented in the Dutch-German trade agreement is going to strengthen the trust movement on the Continent. I hope, therefore, that the President of the Board of Trade will be able to give us some satisfactory assurance in this matter of export credit. I feel strongly that in the chaos of doubt and uncertainty in the past two years we have lost very valuable opportunities. We have sacrificed a good deal of ground in commercial relations which would have gone far to meet present unemployment. I can only hope that we are not too late, notwithstanding the Dutch-German and other agreements, to make good the loss which, partly for reasons over which we had no control and partly for reasons which I think were within our control, we have so far sustained.

The third point to which I desire to direct attention is the use we are making in Great Britain of very valuable reports on economic conditions in other parts of the world which are issued from time to time. These reports have a very important bearing upon employment, they have a very important bearing upon overseas markets, and they are full of useful information for British manufacturers and British workers, but unfortunately they are read to only a very limited extent, and I want to ask, and to press the question, as to whether the Board of Trade is doing everything it might do to bring those reports into active use in the community for our common benefit and good. May I take one or two very simple illustrations? It has been pointed out in one important report that we are in danger of losing a considerable part of the Japanese market for two reasons. The first is uncertainty of delivery and the second is the high price which we are compelled to charge for most commodities. I recognise that that raises highly controversial issues, and I am not going to try to analyse the causes. What I am going to suggest at the moment is that if that report is accurate, and I presume it is, and if for those reasons we are in danger of losing a portion of the Japanese market, it becomes the duty of the Board of Trade, of the Government and more particularly of British manufacturers and workers, faithfully to investigate both reasons and do their very best to find a remedy. Another illustration has been strongly emphasised in recent times. It is very important for Lancashire and other parts of England. It has been pointed out that during the past two years there has been a remarkable development in the cotton trade in China. Within a short time they hope to lay down not fewer than 250,000 extra spindles. They are looking forward to periods of considerable prosperity, and the conclusion that was reached in one of these statements was that at no distant date this country would feel that competition in a more or less acute form. At the same time, in connection with Japan, China and other countries in that part of the world, we have not merely the growth and development of shipbuilding, not merely an extension in the woollen and other industries, but we have a great deal of inter-penetration, more particularly by Japan in the case of China, which is going to have a profound effect upon British prosperity.

It is very often argued that Labour is narrow and bigoted and sectarian in its views. I have heard some hon. Members—not many—and a good many speakers outside the House suggest that all that Labour understands is an increase in weekly wages, or some immediate return for the services which it renders. I want to plead that Labour is not blind to the wider considerations of trade and commerce, that in its own way it is studying the facts which I have summarized, and it is anxiously looking to the Board of Trade and to this country to try to give some kind of effective reply. We realise that unemployment may begin in the most distant corners of the world. The mere interruption of enterprise in a certain market to-day may express itself in the unemployment of a section of our people six or nine months hence, so very difficult is it to trace the association between the employment of our people and the access of our goods to purchasers in all parts of the world. I think I have said sufficient to show that we realise quite clearly that employment will never be safeguarded, and that it will not be for the great majority of our people remunerative in character, unless all of us in this country face these issues and unless, above all, we get that plain definite and courageous leadership from the Board of Trade which we firmly believe this country urgently requires.

I am only voicing the opinion of the Committee when I thank the hon. Member who has just spoken for his very thoughtful and highly-informative speech. His moderation and the obvious clues that he shows of deep study are appreciated on all hands. I wish to follow him on a tremendously important subject which is talked about everywhere by all classes of people, by all shades of political opinion, and in every part of the country, namely, the present stagnation of trade, the ever-increasing unemployment, or short time, and the extremely hazardous financial situation in which many of our great commercial firms find themselves to-day. The City of London and the financial centres of our great commercial cities are in a state of gloom and dejection. Here and there we get a ray of light, but, nevertheless, it will be agreed in all parts of the House that the subject is very serious, and any suggestion that can be made for dealing with the problem with a view to reducing trade stagnation and bringing about employment ought to be made. It is in that spirit that I wish to speak.

I wish, first of all, to deal with two or three particular causes of unemployment and very humbly to suggest certain remedies, and then I propose to suggest a possible general solution for the present trouble. The first particular cause that we should consider is the question of Russia. I do not want to tread the well-worn path of debate as to the desirability or otherwise of trade with Russia, but I wish to ask the President of the Board of Trade whether we are proceeding immediately with the trade negotiations with M. Krassin. I understand that M. Krassin returned to this country on Friday night. It is now Wednesday, and the matter is very urgent. These negotiations have been talked about by the Government and have been pursued for over a year. I believe the Prime Minister's first statement of policy in regard to opening trade with Russia was about fifteen months ago in a speech at the Guildhall. Have the Government at once reopened negotiations or are they waiting to see which way the cat jumps in Moscow and Petrograd?

I hope the hon. and gallant Member is not suggesting that the delay lies with us. He is very ill-informed if he does so.

If the right hon. Gentleman means to tell me that the delay lies on the other side I should be very surprised. In any case, perhaps he will tell us where the delay is and whose fault it is. I do not wish to enter into a discussion of the merits of the other side and the delays. I want to know whether we are waiting to see what happens in Petrograd and Moscow. In other words, is my right hon. Friend paying any attention to newspaper reports as to the imminent fall of the Soviet Government If so, I would remind him that this is at least the thirtieth account of the immediate downfall which we have had during the last three years. Almost every month we have had an account of the terrible happenings there and of the impending fall of the Soviet Government. If he is waiting for that, not only do I regret the delay but it will only give ammunition to the very powerful party of Communists who do not wish to trade with this country, and it will help them in their policy of delaying the happily strong and dominant party which does hope to trade with this country for the mutual benefit of the two Empires. I hope the right hon. Gentleman will give us such information as he can. I agree that trade with Russia at the present time will not solve all our troubles in this country. No one has ever made that suggestion from these Benches. Trade with Russia is only one of the means of opening up badly-needed markets for British goods, and we cannot afford to neglect any market that can purchase goods from us. Every little helps. I know that the moment that the trade agreement with Russia is signed, automatically Russian locomotives will come over here to be repaired by Armstrong, Whitworth and Co. The right hon. Gentleman the late Food Controller tells us that there is nothing to be looked for from trade with Russia, but I would point out that Armstrong, Whitworth and Co. are a fairly successful firm, and that they have an arrangement that the moment this agreement is signed over will come the locomotives, so many a week, to be repaired. Employment will be given to British workmen in reconditioning these engines.

Will the President of the Board of Trade tell us if it is a fact that a very heavy purchase of motor lorries made by the Russian Trade Delegation from the group who have bought the Slough depot has been hindered or held up in any way by the Government, and, if so, why? There is a great slump in the motor trade, and motor engineers are being thrown out of employment. If we can relieve that heavy slump by selling motor transport at a decent price to Russia, it will be a good thing, and if such a transaction has been prevented it is very criminal. Until transport is restored we cannot begin to send in the smaller goods. I do not wish to argue the matter as to how we are to get payment for these things, although I could argue it. The House has decided this matter. Sooner or later there will be great riches available in Russia, and it will be a great market for our goods. Every month we delay the longer we cut ourselves off from that market.

There is an even more important matter, and that is the present situation with regard to Germany. I do not wish to go into that in detail, but I do say that it is very disastrous that the negotiations with Germany have broken down. I am not blaming anyone particularly—

That does not arise on this Vote. We are confined to matters under the Board of Trade. There is a Motion for reduction before the Committee in regard to the items for the Board of Trade, and only matters which are subject to the jurisdiction of the President of the Board of Trade is within our purview at the present time.

Then I am immediately ruled out. Another matter which is affecting employment in this country is the artificial hindrance to trade. These hindrances are most injurious. I will mention what I consider the very disastrous Act called the Dyes Act, which was passed last Ses- sion, and what may be a still more disastrous Bill, the Anti-Dumping Bill, with which we are continually threatened—

I thank you, Sir, and I regret that I am prevented from pursuing that matter, although I had only intended to touch upon it in passing. I suppose that I shall be unable to refer to loss of trade with Ireland owing to the present state of affairs. The loss of trade with Ireland is hitting British industries very hard, because in normal times we sent more goods to Ireland than to the whole of India. In the present state of affairs there we are suffering loss of trade to this country, which is causing unemployment, and I am afraid that these things will be worse before they are better. If our policy were adopted instead of that of the Government all these things would be preventable. May I suggest a possible general remedy? When the Overseas Trade Credits Insurance Bill was brought in last Session certain hon. Members pointed out its defects, and I think that they are amply justified. The Government, quite properly, have announced that that Act will have to be modified. With regard to its administration as it stands at present, I think a case has been made out quite clearly that that Act is very largely a failure. A sum of £26,000,000 was voted, but an almost insignificant sum has been taken off. Only a few millions—about £3,000,000 or £4,000,000—out of the £26,000,000 have been taken up by merchants. At the present time, when there is such tremendous tightness of money, and when it is so difficult for merchants to get credit for their business, the fact that they have not been able to avail themselves—owing to the extremely narrow way in which the fund is administered or to the way the Act is drawn—of the £26,000,000 of Government money which is available for them shows that there must be something wrong. The Government have admitted that there will have to be modifications.

Of course the Government must in this matter closely guard the interests of the taxpayer; but in regard to well-established firms in this country who are deal- ing with known customers abroad, whose reputation is good, and with whom they have dealt for generations, I think the Government in these abnormal times might have been much more generous and ready in giving them the necessary credits. Another defect in the scheme which was pointed out last Session is even more manifest to-day, and that is that the great need of these devastated countries in Europe is not manufactured goods so much as semi-manufactured goods and raw materials. They have to get their economic machine started again, and today they must have in many cases raw materials or semi-raw materials. If trade can be done in this country with raw products from the Dominions and Dependencies badly needed in Central Europe, if that can be carried out by British subjects by means of credits given by the Government, I think it is a pity that it has not been done. After all, one thing have been clearly shown in the last few years, namely, that countries are inter-dependent, and if we can support the economic life in any of these countries of Eastern Europe, that will have a good effect upon our own markets. As these foreign markets sink lower and lower down into depression and ruin so we are feeling the effects, and even if the fact of buying raw materials abroad and sending them with Government credits to these countries cannot immediately remove unemployment here, in the long run it will all help to restore the machine of credit and commerce, without which we cannot hope for the recovery of permament prosperity in this country. We can only support a limited population on our own soil. We have grown rich by being at the gate of a rich Europe, and until that Europe becomes rich again we shall find ourselves extremely poorly off for money and credits.

I must raise my voice once more in this House on one particular point, namely, the Consular service abroad. We have had all sorts of fine promises from the Government that they are going to reorganise the Consular services, but I am still receiving complaints from British business men about the bad state of the Consular service in most important markets abroad. There have been improvements, especially in the case of Central America, I am glad to' say, but never- theless in many most important countries and most important centres of trade and commerce the Consular representation of this country is not what it ought to be, and is not fitted by those who man it, or by the remuneration of the people sent to represent us, to give the British business man what the German Consular service used to give the German business man before the War, and what the American Consular service gives throughout the world to-day. I do not really know who the Consular service is under now, whether or not it is under the President of the Board of Overseas Trade.

Are we discussing the Board of Trade or the Overseas Trade Department? What is the Vote we are discussing?

Yes, quite so. I was asked whether the question of inter-national credit and the restoration of trade and credit in Europe and the rest of the world could be raised, and it seemed to me that it came generally under the jurisdiction of the President of the Board of Trade, and for that reason I thought it was in order. The Overseas Trade Department is a separate Vote, but the Minister is an Under-Secretary of the Board of Trade and also of the Foreign Office. Therefore it is impossible to draw a very hard and fast line, and I think that references to suggestions for restoring the world trade of various countries are quite in order.

I had avoided going into details with reference to the Consular service. I only mentioned it because the President of the Board of Trade must rely upon the Consular reports in certain directions. I think it is a matter which should receive a very great deal more attention from the Government. We shall have to go a good deal further if we are to restore trade than the removing of artificial embargoes, devising peace treaties, giving credits, or improving the Consular service or any other of these minor palliatives. The problem of the collapsed exchanges is going to face us for some years to come. It is the most serious obstacle to the recovery of international trade to-day and it is to some system to get over that that I think the Government should have bent their energies for some time. We have had a tremendous amount of talk upon this subject from the Government. The Prime Minister comes down here and attacks the British bankers for not putting their depositors' money at the disposal of merchants for financing trade with countries which the Government themselves will not touch through their own scheme. At the same time the Prime Minister on that occasion, a few days after the opening of Parliament, did point out the urgent necessity of this question being tackled. We have had the Ter Meulen scheme, Sir Edward Mountain's scheme, and the scheme of the hon. Member for Eccles (Mr. Stevens). We have also had the Conference at Spa and the recommendations of the distinguished economists there. What is being done about it? Are we still corresponding with a dozen or twenty countries interested? Has the League of Nations been asked to look into this matter at all? They have an International Bureau which can be turned to use in cases of this sort. Has the Government attempted to do anything through the much abused League of Nations? We are told it cannot stop the war between Costa Rica and its little neighbour. Turn it on to the work of peace, of trying to solve this terrible problem of exchanges. I have a suggestion to make in this matter. I believe the whole system of exchange by means of acceptance bills, discounts, bankers' credits, and cheques has completely broken down through the War. It is smashed to pieces. The machinery has gone. In fact, the Prime Minister has actually used those words. The delicate machinery which, by means of credits and bills, enabled the products of all countries to be exchanged was broken on 4th August, 1914, and it has not been repaired. I am afraid it has got still worse since the Armistice. How can you trade with Poland to-day when the mark, instead of standing at 20 to the £ has touched 3,200 to the £? How can you trade with Austria when the kroner is 1,800 to the £ and you have no knowledge when it is going to jump up 300 or 400 points? Even the German exchange is hitting us badly in many directions?

These schemes of groups of financiers and bankers do not, and I suggest cannot, touch this problem. The idea of getting private financiers to put up these credits when they can hardly finance their own regular customers today is absolutely fantastic. You cannot expect private financiers to take the risk of more revolutions and anarchy in the countries of Europe which are verging upon that state to-day. There is no one who can say that Poland or Austria will not go Red within thirty days. While that fear exists financiers quite naturally will not take risks, very largely with other people's money, which, of course, they would have to do. The only people who can take risks to-day, in my opinion, are the Governments themselves.

The difference is that the Government can force people to squander their money, but, fortunately, the bankers cannot force them.

If we talk about any system for restoring international trade as squandering money, what about the £130,000,000 we spend on armaments? I should like to see some of that money devoted to this purpose.

The hon. Member is altogether too discursive. He must concentrate upon the point before the Committee. We are not travelling quite so wide as that.

Thank you, Sir. May I deal with the financing of credits to Poland? It is not to our advantage that that country should go into anarchy at the present moment. It is a rich country, with wealthy manufacturing communities, once they are got going, with great agricultural resources, and some of the richest mines and forests in Europe. It is to our interest that trade should be restored and should be increased with Poland. Would it not be possible to give Government credits to the extent of £10,000,000 or even £20,000,000 to finance trade with that country? Poland to-day, above all things, requires transport. It was stripped by the invading armies that swept across it—Germans, Russians, and so on—during the War. Would it not be possible to give Government credits for the supply of locomotives, road transport, agricultural implements, and other absolute necessities, without which the Poles cannot get to work again? If we were still at war, and Poland was our Ally, and required transport, we would give her transport with Government credits without hesitation. And we would not get any payment for it, because the transport, munitions, and uniforms we supplied her would not produce wealth, but destroy it. But if we can supply her with the implements of peace—agricultural machinery, machinery for her factories, phosphates, rubber, and other things, instead of destroying wealth we shall produce wealth, which she can enter on the other side of the book and wipe out the credit advanced to her. Unless something is done we shall be faced with a financial crisis ending perhaps in a crash which may take us years to recover. One after the other these countries are collapsing; that is shown by the exchanges, which have got worse and worse during the last two years. If things get much worse France and then ourselves will find ourselves in equal difficulties. It may take us years to recover from it. We may not get through that period without the greatest unrest and anarchy and confusion in this country.

5.0 P.M.

I would like, if I am in order, to make some remarks upon the very able speech of the hon. Member for Edinburgh (Mr. Graham). There are two main points in his speech—two suggestions to get over this extremely grave crisis. The first suggestion was that the Board of Trade ought to use all its powers to hasten on a trade agreement with the Russian Soviet Government. He obviously in his own mind had a clear idea that there were certain dangers and difficulties in that trade agreement, but I doubt whether he realised the utter impossibility under any circumstances and any form of agreement of dealing with a Communist country. It is of the essence of Communism that trade becomes impossible. Communism such as is practised in Russia at the present day, if it is carried out properly and on the lines they themselves have laid down, must lead to a complete destruction of capital and must lead to there being no replacement of capital as long as there is true Communism in Russia. Communism takes away any incentive for any man to produce more than he consumes. In fact, it leads him to endeavour by one unfair device or another to consume more than he produces in the hope that some unfortunate fellow countryman may make up the differencee. The hon. Member for Edinburgh (Mr. W. Graham) has apparently forgotten that the co-operative movement in this country endeavoured to open trade with Russia some time ago, that they actually made a shipment, and that they have not any return for that shipment.

Understand what it means to enter into trade with Russia at this time. So far as I know, licences would be granted by the right hon. Gentleman (Sir R. Horne) for certain articles—articles which could not be used by Russia to assist in military operations against her neighbours. Let us suppose a shipment of drugs to be used for medicine to be in question, and that a licence has been procured for the shipment of these drugs. How are these drugs to be paid for, because, after all, that is the whole difficulty we have got to face in trade with Russia? To my mind, there are three alternative methods of payment. In the first instance, payment could be made with that rapidly diminishing supply of gold now in the hands of the Soviet Government—I say rapidly diminishing because I believe that there is now a comparatively small amount of gold left in Russia. But immediately the trader receives his gold the real owners of that gold put in their claim, and as the law stands at present the real owners can restrain the British trader from taking that gold.

How can you identify one of these gold roubles from another?

The proof is this. We have evidence that those who have the gold now had no gold at all before. The right hon. Gentleman (Sir D. MacLean) says there is a doubt about the legal position. Where there is a doubt no trader is going to commit himself. The right hon. Gentleman admits the doubt. No one is going to make payment in gold which may be taken away immediately. The second possibility of payment is through barter. Barter, of course, necessitates some useful commodity to be given in exchange. We remember the Prime Minister a good number of months ago favouring this idea of barter with Russia to the best of his ability. We remember his picture of the bursting corn-bins throughout agricultural Russia, and all those natural resources which were simply waiting for us to send and fetch them. But we have not heard much of those bursting corn-bins lately and for this reason: that not only do they not exist now, but they did not exist then, and under no possible conceivable circumstances could they exist under a communist régime inasmuch as no man can produce a surplus. Therefore the question of payment in gold falls to the ground and the question of exchange by means of barter falls to the ground. The third alternative is left and that alternative German capitalists are using on a large scale. It is the granting by the Soviet Government of concessions for the exploitation of districts in Russia, exploitation not only of their natural resources, but of the labour existing in those districts. The object of the German capitalists is to obtain the complete domination of whole districts of Russia including the privilege of forced labour of the inhabitants. I do not think the hon. Gentleman opposite would suggest that we should take part in a game of that sort, and moreover if we did, we lay ourselves open to a further danger. As soon as concessions are taken up by a country, there is an immediate drain of capital from the country effecting the concession for the development of these concessions. In Russia to-day capital is worth it may be 1,000 per cent. or 20,000 per cent. Capital has been deliberately destroyed and therefore there is an enormous drag upon the whole capital of the world towards Russia where it can be employed to get such enormous returns. The result is that, at any rate for a few years before we begin to get a return from those concessions, we are going to have a further drain on the capital of this country and a further increase of that famine of capital which is at the root of unemployment in this country at the present day. I hope I have convinced the hon. Member (Mr. W. Graham) that this question of trade with Russia is not the simple matter he thinks it is and not the simple matter the Prime Minister thought it was.

The other point that the hon. Member raised is one on which we have had very much discussion lately, and that is the question of export credits. The Mountain scheme, the Ter Meulen scheme, and other schemes of this nature are simply devices for enabling undischarged bankrupts to continue trade. There is a complete analogy. Foreign countries want certain commodities which we can supply but owing apparently to the fact that they have nothing to exchange and apparently owing to the fact that our prices are outrageously high, trade cannot take place. Any system of bolstering up the credit of these bankrupts means in the end the loss of our money and even presupposing that some day or other we might get paid back, remember this, that every pound of credit given to the customer abroad is one less pound of credit to be allowed to the manufacturer at home. I think we have been deceived and I believe the Government and some Government Departments have been deceived by a catchword. That catchword is "manufacture of credit." It looks from their actions as if they believe that credit is a thing that can be manufactured without raw material. It is possible to manufacture credit, but you must have raw material for the purpose; that is to say, you cannot pile up credit unless there is some asset to back it up with, and the Government in adopting these schemes is acting like the man who thinks that it is possible to pawn his trousers at one pawnshop and go and pawn the same pair at another. The essential fact is this, that if any credit is given abroad it means so much less credit at home, and to that extent it means so much more unemployment. If I may continue with the arguments of the hon. Member for Central Edinburgh (Mr. W. Graham) I should like to point out that he brought his series of logical arguments such as he is so very capable of to the brink of a dénouement. He brought us to that point and then he stopped. He showed how the real cause of unemployment in this country is the fact that people abroad are not buying our goods; that they cannot buy our goods because our goods are too expensive; that they are too expensive because they cost too much to manufacture—and then he stopped. May I continue his argument?

The cost of manufacture is too great because wages are too high. All these credit schemes are simply in the long run devices to keep wages in this country, and the standard of living in this country, higher than the circumstances of the world at the present time can permit. We see the thing perfectly in the case of the coal industry. We heard last night a very complete discussion of the situation, and it is exactly analogous to the situation of our foreign trade. The idea then put forward was that under no circumstances must the standard of living of the miner be reduced. Then we reached ultimately the conclusion that every ton of coal produced in this country would have to be subsidised in some way or another to the extent of something like 20s. in the ton. Therefore you see it is impossible to raise coal in this country on the present wages basis at a price at which we can compete with coal sent from countries abroad, just in the same way as we have been beaten out of the markets of the world by our late enemies and by the Belgians and others because we are endeavouring to do what no nation can do, endeavouring to have a higher average standard of living than we had before the War. I have said over and over again in this House, and I say it again, that until people in this country begin to realise the essential fundamental fact of the situation we shall never get out of the present position, and that fact is that the average standard of living depends upon the amount of food to go round and the number of stomachs to fill. For some five years we have been distributing in such a way as to enable the working man to have a higher standard of living. We have been taking the savings of certain classes of the people and distributing them amongst others. But now those savings are exhausted.

As far as I follow him, the hon. Member is replying to the hon. Member for Central Hull (Lieut. Commander Kenworthy).

No, I am replying to the hon. Member for East Edinburgh (Mr. W. Graham)

The hon. Member is referring to the means of restoring national credit and trade between the nations. In that matter he is quite in order in going into economic questions, and all we can hope is that he will not go into them too deeply or at too great length.

You have been rather kinder to me than I deserve on that point, because I had developed my argument, which was coming back more closely to the simple fact, that, while we are endeavouring to maintain an artificial and an impossible position, our late enemies have faced the situation, and while we in this country, on the average, are consuming very much more than we produce, our late enemies, possibly owing to circumstances outside their own control, are adopting exactly the opposite policy. They are consuming very little, and producing right manfully at the present time. If the existing conditions continue, we must go down altogether as an industrial nation.

I agree thoroughly with a great deal of what the hon. Member for Mossley (Mr. Hopkinson) has said, but every one of us realises that if we are to maintain in comfort 45,000,000 of people in our islands, it is absolutely necessary for us to find markets in which to sell the goods that they make. I hope however that the Government will not give any credit, even if assisted by the bankers and the insurance people, unless the country of the nationals to whom the credits are given is willing to shoulder the burden, and assume the payments of the debts in the long run. To-day we all know that almost every country in Europe is unable to pay its way. Until the Napoleonic Wars we relied upon our colonies for our markets. After these wars we relied largely upon the European markets. To-day we find that almost every country is unable to produce any balance sheet that shows that it is able to pay its way. I have suggested, and I want to suggest again, that if we are going to reconstruct Europe, or lend a hand at doing it, we ought to get the 47 nations who have joined the League of Nations to take a hand in it. If those 47 nations would work together, and establish an international bank, not to be run to make money, but to be run as a sort of clearing house in connection with the existing banks and acceptance houses, and if the international bank to be established would not lend any assistance to any country that did not enter into agreements with them; if for argument's sake that bank were started to-day, and a country wanted to get assistance, it should arrange with it to start a branch in the country.

Let us take, for instance, Czechoslovakia. An Englishman sells £50,000 worth of wool to a merchant in Czechoslovakia. The bank hands in a bill of exchange with bill of lading attached. If the man in Czecho-Slovakia is unable to pay for the goods, he is allowed to sell it, the bank retaining an interest in the goods until sold. If sold for paper, the paper shall be the best that this merchant can get, and shall be approved of by a committee of three, one representing the League of Nations, one the bank, and the other the Government concerned. If they take it, the bank can then go to the Government of the country and ask them to give trading certificates, not bearing interest, and made payable in 10 or 15 years, without interest, but the country undertaking to provide a sinking fund, either by an export tax or a tax on railways, or on amusements, or in whatever way it may be, and those certificates should be given to the bank. That country would then have to agree that all the exports from the country should go through the bank, and any bills of lading and bills of exchange are handed to the bank. The bank can pay for it by the trading certificates it has received. It can then forward the bills of exchange to the acceptance houses in the different countries. The result of it would be that those trading certificates would remain in the country of issue, except such as represent the difference between the exports "and imports. By having the League of Nations in, you would have a guarantee that if there were revolutions in the country, or if adjoining countries invaded it, those 47 nations would undertake not to have any dealings of any sort with the countries involved.

Of course there are a great many things that would need a great deal of work-out but I believe firmly that if you can get those 47 nations to agree, it would be a great deal better than for any one country to go ahead, and do it. We would not then be advancing money or giving credits to any of these nationals. We would be giving it to the bank, and the country to which the credit was given would be standing behind the bank so far as those advances were concerned. The League of Nations should not be expected to be responsible either for the money in the bank of for the advances made, but it would have great effect in guaranteeing that whatever the bank advanced would be in the end received. If you do that, you would get the country to give a lead in reconstruction, and the country would be bound to try to find the necessary gold at the end of 10 or 15 years to pay those trading certificates. Some people may say, "You are starting two currencies, or going back on the old Hanseatic problem," but those trading certificates would not interfere with the currency. They would only be given out where real goods were sent into the country, and that would be the best manner in which you could reconstruct the markets that we absolutely need for our workers.

I hope the Government will be able to announce some variation of the Overseas Credit Amendment Act of 1920, because this question of ex port credits is to-day of enormous importance, and something is wanted which must be done quickly, and I hope at no very great expense to the Government. It is quite clear that trade in many articles is frozen to-day. There are enormous accumulations of stocks of all sorts of goods which cannot be removed. There are buyers for these goods, and sellers are willing to cut their losses, but credit, especially export credit, is so difficult to obtain that unless the Government do something to help some adequate system, we are likely to have the existing situation prolonged, and unemployment unrelieved. I would suggest that the Government might present some sort of scheme to the commercial classes which would enable them with the aid of Government support, insurance or some system of that sort, to get out of the present situation. A variation of Sir Edward Mountain's scheme appeals to me. I have heard it discussed in very large assemblies of business men, and I cannot find any objection to some sort of scheme of that kind. He suggests that £13,000,000 of the £26,000,000 devoted to overseas credits should be given as a guarantee or insurance to a national scheme of export credit. He suggests that that money should be managed by a committee of London bankers, and insurance companies in London, that credits should not be given unless they were passed by this syndicate in London, and at the same time similar banking and insurance syndicates should be formed in the importing countries which would also pronounce upon the credit of the importer, and I may suggest that a portion of the money which Parliament voted for overseas export credits should be devoted to guaranteeing an insurance fund. Considerable premiums can be charged for guaranteeing these credits 2½ per cent. or perhaps 5 per cent.

I would suggest that with a scheme like that it might be possible, with proper support in the City of London and the exporting countries, to get a system of this kind established which would allow of large credits on the payment of premiums, careful scrutiny to be given both here and in the importing countries of these business transactions, the premium to be directed to covering all the anticipated losses. With some system of this sort, the Government would lose nothing in money. The Government credit would have to be pledged to a certain extent in discharge, and sufficient supervision by exporting and importing countries ought to insure that there was no serious loss on the credit to the State. The kind of system suggested would not take the place of the Ter Meulen scheme but would be complementary to it, and could be started at once. What I want to impress upon the Government is the great advantage of such a scheme to relieve the mass of frozen trade with the enormous stocks that are held by almost every industry in the country which cannot be moved at present. With comparatively small risk, and in the end with no serious loss, it would be possible that the Government might adopt a temporary measure of this sort, which can be set in motion quickly and would give a fillip to trade, and would get rid of the present industrial block, and in this way have a better chance of helping the unemployment problem than many much more ambitious schemes.

Having regard to the number and variety of Departments comprised in the Board of Trade, I think that my right hon. Friend will receive some satisfaction in the fact that, so far, his administration has not been challenged as it may be later on. But I think there is remarkable significance in this discussion which has dealt, not so much with mere matters relating to the administration of the Department as with the great question of policy of the Department as representing the Government in trade and commerce. I wish that my hon. Friend who has just spoken from these Benches had not left the Committee, because I feel that he, and those who associate themselves with him, are making a mistake in stressing the view that only a reduction in wages can save national and international trade in this country. I prefer to make some appeal to employers and employed to co-operate for the purpose of promoting the highest possible efficiency in their industry. It is certain, as the hon. Member for Central Edinburgh recognised, that trade in this country is stagnant at the moment because the prices of commodities are so high. But, in my opinion, the solution of the problem is not a reduction in wages, because that will tend to defeat efficiency in production. It is perhaps the most disturbing factor at the moment. It gives the workman no encouragement to exert himself to the best of his power, and gives rise to the suspicion that there is a movement in the country to deprive the working man of all the advantages of the settlements which he has secured in recent years. I recognise, and have stated all over the country, before every class of audience, that the worker can take only a certain amount out of industry, and the amount that he can extract is determined by his own productive capacity. A great deal of harm is being done in the country because there are too many allusions in this House to the necessity of reducing wages. I have put it in this way: In my view there is no alternative to a drastic cut in wages but better means of production, but that does not mean that the worker is alone culpable. I believe that in co-operation with their employers they can devise better methods of production whereby costs may be reduced.

I did not follow my hon. Friend when he argued that to supply capital to another country inevitably meant that there was a corresponding deficiency of capital for investment here at home. If that capital supplied to another country produces economically, then it increases the margin of capital and thereby might help to supplement capital available here at home. In the end, of course, the great outstanding necessity of the moment is that of credit. It is very easy to say that the Government ought to furnish that credit to any country that stands in need of it. But credit here means also capital. What we are really asking is that the Government shall furnish capital to all these other countries, and they can furnish capital only by levying more taxation on the people of this country. After all, the Government have not a hidden pool on which they can draw. In the end it can get the resources either for expenditure or for investment only out of the people of the country. One might argue that these facts all go to emphasise the positive necessity of the producing classes getting down, to the most efficient method of producing wealth. We are told that Germany stands in need of credit and that all European countries require it. Like every other public person, I do the best I can to inform myself of circumstances in the various countries, and I doubt whether Germany is in such urgent need of capital as is suggested. It is true one gets very conflicting accounts, but I have been told by business men who have recently returned from Germany that Germany is settling down to work, and that once political questions were settled Germany would rapidly become a prosperous nation once more. I deplore the breakdown of the recent negotiations. On the other hand, I do not think it is fair to charge the British Government as being alone responsible for that breakdown. To make a charge of that character against your Government is to give encouragement to the enemies of your country in all parts of the world, and thereby tend to destroy the very credit that we recognise as being absolutely necessary.

I am glad that my hon. Friend the Member for Central Edinburgh (Mr. W. Graham) and my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) have today succeeded in placing the question of Russia in fairer perspective. I suppose I have become quite a controversialist on this question. I believe I have been greatly misunderstood, but that is a legacy which attaches to every public person. It may be because of lack of ability to express oneself correctly. Everybody who is accustomed to platform work knows that he does not always succeed in conveying to an audience exactly what he intends. Of course, if it was possible to resume relations with Russia it would be better for trade and employment in our own country. That is a matter of common acceptance. But when I have spoken on this subject I have ventured to point out what appeared to me to be the practical difficulties in the way, and, as far as I am able to ascertain, those difficulties have not yet been surmounted. Therefore, I say that to place undue weight upon this question of the resumption of trade with Russia is to mislead large sections of our people who are suffering lamentably to-day. I know that when I have addressed meetings of unemployed—no more difficult or unpopular task could a man undertake—I have been confronted repeatedly with the statement that if the British Government would only agree to enter into trade relations with Russia the unemployed problem would be solved. My hon. Friends know that that is an exaggeration. I agree that a resumption of trade with Russia would very soon have an effect on employment in this and in other countries, but to state the problem as if it were merely that of the suffering people in Russia who are able and willing to buy goods, only that they are denied the opportunity of so doing by the British Government, is to state the case incorrectly.

There is nothing to prevent British traders from selling goods to Russia today. To my knowledge some have done so. Let us clearly understand the matter. It is not possible for a British trader to enter into arrangements with any trader in Russia. The Soviet Government have superseded the private trader and have made a monopoly of trade for the Soviet Government. Who in this House or else where has sufficient confidence in the Soviet Government to do trade with it? Is not that the real fact of the situation? I have had two or three illustrations brought to my notice, where men, or a combination of men, have run great risks and there is no certainty to-day that they will get payment for the goods that they have sent out in perfect good faith. There was the case that came into the courts at the end of last year, in which a British firm entered into an arrangement to take large supplies of timber from Russia. When the first portion of the timber was landed in this country it was claimed by the representative of a Russian firm that had a branch in this country, and it was stated in the courts that these Russians had bought and paid for that timber in Russia and it had then been sold to a British firm by agents of the Soviet Government. That is the sort of thing that is making it absolutely impossible for trade to be carried on between this country and Russia. It is not that the British Government is setting up obstacles to trade. Bear in mind that my statement does not necessarily involve a charge of absolute dishonesty against them. It is in accord with their political creed. They think it is quite right to exploit any capitalist or capitalist country and therefore they feel that they have done a smart thing when they have entered into what we regard as an extremely dishonourable transaction. There is another case of a friend of mine who joined with a group of men and sent a volume of goods to Russia. These are men who must have their money turned over. You know how difficult it is to get money from the banks to-day or to borrow it from any quarter, and therefore to pay wages they need a fairly rapid payment for the goods they sent out. This friend of mine and his associates are actually confronted with bankruptcy because they entered into these undertakings. They acted in good faith, and to-day are unable to get their money

It is quite true that the whole of this charge lies not against the Soviet Government. The Soviet Government, by arrangement, have deposited gold with Swedish bankers, but the Swedish bankers will not release that gold because a claim to it has been preferred by parties who say they are the owners of the gold. These are all difficulties in the way, and to think that we can re-establish trade with Russia easily is an entire delusion. I desire it. I have endeavoured to do my best. When a Member of the Supreme Economic Council it is well known that I explored to the best of my capacity the means of doing trade with Russia. Let me give one illustration of what occurred at a meeting of the Supreme Economic Council at San Remo. I was then no longer a member. The meeting was held in May, 1920, and a British representative reported that agents of the Soviet Government were offering flax for sale at Reval although the British Government had actually bought and paid for that flax. That was reported to the Council and I believe the statement was true. These are risks not confined to one side alone. It may be that our Government have not done all that they might have done. That, of course, would lie against any of us merely because we are human and liable to come to false conclusions. So long as there is this lack of confidence in the Soviet Government, I feel sure that it will be extraordinarily difficult to carry on trade. I do not want to follow that much further, because I think that the discussion to-day has been carried to a high plane and in a friendly spirit, and has brought us to much closer agreement and understanding of the Russian problem. We do not really differ in our desire for the resumption of trade; we simply have difficulties in our minds as to the means of achieving the result.

I will turn for a moment to two Departments of the Board of Trade and ask the President of the Board a few questions about them. There is an item of £127,000 standing under the sub-head of the British Italian Corporation. When I had the privilege of serving as Parliamentary Secretary to the Board of Trade this matter came under my notice, and naturally I am still interested in it. It will be seen by the note attached to this sub-head that the Government undertook to pay to the British Italian Corporation, Limited, a subsidy equivalent to 5 per cent. of the amount of the paid-up capital of the Corporation as on 30th November last, and this for a period of years commencing in 1916. Do I interpret the payment of this subsidy as meaning that this Corporation is developing its operations, and that we may regard it as being the means of facilitating trade between this country and Italy? If so, in my opinion we ought to have some information upon it. I always regarded it as a desirable scheme, and if it is really effecting trade as between this country and Italy I think that again is a step in the right direction.

The other matter to which I want to make a brief allusion is the item of £50,000 devoted to the purpose of pro- moting the growing of cotton within the Empire, and I would like my right hon. Friend to inform the Committee what progress is being made in this direction. This question has been agitated in this country for many years past. We have long recognised how unwise it is to be dependent on one source of supply, and there is no doubt in my mind that our extreme dependence on the American supplies has been a source of weakness to the textile industry of this country. Therefore I have been interested, with others, and not only while at the Board of Trade, in opening up and developing new sources of supply. A great deal, I believe, has been done in Egypt, and I would like to know what has been done in improving cultivation in India and also what has been done in Africa. I am certain that this is a question of great moment to the textile industry of this country, and one which will do much to strengthen the ties between Great Britain and the Empire.

I was surprised, when I was told that the Debate to-day would turn on the question of the resumption of trade with Russia, to see so sparse an attendance on the Labour Benches, and I thought perhaps it was because of the doubts entertained there as to the stability of the Soviet Government. However, the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) has told us that the Soviet Government is safe and that, like a cat with nine lives, it has got thirty lives and is now enjoying the thirty-first. At the same time, I would like to ask the President of the Board of Trade one or two questions with regard to our relations with Russia, and not so much our trade relations or the opening up of commerce between the two countries as exactly how our nationals stand with regard to property and businesses owned in Russia. Is he, in the negotiations which I am told he is opening up again with M. Krassin, seeing to it as far as he can that our interests in Russia are safeguarded, even under the present Communist Government? The other day I asked point blank whether when he opened up these discussions they would be based on the Communist Government either recognising the properties and rights in oil and other mines possessed by British subjects when the Communist party assumed power, or else their buying out the holders of such mines and concessions on adequate terms. The answer I got from the hon. Member who represents the Board of Trade was as follows:

"M. Krassin, the Representative of the Soviet Government, arrived in this country at the end of last week. The draft of the agreement proposed by His Majesty's Government has been published, and the President of the Board of Trade has already stated in the Debate in this House at the end of last Session the attitude of His Majesty's Government."—[OFFICIAL REPORT, 7th March, 1921; col. 49, Vol. 139.]

That was rather an ambiguous reply, though I daresay it was very well drafted. I turned up that Debate, on the 22nd December, which was initiated by the right hon. Member the then Leader of the Labour party (Mr. Adamson), and, as he always does, he showed the velvet glove on the iron hand. He told the House how necessary it was that this trade agreement should be at once concluded, and that if it was not concluded, there was such a thing as the Council of Direct Action, which would probably take action. Then the President of the Board of Trade made a very interesting reply and told the House that there were four points on which he and the Communist Government were endeavouring to frame their agreement, four points on which he insisted on behalf of the British Government. The first was that the British prisoners should be repatriated, and I take it that the British subjects captured by the Communist Government and kept, either under the guise of it being the Azerbaijan Government or otherwise, have been as a fact repatriated. The second point was that hostile propaganda should cease. That is quite impossible, for it is not possible to stop any individual coming into this country or going into other countries, and acting as a propagandist for the Communist Government. I would remind the Committee in this connection that the man who sups with the devil must eat with a long spoon. The third and more important point was this, that debts arising out of goods supplied and services rendered to Russia should be recognised by the Communist Government; while the fourth point was that there should be a grant of commercial facilities on both sides. I want to know exactly what those points mean. The right hon. Gentleman himself was pressed on the question of commercial facilities and debts arising out of goods supplied, and he said:

"At the present time we are insisting—and here I would draw my right hon. Friend's attention to the reciprocal character of the operation—upon the following agreement: 'It is agreed that all claims of either party or of its nationals against the other party in respect of property or rights or in respect of obligations incurred by existing or former Governments of either country shall be equitably dealt with in the Treaty referred to in the preamble.'"

Will the hon. and gallant Gentleman read the caveat immediately after that?

The right hon. Gentleman goes on to say this, that the agreement continues:

"'The Russian Soviet Government declares that it recognises its liability to pay compensation to private British subjects in respect of goods supplied or services which have been rendered to Russia which have not been paid.'"—[OFFICIAL REPORT, 22nd December, 1920; col. 1875, Vol. 136.]

What I want to know is this. What exactly is a private British subject, and what exactly are goods supplied for services which have been rendered to Russia which have not been paid? I want to put it perfectly bluntly to my right hon. Friend. What is the exact position of British shareholders in an oilfield in Baku at the present moment, or in a gold mine in the Ural Mountains? Are they protected under this particular agreement which he was about to conclude with the Communist Government in December last? There are literally millions of British money invested, in good faith, in Russia in oil fields, coal mines, gold mines, and lead mines, and we want to know exactly, under this particular agreement which is concluded, or about to be concluded, or may be concluded, between this M. Krassin, or the Communist Government, and our Government, what protection there will be for those British interests in all parts of Russia. I admit that it is essential, if we can possibly do it, to resume commerce with Russia. It is as essential to do that as it is to resume commerce with Mexico. I cannot understand why British merchants at present cannot enter into trade conditions with Russia. The hon. and gallant Member for Central Hull told us about the Arm- strong-Whitworth Company repairing Russian locomotives here, and why should they not? Is there anything going to stop them going back to Russia? Again, if Russia wants motor lorries, why cannot they go to the Slough depot and have them sent over to Russia?

Yes, and it is up to them to do it. Again, take the great co-operative societies. They surely want to stretch out their hands to their Russian co-operative brethren, and there is nothing to stop them; they have money in the banks. But the more important thing, from the point of view of the people of this country is exactly what is going to happen to the millions of money which we have sunk in Russia. Is the Soviet Government going to grant great concessions to Mr. Vanderlip, or any other American or Swede or Norwegian, over these British properties of ours and take them away from British shareholders and give them to these foreign concessionaires? If there is danger of that, I say that no trade agreement ought to be entered into either with M. Krassin or with anybody else representing the Communist Government.

6.0 P.M.

I confess I am a little surprised at the want of interest which is being shown by the Committee in this Debate, because after all it is a matter of very great importance, not only on broad questions of policy, but because it undoubtedly does touch the question which is agitating the minds of many people outside, namely, the question of unemployment. I do not myself think that anything that can be done with regard to our overseas trade, or even with regard to the organisation of our trade here, can touch the immediate problem of unemployment, but, of course, we have to consider not only the immediate situation but the situation that is likely to arise in the future. There was one observation in the very interesting speech of my right hon. Friend the Member for Norwich (Mr. G. Roberts) with which I found myself in thorough and complete agreement. He protested against the repetition of the observation that the real necessity in the matter of the revival of trade was the reduction of wages. I think it is quite possible that the reduc- tion of wages is necessary, but I think it is putting the case in the way that is likely to cause most trouble, and is not the most equitable way of putting it. What you really want is a reduction in the cost of output. It is quite possible that may be reached either by a reduction in wages or by an increase in output, and undoubtedly every reasonable man will wish that, if possible, the second alternative should be found practicable, and not the first. Nobody—not even the most hard-grained employer who ever lived—wishes to reduce wages for the sake of reducing them. That is not the object of anybody, and, therefore, if you can get an increase of output without reduction of wages, that is the thing to be aimed at. This Debate may be conducted, and rightly conducted, in a very non-controversial spirit, and I do not want in any way to interfere with the harmony which prevails, but I should like to ask the Government whether they cannot make a general declaration, either now or at some future time, as to what their policy is with regard to the question of reducing the cost of output. How do they really envisage the great industrial problems, not only to the immediate needs of unemployment, but what do they think is going to be the future of industry, and what ought we to be aiming at in this country?

I know we have had from the Government Benches, and many parts of the House—I know I have indulged in it myself—adjuration for closer union between employers and employed. I am sure that is a very good thing. At any rate, it is a very good thing for the gentleman who utters that adjuration if it makes him a more charitable or pious person, but whether it produces any effect on the industrial situation is a little doubtful. If adjurations come from what are regarded as the capitalist class they are suspect by the workmen; if they come from the working classes they are suspect by the employer. I really do hope that we are going to make an effort to do something practical and direct in order to achieve this object. I do not think this would be a suitable opportunity to indulge in an elaborate discussion on that subject, but I have felt for very many years, and I have had the honour of saying so in this House, that, unless you can produce the spirit of partnership between employers and employed, you will not get on, and that you must face boldly that the workman is entitled to the status of a partner, and not only to the status of an employé. I am satisfied myself that that is the key of the whole position. As to the details of how that should be worked out in each particular trade, I do not suppose the House would think me competent to give an opinion. Certainly I am not going to attempt to do it on the present occasion, but I should very much like to know from the Government whether they are making any preparations, whether they are doing anything to promote that, apart, I mean, from the very valuable Whitley Councils and things of that kind—whether, in fact, there is a Department of the Board of Trade which is working on that problem.

I am sorry. I should have thought it was the duty of the Board of Trade to consider that subject.

I considered it very carefully, so far as it was my duty, when I was at the Ministry of Labour, but I have always recognised that it was the duty of that Minister, and not of the Board of Trade.

Then perhaps my right hon. Friend will not think me impertinent if I venture to hope that he will communicate, for what they are worth, the observations I have ventured to make to his colleague the Minister of Labour, and I will not pursue the matter further, because evidently I should be out of Order in doing so. All I want to say is that you cannot treat the question of unemployment, or the revival of trade, as a thing to be dealt with by this or that particular measure, unless you deal with the whole thing comprehensively. It is partly a question of our overseas trade, and partly a question of our industrial position at home, and if you are to get any reduction in the cost of output, if that is not a matter for the Board of Trade—I should have thought it was—then, in Heaven's name, let someone be considering how you are going to increase output if you cannot or do not desire to reduce wages. I am quite sure the only way of increasing output is to make it quite clear that there is no division of interests between the two sections of the community engaged in trade, and it is not true to say that mere additional work by the workman inures solely to the benefit of the profits of the employer.

I pass from that, and I want to ask one question about the Overseas Department. I understand—and I should like to know exactly whether I am right or not—that the Overseas Department is partly under the Board of Trade and partly under the Foreign Office, and I suppose, so far as it deals with the trade when it comes into this country, it is under the Board of Trade, and that, so far as it deals with the trade outside this country, it is under the Foreign Office. I do not know whether that is the point of junction of the two branches, but I should like to know exactly how it stands. I recognise that if that is so, it would not be in order to discuss the question of the Consular service, but I should like to say, if I may, just one sentence about it, because it has been raised in the Debate. An hon. and gallant Member made an attack on the Consular service of this country.

He said it was a great deal worse than the American or German Consular services. I do not know what it is now, but I used to know a good deal about it, and I found precisely the same thing was said in Germany and in America about their Consulates compared with ours. Particularly, there were some eloquent observations, I think in America, directed against their Government, urging them to adopt the enlightened and progressive measures the English Government had adopted for a really efficient Consular service, which was driving American trade out of all foreign markets. I do not want to say our Consular service is perfect, but I do want to say two things about it.

I cannot allow the Noble, Lord to proceed further on that. There is a Vote further down for the Consular Service.

I beg your pardon. I will not say another word about it, but I did wish to enter that protest. That brings me to the question which has been mainly discussed in this Debate, namely, the question of foreign trade. A great deal has been said about Russia, and, of course, I agree most fully with what has been said that a renewal of Russian trade is not going to be a panacea for our evils, or anything like a panacea, but, at the same time, I believe most fully that it is very desirable we should get going as much trade with Russia as possible. All I want to ask the Government is this: Is it quite clear, and has it been publicly announced, that there is no kind of obstacle to trading by individuals here with anybody in Russia? I know there have been negotiations, which have been prolonged over many months, with representatives of the Soviet Government. They may have been right or they may have been wrong, but they do not seem to have come to a very successful result so far. I daresay that is entirely the fault of the Soviet representatives—I do not know—but, personally, I have always doubted whether any good result would accrue from those negotiations.

There are great difficulties in negotiating with the Soviet Government. There is the difficulty that many people think it rather a disreputable thing to do. There is the difficulty, even more serious, that you never quite know with whom you are going to deal, and there is the third most important difficulty of all, that you cannot rely on the assurances you get, whether it is because they are wicked and untruthful people, or whether it is because the Government are very imperfectly organised. Therefore I never myself thought you could get very great results from those negotiations. I do think that some time ago—two years or something like that—results might have been obtained by simply allowing your traders to go and do the best they could in Russia, but that certainly was not allowed at that time. I do not know exactly when it has been allowed, and whether the obstacles put in the way of private trade with Russia have been removed. I hope the right hon. Gentleman will tell us exactly how the matter stands, and whether there is no obstacle left. My hon. and gallant Friend the Member for Finchley (Colonel Newman) apparently took an entirely different view. He wants negotiations to continue, and he wants our interests to be safeguarded by the assurances of the Soviet Government. I daresay it may be desirable to get such assurances. Per- sonally I should rather doubt whether they would be very much when you got them, and I think that, from our point of view, the great thing is to get, if possible, the trade going, that that is much more important than to get any paper safeguards or assurances from the existing Russian Government.

Let me come to the last point about which I want to speak, namely, the question of what we ought to do to improve our trade relations with other countries. The hon. Member for Mossley (Mr. A. Hopkinson), apparently, was altogether against any credit scheme. He went so far as to say that the more you create credit abroad the less credit you will have at home. I think my hon. Friend, who is a gentleman of very acute intellect, has perhaps an almost excessive affection for paradox. Certainly that appears to me to be a complete paradox. I should have thought it was almost the exact reverse, and that the more credit you created abroad, the more credit you would have at home. I quite agree that if the sole means of creating credit abroad is to advance credit to foreign countries, evidently in our present financial situation that is a step which cannot be taken except with the greatest caution, but even there I venture to urge strongly that we must get into the way of regarding commercial interest as a whole, and it is not the least true to say that we must reserve our strength, as I heard a distinguished person say, in order to safeguard our own position if difficulties come, and in order to do so we must not do anything to assist countries abroad. It is not the right way of looking at it. The truth is if other countries go to pieces we shall go to pieces. If trade and confidence and credit and commerce are destroyed in Western Europe, it will be small satisfaction to us to think how much we could have done if that had not happened.

That fundamental conception must be established in this country. It is a conception particularly attractive to myself because it really is one of the fundamental conceptions of the League of Nations. It is because you believe nations have a joint interest much greater than their joint hostility that the whole conception of the League of Nations becomes possible. I welcome the fact that quite recently we had very important pronouncements by great authorities on finance and commerce declaring that the League of Nations is really at the root of restoration of commerce. We had a very strong statement at the Brussels Conference to that effect. The members of that Conference consisted of people chosen merely for their financial and commercial abilities from all the principal countries of Europe, and we have had recently strong statements of that kind from leading financiers in the City of London. What we want to do is to start the wheels of commerce again. I rather like the phrase "frozen trade" which has been used in this Debate. You have to get the thing moving. You have to thaw it, and that is the real problem before us.

Take the case of Austria. I am not sure that we proceeded very wisely in the case of Austria. I should have liked to have seen our assistance to Austria, which has been given very freely in times past, made conditional on the abandonment by Austria of the fatuous financial and commercial policy which that country has pursued. I am not sure that this might not be done now. Take the question of Transport between Austria and the neighbouring countries. We are all agreed that that is one of the great things standing in the way of the possibility of a renewal of trade with that country. Is it not possible, when you are going to adopt the scheme of a national bank or any other scheme, to say to Austria, "Remember this scheme will not be put into force in any of these countries unless you adopt a general policy which will favour commercial revival"? Not only must they agree to live at real peace with their neighbours and trade with them and remove this idiotic system by which it is more difficult to send goods from Austria to any of her neighbours than it is to send them all round the world, but they must reform their finances and not spend their money on vast numbers of employés or on fantastic armaments, as some of them do. I should like to see our commercial policy joined up with a larger view of national relations.

There are many other things I would like to say about Austria but I am afraid of infringing the rules of Order. Cannot we make a real open declaration that all this business about reparation from Austria is at an end? Cannot we abolish reparations? Cannot we say that the money advanced is no longer to be regarded as a debt because we cannot re- cover a farthing? Can we not recognise that the political problems of Europe have become less important than the financial and commercial problems, and cannot be compared with the enormous interest we have in restoring trade and setting Europe on its legs again? That is a proposition which I wish to press upon the Government. I am sure they have not always been guided by that principle. I hope we shall hear from the President of the Board of Trade that they are now being guided by those principles, and that in any future arrangements they make they will have in view these vital British interests, the pacification of Europe and the restoration of its commerce and industrial life.

The right hon. Gentleman who has just sat down opened his speech by a reference to a subject which I have at heart almost as much as he has, namely, the possibility of setting up a relationship of a new character between employers and workmen in this country in order to bring about a spirit of more contentment and harmony than we have had in the past. I am not sure that I have entirely appreciated the point of view from which the right hon. Gentleman addressed the Government on that matter. He seemed to think that we were negligent in not having done something definite in regard to it. I do not know what he thinks could be done by the Government.

I should have been very glad to develop that point, but I was informed that it would not be in order.

In my view you can do no more harm to the object we have at heart than by rushing legislation. I think you will find a larger number of employers than workmen favour the scheme. At any rate my right hon. Friend and I agree upon the main principle, although perhaps we differ somewhat upon the possibility of the method by which the object may be achieved. The main questions addressed to me have been upon the prospect of trade with Russia and export credits schemes by which trade can be revived on the Continent of Europe. Several questions have been put to me on both of these matters, I admit some of them somewhat truculently by the hon. Member for Central Hull (Lieut.-Commander Kenworthy) whose method of ask- ing questions seems to be to ask a question, assume an answer adverse to the Government, and then condemn the Government. I wish to congratulate the hon. Member for Central Edinburgh (Mr. W. Graham) upon the very able and lucid speech which he made. On the question of trade with Russia I agree to some extent with what was said by the hon. Member for Mossley (Mr. Hopkinson), who stated that you will never get far in trading with a Communist country, and that is true for two reasons. You have to imagine a great population like that of Russia trying to conduct all its trade through one bottle neck, namely, through the Central Government, which has to do all its external trade, and therefore the exchange of articles with the rest of the world entirely disappears and makes trade impossible. My hon. Friend said in a Communist community each individual will only produce that which he requires to consume, and there will be no surplus to export. We already see the course of conduct which he has described in active operation over all the great districts of Russia. In Russia no peasant will produce more than he requires, and if he does he hides it in order that it may not be discovered, and that is bound to happen.

My hon. and gallant Friend really ought to study the conditions in Russia, a country whose cause he so often espouses. Before the War Russia was exporting an enormous quantity of grain, and now the Russian peasant not only cannot export it, but he will not grow it.

This is a rather important matter. Before the War requisitions were made by the Czar, and surely the right hon. Gentleman knows that that was one of the causes.

Wherever you have requisitions it is to a certain extent a check upon production, but the Communist system is a perpetual system of requisitions. I know you may have requisitions during war-time, but the Communist theory is one of perpetual requisitions and it cannot possibly succeed.

You have to consider the question of payment at the present time for the goods you are able to send to Russia. We have been told in this Debate that you could not get any payment for your goods because there is no surplus of goods in Russia. There is one way of getting payment now, and that is by gold. You may say what you like about the gold in Russia. You may say that it is tainted, or has been looted or stolen, but at any rate there is gold in possession of the de facto Russian Government. The hon. Member says that if they send gold to this country from Russia it is subject to arrest, but the Law Officers are of opinion that if the Russian Government is recognised as a de facto Government then the gold is not subject to arrest, and that is my own view for what it is worth. I believe that this gold will become a means of exchange as soon as this matter has been determined in the Courts. The case of the wood cargo which has been referred to was decided on a totally different issue. It had to do with goods held by the Soviet Government and it was decided on the ground that the Russian Government was not a de facto Government. Once there is any trading agreement with Russia there can be no question about it being a de facto Government, and their gold will, I think, not be liable to arrest. I am all for trading with Russia. I detest, as much as anyone, the crimes committed by the Soviet Government, but it is no good saying you can cut yourself off for ever from a country which has gone through such experiences. If you wish to bring it back to civilisation the sooner you trade with it the better. Accordingly in this House and outside I have all along advocated the resumption of trade with Russia. I believe nothing will so upset the Communist system there as to resume trade, and if you begin the trade with gold you will find that the system existing to-day will be so upset that the Russian people will very soon become ready to adopt individual effort to produce goods which can be exchanged for our commodities.

Where do we stand now on this matter? I venture to say we are not responsible for the delay which has taken place. The negotiations began last summer, but for a long time Russia entirely abandoned any attempt to continue them because the Government were too much engaged on their incursions into Poland. At that time they took up the attitude that they had better leave these matters alone. After, however, the Polish difficulty had been settled the negotiations were resumed and when the House rose before Christmas we had just drafted the terms of an agreement and handed it to M. Krassin, who went to Moscow in January to consult his chiefs. He has been away ever since, returning only on Friday last or Monday. Since then he has been seen on behalf of the Government, and I myself shall see him on Friday. That is the position at which we have arrived at the present time. There are certain difficulties which have been raised by those to whom the hon. and gallant Member opposite (Lieut.-Commander Kenworthy) refers—people who in Russia are against making the trade agreement and have therefore created considerable obstacles. I do not know why in the country Labour Members and others, when talking on this matter, never make it known to the public of this country that there is a body in Russia which has rendered it very difficult to arrive at any agreement on this matter. They throw the whole of the blame for the delay on the British Government, who, they say, are robbing the workers of a chance of employment. In candour, I think, this ought to be stated.

It ought also to be made plain that even although this agreement may go through at once, it is not going to afford an immediate remedy for the present state of things. Still, if even only a small trade can be done—and I for one am anxious for a beginning—we can look forward to greater things in the future, to a better system in Russia, and better conditions in Europe generally.

May I interrupt? Will the right hon. Gentleman say quite definitely whether all the obstacles to trading by private persons have been abolished?

The present position is that the Regulations still continue in force under which an export licence is required for goods sent from this country to Russia.

Certainly, on occasions. The necessity for the licence has never been recognised as a barrier, particularly because of the conditions which were created by the negotiations into which we entered. I do not know whether hon. Members have observed that the Foreign Minister of Russia has been using language calculated to make a satisfactory solution of this question extraordinarily difficult. In point of fact Great Britain has been doing more trade with Russia, so far as we know, than any other country. During the last 12 months the trade done with Soviet Russia represented over £4,000,000 in value. Before the War our Russian export trade represented 3·45 per cent. of our export trade. During the last year our trade with all the countries which formerly formed part of the Russian Empire, Poland, Lithuania, Finland, etc., was over £16,000,000 and represented more than 1 per cent. of our total export trade. We have been really active in this matter. The commodities which have been sent have consisted of clothes, boots, rubbers and agricultural implements.

Can the right hon. Gentleman give the House some hope that these irritating restrictions of licensing will be swept away?

To be quite frank, I think they will disappear, whether we like it or not. But at any rate they are not at the present time operating at all as an impediment to trade, and there is one obvious reason for that. I do not know whether, from the point of view of public policy, I am being too candid, but I think the House will realise there is a perfectly plain reason for it. Reval is a port which is not in Russia, but it is a Baltic port for Russia. Export to Reval is perfectly free, and accordingly anyone in Russia who wants anything from here has only got to have it exported to Reval and the thing is done. The Noble Lord shakes his head, but I can assure him that if he thinks there is any impediment caused by these restrictions at the present time, he is quite in error.

The other question I ought to have answered was as to the position of the people who had shares in gold mines and oil wells in Russia—British citizens I mean. There is a considerable misapprehension as to what the trade agreement professed to do. The general questions of indebtedness as between Russian citizens and British citizens are left to be decided at a conference to be held, so that all matters between the two countries have been cleared up. There are a great variety of claims. The British Government has claims against the Russian Government, and the Russian Government is making claims against the British Government. In the same way the citizens of the two countries are claiming against each other. But in order to get trade started we said that, so far as debts owing by the Russian Government for goods supplied or services rendered were concerned, an assurance must be given at once that no question would be raised in regard to them. Other matters are left to be determined later. The claims mentioned by the hon. and gallant Gentleman did not fall into the second category in my opinion, and, accordingly, they are left to be dealt with in the general settlement that is to take place between the two countries. We want to do something immediately with regard to the trading community, in order to assure them that what they do will be recognised at once, while other questions in dispute are left over for the final settlement.

Surely my hon. Friend will recognise that a Government which, confiscates the property of its own citizens is not very likely to have any special regard for property belonging to non-citizens. That is one of the questions which is left over for decision. All we could get was immediate recognition in regard to goods supplied and services rendered.

I now turn to other questions which have been raised in the course of this Debate. The hon. Member for Central Edinburgh (Mr. Graham) referred to the reports on the economic conditions of other countries which reach us from time to time, and asked us what use we make of them. These reports are taken the fullest advantage of by the Departments concerned. They are circulated to merchants and manufacturers throughout the country and also to the trade unions, and the latter bodies, I believe, in some cases reprint and circulate those reports or portions of them. My hon. Friend may be assured that full advantage is taken of the reports. Two questions were raised by my right hon. Friend the Member for Norwich (Mr. Roberts). One was as to the British Italian Corporation. This matter is precisely as he stated it. The second was with regard to the new Empire Cotton Growing Association. A grant of £50,000 is to be made to that association for the encouragement of cotton growing throughout the Empire. That particular scheme has interested the whole of the cotton-using interests in this country, and manufacturers owning 80 per cent. of the spindles have agreed to impose upon themselves a levy of 6d. per bale on all cotton they receive for the purpose of carrying out this policy. That means a very large sum for the cotton industry to supply. The Government is subsidising the scheme to the extent of £50,000 a year, to be paid for five years, conditionally upon the levy being carried into effect, and I cannot imagine anything more likely to benefit this country and the Empire as a whole than the scheme. I think it is one well deserving the support of this House.

The last matter is that of the export credits scheme. I do not at all agree with my hon. Friend the Member for Mossley (Mr. Hopkinson), who thought that all schemes of that kind were fallacious and futile. I agree with the criticism of the Noble Lord (Lord R. Cecil) upon that part of the hon. Member's speech in which he stated that £1 of credit given abroad was £1 less at home. In my view, as in that of the Noble Lord, that is a complete fallacy, and in the present case it entirely misses the mark. The credit is given to the British exporter to enable him to do his business. The difficulty at the present time in getting business done abroad is that the British merchant is not in a position to give upon these transactions the credit that he was able to give in the past, and his difficulty is all the greater owing to the position of his foreign buyer. The Government scheme has received some criticism this afternoon, but I would like to remind the Committee precisely what we have done. We brought in the scheme about a year ago, and for the first part of the period trade was doing very well in this country. The merchant and manufacturer had no need to look for markets; they were getting more demands than they could supply. Accordingly, at the initiation of the scheme, the whole system hung fire, and very little was done under it. When, however, markets became more difficult to obtain, we had the opportunity of seeing the amount of help which the scheme could give to the traders of this country. Whereas at the beginning we were doing very little, now we have got as far as this—I do not say it is very much—that we have granted applications to the extent of something like £2,000,000, and have actually advanced about £400,000. [An HON. MEMBER: "Out of £26,000,000!"] It is perfectly true that the House granted £26,000,000, but the Budget did not include the full £26,000,000. I think that for the year it only included £2,000,000.

That would be so; it would be a pool which would constantly be refilled. In point of fact, the scheme has been very useful in many cases. [An HON. MEMBER: "Has any been repaid yet?"] A certain sum has been repaid, but I do not think it is very much. I would like the Committee to understand what we do. It is not by any means a bagatelle. I do not think that anyone who really considered the scheme carefully would suggest that the Government was not taking a considerable burden upon its shoulders, especially at a time of great financial stringency. One always has to remember the kind of criticism we may anticipate if we embark upon schemes which involve a burden upon the taxpayer, and which, it is said, increase the cost of living, inflate currency, and do all the harmful things that the human mind can conceive. We have to consider very carefully exactly what we are doing. At the present time we advance, to any British merchant who wishes to export to one of these countries, 100 per cent. of the whole cost of his articles. If he has losses, he is absolutely safeguarded to the extent of 80 per cent. of his costs by the Government. That is a considerable help.

I was coming to that question. What we have required up to now is that in the importing country there should be put up, in the currency of that country, a sufficient amount to repay the whole of that 100 per cent. of costs.

No, only in some cases. It is obvious that different people deserve different credit, and in some cases you must ask for more security than in others. Where, I think, the scheme has met with ill-success has been in the amount of security which is required to be put up by the foreign importer, and we propose now to make such changes that it will be easier for him to carry through the transaction. To this point I will return later. In the meantime I should like to say just a word about some of the other schemes that have been mentioned. There was one scheme which has been a good deal advertised—that of Sir Edward Mountain. That involves putting £13,000,000 at the disposal of a committee of bankers and insurance managers, who, according as they thought insurances should be given in connection with such transactions, would grant the necessary facilities. They would be dealing at their own discretion entirely with Government money, with no Government control of any sort or kind. I was very much impressed with the great benefit of getting the bankers and insurance managers of this country into a conjoint scheme with the Government, and I had repeated meetings with them. At first the insurance companies indicated that they would be prepared to take part in the risk, and there was an indication amongst some of the bankers that they also would be prepared to take part. Negotiations went on for some time, and then, unhappily, the insurance, companies informed us that they thought that this kind of insurance was too difficult for them, and they proposed to withdraw from taking any part in these transactions. After this interval we were left with the bankers, and I endeavoured to come to some arrangement with them. They, however, after considerable discussion and consideration, at last announced that they gave their support to the Ter Meulen scheme, which they thought was the best, and the one that would achieve the object most successfully and with the least risk. The Ter Meulen scheme, of course, will take some time to put in operation, and accordingly we wanted to get some earlier method of tackling this very difficult subject. We proceeded upon the lines which my hon. Friend the Member for Central Edinburgh suggested this afternoon. We tried to make a development of our own scheme, and I will, if I may, outline its principal features. It has been before a committee of bankers, and, while they do not express approval of every detail, they think that in its main principles the scheme is one which should be supported. Instead of advancing 100 per cent. of the cost to the manufacturer or exporting merchant in this country, in connection with transactions with one of these countries, we now propose to guarantee up to 85 per cent. of the selling price of the goods—the invoice price. That, of course, is an advance upon what was previously proposed. We do not propose to give 85 per cent. in every case. A remark was made by an hon. Member about the large stocks which have been accumulated in this country in recent times. It is obvious that a great deal of that material would be invoiced at the price which it originally cost, and which it is no longer worth in the market; and, therefore, we have to be very careful that the invoice prices are not written up above the market value of the goods. The Department is able to investigate, and has already done a considerable amount of such scrutiny, what kind of fair value should be put on the goods. We propose, accordingly, to have a discretion up to 85 per cent. in our guarantee. The distinction of guaranteeing as against advancing is important. I remember a very lucid speech by the hon. Member behind me (Sir W. Rutherford) upon the previous Bill, in which he said that the best way to conduct these transactions was by the ordinary mechanism of trade. The fact that we guarantee rather than give advances, would enable the merchant to do his business through his banker in the ordinary way, and that, in itself, would greatly facilitate the transaction. A point was raised by an hon. Member opposite as to the amount of security to be put up by the importer. We make this modification, that we do not necessarily require security to be put up to the full value of the goods, or even the full cost. What we do is to say that not less than 50 per cent. must be put up. We consider that he should be able at least to do that, and we say that we will guarantee one-half of the uncovered risk.

No, we guarantee payment to the exporter, he taking one-half the uncovered risk, and the Government taking the other half. The difficulty at the present time is to get the importer to put up security to the extent of 100 per cent. We say that if the exporter will take 25 per cent., we will take 25 per cent., where the importer can only put up security to the extent of 50 per cent.

The right hon. Gentleman said that the Government were going to guarantee 85 per cent. of the invoice cost.

7.0 P.M.

That means that we may guarantee—not necessarily in every case—as much as 85 per cent. upon approved security; but it will depend upon the security. Where the importer is not able to put up the full security, but is only able to put up a portion, he must put up not less than 50 per cent. Then we will take one-half the uncovered risk thereafter. Let us take a case in which an importer comes forward and tenders as security a Ter Meulen bond representing the full amount of the purchase. If the price is really a fair price, he will get, upon that, a guarantee of 85 per cent. of the face value of the bond. Similarly with other forms of security—it may be the currency of the country up to a particular sum, it may be commodities, or Government securities, or first charges upon railways, and so on. Wherever you have an approved security of the full value required to meet the price, then there would in the ordinary case be a guarantee by the Government to the exporter of 85 per cent. of the invoice value of the goods. There is a further feature of the scheme which I will explain to the Committee. We did not entirely give up the hope of making an arrangement with the banks, and accordingly we are going to leave it open to any bank to do business upon the principle that we will guarantee 70 per cent. of the loss on any transaction carried through by a bank for an exporter in this country. We leave it to the bank to arrange with the exporter as to how much risk each of them will carry. But the Government will undertake in cases in which we are convinced that the transaction is a wise and sound one, to-guarantee 70 per cent. of the risk. I think what I have broadly outlined is a considerable advance upon the facilities which exist under the present scheme.

It will not be the same in every case. There will be a certain premium charged.

I would not like to commit myself to that at the present time. I am only now dealing with this scheme in broad outline. The Committee will understand the lines on which we are proposing to work. I hope and believe, after what I have sketched, that they will approve it as a scheme upon which increased business will be done. I think we should extend this not merely to the derelict countries of Europe, but that we should give similar facilities in cases, say, of our own Dominions, where, after all, security is much safer and the business is in every respect just as good or better, and there is a greater quality of permanence about it.

I agree. But when we took this question up originally it was with the idea of reviving the derelict countries of Europe and we must not lose sight of that purpose. As the right hon. Gentleman opposite said unless you get Europe into a sound and stable condition commercially England will suffer amongst the others.

Is it to be extended to raw materials or merely to the manufactured goods?

Not even Empire-produced raw materials, as distinct from those of outsiders?

This is a subject which has attracted my attention for some time. I happen to be a manufacturer, and this morning I got a letter from my mills asking if it were possible to get some orders to keep them going. I have no doubt that the manufacturers in this country are in a very serious position indeed, and I have been trying to discover, after what has been said this afternoon, how soon it will be before we shall get orders to keep our mills going. I do not feel at all satisfied with the explanation of the President of the Board of Trade. In the first place, I agree with the Noble Lord the Member for Hitchin (Lord R. Cecil). I observe that every time he refers to the League of Nations there are a good many in this House rather inclined to sneer. I honestly believe that the sentiment and spirit which formed the League of Nations is an absolute necessity for the rehabilitation of the trade of this country and of the world.

Reference has been made a good many times to Russia. This morning I met a manufacturer from Yorkshire. He has been doing trade with Russia to his cost and has been making khaki cloth. It was undoubtedly ordered for Russia, and went to Reval. It is highly discreditable that we in this country should allow our manufacturers to make khaki cloth for a country like Russia at the present time, when we know for what it is wanted. If they want cloth, they ought to have civilian cloth. 100,000 yards of cloth at about 10s. a yard was sent in January. They paid a deposit of £12,500. A fortnight afterwards 30,000 yards was sent, with no deposit, and the firm have now on their hands over £50,000 worth, out of a total order of £130,000 worth. They have received £12,500, and have very little prospect of getting any more. I agree with the hon. Member for Norwich that we are spending too much time in this House in talking about Russia. For goodness sake, let Russia work out her own salvation, and let us say, "We will not have anything to do with you; you are not playing the game, you are not being honest." If we do that, I think we shall find a solution much more quickly. If, however, hon. Members can prove that it is to our advantage to do trade with Russia, I shall be quite willing to sink my own feelings on the matter.

With regard to the question of prices being too high, I hope the Committee will forgive me if I illustrate the point by a Yorkshire story. A man in Huddersfield, in the wool trade, went to a neighbouring village, taking with him a sample of very fine wool. He met a friend, who said, "Good mornin' Bill, a'll cap thee this mornin'!" "What is't?" asked Bill. "Look at this wool, at half-a-crown a lb." "A'll cap thee, a'll offer fifteen pence for it." The Huddersfield man replied, "Ah, an' a'll cap thee, a'll tak' it."

That is the position to-day. There is not a price. There is not a stable price to pay, and there is no confidence in the trade. Until we get back to the bedrock of things, and realise that we have to get confidence back, we shall never find a solution. No good purpose can be served by blaming either one class or another. The Noble Lord spoke about production. The production to-day is not worth having unless it is coupled up with distribution. During the War we applied to our troubles a scientific remedy. We said, "What is it we need? We want production." We got production, but our customer was there ready for us. It was the War Office, the Air Force or some other Department. We had not to seek our customers. In the boot trade we got magnificent production, and we got it after the Armistice. Then the slump came along, because there was no distribution. It will be a long time before you will get these bootmakers in Northampton and Kettering to believe in any talk about production unless it is coupled with distribution. I mention this because it is absolutely necessary for the Committee to consider this matter in the broad sense.

I was not altogether satisfied with what the President of the Board of Trade said, and with what he is proposing. It is not a question for banks, insurance people, or manufacturers alone, but for every trade to come together, and make up their minds what they are going to do, and to form at once a sort of Ministry of Trade or Commerce, or whatever you call it, on the same scale as before. We do not want a Ministry set up where there will be control by officials. We have had enough of officials. What we want is a little help from the Government, and they ought to give it, for they are capable of doing so. The different States in Central Europe have set up barriers against each other, and they are not exchanging goods, but the great trouble there is that the railway and transport system has broken down. I say, emphatically, that the Government ought to undertake to remedy that as a first charge. If they do so, it will be a step in the right direction, and will help traders to get going.

There is no question that to-day we have in this country stocks to an amount that I do not like to think about. There is no manufacturer to-day who is not running to stock. I myself am running to stock, and it simply means that every manufacture is going on as long as the banks will let him. We are running on credit, and unless the Government seriously make this the most important question that they have before them, and relieve unemployment with much more drastic methods than we have heard outlined this afternoon, we shall have a very serious state of affairs in this country. It is time we ended all this talk about doles and various other things. In March of last year I took the opportunity of addressing a few remarks to the House on this subject. I pointed out that the Government, with all their faults, were not to blame about this. Although we have had, and shall have, by-elections, and our opponents are making a good deal of capital out of the fact that we have unemployment, and though they dangle before the electors a £2 a week dole, I say emphatically that the Government are not to blame. They will be to blame, however, unless they find some way out of it other than the giving of grants. It is possible to consolidate the various trades, in the same way as the banks and the insurance people have joined together, and to get into touch with the various countries in Europe. In that way I am sure we can rehabilitate our trade. The President of the Board of Trade ought immediately to call to- gether the employers and the employed in every staple trade in this country, and get them to form themselves into a body for running their own trade. In that way they could form some kind of connection with the Continent.

Again, it is absolutely essential that we should form an international bank in this country which will trade with all the various countries on the Continent on a sterling basis. If we do that, we shall arrive at some solution. I am convinced that unless we have a spirit of unity and confidence in each other, and feel it is the responsibility of every class, we shall never find any solution. For me, there is no question of politics in this matter; it is one of bread and butter. If the President of the Board of Trade will ask each trade to find its own solution, it will be the best way out.

I heard the remarks of the hon. Baronet with very great interest. Like him, I believe there is no possibility of any effective working unless we have a business arrangement, not only with Central Europe, but with Eastern Europe and Russia. I believe, however, he said we ought to tell Russia that we will not have anything to do with her. We cannot simply dismiss Russia by saying we will have nothing to do with her. So long as there is no peace with Russia every country on her frontier is in danger and the rest of the world is equally in danger. Our trade in India, for instance, is at present hindered to some extent by virtue of an agitation in that country which in my opinion would not be going on if we had succeeded in securing peace with Russia. There is another great thing the Board of Trade might do. If once we make it known to the Russian people that there is no obstacle to their securing goods from us if they pay their debts at once you remove one of the strongest props that support the present system in Russia. One of the strongest arguments used in Russia for the maintenance of the present system is an argument which might be used in this country, an appeal to national feeling on the ground that the country is being badly treated. Take away that excuse and I am quite satisfied that the. Russian people will attend to their development for themselves. We are told by the President of the Board of Trade that licences did not much matter because there were no licences for Reval, and Reval was the port for Russia. I wonder if the right hon. Gentleman knows what the railway line is from Reval to Petrograd, and the number of trains that can run on it, and what is the condition of the dislocation that exists, and how futile it is to talk of Reval as if it were of equal importance to Russia as Petrograd. The railway system from Reval to Petrograd is very insufficient. It is very difficult indeed to carry goods between those two centres, and it is not exact to say that it is the same thing to Russia to send goods to Reval as it would be to send them to Petrograd.

May I devote a word or two to what I consider is a great danger of the policy of the Board of Trade. Like others, I should like to see the system of licences abolished. I believe it is one of the greatest hindrances to trade. I believe it is almost impossible to conduct trade quickly and efficiently when everything you do has to go through a Government Department and be subjected to Government scrutiny. The very essence of trade consists in the maximum of smoothness of movement and of quickness. There can be neither smoothness nor quickness with a system of licensing, and yet the policy of the Board of Trade is apparently to develop the system of licensing rather than to minimise it. The very last attempt at legislation was to set up another licensing system in one of the most intricate and complicated trades, where at present at least 60 per cent. of the people are out of employment, and we have another licensing system set up in order to show us how we can get the other 40 per cent. also on the street. It is bad policy. It is not a businesslike policy, and the Board of Trade ought to move in the direction of as great freedom as possible in the exchange of goods between one country and another instead of impeding trade by a system of licensing.

I suggest also that the Board of Trade has failed miserably in its lack of attempt to develop properly our intelligence system on a really sound commercial basis. It would have been possible for the Board of Trade, through its Overseas Department, to attempt to remove one of the things that gave our greatest commercial opponents before the War a great deal of success and in some cases drove us out of markets, not because our workmen were incompetent or our wage costs were too high, but because we had not a properly arranged system of merchanting the goods that were produced. Before the War I know one case myself in which a manufacturer had literally captured the whole of the trade in a certain line of articles that went out largely to the East and were sold in small packages. Eighty per cent. of his production had to be sent to Hamburg in order that the Germans, who were superior to us in merchanting, could merchant the goods in the markets for which they were intended. That, I believe, was the result of the superior German Consular system, and unemployment in an exporting country can be materially reduced by the wise expenditure of money on things which will really pay. I know there is a cry for economy, I know there is a cry against spending anything, but money can be spent to advantage, and it would be spent to advantage, by a development of the Consular system so that in every principal centre in the world we should have a consul who, not only was a business man, but spoke the language of the country to which he was accredited and had an adequate staff to investigate the conditions existing and to find what the people wanted and how they wanted it.

All that the hon. Member is advocating has been done within the last six or eight months.

Then my complaint against the Board of Trade is that it has hid its light under a bushel.

I am very glad we have succeeded in doing all this in eight months. I am not satisfied with the 1½d. publication. I am not satisfied with the scheme.

The right hon. Gentleman who represents the Board of Trade, will be able to tell us, not what has been put on paper—we had elaborate schemes of reconstruction on paper—but what has been done. That is my request, and I should like to hear not what the scheme is, but what has actually been done in this regard.

What the hon. Member asks for has been in operation longer than my hon. Friend opposite has told the House. The Board of Trade has brought out form K, and the sheets are 1d. a piece, and you may get thousands of them. They represent the needs of every country in the world. They are produced by the Consular Service, and very excellent things they are. They are the very thing the hon. Member is asking for, and they are helping us very materially to sell our goods abroad.

I accept the hon. Member's statement absolutely, but it does not square with statements which have been made to me by exporting manufacturers, who state that very much more might be done in this direction than has been attempted up to the moment. Now I want to suggest that the principle reason for dislocation in trade is the failure to stabilise the exchange. I know it is said it is absolutely impossible to stabilise the exchanges. Of that I have a doubt.

I am dealing with India for the moment, and I will go on to one or two others to explain my meaning. Here is India with the rupee diminishing in value until probably millions of pounds worth of cotton cloths are unsaleable, except at a tremendous loss, through the mere depreciation of the currency against the British manufacturer. Is it beyond the wit of man to devise a method so that between India and ourselves there should be a stabilisation of exchange so that the rupee that the British manufacturer sells his goods for shall represent in this country always the same amount of money? I do not believe that is impossible. I am also of opinion that on the Continent of Europe it is quite possible for the Governments, meeting together, to make arrangements so that we shall have roughly a stabilisation of exchange. How is it possible for the trade of Europe to move on sound lines when in one of the most industrial parts of it the exchange can swing from 300 to 320 in one week These things make it almost impossible for trade to flow in a normal way. Not a word of the speech of the President of the Board of Trade dealt either with the possibility or the impossibility of stabilisation, and it is a subject that ought to be carefully considered and given the attention it really deserves.

I am glad to acknowledge that, so far as the growing of cotton is concerned, something has been done by the Board of Trade. I believe the time will come when the development of our Empire will be its first consideration, not perhaps on fiscal lines, but a really serious policy of developing those parts of the Empire which can fit our needs and be calculated to take away our great supplies of manufactured articles. Obviously, if we are to maintain our population we must always be an exporting country. It is vital to us that the Board of Trade should be a really living organisation which in every way should be helping the country to come to the top and gain material prosperity. May I ask the President of the Board of Trade to give consideration also to another very important matter, that of industrial research and scientific development? I think I can speak this time without contradiction when I say we have been lacking in the past in developing the scientific side of industry. We know at present comparatively little of the higher branches of certain industries. May I take the German dye industry as an example? It was undoubtedly more highly developed than ours. I should like to see the Board of Trade taking an almost fatherly interest in everything that went to scientific research and to development. That would be a better occupation than the issuing of licences. It would be really useful. If the Board of Trade approached the Treasury and asked for funds to help or even to build institutions for the scientific study of industry there would be something useful done.

I suggest also that although there may be no confidence at the present time in the markets, that the whole question of confidence depends upon one thing, and that is peace between the nations, and as we are getting further from peace between the nations I am afraid that confidence cannot exist. I appeal to the Committee to consider carefully whether it would not be better to make a perfectly open statement in regard to Russia, and if possible to get a definitely settled peace with that country. Since last July we have been talking about making a trading arrangement, and nothing has yet happened. I am not prepared to say that the fault is with the Board of Trade or that it is with Russia; but there we have the fact, that since last July these things have been drifting and we have gone from bad to worse. We cannot leave Russia out of account in considering our future as a commercial nation, because so long as she remains in her present position so long will Central Europe also be undeveloped and not taking its proper place in the world's economy. The extraordinary fact is prominent to the eyes of any man that we, have quantities of raw material, that people are needing manufactured articles, and that workers are unemployed.

They cannot pay for the goods. We have this remarkable set of circumstances, that people are needing goods, that there are the raw materials available, and that there are the workers unemployed and you are preventing them ever getting the money to pay for the goods.

Is it impossible to attempt in Central Europe what I suggested in regard to India? Is it impossible for the Government to arrange a stabilisation that will let the Bulgarian know exactly what his currency is worth to us, and let us know exactly what our notes mean to him? The present method leads nowhere. If it comes to criticising what I say, I could turn round and criticise the present position. The present position could scarcely be made worse. We see the principal exporting trade in the country with 50 per cent. at least of its people unemployed and the majority of the others partially unemployed, and it is no use categorically saying that nothing can be done. If a nation, which reversed all its usual methods during the War, and which came through the War successfully, really made up its mind that these things had to be done now, I believe they could be done. It might not be done without infringing upon the private interests of certain people; but about that I am not very much concerned. What I am concerned about is the people I see at home walking the streets, doing nothing, who might be working, when I know at the same time there are millions of people who could make and grow useful things and who want the things that our people could make. There is the problem, and up to the present the Board of Trade has not been able to find a solution for it. However wild ideas may seem, they can scarcely be wilder than the position that now obtains on the Continent of Europe; a position where everyone is needing what the other could make and yet there is no method of bringing the worker into contact with the raw materials so that he could make the things which the people really need. That is a matter that needs the early consideration of the President of the Board of Trade, and I am not satisfied that it is not possible for the Government, not only in Europe but in India, to make an arrangement that would stabilise exchange and by so doing give, a huge fillip to industry, and turn the unemployed into the mills and factories, where they ought to be making things and making the world wealthier and themselves wealthier as a consequence.

May I say a few words as to what might be done in regard to banking. Is it not possible for the Board of Trade to help industry by making banking less a profit-making institution and making it a real live institution, backing industry wherever industry requires it? I would repeat what I have often said before the War that there were certain things in industrial matters before the War which Germany did better than we did, and there was a considerable difference between the German banking methods and our own.

I suggest that there is fertile ground on which the President of the Board of Trade might proceed, and that there is necessity for a more go-ahead policy in regard to our banks. Surely it is the business of the President of the Board of Trade, who seems to be responsible for all Government help to industry, to investigate the possibilities of devising a banking system that will give more help to industry than we have at the present time. I am glad that in this Debate I have not heard the old story of trade unionists by their huge wages being responsible for our difficulties, and that it is not the misdoings of the President of the Board of Trade.

I do not. The wicked trade unionist made a mad attempt to get up to the prices that were being charged by his employer. The wicked trade unionist made a mad attempt to get his share of the plunder that was taken by his employer. He made a very unsuccessful attempt. He never got anywhere near the employer, and now there are employers who have the assurance to turn round and say it is the wicked wages that are responsible for our condition. It is the most amazing piece of assurance that one could listen to. I am sorry the statement has again been made. I thought that idea was dead, and I do ask the President of the Board of Trade not to be prejudiced by a statement which in itself is so incorrect as to be untrue. Over and over again there were rises in wages, but in no case did the rise in wages precede the rise in prices. It was always the employer, always the seller, who pushed up the prices first, and I suggest to all those gentlemen that having made magnificent profits they might cut some little of their losses, get rid of some of their stock, and get the machinery going again. It might mean a loss, but they made such huge profits that if they turned their attention to it they could cut some of their losses and get people working instead of walking the streets.

By far the most important improvement that we have heard of in connection with the trade of the country for some time has been the important declaration by the President of the Board of Trade in regard to the adoption of a new scheme of helping our trade abroad, more especially in the derelict countries of Europe, to start with. The Commercial Committee of this House, which is a voluntary Committee, and consists of 153 members, has been devoting attention for the last 18 years to branches of this particular subject. It has had a number of Sub-committees working on the subject and has had explanations from time to time from the Board of Trade and other sources with regard to what has been done. The hon. Member who spoke last was entirely wrong in stating that there was at present no organisation for the purpose of advancing and improving our trade abroad. During the last three or four years an Overseas Branch has been set up, and quite lately a complete organisation has been established. Every consul abroad now is not merely a diplomatic representative of this country, but he is a trade representative, and special commissioners have been appointed to various countries. There is a complete organisation, consisting of some thousands of consuls, vice-consuls and commissioners in the various countries, all engaged in finding markets for British manufactures, and helping our trade in those countries. It is a comparatively new thing, and it has only been possible to put it into operation to any great extent within the last two or three years since the end of the War. If hon. Members will take the trouble to purchase or obtain from the Board of Trade printed particulars as to these officers who have been appointed, what their duties are and how they are working, they will have their eyes opened as to this new effort which has been made by the Board of Trade to advance the interests of our manufacturers in foreign markets and our traders generally. This important new feature that the President of the Board of Trade has told us about to-day is on the lines that the Commercial Committee have been advocating for a good many years past, and which I had the privilege of addressing this House about last year and the year before when this Vote came on: The idea was to follow, without the chicanery, the plan which the German trade emissaries had already adopted, and which was in full operation for 15 or 20 years before the War, and which enabled a German manufacturer, with the assistance provided by the bankers in London, to cut the English manufacturer out of his market and to substitute German goods. It was a most ingenious and carefully carried out organisation, but without the chicanery part of, it, the trickery and spying, which was part of the system, it is possible. We have been urging for many years the adoption of the system, and now we come here to-night and we hear for the first time—because we were not taken into confidence in any shape—that exactly that system is going to be adopted. All I can say is, any criticism of its details would be inopportune. We have not the details; we have only listened to the questions of the Board of Trade. I would like to know from the representative of; the Board of Trade when we may count upon seeing this new scheme in print, and whether there is going to be an opportunity given to a committee of this House to consider that scheme, and see whether any suggestions can be made.

Roughly speaking, the scheme is this, that the Government need not find any money at all. This is exactly what we have been endeavouring to impress on the Government and on this House when the £26,000,000 was voted last years that it was not necessary to find the money, that all that was really necessary to be found was that a guarantee should be given that a percentage of the sum would be made good. It appears now the system which they had adopted previously, and which turned out to be a complete failure, is going to be scraped in future and an intelligent and reasonable system, which the commercial committee of this House has been advocating for the last seven or eight years, is to be adopted. The system is a guarantee in approved cases that ultimately a certain percentage of the invoice will be paid. The German emissary abroad before the War succeeded in getting business at the same prices for the German manufacturer against the British. How? By promising the customer credit. The British manufacturer could not give credit. He simply could not do it. When he took a bill to his bank—a bill by the Bulgarians mentioned by the last speaker, for example—what bank in England would accept the bill. The German trade emissary in Bulgaria succeeded in finding the market and finding the prices and transmitting the information to Berlin, and then a representative of that trade comes out there and secures that business from that buyer and says, "We will charge you no more than the English merchant, but we will give you credit" When that bill was discounted by the banks in Berlin with the Government guarantee of 75 per cent. of the amount of the bill in all cases where the German trade representative certified that the buyer was good. I was told on good authority when I made a careful investigation into this subject that the Government had not had for seven or eight years to find sixpence under that guarantee. When those bills were discounted and the money was paid to the German manufacturer in cash at the time when he shipped the goods, those bills were discounted by the committee of bankers for foreign trade in Berlin. These bills being collected together were re-discounted in London in batches and the money was actually found by the London banks to help the German manufacturer to cut the English manufacturer out, and it was the English manufacturer's own money deposited in those banks that was used for the purpose.

The Committee will remember that we advocated, not a system of spying and stealing other people's business, which was this German system of sending young fellows out into offices to pretend to learn a language, and so on, but really to send particulars of all their master's business to Berlin, which was simply used to grab any business worth having all over the world by a system of spying. No, this system was to have intelligent representatives of Great Britain in every part of the world where there is business to be got, who will let us know where that business was, and will send proper accounts of it home, and will make proper inquiries as to the soundness of the purchaser, and in all proper cases where it is certified the bill will be discounted here by the banks in the ordinary course, with the Government guarantee of 75 or 80 per cent. of the amount. The banks would have no loss, the Government would not have to find a penny, and business would be advanced. That is the system I gather the President of the Board of Trade is going to adopt. He has outlined it to-day. We cannot criticise it in detail, because we do not know the details, but I heartily congratulate the Board of Trade on having come to its senses on this matter, and on having learned something from the Commercial Committee of this House and from the speeches made here expounding the researches of that Committee and the facts that they found out and the scheme which they have advocated.

Instead of spending £26,000,000 of; money in advancing it at prices and invoices at four times the price you could get for the goods the scheme is to give instead of that an intelligent considered guarantee on approved business to help the British manufacturer to find a market in an approved place for his goods. It does not want any money. It wants a guarantee and intelligent representation in every part of the world. You must have a representative of this country who will devote himself to finding out in each of these places where there is something that can be had, where there is a market that exists or that can be made. That is the kind of help we want, that the Board of Trade at last are setting at work to do, and I do heartily congratulate this Department for which for many years past I have had the most unutterable contempt because the Board of Trade never helped a British manufacturer to sell a ton of goods in any part of the world, any more than the Board of Fisheries ever helped the fishermen to catch a fish, or the Board of Agriculture ever helped an old woman to grow a cabbage. If the Board of Trade is at last coming to its senses and going to take the advice of those who know something about these foreign countries and their trade, then at last we have something to be grateful for.

8.0 P.M.

I wish to express my regret and disappointment that the President of the Board of Trade has not been able to see his way to announce the withdrawal of all restrictions on private trading with Russia. Personally I hate the idea of trading with Russia, and would not trade with them myself under any circumstances, both for business and sentimental reasons. There is no doubt there exists in this country a very large body of misinformed public opinion, deluded by the outpourings of hon. and right hon. Gentlemen in this House and outside, who really do believe that the condition of trade at present and the disastrous condition of unemployment in this country is simply and solely due to the refusal of the Coalition Government to allow private enterprise to trade with Russia. If that misapprehension be removed, it would go a long way to removing a great deal of the discontent and dissatisfaction which exists at the present moment. Personally I do not believe that any great amount of trade can be done. I always believe that the value of a nation's exchange is a very good criterion both of the economic and financial conditions of the country, and as the Russian exchange is at the present moment practically at zero, it means to all intents and purposes that the amount of goods they have to offer us are also at zero. As far as I can make out the position at present is that trading with Russia is banned as trading with the enemy which exposes anyone who attempts to do so to a heavy fine, and I think imprisonment, but we are also informed that licences can be obtained, and the inference is that they can be obtained without difficulty. During the early days of this Parliament, on behalf of my supporters, I visited the Board of Trade and other Government offices to endeavour to obtain licences not to trade with the enemy but with our Allies or neutral countries, and the time that I and the Government Departments and my friends wasted if totted up would have gone a long way towards rehabilitating the trade of this country. Everybody is sick of licences and the Government control of industries, and they want freedom to do what they think best in their own business. I do not think there is anything to be done with Russia, but if other people think so, for Heaven's sake let them try. The constituency which I represent is Hull and they suffered a great deal right through the War. Their principal trade was with Western and Northern Europe, which, as everybody knows, is to a large extent at a standstill. Now trade to a certain extent is being resumed, and they wished to have an opportunity of participating in the improving trade of the world. Before the War immense sums were spent in developing that port for coal export. Export of coal has been practically banned for many months and until the prices fell so low and the demand on the Continent was practically extinguished, they were not allowed to export a ton. Now they want to have liberty to trade with Russia. I believe some of those gentlemen do not share my opinions. They think there is trade to be done with Russia; they think Russia has a certain amount of goods to give in exchange for the goods we can send, and they want to be free from all those vexatious Government restrictions, and the delay and annoyance of obtaining licences, and to be allowed to carry on their trade as before the War. I say, for Heaven's sake let them have the opportunity. If there is any trade to be done it will all be to the advantage of this country. If there is no trade to be done, then they have tried and it is their funeral. We also heard from the President of the Board of Trade that exporting could be done, through the port of Reval, but Reval is not the port of Petrograd. I admit that recent changes in the map of Europe have made it difficult for us to keep in touch with the boundaries of nations at the present time, but I was of the opinion that Reval was in Esthonia, and therefore it is certainly not the port of Petrograd. Riga or Kronstadt may possibly be, but Reval is certainly not the port of Petrograd. I have some knowledge of the difficulties with which trade in Europe is confronted at the present time through each country being surrounded by tariff walls, and those countries are supposed to be friendly, and, knowing that, I can imagine the difficulties which will confront anybody who wishes to send goods to Russia through Reval or through Esthonia. Does anybody seriously imagine that the best way to send goods to Czecho-Slovakia would be through Poland or the best way to send goods to Austria would be through Jugo-Slavia? If they do they have no idea of the difficulties and the formidable obstacles to trade which those countries place in each other's way. At the same time I imagine the difficulties in trading between those countries are as nothing to the difficulties of sending goods through Esthonia into Russia or to Petrograd. If any trade by private enterprise is to be done with Russia at all it must be done direct. It is perfectly impossible to do it through another country without that country snatching all the profits. If there are any profits to be made, I want the traders of this country to make them. I do not want them to be compelled to hand over the profits of this distinctly dangerous trade to some other country.

A few words were said on the subject of stabilising the exchanges. The hon. Gentleman (Mr. T. Shaw) requested or implored the Government to do something in that way. I implore the Government equally fervently not to do anything in the way of tinkering with the exchanges. They have done enough harm in that way already, and in addition to that it is perfectly impossible for us to endeavour to stabilise the exchange of another country. Countries can do that for themselves if they choose. They can do it by curtailing their expenditure, and by curtailing the printing of paper money, things over which we have absolutely no control. If we stabilise the exchange of Austria, in a month they can reduce it to the condition it is in at the present time by simply working their printing presses overtime and printing paper money. We can depreciate the exchange of this country to the level of other countries if we like to do so. All we have to do is to stop taxation, live on capital, and pay for everything with bank notes printed by the Government printing presses, and within a few months our exchange will have sunk to the level of France or Italy. People who have not travelled abroad recently imagine it is a fine thing to stay in a country with an adverse exchange. I can assure them that is a great mistake. The difficulties with which we are confronted in a country with a favourable exchange are as nothing to the difficulties those countries have to face whose exchange is adverse. Therefore, for fear of making matters worse, I do express the hope that the Government will make no attempt to tinker with the exchanges.

I have listened to the Debate which has been carried on on many subjects. Many of the remedies, I think, are rather extravagant. I shall begin, first of all, with Russia. We have heard a great deal about trading with Russia, especially from the Benches opposite. The idea of those gentlemen is, of course, State trading, to begin with, and their one object in supporting the Soviet Government is that the Soviet Government is the only authority which can trade in Russia. At the present time we have heard that it is necessary to have a licence to trade with Russia. The last speaker mentioned that it was criminal to trade with the enemy. I am not aware that we are at war with Russia. We have had disputes with Russia in reference to the treatment of our prisoners, but we are not actually at war; We started in this great War by being Allies with Russia, and it was the hostility of the revolutionaries which created the conditions between this country and Russia which exists to-day.

As a matter of fact, when hon. Members speak of having to procure a licence to trade with Russia, I see every day transactions being carried out. I have seen many transactions initiated, but 99 per cent. of them have fallen through owing to the inability of the Soviet Government to give any assurance that the goods sent from this country will ever be paid for. The President of the Board of Trade told us last year there were £4,000,000 worth of goods sent from this country to Russia. I will come back to the theory of hon. Members opposite, that we should enter into trade relations with the Soviet Government. We who have been in business with Russia in years gone by know perfectly well, and it applies equally to this Government, or the Russian Government, or any other Government, that Governments have absolutely nothing, they have no property, no possessions; and what has happened in Russia is that the so-called Russian Government—I do not know what that Government is, by whom it is elected, whom it represents, or what authority it has to act upon—has confiscated all the property it could lay its hands on. And when we see the Russian Soviet Government exporting gold in payment of cotton goods and machinery which they are importing at the present day, we know perfectly well they are paying in stolen property. In this country it is a criminal act to receive stolen property, and if our Government wants to make an agreement to trade with the Soviet Government of Russia, I cannot see any reason why they should not bring in a Bill to alter the law of receivers of stolen property. We cannot have it both ways. It is either legal or it is illegal, and in my opinion this House cannot possibly pass any agreement which has for its principal object the receiving of stolen property.

One hon. Member asked a question about gold shares and oil shares and other things. If this agreement comes into operation, the Soviet Government will immediately offer in this country the produce of the mines which it has confiscated from Russian or from British subjects, and if you are going to legalise that, I am afraid the commercial morality of the Members of the House will be very materially lowered in the estimation of many of our Allies. But we know perfectly well that this system in Russia cannot maintain for any length of time. The few things that the Soviet Government will have to export are very small compared with the requirements of the Soviet Government. If you take the great article of export before the War, grain, the Russians on their large estates were able to cultivate scientifically, not only what they required for their own home consumption, but were able to cultivate an enormous quantity for export As one of the speakers has pointed out, with the advent of the Soviet Government the large estates in Russia have been sub-divided, and you have now peasant proprietors all over the country. These men have shown us they are not prepared to work for the Government, and those peasants know perfectly well that whenever they produce grain they cannot consume the Government comes down and confiscates it. They do not buy it from them. They simply confiscate it, and if there is any resistance the penalty is death. The Member for Preston (Mr. T. Shaw) said that the confidence of the merchants in trade had been shaken. So far as Russia is concerned, no merchants would give credit unless they had absolute security either from this Government or from the Russian Government, which they would be very ill-advised to reckon upon. The President of the Board of Trade mentioned that, if trade resumption with Russia were allowed under the agreement, conditions would become normal very soon, but hon. Members will realise that with a Government composed as the Russian Government is, of Communists, who allow no freedom to anybody, who confiscate everything which anybody possesses or can earn, it is highly improbable that you will ever get conditions in Russia to become normal again, and that until you have a Government which respects private property there can be no normal conditions established.

A question has been raised as to credits and the trade of this country with foreign countries. The Government proposal to advance 100 per cent. has, I am pleased to learn from what the right hon. Gentleman said, been abandoned. It is unnecessary and undesirable for the Government to interfere in that respect. If the Government are going to assist trade financially, they cannot raise the money without going to the banks or by means of taxation. I see no reason why the Government themselves should interfere with the finance of the commerce of the country, which can be and has been done for generations in the usual way. It is practicable, and perhaps in regard to those countries in Central Europe or the Near East it is to a certain extent advisable, that there should be some system of insurance or guarantee against loss, but I want to caution the Government. It is very easy to give guarantees and equally easy to lose the money. The guarantees are, in the first instance, 85 per cent. of the selling price. The President of the Board of Trade explains that if the Government guaranteed this 85 per cent. the buyer in the country, Czecho Slovakia, Austria or Poland, was to put up 100 per cent. security. If the buyer only puts up 50 per cent. security; then the Government was going to guarantee half of the other 50 per cent. The onus, naturally, is to be on the seller of the goods here to see that his security is of the very highest class and that if and when he is called on to realise that security he will not be involved in any loss. The scheme, so far as it goes, is a good scheme if it is practicable, but I am afraid that in practice we shall find great difficulty, owing to the alteration in the exchange, in getting the amount of security necessary to carry on the scheme.

There is at present a considerable amount of business being done between this country and Czecho Slovakia and some of the other countries on a basis of exchange of commodities. For instance, I know of a transaction which has just taken place where the merchants have sent cotton goods to Czecho Slovakia and they were given maize in exchange. May I say a word in defence of the bankers and accepting houses who seem to have the reputation of not being willing to assist the commercial community? These transactions are all being financed here by accepting houses and bankers. The cotton goods are shipped from this country and the manufacturer draws on one of the accepting houses for the value of these cotton goods. In the case of the maize, which is shipped from Czecho Slovakia, and comes generally by the Elbe, the bills of lading are handed to the accepting houses and the prices realised, and that pays for the cotton goods which have been shipped in exchange. That system can be carried on only to a limited extent. The arrangement which the Board of Trade propose cannot possibly be carried out unless the country to whom you give the credit have some material or some produce that they can ship to this or some other country in exchange. The mere fact of these buyers putting up a certain quantity of paper securities does not make it possible for them to meet their foreign indebtedness to this country by means of those securities. There must be international credit. What many people do not realise is that the whole trade of the world is at present hung up.

I have listened with considerable interest and amusement to the fairy tale of my hon. Friend the member for Liverpool (Sir Watson Rutherford) about the way finance was managed before the War. I have had 50 years of business experience in different parts of the world. I have had a great deal to do with the exchange of produce and manufactured goods. I went out to Japan to my firm in 1882. At that time there were paper yen, silver yen, and gold yen, and silver dollars, Hong Kong dollars, and Mexican dollars. You could get about 300 paper yen for 100 silver yen, and the silver yen was about equal to the Hong Kong dollar and the Mexican dollar. During my stay in Japan, from 1882 to 1887, I saw the paper yen drop down to par, and afterwards we had the silver yen or the Mexican dollar for our trade purposes. Those also were at a great discount until Japan introduced a gold currency, and made the exchange 2s. 1½d., where it has remained ever since. That has been possible only on account of the international commerce carried on by the Japanese merchants and the Japanese banks. We have heard about the stabilising of exchange. Unless you can re-establish international trade it is utterly impossible to stabilise exchange. The exchange of one country is not dependent upon the trade it does directly with any other country. This Government has been responsible to some extent, especially in Eastern exchanges, for bringing about a decline.

I will relate a rather amusing incident which will show how utterly incapable any Government Department is of interference in the matter. During the War, on account of the fluctuations in the Indian exchange, the Government decided to put the rupee at 2s. They did the same thing in East Africa. After the War, notwithstanding the action of the Government, the rupee in India persisted in falling in value, and at the present time the quotation at Calcutta is 1s 2½d. A certain ship arrived at Calcutta a short time ago. The captain had a letter of credit on his owners. He went to the bank and he drew a draft upon his owners at Is. 2½d. exchange, though he knew perfectly well that the Government rate of exchange was 2s. He then went round to the local equivalent of the Board of Trade offices and immediately converted his rupees into a draft on London at the rate of 2s. to the rupee, and he telegraphed to his owners, "Please send me a credit of £2,000, as I can make £800 profit on it." The people on this side did not want to swindle the Government. They went to the Treasury and stated what was happening, and the consequence has been, I believe, that orders have been sent out not to buy any more rupees at 2s. each. Another incident refers to Basra. We shipped out large quantities of manufactured goods to the Persian Gulf. Our people knew perfectly well that the Government were selling Post Office orders to a maximum of £40 each. We received something like £25,000 remittance in Post Office orders of £40 each, while the bank rate of exchange was about 1s. 4½d. for the rupee. I told the Secretary to the Treasury what was going on.

These incidents show how impossible it is, in world-wide business, for any Government to carry on any commercial transaction when what is required is a constant knowledge of fluctuations. I agree with the last speaker, that whatever the Government do they should not try to tinker with the exchanges or try artificially to regulate things which can be regulated only by international trade. An hon. Member spoke about the Indian exchange. One of the most important causes of the low rupee is the lack of export trade in India. In pre-war days enormous quantities of goods, linseed, rape-seed, and other produce were shipped to this country and Europe. Now there is almost a cessation of shipment. The imports of those goods and many other articles help to regulate the exchange. There, is not in Europe the power of purchase that existed before the War. I am afraid we shall have to endure a great deal more unemployment and more stagnation in business until such time as we are able to turn round and re-establish the international trade of the world. It is only by that means that we can hope to make the exchanges more nearly even than they are. That re-establishment of international trade is going to take a long time, but until then we shall not be able to rely upon the relation of silver or gold to paper.

The hon. Member for Liverpool drew a picture of what the representatives of Germany did before the War, how Germany gave credit, and how she was able to do us out of our trade. I claim for the British merchants that we have been the pioneers in the trade of the world, and I maintain that at the present time, as in the past, the British merchant is in as good a position and as capable of carrying on the business of this country, of the Empire, and of the world as he ever has been. We were in all parts of the world before the German nation was born, I was going to say, and I have in my long experience suffered, as many other British houses have suffered, by employing Germans. I know from experience in my house in China and in Japan that Germans went out there as clerks, simply going round and travelling and learning a good deal of the business, and we found that many of these men were utterly unscrupulous in their methods. We found that they were going through the copy books of the firms employing them, that they were writing to the customers of the firms, and saying that they were in this business and had been with such and such a firm, but that they were going to set up in business for themselves. That is how the Germans have established themselves, and not through any lack of ability or energy on the part of the British firms. When the hon. Member for Liverpool talks about the German firms being able to do business better than the English firms, we have had experience in China which bears on that question. If a British firm in China goes outside the Treaty limits to do business with manufactured goods, and if he is let in by the authorities, he has to whistle for his money, but with the Germans it was very different. I can recollect an occasion where a German firm went to Chekiang and did business with the guarantee of the Governor of Chekiang, but things went wrong, and the consequence was that they were not paid. A British firm was in exactly the same position. The case was put before the British Minister and before the German Minister. The German Minister told the Chinese Government that the German firm had done business with the Governor, that there was no jurisdiction of the International Courts, and that consequently he looked to the Chinese Government to make the people pay, and those people were made to pay. The British merchant went to the British Minister in Pekin and said, "We have sold these goods and done this business." The Minister's reply was, "You ought not to have gone outside the Treaty limits, and I cannot help you." That is the sort of thing that the British merchants have always complained about.

I had a letter from the Overseas Trade Department a short time ago saying that they understood my firm was interested in the export trade of this country, that we represented several manufacturers, and that if we would give them the names of the manufacturers that we represented and tell them the articles that we dealt in, they would send the names to their representatives abroad, who, in the event of having inquiries for those goods, would communicate with us. My reply was that as we had been dealing in these goods and had been established in this country over a hundred years, we thought that, if there were inquiries for that class of goods, the merchants or manufacturers would most probably apply to us for those goods and not to the representative of the British Government. The sequel has been, I think, most disastrous for some of the manufacturers. A lot of people who wanted to get into direct trade with this country, who were more or less adventurers, have gone to the British representatives and asked to be put into communication with various manufacturers, especially in Manchester. They have been put into communication, they have got samples from the manufacturers, and they have sent them in some cases very good orders. In sending the orders they have been able to arrange through one of the banks, the Chartered Bank, or the Hong Kong Bank, or some other bank, to write home and say that they were authorised to negotiate the drafts with documents attached by such and such a firm upon them. These manufacturers, who had had very little experience in export trade, looked upon that letter from the bank as a letter of credit, and they were indiscreet and unfortunate enough to send the goods out to these people and draw under what they thought was a letter of credit. The slump came, with the result that these people, who ordered the goods and authorised the manufacturers to draw upon documents attached, when the goods arrived out have failed to take them up and have repudiated any responsibility for them. That has been one of the results of the appointment of some of these trade agents. No doubt the information that we get through them is very useful, but it is very dangerous indeed for manufacturers to rely upon the introductions through these sources without taking the very greatest precautions to ascertain who the firms are that they are dealing with.

Now that the President of the Board of Trade is in his place, I should like to repeat what I said before, that the scheme which he has outlined to us is only practicable if the country to whom we give the credit for these articles is in a position to pay for them by shipments to other countries of produce. The paper which we have as security would never realise anything like enough to serve as a guarantee.

I entirely agree with the remarks made by the hon. and gallant Member for North-west Hull (Colonel Lambert Ward) regarding the great importance of re-opening trade with Russia at the earliest possible moment, and I am sure that everybody agrees that the proposed economic treaty is deserving of the most careful consideration. I have a certain knowledge of the Bolsheviks and of their methods, and that, combined with the very careful study of this proposed agreement, leads me to say without hesitation that I am opposed to it, not only from the point of view of international morality, but also from the point of view of its being entirely unsound economically. Taking the point of view of international morality, whatever technical explanation may be given as to the meaning of an economic treaty, if we sign such a treaty. it cannot be denied that we recognise the Soviet Government as a Government having the power to enter into a treaty. I go further, and suggest that for us to do that would be contrary to all the traditions of this country, because it would be recognising an unconstitutional form of government. If we sign this treaty we are recognising the Soviet Government, this band of people who simply by force of arms, and by the control of foodstuffs are in the position they now hold in Russia. But I think that in considering this Treaty we have also to consider what are the bona fides of those people who are negotiating. I would like to remind the Committee of the experience we have so far had of the different members of the trade delegations which have come over here. With the first delegation last year we had that notorious man M. Kamaneff, who very soon after his arrival broke every condition as regards his coming here by certain actions he took with regard to the "Daily Herald" When he was removed they set up a society which is termed the "All Russian Co-operative Society," and it is only necessary to look at the directors entered on the register to appreciate that this was neither more nor less than a propaganda bureau. The directors were M. Kryssin, who, if I am right, was the same M. Krassin arrested in September, 1918, on the same charge with which M. Litvinoff was dealt. The second director, named Rosovsky, was returned to Russia at the instigation of the British Government three or four months ago, and the third director was a woman, Mme. Polotsava, who was an intimate associate of both M. Kryssin and M. Rosovsky. Coming still nearer, I think one point alone which should decide the Government that they cannot possibly consider the signing of such a treaty is the attitude which has been taken up in Russia by Lenin and Trotsky in endeavouring to explain to the people of Russia why they should be carrying on these negotiations. I do not know whether it is news to the President of the Board of Trade, but I would like to read an extract from a speech by Lenin, which I took from the Moscow paper, the "Pravda," two months ago. He made this speech to show why he was negotiating with Britain. He said:

Further from the point of view of their inability to supply anything to us, or to carry out their obligations from an economic standpoint, an hon. Gentleman opposite referred to certain business—he mentioned the sum of £4,000,000—which had been carried on with Soviet Russia, I understand, during the current year. I am sure the President of the Board of Trade knows better than I do that one of those transactions was approximately for £300,000 of cloth, which was sent to Reval for consignment to the interior of Russia, and I believe that up to four or five weeks ago, although it was sent there in September of last year, it was still lying at Reval, as it had been absolutely impossible to obtain any satisfaction with regard to payment for these goods. As regards the agreement with the Swedish firms, everybody knows they were quite incapable of carrying out their agreement in the matter of the exchange of goods, and it was only by sending into Sweden a certain amount of gold that this agreement with the group of Swedish firms could be carried out. I maintain, first of all, we cannot trust the people, and, therefore, from the point of view of international morality, it would be wrong to recognise them, and from the economic point of view there is nothing they can export.

I think the hon. and gallant Member knows that every mill in Archangel has been destroyed, and, until transport can regain anything like normal conditions, it will be impossible to use transport. There may be a certain amount lying at the coast, but not very much. It can only be by the overthrow of the present system in Russia that those conditions can come to life which can enable us to make a treaty with the Government which will be honoured by the other party, because surely an agreement cannot be of any advantage to either side unless honourably agreed to. There can be no question, surely, that the Soviet Government have any idea of entering into honourable agreements, when at the same time that they are carrying on negotiations here their leaders state that they do not mean what they say with regard to the basis of agreement. I say that only with the overthrow of that dictatorship can conditions be brought about to enable Russia ever again to become a factor from the economic point of view.

In common with most other Members of the Committee, I heard with great satisfaction to-night about the arrangements which are in course of being made by the Board of Trade for export credits. We were also very glad to hear of a great expansion of the Consular system under the ægis of the Foreign Office and Board of Trade. Because there are opportunities of doing trade, and doing it on a large scale, with the middle countries of Europe, with countries that were our Allies in the War, and other countries which have arisen owing to the break-up of the Austrian Empire, I have listened with the more dissatisfaction to these proposals for an agreement with Russia. Since the Debate took place three days before Christmas, my right hon. Friend seems to have learnt nothing and forgotten nothing on the subject of this agreement. He has repeated to us to-night exactly the same arguments in extenuation of the agreement. He has told us that arrangements have been made by which goods and services rendered to the Russian Government are to be paid for, and "for this relief much thanks." I asked, "What about confiscated property?" That is a very difficult question, and it has been well said: "If you sup with the devil you must use a long spoon." My right hon. Friend has told us for all reply that you could not expect people who had confiscated the goods of their own subjects to refrain from confiscating ours. I think that is a new principle to lay down in the British House of Commons.

I deny emphatically that it is a fact. If I were unfortunate enough to be a Russian I might have to put up with the Government I. had got, and if that Government confiscated my property I should have to grin and bear it if I were not able to upset the despotism that took my property. Nevertheless, I have yet to learn that there is any precedent for entering into an agreement in face of the fact that while the negotiations are in progress the country entering into that agreement is confiscating the property of British nationals. You will search in vain for any such precedent. Very valuable property, such as oil and timber, has been stolen from British subjects in Russia, and I do not think it is too much to suggest that if we are going to enter into a trading agreement with the Russian Government, we should stipulate for justice to be done to our own nationals.

When this matter was discussed three days before Christmas I said a word or two against the agreement myself, but the discussion was switched off to the subject of Anatolia", although ten or twelve hon Members rose to speak, and never got an opportunity of saying a word against the agreement. It was said afterwards that the general sentiment of the House was in favour of the Russian agreement because only one voice, and that my own, had been raised against it, but if my right hon. Friend had put this matter to a vote with the Whips off, I believe that not one in four of the Members of this Committee would have voted in favour of such an agreement with Russia. There is nothing to be got out of it. It is a bad thing, no doubt, to sell one's soul, but it is even more pitiful to sell one's soul and never get the price. I do not believe what has been said about the propaganda proposal, because M. Lenin and M. Trotsky are only waiting until they have got through their military troubles. You cannot believe a word they have said on this subject and the whole business is futile in the extreme. I think we are betraying the good name of our country by entering into an agreement with them, and when we have entered into it we shall get no trade because they have nothing but stolen goods to deliver. Personally I do not believe that this agreement will ever be entered into, and I hope the Government will see the desirability of giving this Committee an opportunity of considering at length the terms of any agreement before it is finally settled.

9.0 P.M.

I think I am inclined to agree with the previous speaker and the hon. Member for Huddersfield (Sir C. Sykes) that too much time has been given to the subject of Russia. On this point I will only say a few words. Last spring, summer and autumn, and now this spring, we have been told every day and many times a day that the great obstacle to trade with Russia is the British Government and the Board of Trade. When I hear that said and stated in the newspapers I always think of what I read in a book which is very much the best work written about the new Russia by Sir Bertrand Russell, who accompanied the Labour Delegation to Russia last year, and who, being a close observer, had an opportunity of getting to know what was in the mind of Russia. He said that M. Lenin was much less anxious to resume trade with us than were the members of, our Labour Delegation then visiting, Russia. The reason is not far to seek, and it is that no political Communism can afford to have trading relations with what are called capitalist countries otherwise the Communism is sure to be undermined. What was true last summer seems to me to be still true of Russia to-day. I desire to enter a protest against the attribution, to our Government of a desire not to trade with Russia when it is perfectly plain that the Russian Government has its own motives for not trading with us. I am only giving the opinion of a very distinguished socialist when I say that in the mind of M. Lenin there is no great desire to resume trade with us.

I wish now to pass to the Vote of £15,000 for the Department that works under the three Profiteering Acts. Those Acts were passed in 1919 and 1920, and the work which they undertook is divided among the local tribunals and among three bodies in London, namely, the Standing Committee on Complaints of the Central Profiteering Committee, the Standing Committee on Prices, and the Standing Committee on Trusts. At the present moment there is very little profiteering up and down the country. I have no hesitation in saying that, because I have had some experience of these inquiries. On the 19th of May the Profiteering Acts expire and the operations of the Central Profiteering Committee come to an end.

I wish to draw attention to one aspect of that work and put a question to the, President of the Board of Trade. At the present moment the most important thing which the Central Profiteering Committee, through its various sub-committees, is doing is to inquire into trusts and monopolies, and all kinds of trade combinations. No one who knows the state of the country, no one acquainted with industrial constituencies doubts that the fear and hatred of trusts is one of the livest political issues of the present day, and no one who observes the effects of this fear and distrust can doubt that these feelings greatly swell the demand for nationalisation. There is in fact the closest connection between the agitation against trusts and the agitation for nationalisation. About nationalisation as a cure for trusts I will say nothing, except that, in my opinion, nationalisation would be no cure for trusts. What the Central Profiteering Committee is doing and has been doing for months has been to develop a new and interesting British method of dealing with trusts, by setting up subcommittees of a representative kind to make full inquiry. These committees have certain powers reserved to them in regard to the effect of trade combinations in respect of excessive prices and their action in restraint of trade.

A good many inquiries have been held and reports published. They have had a good Press, and considerable pro-eminence has been given to them. There has been a good deal of discussion, but they have, on the whole, done justice to the subject as well as to the trusts. They have shown that trusts and big amalgamations are not the large avaricious bodies which many of their enemies contend they are. They have shown that big companies are not things that this State can afford to let drift. The Central Profiteering Committee has established itself as an authority as between trusts and the public, and they have brought publicity to regions where before suspicion, hatred, misrepresentation and prejudice were rife. That seems to me altogether in the right direction. As many as 35 reports have been issued and another score are, I believe, in preparation. But this is the point I wish to put: That this good, excellent and original pioneer work done under the Profiteering Acts must come to an end on the 19th May. In the present state of feeling in the country regarding trusts, I think it is desirable for the Government, busy as it is, to give an indication that it intends to pursue this new method in the future, not by the temporary machinery of the Profiteering Acts, which had better come to an end, but by some permanent legislation which will enable publicity of the best sort to be brought to bear on the whole question of these monopolies.

The diversity of views expressed this afternoon is an indication of the magnitude of the trouble with which we are confronted in our endeavour to understand the present trade depression. Many of the arguments have been contradictory, and I suggest that some hon. Members have gone to the length of setting up their own economic formulae to meet their own circumstances and their own particular point of view. We have had suggestions that employers and employed must come into closer partnership, and we have had from the hon. Member for Preston a claim that we should embark upon some method of scientific research. Both these suggestions are valuable in their way, and might help to sustain trade and industry in the future. But what we require at the present moment is something of a more immediate character, something that will stimulate trade and industry at once. I have often thought that Members of this House take a one-sided view of trade and commerce. It is natural, having regard to the composition of the House itself. They seem to view trade and commerce from the point of view of what it will yield in the shape of dividends and profits. Trade is viewed from the standpoint of the buying and selling of commodities and the advantages that will come from that aspect of the transaction. I think we ought to take more cognisance of the fact that the function of trade is to provide what people require. It is social in its very nature. At the present time the world is confronted with the fact that in some parts there is no lack of commodities which people require, while in other parts there are large numbers of people who cannot secure those Commodities, and at the same time there is a tremendous productive force ready and willing to stimulate production in every department.

The present condition of things has given one school of thought a rather rude shock. We were told in various quarters that when the War was over the boom in trade would continue for a considerable length of time because the destruction that had taken place in the world as a result of the War would need to be made good, and that in making up the leeway of loss of productive effort during the five years there again we should find a considerable stimulant to trade which would last for a lengthy period. We all know now that that view has gone astray. The shortage has not been made good. Those things which have been destroyed have not been reproduced, neither has the damage done by the War been repaired, yet trade is depressed. There are those who suggest that the present trade depression is due to the high cost of production. During the last few days we have been made familiar with the assumption that the high cost of production is an outcome of the high wages now being paid, and that the one remedy which will secure an improvement of trade is a reduction in wages. I suggest that that is a fallacy; we know that if in some industries men were to work for nothing at all it' would not improve the demand for those particular commodities in different parts of the world. And if we are entitled to point out, as I think we are, for we can produce facts in plenty to support our view, that goods cannot be sold now on account of high prices due to the high cost of production, excessive profits are an equally big factor in the situation as high wages. With reference to the coal trade, we were told just before the House rose at Christmas, by the Prime Minister, that if there were a greater production of coal it would stimulate our export trade and one effect would be to bring down the prices of commodities. Despite that declaration we to-day have hundreds of thousands of coalminers walking the streets, and I want to suggest that, as far as one can study economic development, there are many markets in the coal trade that have been secured by outside competitors which look like being irrevocably last to this country. There are only two large coal-exporting countries in the world—America, and this country; and it is fair to say that European markets which used to be held firmly by the coal trade of this country are now largely in the hands of American exporters. The probabilities are that we shall not regain those markets in the future. There are many sound natural and economic reasons for that. It is not a question of wages. America produces coal far more cheaply than we do in this country. Machinery in coal production has been developed there to a far greater extent than it has here. The wages, both nominal and real, of American miners are higher than those of miners in this country, but coal is more cheaply produced in America, and can, therefore, be sold more cheaply in the markets of the world. The Americans, also, are developing their own carrying trades; they are not only mining their own coal and seeking world markets, but they are doing their own carrying when they have got it Moreover, America has an almost illimitable supply of coal within her own borders.

An hon. Member last night referred to the steel trade saying that it was in a very bad condition, and that furnaces had been shut down which had not been shut down within his recollection. He went so far as to say that, if the steel makers worked for nothing at all, the high price of coal would prevent the industry from continuing. I will put it the other way, and say that, if the coalminers worked for nothing, and gave their coal to the steelworks, there would still be the same difficulty in that industry as there is at the present moment. We know that last year the local authorities of this country went to America for large purchases of steel products, and, under the existing condition of things, that must inevitably continue. Just before the War, the Cleveland ironmasters asked the Government to look out for foreign supplies of ore, and I understand that while the War was in progress those representations were repeated. What are the facts? It was stated that the Cleveland iron mines were rapidly running out, that the Furness ore was not of the quality of that previously obtained in the Cleveland area, and that, if the production of iron and steel in this country was to hold its own in the future, a more liberal supply of ore would have to be found. America has every ounce of ore that she requires within her own borders. Before the War, we were worse off than Germany as regards imported ores; we had to import one-third of the ore that we required. The position of Germany is now considerably altered, because the Peace Treaty has cut off Germany from the Lorraine supplies of ore. Under the operation of the Peace Treaty we shall be better off than Germany as regards the supply of ore for the production of iron and steel; but there is another factor which is exceedingly important. We are told that the iron-ore deposits of Europe, outside Germany and this country, are in Russia. This will necessitate, it may be, some agreement between this country and Russia. The Lorraine supplies of ore being denied to Germany, Germany will look elsewhere, and if this country does not enter into an agreement with Russia, Germany will. If Germany effects that agreement, and ex- tends her supplies of ore from that quarter, we shall not only have America, but Germany on the top of us so far as the natural products are concerned which go to the development of the iron and steel industry. There is little hope of our iron and steel trade holding its own against Germany and America unless it finds other sources of ore. If we cannot find them in Russia, we are entitled to ask the President of the Board of Trade where they are to be found. The men who can speak with authority say that this is a necessary development if we are to preserve our trade in this direction.

Again, take the question of shipping, which I bring in with coal and iron because it has often been stated that the industrial supremacy of this country rests upon coal, iron, and shipping. If there was one thing more than another that stood out prominently in the early days of the War, it was the extent to which our trade was challenged by the high shipping freights, and these enter even now to a large extent into the question of the retention of our Eastern trade. The passage of our ships through the Suez Canal stimulated our Eastern trade to a tremendous extent. From the period when we found that short cut to the East our trade with India, China, and other Eastern countries increased at a very rapid rate, and for the past generation or so it has been one of our most important fields of foreign trade. Now, however, we are confronted with competitors in that quarter. Japan is coming along as an industrial power. British capital has found its way into India, and, exploiting cheap Indian labour, has put down factories for the manufacture of goods which were previously sent there from this country. With those rivals in the East we are endeavouring to compete. Hon. Members on the other side tell us that, with the low cost of production due to cheap labour in China, Japan, and India, we cannot compete unless wages come down here. If we have to enter into competition with China, Japan, and India in sending to them those goods which they can manufacture on the spot, I would suggest, as a definite contribution in this direction, that we are entitled to argue that those people who charge high freights for carrying goods from this; country to the East should bring down their freights, just as much as they are entitled to tell us that we must bring down our wages. There is another factor in connection with the shipping trade which operates against the trade of this country, and with which we shall be confronted. We are confronted with it now. History is repeating itself, and just as the Suez Canal is stimulating British trade with the East so the opening of the Panama Canal has brought another competitor across our track by shortening the distance for all American vessels from North America to the South American ports and to the Argentine. I am not a business man; but at least I can read a business man's newspaper, and see the facts presented there. We have presented to us the fact that the shortening of the distance from the North to the South American ports through the opening of the Panama Canal—

On a point of Order. What has the shortening of the distance to the South American ports got to do with the Motion before the Committee, which is the granting of a sum of £197,000,000 on account of the expenditure for the Civil Service? It is not in the power of the hon. Gentleman to interfere with the Panama Canal without legislation. It is a well-known fact that anything that requires legislation cannot be discussed on a Vote of this sort. I would ask you whether or not the hon. Gentleman who has given us this extremely interesting lecture is not straying very far from the paths of order?

In view of the course of this Debate the questions to the President of the Board of Trade have been rather wide, but I have no doubt the hon. Member will keep within the rules of order.

I look very kindly on the right hon. Baronet the Member for the City of London, and I have sat here this afternoon during the greater part of this Debate. I heard the Chairman of the Committee say that all questions of all national and international trade had at least a bearing upon this Debate. I would respectfully suggest that nothing I have said up to the present is outside the scope of that ruling. I am suggesting nothing in the nature of legislative action relating to the Panama Canal, but I am urging that that water passage has brought a competitor to our British trade.

By shortening the distance from North America to the South American ports, so that American vessels, which are in closer proximity to those ports than ships from this country, obtain the trade. This affects the carrying trade to such an extent that our business newspapers are at present filled with anxiety as to whether the trade that was held by this country with South American ports will not be lost to us. Taking the whole question of transport, either by road, rail, or sea, I would point out that we are an island community, dependent on our foreign trade. We are dependent on raw material and food coming in and on our manufactured products going out. Everything that can be done ought to be done to keep the question of transport equitable and cheap, and to the benefit of the trade of the country.

An important point raised in this discussion has been the question of the export credit and of the £26,000,000 already allocated for that purpose. This sum has missed its way, and is not carrying out the object for which it was intended. It was intended in the first instance to help to create facilities overseas for those who require the products of this country. It has not been used in that direction, but rather for the insurance of goods which were sent from this country by the seller. We can talk round this question as much as we like, but we have to come back to this point. There is a tremendous demand for commodities in this world and a tremendous avenue of supply, while the machinery of exchange which comes between has somehow got out of order. I stated the other day that an eminent financial critic said that the whole of international trade was dependent upon credit, and that the whole of our trade and commerce was now at the mercy of less than 50 men. If that is so, it is obvious, from their point of view, that credit is a very important factor in the development of trade. Those of us on this side of the House, who are sometimes measured by the university yard stick, and are found to be very short measure, cannot be expected to embark upon all the intricacies of exchange, credits, and the like. There are some Members of the Committee, however, who could speak with authority, and I am afraid some of them know more about this operation than they have yet told us. If it is a question of credit required to be used as a medium of exchange between a person who has goods to supply and a person who needs them, then it is the responsibility of the Government and of their officers to move in that direction. We have heard a great deal about underproduction and of the high cost of production. There is one certain and sure remedy for that. If we want to improve the trade of the country we have to stimulate consumption, not production. Production will go on all right when we have stimulated consumption. The whole problem of bad trade is under-consumption.

The discussion which has taken place with regard to the extension and sustaining of our foreign trade is all very well, but another factor enters into the situation. The whole trend of world economic development is in the direction of keener competition against industries in this country. The competition of Japan and America in the future will be much more fierce than was that of Germany in the past. If we move on the old orthodox lines we can endeavour to fight American and Japanese competition by the ordinary weapons of trade, but in 20 years' time probably it will result in another war. We want to avoid that. I suggest that one method of improving trade is to be found a good deal nearer home. We might move in the direction of the intensive production of such things as we require which will not enter into competition with any producer abroad. We need food, timber, poultry and eggs; and all these things came from wicked Russia. There is plenty of room in this country to supply ourselves with these things, and we can provide ourselves with a home market which would never need an army or a navy or a treaty to protect it. Let me turn to the question of Russia to which the President of the Board of Trade and the hon. Member for Islington referred. I was not impressed with their point of view. "Russia has a Communist Government," they say. "We cannot trade with a body of that kind." The hon. Member for Islington trotted out the question of international morality. I have yet to discover that there is much morality in trade. If we want to test that we can do so by the trade experience we had in Russia before Sovietism or Communism or anything of the sort was mentioned. Russia embraces one-ninth of the population of the earth, and whether the people have a Soviet Government or a Monarchy or are under Communism, they have to live. They cannot be self-contained for any length of time. I agree with the President of the Board of Trade, that if we opened up trade with them it would prove one of the shortest cuts towards breaking down the impossible theories which some people say they hold. Since when did we make the form of Government a test of trading with foreign countries. We traded with Persia when the Persian Government would not have passed muster. We traded with Turkey when it was one of the most corrupt Governments on God's earth. We have traded with Russia under Czardom, when everything the Russian Government stood for was expressed in terms of contempt and reproach, and we traded with Belgium at the time of the Congo atrocities and other things at which the whole world revolted. And then we talk about international morality and trade morality!

Whatever form of Government prevails in Russia the people in Russia have to live. They cannot be self-contained. They will have to recognise their dependence upon the rest of the world, and from that point of view alone Russia has things that we require, we can produce things that they need, and the whole thing is mutual and interdependent. We have to move in the direction of world interdependence. All trade and commerce is interdependent. A blow struck at one particular point will vibrate through the whole economic fabric of the world. What we want more than anything else at present is a world peace. Everything at present indicates that we are moving in the wrong direction in this matter. The discussion yesterday was an unmistakable indication of industrial warfare in the near future, and occurrences and events in the international field during the current week are also not quite an indication that we are moving in the direction of peace. If we have war, whether industrial or a war between nations, we have a big army of non-producers and a large army of consumers. Neither of these operations tends to stimulate the trade of the world. If we can have the world at peace, both in an industrial and a military sense, the wheels of trade and commerce go round smoothly and very person is not a waster but is a producer, making his contribution not to the destruction of the world, not to making the world worse, but making it better, in so far as he makes a contribution to the trade and commerce and the necessities of the people. All trade is the bringing of the energies of the people and the needs of the people together. The principle is sound whether it is applied locally, nationally or internationally.

I have listened very carefully to every speech that has been made to-day with one-exception, and I am sure the Committee will agree that the Debate has been kept at a very high level and has been one of the most interesting that have taken place lately. But practically every speech-has had relation almost exclusively to trade with Russia, America and other countries. Practically there has been no discussion at all of the actual Estimates which are before the Committee or of the Board of Trade as a Department, and I feel that before the Vote is given we ought now, if possible, to wander a little from foreign countries and devote ourselves to Whitehall and the Board of Trade. The whole Vote for the Board of Trade is about £1,500,000. This Vote on Account is for half the amount for the whole year. I feel that we ought to have had before us the Report of the Staffing and the Organisation Committee. I am told its Report was presented some time ago and has been printed. Why has it not been published? I hope the Government have not held up the Report in order to publish it after they have got their Estimates.

I should not like that suggestion to be made without correcting it at once. I am extremely sorry the Report has not appeared. It was only at very short notice that the Treasury knew that the Vote for the Board of Trade would be selected in order to discuss these matters. I should be as glad to have that Report before the Committee as my hon. Friend is, but it is impossible.

I entirely acquit my hon. Friend and his Department of any idea of holding it up, but I hope we shall get the Report soon, because it will be most valuable when we come to consider the Estimates for the year.

It rests with the Treasury. The Committee reports to the Treasury, and not to my Department.

I hope we shall have it as soon as possible. The Estimate for last year was a little over £4,000,000 for this Department, and this year it is about £1,500,000, and I have no doubt my hon. Friend and the President of the Board of Trade, quite rightly, have taken a good deal of credit for having reduced their annual Estimates by about £2,500,000. They are entitled to any credit they can get from that fact, but I am not going to utter any pæan of praise in regard to that reduction, because the whole of it is in regard to services arising out of the War, and certainly it is only natural that two years after the Armistice services arising out of the War should be finally wound up. But in regard to what may be called the normal and permanent services of the Board of Trade, there is a very large increase. In only five quite small cases dealing with the normal expenditure of the Board of Trade have we any decrease at all. I have added them up and they amount to about £2,500, whereas the total increases for the normal side of the Board of Trade reach the very large figure of over £200,000. It is quite true that there has been this very large decrease, say, in the Food Department, in the Profiteering Act Department, in the Coal Mines Department, and in various services arising out of the War, but in regard to the normal services of the Board of Trade there is a very considerable increase. I want to deal largely with these increases. In the present state of our finances it is very unsatisfactory that there should be such a heavy increase with regard to the normal working of the Department. I find that the salaries—I am not now dealing with the services arising out of the war, but with the normal side of the Board of Trade—have increased by £125,000. The Board of Trade has increased by over £56,000 a year in salaries, the legal branch has increased, the Standards Department has increased, the Industrial Property Department has increased, and the Official Receivers' Department has increased. I do not know whether these salaries include bonus, because in the estimates there is a note which states that the rate of bonus applicable to salaries is shown on page 4. I have hunted this page until I am nearly blind, and I can find nothing.

The full bonus is included in the Estimate, and if the hon. Member looks at the end he will see the amount of the bonus. The explanation in regard to the figures which he has been seeking on page 4 is this: when these Estimates were in preparation I thought it was very desirable that there should be a note to show exactly what was the rate of war bonus which is applicable to all these different grades. The point was then raised that the Treasury should put a note in the Estimates in each class showing exactly how the war bonus is calculated for that class. When these Estimates were in draft—the Board of Trade Estimates are not in Class 1, but are Vote 10 in Class 2—that Note had reference to page 4 of the total Estimates. The Estimates of the Board of Trade are on pages 45–55. The publication of this Vote was hurried, in view of the Debate to-day, and, therefore, the reference to which the hon. Member has referred will be a perfectly correct reference when the whole volume of the Votes can be published. When I reply on the Debate I will tell the hon. Member what is the exact scale upon which the bonus is calculated.

I do not know whether the House is very much wiser after that explanation. It only shows how extraordinarily difficult it is to understand these Estimates, and I do wish the Government would carry out the recommendations of the Parliamentary Committee on expenditure, of which my right hon. Friend (Sir F. Banbury) is; the distinguished head, and really simplify these Estimates so that we can understand them. We find that travelling and incidental expenses have been increased in nearly every single section and sub-head of the Board of Trade. Law charges have been increased in the Legal Department, and incidental expenses by £4,200. With regard to the grant given for cotton growing, I should also like an explanation. Last year the President of the Board of Trade explained that the grant was going to be an annual grant of £10,000 for five years, making £50,000 in all. That was quite clear, I have just looked it up. This year he is asking for £50,000 for five years, Which will make £250,000. That is a very different story. I am not now dealing with the object of the grant. I gathered from the right hon. Member for Norwich (Mr. Roberts) that the object is a good one. Perhaps when the Parliamentary Secretary replies he will explain this matter. Taking salaries and other things on the normal side of the Board of Trade, we find that there is an increase this year of over £200,000, and I maintain that in the present state of our finances that ought not to be so.

In regard to the point whether the Government are cutting down the services arising out of the War, I would point out that they are still going to have in the coming year 725 officials in the Food Department. They are still going to have 294 officials in the Department dealing with wheat supplies, and they are going to have in the divisional section of the Ministry of Munitions 112 officials. Therefore, on the special services arising out of the War, they are still asking this year for a staff of 1,129. If you bolt a rabbit out of its burrow, it pops into another one, so that there are exactly the same number of rabbits in the burrow. The same principle applies to doing away with the Food Ministry or doing away with the Shipping Ministry or with the Ministry of Munitions, if there is simply going to be a transfer of all the officials from one Department to another. I look with consternation upon this Vote, because it seems to me to be a sort of general post. From Departments which have been nominally wound up there is a general shuffle of officials going into the Board of Trade or other Departments. We have had a very interesting Debate on foreign exchanges and foreign trade, and I hope some hon. Members will now deal with these Estimates. I look upon them very seriously.

We have had a most interacting and important speech from the President of the Board of Trade. He dealt at considerable length with the tremendous problem known as Russia. I do not propose to pose as an authority on: Russia; I have read something about Russia, and I have listened to a great deal on the subject, and the more attention I have given to it the more perplexed I have become about that wonderful country. There are two or three matters which the President of the Board of Trade might clear up. Are negotiations going on at the present time, and if not, why not, with M. Krassin? M. Krassin has been away and has now returned.

Surely the hon. Member cannot have listened to what I said. I said that M. Krassin had returned, and that he had already met a representative on behalf of the Government and of my Department, and that I was to meet him on Friday.

I am obliged to the right hon. Gentleman. I did not hear the remark that he was going to meet M. Krassin on Friday. I am very glad to hear it, because that shows that negotiations are taking place. I did not hear what the right hon. Gentleman said on this point, and I am assured by other hon. Members that they did not hear it.

I have just seen an advance copy of what I said, and it is there, clear enough.

I did not hear it, and other hon. Members say that they did not hear it, so that will perhaps justify the inquiry I made. Perhaps the right hon. Gentleman will tell us when he is going to remove the restrictions on private trading? He will then do much to relieve the minds of many who have been taking a very active part in these negotiations for some time.

I want to deal with the much more important matter of export trade. I have never been enthusiastic about this scheme. I believe that the less the Government interferes with trade the better for trade. When the scheme was before the House I pointed out that the Regulations they were, insisting upon would make their proposals worthless. To-night, after twelve months, the President of the Board of Trade admits that out of £26,000,000 he has only advanced £400,000. He told us of an entirely different scheme in which I think there are great possibilities of the Board of Trade doing something to encourage trade overseas. His speech and the details he gave were very difficult to follow, and I trust that he will issue a statement or White Paper by which we could clearly understand it, that at the same time he will invite those who have experience or knowledge to make any suggestion they have to offer, and that he will give them a little more attention than he gave the suggestions made twelve months ago, for they might be helpful to his scheme. One very useful point he made was that it was his intention to include the Dominions and other possessions of the British Empire in these advances. I welcome that sincerely, because whatever difficulties and risks there may be in Central Europe they are considerably reduced when one comes to the British Empire, where the need for assistance in trade is just as great. One has only to trade with Australia—and practically no money is permitted to come out of Australia—to realise that if you had some assistance such as he suggested it would do much to stimulate trade in that direction. We know that trade with India is practically at a standstill to-day. Although it would be difficult and risky for the Government to make good the difference in exchange, yet a considerable trade can be started without any risk by giving credit, as this scheme would do, in order to facilitate trade with India, one of our largest consumers of British goods. It would benefit us especially in Lancashire if we got trade going with that part of the world.

As to trade in other directions, the hon. Member for Wood Green (Mr. G. Locker-Lampson) has mentioned the details of the expenses and staff of the Board of Trade. One wonders if the work of the Overseas Department—it is quite true we have now got a very large staff, and they are undoubtedly doing useful work—is commensurate with the vast amount of money they are spending. I am not one of those who are always inclined to run down our Consuls and representatives abroad. They have done very good work, and from my experience and knowledge of the representatives of other countries, especially German, I am inclined to think that one English representative is equal to two or three German or foreign representatives. But I do question whether the vast expenditure which has been incurred by the new Department of Overseas Trade is justified by what they have been able to accomplish up to the present. I hope something more can be done to get the Foreign Office and Overseas Trade Department to work together instead of trying to work, as they are doing now, in separate watertight compartments. Take Portuguese East Africa, for instance, where a dispute has arisen about exchanges. The British banks and local banks have been at loggerheads over sterling exchanges and it has been impossible to get money from that part of the world except in Portuguese dollars, which are of no good in this country. You appeal to the Overseas Department, and ask if they cannot do something to facilitate the trade with that part of the world. They reply, it is not their duty, it is a case of a foreign country and a Foreign Office job. By the time the commercial section has discussed with the diplomatic section a considerable time is lost and after many months of negotiation and discussion the matter remains as it is. Practically a large part of oversea trade in that part of the world is to-day at a standstill owing to the inability of the two classes of banks to come together and of our Overseas Department and Foreign Office to act as negotiators between the two parties.

I know what I am talking about. The Overseas Department assure me they are doing their best to adjust the difficulties which have arisen. There is another matter in which trade could be stimulated overseas. If firms in this country desire to trade with Australia, they send their catalogues out. On account of the desire of Australia to protect its own industries they levy a tariff upon catalogues. The result is that a manufacturer in this country sends out catalogues, and has first to pay a duty levied in two ways, either ad valorem or by weight. In the former case, on the value of the catalogue, anyone who knows anything about printing will know it is very difficult to price a catalogue. It depends a good deal on the illustrations, whether they are originals or copies, whether they have been used time and again, or whether you are going to print other editions. Therefore it is impossible to fix a value, and you pay by weight in England and when you get to Australia they levy a duty by—

I am afraid that does not come under the Board of Trade. It is distinctly a Foreign Office matter.

I was trying to show that this was a matter of trade and to suggest that the Board of Trade should make some arrangements by which these catalogues should be dealt with but if you rule that is not permissible I will not continue it.

I do not object to the hon. Member making reference to it, but he must not elaborate because it really belongs to another vote.

I will finish that sentence by saying that it would be of considerable importance if the Overseas Department could give some attention to that bar to trade so that catalogues from this country can be admitted to Australia under a duty which can be understood instead of having as now two options. There is one other matter which I am going to suggest to my hon. Friend the Member for Wood Green. The Overseas Department is now going in for the exhibition business as a means of promoting trade. They held an exhibition in London on which the outlay was very considerable. I think they have spent something like £32,000 on exhibitions.

That again is subject matter for a separate Vote. The Overseas Trade Department only in so far as it is a matter for arranging international credit is within the jurisdiction of the President of the Board of Trade.

I carefully inquired from the Chair as to whether any item in the Board of Trade could be discussed, and I was assured it could. If I have done wrong I have done wrong as advised from the Chair, and if you decide that the House cannot discuss the exhibition work I will not finish what I was going to say. But in the absence of any ruling of that kind—

I gave no such advice. It distinctly is not in order on the present question before the Committee. Overseas trade can only be discussed in so far as it relates to international credits which is the main subject-matter we have had before us to-day, not exhibitions.

I accept your ruling and I shall defer my remarks on the exhibitions till another occasion. I will conclude by congratulating the President of the Board of Trade on the advance he has been able to make in facilitating the expansion of trade which, I am sure, will be very useful to the country at the present time, and by asking him if he will be good enough to issue a White Paper showing more fully what he has already told the Committee.

As one interested in overseas trade, I was exceedingly interested to listen to the President of the Board of Trade making his statement with regard to the credits he hopes to arrange in the future. For some time I have held that this matter of unemployment was really something far deeper than most of the speakers in this House during the last three months have realised. The trouble, to my mind, is a practical one. The world's financial troubles began about February of last year in Japan, not their poverty, but their excess of wealth; because the wealth of the Japanese had expanded so rapidly that the people had ordered from England and from all parts of the world such enormous quantities of goods, and their merchants had committed their bankers to a necessity of finance far beyond their ability to manage, and the financial obligations of the Japanese banks expanded and expanded until the burst. That has reacted on all parts of the world, and here let me say the British bankers showed the most patriotic sentiments and actions in the way, not only that they themselves helped to finance the War Loans, but in the way they backed their clients who were also patriotic in their desire to meet the demands of the Government for money during the five years of war. The result has been, owing to this locked-up capital, now that we have got into times of peace, when we go to our bankers and ask for facilities, the banks are unable to find the means of financing goods from Sheffield, we will say, to Buenos Aires; and from the North of England traders come to me constantly and say, "How is it, Mr. Bigland, we have come to London for 25 or 30 years and taken our bills to the bankers and received cash to enable us to do more business, and we are now told we must send these documents to all parts of the world and collect our own money, and wait until that money comes back before we can make another transaction?" The President of the Board of Trade has solved that difficulty to the extent that British banks will be enabled to discount bills of exchange and bills of lading produced as security, because if he gives them the British Treasury guarantee it is equal to the banks having increased their liquid capital.

If the Board of Trade carry out the idea suggested by the President to-night we are going to solve the most difficult of all the business and financial problems in the world at this moment, that is, the impossibility of moving goods from country to country, owing to the inability of the merchant being unable to sell his bills of exchange as he has been in the habit of doing for the last 20 years. May I go a step further and say to the President of the Board of Trade that, in addition to that, even if he goes the length of £200,000,000 sterling in the British Government guarantee of bills of exchange, he will not do enough to release sufficient movement to make the employment of the people of this country come back again to normal. But I can make a suggestion, and this Debate has been very useful, in my opinion, because the speakers have endeavoured to make suggestions to the President of the Board of Trade by which he, in the difficult handling of these problems of trade, especially of foreign credit, may be able, out of the suggestions made, to find something which will unlock the door of what has been called frozen credits. For 70 years up to 1873 those of us who traded with the East had no difficulty with the exchange. Silver never varied between 60 and 64 pence per ounce. During the last 18 months it has ranged from 87 pence down to 32 pence. For 70 years prior to 1873 after the Franco-German War when the indemnity was paid by France to Germany and the breakdown of the French Mint took place, the French Mint always agreed that if a man brought silver to the French Mint they were willing to give him so much gold in exchange, and if he brought gold in ex-willing to give him so much silver. If we can get back to that, and re-establish equality of exchange between London and Shanghai for 20 years, if you enable every trader who may trade with the East to know five years ahead that there will be no difference in the present rate of exchange, you would help business to an extent that could hardly be realised. It re-acts upon employment in this country in this way. The capitalist in Europe to- day realises that if he takes his machinery into China and produces goods there and pays wages in the depreciated silver currency there and sells his goods in the European market he is making a double profit, and it would be a good thing if you make it so that silver should not fluctuate for the next 20 years, that it shall remain as it did for 70 years.

And it is quite easy to do it. A conference held between three statesmen from America, our own Prime Minister, Lord Salisbury, Sir Michael Hicks-Beach, and the Lord President of the Council in 1897 almost arranged it. They met here in London with three representatives from France and three senators from the United States, and talked this question over. It never appeared in the Parliamentary Report, but it is a fact that those men practically arranged the stabilisation of the silver exchange in the East, subject to one thing, that is, the confirmation of the Indian Government. Lord Minto was then Governor-General in India. He vetoed this proposal and it broke down. But I do press the President of the Board of Trade to revive the idea that we invite from the United States and from France three recognised authorities on this question, and that we will confer with them as to whether to re-establish the movement of commerce in the world, they will consider the taking up again of the question of the exchange between the East and the Western part of the world, because after studying this for some years now, though I was against it when a young man, when Manchester was rigid in this matter, 30 or 40 years ago, I have come to the conclusion that the rupture which took place after the Franco-German War in 1873 may be repaired after the awful War we have passed through, and that this will be the means of re-establishing trade in Lancashire, where people look to the buying power of the East as one of the great necessities of prosperity in Lancashire.

The buying power of the East is dependent entirely on the stability of the silver exchange. You cannot overproduce silver. At one time, between 20 and 30 years ago it was thought that the marvellous produce of the Mexican silver mines was such that the world could be flooded with silver. It cannot be so at 60d. or anything like it on the present cost of production, and I state positively that with, the whole of Africa to be fertilised, shall I say with silver currency, and the great business and trade with other parts of the world, that are growing up in Africa, and the world need of a currency of this sort. There is no possibility of the mines of the world overproducing this product that is so much wanted. I ask you to consider this suggestion with the greatest seriousness because many of us are coming to the belief that there is no hope of re-establishing the commerce of the world on the 1913–14 basis unless you do something to reinstate the volume of credit that the banking world was able to hand out to the merchants who move the goods. If the Government increase the amount of gold in the world to-day by welding it with the amount of silver in the world, they will practically treble the power of banks to give credit and to finance the produce of the world.

The Debate has taken the form, partly of reference to certain detailed considerations arising on the Estimates and partly of a general discussion of the statement made by my right hon. Friend on export credit policy. My hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson) is, of course, always difficult to satisfy on the Estimates, and I am very glad that he should be so. I was for a time a member of the Select Committee on National Expenditure, and was proud to serve under my right hon. Friend (Sir F. Banbury). If I learned nothing else on that Committee I learned how to look at Estimates with a critical eye, and I hope the lesson has not been altogether forgotten. I am perfectly willing to place these Estimates before hon. Members as a purely business proposition. The hon. Member for Wood Green said it was very reprehensible that although it was true there was a reduction on the Estimates of over £2,500,000, there was something of an increase on the cost of the permanent Departments. My hon. Friend knows quite well that under the system of war bonuses now in operation, if the cost of living has risen there must be an automatic increase in salaries. The note to which he referred was due to my anxiety that he and other critics should not be left in any doubt as to what the rate of war bonus is. If my hon. Friend really wished to apply a test to ascertain whether the Estimates for the permanent Departments of the Board of Trade are reasonable or not, he should ask, what were those Departments costing before the War; what, owing to the increased cost of living, is a reasonable increase of cost; and what are those Departments costing to-day? I do not think anyone would suggest that, with the extraordinarily difficult trade position in which we find ourselves to-day and with the multifarious duties which fall, and rightly fall, upon the Board of Trade—it is a matter for congratulation that traders come to the Board of Trade and give us their advice or ask for our help and the more they come the better—some increase of work was not inevitable. It has been said by many business men that you might very well expect to-day that if a thing had cost £200 to run before the War, it is not unreasonable to expect to find it costing £500 to-day; that is an increase of about 150 per cent. I will give the Committee the figures of what the permanent Departments of the Board of Trade were costing in 1914 and what they are costing to-day. In 1914 the figure was £409,910, and to-day the cost in the Estimates is £687,418. That is not an increase of 150 per cent., nor of 100 per cent., it is an increase of considerably less than 100 per cent.

The Coal Department was not in existence before the War. Taking the Departments which the Board had before, I am certain that any reasonable critic would not suggest that the Board has less work to do to-day than it had before. The Transport Department of the Board of Trade was an extremely insignificant and small affair, and I am not quite sure whether if it had been larger we should not have avoided some of our present troubles, but I venture to submit that that is not an unreasonable criterion to apply, and judged by that test, the Estimate for the permanent Departments is a reasonable one.

The other item which my hon. Friend cavilled at was the staff preserved in the temporary Departments. He did not criticise any except the Ministry of Food, which will come under the jurisdiction of the Board of Trade at the end of the present financial year. My hon. Friend suggested that what was really happening was that the whole of the staff of the Ministry of Food was not being dissolved at all, but that they were quickly running and finding other burrows. In 1920 the staff of the Ministry of Food was 10,480; on 1st April this year it is estimated that the staff will be 1,150, the vast majority of these, of course, being employed in the work of liquidation. The stocks in December, 1920, were £150,000,000, and it is estimated that on the 1st April this year they will be reduced to £100,000,000. We have a total estimate of £313,000; that is an estimated liquidation cost of less than one third of one per cent. It is absurd to represent to the Committee that you can suddenly wash out vast stocks and liquidate them in a difficult time like this. What would happen if all the stocks were suddenly flung on the world? Not only would we lose a great deal of money, but it would ruin hundreds and hundreds of traders in this country at the present time. It is perfectly well known that during the War distinguished business men, like Sir William Plender in the case of banks, were put in to wind up great businesses. Hon. Members with practical experience of business know how long it takes to wind up a great business in its multifarious affairs, and I suggest that to be able to liquidate £100,000,000 of goods is a most difficult task, and that at a cost of less than one-third of 1 per cent. is an operation of which no business man need be ashamed. My hon. Friend the Member for Wood Green also criticised the amount which we propose to spend upon cotton growing.

I did not criticise it. I simply wanted to know why there was the difference between last year and this year.

I was not quite aware there was a difference, but I will tell the Committee precisely what we propose to do, because we do not intend to do this without having the full sanction of the House. The scheme we have proposed to the Committee is that if the cotton firms in Manchester and in Lancashire raise £100,000 a year, the Government will contribute £50,000. I think that is a very business-like proposition, if they come in, and 80 per cent. of the spindles are already in. The cotton trade is an essential part of the trade of this country, and it is vital that the cotton trade should have the most scientific equipment it possibly can, that it should have experts travelling to see whether new cotton areas can be developed, particularly within the British Empire, and I venture to suggest that a joint undertaking, in which the British Government and the great and small Lancashire cotton interests are going to co-operate, will return a hundred-fold; and do incalculable benefit, not only to this country and to Lancashire, but to the Empire in its cotton trade resources.

I only want to say that the policy has changed. You were going to give £10,000 a year for five years; it is now £50,000 for five years.

It may be that my hon. Friend is right. I am here now to defend this proposition on its merits. I venture to suggest that it is an expenditure which every Member of the House, in the interests of economy and efficiency, is perfectly prepared to accept. Second thoughts are very often better, and we have co-operation which we had not got last year from all the interests in Lancashire. There is one other point before I come to the general position. The hon. Member for Leeds (Mr. J. Murray) referred to the work which had been done by the Central Committee on Trusts, and he asked what was the intention of the Government with regard to legislation on trusts. I should like at once to say how much the Government, and I am sure the House of Commons, appreciate the very hard and disinterested work which my hon. Friend has given as Chairman of the Standing Committee. It has not been an easy job. It has been a job which, I know, must have needed very considerable tact in dealing with the sections that were inquiring and the sections being inquired into, and I must say I do not think the work could have been done more efficiently or more tactfully, and it has been work of very considerable value, not because it has disclosed that the country is in grave jeopardy because of these combinations, but because it has disclosed the fact that these combinations in the great majority of cases are not abusing the position they have got.

The hon. and gallant Member cheers ironically. I understand he is in favour of a kind of syndicate which is even larger than any which operates in this country, which certainly operates far less efficiently and far more to the detriment of the people among whom it operates.

I do not think it is likely to be tried in this country. It is the intention of the Government to pass legislation which will enable us to deal with trusts both in the interests of the business community and the public. That is our intention. I should be misleading the Committee if I suggested that it would be possible to introduce that legislation this Session. The Committee knows that the time of the House is very fully mortgaged with Bills of great urgency, but it is quite definitely the intention of the Government to proceed with that legislation when opportunity offers.

The main Debate has turned upon the new proposals for facilitating credit. The hon. Member for Preston (Mr. Shaw) delivered a speech to the Committee which I was really rather sorry to hear from one who is a member of the Advisory Council of the Board of Trade, and I hope he will give us better advice than that which he has given us to-night. His advice is that it is the duty of the Government at once to stabilise exchanges. When I hear anyone say that I am afraid he has not the least idea what is meant. I can conceive of only one way of stabilising exchange and that is, you take your own appreciated exchange and bring it down to the depreciated exchange of the other country; that is, you bring down your own exchange to the level of that currency, and I do not know of any other way. That is really a most dangerous doctrine, because it suggests that is is in the power of the Government of this country to stabilise the exchanges of other countries. The only people who can stabilise the exchange of other countries are their own Governments, by balancing their Budgets and adopting sound and economic finance. To suggest that by the mere means of lending the money you are going to make these exchanges more steady, is only suggesting it is less necessary instead of more necessary for the countries to set their own house in order. No such policy is going to be encouraged by the Board of Trade.

In this connection it is most essential in operating the credit schemes which my right hon. Friend has outlined, that the guarantee which is given should be one to the exporter in this country, and should not in any way, either directly or indirectly, relieve either the importer in the foreign country or the importer's Government of any obligation which either he or they may enter. The latter part of the hon. Member's speech was a little more hopeful. He urged us to engage in scientific research and development. That is exactly what we are doing in the case of the cotton industry. We are setting up a Committee on Dyes which we hope will promote the efficiency of the dye industry. It is the intention of the Board of Trade to work in the closest cooperation with the Department of Scientific Research, and every attempt will be made to promote the efficiency of industry. We shall also co-operate in all wise movements for Imperial development. The chief thing the hon. Member for Huddersfield wanted was that there should not be too much Government interference and red tape in any scheme introduced: he wanted an opportunity for all manufacturers in an industry to come together and assist in the working of the scheme. I can assure the hon. Member he will find us most anxious to co-operate in both directions—in getting rid of red tape and of unnecessary Government interference, and in enabling business to be done through ordinary trade channels instead of creating a fifth wheel for the coach. We shall be only too glad to get associations of manufacturers to co-operate with us in working a scheme of this kind. It is a most admirable suggestion and if any cooperative credit association is formed in any district which would have local money put into it, we should be as ready to work through it as through the banks. In one district such a proposal has already been made, and I believe it offers a very hopeful avenue.

I am not quite sure that the hon. Member for Edge Hill (Sir W. Rutherford) was not a trifle too optimistic. Some Members have been anxious as to how much this scheme would cost. The hon. Member for Edge Hill paid us a high compliment; he said we were doing what he had always advised us to do. He also said it would not be necessary for the Government to find any money at all. I should not like the Committee to go away with that impression. It is not strictly accurate. I hope that if this scheme is carefully administered—and it can be most carefully administered by people who are entering into it taking their own share of the risk—that is by far the best check you can have—there will be little ultimate loss. It certainly will mean that the Government will have to find money when bills reach maturity, because there will be transactions which will not be liquidated at the maturity of the bills on which they are based. Someone will have to find sterling for those bills when they reach maturity, and there will be a margin which we shall not be able to get from the foreign importer. Therefore the Committee must realise that at any one time the State may have to find a considerable amount of money to meet these bills at maturity, although the ultimate loss, if any, which will fall upon the State will be far less than they are finding at any one time upon these transactions.

My hon. Friend the Member for Wands-worth (Mr. S. Samuel) had two points of advice to give to us. He was anxious lest, in cases where a guarantee of 85 per cent. was given, there might be a possibility of people making a good deal of money out of it. I agree that if a manufacturer or a merchant is selling goods at the cost price at which they were made some time ago, plus a considerable profit, it would be a perfect godsend to him to get rid of them with 85 per cent. of the risk covered; but I am sure we can get traders to cooperate with us to such an extent that cases of that kind will not occur. I know that traders are only too anxious to clear their stocks at what will not be a profit, and I have been assured by great trade associations that they will put their machinery at our disposal for testing these cases and ensuring that only a reasonable market price is charged. I think it rather suggests that the buyer to-day is less astute and alert than most buyers are. My experience is that you can offer a buyer goods at a price which leaves no profit, but, indeed, a loss, and he offers you 30 per cent. less; and, in nine cases out of ten, you are glad, if it is a firm offer, to take it. I do not think we shall have any undue difficulty of that kind. My hon. Friend was also anxious as to whether it was wise to extend the scheme beyond the disorganised countries of Europe. That is a big problem.

I venture to suggest to my right hon. Friend, who is always a cautious watch-dog in these matters, and is, I am sure, anxious that the money of the State should not be ventured unless it is a wise venture to make—

I view the scheme with great apprehension. I think that it is a very dangerous one, and that probably it will result in a great loss to the taxpayer.

My right hon. Friend will have an opportunity on another occasion of developing that theme. Really the alternative in this matter is not between spending nothing at all or doing this; it really is whether we shall go on paying out dole after dole of absolutely unremunerative expenditure — indeed, worse than unremunerative in one sense, because there is nothing worse for industry or for the worker than going on paying out-of-work pay without being able to see the end of it. Between the two the wisest thing is to try to stop the thing as its source, and to get trade moving. Once you get the movement begun, and can see orders being placed on a reasonably large scale, everybody will think that the slump has reached the bottom, that it is probably time that they were going in, and they will begin to nibble. So far from its being a dangerous thing for the State—it would never be suggested if it was not necessary to get trade going, and it is not suggested that it is a normal enterprise for the Board of Trade and the Government—if it be necessary to do it, and if it be the fact, as I believe it is, that for the time being this block has come almost all over the world, then it may be the best policy to carry this scheme further a field than the disorganised countries of Europe.

After all, when these countries have recovered, they will not, in the long run, be the best markets for this country. They must tend to go to the natural sphere of Central Europe. Countries like Rou-mania and Czecho-Slovakia are not going to buy rolling stock and steel rails from this country. They will get them from Germany or from Belgium, and the rolling stock, which will go along its own rails, will naturally tend to take other trade along with it. Overseas, however, in our own Empire, you have the very best market, actually and potentially, that you have in the world. What is wanted is to begin to get trade going. It does not much matter where it is started; the great thing is to get a start. What is important is that having got that start trade will go on in the channels and directions in which you have started it.

In reference to our Colonies and Australia, is the hon. Gentleman aware that the only reason that trade is stopped there is the prohibition of the export of gold? Does he propose to ask the Australian Government to release that gold? If he does trade will resume.

I think there are many other reasons besides that why trade is stopped there, and I suggest that if you can get a chance of getting trade moving from this end it might be creating just the situation that is needed in Australia and in the other Dominions to start it. Not only, therefore, would an expansion in that direction be financially sounder and the risk less and you would be able to turn the money round more quickly, but you would be developing markets which, when trade gets normal, would remain your markets for a very long period of time. I commend this scheme to the Committee, and I believe it will succeed, because it is an attempt to get the whole of the trade working through the ordinary trade channels. A good many things have been said by critics, I think half-heartedly, to the effect that, after all, we have not got very good merchants; that our banks do not altogether play up; and that our accepting houses do not always do all they could to help trade. None of us are perfect, not even our critics. Taking it all in all, however, taking the standard of the British mercantile community and of the other mercantile communities of the world; taking the British banks, the British accepting houses and the British merchants as a whole—the great machinery of all the organisations of trade and commerce in this country—and comparing them with other similar machines all over the world, you will not find anywhere, in any country, a better machine or organisation for doing business of every variety and kind. The whole object that is behind the proposal we have put forward is that we shall use that great organisation and get trade going, get it going through those channels in order that it may continue in the normal channels with the least possible interference and with such help as is necessary. It is in those channels that it has ultimately got to flow and that it can flow with success.

It is evident that what the Board of Trade is going to do is to begin business as an accepting house, and having begun business as an accepting house for bills with derelict countries, it is going to extend the business—naturally from the point of view of business men that is all right—and to take in other countries including the Colonies. That is to say they are an accepting house for the whole of the world. My hon. Friend says this is only going to last for a short time. Just as the original agreement was for the derelict countries, and just as it has now been extended to all the countries in the world, the certainty is that the Board of Trade will continue this until the taxpayer has lost so much money that he will rise and stop it. Of course, hon. Members who stand to gain are in favour of it. My hon. Friend who gave us a lecture on bimetallism and what took place when the Latin union was destroyed in the Franco-German War, is now going to gain an advantage. He said the bankers would not accept Bills as readily as they used to do. So the Government are to come in, with my money, to provide facilities for my hon. Friend, which his bankers, who have known him for a great number of years will not do. I could not sit quite quietly while proposals with which I disagreed were being received with a certain amount of gratification in many quarters of the House. I hope on another occasion I shall have an opportunity of stating at greater length the reasons which have impelled me to make these remarks.

I should like to ask the right hon. Gentleman a question. Am I to understand that under no circumstances will he agree to any inflation of our currency even in the present abnormal times and even if that inflation of our currency were to bring our exports more in relation to those who are our ultimate customers, so that they can buy from us, and thereby prevent unemployment here? I differ entirely from the right hon. Baronet, because even if money were found by the Government to help traders at the

present time, and even if by finding that money our currency were inflated, money would eventually be saved, because we should have to pay less in unemployment allowances, and the money of the right hon. Gentleman would not be used in the way he suggests.

Question put, "That Item Class II. ( Board of Trade ) be reduced by £100."

The Committee divided: Ayes, 62; Noes, 218.

Division No. 26.]

AYES.

[11.0 p.m.

Acland, Rt. Hon. F. D.

Guest, J. (York, W. R., Hemsworth)

Robertson, John

Adamson, Rt. Hon. William

Hancock, John George

Royce, William Stapleton

Barker, Major Robert H.

Harmsworth, Hon. E. C. (Kent)

Shaw, Thomas (Preston)

Bowerman, Rt. Hon. Charles W.

Hartshorn, Vernon

Short, Alfred (Wednesbury)

Briant, Frank

Hayday, Arthur

Sitch, Charles H.

Bromfield, William

Henderson, Rt. Hon. A. (Widnes)

Smith, W. R. (Wellingborough)

Brown, James (Ayr and Bute)

Hirst, G. H.

Spencer, George A.

Cairns, John

Hogge, James Myles

Swan, J. E.

Cape, Thomas

Irving, Dan

Thomas, Rt. Hon. James H. (Derby)

Carter, W. (Nottingham, Mansfield)

John, William (Rhondda, West)

Thomson, T. (Middlesbrough, West)

Davies, A. (Lancaster, Clitheroe)

Jones, J. J. (West Ham, Silvertown)

Thorne, G. R. (Wolverhampton, E.)

Davies, Evan (Ebbw Vale)

Kenworthy, Lieut.-Commander J. M.

Walsh, Stephen (Lancaster, Ince)

Davison, J. E. (Smethwick)

Kenyon, Barnet

Wedgwood, Colonel J. C.

Edwards, C. (Monmouth, Bedwellty)

Lunn, William

White, Charles F. (Derby, Western)

Edwards, G. (Norfolk, South)

Mills, John Edmund

Wignall, James

Entwistle, Major C. F.

Morgan, Major D. Watts

Williams, Aneurin (Durham, Consett)

Finney, Samuel

Myers, Thomas

Wilson, James (Dudley)

Galbraith, Samuel

Newbould, Alfred Ernest

Wilson, W. Tyson (Westhoughton)

Glanville, Harold James

O'Connor, Thomas P.

Graham, R. (Nelson and Coine)

Parkinson, John Allen (Wigan)

TELLERS FOR THE AYES .—.—

Griffiths, T. (Monmouth, Pontypool)

Raffan, Peter Wilson

Mr. Frederick Hall and Mr. Neil Maclean.

Grundy, T. W.

Richardson, R. (Houghton-le-Spring)

NOES.

Agg-Gardner, Sir James Tynte

Cope, Major Wm.

Greig, Colonel James William

Ainsworth, Captain Charles

Courthope, Lieut.-Col. George L.

Hacking, Captain Douglas H.

Allen, Lieut.-Colonel William James

Cowan, O. M. (Scottish Universities)

Hallwood, Augustine

Archdale, Rt. Hon. Edward Mervyn

Curzon, Commander Viscount

Hall, Rr-Adml Sir W. (Liv'p'l, W. D'by)

Atkey, A. R.

Dalziel, Sir O. (Lambeth, Brixton)

Hamilton, Major C, G. C.

Baird, Sir John Lawrence

Davidson, J. C. C. (Hemel Hempstead)

Hannon, Patrick Joseph Henry

Baldwin, Rt. Hon. Stanley

Davidson, Major-General Sir J. H.

Harmsworth, C. B. (Bedford, Luton)

Balfour, George (Hampstead)

Davies, Alfred Thomas (Lincoln)

Henry, Denis S. (Londonderry, S.)

Banbury, Rt. Hon. Sir Frederick G.

Davies, Thomas (Cirencester)

Hewart, Rt. Hon. Sir Gordon

Barker, Major Robert H.

Davies, Sir William H. (Bristol, S.)

Hinds, John

Barlow, Sir Montague

Dewhurst, Lieut.-Commander Harry

Holbrook, Sir Arthur Richard

Barnett, Major R. W.

Doyle, N. G rattan

Hope, James F. (Sheffield, Central)

Barnston, Major Harry

Edgar, Clifford B.

Hopkins, John W. W.

Bell, Lieut.-Col. W. C. H. (Devizes)

Edwards, Major J. (Aberavon)

Hopkinson, A. (Lancaster, Mossley)

Bellairs, Commander Carlyon W.

Elliot, Capt. Walter E. (Lanark)

Home, Edgar (Surrey, Guildford)

Bigland, Alfred

Elveden, Viscount

Home, Sir R. S. (Glasgow, Hillbead)

Birchall, Major J. Dearman

Eyres-Monsell, Commander B. M.

Hotchkin, Captain Stafford Vere

Bird, Sir A. (Wolverhampton, West)

Evans, Ernest

Hurd, Percy A.

Bowyer, Captain G. E. W.

Falcon, Captain Michael

Hurst, Lieut.-Colonel Gerald B.

Breese, Major Charles E.

Farquharson, Major A. C.

James, Lieut.-Colonel Hon. Cuthbert

Bridgeman, Rt. Hon. William Clive

Fildes, Henry

Jephcott, A. R.

Broad, Thomas Tucker

Fisher, Rt. Hon. Herbert A. L.

Jodrell, Neville Paul

Brown, Captain D. C.

Ford, Patrick Johnston

Johnson, Sir Stanley

Bruton, Sir James

Forestier-Walker, L.

Johnstone, Joseph

Burn, Col. C. R. (Devon, Torquay)

Fraser, Major Sir Keith

Jones, Sir Edgar R. (Merthyr Tydvil)

Campbell, J. D. G.

Fremantle, Lieut.-Colonel Francis E.

Jones, G. W. H. (Stoke Newington)

Campion, Lieut.-Colonel W. R.

Gange, E. Stanley

Jones, Henry Haydn (Merioneth)

Carew, Charles Robert S.

Ganzoni, Captain Sir F, J. C.

Jones, J. T. (Carmarthen, Llanelly)

Carr, W. Theodore

Gardiner, James

Joynson-Hicks, Sir William

Carter, R. A. D. (Man., Withington)

Gibbs, Colonel George Abraham

Kelley, Major Fred (Rotherham)

Casey, T. W.

Gilmour, Lieut.-Colonel John

Kiley, James D,

Cecil, Rt. Hon. Evelyn (Birm., Aston)

Glyn, Major Ralph

King, Captain Henry Douglas

Chamberlain, N. (Birm., Ladywood)

Goff, Sir R. Park

Knights, Capt. H. N. (C'berwell, N.)

Child, Brigadier-General Sir Hill

Gould, James C.

Law, Alfred J. (Rochdale)

Clough, Robert

Grant, James A.

Lewis, Rt. Hon. J. H. (Univ., Wales)

Coats, Sir Stuart

Gray, Major Ernest (Accrington)

Lewis, T. A. (Glam., Pontypridd)

Cockerill, Brigadier-General G. K.

Green, Joseph F. (Leicester, W.)

Lindsay, William Arthur

Colvin, Brig.-General Richard Beale

Greene, Lt.-Col. Sir W. (Hack'y, N.)

Lister, Sir R. Ashton

Coote, Colin Reith (Isle of Ely)

Greenwood, William (Stockport)

Lloyd, George Butler

Lloyd-Greame, Sir P.

O'Neill, Major Hon. Robert W. H.

Sutherland, Sir William

Locker-Lampson, G. (Wood Green)

Parker, James

Sykes, Sir Charles (Huddersfield)

Lorden, John William

Parry, Lieut.-Colonel Thomas Henry

Taylor, J.

Lort-Williams, J.

Perkins, Walter Frank

Terrell, Captain R. (Oxford, Henley)

Loseby, Captain C. E.

Pickering, Lieut.-Colonel Emil W.

Thomas-Stanford, Charles

Lynn, R. J.

Pollock, Sir Ernest M.

Thomson, Sir W. Mitchell-(Maryhill)

M'Curdy, Rt. Hon. C. A.

Pownall, Lieut.-Colonel Assheton

Thorpe, Captain John Henry

Mackinder, Sir H. J. (Camlachie)

Pratt, John William

Townley, Maximilian G.

McLaren, Robert (Lanark, Northern)

Purchase, H. G.

Townshend, Sir Charles Vere Ferrers

M'Lean, Lieut.-Col. Charles W. W.

Rae, H. Norman

Turton, E. R.

Macpherson, Rt. Hon. James I.

Rankin, Captain James S.

Vickers, Douglas

Macquisten, F. A.

Raper, A. Baldwin

Waddington, R.

Manville, Edward

Rees, Sir J. D. (Nottingham, East)

Wallace, J.

Marks, Sir George Croydon

Reid, D. D.

Walters, Rt. Hon. Sir John Tudor

Marriott, John Arthur Ransome

Roberts, Rt. Hon. G. H. (Norwich)

Ward-Jackson, Major C. L.

Mason, Robert

Roberts, Samuel (Hereford, Hereford)

Ward, Col. L. (Kingston-upon-Hull)

Meysey-Thompson, Lieut.-Col. E. C.

Roberts, Sir S. (Sheffield, Ecclesall)

Ward, William Dudley (Southampton)

Mitchell, William Lane

Robinson, Sir T. (Lancs., Stretford)

Waring, Major Walter

Moles, Thomas

Rodger, A. K.

Weston, Colonel John W.

Montagu, Rt. Hon. E. S.

Roundell, Colonel R. F.

Wheler, Lieut.-Colonel C. H.

Moore-Brabazon, Lieut.-Col. J. T. C.

Samuel, A. M. (Surrey, Farnham)

White, Lieut.-Col. G. D. (Southport)

Moreing, Captain Algernon H.

Samuel, Samuel (W'dsworth, Putney)

Wigan, Brig.-Gen. John Tyson

Morison, Rt. Hon. Thomas Brash

Sanders, Colonel Sir Robert A.

Willey, Lieut.-Colonel F. V.

Morris, Richard

Scott, A. M. (Glasgow, Bridgeton)

Williams, Lt.-Com. C. (Tavistock)

Morrison, Hugh

Shaw, William T. (Forfar)

Williams, Col. Sir R. (Dorset, W.)

Munro, Rt. Hon. Robert

Shortt, Rt. Hon. E. (N'castle-on-T.)

Williamson, Rt. Hon. Sir Archibald

Murchison, C. K.

Simm, M. T.

Willoughby, Lieut.-Col. Hon. Claud

Murray, John (Leeds, West)

Smith, Sir Harold (Warrington)

Wilson, Daniel M. (Down, West)

Nail, Major Joseph

Sprot, Colonel Sir Alexander

Wilson, Colonel Leslie O. (Reading)

Neal, Arthur

Stanier, Captain Sir Seville

Wise, Frederick

Newman, Colonel J. R. P. (Finchley)

Stanley, Major Hon. G. (Preston)

Young, Lieut.-Com. E. H. (Norwich)

Newman, Sir R. H. S. D. L. (Exeter)

Steel, Major S. Strang

Young, W. (Perth & Kinross, Perth)

Nicholson, Reginald (Doncaster)

Stephenson, Lieut.-Colonel H. K.

Norris, Colonel Sir Henry G.

Sturrock, J. Leng

TELLERS FOR THE NOES .—.—

Oman, Sir Charles William C.

Sugden, W. H.

Lord E. Talbot and Captain Guest.

It being after Eleven of the Clock, the Chairman proceeded, pursuant, to Standing Order No. 15, to put forthwith the Question necessary to dispose of the Vote.

Original Question put, and agreed to.

Civil Services and Revenue Departments Supplementary Estimates, 1920–21

Class III

Reformatory and Industrial Schools, Great Britain

Resolved,

"That a Supplementary sum, not exceeding £15,100, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1921, for the salaries and expenses of the Office of the Inspector of Reformatories, and for the expense of the maintenance of juvenile offenders in reformatory, industrial and day industrial schools, and in auxiliary homes in England and Wales."

Resolutions to be reported To-morrow; Committee to sit again To-morrow.

Children [Treasury Contributions]

Considered in Committee.

[Sir EDWIN CORNWALL in the Chair.]

Motion made, and question proposed,

"That, for the purposes of any Act of the present Session to amend The Children Act, 1908, in respect of the expenses of reformatory and industrial schools, it is expedient to remove the limit which, under Section seventy-three of The Children Act, 1908, is imposed on the contribution which is to be made out of moneys provided by Parliament towards the expenses of a child detained in an industrial school on the application of its parents or guardians, and that such removal should have effect as from the first day of April, nineteen hundred and twenty."—[ Sir John Baird. ]

The White Paper has not made clear the exact amount of money to be voted.

The money has already been voted. This is really to show how much money is involved, and it is to give effect to a very small matter, which is clearly set out in the White Paper, namely, the case of children who are taken into these schools at their parents' request. Unless we make this alteration in the Act of 1908, we shall not be able to give effect to the new arrangement by which the State agrees to pay half the cost.

There is no extra money involved. The only money involved is the sum of £21,000, which is covered by the Vote which has already been passed.

Question put, and agreed to.

Resolution to be reported to-morrow.

The remaining Orders were read, and postponed.

Adjournment

Resolved, "That this House do now adjourn."—[ Colonel Sir R. Sanders. ]

Adjourned accordingly at Fourteen Minutes after Eleven o'clock.