I have to apologise to the House that I could not make the statement yesterday, as had been anticipated. Had I done so, no time would have been gained. On the contrary, some time would have been lost, because, by the procedure of the House, we should not have been able to proceed with a single stage of any proposals which we need to submit to the judgment of Parliament Therefore, had I made a statement yesterday, statements would have had to be made to-day in introducing the various proposals, and we thought that it would save the time of the House if a comprehensive statement were made to-day on all these subjects at the moment when they were introduced to the notice of Parliament.

We are confronted with the worst period of unemployment that this country has seen probably for 100 years. It is not the usual cycle of trade depression. It is due to purely abnormal causes. We have seen nothing like it since the end of the Napoleonic wars, and the causes are the same. My right hon. Friend the Minister of Labour (Dr. Macnamara) gave the figures yesterday to the House. There are 1,750,000 workers who are unemployed at the present moment. [An HON. MEMBER: "Does that, include women?"] Yes, that includes women, and boys and girls also—all those who are workers. I am afraid I cannot divide the figures. The greatest unemployment is to be found in the metal trades, which are suffering very severely. I believe the percentage of unemployment there has run up to 17 per cent.

As to the causes—the impoverishment of our customers, the diversion of industries from production to destruction, the derangement of the machinery of trade, the fluctuation of the exchanges, all these can be summed up in one word, "War." Every war has been followed by periods of depression, and the depression has been in proportion to the magnitude of the War. This is the greatest depression that has been felt, certainly for 100 years, and we have just emerged out of the greatest War we have ever witnessed.

Napoleonic Wars

The Napoleonic wars produced exactly the same symptoms, and it is worth everyone's while to refresh his memory of what happened on these occasions, because it will explain all the phenomena, and it is not without its lesson when we come to remedies. There were the same symptoms—crushing taxation, all our customers very much poorer, and 300,000 men brought back to industry who had to be assimilated. We had to find employment in this country for 5,000,000 or 6,000,000 of men who came back from the Colours after the last War.

The Napoleonic wars were followed, exactly like the late War, by a great trade boom. Europe (had been starved of goods, especially of British goods, for a good many years, and the need was great. Manufacturers worked hard, in order to supply the need, but the supply was in excess of the demand, because those who needed them could not pay for the goods. The result was that the depots of the Continent were glutted with British goods, and there was an appalling reaction. Mills and factories came to a standstill. A high economic authority, describing that period, said:

"Without fear of refutation, it may be said that the whole range of history furnishes no example of distress and misery so extensive, general, and severe as that experienced by the people of the United Kingdom, with but little intermission, from 1816 to 1822."

In Birmingham one-third of the population were in receipt of parish relief, and one-half the rest of the workers were working half-time. The sovereign fell in value in almost every European exchange. Even in defeated France the sovereign fell in value. When you consider how much greater the last War was than even the Napoleonic and revolutionary wars, how many continents had to sustain the shock—the gigantic armies of millions and almost tens of millions that were engaged

Action and Inaction

In the face of that condition of things, abnormal as it is, there are two possible policies. Our ancestors were faced with exactly the same policies. The first is to do nothing—to take no action, to leave suffering to the pity of neighbours, and, as to the rest, to let economic causes work their ruthless way to the end. There are advocates of this policy. The second policy is that the community, to the best of its restricted means and powers, should render such assistance as if can towards shortening the period of depression and limiting its operation, and, during the period which must necessarily intervene before trade, can be restored to its normal prosperity, strive to prevent suffering among its citizens. No man really believes that we can pursue the first policy.

Some do.

There are not many. After the Napoleonic wars, it is true, the Government left the problem of poverty to be dealt with locally. The Government did not take, at least for some time, large national action. The result was appalling. It was disastrous as far as the rates were concerned. It produced appalling suffering. It created disorder, riots, civil tumult throughout the land. There was a general sense of neglect. It fomented revolutionary sentiments. Let anyone read of that period who thinks that you can leave such a situation to the working of economic causes, and he will find that it did not accelerate the restoration of trade. Even if it were possible to do it then, it cannot be done now. Conditions are different. Apart from considerations of humanity, I cannot imagine any more unwise course, and I do not believe that any Government is prepared to accept the responsibility of this attitude of inaction. The Government, therefore, unhesitatingly recommend the second course.

Steps Already Taken by Government

Before I come to an examination of the proposals which, on behalf of the Government, I shall have to recommend to the House for its approval, it is necessary that I should, for two reasons, recount the steps which have already been taken. The first is that it would be quite impossible to understand the further action which has to be taken unless the House had in mind the steps which have already been taken. My second reason is that I think it necessary to remind not so much the House of Commons as the country of what has been done, because there has been a great deal of talk about nothing being done. [HON. MEMBERS: "Hear, hear!"] That cheer confirms the wisdom of my speech. It shows that there are some people, even in this House of Commons, who stand in need of enlightenment. If they believe in the House of Commons that nothing has been done, can anyone complain if there be millions in the country who have been misled by these statements, and that discontent has been fomented among people who are suffering, and who are therefore peculiarly amenable to appeals and statements of that character. Therefore it is vital that the country should know what has been done.

The statement has been made that the Government and Parliament—because it is the responsibility of Parliament just as much as it is the responsibility of the Government—and what is called the "governing party" have stood by callously without taking any steps to avert distress. It is said that there has been no preparation, no foresight, and therefore a complete lack of forethought until the London Mayors went to Gair loch. Let us see what has been done. In 1919 two steps were taken. That was at a time of boom. There was no distress or unemployment then. Trade was going well. But two steps were taken, and very considerable steps, with the view of trying to restore Central Europe, because the most complete breakdown was taking place there; and if Central Europe could have been restored, it would have made a very great difference in the trade position of the world. A very considerable sum was voted by this House for the restoration of Central Europe. I have no hesitation in saying that it had a considerable effect in not merely averting a great deal of suffering, but I believe that had it not been done, things would have been infinitely worse even than they are now in Central Europe, and that they probably would have been driven into Bolshevism. The second step we took was the setting up of an Export Credit Scheme with a sum of £26,000,000. That was in 1919.

Now I come to 1920. Let the Committee bear in mind what was the position in 1920. In 1919 the unemployment was 2·4 per cent. That is comparatively low, especially when it is recollected that millions of men had just been brought back from the Army and the Navy, and had to be assimilated into civil life. And yet the unemployment was only 2·4 per cent, in 1919. In December, 1919, it was 3·2 pèr cent. In January, 1920, it was 2·9 per cent. In August, 1920, it was down to 1·6 per cent. That was comparatively low, even for good times. Will the Committee, first of all, kindly get that date fixed in its mind—August, 1920. Trade was so good that the unemployment was only 1·6 per cent. What have we done since then?

Insurance Fund Increased

We were advised that unemployment would increase, in spite of appearances to the contrary. The first step we took was, I think, in July, 1920, when we brought in a Bill, which was carried by this House on the 9th of August, 1920, that added 8,000,000 workers to the Insurance Fund. This was done by the Government that had made no preparations, and never looked forward; and yet in a moment of roaring trade the first step we took was to provide maintenance for the unemployed when unemployment might come. The next time these statements are made, I hope that that fact will accompany them. [ Interruption. ] Hon. Members will have plenty of opportunity in the course of the next two days of expressing their views, and perhaps they will kindly allow me to continue to make my statement. When that scheme came into operation, as I have said, unemployment was not bad, but between that date and the present date under that scheme £48,000,000 has been distributed to unemployed families. And yet the statement is made that nothing has been done, that there has been no foresight and no preparation, though that gigantic sum has been paid as the result of a scheme which this House of Commons carried at a time of good trade.

But that was not all. In August, 1920, the Cabinet appointed a special Com- mittee, at the instance of my right hon. Friend the Minister of Labour, to consider unemployment and what further action was necessary to deal with it, in order that we might get ready. In previous periods of trade depression no action comparable to that had ever been taken. I was a Member of a Government in 1908 when we were confronted with a very bad period of unemployment. Unemployment ran up to 10 per cent., not so high as it is now, but it was very high, and there was great distress. We took practically the same action as had been taken by previous Governments in similar conditions. There was a sum, I think, of £300,000 for the purpose of relief works. I do not believe that any other Government would have voted more, or would have voted as much, at that date. At that time there was no unemployment insurance. What did this Cabinet Committee of August, 1920, do? It instantly set on foot schemes for the provision of relief work for the unemployed. For arterial roads £10,400,000 was allocated; £3,000,000 was voted for assisting local authorities in the provision of relief work; other alternative work was provided by Government Departments. Local authorities were stimulated to provide emergency work, not by mere circulars, but by example and by subvention. Twenty-five million pounds was spent on these various schemes for relief of unemployment, and at least 200,000 men have from time to time been provided with work under these schemes. Yet we are told that nothing has been done. [HON. MEMBERS: "A drop in the bucket."] Forty-eight million pounds is not a "drop in the bucket," not even in these days.

Settlement of Ex-Service Men

I will refer to another matter. Steps were taken to enable ex-service men to settle in the Dominions. A sum of £637,000 was voted for that purpose. Under the scheme 60,000 have already settled in the various Dominions of the Empire. At the present moment the applications are coming in much greater numbers. Australia has recently taken up an immigration policy. The result is that, as part of this present scheme, we propose to ask Parliament for another £300,000 to enable more ex-service men to emigrate. [HON. MEMBERS: "To get rid of them."] One thing the War taught us was not to get rid of them. Nor did our enemies get rid of them, either. There is no compulsory expatriation, and if men choose to settle under the flag under the most favourable conditions—

They have no alternative.

If they choose to settle under the flag under these favourable conditions, I can conceive of nothing better, not merely for the Empire but for this country. Because at the present moment we are more dependent upon our Dominions and upon the Empire for trade than at any previous period in our history, and the more men we settle under the British flag the better it will be for the trade of this country, and the better it will be for employment in this land as well. It is no use making short-sighted observations. I will point to another thing which has been done by the present Government and the present Parliament, for the attack has been upon Parliament even more than upon the Government. In every previous period of unemployment the trade that has suffered worst has been the building trade, not at the beginning, but gradually, and the suffering has always been great. For that reason it was one of the first trades included in the Unemployment Insurance scheme. Under the arrangements made by this House, the building trade at the present time is engaged to the limit of its capacity upon public credit and public funds, under an Act of Parliament passed by this House. There never was more effective provision for unemployment, so far as one of the most difficult trades of the country is concerned, than the steps taken by this House.

All I ask is that when there are meetings of unemployed, full of despair, full of worry, and ready to he exasperated, as people under these conditions always are, at any rate the truth ought to be told. It is unfair to go to them, and say that £48,000,000 is only a trifle, and that when you vote £10,000,000 for roads, it is nothing. Tell them that you have done that. They can judge just as well as you can whether £48,000,000 is a thing of no consequence. I think we are entitled to ask that, not merely in this House but outside, where there is no means of checking such statements.

Trade With Russia

I should like to say something about trade with Russia. Last night there was a very interesting speech made by the hon. Member for Dartford (Mr. Mills). I was interested in what he said of his experiences. But he gave the impression that there was enough work in Russia to provide employment for everybody in this country. It is no use making statements of that kind; they are only misleading. As a matter of fact, that was one of the arguments which I used in favour of a trading agreement with Russia, because I knew perfectly well that unless there were a trading agreement and every facility was given for trade, it would always be said: "Why do not you open Russia? If you had opened Russia, everybody would have had plenty to do." My right hon. Friend the Chancellor of the Exchequer and I warned the House of Commons when that Measure was going through not to expect too much of it. We knew there was some trade, but not trade to the extent of the anticipations of some of the friends of the trading agreement.

Perhaps the House would like to know exactly how much trade we have done under that agreement. There have been no restrictions on our side to any trading with Russia—none. It is reported that the total purchases from the 1st January to the 31st of August of this year by the Russian Trade Delegation were £3,650,000. I asked for the figures of actual export for the last three months. They show, no doubt, that there has been an acceleration in the rate of progress of export which has been done. During the three months up to 30th September the export has been £1,339,000. That it is not possible to get statistics does not include the trade which is done indirectly through the Baltic ports.

I am not going to minimise the importance of getting trade to the amount of even £3,000,000 or £4,000,000. Before the end of the year at that rate we might have £5,000,000 or £6,000,000, and that is a contribution of value. All I want to say is this: There is nothing to be gained by creating the impression that there is an unlimited field for British or any other enterprise in Russia. There are, I believe, certain large engineering orders in the North of England at the present moment for Russia, on terms which satisfy those firms. But there is a limit, and until Russia is restored to a much better condition than she is in at the present moment, I very much fear, what- ever be done, there is not much hope for British or any other trade in Russia. That reveals the position up to the present moment. And now I ask the question which everybody must be asking themselves: "Is it necessary to do more, and, if so, what?" The answer to that depends upon the view which each Member takes of the prospects—the trade prospects.

Industrial Revival

There are two governing factors in the decision to which we have to come. The first is that of the trade prospects; the other I shall mention later on. Now, what are the trade prospects? There are undoubted signs of a revival in some of the most important industries in this country. That is the answer which we get from those quarters. On the other hand, there are other very important industries where there is no such sign or symptom. It is true that when trade begins to move, it moves along the whole front, but taking into account the economic and political condition of Europe—its impoverishment, its heavy burdens, its racial and political restlessness—the man would be sanguine who would predict a return to normal conditions at an early date, or who would predict that there will not be considerable unemployment for some time to come. Our best hope lies not in a short-lived and feverish boom, which would end in a worse reaction, but in a slow and steady improvement. A sudden leap upwards of trade would, I fear, end in a precipitous fall. The best we can hope for is a steady improvement, and I think we shall get it. But meanwhile there will be unemployment on a very considerable scale, and we shall have to provide for it.

Working Classes—Supplementary Reserve Means

What is the second factor in the decision of the Government—and, if I may so submit, it should be a factor in the decision of the House of Commons? It is the exhaustion of the supplementary means at the disposal of the working classes to provide against unemployment. The miners' strike—[HON. MEMBERS: "Lock out!"]—I am sorry, the miners' stoppage—demonstrated that there was a larger fund of savings among the workmen of this country than anybody had imagined, and I have no doubt that the unemployed have been drawing upon their savings. These must be nearly exhausted in hundreds of thousands of cases, and that reserve, I am afraid, is disappearing. There was another reserve in the trade union funds, and I put a question to the Labour representatives who were good enough to come to see me the other day as to what sums had been expended from trade union sources. They were prodigious; they were very considerable sums of money—very impressive figures. I also asked them whether they had raised supplementary funds, and again the answer was, I must say, very impressive. They were raising special levies among their workmen, some of them fairly high, for the purpose of relieving distress among their fellow workmen who were out of work. But I may also state—and I can well understand it—they are coming to the end of their reserves in many unions, and it will be difficult, even impossible, for them to repeat the grants they have been making in the course of the past 12 months. That must also be taken into account. The third reserve, the limit of which we are approaching, is the reserve of the rates, especially in some districts. There are some districts where, I have no hesitation in saying, they have acted unwisely. There are some districts where they have acted with moderation, but there is no doubt that in the distressed areas the guardians are reaching the very limit of the capacity of those areas, and so we must take into account that the reserves which have been available up to the present are rapidly approaching exhaustion, if they have not already reached it.

Export Credits

Therefore it is essential that further steps should be taken. What steps should be taken? The best undoubtedly would be action that would provide employment for men in their own avocations. Relief work at best is unsatisfactory, and what are known as doles are worse. I am not sure that there is much to choose between them. What can be done, without creating fresh difficulties in the way of trade, to supplement the overwhelming difficulties, which it is already encountering? We are an exporting country; we are more dependent on overseas trade than any land under the sun. Before the War—let us take the three great industrial countries, the United States of America, Germany, and Great Britain—the United States it is estimated exported about one-tenth of their produce; Germany exported something like one-fourth of her products; Great Britain exported one-third of its products, and, if you take purely manufactured goods, you will find that Great Britain exported 40 per cent. of the goods manufactured within these shores. Therefore, as far as trade is concerned, our interest for its restoration rests upon a revival of trade, industry, and purchasing capacity abroad. There is no doubt about the need for our goods. For years the world has done without them, and they need them. They need our fabrics, our textiles, they need our engineering, machinery, and they certainly need our coal. [An HON. MEMBER: "At a price."] Yes, I am coming to that.

The whole point is this—Can need be converted into demand? And a more important question is—Can demand be converted into payment? Unless you can give a satisfactory answer to these questions, you will have unemployment. There has been a suggestion that the world needs these goods, and "why do not you manufacture them? Why do not you send them abroad? Everybody wants them." Does that mean they will buy them? It is no use stacking British goods in rotting pyramids in foreign depots. That was what happened in 1815 and in 1816, and it happened to a certain extent even in 1919 and 1920. Our export credits system was an attempt to stimulate legitimate trade. Experience has shown that it needs amendment—the experience not merely of the Government, but of the traders. It was quite a new system. Traders had to feel their way; they had to find out what the defects were, and report them to the Government from time to time, and we had to attempt to adjust ourselves to the difficulties that traders experienced. But I think we must go further, and I propose to give to the Committee three or four points in respect of which we propose to amend our export credits scheme.

We voted 26 millions of money for the purpose of facilitating the export of British goods to these various countries. Our first difficulty came, with security. In order to trade with these broken countries, it was proposed that the importer should find some security. Well, at first he had some reserve for security in one way or another, but it Has all gone, and you are left with three kinds of security. One is Government Bonds in those countries. The League of Nations are trying to organise something which is known as the Ter Meulen scheme, which I have no doubt at all would be valuable, if it came into operation, but it is not yet operative. The next is that the banks guarantee payment in sterling, but the banks are not in a hurry to do that.

Currency of Importing Countries

The third class of security is the currency of the importing country. I hope the Members of the Committee will pay some attention to that. There is Germany. A year ago the mark stood at 238 to the £; three weeks ago it stood at 410; on Monday it was at 750; it has now improved, and it is 730. You cannot get any good trade on that basis. How can you take currency of that kind as a security? Take Warsaw. A year ago it was 920; it fluctuated on the same day between 920 and 970, so that there were 50 points difference in a single day. Yesterday it was 14,000 to 16,000; there was a fluctuation of 2,000 marks in a single day; and three weeks ago, I believe, it was 27,000. Vienna, 920 to 990 a year ago; yesterday it fluctuated between 7,000 and 7,400. I will take Rumania, which is a rich country, very rich in natural products, and very rich in possibilities. Bucharest a year ago was 200; yesterday it was 560.

It is obvious that neither exporter nor importer can build up a trade on that acrobatic basis. Government Bonds would be in a different category, but we have not got them. Therefore it comes to be a question of the exporter's risk, and whether the Government is prepared to share it—the exporter taking his risk upon a knowledge of the trader he is dealing with, and that is invaluable. I remember very well at the beginning of the War how we had to take our risk upon slips of paper, which depended entirely on the credit of the names attached to them. There was no other security, and this is the conclusion to which we have come. We were guaranteeing 85 per cent. of the cost, with recourse against the exporter for half the uncovered risk. That means our risk was 42½ per cent., but we were guaranteeing only 85 per cent. The trader says he cannot trade on those terms. He is quite willing to do so if the State guarantee 100 per cent., without altering his risk. The credit would be for one year as a maximum. That means that the State would guarantee 100 per cent., but the exporter would be liable on recourse to 57½ per cent., and the State risk would still be 42½ per cent. We are assured that on those terms it will be possible for traders to do business. [An HON. MEMBER: "Gamble!"] If trade is to be started at all, I agree there is a risk in it, but the whole question for us is, "On which side is the greater risk? Is our risk greater in losing part of our money or in doing nothing to aid and restart trade?" The conclusion we have come to is that our risk is much greater by standing still and doing nothing.

Maximum Credits to Exporting Firms

I come to the second amendment of the Export Credits scheme. When you were doing business with these countries before, you had to get sanction for each separate transaction from the Department. The textile trades said that they could not do business on that basis. Their method of doing business was to send commercial travellers out to these countries to get orders, and if they had to wire home, before the close of the transaction, to the Export Credit Department all the particulars, and get sanction for each individual transaction, it made it impossible to do business. The proposal now is that there shall be a maximum fixed for each firm. The maximum will be fixed upon the advice of a special advisory committee, a business committee—the value of the exporter's credit is taken into account in fixing the maximum—and each firm will be permitted to trade within that maximum, and to the limit of that maximum. That will enable business in textile fabrics to be done in these countries.

Area and Period of Credit

The third Amendment is an extension of the area of the credit system. The first proposal was that the Export Credits Scheme should only apply to the countries whose credit is practically destroyed by the War. It is now proposed that the Export Credits Scheme should be extended to other countries as well, including the British Empire. The fourth, and in some respects, perhaps, the most important, Amendment deals, with the question of the length of credit according to the quality of goods. When you are dealing with consumable goods, you want short credit; but it is not consumable goods of which the world stands in the most urgent need. What it stands mostly in need of is equipment to start its trade—machinery, transport—and short credits are of no use when you are dealing with heavy goods of that kind. There are often contracts which extend over several years. We have before us at the present moment proposals from foreign Governments for very considerable engineering orders to renew the transport facilities in those countries, provided we are prepared to give an extension of credit for repayment. We have come to the conclusion that, where there are large orders of that kind for heavy goods for countries which would take years to develop and complete, it is desirable that we should extend credit for five, or even six years. We believe that, under this Amendment of the Export Credits scheme, it would be possible to give very considerable orders, especially in the engineering line, which is suffering most from unemployment at the present moment.

Trade Facilities With Foreign Countries

I come to another aspect of the same question, which deals with the Resolution I shall move at the conclusion of my observations, and that is the provision of special trade facilities between foreign countries and the British Empire at home. It is obvious that there are two classes of orders which we might expect to come to our markets. One is from countries which can, without British Government credit, finance their own demands; and the other is the class of order you might get from countries or enterprises which could not be financed without some Government guarantee. In that first class will be India. India has already raised a substantial sum of money on the British market, and given very substantial orders to this country. If Members of the House of Commons have not read the recent report on Railways in India, I hope they will do so. It is a very instructive document. In some respects it is a document which is not very pleasant for us to peruse. The railways in India are short of almost every facility for properly conducting their transport work. There are cases, say, at Madras, where the authorities ask for 11,000 wagons to do their work, and there are only 2,000 or 3,000 available. The whole report is full of cases of that kind—goods rotting because they cannot be transported from one place to another. India is suffering from the fact that it is short of wagons, short of locomotives, and her bridges are inadequate. This is apart altogether from the development you would expect from a gigantic country like India, and it is one of the countries which, I have no doubt, at an early date, will have to make a great effort to repair the very backward condition of her railways at the present moment.

Then we come to the British Colonies. Here we have gigantic areas awaiting development, and repaying development. If anyone will follow what was done by the late Mr. Chamberlain in Nigeria, he will realise at once how those great Possessions of the Crown in Africa repay expenditure for development. At the time when he took Nigeria in hand, the trade was comparatively small. Last year, between imports and exports, British trade with Nigeria came to £33,000,000, and I do not mind saying that, from the point of view of British trade, the imports were more valuable even than the exports, because they were essential raw materials for the purposes of our trade and industries.

4.0 P.M.

My right hon. Friend the Colonial Secretary (Mr. Churchill) is following that fine example, in making a real endeavour to develop still further the resources of those great African Possessions, and not merely our African Possessions, but other parts of the Dominions of the Crown. He has already, either actually raised in the market, or is making arrangements for raising in the market, something like £20,000,000, upon the credit of these Colonies, without any British guarantee, for the purpose of development. It will be mostly for engineering work, and I have no doubt at all that it will have an appreciable effect upon business in the engineering trade of this country. I have been dealing with countries and with enterprises where the credit of the countries themselves is quite sufficient, without resorting to any British guarantee. I now come to a different category.

High Cost of Production at Home

There is much to be done at home and abroad in loosening the wheels of the machinery of industry at the first point at which they are stuck, and that is in the restoration and improvement of the means of production and of transport. The need is undoubted. The arrears of the War have not by any means been made up; they have not been appreciably touched. The need is undoubted, but orders are tarrying. Why are they tarrying? There are two reasons. One is that the cost of production is too high. I should not have thought that there was any doubt at all about that.

We know what that means.

Whatever it means, let us have the facts. If we do not face the facts, we really never can find a remedy. There is no doubt at all about the high cost of production at the present moment. The first effect is that orders are going to our competitors which otherwise would have come to us, but that is not by any means the worst. The worst effect is that orders are not going anywhere. People are holding back. They say, "We will not give orders so long as the cost of production is so high." I should have thought that it was in the interests of employer and workmen to realise that fact, because Governments cannot provide a remedy for that. No one can provide a remedy for that but those who are engaged in the industry, whatever be their capacity. It is a matter which employer sand employed must work out among themselves, but they will make a fatal mistake if they do not realise that it is one of the most important factors in the trade depression throughout the world at the present time.

There is a second difficulty. It is the difficulty of raising capital for some of these enterprises, and there is the still greater difficulty of raising it at a price, which will not unduly burden the enterprise. There, undoubtedly, the Government can assist. It is proposed that where the Government are satisfied that the proceeds of any loan to be raised by the Government of any part of the Dominions or the Colonies, any foreign Government, any public authority, or any corporation or other body of persons are to be applied towards the carrying out of any capital undertaking, or in the purchase of articles to be manufactured in the United Kingdom required for the purposes of any such undertaking, the Government may, on such conditions as may be deemed proper, guarantee the payment of interest and principal of the loan. It is to be a condition of the guarantee that the application of the loan is calculated to promote employment in the United Kingdom. That means enterprises—railway extensions, electrification, and waterways, if there be schemes of that kind—which could produce immediate employment. Their power is to be so limited that the aggregate capital amount of the loans guaranteed does not exceed the sum of £25,000,000.

The total is £25,000,000. What does that represent?

It represents the total of our liability under this proposal.

The Government will never be liable for more in the aggregate?

No.

It is a capital sum.

Oh, yes; not annual. It is guaranteed. It is capital. I hope that is clear. The Government cannot adjudicate between the various schemes. It is, therefore, proposed to set up a Committee of men of high authority and great knowledge in financial, industrial, and economic matters to administer the scheme. It will be the function of the Committee to deal with applications for the guarantee of the Government under the scheme, within the financial limits referred to. They will be instructed to consider each application in the light of the amount of fresh employment which the scheme proposed will bring to this country, and of the benefits, by way of increased and cheapened production and transport facilities, which it will confer. That is the proposal submitted under the Resolution which will be read to the House in a few minutes. I want, again, to utter one word of warning and of safeguard in this respect. This sum of money is not to be used to help cases where orders are withheld because of the excessive cost of production. It is only where the interest and sinking fund on the capital prevent progress being made with the orders. It is not to be utilised to subsidise excessive cost, because that would not facilitate recovery; it would retard recovery. Those are the proposals of the Government in respect of trade facilities.

Relief Works

The next class of proposal is with regard to the relief for distress. Whatever the Government may do, it cannot bridge the great chasm of unemployment. You may have trade facilities, and you may have export credit schemes, but they can only provide employment for a percentage, and not a high percentage, of the unemployed of the country, whatever you do. The permanent remedies are of a different character. Therefore, under any scheme, there will be a considerable amount of distress to be relieved. We shall proceed with the relief works which we have already undertaken, and it is proposed that a sum of £10,000,000 shall be allocated for assisting those works. That will include a certain amount of provision for agricultural unemployment, because I am sorry to say that there are some districts where there is a good deal of agricultural unemployment manifest. There will be a sum of money allocated for forestry and for land drainage, and there will be further proposals with regard to roads. Negotiations are pending with the local authorities in these respects, and therefore I cannot give the particulars. In fact, if I were to give the particulars, it would interfere with the negotiations, because obviously, if you have through roads, there is not quite the same interest for one local authority as there is for another, and it is very difficult to induce the local authorities to make the same contribution when a road passes through their territory.

Land reclamation?

That is in land drainage.

I was referring to the foreshores.

No, it is only drainage.

Unemployed Workers Dependants' Grants

I now come to another proposal of the Govment, dealing with the unemployment allowance. We were compelled by the exigencies of the public revenue, and the fact that the Unemployed Fund was exhausted, to reduce the benefit which was paid to the unemployed to 15s. No one pretended that 15s. was an adequate sum. It was a contribution. It was a bigger contribution than had ever been made before. [HON. MEMBERS: "No!"] The only larger contribution was made by the present Parliament, and it was continued until the fund was exhausted. Before the present Parliament, there has been no contribution that approached it. I do not say that the proposal which we are now making is adequate to maintain a man and his family at the high cost of living, but it is an increase which we are proposing upon a basis of a further levy on the contributors to the scheme, including the State.

The Government propose to introduce legislation establishing for a period of six months a fund to be called "The Unemployed Workers Dependants' Fund." Out of this fund unemployed workers who are in receipt of unemployment benefit will receive grants towards the maintenance of their wives and dependant children. These grants will, subject to a maximum limit of 9s., be at the weekly rate of 5s. for the wife and 1s. for each child. The money necessary for paying these grants will be obtained by means of a compulsory levy upon the contributors to the unemployment insurance fund at the following rates: In the case of men—employer 2d., employed person 2d., State 3d.; in the case of women—girls, and boys under the age of 18, employer 1d., employed person 1d., State 2d. I trust if this proposal be accepted by the House of Commons, it will be possible to bring it into operation soon after 3rd November, the date on which the new period of benefit begins under the old scheme.

Does this proposal apply to Ireland?

No. My last proposal in this respect is that we propose in the case of necessitous areas, where the guardians find it impossible to cope with the difficulties, that there shall be a Government loan which will enable them to spread the amount out to carry over the immediate difficulty with which they are confronted. These are the proposals which in a series of measures we propose to submit to the House of Commons.

Public Economy

But trade recovery is what we have got to look to for the ultimate solution of unemployment. That does not depend upon Governments. [HON. MEMBERS: "Oh!" and "Taxation."] I will give the measure on which these things do depend on Government, and I will give it quite sincerely. Here, in the main, there is nothing that can be done by this House or any other House upon which trade recovery in the main depends. [An HON. MEMBER: "War debts!"] There are things for which Governments are responsible. Governments are responsible for economy. [An HON. MEMBER: "We do not get it!"] Will my right hon. Friend allow me?

I did not say anything.

There is no doubt at all that in this country and in every country heavy taxation, local and Imperial, must necessarily retard trade recovery. It is the business of every Government, it is the business of every Parliament, to insist that the whole of the estimates of expenditure should be cut down ruthlessly. If Governments fail, it is the business of Parliament. I have never challenged that provision and, if Parliament think that the Government fail in this essential obligation, then we ought not to be a Government. All I say is that when the Government comes with proposals for cutting down, we shall expect the support of Parliament. There must not be one section saying, "You ought not to cut that out," and another section saying, "It is monstrous to cut that down." That has been the experience of the past. If the Government come with proposals to cut down, we are entitled to ask Parliament to support us. If we do not come with proposals for economy, Parliament is not merely entitled, but it is its duty, to put us out, and put somebody else in. That is all I want to say upon that subject.

The other observation I want to make is this: Nothing the Government can do in the way of economy can get rid of the fact that you have a debt of £8,000,000,000—that everything costs twice as much as it did. [An HON. MEMBER: "And more!"] Within these limits it is our business to exercise a ruthless economy, and that is an element in trade recovery. That is where the Government can assist. We are one of two countries in the world where up to the present we have been able to make both ends meet. It has been an enormous strain. It has this advantage. It does not hide expenditure. It does not conceal it. The taxpayer knows it. [HON. MEMBERS: "He does."] Yes, but there are systems where the expenditure is higher, and where the taxpayer does not know it. Those are the two systems that are in conflict in the world at this moment. There is the system which, whereby here and in America we have taxed our people to pay our way. It makes economy even more obligatory, and it makes it very much more difficult for the Government. But you take the other system where there are deficiencies, and where they are covered up by the printing of paper. What does it mean—inflation! You do not escape taxation. Inflation is only indirect taxation of a most ruinous character. You pay it in high prices, not only in inflation of credit for purposes of production, but in the creation of currency for the purpose of paying your debts.

British Credit

These are the two systems; and in spite of the fact that for the moment we are suffering not merely from high taxation, and not enjoying the artificial prosperity which inflation creates in the end, this country will be rewarded for the old courage which it has always displayed in these matters. Its credit will stand, and credit is the oxygen of trade. It is the energiser, the purifier, the thing that keeps it going; without it, it faints. In other countries you have a feverish activity, but fever simply draws upon the resources of the body. Here the fever has gone, and we are subnormal. All we have to do is to build up our strength. You do not build up your strength with patent medicines. You must do it with healthy food. That is why, in spite of the fact that by the artificial creation of credit, they are able in other countries to give an appearance of prosperity. You have only to watch what is coming. This country, I believe, has probably touched bottom in regard to its trade. It has faced its obligations with courage, and courage will have its reward. We will begin to build up, and our credit will stand, as it does stand to-day throughout the world.

Cost of Production

The second thing is what I have already said, and I am not going to dwell upon it again. You must face the cost of production. You must face it. It is not for the Government; it is for the employers and the workmen to come together. It is so easy to excite prejudice by saying, "Oh, there is the old story; you are going to cut down wages," but if you do not do it, you will have no wages at all.

What about prices?

Well, take prices. I have really gone into that matter quite impartially. It is not a question of excessive profits; it is a question of no profit at all. When men come to you, as they have to me, prepared to show their accounts, and point out that they are running their businesses often at a loss, and that they are delighted if they can just pay overhead prices without making any profits, naturally you hear what they have to say. There are orders to be taken in hand by the businesses of this country to-day if you can assure the men taking them, not that they will make a profit, but that they will be able to meet expenses. It is no use denying these patent facts.

A case was put to me the other day. It relates to a contract offered to a big firm in the North of England. The Germans were competing. The manager said he could not, whatever he did, and without any profit at all, come anywhere near the offer that was made. He went to his workmen. He put the tender of the Germans before them, and he put before them what he could do, and said, "If you will meet me here upon this basis, I shall be able to tender." The workmen agreed. The firm got the contract. What did that mean? It meant that thousands of men had work for months to come who otherwise would have been dismissed. [HON. MEMBERS: "Oh!"] I really entreat the responsible leaders of Labour to consider that position.

Trade will never be restored to this country, certainly not for years and years to come, unless this problem is courageously faced. Face it with the employers. They are bound to make their case, and if they make their case, it is surely in the interests of the workmen, as well as of the employers, that something should be done to enable trade to begin again. What workman wants to live on doles and relief works if it is possible to re-start trade on a genuine foundation that will enable it to go on from year to year, and enable the world to recover. I make that appeal in all sincerity. These proposals are simply expedients to tide over periods of distress. There will be periods of distress, whatever we do, and these things will have to be done.

Peace and Trade Recovery

I now come to my last point. This is where, not this Government, but where all Governments can assist. Trade recovery depends, I agree, on a complete understanding between workmen and employers, but it depends upon an understanding among the nations of the world. There is no doubt that political unrest, which is still fermenting, prevents trade from recovering. You can see the effect of that in Germany. You see the enormous fall in the mark, and this is not attributable to any economic force, during the last few weeks. If you get political disturbances, quarrels, racial quarrels about boundaries, and about all kinds of things between nations, if you get threats of military enterprises, they disturb the world, and trade cannot build upon that basis, because it is nervous, timid, and fearful, and it has good reason to be so. It is not going to rise upon soil which is rocky. Therefore, peace and a good understanding between the nations of Europe is necessary. Let us get out of the atmosphere that if you talk about a German without a frown on your brow, you are not a patriot.

All the Powers in Central Europe are in the same condition, and they have difficulties arising about one thing and another. Trade cannot start so long as that goes on. In this country it is often very difficult to know what to do, and if you intervene to make peace, your motives are misunderstood and your efforts very often intensify restlessness. If Britain will not move, who will? We stand for peace and stability. Whatever may be said about our motives, we have no other—none. We want to see the nations begin again the task of peace. The world has been harrowed by wars for years, and yet there are people who talk war, and who think war. In order to re-establish trade, you must have peace, you must have good will, and you must have co-operation between the nations, yea, and between all classes.

Motion made, and Question proposed,

"That it is expedient:—

1. To authorise the Treasury, with a view to the promotion of trade and of employment in the United Kingdom, to guarantee the payment of loans (of an aggregate capital amount not exceeding £25,000,000) to be applied towards the carrying out of capital undertakings or in the purchase of articles manufactured in the United Kingdom required for the purposes of any such undertakings, and to charge on the Consolidated Fund any moneys required for fulfilling any such guarantees.

2. To amend the Overseas Trade (Credits and Insurance) Act, 1920, and the Overseas Trade (Credits and Insurance) Amendment Act, 1921, by authorising the granting of credits and the giving of guarantees in connection with export transactions between the United Kingdom and any country whatsoever, and by extending to the eighth day of September, nineteen hundred and twenty-seven, the period for the liquidation of credits granted under those Acts and the period during which guarantees given under those Acts may remain in force."—[ The Prime Minister. "]

I need not assure the Prime Minister that hon. Members with whom I am associated fully realise the necessity of what the right hon. Gentleman has said with regard to a world's peace and the creation of international good will. Although all these great things have a very close relationship to the subject now under consideration, I do not propose at any length to cover the ground again which the Prime Minister has followed upon the necessity of creating the will for peace, as in many countries formerly there was the will for war. For myself I look upon this sitting of Parliament as denoting a turning point in the history of this country. The speech, and the terms of the speech, of the Prime Minister have, I think, denoted the fact that Parliament must more and more in the future accept the task of governing the people of this country by providing the masses of the people with two conditions, employment and contentment.

We have not always received the general approval of the House in asserting on former occasions that that in the future was to be a test of good government in this country. Formerly Parliament has not gone beyond providing some facilities for insurance benefit in the case of unemployment. What it has done in addition to that has been occasional, temporary, limited, and inadequate, but the speech of the Prime Minister to-day, if it means anything at all, means that Parliament has come to accept the great obligation of entering into the general trade affairs of the world as a Parliamentary and financial instrument in order to secure work and to keep the people employed. I know that many hon. and right hon. Gentlemen will say that that is not their commitment, and that I am giving an exaggerated description. [HON. MEMBERS: "Hear, hear!"] I know that is in the minds of hon. and right hon. Gentlemen opposite, but just as only a year or two ago the Government refused to go anything like the length of to-day's announcement, so will the Government in the years immediately ahead of us find that it is committed to the full obligation of the workman's right to work in this country. The precedents set to-day, and the obligations which are being accepted, cannot remain precisely in the same position in which the words of the Prime Minister have left them, and they will have to be expanded and enlarged in a manner fully to cover the right of the workman to earn his living by labour, and no longer be deprived by any conditions of an existing social system from earning his daily bread. I regard this precedent set by Parliament as a further step in advance of the acceptance of great State and Parliamentary obligations towards the working classes of this country.

I hope that, throughout our Debates on this problem of unemployment, which has called us specially together, we shall not be too controversial, and that we shall lend all our efforts to speedily providing Parliamentary measures of assistance for the great mass of people outside these walls who in our towns and cities are looking now with great hope and expectations to Parliament for some real remedy to relieve their distress. The Prime Minister is the last man to expect to be entirely free from criticism on a question of this sort, and when he says that the whole source of our troubles is summed up in one word and that one word is "war," I go further and say that we must add to the source of our difficulties the terms of the peace that followed the war. Those terms have been found incapable of fulfilment, and the Prime Minister's efforts since the Treaty of Versailles has been signed have been devoted to trying to make certain provisions of that Treaty work so as not to seriously dislocate the industrial and trade arrangements of this country and other countries. The Prime Minister will not think it altogether out of place if I remind him of many things which he said in this country, perhaps more outside Parliament than in it, before he gave us as he did to-day at great length some account of the economic and trade circumstances which followed the wars of Napoleon. Listening to the Prime Minister I wondered when he did begin to read the records of our industrial and economic history following the Napoleonic wars, for I recall how graphically and how often the Prime Minister, towards the close of 1918 and during the middle of 1919, spoke to this Kingdom especially, and to the world at large, of the "New World" which a new Parliament could build up. I have not any of those lengthy but always readable quotations by me, but the Prime Minister did raise expectations and did inform the country of what could be done by a new Parliament of which he was the head. Before these Debates are finished, if the Prime Minister does not accept my assurance, I shall furnish him at some length with what I have termed these graphic descriptions, which have meant so much outside these walls to men who gave their votes to him at the last General Election in the expectation and belief that something like a new world would be brought nearer to them. Does the Prime Minister now mean that it was in the nature of things, and inevitable, that we had to face and to suffer such conditions of economic and trade dislocation as followed the wars of Napoleon? If he does believe that, does he now mean that the people must suffer submissively and until they have exerted such pressure upon his Government that some measures of relief are afforded on the lines of those he told us about to-day? I ask the Prime Minister to take either the one side or the other, not to talk of the possibility of a new world at one moment, and to tell the country next moment that all its distresses are the inevitable consequences of the War.

The Prime Minister laid before the Committee two chief lines of service so far rendered by the Government in relation to unemployment. One was emigration and the facilities arranged under that head, and the money it has cost the Government to organise emigration. I am not claiming to speak for every one of my hon. Friends on this side of the House in what I am about to say, but in all these questions we must be frank and express whatever opinions we hold. For myself, I can conceive of it being serviceable and advisable either for individual workmen or groups of workmen to leave a small and crowded country if they can do better in a large and thinly populated country. Therefore in principle I have no prejudices against emigration as such; but I come to the question of under what conditions it is to be arranged and encouraged. Recent reports from Australia, Canada, New Zealand, and South Africa, show that those countries have their unemployed troubles and speak of resolutions of protest against continued immigration. Having said that I say that labour, if workmen are to be asked to emigrate, should be asked to take part in the supervision and conduct of any emigration arrangements. We should be assured that when they land on strange and new shores they are not to be faced with conditions of distress, that they are to be assisted adequately and established in conditions of employment that will make their lot in the new world better than it was in the old. I am not prepared to leave it to, say, shipping agents or others who may be interested in the financial side of such a policy, to say what facilities can be provided and what exchanges can be made for the good of the individual as well as for the State itself.

Another matter to which the Prime Minister referred was the extension of the Insurance Act. I think the Prime Minister claimed rather undue credit for the extension which was made some time ago. As a fact, when the Government agreed to that extension it was only carrying out an obligation accepted long ago, an obligation which any Government, Coalition or otherwise, would some day have had to accept. As is well known, unemployment insurance was established in this country as an experiment covering three great branches of industry and embracing some 2,000,000 or 3,000,000 workers, and it was always understood that if the experiment turned out a success it would be possible, and indeed necessary, to apply it to almost the whole of the wage-earning classes of this country; so that I cannot give any considerable credit to the Government for that particular remedy.

On the whole, I welcome the announcements made by the Prime Minister of certain proposals for assisting trade under the head of Credits and Loan arrangements. The Prime Minister may remember that in the early part of this Session, and indeed more than once, I asked that the Government should take the House more into its confidence as to what was being done in relation to these discussions. I gathered from the only announcement which, I think, was made on one occasion by the Chancellor of the Exchequer, that the Government in its consultations did not find representatives of banking houses, financiers, and those who have authority in great insurance companies very helpful in any plane then under consideration. We cannot, I think, in discussions to-day go into detail on these schemes, but while the right hon. Gentleman rejects the device of seeking to build up the body by any process of quack treatment or mere bottle medicine, there is, after all, something to be said for artificially assisting trade which is faced to-day with difficulties that of itself it is unable to overcome. I should hope, however, that in any steps which the Government may take they will act in the spirit of real co-operation and leave employers as free as they possibly can to manage their own affairs. I do not think the amount for which the Government is to be committed over a long period of years can be described as at all adequate for substantially assisting these trades. There must surely be a much greater liability accepted by the State if the assistance of trade is to be worth while, and my own view is that unless this part of the job is done very well indeed, it is better perhaps to leave it alone altogether.

We had international trade dislocated, as I have said, not merely because of the wastage of the War, but because of the terms of the Peace Treaty which followed the War. Europe was in need of a Peace Treaty which would have enabled the defeated countries not only to pay for the damage wickedly done in Belgium and France, but to begin in their own countries internal works of reconstruction and economic development. Their prosperity would have made our prosperity more certain. Their injury which our policy of reparations was designed to secure has come more nearly to securing the industrial and financial ruin of some of the victorious countries. No scheme of credit restoration of trade development by artificial means can succeed without international co-operation. I do not know how far the right hon. Gentleman, either through such agencies as the League of Nations may afford or any other apparatus he may have in mind, proposes to keep in touch with other countries, whose masses are more or less in a similar degree of trouble to our own. Immediate measures to stimulate export industries are therefore necessary. Adequate measures can only be taken by the Government. Alone does the Government possess that privilege. The Government, therefore, can come to the rescue and be responsible in a very large measure for our export trade, paying manufacturers for their goods and trusting to receive the money from European countries after business is done with them. I, of course, accept the Prime Minister's general outline of not manufacturing merely to give goods away. That is not in my mind. That would only be further impoverishing ourselves; but the world never hungered more for wealth and work, and it ought not to be beyond the capacity of statesmen to arrange the necessary avenues through which that wealth and work may be made to flow to meet the needs of the masses of this and other countries.

5.0 P.M.

On this question of credits I would like further to give my own views on one of the schemes which has been under discussion. In January of this year Sir Edward Mountain, controller and managing director of the Eagle, Star, and British Dominions Insurance Company, propounded a scheme for the establishment of credits to enable trade to be re-established with countries in Central Europe. Great interest was manifested in that scheme. It was put in more or less complete form as to terms and submitted to the. Government. But so far as I have read no response at all has come as to the opinion of the Government on that scheme. Sir Edward Mountain put in the fewest possible words his own proposal. They involved in the first place the creation of a syndicate of bankers and insurance companies acting voluntarily but on behalf of the Government to insure exporters in this country against possible losses on bills of exchange drawn by them on customers abroad. They involved, in the second place, the creation of similar syndicates abroad, acting on behalf of their respective Governments to guarantee foreign acceptance of their bills. I think that in some degree the plans outlined by the Government approximate to certain—indeed to some of the principal—of the proposals of Sir Edward Mountain's scheme. As to the further details of that scheme I shall not trouble the Committee at this stage.

In the course of the Prime Minister's speech he referred to the Russian situation, and, as I put to him yesterday a question which has its economic relation to our whole situation, and has a bearing, indeed, upon unemployment, I would like to pursue the matter a little further now. The answer given to me was substantially to the effect that, unless the Soviet Government recognised the debts of former Russian Governments, we could not give that financial form of assistance in relation to the Russian famine, which I think the necessities of the situation demand. We have entered into a trade arrangement with Russia, but we have not entered into full diplomatic relations of peace with Russia. We do not recognise her Government. There are many men in this House who are well aware how the Government of this country is criticised in other lands; but I think we should be the first to protest strongly against anybody in any other country daring to refuse to have relations with our Government on the ground that they did not approve of it. After all, it is for each country to determine its choice of Government; and, even if the method of choice be the wrong one in our view, that method is also a matter to be determined by the people who are themselves affected.

There is good reason to believe—at any rate, I know nothing to the contrary—that the present Russian Government would be quite ready to enter into discussion with this Government as to the acceptance of debts contracted under the old Czarist regime in Russia, if this Government accepts and recognises the Russian Government as one with which it is proper to have discussion and to trade. We cannot expect the Government to settle this question until there is proper joint discussion between the two countries concerned. But I put this question of assistance in the Russian famine upon a higher basis, and I suggest to the Prime Minister that debts which were contracted either in the early stages of the War or before the War began, and for which then the Russian Government of that day made itself responsible, are debts which ought to stand upon and be judged by a totally different principle from any question of famine rescue work such as is now so urgent. I say that not merely in the interests of starving Russia, although we must not leave these great human aspects out of account in dealing with this question. A territory afflicted with the ravages of famine, about three times as large as our United Kingdom, will, unless the Governments of the world come to the rescue adequately and speedily, react again upon the economic and employment conditions of the working classes of this country, and we shall in due course carry a share of the suffering expressed in the disease and death which might be reduced in large measure by the complete cooperative act of the Governments of the world. I hope, therefore, that the Prime Minister will open his mind to the appeals which are being made for more substantial support from our own Government, in spite of those debts which, as I have said, are still an unsettled matter, and cannot be settled until there are real diplomatic relations between the Russian Government and ourselves.

Another branch of the speech of the Prime Minister was his outline of a form of supplementary grant to sections of the workers entitled to benefit under the Unemployment Insurance Act. It may be that the mind of the Prime Minister, as well as the mind of the Minister of Labour, is open to consider many of the objections, which I hope he will recognise at sight. A considerable number of workers are not covered by the Unemployment Insurance Act at all, and can neither be contributors to nor gainers from this supplementary provision which the Prime Minister has outlined to-day. Many of them are unemployed, and are suffering the distresses of unemployment. No individual, no class of workmen, should be left outside the area of any supplementary grant of this kind if it is to be provided. The Prime Minister, therefore, must understand that we do not accept this proposal as being in any way sufficient to meet the deepening financial necessities of the ordinary working-class family. If it be a choice between having this and nothing, we choose to take a little rather than be left without anything; but if we can, by further suggestions, induce the Government to increase and to amend this proposal for a supplementary grant, we may be able to go a long way to meet many of the distresses which otherwise will not be overcome during the winter yet to be faced.

Insurance has been designed on a scale to meet only the needs of a normal period of unemployment, that is to say, that period in which a workman found himself idle as between work and work; and for this purpose it served a very good end indeed. But if we are to try to adapt insurance principles and provisions to the abnormal state of employment now existing, the Government will have to go far further than it has gone in the outline given in the Prime Minister's speech this afternoon. In short, no attempt has yet been made to expand the machinery and the financial provisions of the Unemployment Insurance Act to an extent which will adequately meet the extraordinary state of unemployment which now exists. I would remind the Prime Minister again of the last uncharitable act of the Government when this subject of Unemployment Insurance was dealt with in this House in August last. We then reminded the Minister of Labour of all the things which the Prime, Minister this afternoon has recalled to the memory of the House. The Prime Minister has told us how the ordinary working-class household finds itself deeper and deeper in its difficulties—its resources am going, its savings are exhausted, and many of the ordinary bits of furniture are taken to the pawnshop. These things we told as emphatically and in as warm terms as we could—in terms of appeal—when the House was dealing with this question in August last; and yet, in spite of the facts as they were, the Government decided to increase the contribution of the worker for the benefit he was to receive, and to reduce that benefit from £1 to 15s. I am glad to recognise that the heart of the Prime Minister has somewhat softened and is a little warmer on the subject, as judged by his references to the subject of unemployment insurance this afternoon. This additional grant, as I understand, is to be limited to wives and children. Now there are very many cases of real domestic distress which are not covered by the term "wife" or the term "child." There are old folks, there are feeble relatives, there are invalids, there are persons who have to be assisted and kept though they do not stand exactly in the relationship of wife or child; and I should hope that it will not be found impossible to cover those cases, and to see that individuals who in the workshops, as contributing workmen, will be compelled to pay their share for this supplementary fund, will not be deprived of their right of making a claim upon the fund if they have obligations corresponding to those which the wife or child may present in other families.

It will not do, then, rigidly to adhere to the line of benefit proposed in the statement of the Prime Minister this afternoon. This scheme, as outlined, is too exclusive, too selective. Financially, even though it were right in all other respects, it does not meet the conditions which the high cost of living still present to the ordinary working-class family. The regular workers who are in work will have to contribute to this scheme, and I think the view of this House has always been that there should be no taxation without the right of benefit. It is not right or fair to tax a class, and most of all the class in receipt of the smallest share of the national wealth, and at the same time withhold from it benefits specially reserved for persons who may not contribute at all. I may remind the Prime Minister that wages have been reduced very substantially. I am going to touch a little later on that theme, but let me say that wages, in the case of many hundreds of thousands of workmen whose pay was in the region between £3 and £4 a week, and of many receiving less than the lower rate, have been substantially reduced. Their obligations have been increased. They have to pay more to insurance funds, and many of them are voluntarily paying large sums as levies. The Prime Minister to-day did give some credit to trade unions for what they have done to rescue their members from the distress of their low incomes and of unemployment; but I do not think that many Members of this House are aware of the millions of money paid in the last ten or twelve months through the different trade unions, and paid to some extent upon the basis of voluntary levies by enormous masses of workers, to shield their less fortunate brethren from the privations of unemployment.

The Prime Minister repeatedly asked us to deal with what he termed the question of the cost of production. Here, again, I may not carry with me every one of my colleagues upon this side of the House, but I may remind the Prime Minister, if he is not aware of it, that, in the recent manifesto of the joint Labour bodies, Labour expressly states that it is in the interests of the whole community that production should be increased and costs reduced. We appear, then, to be agreed upon a great principle, or upon a great industrial fact which gives rise to a subject of principle; and the question is, how can we best, with justice to each interest, attain the desirable end of reducing the cost of producing the articles that we must sell in other countries? To reduce wages gives no guarantee at all of lessening the price of the article. In itself a mere reduction in wages is not a guarantee of reducing the price of the articles we have to sell. Indeed, we often find instances of articles which are made at sweated rates and under the cheapest conditions of production, and sold at very high prices indeed. Profits and interests and dividends and rents for land and premises, high salaries and maintenance charges, should all be subject to revision in order that they may make their contribution if this matter is to be gone into. I agree that we must cheapen commodities, for it is true that we must produce our commodities at a price within the capacity of other people to buy them. If we do not do that, we do not do trade. I do not know whether the right hon. Gentleman has seen the figures published only to-day in the "Labour Gazette." These are the last official figures of the Government as to wage reductions. Since the beginning of 192l changes in rates of wages reported to the Department have resulted in a net reduction of over £3,800,000 in the weekly wages of nearly 6,700,000 workers. That is a very substantial reduction without any diminution in price in the sale of the articles.

But I recognise that though wages are not the whole element in determining prices, they are a considerable element, and I do not say that under no circumstances should there be no reduction of wages, but I ask the Government and employers who are Members of this House not to face this question as though reduced wages were the short cut to a solution of this difficulty. The Prime Minister gave the Committee an instance of how an embarrassed employer, having an opportunity to tender for certain work, finds himself faced with German competition and his workmen cannot possibly approach the figure of the German wages. I hope the Prime Minister does not mean that in all cases we must go upon the line of reducing the British workman, who took his part in winning the War, to the level of the pay and conditions of work of the German workman, who is now chained down by conditions for indemnity and reparation which will for long enslave to a great extent a considerable portion of the working-class population of that country. That kind of competition solves nothing and does not strike at least that human note which is so common in the speeches of the Prime Minister even in dealing with economic subjects. There is only one pool out of which wages can be paid. It is the pool of the national product. That is the source of wages. Wages must be measured by the total volume, the quantity and quality of the wealth produced by the national energies. The national product, therefore, is the source of our wages. I need not say that we remind the public, as far as we can, that there are certain sections of the country who get far more than their share. The Prime Minister need not bewail his being handicapped in dealing with economic and other facts, and in claiming credit for anything the Government does merely because some imaginary orator tells a street corner audience of unemployed that the Government has done nothing. The Prime Minister and his numerous supporters will see to it that anything the Government has done will be widely enough advertised to leave no one in ignorance of what the Government may justly claim credit for.

As to this question of reduced cost of production, I feel it is of such vital importance to all of us in the solution of this unemployment problem that it is essential that workmen should see that if they can make a contribution to reducing the cost of the article it is urgently necessary, primarily in their own interest, that they should do so. Our internal prosperity depends upon our external trade. Let us do what we like by way of internal relief measures. We cannot supply our population in these islands with its life necessities of food in such abundance and variety as are required unless we continue that great Overseas trade which has been the source of the industrial and financial prosperity of this country. These markets overseas are the secret of our continued employment, if continued employment is to be found, and our goods must be produced within the buying capacity of the people in other lands. If not, we are driven out of the market or we find others bending their energies to produce for themselves at a cheaper rate commodities which formerly they bought from us. But it will not avail if articles are manufactured at a price beyond the means of those who must take them. There are many articles now, I am told, and I believe it, in warehouses, in factories and workshops which could only be sold at a considerable loss to employers if they were sold at anything like the offers so far made to them. It may be that many of them finally will have to rid themselves of these goods at a loss. Indeed, it may be that they will be assisted in such riddance by certain of the branches of the scheme of assistance outlined in the Prime Minister's speech. Price is the first factor in the continued good trade of any country, but I repeat also that wages are not the sole element of price which must be kept in mind. Many articles sold not only at a high price to the consumer but at enormous profits to the seller have been made under the very worst conditions and at low rates of wages. What does a low level of pay for masses of wage earners mean? A lower standard of life, reduced efficiency, a diminution in the competence of the workmen to make himself equal to earning his wages well. I repeat and emphasise this point, that you cannot make a good body of competitors, a good body of wealth producers, upon a low standard of wages, and we want to keep as far away as we can from the C.3 nation which the Prime Minister so often reminded us of during the years of the War, and immediately after.

I agree that at the moment, on all the facts, there must be many employers who are making only low profits, or little profit, but judged by all the facts, as occasionally they are revealed, there are enormous stores of wealth being gradually built up in this country, and they must come from labour; I mean the general collective energies of labour, of both hand and brain. You read occasionally of the will of some man, who, at least, is well advertised at death if he was never known before, and millions stand to his name. I read recently of a wedding in which the presents to the lady amounted in value to £250,000. I wish her joy, but all these things are some evidence of there still being enormous financial resources, which are derivable in the main from the energies of the wealth-producing classes" in this country. We want in the fullest degree to cheapen prices, to consider questions of efficiency, re-organisation of methods of mechanical working, perhaps greater sub-division of labour, improved condition of management, and no longer the scornful rejection of ideas which working men themselves could contribute to the benefit of industry if they were allowed to do so. You find managers who will frankly admit that many of them have been remiss in not making full use of the brains of workmen as well as their hands. But all these things will not complete the steps which are necessary if workmen in any way consciously or deliberately refrain from giving what I would call a full day's work for a fair day's pay.

There is, I think, a good deal of unworthy suspicion in the minds of employers as to workmen deliberately shirking the day's task. On the other hand, I am not going to allege that workmen in the mass are so perfect that shirkers cannot be found, and we know that men who have to work collectively, in large numbers, cannot go faster than the pace of the slackers. It is the slowest man who determines, very often, the conditions under which a job shall be done, and I make them an appeal, so far as it is needful. I do not know that anyone does preach the idea of deliberate underproduction, and so far as it is practised it must be practised by workmen who are ignorant of the real injury which it does to them above all other classes. The fallacy of diminishing the quantity of goods produced in the belief that the less work one man does the more work is left for another must give place to a standard of production consistent with the certainty of attracting markets to take what we have to sell, and consistent with the best treatment in labour conditions and pay of all classes who are employed in serviceable labour. Underproduction in any degree increases prices and reduces the purchasing power of a man's weekly wages. It is the greatest handicap to a man who has to lay out his money to the best advantage. Underproduction, for the reason that it increases prices, tends to make things scarce. Scarcity is the shield of the profiteer, and the workman is just as bad a profiteer if he deliberately refrains from doing a fair day's work for a fair day's pay.

There are many other aspects of the general problem of unemployment which I am sure will find their place in the course of the discussions which are yet to follow, but I have felt it my duty to stress this point in order that the workman should be liberated from the suspicion under which he rests of not doing his best to help himself. I do not want him to help others. Others are well able to help themselves. But if the State is to rise and confront its duty, and try to do it, it is the business of the individual workman to help those who want to help him. That is a doctrine which I am certain will find universal acceptance. During the next week or two, by these various measures, we have imposed upon us the duty of supplementing outside means. All these measures together will fall far short of what is wanted, but collectively I should like to see us putting our minds together to make the very best use of these proposals in order that at least some substantial relief shall come to the distressed poor.

The statement made by the Prime Minister this afternoon naturally and necessarily covered so much ground, and the proposals with which it concluded involve so many matters of principle and detail which require careful consideration, that at this moment I should like to reserve anything but a general judgment upon them. I imagine that to be the opinion of the Committee, for I should be sorry to think that the attenuated appearance of the Benches is due to any lack of interest in the subject, and not rather, as I hope, to a conscientious desire on the part of hon. Gentlemen to engage in the process of intellectual mastication and digestion, which can be more decently and effectively carried on elsewhere than on the Floor of the House. There is one point in regard to which there will be general, if not universal, regret, and that is that the proposals which the Government have made to-day were not brought before Parliament at an earlier date. The figure of unemployment at the moment is something like 1,500,000. [HON MEMBERS: "1,750,000."] It was nearly if not as high in February last. Yet we devoted a good deal of Parliamentary time to the discussion of the Budget, some parts of which, before it emerged from Committee, were already obsolete, and the main anticipations of which, as I am sure the Chancellor of the Exchequer if he were here would agree, are already out of date. I am sorry to say that we spent many days of the time of this House on a sterile discussion of that futile and fantastic measure, the Safeguarding of Industries Bill, which has already begun to produce the mischievous consequences, including additional unemployment, which some of us predicted, and which, at a time when it was all important that there should be no channel of free exchange not kept open, gratuitously introduces factors of dislocation and paralysis into our foreign trade.

For the moment, however, we must deal with the facts as they are, and face the problem with which my right hon. Friend the Member for Platting (Mr. Clynes) dealt in a speech which, I hope he will allow me to say, was admirable and constructive. We must all, as far as we can, contribute what we can 'to the common stock of ideas and of practical expedients. I want to say in a few sentences, because one ought to reserve criticism of the Government's proposals until we have seen them on paper, what appear to me to be the governing factors of the situation. I will not go into the remote causes of this formidable increase of unemployment. I prefer, rather, to ask the attention of the Committee to possible alternative remedies. First of all, there is the policy which was tried, and perhaps properly tried, during the period of demobilisation at the end of the War, the policy of what I may call doles, frankly giving money without exacting any return in the nature of work. Everybody now believes that for a situation such as that with which we are now confronted, that is a demoralising, ineffectual, and in the long run a fatal procedure. Next, there is the policy, to use a comprehensive phrase, of what is called relief work. That is not open to the same objeptions as the other, though, of course, it has the incidental disadvantage of taking men of special aptitude to other forms of work for which they are not specially qualified. I am not complaining of this expedient being adopted, provided that the work selected will, in the long run, be productive and of a beneficial character to the community; but everyone must admit that it is nothing more than a temporary palliative.

Then there is another proposal, which I thought was favoured by my right hon. Friend the Member for Platting and hon. Members belonging to the Labour party, but I do not think I heard anything about it in the speech of my right hon. Friend, and that is the suggested policy of increasing the scale of the production of commodities by Government assistance, in other words, at the cost of the taxpayer. That, I am satisfied, will do more harm than good. There is no use whatever increasing, even doubling, your production of exportable commodities unless you get in return, or see the prospect of getting in return, something in the shape of service or of goods, and not pieces of depreciated paper, or promissory notes, which, after all, is the utmost you can expect from a good many European countries to-day. That is a policy which I am glad the Government have not adopted, and which, I hope, they will not adopt. Again, there is the policy which I understand from the statement of the Prime Minister he has accepted, and is prepared to elaborate by the necessary legislative provision, namely, the policy of developing the system of export credits. That is not open to the same objections, because it proceeds upon an assumption which I think to some extent can be verified and realised by experience, though up to now the results have been very disappointing. It proceeds upon the assumption that you will by your export credit scheme create an effective demand for our goods in the countries in which, in the long run, the benefit of the credits are to go. I confess that I am a little alarmed at the figures which the Prime Minister gave us. As I understand them—I speak subject to correction—the State will make itself responsible to the extent of 100 per cent. That is to say, to the extent of the whole value of the exported commodities.

With recourse.

The actual recourse which the State will certainly have is, I think, 42 per cent.

The State will be responsible for 42½ per cent, and the recourse for 57½ per cent.

I heard it the other way. That 57½ per cent, depends upon the responsibility and solvency of the exporter. In the essence of things it is a gamble. I do not say that it is not a legitimate gamble, but it is a gamble in regard to which we ought, first of all, to realise what is the extent to which we may possibly, if things go wrong, be let in. I am not going to say that it is not worth doing, but we ought clearly to realise exactly what it means. Let me say, parenthetically, that the real difficulty in this matter is not the actual state of the exchange at any particular moment, but the violent fluctuations. The Prime Minister gave us one or two illustrations. I could not take a more striking example than the case of the Polish mark, A year ago 800 Polish marks were the equivalent of the £1 sterling. A few weeks ago the £l sterling could buy 23,000 Polish marks. They may have gone even higher. I saw a few days ago that they were 16,000. As the Prime Minister pointed out, in the course of 24 hours there may be a variation of 2,000, 3,000, or 4,000 marks in the case of the Polish mark. In the case of the German mark the history of the last 10 days is one of the most disturbing in the whole annals of finance. That is the difficulty of the situation. When you are dealing with this problem and you seek to increase our export trade with the Continent of Europe, the root difficulty is that you cannot in business, while the state of the exchange is like that, make any forward arrangements in regard to which you may not expose yourselves to great loss and even ruin. These exchange rates are not basic facts, but they are symptoms. If you once get, as I hope you may get, at any rate to some extent, by the development of this system of export credits, a real genuine trade in commodities, a free flow backwards and forwards between the countries, the exchanges will tend to stabilise themselves automatically.

There are some other points which seem to me to go more to the root of the matter. There are two ways, broadly speaking, or two categories, in which you may grapple effectively with the problem of unemployment. The first category is here at home in our domestic relations. As the Prime Minister indicated towards the close of his speech, you must have such a reduction of public expenditure as will lead to a substantial diminution of the crushing taxation which is now weighing down the springs of industry, and is certainly, in my judgment, the most immediate, direct, and effective cause of limiting production, and to that extent the consequent slackness in the demand for labour. The Prime Minister—almost shaking his fist in our faces, in the Parliamentary sense—said in his most minatory tone: "You have either to take it or leave it. I shall test your sincerity in the pursuit of public economy by the reception which you give to this scheme." At any rate, whatever scheme on their own responsibility the Government announce to the House of Commons, I think that it is necessary that the House of Commons should draw a very great distinction between different forms of expenditure. There are some forms of expenditure the cutting down of which, because they are reproductive, remunerative, or essential to the wellbeing of the. Community, would not result in real economy. Take by way of illustration a case about which there has been a great deal of foolish talk on the platforms in the course of the recess—the pay of the civil servants. It is a small thing, but it waxes very large in the country on the platforms of Anti-Waste candidates.

I will reveal to the House my little part in this matter. I was asked by the present Leader of the House, then Chancellor of the Exchequer, soon after I returned here, if I would preside over a small Committee to consider a very limited branch of this topic, namely, the remuneration of the head officers of the Civil Service. I sat on that Committee with two of the most eminent business men of this country, Lord Colwyn and Sir Joseph Maclay, both having no connection of any sort or kind with the Civil Service, but both having a very large and long experience of business life itself. After a careful review of the whole circumstances, we came to the conclusion that these great officers, heads of the Departments of the State, were, in view of the altered conditions of life, grievously underpaid, and that there was a serious danger, though they were the most loyal men in the world, and had resisted every temptation to leave, that in future, at any rate, the State might not get the services of the best men, because eminent business men outside, knowing the quality and efficiency of these servants of the State, would offer them terms which no man with any regard to his own interests could possibly bring himself to refuse. I think that the total additional charge which we recommended was about £20,000 a year. There was not a single one of these elections at which this gross, profligate addition to the expenditure of the country has not been represented as a violation of the principles of economy, and incidentally involved me personally in serious disrepute for inconsistency between my own professions and pledges and my actions. I mention that only as one illustration, but anyone acquainted with expenditure might take others. It is not the mere cutting down of money in a particular service which represents economy. It is the character of the service in its relation to the needs of the country.

The root causes of unemployment are not domestic but international. Unemployment exists, as has been pointed out by the Prime Minister and by others, in quite as aggravated a form in almost all the other countries of the world. It exists in the United States of America, I believe, on a proportionately larger scale than it does in this country at this moment. It exists, as my right hon. Friend who has just sat down has said, even in our own Dominions. This raises the necessity for a reconsideration of the whole problem of international indebtedness; international indebtedness in both its aspects, namely, first the indebtedness of the Allies to one another, and next the indebtedness of our late enemies to the Allies. There are one or two salient, and, I think, very significant facts in this connection which are often forgotten. Before the War, up to the year 1913, we were the principal creditor nation of the world, and by a long interval. The United States of America were at that time the principal determination of the world. One of the results of the War is that we have ceased to be the principal creditor nation of the world. The United States of America is at this moment—my figures are taken as lately as June last—a creditor of European countries—and I exclude Russia: otherwise the figures would be much more serious—for £2,240,000,000. That is one of the results of the War, and if you work it out between the different European countries, France, Italy, and so on, you will find that there has been such a complete transformation of their relative position in regard to international indebtedness as to make this practically a new world.

Then take, which I think is relevant, the case of Germany. German export trade in the year 1913 was, roughly speaking, £500,000,000, of which no less than £320,000,000—a very large proportion—were manufactured goods, and to a large extent those German exported manufactured goods were articles similar to those which were produced and sold by us in competition with Germany in all the great oversea markets of the world. We know what the position of Germany is now. We know the enormous obligations which have been imposed upon her by treaty in regard to reparations and indemnities. I wish to record, so far as my own opinion is concerned, the great satisfaction with which I read of the agreement concluded very recently, what is called the Loucheur-Rathenau Agreement, between France and Germany for the delivery by Germany of machinery and material for French reconstruction to the value of something like £300,000,000 or £350,000,000 before October, 1925. That seems to me a very good example of the way in which the process of what is called "reparation" can be carried out in practice with a minimum of disturbance to the normal course of international trade.

Otherwise see what may happen. As we know, Germany cannot pay in these depreciated marks. She can only pay what she has got to pay in some form or other either by commodities or by services. You are going to have her, by the effect of these reparation arrangements, put in a preferential position, not only in our own markets here at home, but in all other markets of the world in which we compete with Germany, and while we shall be receiving with the one hand, through the other we shall be losing a large portion of what we have received. I am satisfied that these considerations are not at all alien to the present question. We must get the international financial situation, particularly in this aspect of relative indebtedness, to a sane foundation before we can ever grapple again, as we did before the War, with the great question of international competition.

Let me add, and this is the last thing which I have to say, that I think that too much attention is apt to be concentrated on the European situation. After all our foreign trade, our export trade is to a very large extent trade not with European countries at all. I was very glad to see some remarks made on that subject by "my right hon. Friend the Secretary of State for the Colonies Taking the year before the War, our total exports of British produce and manufactures amounted to £525,000,000. Of those all European countries together, including Russia, took only £150,000,000, and no less than £200,000,000 or thereabouts went to British possessions. It is all important that we should develop that tendency for many reasons.

6.0 P.M.

I am not speaking of what may be called sentimental reasons; I am on the lower plane of material advantage, and the diminution of unemployment. After all, the things which Germany sends us, and is obliged to send us, are things which we really do not want, or which we can make ourselves. But the British Dominions send us things which we cannot make ourselves, things which are essential to us in the shape of food, material, or half-finished products. They are sending us things which we do need, and there is no reason whatever why, by a wise development of our inter—Imperial resources, assisted on sound lines by what would be really remunerative expenditure by the Imperial Government, you should not establish a healthy trade and a progressive trade between the Dominions and ourselves, which would overtop altogether the European trade with this country. I need not say—it is always well to be cautious in these matters—that I am not suggesting any artificial ex-pedient. A natural and normal and well-conceived policy will do more than anything else to diminish the volume of unemployment in this country.

The House listened with great interest to the speech of the Prime Minister. To a great extent I approve of the proposals of the Government, but I would like the Prime Minister to go a little further in some directions. He referred to an additional £300,000 which was to be provided to assist emigration. He told us that £600,000 had already been expended and that the Government had been able to assist no fewer than 60,000 men to emigrate. If we can help some of our younger people at an expenditure of £10 per head it will be a very good investment indeed. I have noticed in the processions of unemployed that there is always a considerable sprinkling of young men evidently of a class who before the War had not had any opportunity of learning a trade and since the War, largely owing to the action of the trade unions, have been forced into the ranks of unskilled labour. That is a class with which I have the greatest possible sympathy. They look like energetic youngsters and I am certain that with a little Government assistance they might be a very great help to us in our Colonies.

One of the great causes of unemployment, as was foreseen long ago, is the excessive taxation imposed on the nation, the continuance of the Excess Profits Duty and of Income Tax at the heaviest rate, out of all proportion to the taxation imposed in any other country on industry. That was stated by speaker after speaker in this House when we fought the Excess Profits Duty in August of last year; but the Government disregarded our warnings, and that is one of the great causes of the present trouble It does not apply quite so much to the big firms as to the smaller manufacturers They are all in debt to the Government. There is hardly a day passes when they do not get some sort of demand from the tax collector for arrears of taxes It would be an enormous help to in- dustry and to the revival of industry if the Government could devise some scheme by which these arrears of taxes could be allowed to remain on loan to the different businesses for a definite period of time. No man can give himself to the development of his work when he is being harassed and pressed by creditors. Again and again quite recently I have had put to me cases of firms which are being threatened with proceedings, and I know perfectly well that similar pressure is not being brought to bear on the great firms. I hope the Government will consider this question and see whether something cannot be done to give relief in the direction I have indicated

Reference has been made to the Safeguarding of Industries Act. We were hopeful that that Act would to some extent remedy the unemployment which existed at this time last year. As we all know, owing to the whittling down of the Act, not only at the instance of the Labour party, but at the instance of the "Wee Frees," and the Coalition Liberals, it is likely to be of very little benefit to industry. I should have thought that the Government would have seen its way even at the eleventh hour to make some proposals for "hardening up" that Act. As the Act stands to-day, the more Germany depreciates her exchange the less duty she pays on goods which she sends to this country. An Amendment I proposed to the Bill would have made the rate of duty in some measure fluctuate with the exchange and depreciation of exchange would have been followed by increase of duty. If that had been done it would have got over a good deal of the present unemployment.

Another point of vital consequence, on which all speakers have dwelt, is the excessive cost of production in this country. I was amazed to hear the right hon. Member for Platting (Mr. Clynes), in complete opposition to the attitude taken by his supporters, advocate that the worker should give a good day's work for a good day's pay. The official policy of the trade unions has been the policy of "go slow" and ca'canny. They have done it very successfully, with the result that in the colliery industry to-day the output per man is something less than half the output before the War, that in the building industry the output per man is less than half the output before the War, and that there is hardly a works manager who will not tell you that, after making allowance for reduced hours of work in the great majority of our factories in the industrial centres, the workers to-day are doing less for their money than they have ever done before Unless we can overcome that the outlook is hopeless. We are in a world of free competition; we are up against every other nationality, particularly in the neutral markets. It stands to reason, therefore, that we have to produce at the lowest possible cost. A country like India, where they know that our working classes are not pulling their weight, will not place orders here until we come to our senses. Therefore I welcome the words of the right hon. Member for Platting in urging greater production.

Let me make a comparison between the cost of production in England and the cost of production in other countries. First take the comparison between England and France, and assume that instead of our people being paid in money they are paid in bread, and that payment is made in bread in France. What do you find? Take the case of the skilled mechanic with 2s. an hour. The quartern loaf is lid to 1s. here, and the skilled mechanic in this country works half an hour to earn that loaf. The skilled mechanic in France is paid 2 francs an hour. Four pounds of bread in France cost 2 francs. The skilled mechanic in France is, therefore, working one hour for four pounds of bread. Take the case of Germany. I know that German bread is black, and hideously bad. The German workmen work one-and-a-quarter hours for four pounds of bread. In Austria, where, of course, things are in a terrible condition and there is almost a state of starvation, the workman works two hours for four pounds of bread of bad quality. We do not want to go to that extreme, but we must bear in mind the comparative values of labour in different countries, particularly when goods go to a neutral market.

An hon. Member says, "What about output?" I think that if the output could be tested in the countries I have named we should find that it was exceedingly high there, and compared very favourably with the output in this country. When these things are realised in neutral markets would-be buyers will say, "No doubt the working man will sooner or later come to his senses, and we had better hold up our orders until he is prepared to give an honest day's work for a fair day's pay." That is the only point I wish to make on these proposals, and it goes to the root of the whole of our trouble. I would rather see a larger sum expended on assisted emigration than the carrying of this proposal for overseas trade credit. One cannot measure what the liability will be in lending money or guaranteeing payment by a bankrupt nation. I am afraid that when this scheme is examined in detail it will be found to be open to many grave objections; but, at any rate, taking the Government proposals as a whole, they are a useful contribution to a very difficult subject, and I hope the House will give them general support.

After the speeches to which we have just listened, more or less giving due credit to the Government for their intentions, I feel I am rather intruding, in proceeding on a different line entirely, because I feel that we have a distinct grievance. I suppose an Irishman has always that privilege; at all events, we always think our grievances have very good grounds. On this occasion, particularly, I feel there are very good grounds for the grievance which I am about to mention. Up to the present the workers in Ireland have participated in unemployment benefit. I have had frequent interviews myself with the representatives of the Ministry of Labour. I have gone on deputations of workmen, representing practically all classes of industry in Ireland, and more particularly in that part from which I come. On all occasions we have been received most courteously by the Minister of Labour or his representative. They have always shown themselves anxious to do anything they could to relieve the distress caused by unemployment. On the last occasion we approached him, the Minister of Labour deprecated the lack of funds. We saw before us cases of starvation. We saw that when the unemployment benefit period would come to an end, there were families who would be without any visible means of support, and we appealed to the right hon. Gentleman to do what he could. As I say, he gave us plenty of sympathy, and I quite agree with what he said at the time, namely, that the whole question was a matter of money. Within the past few weeks I have had a good deal of correspondence in connection with our local troubles regarding trade and unemployment, and I am astounded that, for the first time, I now hear that this new element of assisting the families of unemployed will not extend to Ireland. I should like some explanation of that. In answer to a query put by the hon. Member for the Falls Division of Belfast (Mr. Devlin) in the course of the Prime Minister's speech we have been informed the proposals will not so extend. The hon. Member asked the very pertinent question would these benefits refer to Ireland. I did not quite catch what the Prime Minister said, but I found out afterwards that his reply to my hon. Friend's query was that unemployment benefit as foreshadowed by him in his speech would not apply to Ireland. I think it is a perfect scandal. One of the reasons why these Measures are being brought before the House is in order that distress due to unemployment may be alleviated during the coming winter. Have we no winter in Ireland? Have we no unemployment there? Do not the working people of Ireland need this as much as those of England, Scotland, and Wales? I hope the Minister in charge of this particular Measure will give us some explanation when the time comes. The notice of the presentation of this Bill on the Order Paper for to-day reads as follows: applied to the rest of the United Kingdom. We noticed, as reported to the daily Press, that the Prime Minister received deputations from various people. There were conferences with experts—who they were we did not know—and with the representatives of various trades, presumably the trades of this particular section of the country, but never was an invitation given, so far as I am aware, to any commercial body, Chamber of Commerce or representative of trade and industry, to express and explain their views on the position of unemployment in my country. I myself brought together the representatives of one of the staple industries of our country. I told them that in all probability legislation would be brought before the House affecting them, and that I wanted their opinion on the possibility of measures being adopted by the Government to alleviate unemployment and produce better trade conditions. I wrote to the Minister of Labour asking if the Cabinet Committee which was dealing with the subject would receive a deputation representing our staple industries. I got the usual courteous reply that my request would be put before the Committee, but up to the present I have received no intimation that the Cabinet Committee is prepared to receive such a deputation.

The Committee will therefore agree with me that we have a distinct grievance in the matter. At no time were we given to understand that these schemes would not refer to Irish workers, and I hope the Committee will support me in insisting while this Bill is passing through that we get our fair share of what is going. We are entitled to it. I am astonished for more reasons than one at the attitude taken by the Government. Here is an industry without which the Great War could not have been won. The workers of Ireland put their backs and their muscles and sinews into the task, and this is the treatment they get. You say to them, "We used you to the utmost of our power whilst the War was going on, but now we can do without you, and we throw you to one side." That is not fair play on the part of the British Government, but that is, what is being done, and I am sorry I can put it in no other language. I think it was for the Prime Minister and those responsible for the introduction of these proposals to take us into their confidence, and see how this great industry might be assisted as well as other industries in the country. There were other proposals alluded to by the Prime Minister in his statement, and I would inquire, Do these also not refer to Ireland? There is the relief of distress, a work which will cost about £10,000,000 in land drainage and other ways. Then a sum of £25,000,000 is to be granted for various purposes, including waterways and railway development. There is no part of the United Kingdom which requires land drainage and waterways more than my part. For years and years we have been pressing both the Government here, and the Irish Government, to release between 30,000 and 40,000 acres of the finest land of the country in the neighbourhood of the River Bann. Time after time the Irish Office has been on the verge of starting these works, but a change of Government came on, and it was put on one side, and has remained so up to the present. If money is going to be spent on these purposes I am entitled to ask, Are we going to participate? We are still contributors, strange as it may seem, of Income Tax. We are still contributors of Excise. We are still contributors to all Imperial funds, and as this money is going to be spent from Imperial funds, I am entitled to ask, Are, we going to be ignored in its distribution? The Prime Minister also tells us that an order to develop industry there is to be a revision of the powers given to banks and assistance generally to traders to carry out work that may bring about an increase of employment. Is in this assistance to be given to Irish trade? We have had no information on that subject. The only information we have to guide us on this matter in the Prime Minister's speech is the definite negative given to my hon. Friend. We are entitled to know something more. This is one of the finest industries in the United Kingdom, and I think when the Committee comes to realise the position in which we are placed it will give us every assistance to alleviate the very distressing circumstances through which our trade is passing.

I agree with a great deal of what the Prime Minister has said with regard to the necessity of getting trade going again, and as far as possible getting the individual employed in his own trade. These relief works at best are only tem- porary expedients. What we want to get going is a man or a woman at his or her own particular trade, and what I have found out with regard to the linen industry of Ulster is that there are two things that they insist on. They do not put emphasis on unemployment benefits, but they do put emphasis on the question of raw material for that industry. I would like again to ask the Committee to remember that this is an industry particularly hit by the War. There is no other industry that was so much affected by the War as this. Our sources of raw material are greatly curtailed, and more particularly by the supply of flax from Russia. In the year 1916 we had 70,000 tons of flax from Russia; during the past year we had 70 tons. I know what difficulties there are in getting trade going again, but I think the Government might do a little more than they are doing with regard to finding out the possibilities, in case our trade develops to any considerable extent, of getting supplies of flax from Russia. All these things—the development of trade, the development of our particular industry—are mere palliatives for the time being. I am not at all buoyed up by what they will do, and I am not at all assured that the suggestion of a credit to the extent of 57½ per cent, to be guaranteed will be of the slightest benefit to trade generally. I am satisfied that the banks will take good care that it is only solvent concerns who undertake this business abroad. The solvent individual can get trade for himself, however, and he does not want the Government help.

I believe, what the Prime Minister has reiterated to-night several times, that the whole thing depends on this country being able to produce an article that is wanted and that is saleable. What is the use of producing an article that people do not want and that is too dear? That is what we are up against. The cost of production is the groundwork of trade, and I think the majority of the Committee are satisfied as to that. In regard to the sensible and moderate-toned speech of my right hon. Friend the Member for Miles Platting (Mr. Clynes), he seemed to see the difficulties of the subject, and he was not afraid to speak out his mind. The cost of production is at the root of all this difficulty. Our business is largely with America, and if we can produce an article at a price, America is ready to buy; but the condition again comes up, as far as our industry is concerned: Where is the raw material coming from? I would like to emphasise this point to the Government, to those who are responsible, to the Overseas Trade Department people who are on the spot, to find out for us what supply there is of raw material, so that we can look after the cost of production ourselves.

The next thing which determines largely whether the old conditions will obtain with regard to exporting to other countries is the whole question of exchanges. That is the second great difficulty that we have. An important exporter said to me the other day: "I have received an order from Austria, a very small order, amounting in our money to £100, and this customer sent along £3, which was all he could produce at the moment." What does that £3 represent now? At 7,000 odd kronen to the pound, it means 21,000 kronen that he sent with that order. It proves emphatically that that country is bankrupt. Is that man going to take that order? The guarantee of 57½ per cent, to that man is not the slightest bit of good, and the bank would not advise him to take the order. The banks know very well that so far as Austria is concerned she is bankrupt, and business cannot go on. As I say, the cost of production is at the root of the whole matter. Let us get an article that the people want at a right price, and trade will follow. We know very well that the world is not buying at this moment, and that is the trouble. The conditions of unemployment are the same all over the world, and I am satisfied that as soon as we can get down to pre-War conditions—I do not say for a moment that wages should be brought down to pre-War conditions—but I mean the pre-War conditions of ordinary supply and demand which regulate trade, then, and only then, will we get trade going. We must have patience, however, and with patience will come the revival of trade.

What about the fellow who is starving? What about his patience?

If the hon. Member had been inside the House and had heard the earlier portion of my speech, he would have heard what I said about that.

You cannot argue with him.

I would like to come back to that point again, because it is a, grievance which must be remedied while this Bill is passing through. It must be remedied so far as our workmen are concerned, and I appeal to all sections of the Committee to assist me in getting this unemployment benefit applied to Ireland.

First of all, I want to express my sincere satisfaction that the unemployment problem has at last been recognised for what it really is, namely, one of the most important questions, if not the most important question, that could engage the attention of this House. I am reminded by the nationality of the speaker who has just sat down (Sir W. Allen) of the relative degrees of importance that may be attached by a Belfast workman in regard to unemployment and the question of self-determination for Ulster, and if I know the workman of Belfast as I think I do, I think I could say that the Belfast workman would regard self-determination for Ulster as of small account compared with his getting arid keeping a job. The unemployment problem is at the very basis of the social and industrial well-being of this country, and, as the right hon. Member for Miles Platting (Mr. Clynes) has said, those classes who have the running of this country will be judged in proportion as they can find or organise employment for the great mass of the people. I am glad the question has now emerged into the daylight of Parliament and is being treated here with sympathetic and with practical consideration. I heard the speech of the Prime Minister from end to end. Of course, there were some rhetorical patches about it—we have never had a speech from the Prime Minister without something of that kind—but on the whole I should say it was a speech characterised by great moderation and a very fine spirit. It was a speech in which he carefully analysed the present position, laid down what had been done—and I agree with him that sufficient emphasis has not been made outside upon what has already been done—and told us what he was going to do. The speech of the right hon. Member for Miles Platting was also in very fine taste, and generally speaking we have proceeded so far with an absence of recrimination which I think is hopeful for the next week or two in dealing with this topic.

It is true that something has been said about the underlying causes of the trouble, and I heard interjections from the other side during the Prime Minister's speech, but after all we are not dealing with underlying causes. If we were, I should be alongside my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), because I believe with him that the fundamental cause of most of our troubles is the private appropriation of land values. I believe with him that industry, both employer and employed, is fined and taxed by landlords before it can proceed to increase the wealth of the community, and, therefore, if we were discussing fundamental causes, I should be with him in imposing heavier taxes upon land so as to make it easier for industry to get on, but, as he knows very well, his is only a voice crying in the wilderness, even in his own party, and his own colleagues would laugh at his ideas with regard to the fundamental causes of our trouble. They would tell him that the fundamental cause is capitalism, and the remedy nationalism, and now we have got a book, a wonderful book, which I am just reading, by Herr Rathnau, the Minister of Reconstruction in Germany, who says that nationalisation is of no economic significance whatever, and that the redemption of the world depends upon the release and free play of spiritual forces. I only mention these things to show that if we were to embark upon a discussion of fundamental causes of unemployment we might talk here till Christmas and not get much "forrader," and therefore, for my part, I am glad that the discussion so far has gone on the lines of practical, sympathetic consideration, first of relief, to alleviate distress, and then, in the second place, as to what can be done in the way of remedies. My hon. Friend the Member for Govan (Mr. N. Maclean) told us that he had foretold the coming of unemployment about this time and had urged the Prime Minister to realise the seriousness of the coming unemployment and to convene a meeting of the House at once.

What I said was that unemployment at the beginning of this year was so serious in Glasgow that I telegraphed to the Prime Minister on the 5th January, telling him that starving men could not wait till 15th February, the date of the opening of Parliament, for their case to be considered.

To that extent I stand corrected. I was only going to say that there, again, it is a waste of time to indulge in predictions. I have referred to one prophecy. On the other hand, we had a prophecy from the Leader of the House not long before. The prophets of the past have been at sea, and the prophets now are just the same. I read a speech of Sir George Paish the other day in which he said that we were going to be faced next year with twice the number of unemployed we have now. On the other hand, I noticed a speech of the Lord Provost of Glasgow only on Saturday last, I think, in which he expressed the opinion that we have now got over the worst of our trouble. I only mention this to show that prophets, after all, are of little account in matters of this kind. I do not believe they know anything more about coming unemployment and the state of the trade than they do about the weather next month. We have to descend to mother earth, and we have to consider what are the obvious causes, I will not say of unemployment on the whole, but rather what is the cause of the abnormal unemployment now facing us. It is pretty obvious, and does not require any gift of prophesy, or the reading of any big book, that the abnormal state of unemployment from which we are now suffering is, as the Prime Minister said to-day, the War from 1914 to 1918 abroad, and the war from 1918 onwards at home. Therefore, having made up our minds that that is the cause, we have got to consider how to remove it. Then we are face to face with the poverty of the countries that were our customers a few years ago.

I was rather surprised to hear my hon. Friend who has just sat down speak so gloomily of the effect of the proposed subsidies to enable the people engaged in foreign trade to encourage custom. It does seem to me that if £25,000,000 is placed at the disposal of a Committee of expert men—not politicians, but bankers, large industrialists, people who know what they are thinking and talking about—it must have some little effect in stimulating trade overseas, upon which we so largely depend. That proposal, which, I take it, is the main proposal outlined by the Prime Minister to-day, has my hearty support, although, at the same time, I do not think that it is calculated to remove causes, or to effect permanent cures of the evils from which we are suffering. Then there is the further sum of £10,000,000 that is to be applied for relief work, including drainage, afforestation and roads. That, also, is in the right direction. It will provide work for unskilled labour, in contradistinction to the first proposal, which will find labour for mechanics, and so on, who are not available, or are not suitable for unskilled work. The first proposal, therefore, will provide work for the mechanics, and the second proposal will provide work for the unskilled men. That also has my support, so far as it goes.

Then there is the third proposal—the supplementation of the insurance benefit. As I understand it, it is to be 2d. from the men, 2d. from the employers, and 3d. from the State, and, in regard to women, and young persons under 18, it is to be 1d. from them, 1d. from the employers, and 2d. from the State. I support that proposal, insofar as it does recognise the need for giving additional benefits. It is right that we should give these additional benefits. These people, as the Prime Minister has said, have now got pretty well to the end of their tether. Further, the trade unions have also been doling out money in the last few months, and some of them have got to the end of their tether. The Prime Minister, I think, was talking of my own union, which has spent, between the beginning of this year and the end of June, about £950,000, reducing their reserves-, in spite of the fact that all that time every member, including myself, has been paying an additional levy of 1s. 6d. a week in supplementation of benefits. I do not know how much that amounts to, but probably, putting that on top of the £950,000, I should say that one union alone, of which I am a member, has spent something like £1,500,000 in relief of unemployed for the first six months of this year. Therefore, I think labour has a right to say that, having done so much for itself, it is only right that the State should supplement that by the State doing a bit more.

I want to say a word or two on my own, or rather to voice the opinion of my trade union colleagues who sit on these Benches. We all agree, I think, that so far as we can, we are going to relieve the unemployed men and women by giving them some additional benefit. For my part, I would much rather that that supplementation of benefit came from taxation. It appears to me, from my observations, that there is a good deal of luxury and a good deal of wealth in the country which might still be taxed to make up that small amount, and, if it should be put forward, I should certainly vote for it. If no one else puts up such an Amendment, I would like to put up one myself. My right hon. Friend reminds me that that would involve taxation, and therefore we are in the unfortunate position of having to vote either for or against the Government. I do not know what I shall do, but I say it would be far better to raise the amount by ordinary taxation. Millions of bills, forms, and tickets are printed on behalf of the workpeople. They are getting a little sick of them. I suppose, if this scheme goes through, they will have to carry another card.

indicated dissent.

At all events, there will have to be a great deal of printing done, and a great collection of small amounts. I think it is undignified for a great country, and a rich country, to raise in this way what, after all, is necessary to keep these people in something like decent comfort. At the same time, I do not offer these observations in any way to absolve the man who is in work from the payment of the 2d. I believe he will willingly pay the 2d., and if the Government's proposal is passed in its present form, I hope he will dub up the 2d. without much grumbling. If I might offer a word on my own with regard to the remedies for the position in which we find ourselves, I should put them under three headings, and I put them in the order of easiness of application. First of all, I should say that more than anything else perhaps depends, as has been said already, on the reduced cost of production. Therefore, my three remedies are these. I should put, first of all, a more hearty co-operation between employers and workmen; second, an easement of the burden of taxation upon industry; and, third, a greater degree of mutual aid amongst Governments in the international sphere. I say that the first one is not only the easiest of application, but, I veritably believe, is the best to be applied. Just let us consider the importance of it in regard to the schemes that have been mentioned. For instance, there is the £26,000,000. That amount was allocated for the encouragement of foreign trade some two or three years ago. I believe about £2,000,000 of that has been spent so far. [An HON. MEMBER: "£3,000,000."] About £2,000,000, I think, out of the £26,000,000 has been agreed upon. Let us compare that with a figure given the other day in the "Glasgow Herald" by Lord Weir, who was putting the need for lessening the cost of production. He said that the increased wage cost at the present time, speaking in the national sense, was at the rate of £180,000,000 a year; that is to say, the increased wages for national production compared with 1914 was now £180,000,000.

7.0 P.M.

I want to say a word—I am going to say it much plainer than my right hon. Friend the Member for Miles Platting put it this afternoon—I am going to make an appeal to my old friends on the other side of the House, and to all who may hear or read what I now say. I am going to make an appeal that the workers should make good the predictions that were made on their behalf many years ago when we were agitating for the eight hours' day. What did we always say? I said it scores of times. It was that the man who had to go, as I myself have had to go, to work at 6 o'clock in the morning, before the streets were aired, in the winter time in cold shops, could not render efficient service, and that he was being placed in a worse position than the man who had his breakfast before going to work. We always predicted that if the man in the workshop had the same sort of life as the man in the office, had breakfast before going to work, and started in a well-aired shop, he would produce more in eight hours than previously he did in nine. We have said it scores of times. What has happened? I do not know how it has happened, but what has happened? I had a letter, six or eight months ago, from a gentleman who is well known to every hon. Member here, and well known in the industrial world, and who runs a good many factories. He told me that the average output from his factories at that time, compared with pre-War days, was 65 or 70 per cent. Lord Weir, in his letter to the "Glasgow Herald" a short time ago, referred to the production in his works, engineering works generally. He was careful to be very moderate. He did not say that it was less per hour than before the War, but he thought it was. He did commit himself to the statement that it was no more per hour than when the men were working nine or ten hours a day. I say to my hon. Friends opposite, and to my Labour friends outside the House, with whom my sympathies still are and always will be, that it is time that we were making our predictions good. If we believed that as much was to be produced in 8 hours as had been produced in 9 and 10, then it is our duty to go to our fellow workmen and say: "You are not fulfilling those predictions which we made on your behalf, and in your own interests and in the interests of the trade of the country, it is, we think, right that you should do so." I speak with intimate knowledge of the engineering workshops, in which I spent 21 years of my life, when I say that if the men and the employers were to put their hearts as well as their hands into their work, at least twice as much could be turned out without hurting anybody and with advantage even to the health of the average man concerned. There is nothing more irritating or demoralising than that a man should spend his time sitting waiting for the bell to ring. He has no interest in his work, I should like the man to have an interest in his work. If he and the employer were to get together, and to co-operate more heartily together, I think they would cut a big hole into that £180,000,000 of which Lord Weir speaks, and would do much more in a day than we or any Government or association of Governments could do in a year.

My second point was taxation. All that I have said in regard to the burden of the increased wages cost applies to the cost of increased taxation. Might I say, seeing the Prime Minister in front of me, how I wish him the best of good luck when he goes to Washington? It seems to me that the first item that ought to be taken up in regard to taxation is with regard to the cost of those immense armaments which still weigh on industry. We imposed our will upon Germany, and we brought them down to an army of 100,000, or something like that. At all events, that was the Versailles Treaty. Whether the Treaty has been carried out or not in its entirety, we have, by imposing our will upon Germany, given an immense benefit to the German workmen. Instead of paying, as they did before the War, immense sums of money for an immense navy which is now at the bottom of the sea, and for a great army which frightened the world, they are relieved of both. I do not know the extent of that relief, but at all events it is a great relief. Is it not an anomaly that we, the victors, should be at a disadvantage as compared with the vanquished? Surely it is a mad world if that is going to continue. I hope that that point will be driven home by the Prime Minister when he gets to Washington, and that we shall bring about, by our own good will and common sense, that which we have imposed upon the Germans in the Treaty of Versailles.

In spite of what has been said by the late Prime Minister, I believe that we might do with a fewer civil servants. It so happens that I know a little about the Civil Service, having been inside for two or three years. I am saying nothing against the civil servant. I believe he is a good, honest chap, but I think he has a fairly comfortable place, as a rule. Despite what was said by the late Prime Minister to-day, his pay, as compared with that of the man outside, who has to take all the chances of industrial life, is at least as good. He is protected until he is 65 years of age, and he then gets a pension for the remainder of his life. I should like to see the bonuses that have been put on to his wages taken off as rapidly as possible and a few of the civil servants dispensed with as soon as possible. That is another means by which we may ease the burdens that at present rest on industry.

My third point is the need for more mutual association amongst Governments. There is a good deal of mutual association amongst Governments at present, and sometimes I think not for the right purpose. I have seen a circular containing statements, which I hope are not true, they should not be true, saying that the British Government is about to finance Greece in her expedition.

No.

I am very glad to find it is not so. That is not the sort of association of Governments, nor is it the purpose for which Governments should be associated at the present time. We want Governments to realise the interdependence of the world at the present moment, and that, after all, although we fought Germany and beat her, we have still got to live in the world with Germany and with Germans. It is to our interest, therefore, as well as to theirs, that we should use our resources and the common resources of all the Governments to put those customers of ours on their feet as rapidly as possible. We should realise that it is to our interest to put them in a position to buy from us and, in the second place, so to improve relations and increase the degree of co-operation in the industrial world generally that the cost of production may be brought within the ability of our would be customers to buy.

There are some facts upon which we are all perfectly agreed, as has been made plain from this discussion. We are all agreed as to the deplorable extent of the need. We are all agreed that palliatives in themselves may be necessary, but are undesirable and wasteful. We are all agreed that if we can get at the, causes and remove them, so much the better. My own conviction is that half of the unemployment which at the present time exists could be done away with if two of the causes, one of which at any rate is in our power and one partly in our power, could be removed. On one of the causes I do not wish to dwell, except just to mention it and I will pass it by with one instance. That is the cost of production, about which the Prime Minister first made a statement. Afterwards we listened to a statement upon it from the right hon Member for Miles Platting (Mr. Clynes), with which everyone was in agreement, and to a speech from the right hon. Gentleman who has just sat down. There is only one thing which, without being controversial, I may suggest to these two right hon. Gentlemen, and that is that the apostolic field that is open is a wide one, and will take all their energies. Without being controversial, may I give my own experience? I wanted a little painting work done in the country—I live four miles from a town. The painters were not allowed by their trade union regulations to come out on bicycles; they had to walk out in the time that was paid for, but they were graciously allowed to push their bicycles in front of them in order to ride back, when the work was done, in their own time. [HON. MEMBERS: "Oh, oh!"] That was my own personal experience. No doubt the causes for such mistakes are perfectly natural. We all know the fallacies to which the right hon. Member for Males Platting alluded. They are perfectly natural, but the sooner they are really understood to be fallacies, the better.

Perhaps I may be allowed, before I pass from the subject, to give one more serious instance which illustrates how this tells on the whole of our position at the present time. I had an opportunity this year of going, first of all, through some American works not far from New York, and, secondly, through some works in this country—I cannot give the name, because I was allowed to do so confidentially—the object of which was the extraction of one of the raw materials which is absolutely necessary in this country. The works in this country had been shut down. I saw the costs; I was given an analysis of them; I was offered, if I wished, to send an accountant to go through the whole of the accounts. The reason the works had been shut down was that the costs had risen 430 per cent, as compared with pre-War costs. A certain amount of that was due to coal, but the largest cause of the rise was the inefficiency of the labour in the works. I know these works, I know those in America, I know the only ones which compete in Germany. The level of efficiency of all of them is quite first-class. They are all on the same grade. There is no question of inefficiency, but the result is in the first place, that the workmen in those works which I went over are out of employment at this moment. The second result is that we have to import that same raw material which otherwise would have been extracted in this country, and that importation tends to depreciate the British exchange, and consequently our work, raw materials and food cost us more. I have only given that just as an instance. We are all agreed as to the need for lessening these costs, and I do not wish to dwell on the subject further. I hope, however, that hon. Members opposite will not mistake our motives from this side of the Committee if we say to them that just as their influence with trade union organisations and with workmen is great, so their responsibility is great in proportion also. I hope hon. Members will not think that I have spoken with any ill-intent at all, if I say that we are often mistrusted, and if any hon. Members, or at any rate speakers outside the House, have propagated that mistrust, it is quite legitimate for us to say that the responsibility lies the greater on hon. Gentlemen opposite while it still lies on all of us.

The other cause is inherent in the present international situation. It was touched upon by the right hon. Member for Paisley, and I think it is better for the country that we should face a disagreeable fact quite squarely, and as soon as we can. In my own conviction the present reparation payments under the Peace Treaty are an element both in the instability of the world and also in the unemployment in this country which calls for action to be taken at an early date. There are certain ways in which an indemnity could be paid without affecting employment, but at most they could have amounted only to a proportion of the total sum, with the possible exception of the plan (which is ruled out) of German workmen themselves taking work in the devastated districts. Otherwise there can be no other effect at all of an indemnity except to force the undercurrent of our own trade either in the home or foreign market. That is the only logical and possible result. There can be no1 other. The indemnity, although measured in currency, as everyone knows, is paid in goods. The conclusions reached by the ordinary logic are borne out, without any question whatsoever, by the experience of the last six months. Those of us who have been trying to ferret into the question to find out the truth find our own conclusions corroborated by, I think, nearly every one of the experts with whom one has had the chance of conversing, and by all the reports one can get, whether they are from Germany or other foreign countries. I pass quite rapidly over an instance or two.

Take the case of electrical machinery. One firm permitted me to see the type of tenders they were getting for electrical machines, for export. The British tender which I saw (for only a small portion, it is true, of the whole)—the British tender was some £4,300—that is the lowest British tender; the American tender, allowing for the rate of exchange, was about the same; the German tenders were between £1,600 and £1,700. There is only one possible result: the German tender was accepted. The same is true with regard to locomotive parts. I gather the same lesson from what has recently been told me by men who have been absent in Germany on business, merchants, that is, trading with the Far East, in the countries where we are dependent for a great deal of our foreign trade, and in South America. In all these cases, whether it is hardware, machinery, whether it is electrical work, or textiles, it bears out the inevitable conclusions of ordinary reason. That is the case at the moment. While it is extraordinarily unpleasant for us to face the facts, it would seem desirable to face them quickly.

So much for the present. What of the near future? Here, again, it is extraordinary what unanimity of opinion there is to be gathered from different sources, from men engaged in finance in Great Britain, and from men engaged in finance in foreign countries. To prophesy is dangerous, as the right hon. Member for Gorbals (Mr. Barnes) has said, but it is equally dangerous to shut one's eyes to what is almost the inevitable trend of events in the near future. The trend of events, so far as it can be foreseen, points to a debacle in Germany in the very near future if affairs are allowed to go on as at the moment. It has been thought by some that the depreciated exchange in Germany was a matter of considered policy in order to be able to undercut Germany's rivals in foreign trade. While it might be possible to conceive this of a depreciated exchange at a steady level, it is perfectly impossible that any people engaged in business would ever want a steeply fluctuating exchange like the German exchange. That hypothesis then can be ruled quite out. The real truth is this, and so far I think all those who are intimate with what has been going on, will corroborate—the last instalment of Germany's loan of a milliard, I think, of gold marks, was made largely by means of borrowing in foreign countries. There were borrowings in Sweden, Holland, Spain—this I know of—and borrowings in other foreign countries as well. It is perfectly true that the German Govern- ment had a certain amount by way of "nest-eggs" tucked away in other countries which they could realise if need be. They had some in the City of London. They had funds in foreign countries. Explanations have been put forward as to the reasons why they did not draw on this source much—because they did not draw on it to any great extent.—for the recent payment of the indemnity. One explanation—and it is not incompatible with the other—was that they had tried to do so, but those who had to give them a dollar exchange for these nest-eggs of theirs tried to squeeze them too hard and they found—that is, the German Government found—that, on the whole, they could borrow to better advantage. The other explanation was that such as they had abroad they wanted to keep for the last emergency. On the whole, the two explanations are not incompatible, but the real point is this: Though there might be minor differences—although not incompatibilities—of opinion there was a general consensus as to the difficulty, and the disorganisation produced by the payment of the last instalment of the loan. That being so, of course the moment the mark went down, all the people who had been gambling in the mark fled from it and threw it on the market, and that is the real cause of the great depreciation.

That the outlook for the future is such as I have described is corroborated by yet another fact. When I was in New York this spring I tried to inquire how the Germans had paid for their purchases in copper, and I found that up to that time they had largely paid for their copper purchases in foreign countries by cash payments. In contrast to that, their purchases of late of wheat, which is, after all, a much more vital necessity, have been made by long-dated bills—not 60 or 90 days, but 120 days—which they had to negotiate in order to get the wheat they needed. All that really points to one conclusion, which I think everybody who knows this matter must agree with, and that is that it is possible, if they are forced, that they may be able to meet their next payment, but that it is almost inconceivable that they will not default with the one after. I put it really to the serious attention of the Government and the Committee: what would be the result of that default? It is quite true it might eliminate Germany from the intense competition with us which is going on at the present moment, but there is no one, I think, who will deny that the débâcle in Germany would cause such a large further upset in the world at large that the disadvantage to everybody and over all the world would be infinitely greater than the ill-effects of the competition which is one of the causes of our unemployment to-day.

The necessity of admitting that we were possibly wrong at the time of the Versailles Treaty is, as I say, an extraordinarily unpleasant thing. What is more, I think we may have to keep in mind this possibility, if we do make a change, of looking back some years hence and saying something like this: "Just think of it; here was a country responsible for the War, here was a country which, so far as one can judge, is still unrepentant for the evils of the War, yet, at the same time, those who won the War let them off, went to their help and they have recovered along with the rest of the world." I think it is quite possible that that judgment may be passed in the future in connection with any action we may take at this moment in facing the facts of the situation. Nevertheless, I think the cause of wisdom is to consider taking that action now. If anyone were to say to me, "Would you abolish the indemnity altogether?" I would reply that anyone who has a sense of responsibility must realise that, when there is great indebtedness between the Allies, it may be impossible to remit indebtedness on the part of an ex-enemy except without retaining amounts that will cover the Allied indebtedness, with a margin over. But at any rate, it is, I think, a matter for the most urgent consideration whether the question of the German reparations should not be taken in hand from the point of view of reducing them to a compass that may be possible, and which may prevent the débâcle , and also with the possibility of postponing the next payments while taking security to prevent the evasion of the ultimate payments on the reduced scale. I hope I have not troubled the Committee too long, but the only reason I have really introduced this subject is that I think it is a most important factor in the problem of unemployment at this moment. If it is not taken in hand seriously and quickly, it may mean that the effect of inaction may outweigh the good effect of any palliative this House may in this brief adjourned Session pass. I say it is a most unpleasant thing to admit that we were wrong, but the wise course is at any rate to ascertain the facts and, if we were wrong, to take the earliest steps to put them right.

The latter part of the speech to which we have just listened, to permit Germany to get off with the larger part of her indemnity in order to re-establish the economic conditions of this country and the world, is welcome to this side of the House, for we have protested—that is, some of us—against the attitude taken by not merely Members of this House, but by the editors of papers, and by the people themselves outside, largely influenced by the statements of politicians and the Press. There is one point to which I wish to draw the attention of the Committee, and that is in regard to the speech of the Prime Minister this afternoon referring to unemployment, and with his endeavour to alleviate some of the distress which we have in the large centres. Speaking last night here I said that I did not believe there would be anything heroic in the measures proposed by the Government. From the statement of the Prime Minister this afternoon I think everyone will admit there is nothing of a heroic character. All that is being done, and all that is likely to be done, is going to be done at the expense of the workers who are fortunate enough to be in employment. We are placing the direct burden of maintaining the unemployed upon those who at present are employed, and the State, or the Government, is attempting to placate, labour and placate capital by offering something like £25,000,000 to finance export. One of the parts of the Government scheme, that of placing ex-service men in the colonies, is to my mind one of the most callous and one of the most inhuman—[HON. MEMBERS: "No, no."]—of the attempts that are being made at the present time. [HON. MEMBERS: "Why?"] In Canada you have unemployed processions. You have Provincial Governments financing the unemployed to take them from the towns, and to send them to the prairie provinces in order to have two months' work in the fields. When this two months work is finished the unemployed people will either drift back to the towns in the prairie provinces or go back to the towns from which they came; and there increase the number of unemployed who appear upon the Federal Government's register. It is inhuman to suggest that you are going to remove the responsibility of unemployment in this country by sending these unemployed men to another country where the unemployed are already receiving assistance from their own Governments. It is inhuman and callous to suggest that you should send the unemployed from this country with assisted passages out to Australia where, as the Prime Minister himself has admitted, they are being compelled to pass greater restrictions on immigrants, and also paying the passages of emigrants back to the countries which they left.

The Prime Minister suggests that it is well to know that the ex-service men who are sent out of the country are still within the Empire. Why? This country cannot find employment for the men who have saved it, but you want to keep them within the Empire, so that if the Empire requires them again, or this country, you will know where they are, and call upon them to save you once again.

They would be glad of the chance.

And yet you cannot find them a place in their own country. You offer to pay their passages abroad, and then you ask them to come back to assist you in your own misfortunes. May I point out that the Prime Minister was not always preaching emigration? There were days when hon. Members opposite supported him in his statement that emigration ought not to be carried out until you had developed your own country. The Prime Minister at that time went through a period of denunciation on account of the speeches he made on this subject. At that time he was the Lenin of Land Reform, and he was denounced by many of those who now support him. Here is one of his statements upon emigration in which he conjures up a vision of the future:

of thousands of men out of work going their weary round searching for employment and finding in their homes little or nothing to feed those dependent upon them, surely it is mocking those people to come before this House with the suggestions which the Government are putting forward now.

There is distress in the country and the working people are being asked to make sacrifices. From speaker after speaker we have heard appeals for a reduced cost of production, but in the main those appeals have been in the direction of lower wages for the workers. We have listened to a speech from the hon. Member for Chippenham (Mr. G. Terrell) in which he told us how the German worker toiled and the remuneration he received for it. We fought a war against Germany for four and a half years. We spent hundreds of millions and we lost hundreds of thousands of lives. We went through four and a half years of blood and misery and horror, and now those who fought to prevent German conditions being imposed upon them by the German Kaiser are being invited to allow those conditions to be imposed upon them by their British employers. The right hon. Gentleman the Member for Gorbals (Mr. Barnes) found fault with us for not advocating that the men should now work as hard arid turn out as much or more wealth in eight hours than they used to do in nine hours, and nine and three-quarter hours per day. Are we not constantly being told that we are suffering from over-production? We are now producing too many things and yet you invite us to produce more in the same time to add to the glut.

I never said we were suffering from over-production. What we are suffering from is under-production.

I thought the right hon. Gentleman stated that we were suffering from over-production. I know we are constantly being told that those who used to purchase our goods cannot do so now. I believe the Prime Minister has said that.

That is not overproduction.

If the hon. Member for Govan (Mr. N. Maclean) addressed the Chair he would avoid these interruptions.

We had another speech from the Prime Minister in which he said:

The Prime Minister talks about having risen from this class. He claims to be one of the people, and says he is acquainted with their conditions, and he says he would remove those conditions if power were given to him. He said in the past that he would do those things which were necessary to make this country a better country, and yet we find that the very land the private ownership of which he and the right hon. Gentleman the Member for Gorbals agree is one of the fundamental causes of unemployment is held as a greater monopoly to-day, and more acres are out of cultivation to-day, and this at a time when the Cabinet Ministers who adorn the Treasury Bench come forward with these paltry proposals. Whilst Cabinet Ministers were sitting in the Town Hall at Inverness considering the Irish problem, on the other side of the street crofters were being imprisoned who had fought with the British Army, and they were being imprisoned because they dared to assert their right to the land for which they and their forefathers had fought and bled.

You now come before the country with this paltry scheme at a time when 2,000,000 men, women, boys and girls are hungry and unemployed in the country. These people are dropping with exhaustion, and you-dare to come before the House with such a scheme as this to mock their starvation. You can get the money in this country if you wish. You say that everything else has gone down in price and wages must come down also. Why do you not bring down the interest of your bondholders? You may say you have given them a pledge and you must honour it, but why do you refuse to honour the obligations you entered into with the men who fought in the War, and with those who remained behind and helped to produce things which enabled you to win the War? If you can break pledges on one side you can break them on the other. If you only reduce the interest on these bonds to 4 per cent, you would produce enough to solve this difficulty. You would save one hundred millions which could be used to assist the unemployed. I have come from my own constituency where one per cent, of the people cannot be said to be living under middle-class conditions of comfort. I have seen in the streets of Glasgow children barefooted and in rags picking up crusts from the roadway. It is because I know the conditions in which these people are living, because I understand the lives they are leading, and because I know that this measure will not even touch the fringe of the question that I demand from this Government better and more direct proposals, something which if not calculated to solve the problem of unemployment at any rate will give more satisfactory relief to those who are suffering from its effect.

I do not propose to follow the hon. Gentleman in his excursions into the flights of oratory of the Prime Minister, although I may say I think that both he and the Prime Minister in the old days suffered under the same fallacy with regard to the land. What is the hon. Member's alternative? What is the single-practical suggestion he made to provide employment? It is that the unemployed artisan, the unemployed mechanic, the unemployed skilled workman should go out into the High- lands of Scotland to cultivate deer forests at considerable loss. That was the foundation of the Bedford speech of the Prime Minister from which the hon. Member quoted, and it shows, as does also the speech of the hon. Member himself, an ignorance of agricultural conditions in his own country at which I am surprised. Surely we know that the land of this country, even with the enormous increase of capital and the amount of capital put into it for improvements, cannot support anything like the present population of these islands. The real solution for our industrial problem is to find employment as soon as possible, not for an agricultural population trained and working on the land, but for the skill of our industrial population. Just as we have on the land men brought up and trained to work it from youth upwards so we have in this country engineers and miners brought up from early youth to apply themselves to a particular trade, and the problem of unemployment is the problem of maintaining in these islands their skill in the particular industries which have in the past been brought up to a great level of efficiency. That, however, cannot be done by a short cut.

I am perfectly certain that the only practical suggestions which we have been making on this occasion are those in connection with the restoration of our overseas trade. That is the vital thing. The only other practical suggestion for getting at the root of the difficulty arises in connection with the question of taxation. Hon. Gentlemen say there is plenty of money in the country. They speak of it as if there were an inexhaustible store of it, but I say that the present taxation and the way in which that taxation falls upon productive industry are one of the main reasons why we are in the difficulties in which we find ourselves to-day. A firm when it has paid its wages and overhead charges has not merely to look at the question of profit, it is rather a question of screwing out every penny possible in order to pay Income Tax, and to keep pace with the present rate of taxation. The hon. Gentleman suggests that we should reduce the interest on our bond issues. What would be the effect of that? Many of these loans were raised when the Income Tax stood from 1s. to 2s. in the pound. Now it is 6s. in the pound and 10s. for Super-tax, and that in itself reduces the amount of interest received on the bond.

Some hon. Members talk as if employers are making no sacrifice. Is it not a fact that there are many employers up and down the country to-day who are putting every penny they have into their businesses and are living as cheaply as they can in order to keep those businesses going? The hon. Member knows perfectly well that up and down the country businesses are being run at an actual loss at the present moment in order that they may be kept going. The hon. Member for the Gorbals Division (Mr. Barnes) is quite right when he states that if we are to get at the bottom of unemployment in this country there must be a new understanding between employers and employed. There will have to be a change in attitude, a change from that shown by the hon. Member who last spoke. I am not an employer or an employee. I have never taken any part in industry, but I say that one of the quickest ways to arrive at that understanding will be that the employee should know exactly the financial position of the business in which he is engaged. Even today there are coal miners who think that the mineowners are making a great profit and that there is a large amount of money still in the industry which can be used for hired labour. I do not believe that is so, but I am quite sure you will never convince the workman, who has constantly had dinned into his ears the statement by his leaders that there is this inexhaustible store of wealth—you will never make him realise the true position in regard to the mines until, through his representatives, he has access to the books of the company and knows exactly what the profits are. This is absolutely necessary in order to restore confidence, and I hope that every possible step will be taken by enlightened employers to take their workmen into their confidence, to show them exactly what is the cost of production, what profits are being made, and what are the hindrances to getting orders. The merchants will tell them that at present prices and the present rates of wages there can be no hope of securing orders from abroad. We cannot sell our goods at the prices which have now to be charged. It is not a question of over-production; it is a question of not being able to get anybody to buy at the prices we are charging. That is the problem. You cannot over-produce necessary or useful articles. The more we get, the more we can produce the greater is the prosperity of the whole world. You cannot have over-production. We in this Island are dependent on our export trade, but we must be in a position to sell our products at a price which will attract buyers. You may get overproduction of a kind—over-production at high prices, but in that case you will sooner or later have to cut your losses.

Let me now turn from these fundamental considerations which have been uppermost, and rightly so, in the Debate this afternoon to the question of palliatives. The Government will have to go a great deal deeper than they have done into the question of public assistance. It is a very remarkable thing that since the Report of the Poor Law Commission of 1909 practically nothing has been done towards the reform of the Poor Law system of this country. During the War and during the period immediately succeeding it we almost forgot that we had a Poor Law. Now we are up against the Poor Law once again—the Poor Law with its old divisions and its old boundaries, its old rating boundaries without limitation. I have always felt that the time has come to deal with this question, and I regret very much we did not deal with it during this Session. I hope that next Session we shall do so. The right hon. Gentleman the Minister for Health has, as it were, by one stroke of his administrative pen, spread the rating in London over the whole of the Metropolitan area. That is to the advantage of London, but he has done nothing for the country as a whole. The Prime Minister explained his proposals in this regard in a rather hurried manner, and it seemed to me they were somewhat superficial. In certain necessitous areas recourse is to be had to the Poor Law and the State is to come to the assistance of the boards of guardians by way of loan. I think the boards of guardians will want to know exactly how they are situated, what is to be the nature of these loans and when they will have to be repaid.

8.0 P.M.

Further than that, when you are coming to the assistance of necessitous boards of guardians, when you are going to assist them in the administration of out-relief caused by unemployment, are you going to impose conditions on those boards of guardians, are you going to lay down new scales of relief, are you going to take any steps to co-ordinate the work of your various relieving authorities, and in connection with the scheme for providing for dependants, are you going to ensure that the scale to be paid by boards of guardians out of the money lent by the State takes into account the amount received from the new Insurance Fund? We must always remember that the Unemployed Insurance Fund does not cover all workers. It covers most, but there are a considerable number outside insurance altogether. This proposal with regard to dependants, and the further levy, will, I presume, leave out altogether the uninsured worker who will have nothing but the board of guardians to go to. The whole question of the supervision and administration of outdoor relief needs examination from the very bottom. That examination is long overdue, and I only hope that the mere fact that the boards of guardians have again been forced into the necessity of becoming relieving authorities on a considerable scale will bring the Government up against one of the major problems that they will have to face in the very near future, namely, the whole position of rating and the incidence of rates, the present distribution of local governing powers, the overlapping between various local authorities, and the amazing inequalities of wealth and population between different areas in this country. I earnestly hope that the further exploration of the palliatives for dealing with the unemployment problem will lead them to tackle the general question of public assistance.

I should also like to ask one or two questions about the grant of credits to the extent of £25,000,000. The Government are going to grant, apart from the export credits, special credits by way of capital, to the extent of £25,000,000, to firms in this country. Of course, that is a small sum when one considers the need of a great many of the firms in the country to-day. I venture to say that there is hardly an engineering firm in the country that is not already indebted to its bank and has not already a very large overdraft, and when once you begin with a grant of this kind you will have, to put it rather brutally, a very ugly scramble. The Prime Minister said that the £25,000,000 would be spread out among the firms of the country by a committee of high and eminent financial and commercial authorities. I mistrust high and eminent financial and commercial authorities. If money is to be spent in this way, if the State is to make this advance as a temporary palliative for dealing with unemployment, do not let us hand everything over to a committee of business men. I am sure that that is a bad principle. I am sure it is right that this House should keep rigid control, and that the responsibility of the Government for the disbursement of money in that way should be kept in hand. I say that that £25,000,000 should be at the disposal of the President of the Board of Trade and of nobody else—not a committee of business men. How are we to know on what basis the committee of high financial authorities have parcelled the thing up between one part of the country and another?

The whole system of Government which is being introduced, of trying to get away from Parliament and away from the Ministers responsible to Parliament, and putting matters on to these expert committees of business and commercial men, is to my mind absolutely wrong and a retrograde step. Admittedly, I speak as one who has had no connection with business, but I have seen enough of business men in Government offices since the War to realise that a business man when he is dealing with his own money, and a business man when he is dealing with the money of the Government, that is to say, the State, are two very different beings. When the business man is dealing with his own money, or his shareholders' money for which he has to account at a shareholders' meeting after his accounts have been audited, and when he has the State and the taxpayer behind him, he is very different. Of course there are exceptions, but I profoundly regret the proposal to have yet another Committee of these extra-Parliamentary experts. In the old days Parliament was good enough; the representatives of the constituencies were good enough. Nowadays Parliament is always set aside, and it is always the successful business man who has to be brought in to put the affairs of the country straight. I profoundly regret that part of the proposal. The £25,000,000 for export credits seems to be nothing but good, but £25,000,000 b be parcelled out by a business committee among firms in this country who are short of capital does seem to me to open the way to all sorts of economic and constitutional difficulties, and to set all kinds of precedents, and I, personally, regret that the Government has adopted that plan. As the Prime Minister said, we have to face the problem of unemployment now—not as it was faced after the Napoleonic wars, but in a humane spirit. We have to realise that it is a great national problem, and that it is the result of the War and the economic disturbance throughout the world. It is not the fault of any system. You have unemployment all over the world. It is the fact that the War, and all that has followed the War, has thrown the commerce and the relations between one country and another out of joint. In going through this difficult time, we have to keep our heads and do what we can to mitigate suffering, and to do all we can to see that the springs of commerce and the wheels of trade are set going again normally and steadily. We cannot do that by sudden Government interference. It is not the fault of any one Government. If the Labour party had been in power after the War it would have been just the same. [HON. MEMBERS: "No!"] If, after four years of war, the Labour party had been on the Government Bench, they would have had just the same problem to face. [HON. MEMBERS: "No!"]

You would have repudiated your liabilities.

If liabilities had been repudiated it would have been very much more serious, because you would never have got the normal development and expansion of trade resumed. After all, what builds up trade? What enables us to have engineering concerns in this country? It is personal initiative. It is not the Government; it is the personal initiative of the man who puts his whole mind and body into building up a concern. That is the basis of all trade and commerce, and no Government ever has been or ever will be able to do it. It is because personal initiative—the personal confidence and the ability of the individual to build up a business—is now, under the world conditions and high taxation, restricted, that we have got into the present condition of unemployment. These are external causes. We have to provide palliatives, but do not let us rush in by State interference and great State credits in the form of capital, and ruin the very possibility of the resumption of that initiative. If doles are demoralising to unemployed workers, so is the idea that an employer has only to hang on and show that he is in a bad state and the State will come to his assistance with a loan of capital. That is a dole to capital just as much as the other is a dole to unemployed workers. Doles of every kind are vicious, and should be restricted as much as possible.

I think that the Committee is greatly indebted to the hon. Member for Erdington (Sir A. Steel-Maitland) for the very excellent speech which he delivered. He touched the crux of the whole question when he stated that the present situation, anyhow, so far as unemployment is concerned, arises from the Peace Treaty through the indemnity and the reparation. There is also another question, namely, the question of currency. In the first place, I want to deal with the question of the metal trades, because that was the first question that the Prime Minister touched upon in his opening remarks. He stated that the metal trades had suffered more than any other trade in the country. I do not know whether that is correct or not. I do not think that the hon. Member for Preston (Mr. T. Shaw) will agree with that, because I believe the cotton trade has suffered quite as much as the metal trade. But the right hon. Gentleman's figures are absolutely incorrect when he states that the unemployment in the metal trades only amounts to 17 per cent. I have some knowledge of the metal trades, and I can assure the Prime Minister that at the present time we have only about 50 per cent, of those in the metal trades of the country working. A few months back about 75 per cent, of the men in the metal trades were idle, and the trade union funds in those trades, as a result of paying unemployment benefit, have been practically exhausted. The men in the steel trade, where you have, say, six furnaces working in normal times, are to-day working two furnaces. These men work one week and are idle another two weeks. The men who are working are paying something like 3s. 6d. a week contribution, including a levy to assist those who are unemployed. Now the Government comes forward to impose upon these overburdened workers another tax of 2d. per week. I consider that that is imposing a tax on poverty already in existence. In the tinplate trade and the steel trade in South Wales, as I read in the Press today, some of the works have been idle for 12 months, and the men have not done a stroke of work for that time. The tinplate trade and the galvanised trade are exporting trades. Arising out of that, you have the collieries that have been thrown idle in South Wales for over 12 months as a result of the steel works and the tinplate works not consuming coal, and all these men have exhausted their little savings, they have exhausted their trade union funds, they have exhausted their national insurance, and if they do get a week's work the Government are going to impose a further penalty upon them.

I suggest to the Government that as this is a national question, and as it is the policy of the Government that has brought the country to the state it is in to-day, the Government ought to take the responsibility of relieving the distress in the different districts. In South Wales we had a deputation from the Glamorgan and Monmouthshire County Councillors to meet the Members for those counties yesterday and to-day. When I talk about Glamorganshire and Monmouthshire I talk about over half the population of Wales. If you take the industries in those two counties—the coal, steel and tinplate industries—out of Wales, you can practically say Wales is bankrupt. The report that we received was that the local authorities were practically bankrupt. We had one report from the Blaenau district, where we have 20,000 people idle, 12,000 people are being supported by the board of guardians and the rates are 35s. in the £—that is one case. In Glamorganshire alone you have 60,000 men unemployed. In Monmouthshire you have 20,000 people unemployed and they have schemes in hand where they will be able to expend £250,000. But if you take 30,000 men who are unemployed at the rate of £2 per week, which the local authorities will be permitted to pay according to the instructions of the Board of Trade, the £250,000 will be exhausted within five weeks. What are we going to do? This is the whole of the work they have. In five weeks the money will all be exhausted, therefore this proposal of the Government is simply a palliative in order to deal with this very important question. That is the position as far as the local authorities are concerned.

Now I will deal with the wider question. I have paid a visit to some foreign countries during the recess. I had a very good holiday and I learned a good many things. I discovered that the first thing the Government has to do is to cut down expenditure, and they must do it as the result of the Peace Treaty. When you get into Constantinople you find British, Italian and French gunboats all along the harbour. In the Bosphorus also you find gunboats of the Allies. You go through the Black Sea to Constanza and you find them there. You go across country to Bucharest and go down the Danube and you find them there. All these are commitments under the Peace Treaty and they mean expenditure, and expenditure means taxation. If you pay money in taxation you have not the money to purchase the goods which are produced in these countries. There you have first of all expenditure so far as our country is concerned. Then what do you find coming down the Balkans? As the result of the Peace Treaty and the change of frontiers you will find the Serbs, the Rumanians, the Bulgarians, the Jugo-Slavs and the Italians at each other's throats on every frontier. They have to keep up huge armies and they also have to tax their people and they have not any money to spend. They cannot produce and therefore they cannot exchange commodities with this country. So that what the hon. Baronet the Member for Erdington (Sir A. Steel-Maitland) pointed out is quite correct. I analysed these cases on the spot and that was the opinion of the various politicians as well as the politicians of this country.

You have another suggestion to consider and that is what arises out of this expenditure that affects our country and these other countries. The question of the exchange is bound to crop up. The question of the currency is bound to crop up, and if you go to Greece, to Turkey, to Rumania and these other Balkan States you find the currency there is so unstabilised that you do not know from one day to another what your £ sterling is going to cost. Let me show the effect of the currency so far as the steel trade and the tinplate trade in South Wales are concerned. I was at a place called Volo in Greece, where there was an engineering shop, and the manager knew this country quite well. He had been doing business with the Lincoln people in purchasing agricultural implements. He was making knives and making nails out of wire imported from various countries. He wanted to purchase a ton of steel. He gave me this illustration. He had £18 worth of Greek notes in his cash-box. Belgium would come forward and offer a ton of steel for £6 of English sterling. That means with the exchange that he would have to pay £12 in Greek money for that ton of steel. The English manufacturers would come forward and offer the same ton of steel for the same amount of money, but as a result of the exchange he had to pay the English manufacturers £18 for what he would get from Belgium for £12. So he preferred buying Belgian steel to English, although the cry I found in every country was for British goods. They would prefer British goods, and, in fact, one Greek manufacturer said to me, "We would rather trade with English people because they are business people who can be trusted. The English business man's word is his bond. The truthfulness and the honesty of the British trader have immortalised the British people in the eyes of the nations of the world." That is a compliment to British business men, and if they prefer to deal with us as business people, it is our duty to try to do something to get our goods into these countries.

Another thing I discovered was this. You who have travelled on the Continent know that they have a level-crossing system where they carry on their passenger business in exactly the same way as they carry on their goods. They are on practically the same lines, and therefore we are able to get to the tracks and find out where the goods were coming from, and all the way from Bucharest right down to Italy, if ever I saw a truck of rails, or a truck of girders, or steel rods, or wire, it was all coming from Germany. I cannot say how far it is true, but I was informed—and I think you will be able to find it out in visiting these places yourselves—that the German Government is poor, but the financiers and bankers of Germany are rich. I am only saying what I have been told. The agents of these people have been to the different countries, and are giving credits for 18 months and two years. They pay the bankers in these foreign countries to collect the money, and while they are collecting the money the German national bank, the Deutsch Bank, is advancing money to manufacturers in order that they may carry on their business for six months, 12 months and 18 months. Our people in this country cannot do that.

Whether the Government is doing the right thing in making the grant of £25,000,000 I am not going to express an opinion, but I am simply stating the position as I found it. So far as Turkey and Greece are concerned, they have been at war since 1910, and they are practically exhausted. In Asia Minor there is no business or trade being done. I am very pleased to hear that the Government are not assisting the Greeks, but I had one experience which is rather interesting. On the boat by which I travelled there was a parcel which was supposed to consist of chairs for the Ministry of War in Greece, but I saw that package opened, and I found that I had been sleeping in my bunk on a 20-ton gun. I do not know who has been paying for these things, or who is sending them. The Allies have tried their best to carry out the Peace Treaty, but we find France supporting Turkey, and the sentiments of this country supporting Greece. I said to one gentleman whom I met in Constantinople: "What do you think of the position?" and his reply was: "Commerce knows no sentiment."

I discovered that in Greece, in Roumania, and in all these countries—if I may use the term without offence—the idle rich and the idle unemployed were living in as much luxury as they did in pre-War days. I found that everywhere. That proves that there is money somewhere. Although the Governments may be poor, you find the idle rich and the idle unemployed in as much luxury, with their furs, their jewellery, their theatres, and their casinos, as you found in 1914. In this country, instead of imposing extra taxation upon the poverty of the workers, the Government ought to tap some other sources. We have rich people in this country who can well afford to have taxes imposed upon them, and that ought to be done instead of imposing extra burdens on the working men. I appeal to the Government that when their Bills are brought forward for discussion, and Amendments are moved, that they will take into consideration the facts which I have mentioned, so far as the working classes are concerned.

The Prime Minister based his proposals upon the admitted fact that this is a national problem and must be dealt with on national lines. He referred to the experience of history, and to what happened after the Napoleonic Wars, and said that we must learn by experience of the mistakes that were then made. He also referred to the fact that then the State acted in the matter of relief through the local authorities, and the boards of guardians, and he pointed to that as a thing that we should avoid to-day. I would ask whether he really is departing far from the line which was followed then, and which he criticised so adversely. When you come to the questions which affect local authorities who are to-day dealing with the question of unemployment, we find, if I understood him aright, that the only thing that the Government are proposing to-day is in certain necessitous areas to make grants by way of loans to the local authorities so that they may capitalise their charges. I question whether that is going to help them to any great extent. The Prime Minister did not tell us the conditions and terms on which the loans will be granted. If it is merely a question of granting a loan and leaving the interest and sinking fund to be paid by the local authorities, the assistance is really not worth having. Even if it is making a grant towards the interest and the sinking fund, I submit that it is not going far enough in dealing with this question on national lines.

The hon. Member who has just sat down gave illustrations in regard to the steel trade in South Wales. The condition of the iron and steel trade is the same in the North of England. There you have a very large burden of unemployment. The Prime Minister quoted figures in regard to unemployment in the metal trades, and the hon. Member who has just sat down criticised them. The 17 per cent, that the Prime Minister referred to is surely quite inaccurate. In my own district, which is only a sample of other districts in the heavy iron and steel trade, the figures supplied to me officially from the Labour Exchange on Monday show that 40 per cent, of our insured members were out of work, and 20 per cent. of them had exhausted their unemployment benefit. You have there 40 per cent. The figure of unemployment during the beginning of the coal stoppage was 80 per cent. in that district. That must have exhausted all their resources, and it has meant a very heavy burden on the local authority, which has also exhausted its resources. To come down after a burden like that, and to tell us that the local authorities must continue to bear the burden, is putting a strain upon then which Ft is absolutely impossible for them to stand.

In my own district the rates to-day are 20s. in the £1, and I am informed by the overseers that if the commitments to which the guardians are pledged during the ensuing six months have to be raised out of local rates, without any Government assistance, the rates will be 30s. in the £1. That is a burden which it is quite impossible for a district or a trade or a tradesman to stand. I appeal to the President of the Board of Trade, who is conversant with this side of the question from the trade and industry point of view, to see that the Government realises its responsibilities from the national point of view, and that it should not seek to place on the local authority a burden which is quite beyond its possibility of bearing. Last year the position was bad enough. Then you had heavy rates in the districts where the people's backs were least able to bear them. A Command Paper was issued by the Ministry of Health at the beginning of this Session showing the difference in the burden of rates in different towns. I took out a few figures showing the contrast between industrial and residential areas. I turned to Birmingham, and I found the rates for last year were 17s. 6d., compared with 9s. in Bournemouth. In East Ham the rates were 21s., compared with Eastbourne's 9s. 9d., Oldham, 16s. 8d., compared with Oxford. 8s. 7½d., and Stoke-on-Trent, 22s. 3½d. compared with Southport's 11s. 3d Therefore, in the big industrial areas, where the workers live and the rateable value is small, you have the biggest burden, and in the residential areas you have only half the burden. That is aggravated tenfold by the abnormal period of unemployment with which we are faced, which is admitted by the Prime Minister and by every speaker to be entirely a national or even an international question.

It is unfair to place a burden on the backs of localities which it is absolutely impossible for them to bear. Therefore, in considering this matter and the details of the Bills, the Government should consider whether they could not make greater grants to the local authorities, otherwise you will drag down and cripple those industrial districts which you hope will make your wealth and prosperity in the future. We have been told by the hon. Member for Stafford (Mr. Ormsby-Gore) that the London question has been temporarily solved by the agreement of various authorities to have a common fund and draw from it. That may settle the Poplar question, but it does not solve the question in South Wales, the North of England, Sheffield, or elsewhere. Therefore we have the right to-ask the Government to reconsider the question of the local authorities and make a bigger contribution than that which they foreshadow. There has been a great deal of criticism of relief works. There are certain forms of such works which are not open to the objection to which others are open. It depends entirely on the locality. If you have, as you have in my locality, which is comparable only to others of a similar kind, a large number of men engaged in blast furnaces and steel works, they could be engaged in heavy work which would not be hurtful to them or interfere with their powers of labour while the blast furnaces are idle, and they could be turned on to constructional work, such as making roads, improving transport and other systems of public work which will help to keep them fit as well as providing them with employment instead of having them draw unemployment benefit.

Therefore I submit that the Government might instead of spending this paltry £10,000,000 on public work increase that sum considerably in order to provide useful work which will absorb labour and help to keep men fit for their ordinary work when the wheels of industry are-restarted in a normal way. You could start them on road making and repairing. During the War the local authorities had to forego repair work. Our big highways and national roads became deteriorated and there is a large amount of useful work of that character which would require a great deal more than the £10,000,000 fore- shadowed by the Government, but which must not be charged on the local authorities because the rates are already overburdened, and if this work is taken in hand now the State should find the money to finance it. The Prime Minister referred to the question of housing and said that housing labour was employed to the utmost of its capacity. I think that in this, as in some of his figures with regard to employment in the metal trades, he was not quite accurate, because the Minister of Labour informed me on 15th July, in answer to a question, that there were then 23,923 men usually engaged in the building trade who were drawing unemployment benefit.

That was before the Government had cut down so drastically their housing scheme. Since that time there are various employers engaged in the building trade who have thousands of men unemployed because the Government have cut down their housing programme. The first thing which the Government ought to do is to employ every bricklayer and every other man who can be employed in building houses, and so solve two questions at the same time. We had a vision three years ago of getting the 500,000 houses that were then required, but 166,000 have not vet been completed, and the Government choose this time to cut down a scheme which is most essential for the national well-being. All the men who can possibly be engaged on that scheme should be employed on it at once, and therefore the Government should increase considerably the grant of £10,000,000. With regard to the £25,000,000, I share the doubts expressed by the hon. Member for Stafford as to how far that is a wise policy. If it is a question of public utility services there is a great deal to be said for it; but we have not had any details, and I would like to know whether it is going to be a question of subsidising industry.

If it is going to be a question, as the hon. Gentleman suggested, of putting on their feet somewhat rocky concerns, the policy is open to considerable question. Where public money is spent it should be controlled by public representatives, and not handed over to any non-representative body, no matter how eminent those business men may be. In so far as it is a subsidy to industry—and I am not clear, from what the Prime Minister said, how far it is—I question whether it is on sound, wise lines. We have had too much of subsidies in the past on all sides, and we want to get back to sound economic trading, and it may retard, rather than promote, the object in view. I would rather see the £25,000,000 given for public works such as I have indicated and for public utility services, such as the extension of light railways and the development of our transport system, than to have it given haphazard to those private firms who may be in want of financial assistance, especially as the sum of £25,000,000 is inadequate to deal with those works of public utility that are essential.

Then as to the question of land. There are ex-Service men and many others who, if only they had facilities given to get back to the land, could open up for themselves a future which would render them independent of any State assistance. I submit there are many ways which the Government have not yet fully explored of dealing with this question as a matter of palliative, but when it is a question of a permanent matter of unemployment we want to be warned by the experience of the past. We have had such cycles of trade in the past. As soon as we got over a period of unemployment we have, as a nation, gone to sleep and left things to drift along in the old haphazard way. I hope that we shall learn at any rate from this misfortune to set our house in order in time and build up, whether on the lines of the Poor Law Commission of 1909 or on some other lines, a sound policy, so that we can deal with this question of unemployment if it recurs in future. To-night is not the time to go into that question, but I would like to submit, as the hon. Member for Stafford said, that if you are to get increased output masters and men must show more confidence one in the other.

The right hon. Member for Miles Platting (Mr. Clynes) agreed that increased production is the great thing required to-day. We are suffering possibly from the sub-division of industry which has followed great mechanical invention and the development of commercial activity, because owing to that sub-division of labour the worker to-day is in the position of a mere cog in the wheels of industry. Some of us who were not born to manual labour but had the good fortune to serve in the ranks of the Army have learned a lesson from that. One realised that in the Army one became merely a cog in a machine which went on grinding its way regardless of the personality of the unit. One felt that one had lost one's individuality and personality for all time, and one became depressed in consequence. But, after all, this loss of individuality and this crushing down by the military machine were but for a time. The worker, particularly the younger man in industry, must feel that he is in the place of a cog in the industrial machine, and that he has not that outlook and opportunity which his fuller nature requires. It is not entirely a question of wages or of hours of labour, but the desire for a fuller and larger life, so that a man can feel that he is playing some part in an industry. If you are to have confidence between employer and worker, the employer must allow the worker some share in the management and control of industry. Until the worker has access to all facts and all figures and all costs, he will not realise the significance of what he is told sometimes by his employer.

The workers must be taken into a real partnership. Then good will could be fostered as it cannot be fostered now. It is true, as has been said, that in the past the fear of over-production has been ever present in the mind of the worker. He felt that if he made too much to-day there would be less for him to do tomorrow. If you can establish, not merely the miserable 15s. a week available now, but embrace all industry and every worker, and assure to the worker that whether employment be good or bad there is maintenance for him, then, the carking fear of unemployment being put out of his mind, he will put his; back into his work and we shall get that cheaper production and bigger demand whereby the whole of industry will benefit. Give the worker a larger share in industry in the fuller sense; then out of this evil some good may yet come. It is unfair for the State to shelve its responsibility and to place the burden of palliatives on the backs of localities which in industrial areas are already strained to an extent which they cannot bear. The Government should shoulder the responsibility themselves, even if that upsets the Budget of next year.

Before I address myself to the speech of the Prime Minister, I would like to express a word of sympathy with what fell from the hon and gallant Member for North Armagh (Lieut.-Colonel Sir W. Allen), who said that the Government was doing nothing for the unemployed of Ireland. The unemployed workers of Belfast are a somewhat quarrelsome lot, as we all know, and their condition cannot be met by allowing them to remain in idleness. To my mind the hon. and gallant Member had an unanswerable case. The Government has set up a Government in Ulster. At the same time it has not given that Government either the means or the power of dealing with its unemployed. Taking into consideration the fact that unemployment in Ireland is to a very large extent due to the international action of the present Government, I must say that I feel very strongly that something should be done by the Imperial Government for the unemployed of Ireland.

I wish to say nothing unfair or hypercritical as to the policy of the Government regarding the unemployed. I hope I may, without offence, congratulate the London Mayors on the result of their journey to Scotland. They have at all events got the Government a long way on the road towards a recognition of that for which the workers of this country have for many years been asking. We are told that the only way to compete with our foreign rivals is to have a better feeling between masters and workmen, and that the workmen should put their backs into their work. I have never been able to see how in fairness we can ask the worker to do that if, when he had done so, we told him that he had produced too much and that all we could do for him was to give him 15s. a week. I am glad we have gone beyond that. I think the London Mayors are to be congratulated on having got from the Government what we in this House have never been able to get. I listened with great interest to the remarkable speech of the Prime Minister. I could not help feeling that all the time he was in some degree talking round his subject. There is, of course, a great deal of truth in what he said—that if prosperity is to return to this country there must be co-operation between the worker and the capitalist, and that both must combine to reduce the cost of production. Those are eminent truths, but they are not the whole truth. The whole truth is that there can be no return to prosperity in this country, or any other country, so long as the Government adheres to its policy towards Germany. There is a growing feeling here and in America that the collapse of our export trade and of the export trade of America is very largely connected with the collapse of the German exchange, and that the collapse of the German exchange is due to the political action of this and other allied Governments

As long as we adhere to that policy, so long will German exchanges perform acrobatic tricks, so long will it be impossible to do trade with Germany or any other Continental nation, so long will our unemployed be here in thousands, and so long will our rates and taxes rise. Viscount Grey recently complained that our Prime Minister was an opportunist. I suppose there is a certain amount of truth in that. It is true that the Prime Minister always has his ear to the ground, and is always quick to set his sail to the prevailing breeze. But I do not complain that the Prime Minister is an opportunist. A great deal of our effort on this side is to make the Prime Minister an opportunist and to get him to do what we want him to do—the right thing. For instance in Ireland, to abandon the policy which was plainly disgraceful to this country and to attune his policy to the traditions of this country. The point is not whether the Prime Minister is an opportunist, but whether his policy is right or wrong. My humble conviction is that ever since the Armistice his policy has been fatal to the restoration of our export trade. Can it be claimed, for instance, that the maintenance of the blockade for many months after the Armistice was conducive to the restoration of that state of things in Germany which is so necessary to our export trade? Can it be claimed that our policy in Russia and in Poland, our unwillingness to prevent war between Russia and Poland, our inability to prevent war between Turkey and Greece—can it be claimed that this policy, or lack of policy, has been helpful to our export trade? Can we claim that this policy of heaping vast reparations upon the German people is in any way helpful to our export trade?

9.0 P.M.

The whole policy of the Government has merely served to prove true what Mr. Keynes said as to the economic consequences of the War to the Allies to-day. It has also proved true what Mr. Norman Angell said that the fruits of victory are nothing more or less than Dead Sea fruit. It would have been much more to the point, if our representatives had taken with them to Paris not Sir Henry Wilson, Earl Beatty or Marshall Foch, but Mr. Keynes and Mr. Norman Angell. It is really rather unfair to blame the Government. After all the Government are neither much better nor much worse than the people whom they represent, and I am afraid we must confess that the Government, when they went to Versailles to conclude the Versailles Treaty, and load reparation upon Germany, only carried out the prevailing sentiment of the time. It is time we took stock of our position and considered whether our ideas have been right, and whether it is not time to de-militarise our opinions and make them more in accordance with our traditions. Is it not time we ask ourselves what benefit will it be to us, if Germany goes bankrupt? What benefit will it be to us if thousands of the men and women in Russia are reduced to starvation? What benefit will it be to us supposing we get several millions from Germany, if we have to spend many more in dealing with unemployment caused by our policy towards Germany? What benefit will it be to receive large indemnities, if the mere payment of those indemnities drives us out of our international markets and puts thousands of unemployed on our hands? What good is it to ask our working men to accept a reduction of wages if that reduction of wages is necessitated by our policy towards the German working man? Can we ask our working men to accept a reduction in their standard of life, simply in order to compete with the new standard of life among the German working men, which, in turn, is the result of our policy. I put in a most serious plea, that we should put on the scrap-heap all our war thoughts and war ideas, all our war bitternesses and prejudices and animosity and sectional interests, and give free play to that most necessary international action which is based on the fundamental truth that our daily bread, our prosperity, the welfare of this country depends upon recognising the essential unity and the essential inter-dependence of all the nations of the world. We have to ask ourselves is it not time that the nations recognised this essential fundamental fact? These ideas may be soppy and sentimental ideas for some people, but they are gaining ground very rapidly in commercial and business circles of this country and in other circles as well. My humble opinion is, the best way of restoring our trade is to be true to the principles for which our soldiers fought in the War. We asked them to persevere in the fight, in order that once German militarism was taken out of the way, the whole affairs of the world might be conducted on principles of amity, goodwill, mutual helpfulness and mutual fair play. We shall never get prosperity in this country unless we have the honesty and good faith to be true to our pledges and promises to the men who served us so well, and base our policy upon the principles for which they died so gloriously in the field.

I represent a constituency which has suffered very heavily in connection with the iron and steel trades. It is a constituency almost solely employed in the heavy iron and steel and engineering trades which were alluded to by the Prime Minister to-day. It is a constituency which did not spare any money in order to meet the urgency and the difficulty which was created by the War. One firm alone which had a capital of £800,000 increased it to £7,000,000, and nearly the whole of that was put down in order to help the nation at the moment it was in its greatest difficulties. I am not going to suggest for one moment that the patriotism of the constituency which I have the honour to represent is greater than the patriotism of any other constituency. I should not like to suggest that, and I would not have the hearing of the Committee if I did. Unfortunately to-day that constituency is suffering, perhaps more than any other constituency, because of the work and the capital which it expended in order to provide the munitions which the nation required. It has been exceptionally hard hit, and the heavy iron and steel industries and the engineering industry formed one of the greatest national assets which this country possessed during the War, and it is also a national asset during times of peace. As we spent every penny we possibly could to meet a national emergency so I ask at the present moment that this constituency should not have to bear the whole of the burden of unemployment. That should be counted more or less as a national burden. We do not want help in the shape of doles or relief. No honest British working man likes either. What he wants is work and what he wants more than anything else is work which is not in the shape of relief work but is of public utility. I sent to the Minister of Labour a suggestion which he did me the honour of bringing before the Cabinet Committee dealing with the question of unemployment. Everybody in this House who is in business, and who thinks seriously, knows the seriousness of the problem. No Prime Minister ever had to deal with a more difficult problem than had the present Prime Minister when he got up to speak to-day. He had the sympathies of everybody, and it should be our care not to hinder him, but to help him in the solving of this great difficulty. It is so easy to destroy, but it is very difficult to construct.

I have made a suggestion with regard to the heavy iron and steel trades in my Division. I want to make it perfectly clear that I am not speaking with the authority of the employers, although I think I am speaking with a very full knowledge, and that they know what I am going to say. Taking-into consideration that in the borough I represent, Rotherham, the poor rate to-day is 12s. 6d., and certainly will be a very great deal more, and that the total rates are about 22s. or 23s. in the £, the suggestion which I made to the Minister of Labour, and asked him to bring before the Cabinet Committee, was whether, instead of the local rates having to bear the burden of maintaining some 7,000 men we have out of work to-day, it would not be a sounder policy to approach these employers, as I believe they are perfectly willing to be approached, with a view to the wage lists of these firms being helped by a sum which, I think I am correct in saying, would be less than would be chargeable on the rates or taxes of this country.

Would you do it all round?

I would do it all round?

All competitors?

I do not mind. I do not know how far it is workable all round, but what I do say is that, take it all round, if employers of labour will accept—and I am given to understand they are willing to do it, at no profit to themselves, and with no reduction of wages to the men—either the dole or the amount which the rates will have to bear or anything like the proportion which We are going to charge the country, and will undertake to keep their workmen employed, we shall be using that money on productive work, and not on unproductive work. Therefore, I do not mind how far he carries my argument or idea What I do say with regard to my own Division is that we have some of the largest steel industries in the country. If we can use the money which would otherwise have to be paid in rates or taxes—it is immaterial which, for it has got to be a charge on industry at the finish—if we can use that money—and I am told we can use even less—we can keep our rates down to a moderate sum. If the rates go up to anything like 30s. or 32s. in the £ it will handicap industry to such an extent that it can never recover and compete with anybody else, whereas, if we can use that money for productive work, we are doing a great thing for the nation and for the manhood of the nation, not only with regard to work with which I am dealing at the present moment. There are 7,000 men there to-day unemployed. If we could keep them employed, it would mean a tremendous number of other people being kept employed. It is a circle. I am not only pleading for my own Division, but for the best way to solve one of the greatest difficulties this nation has ever had to face, and it would keep our people from being pauperised. I say that if there is anything in the scheme I suggested to the Minister of Labour, and if we can keep our works going, and employ the 7,000 men now out of work in the heavy steel trade in my division, it will keep many thousands of colliers producing the coal required, many thousands of men producing the pig-iron they require, and many thousands of men dealing with the finished material which the works will turn out. We shall keep our railways going, and also keep down the rates and taxes. The greatest thing at the back of my mind is that, whatever the cost, this nation has to see that its people are well fed and kept contented. I am only putting my scheme forward as a mere thought. I hope if there is anything at all in it, and that if the money can be better spent in the way I suggest, it will be taken into consideration, because the more you burden the country with taxation, a great deal heavier will you make the difficulties of the workman as well as the capitalist to carry on his business in the future.

The difficulty of the scheme which has been put forward by the hon. and gallant Gentleman who has just sat down is practically the same difficulty that occurs to one in listening to the schemes put forward by the Prime Minister. In this instance a very strong case can be made out. Here are 3,000 men who will be thrown out of work next week, and put upon the rates. If the Government will give a very small subvention to that industry, help them with orders, and guarantee that they do not lose, then those 3,000 people can be kept at work. But we have to remember that every competing employer who has got work will then rightly come forward and ask to be treated in the same way, not only in the iron and steel industries, but in other industries as well. It is the thin end of protection still—the desire to help one trade that particularly needs it, and, in the long run, causes more unemployment in the whole country owing to the additional charge on the community. Let me refer to the Prime Minister's speech, because, practically speaking, the same reply can be made to most of the suggestions he put forward to deal with the difficulty. If all these schemes he has now propounded are going to be good for trade and relieve unemployment, why were they not thought of by our grandfathers? Why were they not thought of fifty years ago, or ten years ago? Why has it been left till now to devise wonderful schemes for improving British trade and increasing employment?

For a long time it was Tariff Reform that was going to increase employment. That has fallen out of favour, and now we have an export credit scheme to help traders to export goods abroad. Just as strong a case as for Protection can be made out for this export bounty scheme. They say: "Cannot you see the additional people who will be employed in the cotton industry of this country if we can facilitate the purchase of cotton goods by Chile and the Argentine? Chile and the Argentine, if we only give them a little help, will buy our goods from Lancashire and keep employment there." But we know that, as the community has to pay the bounties in the long run, there is more unemployment by reason of the bounty paid to the special interest. Really, we shall never get away from the fallacies connected with unemployment until we realise that a pound spent on keeping anybody employed in doing no useful productive work does not relieve unemployment, but creates just as much unemployment as it relieves. Most of these schemes are based upon the idea that the public purse, or credit is bottomless, and that we have only to shovel money out of the public purse. It is so easy for the Government to do good, and at the same time the Government itself is thereby creating the unemployment. In the old days of the Pharaohs, before the time of our grandfathers, when there was unemployment, the Pharaohs put the people on to building pyramids. They were pretty useless things. We now put them on to making roads which are not wanted.

Our whole object in dealing with unemployment ought to be to see that the work to which the unemployed are put is useful work for which they are best fitted, and anything else is a waste of labour and, thereby, an additional burden on the rest of the community. If you want to increase only useful work, if you do not want to make work for people, you have got to get to the root of the problem, and consider what useful work is. Useful work, if you come to analyse it, consists in nothing more or less than the conversion of land and raw materials into finished articles. All useful work begins by the application of labour to land. If the primary trades have a chance—the mining trade, the building trade, and the agricultural trade—of getting at their raw materials cheaply, then they call for the services of all the rest of the community to complete the processes of production. If you really want to deal with unemployment, which you do not, all you have to do is to throw open nature to the primary trades so that they can start work. On one side of a brick wall is a man able and willing to work, and on the other side is the raw material with which alone he can start work.

Following out the hon. and gallant Member's ideas, some little time ago I offered to Mr. Outhwaite, whom he knows, his share of the land of this country, on the condition that he would live on it, and he refused.

Is that supposed to be a logical reply to my argument?

The advocation of the principle In corpore vili.

Mr. Outhwaite is a friend of mine, so I do not see why he should be abused, but I can point out that whether the gentleman in question wished to have access to the land or not is not the point. The question is that there are people in this country who want work, and that they should be enabled to work the raw material without which they cannot start work. The real difficulty is that the hon. Member for Mossley (Mr. A. Hopkinson) does not want to solve the unemployment problem. It is the last thing he would like to do. [An HON. MEMBER: "Withdraw!"] I do not mean he is hard-hearted. He would like to make unemployment a little bit more tolerable. No one likes to have people out of work. It is beastly to see them going physically and morally down the hill, and naturally everybody wants to prevent that, but to solve the unemployment problem, not to have the unemployed knocking at your factory gates, anxious for a job, that would end the capitalist system altogether. Without the unemployed what could you do? You could not make the other chaps work, if there was not an unemployed margin anxious and pressing for work. I have heard a Member of this House say, in the last Parliament—I do not think we are so frank to-day, but this was during the War, and he was in the engineering trade—that the engineering industry could not be carried on without a 5 per cent, margin of unemployment. Of course, it could not under your present system. Unemployment is essential, and therefore we, on this side of the House, are bound to look at this question from rather a different angle. We do not want to have unemployment respectable; we do not want to help the lame dog over the stile. We are willing enough to do that. We do not end our politics at helping them over the stile, but we want to see that every man has the right to work for himself instead of having to go and work for a master.

The Prime Minister put forward a series of beautiful measures for improving trade which he has just thought of, none of which, I am afraid, will be very popular, and they will end, no doubt, in being amended, and amended, and amended, but the peculiar result of all these attacks on natural economic laws—and we have had lots of them lately—is that the natural laws come back on you like a punch-hall. All these interferences with the' natural economic laws, whether Tariff Reform, or bounties on exports, or whatever they may be, always come back and make things worse than they were before. But in addition to giving all these beautiful ideas which have just come into his head or into the heads of his advisers at Gairloch, the Prime Minister made an impassioned appeal to labour people on this side to bring down the cost of production. I heartily agree with him. I do not want so much to bring down the cost of production as to bring down prices, and the first thing to make clear is that price and the cost of production are not precisely the same thing. During the War we had in this country freedom from competition, which was a glorious opportunity for the manufacturing interests. There was freedom from competition in goods coming from abroad, opportunity for forming rings and trusts and combines such as no manufacturers had ever had in this country in its whole history, and a great many of these rings were formed. There was a glorious opportunity for getting the production of goods in this country into few hands and into rings, with the result that those rings are more or less able to keep the price independent of the cost of production. Sometimes it will be far above, and sometimes, when desirable, it will be below it, but wherever there is a monopoly the price is independent of the actual cost of production.

If the Prime Minister's appeal to the Labour leaders is going to bear fruit, he will have to do his part, the Government s part. Do not leave it all to Labour; do not rely solely upon the reduction of wages. If you are going to bring down prices in order to compete in the neutral markets of the world you have first of all to break the rings and the monopolies hat are getting from the consumer at the present time not a fair price for the article purchases but a tax in the form of a monopoly charge. You can break the rings or you can bolster them up. The Government has bolstered them up. The Safeguarding of Industries Bill has assisted in the greater robbery of the public by these rings. You can break them, for instance, by taxing the monopoly. The Corporation Tax would not do it, because the peculiarity of a tax on monopoly is this, that whereas the ordinary Income Tax or Corporation Tax is transferred to the consumer, a tax on monopoly is not transferred to the consumer. Take the brick and tile trade, which is completely safe from foreign competition. That trade is in a perfect position for forming a ring, and it has formed a ring. The other day, walking down the streets of my town, where we are full of unemployment, I met a man who said he was unemployed. I replied that that was not peculiar, but he said, "My case is peculiar, because I am a traveller for a brick and tile firm." I asked: "Is trade bad with you, too?" He said: "No; trade is so good that I am unemployed. The fact of the matter is that our firms are full of work; they have an agreement together, and they pool the orders, so that those firms which have too little work get more, and those which have too much, pass on the surplus." That is regular pooling, with the result that they can fix the price at what they like. Only last week they approached their workers, and said: "Will you agree to a 121 per cent, reduction in wage?" No doubt they will get their wages down, but who is to get their prices down? That is one instance. I could give others. [HON MEMBERS: "Why not build new brick works?"] The co-operative societies might break the ring down, and there are other ways of doing so by putting rates on land values. There are ways of breaking these rings, either by competition in the shape of using the co-operative societies or by such taxation. It certainly is not fair, however, to urge the worker to bring down his share of the cost of the product and at the same time to leave the monopolists to keep the price up and thus ruin our markets and prevent the recovery of trade.

How would you deal with monopolies of labour?

I should have thought that the hon. Gentleman knew now how to deal with monopolies of labour.

I do, but how would you do it?

I would create widespread unemployment, and I should know that that would break the monopoly of labour. That, unfortunately, is too well known. It is easier to deal with labour. When I heard the Prime Minister appealing to these Benches I wished we could have appealed to him and asked him to do his part. First of all, these monopolies must be broken. It could be done, and if we were on those Benches it would be done. [HON. MEMBERS: "Oh, oh!"] Yes, we can use the co-operative societies of this country, and you cannot. [HON. MEMBERS: "Use them?"] Finance them. As I pointed out, the cost of production and prices are very different things. What we have to do is to knock out the difference between the two, which is due to monopoly. If you deal with the cost of production itself, that cost is not solely wages. There has to be the co-operation of three things to produce anything—land, capital and labour. These have to cooperate together to produce anything, and in addition you must add taxation to the cost of production taxation. I know there is a ridiculous idea amongst hon. Gentlemen opposite that they pay the taxes of this country. They do not, they collect them. They sign a cheque and hand it to the Government, and they collect it from all of us. They collect the taxes, and every business man knows that both rates and taxes, whether Corporation Tax, or Income Tax, or rates, are added as overhead charges to the cost of production and then charged to the consumer. That increases the cost of the production of the goods and the price at which they can be supplied under competitive conditions.

Income Tax is not added to the cost.

Income Tax is always added.

No, it is never added to the cost.

The Prime Minister did intimate that he realised that heavy taxation had something to do with prices. I was very glad to hear that, because there are a few cuts that might be made as, for example, those "Dreadnoughts." Now that the late Financial Secretary to the Admiralty is Minister for Labour, cannot he protect us from those four "Dreadnoughts"? If he appealed to the Prime Minister, the latter would say, "If we knock off those four 'Dreadnoughts' there will be more unemployment in this country." [HON. MEMBEES: "Quite right!"] I am glad to see the right hon. Gentleman has supporters. He is building the pyramids all over again. So long as you employ the people building useless things, instead of on useful work, you will do nothing but create more unemployment. Every pound spent on these "Dreadnoughts" means a pound less spent on productive industry. Therefore it is wasted, and you might as well pay out that £36,000,000 in gifts to the unemployed.

Does not the hon. and gallant Gentleman consider that the scheme which I suggested to the Committee to-day a better one than paying a man 25s. a week for doing nothing? Is it not better to give the 25s. a week to carry on industry?

I thought I had just replied to that.

May I ask the hon. and gallant Gentleman if he grudges the money that is spent on the Police Force?

Yes, I certainly do. The first action I should perform if I were on that Bench would be to sack Sir Basil Thomson and the whole of the Secret Service Corps. I grudge the money spent on the Police Force or on "Dreadnoughts" enormously. If it were not for the imperfection of human nature you would not want policemen, and if it were not for national animosities you would not want "Dreadnoughts," and the less of them there is the better. They are all a charge on industry, and create additional unemployment in the productive trades. There are three elements concerned in the cost of production, land, capital and labour. Cannot capital take less? You are appealing to the Labour benches to cut down wages even below the cost of living. Where, as in my district, you have an enormous number of people employed only two or three days a week, I can tell you that the wages now are below the cost of subsistence. You are asking them to cut them further, particularly in the mining industry. At the same time, when conditions are as bad as that, you might make an appeal to capital to take less. I know that, as a matter of fact, an enormous number of industries to-day are making no profits, and one does-not expect very much from those particular concerns. Why are they making no profits? Everybody knows that during the War bonus shares were ranging up. Nearly every company divided the melon almost yearly. They issued shares of 20s. which were worth 40s. Industry in this country has been watered until it is almost impossible to pay a decent dividend on capital. Therefore we are justified in asking capital also to contribute its share to this necessary reduction in the cost of production.

There is also the other element—land. Land, capital, and labour are the necessities. Is it not possible that land should also contribute its share? That means that the price of land should be reduced. By land I include building land, agricultural land, and every sort of land. We want to get them cheaper; to make the stonewall between the man who wants work and raw material lower. We want to make it easy for industry to commence; to get land cheaper than to-day! In that way you will get land for housing. It means small holdings for the ex-service men, allotments for the miners. All that can be done if only the Government would do their share and force the issue on that question as well. I appeal to the Minister of Labour. He knows—no one better—for he was one of those who introduced into this House—I will not say how many years ago—but actually from this Bench introduced a Bill putting the rates Upon land values and taking them off houses, factories, and so on. [An HON. MEMBER: "It is not fair to bring that up!"] I would not have done so had it not been a matter of urgency for the unemployed.

Observe what is happening to-day in my constituency. There is a steel works in my constituency and one just outside. Both have closed down. Directly they closed down they went to the Assessment Committees of the boroughs and ex- plained they had closed down, and consequently they could not pay any more rates. They have their assessments cut down—because they have created unemployment! Coal pits all over my district are closing down. Immediately they close down, the rates, which are; actually measured by the tonnage output of the pits, cease to be levied, and the result of it is that there is a bonus for closing down industry, for closing the pits, the factories and steel works by the present rating system. Once you have the other system, whereby the rates, had to be paid whether the coal mine was used or not, whether the steel works were used or not, whether the land was used or not, that system would effectively increase production by making it unprofitable to hold the thing idle, and by making it profitable to get the largest, possible product from the coal mine, the factory, or the land. I trust that the right hon. Gentleman opposite, in conjunction with the Minister of Health—who, I may tell him quite privately, is also sound on the subject—might persuade the Prime Minister that there is still something in the old land campaign and that, at a crisis like this, when it is urgent that people should be doing something, and when the unemployment question has become more than the ordinary capitalistic joke, it might now be advisable to make this change in order to encourage production and in order to discourage the dogs-in-the-manger who are creating unemployment. It is possible it might do something more.

Consider the first years of the War when unemployment was very bad and when the production of food was an urgent necessity in this country. Under the Defence of the Realm Act—our own Defence of the Realm Act—the Government took urgent steps to secure allotments for everybody who wanted allotments, whether in the neighbourhood of towns or in the mining villages. The situation now is just as critical. It is just as proper now to override the legal rights of the landlord in the interest of developing allotments, and giving these people who are working two or three days a week something to do on the other three days rather than eat their hearts out at the street corners thinking out the injustice of the present social system. The hon. Member behind (Mr. Thomson) spoke on this question today. He said that he thought what the workers wanted in this world was shorter hours and more comforts. I am quite certain that is not what the workers want. What the workers want is not shorter hours nor greater comforts, but justice. [HON. MEMBERS: "Oh!"] They are not getting it at present. [An HON MEMBER: "Why not?"] Can you say that a man who for years has been working for his family and putting something by, and now is suddenly deprived of his means of subsistence and cannot get food is getting justice? [An HON. MEMBER: "Define justice"] Justice is the worker getting the full reward of his labour. It is this sense of injustice which is making the worker bitter. If you are to bring together masters and men, if you are going to try and end the sense of injustice which is growing up at present, you have got to mete out to these men not comforts but justice.

The hon. and gallant Gentleman who has just sat down was two or three days ago elected vice-chairman of the Labour party. During some portions of his observations to-night I wondered how much longer he was likely to hold that honourable position, particularly when he pointed out that it is perfectly true that if you subsidise one industry you must subsidise another; if you subsidise one man you must subsidise another. With regard to his great contention as to the access to land and the natural resources of the world, I do not think the hon. and gallant Gentleman quite realises the task in front of those who follow that policy. It is not only access to these things you want, but the power to use them. If you gave every man access to the land it would really not do them very much good, provided they had not the means to work it. I assure the hon. and gallant Gentleman I have had a little experience in this matter, and it takes a considerable time for any man who has had no previous experience on the land to cultivate it at all, let alone making a living on it. If you want proof of that look at the small holdings schemes.

And look at the allotments during the War!

I trust I am as solicitous as the hon. and gallant Gentleman about the general lines of Government policy. I think we have got off rather lightly, though it seems to me that the State can do very little good on these occasions but can do an enormous amount of harm. I just want to measure the Government's efforts by the harm that their proposals are likely to do, for, as has been very rightly pointed out, we may be giving employment in one way and taking it away in another, and that is the danger of these proposals. I want, however, to ask for a little explanation on some of the points which the Government have brought forward. I mistrust profoundly this great exports credits scheme. I cannot think why, if it is such a good thing, it has not been used during the many months during which it has been available? The sum of £26,000,000 was devoted to this purpose and less than £3,000,000 has been taken out. Even if you give an increased guarantee I cannot, conceive of any man being willing to lose 25 per cent.; much less 50 per cent. Secondly, if there is so much in this; scheme why is it that the bankers have-not taken it up themselves? The whole world is crammed with experts on credit, insurance, and so on, and if they thought there was a good thing going they will have spotted it already. The people with whom we are going to deal in the future, in supporting the credits, scheme, are the continental bankers. I cannot see that we are going to get much genuine trade out of it at all. Of course, if you look upon this scheme in the light in which the French looked upon their exports during the Napoleonic wars, when they sent ships out laden with silk and sunk them in the sea in order to give-employment, then there is not much harm being done. I hope we shall not build great hopes upon this export scheme, because if we do I am afraid we shall be-profoundly disappointed. I should like some further explanation as to what is going to be done with the £25,000,000. The Prime Minister said that in certain instances we are going to allow manufacturers and employers generally to start enterprises capable of giving production, and he said that we are not going to put this money into the hands of the wicked politicians, Germans, lawyers, or clergymen, but into the hands of those who will1 benefit themselves.

How is this thing going to work? This money is going to be utilised only upon the condition that the enterprises which it finances are not to produce things at an unfair price. What is an unfair price? I can understand a profiteering price being an unfair one, but who is to judge? If that is to be made a criterion for the advancement of this money, I do not think it will be advanced unless it is to save businesses which are in great peril. There has been a great deal of talk about the badness of doles, and how much more preferable it is to give men productive work. That is perfectly true, but when you have got to tide over a period of abnormal distress, I say quite frankly that I prefer the dole to unproductive work or relief work. It disintegrates a skilled man or artisan far more to 'be put on filling up holes in the road than if you pay him money to be idle, because you get bad work. He knows that he is doing work which is thoroughly unsound.

There is a gap in the Government scheme. We have these palliatives put forward, but what about the whole administration of the employment scheme in the future. There has been no suggestion of any alteration of the means adopted hitherto of finding a job and getting the man to it. Mobility of labour is half the question. If you can not only find a job but get the man to it, then you have gone a long way towards a permanent benefit in the administration of your unemployment scheme. I have said before that if the Government will look to Canada and take notice of the example there, and the scheme under which trade unionists themselves are put in charge of the job of getting a man the work for which he is fitted, I believe in this way you will be able to greatly improve the administration of your unemployment system in this country. In this way you get rid of your labour exchanges and officialism, and you free the industries of this country to a large extent from the shackles of officialism with which it is bound at the present time, and you will be giving the trade unionists their proper job to do. That is work for which they are essentially fitted, namely, looking after their men and seeing that justice is obtained for them.

There is one other gap in the Government scheme upon which I should like a little elucidation. Provision has been made in these suggestions for every class of people except two; first of all Irishmen, and, secondly, those engaged in agriculture. There has been very little mention of those employed in the agricultural industry. There has been a vague suggestion that agricultural employés are to get their share of the £10,000,000 which is to be devoted to land reclamation and drainage. I am able to speak on behalf of a good many agricultural Members of this House, and I think I am expressing their view when I say that I do not think that is enough for the agricultural industry during the coming winter. I believe we are threatened with a very serious increase in the unemployment figures in that particular industry. These people are not included in the Insurance Act and there is no provision for them whatever.

I think this question should be reconsidered because it is a very serious matter. Wages in that particular industry are falling with a heavy rush, and it is now a choice whether the farmer should employ a few men at a high rate or keep all their men on at a lower rate. On the whole I believe we have in the Government suggestions a fair attempt, even if it is only temporary or palliative, to meet a crisis. The mistake is in thinking that this crisis is temporary, because it is recurrent, and will be increasingly recurrent so long as these enormous fluctuations in prices continue. I wish to reinforce most strongly an appeal which was made to the Government that the time has come for a reconsideration of the question of German reparations. This is not an unpatriotic act, but I believe it is the path of wisdom at the present time to look round and see whether we were not wrong two years ago. I for one never thought or said that we should get anything out of Germany in the way of reparations.

The hon. and gallant Member has persistently supported the Government in this matter. I divided the House against the original Peace Treaty.

Everybody cannot claim the extraordinary prescience of the hon. and gallant Member. The slight improvement in our trade which is taking place at the present time is only due to the fact that Germany is simply choked with orders, and we are getting the residuum of the orders which Germany cannot take. Until we get to a level competition in neutral markets between Germany and ourselves we shall never become a competitor with Germany. That means that until the German exchange is reduced more or less to equality with our own in the markets of the world, there is no chance of getting back our general foreign trade. But remember that the danger, so far from diminishing, will increase, because, as these orders come flooding in, Germany will extend her industries and in time will take them all on. There is one further point I would like to make. A great deal has been said about the extension of trade within the British Empire, but nobody has mentioned the fact that the great difficulty in this respect is the large debt which the Dominions owe to this country. Australia, Canada and New Zealand owe this country large sums of money by way of war debt. It is the policy of the Government that war debt should, so far as possible, be cancelled, and I would suggest that they start by making a free present to the Dominion Governments of the moneys they owe us. It is impossible, as hon. Members know, to get drafts sent over from Australia to this country, and many Australians have had to return to Australia because they could not get money sent here. It is these war debts that are checking Imperial trade at the present time, and I do suggest that the question of cancelling them should be taken into consideration in the very near future. After all said and done, it is quite true that the question of prices is at the bottom of the whole difficulty, and I agree with the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) that what is necessary is that all should share in the inevitable reduction of prices that must come. It does not mean the same for the workman as for the employer, because it always hits the workman harder, and must do so, but I should like to ask my hon. and gallant Friend, when he talks so glibly about cutting the monopoly of value out of prices, how he is going to do it?

I thought I explained that. It would be by taxing the monopoly or else by competition with State capital, or co-operative societies.

That really means a resumption of control and I do not think that that is desirable. If we started passing laws to limit prices the hon. Gentleman well knows what difficulties would lie behind it. My last word is this. I think as far as possible in the difficult and dangerous times which we have in front of us, employers and work- people should show a united front. The hon. Member for Stafford (Mr. Ormsby-Gore) has mentioned some things which appeal to both sides. These are things, which have been advocated by many honest strivers after industrial peace in this country. But it is not merely industrial peace that is wanted here. It is not merely toleration that is required-It is an active comradeship in meeting the enormous assault which nature and economic laws are making on the industrial body at the present time, and unless, we have a united front we shall be unable to overcome that attack.

10.0 P.M.

I think that in a discussion of this kind we should show ourselves above sectionalism and not indulge, in pious hypocrisies. I am not so anxious about the right to work as I am about the right to live, because if the right to work were enforced on all classes I am sure there would be a revolution. I want hon. Members to realise that the problem of unemployment is much more serious; even than the problem of war. The Departments responsible for remedial measures of relief have my sympathy. I wish them well, and I am sure this House will help in any offer of material practical aid. But I feel that the Cabinet has gone to labour and has produced rather a mouse, when had it been warned it might have laboured to produced a lion. There are two millions of people in this country directly affected by total unemployment. There are three millions of people affected by unemployment. There are twenty millions of the working classes affected in one degree or another by starvation. They are pawning and selling their goods. There are at least 12,000,000 of their children who are suffering from a lack of food and a lack of clothes. I ask the Committee to come out of this pedantic method of discussing a question of this kind. I cannot imagine for a moment that a House like this would have indulged in such Pecksniffian criticisms during the War. This unemployed problem is hitting us now, and it will be with us for at least seven years, if not for a generation. The people who are pawning and selling their clothes and furniture will not be the people who will purchase commodities in the markets provided by labour. Here we have 20,000,000 people whose fate we are discussing in a light-hearted manner. I do not suggest that hon. Members opposite are callous, but I do complain that they do not take so serious a view of this as they ought to do. I am not one of those who say that every employer is an evil genius, because real employers, capitalist employers, must suffer materially if they are unable to find work. I have some sympathy for such an employer. There is much to be said for the employer who employs his capital for the purposes of employment and the production of useful things. That employer is under an embargo equally with labour. The banks are against him, the great merchant classes are against him, the super-financiers are against him, and the country is against him necessarily in the matter of taxation. He has my sympathy. I am one of those who believe there are employers with brains enough to realise it is most essential that industry should be carried out actively for the good of their particular craft as well as for their country's good.

The speculative capitalist is probably the evil genuis. What has happened in this matter? It is proposed to provide £25,000,000—less than the cost of three days of the War—to deal with a problem affecting 20,000,000 people in particular, and the whole community in general. What happened when the War broke out, and we saw international disaster ahead of us? The bankers were called together. They were very anxious to be called together by the then Chancellor of the Exchequer—the present Prime Minister. Why were they anxious to be called together? Merely that their credit might be confirmed and substantiated. The bankers gave practical advice to the Chancellor of the Exchequer of that period. The Government called to their aid the great financiers of the country. Why, if we indulged in those practical acts of statesmanship for the purposes of war, cannot we call in the bankers now? They are much more effectively organised now than ever they were. They are much more entrenched. The five great banks have amalgamated, and they are a considerable power and can exercise their credit influence not merely upon our markets, but upon the markets of Europe and even of America. Why should not the Chancellor of the Exchequer be allowed to call the bankers in, and indicate to them that a high rate for credit is inimical to the trade and the best interests of the country? Why not ask their advice? These money spiders are all geniuses, or they never would have made such a web to cover the whole of the world. If they are as patriotic as the Prime Minister has justly asked this side to be, and it is to their interest to save their country as much as it is ours, there might be a chance of getting practical suggestions from them. One of the great banking authorities has said that there are less than 30 men controlling the whole financial interests of this country. Let that banking authority ask those 30 men to cooperate with the Chancellor of the Exchequer, and let us get their advice. If any advice of mine could be of any importance, I would invite the Prime Minister and the Cabinet to call in the bankers and the super-financiers; and where they could lay a hand upon the mischievous speculative capitalist, gaol would be the best place for him during this period of unemployment if real justice were dealt out.

I do not want to quibble. There are 12,000,000 children actually wanting food, and moral anguish and mental distress physically deteriorate the motherhood of our country. A woman looking into an empty cupboard is bound to lose heart and bound to lose courage; and if you take away from the mother the sense of confidence and of comfort, and of knowledge that she can provide for her children, you are going to make her a very discontented individual. We sang, "It's a long, long way to Tipperary," during the War; it will not be such a long, long way to the cemetery during periods of unemployment for only too many hundreds of thousands of people. Why cannot we get together the great organised industries—the great organising geniuses in the engineering trade, the great organising geniuses of our coal properties, of our metal trades, of our textiles? Why not have the Chancellors and the Prime Ministers of all the great States of the world joining in some international organisation to deal with matters of exchange? The Allies are always meeting over the Versailles Agreement. There is a much bigger problem than the War, than the Armistice, or the Versailles Agreement right upon us at this moment. I cannot see why our pastors and masters should not act boldly, with audacity and still audacity. I am positive that Germany might be included. Russia supplied Europe with 20 per cent, of its food, but we have got so sick of the name of Russia in this House that it is passed by with derision. If we can spend on Mesopotamia, if we can spend £250,000,000 on our fighting forces, if we can spend money on our little wars, then, I say, how much better than having our "Dreadnoughts," than having a great army, will it be to get our land filled with labour and energy for useful work? The farmer is now fast receding into his pre-War condition. The middlemen have acted like tigers as monopolists in the distribution of food. Cattle that the farmer will sell for a shilling a pound the middleman sells for half-a-crown. There are a hundred and one ways of disposing of that £25,000,000, and most of it will be paid for by the employer and by the workman. You are trying to make the dog live on its own tail.

I wish we could float an unemployment fund. For war we would not mind floating £1,000,000,000. We talked in thousands of millions during the War; why not talk in thousands of millions at the present moment? You come with an exact accurate survey of things; you divide into fractions; you focus with microscopic care all your expert experience upon whether it will pay. Unemployment is the greatest of the economic disadvantages that can curse a country. You are doing wrong by trying to introduce the most exacting business terms and conditions into unemployment. In the trenches men shared their food and shared their common danger. All classes joined together, and we were all so proud and worked for all we were worth to save our old country. One gentleman said he had offered to another gentleman the amount of his exact share of land. The exact share of land for 80 per cent, of the working classes to-day is 6 feet by 2, which they share with half-a-dozen others. I am anxious that the Labour party shall not be satisfied with £^5,000,000. I honestly believe the Cabinet would have more if they could have willed it, but the Treasury is up against them. Not even the Cabinet rules the Treasury. I suppose there are unseen hands outside that rule the Treasury. It is quite possible that £25,000,000 or £50,000,000 would not satisfy the best intellects and hearts in the Cabinet. If the Cabinet want the support of the country to force from the Treasury something like adequate means for meeting the dangers of under-feeding as well as unemployment, I believe the country will be with them in forcing consideration. Just as the capitalists said to all of us, "Come and save your country," I say to the capitalists now," Come and help us to save your country. Come and help us. Not with all your cleverness and all your wits. The children and their mothers do not want cleverness and economics." My plea is that, whether you like it or not, the discontent prevailing at the moment is dangerous. No man can say that I have tried to foment this discontent. It will want a lot of controlling. Your policemen's batons will not do it, and your soldiers' bayonets and bullets will not do it. Hunger is a desperate thing, and I want at least that people shall understand that this great House, with all its great tradition, has soul as well as brains, heart as well as business capacity. I do not want to be a carping critic at all. The problem is much too profoundly serious for us to be carping at this moment when our whole country's interest is at stake. It is worse than war. Whatever may be the outcome, let the governing powers, let this Parliament, let our Government, let the Cabinet itself take full responsibility. Let it call the heads of all the municipal authorities, let it call all the financial heads, all the manufacturing heads, all the banking heads. They did that for the War. It would be more to the purpose if that were done on this occasion, when we have a much greater problem than the War. We got over that in five years. We shall not get over this unemployment in thirty years. I make this, not appeal so much as demand, that we should consider this matter in a more serious vein than we have to-day, because the children of the future will depend for their manhood and womanhood on what we do for them in this their hour of need.

I was very much impressed by the speech we have just heard, but one point of view the hon. Member took up appeals to me particularly as the underlying fallacy amongst those who confuse war conditions and conditions in peace time. He has asked us not to be meticulous, not to be precise, not to try to see how we can balance accounts and do things with the least margin of wasted expenditure, but to go straight to this question of settling unemployment, and he used the analogy of what was done in time of war. There is a very great difference in the conditions. War is a physical and mechanical assault in the last resort, and to meet that you must not wait till you have the best possible system of recruiting, until you have reduced the possibility of waste of money to a minimum. You must act at once when the battalions are upon you, and you must roll back the attack at whatever cost in money and material. But when you are dealing with this question of unemployment, the concomitant of which is starvation, that is an economic problem. It is out of economics that unemployment arises, and you must give time. You must even, working at pressure, give your best and most meticulous considerations to how you are going to deal with the economics on an economic basis. You are not fighting physical assault with economics. You are fighting economics with economics. I know the hon. Member and his colleagues are most genuine and most desirous to arrive at a permanent settlement, but they must not let that genuine desire override that distinction between the two conditions of war and peace. The problem in war is how to meet physical assaults. The problem of peace is how to meet economic conditions with the wisest and most meticulous and most careful measures on an economic basis. I will not dwell upon it longer, but I want to point it out as being an essential difference and a reason why one cannot just go bald-headed at these things as one had to do in war-time.

I want to refer to the question of German reparations, because that has a very distinct and quite an important bearing on the question of unemployment in this country. I am not one of those who say that I never thought that we should get anything out of Germany, because I believe that we can. I believe it is a divine law as well as an economic law that the nation that transgresses as Germany did cannot get off without making reparation. I believe that it can be done. So far as I recollect the state- ment of the right hon. Member for Paisley (Mr. Asquith) with regard to the agreement that the French have come to-with Germany, I understood him to say that they had agreed that by 1925 a good many million pounds' worth of material, in the way of machinery and so on that would be useful in reconstructing the industries of France, were to be paid over.

We are under the belief that in a roundabout way we are getting payment from Germany. We are allowing Germany to flood our markets with goods at a very cheap price. I will not go into the very complicated question of the exchanges. We are allowing Germany to flood our markets with goods at a price with which we cannot compete, and however we may-ask our capitalists and the employés to make sacrifices we cannot expect them under present conditions to try to compete with such prices. The middleman is getting the profits on that to-day, and the State is getting nothing, while at the same time unemployment is increased thereby. If France can come to an agreement with Germany that by 1925 she is to supply-France with machinery and other things necessary for the reconstruction of France, why cannot we say to Germany: "Supply us not in the standard of the mark but in the standard of the pound sterling, with so many million pounds' worth of goods of your manufacture or raw material per annum as we can agree upon, and the British Government will take the goods over and there will be no exports to you in respect of that." Germany is not a good market for us just now. We will find other markets for our exports, beginning with the overseas dominions of the British-Empire, and going through the United States of America, South America, and other places.

We should insist that these goods from Germany are delivered to the British Government as reparation. The British Government would sell those goods, but not as the middleman is doing and making his big profit out of them. The profit would come to the British Government, who would sell the goods at a reasonable price in accordance with the cost of manufacture and produce in this country. [HON. MEMBERS: "Socialism!"] These are temporary measures. We are not quite out of State control so long as we have a big reparation to bring in. If we do what I sug- gest it will certainly stabilise the market here. It will prevent what a great many of the consuming class are afraid of, namely, that without any such competition as that, wages and prices might soar out of proportion to the consumers' capacity to pay. All the money that was received for the goods would go right into the Treasury, either in relief of taxation or as a subsidy to finance those palliative and temporary measures to which we are committed, until a genuine revival of trade takes place. I recomment that as a suggestion to those who think that we cannot get reparation from Germany. I believe that in that way we can, to a very large extent, make Germany pay, without dislocating employment in this country. The money so realised could go into the Treasury to enable us to relieve taxation, which is one of the things that is strangling industry to-day, and even more directly for the temporary palliative measures it would be there as a source of supply. But I want heartily to say that I concur thoroughly with what the Prime Minister said, that all these are temporary and palliative and that it is only by good will and by co-operation between all classes in this country that we can gradually work back to that world prosperity which the War has blown away. We have got to have patience, but if we work with good will and without feelings of suspicion between one class and another I am certain that this country is going to see times of prosperity for all classes such as it has never seen before.

I listened with great interest to the hon. Member who has just sat down, but I am afraid that his method of solving the problem would not be a solution in any sense. If we were able to draw into this country still larger supplies of German goods without corresponding exports, what class of goods could we draw that would not make unemployment more severe in this country? Are they to be metal goods or textile goods, or what type of goods are they to be in these huge quantities that would not throw more of our workers on to the streets than are there at the present moment?

As a personal explanation may I say that I propose that these goods should come as a direct tribute to our Government, and therefore the taxpayer should benefit, if not the individual trader?

It does not matter much whether the goods come to the Government or come to private individuals. If they are to be unloaded on our market and they are goods that unemployed men or women could make obviously there is less chance of our men and women being employed making them than there is now. The most hopeful part of the Prime Minister's speech was that in which he referred to peace. Speaking as one who knows something of the largest exporting industry in this country in normal times, an industry which has suffered very severely from unemployment, not only since the War but during the War, which could not get its raw material, which has had suffering that can scarcely be equalled by any other trade in the country—I refer to the great cotton textile trade—I want to call attention to an international matter which in my opinion is of the greatest importance if that one great exporting industry on which others depend is ever to become prosperous again. That industry exported something like 80 per cent, of its products before the War. Of that 80 per cent, a very considerable proportion went to India. To-day our products are boycotted all over India. They have been burned in the streets, and one wants to find out if one can a reason for that state of affairs and a remedy that will allow our goods to flow again into India and will give India a chance of supplying in return the raw material that India can supply to us for the products that we send her.

In my opinion that revival with India is purely a matter of foreign polity. There are 75,000,000 Mussulmans in India. I think that it is beyond doubt now that there is among the Mussulmans in India a tremendous agitation, due to what they consider, rightly or wrongly, to be a breach of faith on the part of the British Government. I am making no general accusation, but merely stating what appears to be a fact, and I allow the House to judge whether the fact is logical and clear or not.

The boycott advocated by Mr. Ghandi is a boycott by the Hindus, not by the Mussulmans.

Mr. Ghandi is making his appeal to the whole of the people of India, and I think it is true that the late dispute—I will use that word—which has resulted in fire and slaughter, is the work of the Mussulmans. The Moplah, I believe, is a Mussulman. During the War the Prime Minister made a very definite series of statements with regard to the East. He said that the Allies were not fighting to take away Thrace from Turkey or the renowned lands of Asia Minor which were definitely Turkish in race. Yet the Mussulman sees these parts of Turkey in the hands of Greece, and certainly, judging from the public declarations of the Prime Minister, they are justified in assuming that the Prime Minister has no lack of sympathy with Greece. The Sultan of Turkey is the head of the Mussulman Church, and one tenet of the faith is that he must be at the same time head of the Church and an independent temporal sovereign. The Mussulman sees the Sultan's palace on the Bosphorus under the guns of the Allied warships and the Sultan practically a prisoner. It is evident that the Turkish people do not look upon the Sultan as an independent temporal sovereign, and do not look upon his Government as representing the Turkish people.

Personally, I believe that a plain declaration from the Prime Minister, making it perfectly evident that, so far as he is concerned, he recognises the Mussulman grievance and that he will do his best to see that the words he pronounced during the War are given effect to, would cause a tremendous change in public opinion in India, would lead to an immediate expansion of trade between this country and India, and as a consequence would bring from India to this country those raw materials which our industries need. These things have a tremendous bearing on the future of unemployment. We can talk for hours and for weeks and for years, but unless the industry of the world is moving there is no possible chance of a nation like ours getting rid of the problem of unemployment. We are unique among the countries of the world in the fact that we are the most highly-developed industrial exporting nation of the world, and that we cannot live unless we get the wheels of industry turning not only here but the world over.

If one may turn from India to the East of Europe, there again, it seems to me, a different policy might be followed with advantage to our own country. I am whole-heartedly in favour of recognising the Government of Russia, because I believe that only the people in a country have a right to determine their own form of government, and therefore, that once the Russian people understand that there is no danger of attack by foreign powers and that this country above all others is prepared to deal with the Russian Government, we can trust the Russian people to see that their Government is worthy of the name. If that were done, it is not alone Russia which would benefit. There are countries bordering upon Russia, and they are doubtful as to what the future is going to bring. Anybody who has seen, or has read of, Eastern Europe knows perfectly well the condition of affairs there. There are infinite possibilities for the production of just the things we need and an enormous want of the very material we produce. On the one hand, in the East is the cultivator who has need of ploughs, and boots and clothes. On the other hand, in this country our own people, who should be making those things, need the agricultural products that could come from Eastern Europe. There, I think, lies one of the great solutions of the problem of unemployment. Our skilled artisans can make the things these people want, and they want in return the things these people can grow and produce. In the Prime Minister's own words, peace is the prime necessity if this problem is to be tackled radically.

Looking at another section of the problem, one finds the startling fact that America, the richest land in the universe, with the best rate of exchange, has the highest rate of unemployment. Next among the large nations in this respect comes our own. We stand proudly among the nations, so far as our rate of exchange is concerned, but we are second so far as unemployment is concerned. That is a problem which I hope the financial experts of the House will kindly elucidate for the benefit of those of us who do not pretend to know anything about economics as a science, but who can see evident facts. We see the facts staring us in the face—America with the highest rate of exchange and 6,000,000 unemployed, and our own country with a good rate of exchange and 2,000,000 unemployed, while Germany in spite of her collapsed exchange has nearly all her workmen employed at wages and at any rate making a living. These are facts which require elucidation. We want to know if it is possible by any ordinary or extraordinary means, to arrange a system of exchange between the nations which will give security and regularity. That is beyond my ken, but no amount of theorising, no amount of claiming that the high rate of exchange is a good thing, will get rid of the ugly facts.

When we come to the indemnity question, I believe Germany ought to pay for the damage she has done, and pay in full, but an hon. Member in this House some time ago made the very concise statement that there were three ways, and no fourth, in which Germany could be made to pay. She could pay in gold, she could pay in service, or she could pay in goods. I know of no fourth way. Gold may be left out of consideration. If we took every gold earring and article of jewellery from every German woman, the amount of gold would still be infinitesimal. As to services, what need have we of services? Our own ships are lying idle, and our own seamen are unemployed. As to goods, we have our own men and women unemployed who need to make the very goods we should have to import in payment of the indemnity, and there you have another problem that I would like to have elucidated by the experts in the House, who are better able to deal with these matters than I am. Looking at the thing as a plain man, I see no way of extracting this huge indemnity without adding to the enormous amount of unemployment we have at present.

When we come to the scheme of help that is proposed, what it amounts to is this, that the industries which are the most badly hit are mainly to pay for the extra benefit. Frankly, on these benches we are not satisfied with that. We look upon unemployment as the direct result of the War, as a direct national responsibility that every man and woman in the nation must face as a burden, and the burden, we hold, should not be placed on the back of any special set of individuals at all, but should be faced fully as a national responsibility, treated as a national debt, and met from national sources, so that the banker, and the man who is living from land, and the man who has his living from interest, as well as the industrial man and the worker—all these classes—should bear their full share of the cost. To that position we hold, and we hope we shall get the support of the responsible Minister in putting before him a request that the liability should be recognised as fully national, and be met from national funds in the fullest possible way. Whether the credit scheme will help or not is a matter of opinion. In my opinion, it will help, and help enormously, but, in conclusion, to me the brightest part of the Prime Minister's speech was the part in which he laid emphasis on the fact that only peace, and the works of peace, could solve our problem, and that so long as we talked war and thought war, so long as we had no peace, there could be no solution to this problem, and no hope for the workers who are now suffering.

I should like to give a concrete instance of the state of things that obtains in this country at the moment. A few months ago in the City of London the Union of South Africa obtained a loan of £5,000,000, the purpose of which was for the erection of certain engineering works in connection with railways and grain storage in South Africa. The tenders for this work have within the last week been opened, and I understand that these orders have gone to America, the Americans putting in a lower tender than our own engineering firms This is not a question of exchange, because America is in a worse position in regard to the exchange than ourselves. It is not a question of wages, because the American engineers are drawing very nearly twice as much money per man per week as our own engineers are drawing, so that it comes to this. In backing up the appeal of the Prime Minister, I wish, quite inoffensively and in all honesty, to ask hon. Members on the Labour benches to look into the question of the output and the production per man that we are getting in our various trades. It is a very important matter, and will largely go to provide a solution of this matter.

If I may give a second instance, I know a firm who are prepared to put into stock £200,000 of machinery just as a speculation in order to provide employment, and an endeavour was made to fix up wages on these terms. One of the slowest and least capable men in an engineering shop was put for a week on a certain class of work, and it was found that this man could earn the sum of £3 18s. 6d. per week. This was a man of 45. A younger man could have earned at least £4 or £5 a week. What happened? On this basis of £3 18s. 6d. they offered to put this work through with a view to relieving unemployment. I daresay hon. Members on this Bench know very well that there is a custom in the engineering trade that if a man cannot make £3 12s. a week on piece work he can compel them to pay him £3 12s., regardless of output altogether. Within the last month this firm in question asked the trade union to abrogate this question of £3 12s. and to put the whole transaction on a piece-rate basis. The trade union, I regret to say, refused to do this, and as a consequence this work has not been gone on with. If we are going to offer in the markets of the world equal value with the United States—I leave out Germany and Austria—but a country with an exchange worse than ourselves, we must have increased output. Low wages are of no use to anybody. A man with money which he can take home to his wife to spend at the grocer's and draper's—that money circulates, and is good for us all. The hon. Member for Salford (Mr. Tillett) addressed a number of remarks in the eloquent language that is famous in two hemispheres. One would hardly think from his reference to starvation and so on in Manchester at this moment—and he represents a constituency that is very adjacent to Manchester—the scale of relief provided by the guardians is this: an amount for rent, 15s. for a man, 10s. for his wife, and an allowance of so much per child. In the case of a man with a wife and four children it comes up to something like £3 per week. I do not think it is quite fair to come here and talk as if our municipalities were leaving the people of this country to starve. It is not true. They are making, I will not say an entirely adequàte allowance, but certainly they are not leaving the people of this country to starve.

I am convinced that if we can only get some modification of these extreme trade unionist rules that obtain at the moment we shall have gone a long way toward meeting this difficulty. I had a case in the building trade the other day, and I think an ounce of fact is worth a ton of theory, where a packing warehouse is being built. A concrete floor is being put in in order that the machinery in the basement may be ready to pack the goods while the rest of the building is being put right. The architect invited the concrete men to work overtime in order that they might get the floor space ready to receive the packing crates. Do hon. Members know that it is a regulation in the building industry that if you call on one trade to work overtime every other trade on that job must be called on to work overtime, whether it is necessary or not? It is true that in Manchester there are all these things, and I implore hon. Members to look into these questions. It is a matter in which we are all interested. It is the duty of both employer and employed to do their very best to remove all the stumbling blocks that clog and impede trade to-day.

I rise for the purpose of emphasising the importance of this question from a standpoint that has been referred to but once during the whole of this discussion, namely, the application of these provisions to the man who is unemployed in the agricultural districts. The hon. and gallant Member for the Isle of Ely (Captain Coote) in referring to the position of the agricultural labourer who might be out of work, commented on the fact that for the moment he is different to the mass of the industrial class by virtue of the fact that he is outside the provision of the Unemployment Insurance scheme. He seemed, however, to be under the impression that that is the fault of the labourer himself because he refused to come within the scope of the measure. I do not know on what ground he bases that assumption. So far as my knowledge of the matter is concerned the agricultural worker was never approached nor asked by the Government, nor was it considered whether or not it was wise for him to come within this scheme, nor, if the scheme is not altogether applicable to him was he given an opportunity of making suggestions as to whether some other provision might be made. I do not know whether the employers' section was consulted on the matter, possibly the Ministry of Labour, when dealing with this question, set a precedent which was followed by the Ministry of Agriculture with regard to the Corn Production Acts (Repeal) Act when they consulted the farmers and got their opinions, but entirely ignored the labourers. At any rate, it is the fact to-day, let the explanation be what it may, that the agricultural workers are outside the scope of the Unemployment Insurance Act. Being out of work, they are entirely devoid of any income from any source whatever unless it may happen to be such as is forthcoming from the rates. Therefore the extension of the scheme of unemployed insurance which would add 5s. benefit to the wife and 1s. for each child has no application whatever so far as the rural worker is concerned, and one has to look to the other suggestions and provisions in order to find out how far his position is being met in regard to the unemployment that now exists. The only part of the suggestions that seem to me to have any bearing upon the position is that which deals with reclamation or land drainage. I want to suggest that there is a great probability that a very large number of unemployed men in the agricultural areas will not be affected or helped at all by this scheme. I am not for one moment suggesting that the drainage should not be proceeded with, there is a lot of land in this country that would be greatly benefited by the application of such schemes, and following that would be producing more food. The probability is, however, that if investigations be made, you will find that the larger number of agricultural labourers are out of employment in the districts where you have the lighter lands—the poorer and the sandy soils. In these districts you cannot bring in the drainage schemes, for the land naturally drains itself. I would like to ask for some further information or explanation as to how the position of these men is going to be met, having regard to the fact that in some areas the numbers out of work are larger now, and as the winter approaches the possibility is that they will be largely increased.

The Government, in my judgment, cannot afford, in fairness or equity, to leave the agricultural worker entirely out of this provision. Up till now he has been kept entirely out of previous provisions, but his position is such now that it is imperative that it must receive some attention. I suggest that your Unemployment Insurance scheme will not touch him and that this question of drainage should be examined from the standpoint of how far it will deal with the situation. There is a problem which has got to be met in the position of that section of the community, and it should be dealt with adequately. I hope the Government will give us some information upon that point. Of course it is a very serious question. At the recent harvest I know one village where there were 19 men unable to get houses, a condition of things almost unprecedented as far as agriculture is concerned. The situation has become greatly intensified in the rural districts, and the problem, it appears to me, is unlimited by the suggestions made.

There are two other points, one, Colonial development. I should like to refer to some of the observations made with regard to finance, and what those concerned may be called upon to do in order to help. It is not so long ago that the Premier of Queensland was in this country in connection with development work in the Colony. It so happens that Queensland is governed by a Labour Government, and when the Prime Minister got to this country to raise the loan which would have created employment, the financiers of this city refused to help, or grant any assistance in raising the loan, mostly because of the programme the Labour party had put forward in that part of Australia. He was told that unless he cancelled certain legislation that his Government had passed and withdraw other items from his programme the financiers would refuse to touch the loan, and because he would not consent to these conditions.

11.0 P.M.

Will the hon. Gentleman say what was the reason why the financiers in the City refused? Was it not a fact that the Queensland Government had broken their contracts?

I have already given the reasons, which I heard from the lips of the Prime Minister of Queensland himself. Therefore I am not speaking upon secondhand information. I heard him make the statement that the financiers of this city refused to grant facilities for a single penny of loan unless he cancelled an Act which his Government had passed, and further that he should withdraw from his programme other projected legislation which he had in view. He had to go back to Queensland without being able to raise a single penny in this country. It seems strange that we should have the Prime Minister here speaking of the necessity of colonial development and that one of our colonies should send their Prime Minister here and that he should be prevented from getting the money to carry out that development, and that the financiers in London should attempt to dictate to the electors of Australia what they should do.

The irony of the situation is that since he has been refused the loan here he has gone to America and obtained it. We are told to look to the Empire and make arrangements to develop trade when we have our own financiers absolutely hampering schemes of this kind, which would have given opportunities for employment. An appeal is continually being made to us on the Labour Benches to seriously consider the question of production. I endorse the appeal which has been made by the hon. Member for Salford (Mr. Tillett) and the hon. Member for Preston (Mr. T. Shaw), when they asked that our financiers should be approached in regard to this question and asked to make some contribution. I was reading a report of the annual meeting of a large bank, at which the chairman, in more or less apologetic terms, announced a dividend of 15 per cent., and shareholder after shareholder got up and lamented that the dividend was not more; and hoped that in future it would be larger.

If banks are to take from industry these large dividends of 15 per cent. I think this is a source which could be approached in order to effect some economies in regard to production and thus give the industries a better chance than otherwise would obtain. With regard to foreign trade, I think the hon. Member for Preston has put his finger upon the key to the situation in his request that some examination should be made as to the best way of establishing or securing the trade of the country. The suggestion of the Prime Minister in seeking to develop our trade at home by these credits without due regard to the possibilities of other nations also developing their trade whereby exchange can take place is following a course which will lead us nowhere. I think an examination of the situation from the financial standpoint, not only of enabling us to develop industries, but also enabling other nations to do the same, and facilitating the exchange of goods would lead us into a better position to renew industry, and this problem would then be less acute. One or two hon. Members seem to have been standing in white sheets so far as the German indemnities are concerned. There seems to be a strong feeling that we have adopted a wrong policy up to the present moment. One is entitled to say a word with regard to the Russian position in the same respect. Many on this side of the House urged for some time, before the Government entered into the trade agreement with Russia, the necessity of some understanding being reached. We were continually being told that there was no possibility of any good coming from Russia, even if these trade relationships were entered into. We have now been told, however, that during the year there has been an increase of trade, and that in recent months the demands from Russia have increased, in spite of the difficult circumstances through which she is passing. There is a steady increase in that trade. Might it not reasonably be deducted if the Government instead of waiting for about 12 months before they made their treaty arrangements, had done so earlier; if they had not allowed their Minister for War to hanker after policies of his own in this country and make it impossible for Russia ever to settle down by backing up every adventurer who came along with munitions and things of that description—is it not possible, I say, that Russia might have had a greatly increased trade at the present moment? I suggest that, following from what has occurred there, we may equally have taken a wrong course so far as Germany is concerned, and have thus increased our difficulties with regard to the problem of unemployment. I would like to conclude by again referring to my opening point as to the necessity of some clear statement being made as to how far these proposals for dealing with unemployment are going to help the agricultural labourer who has been thrown on his own resources at a most difficult time in the history of the industry by the cancellation of an Act to the effects of which the industry had been looking forward. I want to know if, and how far, the Government proposals are going to help him in common with other sections of workers. If we can have some information as to how far these various schemes will help him, I shall be glad.

May I make an appeal to the House to let us have this Resolution now. We have had a very interesting discussion, and I may venture to remind the Committee that the Debate will be resumed to-morrow, when exactly the same field will be open to my hon. Friend. If any hon. Member has been so unfortunate as not to get his chance to-day, he may do so to-morrow. It is I think, the desire of everyone we should make progress, and therefore I hope we may take the Resolution now.

Question put, and agreed to.

Resolution to be reported To-morrow.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER, pursuant to the Order of the House of 18th October, proposed the Question, "That this House do now adjourn."

Question put, and agreed to.

Adjourned accordingly at Twelve Minutes after Eleven o'clock.