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

This matter was dealt with in Committee and the Minister could not see his way to accept the proposal because, apparently, of representations from the Treasury that it was not in accordance with precedent, and that it would cause great difficulty in delaying the Regulations, and he also raised the objection that the Amendment in the form in which it was moved provided for laying the Regulations before the House of Lords as well as the House of Commons and that would contravene constitutional practice with regard to financial matters in that it would allow possible interference by another place. I am still unrepentant about the matter. To meet the last point I have deleted the provisions that the Regulations should be laid before another place as well as before this House and that objection, therefore, is removed. The practice of the House has become so established in doing all it possibly can to keep control of administration and government by regulation that it is disconcerting to find that on nearly every occasion where an Act is to be administered partially by the Treasury that Department does not conform to what is becoming the established practice of all other Government Departments. I fail to understand why the Treasury should be sacrosanct in this matter as compared with other administrative Departments. It is quite conceivable to us that very many questions may arise, especially in regard to the administration of the second part of the Bill with regard to short term credits and administration by regulation, on which unless the Regulations are laid before the House we shall have no real opportunity of criticism or of making such Amendments as may be necessary in the interests of efficiency and economy or in the interests of the industry which it is hoped this Bill will further. I have always felt that hon. Members in all parts of the House have been jealous of their rights in keeping firm control of administration where such wide powers are given to Departments and to Ministers as are given in this Bill, and I feel sure the Clause will receive support.

I beg to second the Motion.

The difficulty about this matter is not that the Treasury or anyone else wishes to conceal these Regulations or Orders or provisions which may be made. The difficulty is about the Public Works Loans Commissioners, who are a semi-independent body and not a Government Department. I do not want to hide any of these things in the least, but if it was laid down that any Regulations made would be subject to be annulled by Parliament it would make it very difficult to get on with this work. The work begins after the House rises. The House will not be sitting when most of it is in progress and if any Orders which have been made were liable to be annulled by the House some two or three months hence, it would make the getting on with the Bill exceedingly difficult. But I want to meet the hon. Member as far as I can and I am quite ready to undertake to lay the Regulations and Orders, but I am not ready to consent to the latter part of the Clause which says they must lie for 20 days and are liable to be annulled. If the Orders are made the House, by questions to Ministers or by moving the Adjournment, has a good deal of control in the matter. If I accept the first words, I hope that will meet the hon. Member's point.

I appreciate the way in which the Minister has dealt with the question. He does not quite satisfy the argument I put, but it is a step forward in the direction we desire.

Question put, and agreed to.

Clause read a Second time.

Amendment made: Leave out the words

"and if an Address is presented to His Majesty by such House within the next subsequent twenty days on which the House has sat next after the Regulations or Order are laid before it praying that the Regulations or Order may be annulled, they shall thenceforth be void but without prejudice to the validity of anything previously done there-under or to the making of new Regulations or Orders. If the Session of Parliament ends before such twenty days as aforesaid have expired, the Regulations or Order shall be laid before the Commons House of Parliament at the commencement of the next Session as if they had not previously been laid."—[ Sir R. Sanders .]

Clause, as amended, added to the Bill.

The next new Clause ["Advances to allotment societies"], introduces a new class of borrowers, and increases the charge on the Exchequer.

CLAUSE 1.—(Power to Public Works Loan Commissioners to lend money to associations for the purpose of making advances upon certain mortgages.)

(1) At any time within five years after the passing of this Act, and subject to such conditions as the Treasury may prescribe, and up to an aggregate amount approved by the Treasury, the Public Works Loan Commissioners may, in manner provided by the Public Works Loans Act, 1875, as amended by this Section, lend to any approved association such money as the association may require for the purpose of making advances on mortgages to which this Section applies (which mortgages are hereinafter referred to as recognised mortgages), and for recouping to such an association any moneys raised by the association before the passing of this Act for the purpose of making advances on the security of mortgages which were at the date of the advance or have since been varied so as to become recognised mortgages, and may make advances direct to borrowers on recognised mortgages, or at any time take a transfer from any approved association of any recognised mortgage.

(2) A mortgage shall be deemed to be a recognised mortgage if it complies with the following conditions—

(a) the borrower must be a person who has agreed to purchase the land com-

(b) the land comprised in the mortgage must be wholly or mainly agricultural land;

(c) the amount secured by the mortgage must not exceed seventy-five per cent. of the value, as ascertained to the satisfaction of the Commissioners, of the land mortgaged at the date when the advance is made to the association;

(d) the rate of interest payable on the mortgage must not exceed such rate as the Treasury may prescribe;

(e) the amount secured by the mortgage, with interest thereon, must be repayable within a period of sixty years by equal yearly or half-yearly instalments of the principal sum advanced, together with interest on the amount outstanding, or by equal yearly or half-yearly payments of principal and interest combined;

(f) the land comprised in the mortgage must be freehold or copyhold land free from any incumbrance affecting it in priority to the mortgage other than a land improvement charge or other charge to which priority is given by Act of Parliament.

(3) An advance by the Commissioners to an approved association may be made upon the security of recognised mortgages effected by the association with or without other security and for an amount equal to the amount secured for the time being by such mortgages, and may be repayable within such period not exceeding sixty years from the date of the advance as may be agreed between the Commissioners and the association.

(4) Any moneys advanced by an approved association upon a recognised mortgage may be advanced at interest payable at such rate per centum per annum as will, after deduction from such interest of the income tax thereon, yield to the association a net rate of interest.

(5) For the purposes of this Act "approved association" means an association which is approved by the Treasury for the purposes of this Act, and which by its constitution or otherwise is restricted in relation to the rate of interest on loan capital and the distribution of profits amongst its members so as to comply with Regulations made in that behalf by the Treasury.

I beg to move, in Subsection (1), after the word "amount' ["and up to an aggregate amount"], to insert the words "not exceeding five million pounds."

It is the usual practice when the House is asked to give its consent to expenditure under any Bill that a maximum amount is inserted. In the present Bill, no figure is given as to the amount involved in the loans it is proposed to authorise. It is quite true that the amount is, to a certain extent, limited by the fact that the Bill is to apply to those occupiers who purchase, or who have agreed to purchase, their holdings as from April, 1917, down to June, 1921. That is the period which was covered by the Corn Production Act. In Committee, the Minister of Agriculture said that, so far as he had been able to ascertain, the amount of the mortgages which had been entered into by the occupiers who purchased their holdings during the period I have mentioned was approximately £20,000,000.

I said £10,000,000.

I took it to be £20,000,000 as the total, and that one-half of that had been paid off.

No.

If what the Minister now says be the case, any Amendment is made the stronger, because the total liability entered into by those occupiers who purchased from April, 1917, down to June, 1921, is £10,000,000. Hon. Members who were on the Committee will remember it was stated in the Committee that approximately one-half of that liability had been paid off by the occupiers, which would therefore leave a total liability to £5,000,000. That is exactly the sum for which I am asking in the Amendment, and that is the first reason why this limiting amount should be inserted in the Bill. Another reason is that although we are now assured by the Minister that the amount he had in his mind was £10,000,000, may I remind him that an agricultural authority, addressing a farmers' club in March of this year, said that in his view what was required by way of loans to farmers was not less than £30,000,000. The right hon. Gentleman now says that so far as the occupier is concerned, the sum would be £10,000,000. May I ask if the amount the right hon. Gentleman has in his mind, as to the total liability involved on the mortgages entered into between April, 1917, and June, 1921, is £10,000,000?

That is the Farmers' Union estimate.

Is there any information as to one-half of that sum having been paid off?

No, I do not think so.

I certainly understood, and other hon. Members of the Committee got that impression, that, as far as has been ascertained, about one-half of the total amount had already been paid off. As I say, if that be so, it leaves an amount of £5,000,000. There is another reason why the liability should be limited to not more than £5,000,000. Personally, I think that sum is too much, but we have inserted it in the Amendment in order not to appear unreasonable. The nation has already contributed a very considerable sum of money toward the relief of the occupiers and owners of agricultural land. Under the Act of 1896, we contracted an annual liability to relieve the occupiers of agricultural land, through the Treasury, of £1,300,000 per year. That has been going on for the last 27 years. Under the same Act, and in addition to that £1,300,000, the occupiers of non-agricultural hereditaments in both rural and urban areas to-day contribute £6,000,000 a year towards the relief of occupiers and owners of agricultural land. We have also proposals before the House at present, under the Agricultural Bates Bill, and in other ways, whereby it is proposed, in addition, to contribute an extra £4,000,000 per annum to the relief of occupiers and owners of agricultural land. Therefore, if we take the relief given under the Act of 1896—first, the contribution from the Treasury of £1,300,000, and the £6,000,000 yearly from the occupiers of non-agricultural hereditaments—and now the additional £2,750,000 from the Treasury and £1,250,000 from the Road Fund, we get a sum of close on £12,000,000 per annum to which we are already committed. On the top of that, we are now being asked to give the Minister a blank cheque to advance loans to almost an unlimited amount. I submit for those reasons that my Amendment to limit the liability is one of prudence and common sense.

I beg to second the Amendment.

This proposal raises the general question, perhaps the most vital which will be raised this morning, as to whether this liability should be a limited one, and whether the State should devote public money to the really relevant or urgent cases, or should act in a somewhat reckless manner. Figures have been given of the total sum lent by the five great banks for the kind of purpose with which Clause 1 deals. It has been said that over £20,000,000 was lent by the banks for the purpose of purchases by the farmers, and a great deal of that money has been paid off. It is admitted that the total value which would afford security for loan has very greatly decreased, and that is the ground for this proposal; and that, further, the money lent by the banks was lent largely on cases with which we ought not, in this Bill, to deal, because on farms which were sold, and which the farmers were morally compelled to buy, the value was not raised directly by the Corn Production Act, and it seems to me that the figure which my hon. Friend proposes is a right figure to meet the case with which we have to deal.

We on these benches want to support any legitimate proposal to help those who, in our view, were very badly taken in by the policy of the Government, including both the Corn Production Act and its repeal. It was, in our view, a colossal swindle, but that is not a point into which we can go now, but we say that if the State is now to come in and remedy its own vice and to do justice to those who were taken in, it should very carefully limit its operations to those actual cases. There is a very large class of farms which were not affected by the Corn Production Act. The Minister may give arguments for some figure which will be more appropriate. Surely in these days of public financial difficulty there must be some limit to the liability of the State and, in my opinion, the Amendment embodies a very fair proposal.

There seems to be some difference of opinion as to the total money borrowed during this period, and it is said that I estimated the value at £20,000,000 in the Committee. I do not think that I did. I have got the same report before me now that I had then. £10,000,000 was the figure given by the Farmers' Union. It does not profess to be more than an estimate, because we have not got precise figures. We do not know exactly what the amount is. I do not see what is the purpose of this Amendment. If the amount comes to less than £5,000,000 there is no good in having it in. It is ineffective. Suppose we found that the sums applied for were more than £5,000,000. That would put the Public Works Loans Commissioners in an exceedingly difficult position, because they have got to make a choice between people who have an equal claim, or if it is arguable that the claims are not equal, then you have appointed no sort of a tribunal to settle the particular point. That is not the intention of the Bill. The intention is to give this assistance, such as it is, to those who bought their farms during this particular period in the belief that the provisions of the Corn Production Act were to continue. We wish it to apply to all those included in that period who wish to have it. Therefore, although I do not think it at all likely that the sum will exceed that mentioned in the Amendment, I am not prepared to accept the Amendment.

I think that we should have a limit inserted in all Bills of this sort. The Minister has said that if this £5,000,000 were inserted, there might be a difficulty in making a choice. I do not think that that is likely to happen, because probably what would happen would be that a certain number of people would make application for money on loan. Those people would have to be taken in the order in which they made the application. If it were found that there were so many people making applications that the £5,000,000, or what ever sum taken in the Bill were insufficient, it would be easy to say to those people whose claims could not be met, "You must wait until we have got further authority from Parliament to advance further money." At the present moment all farmers, so far as I know, who have bought their farms, especially since the Corn Production Act, have made provision of some sort, and, therefore, there is no need for hurry to put the Minister in a position to advance any sum he chooses to anybody who comes forward. I have every confidence in the present Government, but we may have other Governments not so economically inclined. Therefore I adhere to the principle, which I have always enunciated, not to give to any Government a blank cheque so far as expenditure is concerned. All expenditure of money must be controlled by this House. I am not wedded to £5,000,000—it might be £6,000,000 or £7,000,000—but I am wedded to a limit being put upon the Government so that they cannot use the money of the taxpayer beyond a certain amount, without obtaining the further consent of Parliament, and if hon. Members opposite go to a Division I shall vote with them.

I wish to support the position taken up by the Minister. This Bill is intended to relieve the difficulty which arose in circumstances well known to us. A considerable body of agricultural opinion does not think that there is much benefit to be received from this particular Bill, but, at any rate, let us give as much relief under the Bill as possible. I do not understand why objection is made to the sum which is being dealt with. First we may ask, is there good security for the amount to be lent under Government auspices? If the Bill goes through in its present form the advance is limited to 75 per cent, of the present value, which everybody admits is a decreased value and will possibly be the lowest value, unless some of my friends above the Gangway have their views carried into effect and land is taken I do not know at what value or possibly no value at all. We have heard speeches by some hon. Members who claim that no compensation should be given but that the land should be taken, as it belongs to the people. However, that does not arise now, and I maintain that there is a good security. The Post Office rate of interest is 2½ per cent, and a good many agriculturists have been in the habit of putting any little savings where they were able to make into that institution, and they have been getting 2½ per cent, therefor. If the Government can make one or two per cent, out of the money which they lend, instead of the right hon. Member for the City of London, who is one of our great financial advisers in the City, suggesting that the sum should be limited, he should endeavour to increase it and thereby make some capital for the nation.

I recognise to the full the value of the contribution of my right hon. Friend the Member for the City of London (Sir F. Banbury). It is desirable that a sum should always be named in a finance Measure, but, in fact, there is a limitation in this Bill. The Bill was introduced to make advances to those farmers who have bought their land in a particular period, and the amount that can be advanced under the Bill is limited to that particular number of farmers. The amount so advanced cannot exceed 75 per cent, of the present-day value of the farms so bought. Therefore, there is a limitation of the amount that can be advanced, entirely independent of the Government. That should meet the objection of the right hon. Member for the City of London. If any artificial limit was now put in the object of the Bill would be defeated, because it is quite impossible, with the knowledge that the Ministry have, or that anybody has in this country, to tell now exactly how much land was bought and by how many farmers. There is a further point. It is impossible to tell now, with anything approaching accuracy, how many of these farmers who bought their land under the conditions stated will avail themselves of the benefit of the Bill's provisions. Those provisions are by no means yet settled. I have tried hard to get at the facts, but I do not know yet at what rate of interest or on what terms the borrower will receive an advance from the State. Therefore, to what extent the purchasers of these particular holdings will avail themselves of the benefits of the Bill remains to be determined hereafter, when the terms finally settled by the Treasury are known.

I suggest to the Minister that he should accept a limit of, say, £10,000,000. I do not suppose that anyone in this House believes that £10,000,000 will be required, but £10,000,000, according to the estimate of the right hon. Gentleman, is the total amount of mortgage money taken by the persons whom it is desired to benefit. Of that amount some will have been repaid. A good many of the borrowers will not be able to obtain loans because of the weight around their necks, and those who remain will not require anything like £10,000,000. The Ministers will, therefore, be perfectly safe, and my suggestion ought to meet the objection not only of the right hon. Member for the City of London but of hon. Members of the Labour party.

I hope that this crippling and limiting Amendment will not be pressed to a Division, as it will seriously prejudice the utility of the Bill. In these cases the State has, as it should always have, a first class security, and the risk which the State will run is certainly a very narrow one. On the other hand, if these facilities are not provided reasonably we shall find that a great deal more land will come down to grass and a great many more agricultural labourers will find themselves unemployed. While this is a farmers' question, it is also a labourers' question, and it is very important that a limiting Amendment of this kind should not be pressed.

Is not the Minister empowered, under Clause 2, to advance money which will not be subject to the limitations mentioned? Should there not be a limit to that?

Clause 1 applies only to those who bought their farms in a certain period. Clause 2 applies to a different category entirely.

Then an Amendment put into Clause 1 will not touch Clause 2?

No.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 48; Noes, 169.

I beg to move, in Sub-section (1), to leave out the words "from any approved association."

That is a drafting Amendment, consequential on an Amendment which was made in Committee.

Amendment agreed to.

The next Amendment, standing in the name of the hon. Member for Taunton (Mr. J. Hope Simpson)—in Sub-section (2) to leave out paragraph ( a )—has the effect of increasing the charge by extending the liability of the Exchequer.

I beg to move, in Sub-section (2, a ), after the word "purchase" ["who has agreed to purchase the land"], to insert the words

"for occupation by himself or any member of his family."

The object of the Amendment is to limit the benefit of the advances to farmers who have purchased land either for their own occupation or for the occupation of members of their families. It is desired by the Amendment to exclude from advances under the Bill people who purchase whole estates or who purchase land for investment and not for the carrying on of farming. There is no dispute between the Minister and myself with regard to the intention that the benefits of the Bill should be limited to those who purchase under the conditions indicated in the Amendment. In Committee, the Minister agreed that the object of this Amendment, which I then proposed, was one which when he was in sympathy, but the matter was left over until this stage in order that he might further consider it. I hope the result of his consideration will lead himself to accept the words which I have submitted as carrying out the purpose intended. These words will effect the purpose in every case of which I can think. It is a very simple point, but it possesses a certain amount of importance.

I beg to second the Amendment.

The people concerned may be divided into two classes—the speculators on the one hand and the bona fide occupiers and workers on the other. It is hardly the intention of the Bill that speculative dealing should be encouraged by State aid of this kind, and we should confine the advantages of the Act to those who seek land for the occupation of themselves or their families.

I think the hon. Member who moved the Amendment can hardly have considered its effects. I quite see his object, but the effect would be to limit this assistance to land, only as long as it was really occupied by the purchaser or his family.

No.

Yes, it must have that effect, which would almost entirely negative the objective that the House has in view. I would go very far in the opposite direction. It will be remembered in connection with similar legislation in Ireland that advances have been made upon any land, and that those pieces of land may be sold or inherited, subject to the mortgage. It is most important that the same power should rest here, because it is obvious that a man who bonâ fide has purchased a farm which he has been occupying, and who obtains the advan- tages that are now being incorporated in this Bill, is not immortal, and he may die. He may have no successor who would be competent to take the farm on, and it is obvious, therefore, that it is necessary in his interests that his executors should be empowered to sell the farm subject to the mortgage. Again, if he had somebody to succeed him, it is obvious that the successor ought to be able to succeed subject to the mortgage, and it is clear that the association primarily responsible for advancing the money, and the Department presided over by my right hon. Friend, and the Public Works Loans Commissioners, who are responsible for sanctioning these loans, will confine them to those cases which the House has in mind. A limitation of this kind would defeat the whole objective of the Bill, and I hope my right hon. Friend will not accept it.

I do not think the right hon. Member for Chelmsford (Mr. Pretyman) has quite grasped the effect of the Amendment. It deals with the case of a man who has purchased for occupation by himself or any member of his family. Whether that be so must depend upon what happened at the date of the purchase. If he purchases for himself or any member of his family, he is entitled to the benefit to the Bill, and after that he would be as free as anyone could be. The language of the Amendment was framed to make that perfectly clear, and it is not capable of the meaning that for ever thereafter, if at any time he parted with his farm, he should be deprived of the benefits of the Act. If it be necessary to make that clear by another form of words, which I submit it is not, I have no objection at all to words being put in which will relieve the mind of any hon. Member from doubt on the subject. I think probably the Minister will be able to say that he can accept my words.

I am in sympathy with the principle of the Amendment, and should like, if possible, to vote for it, but I wish to draw attention for one moment to a circumstance that actually occurred in connection with a land purchase during the War. It is something, at any rate, that I do not think my hon. Friend the Member for Forfar (Mr. Falconer) has taken into consideration. A landlord desired to sell, and the tenant, who in this instance happened to be an ex-service man, was likely to be removed in consequence of the sale. He goes to a friend and asks if he can help him to buy the farm. The friend, of course, provides the greater portion of the money, the farm is bought, and the tenant of the farm retains the tenancy. That is a case, I am sure, that should not be put outside the Bill, and if we can include cases of that description, I shall support the Amendment.

When I saw this Amendment, I was favourably inclined towards it, because I did not think it would exclude anyone whom it was the wish of the House to include. I purposely did not rise when the Amendment was moved, because I wanted to hear if anyone who had been looking into the question could suggest cases where the Amendment would operate with some hardship. I think it is, at all events, a matter of doubt whether the effect of the Amendment would not be to exclude some of the people whom we want to keep in, and, therefore, I am afraid I cannot accept it.

12 N.

May I make an appeal to the right hon. Gentleman? It is agreed that the class to which I refer should be excluded. Would the right hon. Gentleman, between now and the time when the Bill reaches another place, See if language cannot be found that will exclude the class to which I have referred, while including those whom we wish to include?

I will consider that.

If, as my right hon. Friend says, the Bill is meant to deal with cases of bona fide purchase for use, surely it cannot be beyond the wit of man to devise a form of words which will exclude the people who have bought for more or less speculative purposes. The cases adduced by the right hon. Member for Chelmsford (Mr. Pretyman) really were met by the Bill itself, I think, because wherever a change of tenancy hereafter might take place, through death or otherwise, if the mortgage had been entered into with the present beneficiary, that mortgage could be so drafted as to exclude the risk of termination in cases of change of tenancy, I therefore Suggest that there might be an alteration made in this direction, and I only wish the Amendment could be accepted, so that the qualification, if one be found desirable, could be introduced later on.

I have a good deal of sympathy with the object of the Amendment, which is to exclude the speculator, because, as a matter of fact, the speculator is of no advantage, either to the community or to the farmer—he brought the price of land up much higher than it should have been—but I am concerned as to whether the effect of the Amendment might perhaps make it difficult, later on, for the transfer of a mortgage, when it is once made, to any person, either upon death or for some other unavoidable cause. If the Minister will make it quite clear that there is no difficulty to be put in the way of such a transfer, I shall be prepared to support the Amendment whole-heartedly.

I concur in that view.

We are all agreed in principle with the Amendment, but I rise to ask that consideration shall be given to another class of case, which has not yet been mentioned, and which, I am sure, no one will wish to exclude. It is a case where a purchase has been made by trustees of a farm for the benefit of a son not yet 21 years of age. I know of a number of cases where the actual purchase has been made by a local solicitor, as executor and trustee of a former farmer, of a farm for the benefit of a young man who does not come into his inheritance till he is 21 years of age. No one would wish to exclude a case like that, but it would require special consideration, I think, to see that it was not excluded. So far as the speculator is concerned, I have no sympathy with him.

I think this debate has shown that there are more points to consider than the mover of the Amendment imagined, but I think I understand what the House wishes in the matter, and I will consider, between this and the time when the Bill is considered in another place, whether it is not possible to find a form of words which will meet the point.

Amendment, by leave, withdrawn.

The Amendment next on the Paper, in the name of the right hon. Member for Tiverton (Mr. Acland)—in Sub-section (2, a ), to leave out the words "nor later than the twenty-seventh day of June, nineteen hundred and twenty-one."—removes a limitation, and, therefore, increases the liability of the Exchequer. We cannot, therefore, take it now.

I beg to move, at the end of Sub-section (2, b ), to insert the words

Perhaps the Minister will say, "Oh, but all farms rose in value, in sympathy with farms which were affected by the Act, and we cannot distinguish." Our view, however, is that we ought to distinguish. We are not acting because there is depression now. We are acting to meet the case of those who suffered on account of legislation. If we were only legislating to meet a distress, there are other trades which are much worse distressed; and, again, we cannot afford to spend money in this way on an object which is not strictly urgent. The most appealing claim under this proposal, in my view, would certainly have been the case of those farmers who were compelled to plough up land for wheat, very often quite unsuitable land, which has hardly been got into decent order yet. They have, undoubtedly, a very strong claim. Let it be extended to the whole of the cases affected by the Corn Production Act; but, surely, there ought to be some limitation. Perhaps some other words can be suggested to meet the end in view, but I submit that the end in view is a very proper one.

I beg to second the Amendment.

I should like to invite the Mover and the Seconder of this Amendment to visit Ayrshire, celebrated in Scotland as the place where honest men and bonnie lasses live. They would find there some of the finest agricultural land in Britain growing potatoes continuously, as it has done for the last 30 years, and the produce was of more importance to this country than any other kind that could have been grown during the War. The Amendment would exclude that particular place, and a great many other places in parts of Stirlingshire and elsewhere. So that if the Amendment were carried, it would do more injury to the best cultivated land in Scotland and the purchasers of that land than anything I have known for a long time.

I think the hon. Gentleman opposite has already answered this Amendment, but I may say that I do not regard it as a crime to produce milk. The Mover of the Amendment naturally wishes that any benefit this Bill produces should go to Norfolk, and not to Somerset. I do not say the opposite, but it should apply to all farmers in any county who bought their land during this particular period, and I must resist what is purely a limiting Amendment.

I do not think the right hon. Gentleman understands the point of the Amendment. In the Second Beading Debate it was repeated over and over again that the real foundation of this Bill was the fact that for a certain period of years specified in the Bill the Government pledged themselves to give certain prices for wheat and oats. The fact that the Government were not able to carry out their pledges to the farmers who grew wheat and oats, was the reason, we were told, why this Bill was introduced. It did not affect potato growers in the least. They were in the happy position of being all right, whether the Government were all wrong or not. This Bill was introduced because the Government were all wrong as far as one particular class of farmers was concerned, and when we introduce an Amendment to limit the Bill to a particular class of farmers who suffered, owing to the Government having changed their minds, we are told that the benefits must go to all the fruit farmers of Somerset, as well as the farmers of Norfolk. In the Potteries we should like this assistance, but we have not been in the position of being protected by the Government for a couple of years, and then having that protection withdrawn. While it may be proper to give assistance to those unfortunate people who believed in the Government, and bought land accordingly, we do not see why we should give assistance to those people who bought land on their own, and who had to mortgage it. I cannot conceive any reason why we should put the taxpayers' money at the disposal of people who generally bought land, or who would have bought anything else. There is a ground for coming to the assistance of those particular people who bought land, understanding that the Government's pledge was binding for ever, and who were thereafter betrayed owing to the Government cancelling that pledge. I hope, therefore, we shall have some support in the Lobby for an Amendment which does, indeed, carry out the purposes of the Government as laid down by them in the Second Reading Debate.

I hope I may be allowed to remind the Mover and Seconder of this Amendment that, although prima facie there seems to be some ground for their argument, the increased price of agricultural land which took place during the period of the Corn Production Act was not limited to land to which the Act applied. It was very general. There is another point. If the Mover of the Amendment will read his words carefully in conjunction with the Clause, he will find that it will make the whole scheme impossible, even to those whom he wishes to benefit, because the land comprised in the mortgage would be limited, not to farms part of which were ploughed up, but to the actual fields that were ploughed during that period. I hope, for that reason, the House will reject this Amendment.

I want to emphasise this point for obvious reasons. I am afraid I do not agree with my hon. and gallant Friend the Member for New-castle-under-Lyme (Colonel Wedgwood). The Minister who stands by the Bill wants the benefits of the credit facilities to go to all farms, not on the basis of what they produced during the period, but on the main basis that the value of land increased by virtue of the Corn Production Act, and that being so, we are faced with the difficulty of helping farmers out of their duress under the banks. I want to enforce that point and, as I have said, for very obvious reasons. This Bill is to assist those who have been hit by the withdrawal of the Act which gave to their land an enhanced value, and I only just want to press that point.

Amendment negatived.

The following Amendment stood on the Order Paper in the names of Mr. Riley and Mr. T. Johnston: At the end of Sub-section (2,

"The value of which is wholly agricultural."

This Amendment has been covered by a previous Amendment.

May I submit to you, Mr. Speaker, that this Amendment deals with a different class of case to that to which you refer, and indeed is a vital point. When the Bill was discussed upstairs in Committee, the point was considered by some hon. Members to be of such substance that a promise was made to consider it between then and the Report stage to-day. In these circumstances, I trust that you will allow it to be moved.

The principle involved in this Amendment, may I point out with all respect, is entirely different from the issue raised in the Amendment which has been dealt with.

Yes, but in the circumstances, I do not see my way to select it.

The Amendment, as I gather, deals with the question of ruling out building land, and in Committee the Minister admitted that there was real substance in the point. He said it merited consideration, and he would do his best to meet the point between then and now.

The Minister has down later an Amendment which covers the point.

The following Amendment stood on the Order Paper in the name of Mr. John Davies and other Members: In Subsection (2, c ), to leave out the word "seventy-five" ["seventy-five per cent, of the value"], and to insert instead thereof the word "eighty-five."

Further Amendment stood on the Paper—in the name of Mr. Acland, to leave out the word "seventy-five" and to insert instead thereof the word "eighty," and in the name of Mr. T. Johnston and Mr. A. V. Alexander, to leave out the word "seventy-five" and to insert instead thereof the words "sixty-six and two-thirds."

The Amendments of the hon. Member for Dewsbury (Mr. Riley) and the hon. Member for Tiverton (Mr. Acland) are intended to increase the liability upon the Exchequer, and, therefore, are out of order. The last Amendment is in order.

I beg to move, in Sub-section (2, c ), to leave out the word "seventy-five" ["seventy-five per cent, of the value"], and to insert instead thereof the words "sixty-six and two-thirds."

This is an endeavour to secure from the Government a guarantee that somehow or other the amount on loan or mortgage shall be of a satisfactory nature.

I beg to second the Amendment.

The amount put into the Bill is coincident with that allowed by the Public Works Loan Commissioners.

Can we be certain that the valuation now put forward in connection with this Act will be anything like accurate? Is the Government satisfied that the margin of security which they previously put into the Act will still be sufficient under the new circumstances?

Amendment negatived.

Further Amendment made: In Subsection (2, c ) leave out the words, "is made to the association," and insert' instead thereof the words "or transfer is made by or to the Commissioners."—[ Sir R. Sanders .]

I beg to move, at the end of Sub-section (2, c ), to insert the words

"or exceed an amount equal to thirty times the annual value of the land as ascertained at that date for the purposes of Schedule A of the Income Tax Acts."

This Amendment is designed, to some extent, to exclude land of high building value from the scope of the Act owing to the difficulty of saying exactly how much value is agricultural and how much is due to prospective building. There is a great deal to be said for limiting the amount advanced on mortgage in this respect and that is the reason why I put this Amendment on the Paper. The effect of it will be that the amount advanced must neither exceed 75 per cent. of the value nor exceed 30 times the Schedule A Assessment. The complaint, of course, made is that the land adjacent to towns is of a low Schedule A Assessment, but that the actual building value of the land may be very considerable. If that is the case we do not want to advance up to 75 per cent, of the value which is due to the prospective building quality of the land. Take the case of land close to a town which is assessed at 30s. per acre. Suppose it can be or is actually sold for building purposes at a couple of hundred pounds an acre. As the Bill stands it will be possible for the owner to borrow £150. We do not want that. The effect of this Amendment is that he would be able to borrow only £45. We quite anticipate that the Commissioners will exer- cise discretion as to whether or not any particular case is fairly entitled to ask for a mortgage under this Clause. I have tried to meet by this Amendment any real difficulties which will arise under under the Clause, and I commend it to the House.

I recognise that to some extent the Minister has endeavoured to meet the objections which we held to the Clause as it stood, but I do not think his Amendment meets all the cases of hardship which we have in view. I know of an area where there is much land not actually near to a large town, but where the owners, or the alleged owners, are holding up that land in the expectation that there will be a Clyde Ship Canal made in the vicinity some day, I hope it is not the intention of the Minister or of the Commission to facilitate owners holding up land in that way. I could give other cases of the most grotesque misuse of land in this way. There is a quantity of land flooded regularly every year which for a very small expenditure of money 30 miles away could be protected and the annual floodings stopped.

At present the land is simply wasted and consequently it is rated on a very low value, but it is really being held up in this way for a future profit. It is not land upon which anyone would be inclined to build houses at the present time, but it is being held up for other speculative purposes, and the right hon. Gentleman's Amendment does not cover that point. I understand that the Commissioners have discretion in this matter, and that it is not compulsory on the part of the Commissioners to lend money to alleged landlords in such cases as I have indicated. In Scotland, in particular, when the Government Department gets its fingers upon money, it seems to be the custom to spend that money in very curious ways. I think there should be more stringent regulations imposed by Statute so that these people will not be able to absorb the public funds which this House is endeavouring to provide for the assistance of agriculture. To assist our agricultural industry is one thing, but giving financial assistance to land speculators and holders-up of land from being put to the best social use is quite another matter, and on these benches we shall do everything we can to obstruct such a policy.

I wish to ask the Minister of Agriculture whether this Amendment is not rather a dangerous one. I see that he wishes to limit it to agricultural land. I am sorry there is not a Law Officer present, because I wish to put a legal point. This Amendment appears to me to create an alternative, so that the result would be that the Commissioners lend money on a farm up to 75 per cent, of its value, as set out in the Clause, but they might also, instead of doing that, lend money up to 30 per cent, of its value. If you take a farm let at less than 25s. an acre, and make the necessary allowances, the net annual value might be somewhere about £320, and the result of that would be that the whole of the value would be advanced. I have looked into the effect of this Amendment very carefully, and I can place no other construction upon it except that it provides an alternative.

This Amendment does not meet the point raised in Committee, which was that assistance should not be given to people who had bought suburban land for building purposes. Had this qualification which we are now discussing been inserted m paragraph ( b ), you would have ruled out all such building land for assistance under this Act. This qualification is now being put into paragraph ( c ), which deals with the percentage of the value of the land and the money to be advanced, and consequently you will have still purely building land being assisted under this Bill, and that is not what the Minister promised us in Committee. The right hon. Gentleman during the Committee stage ruled out suburban building land, but instead of doing that now he is putting in an alternative which may be very damaging to the State securities under the Bill.

I would like to have some explanation from the right hon. Gentleman as to why he did not carry out his offer on Committee to try and devise a form of words which would, indeed, rule out from the Bill altogether people who merely bought land for speculative building purposes in and around the suburbs of our towns. We were told on paragraph ( b ), during the Committee stage, that it was not to apply to land within the boundaries of a municipality or a county boundary, and that we should have our point met satis- factorily without any risk to the security of the rest of the Bill. I am not particularly enamoured of this Clause, and I should like to have the Law Officers' opinion as to whether the danger suggested by the right hon. Baronet the Member for the City of London (Sir F. Banbury) does really exist.

I think by these words the Minister has done a good deal to meet the point which has been raised. I agree that it would have been better had these words been attached to paragraph ( b ), but when they are attached to paragraph ( c ) it means that land which has a large element of building value in it will not be able to get advances under this Bill. That is what we want. To that extent I think the Minister has redeemed his promise to do what he could to find words to meet this particular difficulty. I think the right hon. Baronet the Member for the City of London (Sir F. Banbury) is wrong, because it is quite clear that the case mentioned would be excluded. It would be a case where the money would exceed 75 per cent, of the present value of the farm. The mortgage must not exceed either 75 per cent, of the present value or 30 times the annual value of the land under Schedule A of the Income Tax Acts. I think the Minister has done what he promised to do, and I am inclined to thank him for what he has done.

I think the intention of the Minister is to meet the objection which we have raised, but I am not quite sure that the words of his Amendment actually do so. If the word "or" is used it is an alternative, and I suggest that to make it perfectly clear he should say, "nor must not exceed an amount equal to 30 times the annual value, whichever is the less." You would then limit it to agricultural land, because it is not conceivable that building land would be worth less than £30 per acre.

I mentioned £30 per acre on the basis of 25s. per acre rent, but there is agricultural land worth more than that.

I am not quarrelling about that, but I want to make it clear that the 75 per cent, to be advanced must be advanced only on the agricultural value, and I think you must use the words "nor shall exceed" to make it mutually exclusive.

This is a double limitation; it is not an alternative. It has been drawn up by lawyers, who, I suppose, understand their business fairly well.

I am not so sure.

This Amendment is quite in order, and the fears of my right hon. Friend are totally unfounded. The Bill says that the amount is not to exceed 75 per cent. of the value, and then it goes on to say that, if the 75 per cent. happen to be more than a sum equal to 30 times the annual value of the land, the lower of the two shall be taken. If you say that the amount to be advanced must not be in gold, or in any case in silver, that does not mean that you are to have it either in gold or silver; it means that you are not to have it in either gold or silver, but that you are to have it in bank notes. Under the Clause as it is drawn it is to be 75 per cent., except in cases where the 75 per cent, exceeds 30 times the annual value of the land, and then it is to be the lower of the two sums.

I can put the matter in one sentence. If I say that the amount shall not exceed A or B, it means that it shall not exceed either.

Amendment agreed to.

The next two Amendments on the Paper—in Sub-section (2, d ), after the word "prescribe," to insert the words

"provided that such interest shall not exceed 5 per centum per annum exclusive of sinking fund,"

and to insert the words

"in no case to exceed by more than half per cent, the rate at which the Public Works Loan Board can borrow"——

are out of order. They increase the liability of the Exchequer.

I beg to move, in Sub-section (2, e ), to leave out the word "sixty," and to insert instead thereof the word "eighty."

The object of this Amendment is to extend the period of repayment to 80 years, and its effect would be to reduce the amount due in respect of the sinking fund from 5s. 7d. to 2s., a reduction of 3s. 7d. per cent. That may seem a small sum, but in the case of a farm in respect of which £9,000 or £10,000 has been borrowed it will make an appreciable difference. This Amendment is backed by the National Farmers' Union of my district, and I sincerely hope that my right hon. Friend will be able to accept it.

I beg to second the Amendment.

I am quite sure that hon. Gentlemen on the opposite side, and those of us on this side, who put down this Amendment have only one purpose in mind, and that is to get fair and reasonable terms for those who borrow under this scheme. Let us recall the terms on which the Irish Land Purchase scheme was promulgated in this House and compare those with the terms given to agriculturists now. I hope that the Minister, in his reply, will assure us that the very best possible terms will be given to those who have to borrow under this Bill.

I quite understand the object of this Amendment. It is simply to decrease the amount of the annual payment that has to be made by any farmer who takes up one of these loans. This figure of 60 was the result of negotiations. The Departmental Committee suggested that the loan should be repayable in 40 years, and, as a result of a good deal of negotiation, and in response to a request from the farmers' organisations, the Government agreed to increase the maximum period of the loan from 40 to 60 years. They are not prepared to go any further. After all, that was a very considerable concession, and it did cut down the rate of sinking fund payments to a large extent. If you take 80 years, it is more than the Public Works Loan Commissioners ever grant unless they are actually secured on the rents. The whole object of this Amendment is to make it easier for the farmer to pay his Sinking Fund instalments. It is not quite certain that it will do so, because on the 60 years' basis the Government would be prepared to make the rate of interest on which the Sinking Fund is calculated 5 per cent. The higher you make the rate of interest for the Sinking Fund the lower is the payment that has to be made in respect of the advance. Suppose this Amendment passed and there was a change in the period of years from 60 to 80 you would not save anything on the Sinking Fund because you would change the rate of the Sinking Fund from 5 per cent, to 3½, and if you did that the result would be practically no gain to the farmer in the final settlement. After all, I think the farmers have been very well met by the extension of the period from 40 to 60, and I hope, therefore, this Amendment will not be pressed.

After the speech of the right hon. Gentleman, my hon. Friend the Member for Denbigh (Mr. J. Davies) and I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

I beg to move, at the end of Sub-section (2, e ), to insert the words

"an option being given for repayment in periods of ten, twenty, thirty, or forty years."

I really want an assurance from the Minister on this matter. The farmers I have come across in conversation on this Bill are anxious for an assurance on this particular point. They are afraid that the period of 60 years having become current in regard to these advances they will not have the option, if they please, of paying off in a shorter time. Many of them wish to leave their farms entirely free of charge on their own death and when their son succeeds. That is a very laudable ambition, of course. I believe it is contemplated that arrangements will be made for them to pay off more quickly if it is so desired. If the Minister will give a public assurance to that effect they will, I think, be satisfied. It must be realised that the longer a mortgage takes to be paid off the more is paid in the total, and I think the Minister was right in saving farmers from the 80 years' term, because, although it would mean a slightly less amount to be paid year by year the amount actually paid by the end of the 80 years would be substantially greater. Will the Minister tell us what sort of option will be given, and whether a man who has taken up a loan to be paid off in 20 years and who finds himself able to pay it off in a shorter time, will be able to do that? I want really a twofold assurance: First, that there will be an additional option so that the man, if he thinks he can pay the advance off more quickly will be able to do so, and, secondly, if he finds himself in a position to pay up even more quickly than the option he has accepted, facilities for so doing will be given him.

I am quite ready to give the assurance asked for, and I am only too glad to do so. I am sorry there should have been any uncertainty on the subject. Really, 60 years is the maximum period, and any lower period will be not only allowed, but welcomed by the Public Works Loans Commissioners.

I have always understood that these loans were repayable at three months' notice.

I understand the right hon. Gentleman to say that he will make the loans repayable at any period.

Yes.

After the assurance given, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Amendment next on the Paper, in the name of the hon. Member for East Grinstead (Mr. Cautley), is out of order. I am afraid it imposes a fresh charge on public funds.

With all due respect, I think not. The Amendment is in these terms: At the end of Sub-section (4), to insert a new Sub-section——

"(5) The money required by any approved association for the purpose of making advances on recognised mortgages may, at the discretion of the Treasury, and on such terms as the Treasury approve, be raised by the approved society by a public loan guaranteed by His Majesty's Commissioners of the Treasury provided the rate of interest does not exceed four and a half per centum per annum and the terms provide for repayment at or before the expiration of a period of sixty years, and His Majesty's Commissioners are hereby authorised to guarantee any such loan."

The object of the Amendment is solely to provide an alternative scheme under which the Government can raise the money to be used for these purposes. This will be a third method of raising the money, and it will be for the Government to decide which method they shall adopt for raising the money they are going to lend to the borrowers. It is only a means of raising money at the option of the Government, and I submit it involves no extra charge on public funds at all.

The paragraph seems to me to create a Treasury guarantee, and I would like to know what the Treasury have to say on that.

That is, I think, a fatal objection to the proposal of my hon. and learned Friend. This is a Clause enabling His Majesty's Commissioners to guarantee a loan, but there is no inherent power in the Treasury to guarantee any loan. Hon. Members will remember the case of the Austrian Loan and the loans which had to be guaranteed in connection with the Trade Facilities Act, in which we had to get specific power from this House to guarantee. There is nothing in the Fianacial Resolution that will enable the guarantee to be given under the terms of this Bill. Therefore, this proposal is outside the scope of the Resolution, and I am afraid it is equally out of order.

I think the Financial Secretary to the Treasury cannot have read the Clause, the last words of which are

"and His Majesty's Commissioners are hereby authorised to guarantee any such loan."

This House can give the Treasury power to guarantee, and that is all I am suggesting in this new Sub-section. The Financial Resolution gives facilities for advances of money and the grant of credit for certain agricultural purposes. If hon. Members would look at the Title of the Bill, it is

"to facilitate the advance of money and the grant of credit for certain agricultural purposes."

My point is that by giving the Treasury a third method of raising money to be loaned for these purposes, it comes within the scope of the Bill, the object of which is to facilitate the advance of money. It cannot, I submit, by any possibility, lay any extra charge on the nation, because the Treasury, having three methods to choose from, will naturally adopt the cheapest, and, in my view, the method I am suggesting here will be the cheapest and will enable the Treasury to lend money to the purchasers at a lower rate of interest. It cannot by any possibility increase the charge: on the other hand, it is likely to decrease it.

The Money Resolution does not matter. It applies to proceedings on the Committee stage, and on the Report stage we are bound by other rules. My hon. and learned Friend has, I think, supplied his own answer to the point of Order by drawing attention to the last words of his proposed paragraph—

"His Majesty's Commissioners are hereby authorised to guarantee any such loan."

A proposal of that kind would require a fresh Money Resolution.

I have said all I have to say on the point.

The same objection applies to the next Amendment on the Paper in the name of the hon. Members for Leominster (Mr. Shepperson) and for Ormskirk (Mr. Blundell)—to insert a new Sub-section (5), which also creates a charge. Then with regard to the Amendment of the hon. Member for Taunton (Mr. J. Hope Simpson) in Subsection (3) to leave out the words

"and which by the constitution or otherwise is restricted in relation to the rate of interest on loan capital and the distribution of profits amongst its members so as to comply with Regulations made in that behalf by the Treasury—"

I rule that, too, out of order. With regard to the last Amendment to this Clause on the Peper, in the name of the hon. Members for North Norfolk (Mr. N. Buxton) and for Dewsbury (Mr. Riley)—in Sub-section (5) to leave out the words

"which by its constitution or otherwise is restricted in relation to the rate of interest on loan capital and the distribution of profits amongst its members so as to comply with the Regulations made in that behalf,"

and to insert instead thereof the words

"does not trade for profit or whose constitution prohibits the issue of any share or loan capital with interest or dividend exceeding the rate for the time being prescribed—"

I am in some doubt, and would like to hear an explanation from the hon. Member for North Norfolk of his proposal.

I beg to move, in Sub-section (5), to leave out the words

"by its constitution or otherwise is restricted in relation to the rate of interest on loan capital and the distribution of profits amongst its members so as to comply with Regulations made in that behalf,"

and to insert instead thereof the words

"does not trade for profit whose constitution prohibits the issue of any share or loan capital with interest or dividend exceeding the rate for the time being prescribed."

The object of this Amendment is to apply the usual phraseology to the machinery indicated by the Bill. The words which I propose to insert are words with which the House is familiar in regard to Public Utility Acts of various kinds, and we do not see why a distinction should be drawn between this Measure, in which it is intended to use a financial body as the intermediary between the Government and the beneficiary, and other Acts with a similar purpose. A limit is needed equally, as it appears to me, in this case. I do not think the Minister gave us in Committee' any reason for the difference. Surely, the intention is that the body employed by the Government should not be a body trading for profit, and, if that is to be assumed, these words appear to be the natural words to use.

I should be ready to accept the words "does not trade for profit," but there is a difficulty about the constitution. There is a company at present in existence which, I think, might be useful to us, but its constitution does not prohibit what the hon. Member wishes to prohibit. It is, however, quite ready to make rules that will meet the views of the Treasury, which, I think, are also the views of this House, on this subject, and it really comes to the same thing. We cannot change the constitution of that company, but it is ready to make such rules as will put it within the limits that are desired. If the hon. Member would leave out the words after "or" in his Amendment I should be ready to accept the first words.

How does that read in relation to the words which the Amendment proposes to leave out? I do not quite understand what is the new proposal. How will the Sub-section read if the Amendment now proposed by the right hon. Gentleman be accepted?

The words will then be

"and which does not trade for profit or otherwise is restricted."

Then it is understood that, instead of the Amendment moved by the hon. Member for North Norfolk (Mr. N. Buxton), there would be an insertion after the word "which," of the words "does not trade for profit or."

I should like to ask the Minister a question with regard to the Farmers' Loan Purchase Company. That company is a statutory company. Its Act, I think, is an Act of 1920. It began as an ordinary limited liability company in 1919, and in 1920 it became a statutory company. I think that, under the conditions of its Statute, it is a profit-making company, and that its dividend is limited to 10 per cent, up to the time when the reserve fund equals the nominal capital. In that case, will not the introduction of these words exclude the company from operating under this Measure?

1.0 P.M.

I happen to be the chairman of the company mentioned by the Minister and by the hon. Member for Taunton (Mr. Simpson). I do not think that these words would exclude that company. Although, by its constitution, it is not precluded from trading for profit, or distributing such dividends as it earns, I may say that it never has distributed dividends, and, after consultation with the Treasury, notice has been published, in accordance with the requirements of the Statute governing the company, summoning a special general meeting, which is going to be held in a few days' time, to pass regulations limiting its power to distribute dividends to 5 per cent, gross, and its power to pay interest on loan capital to 6 per cent.

Might I suggest that, perhaps, the best plan, from the point of view of drafting, would be that the hon. Member for North Norfolk should withdraw his Amendment, and that then I should move to insert, after the word "which," the words "does not trade for profit or"?

I think it will be easier to discuss the whole point on the Amendment as it stands. I should very much regret to see even the words which the Minister suggests inserted, not because I want to see companies making money out of farmers, but because of the effect on certain co-operative farmers' societies. Farmers co-operate together to some extent, and we want to encourage them to do so. For other purposes they have co-operated very efficiently, and it is quite possible that these farmers' cooperative associations would be willing to help in this way, but that is not to say that they will not make any profit over 5 per cent. I do not think there is very much fear of the outside public coming in and making profits out of the farmers. They are not likely to lend money on these terms at all. Bankers know how to lend money better than any of the outside public, and I do not think there is much fear of a money-making concern going into it, but there is a fear that even the words which the Minister suggests may exclude farmers from helping themselves by way of co-operation. We have cooperation now, not only in regard to milk factories and bacon factories, but for the sale of seeds, the collection and sale of eggs, and various1 other purposes.

On a point of Order. Is not the question now being debated by the hon. Member one that would be discussed more properly on Clause 2?

I think that is so. It does not apply to Clause 1, but to Clause 2.

I think it will exclude these societies. If these proposed words be not inserted the Clause would permit the co-operation of farmers, even though profits are thereby made, and, therefore, I should object even to the words that the Minister suggests. I was only putting the point that it would affect the co-operation of farmers, if they wished to assist in this particular way. They stand together a great deal, and are very ready to help their poorer neighbours, so that it would be useful to allow farmers' co-operative societies to help in this way, and not exclude them.

With all respect, I do not think that the arguments of the hon. Member are relevant. I am willing to accept the Minister's suggestion, and accordingly I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendment made: In Sub-section (5), after the word "which" ["and which by its constitution"], insert the words "does not trade for profit or"—[ Sir R. Sanders .]

CLAUSE 2.—(Organisation of agricultural credit societies.)

(1) The Minister of Ariculture and Fisheries (hereinafter referred to as the Minister) shall take such steps as are practicable to promote the formation or extension of agricultural credit societies, that is to say, societies approved by the Minister and registered under the Industrial and Provident Societies Act, 1893, having for their abject or one of their objects the making of advances to members of the society repayable within a period not exceeding five years for such agricultural purposes as may be approved by the Minister.

(2) The Minister at any time within three years after the passing of this Act or during such further period as the Treasury may prescribe, may, subject to the provisions of any Regulations made by the Treasury, make advances to any such society, but so that the total sum advanced to a society shall not exceed an amount equal to one pound for every one pound share held by members of the society on which a sum of five shillings has been paid.

(3) For the purpose of this Section there shall be opened in such manner as the Treasury may direct an account called "the Agricultural Credits Account," and there shall be paid to that account—

( a ) such money as may from time to time be provided by Parliament towards defraying the advances and expenses of the Minister directed by this Section to be paid out of the Agriculture Credits Account; and

( b ) all sums received by the Minister on respect of advances made by the Minister under this Section.

(4) The advances and expenses of the Minister under this Section shall be paid out of the money standing to the credit of the Agricultural Credits Account.

(5) The Minister shall cause an account to be prepared and transmitted to the Comptroller and Auditor-General for examination on or before the thirtieth day of September in every year, showing the sums paid into and the sums issued out of the Agricultural Credits Account in the financial year ending on the thirty-first day of March preceding, and the Comptroller and Auditor-General shall certify and report on the same, and such account and report shall be laid before Parliament on or before the thirty-first day of January in the following year if Parliament be then sitting, and, if Parliament be then not sitting, within one week after Parliament is next assembled.

The Minister shall also cause to be laid before both Houses of Parliament an annual report of his proceedings under this Section.

(6) Payments out of and into the Agricultural Credits Account and all other matters relating to the Account, and to the money standing to the credit of the Account, shall be paid and regulated in such manner as the Treasury direct.

(7) The provisions set forth in Part I of the Schedule to this Act shall apply to every agricultural credit society to which this Section applies as if they formed part of the Industrial and Provident Societies Act, 1893, and if an advance is made to such a society under this Section the provisions set forth in Part II of that Schedule shall also apply to the society so long as any part of the advance remains outstanding.

With regard to the Amendments on this Clause, they all, in various ways, involve an increased charge on the Exchequer, except, perhaps, the last one in the name of the hon. Member for Hillsborough (Mr. A. V. Alexander) and a manuscript one by the Minister of Agriculture. I understand it is desired to move to leave out the Clause, in order to raise some discussion on the methods proposed.

I beg to move to leave out the Clause.

As a farmer, unfortunately a corn-growing farmer, I do not make this Motion from any hostility to short-term credits. On the contrary. It is simply because I think the Clause as it now stands is absolutely impracticable, and I think I might even go so far as to say futile, to carry out the pledge the Government made some time since to give assistance to farmers by means of short-term credits. Two essential conditions must be fulfilled if these short-term credits are to be of any use at all. The first is that the rate of interest must be kept as low as possible, and the second, even more important, that the relief must be given at once. The only method by which these two essential conditions can possibly be fulfilled will be if we take advantage and make use of the only means which lie ready to hand. The only means which lie ready to hand are the existing banks. This is essentially a banking business. Advances are to be made to farmers by means of unsecured loans. The whole machinery is in operation for that very purpose as regards private loans which the banks may be making. They have the buildings, they have the clerks, they have the ledgers, the penholders, and even the blotting paper. They have the whole machinery through which these advances can be made. The fact that that machinery is all in operation to-day must have a very direct effect on the rate of interest to be charged, using the means which are to hand is the only way we can make sure the relief will reach the farming industry without any delay. Banks are the only institutions which have the necessary knowledge to enable these loans to be made successfully. Farmers will not confide in a committee of their fellow farmers, rightly or wrongly. They have of necessity, during the last two disastrous years particularly, come to have confidence in the bankers, and I hope the bankers still have a little left for the farmer. Another point is that the banks cover the whole ground. No other institution covers the whole of the agricultural ground in the way the banks do. Every small town, and even some of the larger villages, have branches of a bank. It seems unthinkable that when the farming industry so urgently requires the assistance of these short-term loans the Government should have completely swept the idea out of court. The Clause as it stands does not carry out adequately the pledge given by the Government to come to the immediate assistance of the farming community by means of short-term credits. I hope the Minister can see his way to give an assurance that before the Bill is considered in another place the whole question may be carefully looked into and every avenue explored to see whether it is not possible to make use of the only practical means of giving this assistance to farmers by using the existing banks.

I beg to second the Amendment.

In rising to address the House for the first time, I want very emphatically to endorse every word that has been said by my hon. and gallant Friend. I am very sorry that, owing to the rules, it was not possible to have a clear vote on the Clause my hon. Friend and I put down. We are doing the next best thing in bringing this aspect of the question before the House as forcibly as we possibly can. The general impression created at the time of the Second Reading was that the Bill, if I may use the expression, was nothing to write home about. At the same time we all welcomed its in- troduction and we felt we should be thankful for small mercies. What we are endeavouring to do is to urge upon the Minister the necessity of making this Bill more useful and more valuable to the people whom it is intended to help. This can very easily be done, and if the Minister and the Financial Secretary to the Treasury will inquire into our proposals I think they will come to the conclusion that, by our method, these reliefs and credits can be carried out in a very much more economical way than that suggested in the Bill. The House is fully aware of, the conditions obtaining in the agricultural industry, so that it is unnecessary to refer to them. The House is also aware of the circumstances that led up to those conditions. It is sufficient to say that at present very many farmers are living from hand to mouth, and we are certain that the short term credits will probably be applied for to a greater degree than the credits arranged for in Clause 1. Clause 2 says: of the Government will be sent out far too late, and I think it will be rather impossible to launch the lifeboat at all.

In a question which I put to the Minister some few months ago, I asked if he were prepared to make an interim arrangement, in order to relieve some of the farmers who were very hardly pressed at the present time, and pending the introduction of this Bill. He replied, in his usual courteous and reassuring manner, that no one realised better than he did the urgency of the question. In view of that, I ask him to give the proposal we are putting forward his most sympathetic consideration. The Government can grant these facilities, through the banks, the day after this Bill becomes law. It can be done more expeditiously, more safely, and in a better manner in every way. The machinery already exists, as my hon. Friend has pointed out, and there is no prejudice against the banks on the part of the farmer, which is a very important point. I ask the right hon. Gentleman very seriosly to consider giving his assistance to a system which hitherto has proved satisfactory to all concerned.

The two last speakers, who moved and seconded the omission of this Clause, have dealt with an aspect of the question which is, of course, of great importance, namely, as to whether the Government proposals are right that credit societies should be formed for the purpose of administering these short and intermediate credits, or whether the banks of the country should be utilised. The House will have listened to the arguments of the Mover, and also of the Seconder of the Amendment, whose maiden speech the House has heard with great interest and appreciation. I recognise that the question of the relation of the banks is one of importance, and is one which has been considered for a large number of years. The Government, after the Report of the Departmental Committee and after prolonged consideration, decided not to utilise the banks directly, as is proposed by the Mover and Seconder of this Amendment, but to introduce a system of credit societies on certain defined lines, namely, on a co-operative basis, which would enable a credit scheme to be utilised in connection with the organisations of farmers, as they exist to-day, for agri- cultural co-operation. I propose not to deal with that question which has now been raised of the utilising of the banks. There is, I recognise, much to be said in favour of those arguments, but it is better—after the Second Heading of the Bill has been given and it has been through the Committee stage, and the basis of the proposals of the Government for short-term credit have been definitely accepted by the House and approved by the Committee—at this stage to make the best of the proposals which the House and the Committee have thought good in essence, rather than to attempt, at this late stage, completely to recast the whole proposals of the Government in this matter on lines which do not, at this stage, permit of full consideration. With these respectful submissions to the Mover and Seconder, I pass to the aspect of the subject with which I want to deal on the proposal to delete Clause 2.

The essence of short-term credit, as of any system of borrowing money, is to be found in the rate of interest at which the borrower can borrow. My own view is that these proposals are not proposals which, on their face, are likely to attract a large number of farmers. They present certain characteristics of difficulty, and many characteristics of novelty, and farmers do not rapidly take up a system in connection with their business to which they are utterly unaccustomed. As to the need of the additional credit, I believe the House is agreed. The reports of expert committees on the subject have, I think, satisfied the House that over and above the amount of money that is lent by the banks to-day to the agricultural industry—which is very large—there is a definite place for short-term credit on such lines as the Bill proposes. Therefore on that Second Reading point I say no more, but if we do assume in the Debate that the proposals are good; that, if carried out successfully, they will meet a real need; and that the agricultural community needs this additional money and that the money will help it—if we assume all these things—then the House should approach the question on the footing of being determined to give these proposals a real opportunity of acceptance and utilisation by the agricultural community.

If you ask the borrowers in the agricultural community to pay a rate of interest which they think high, the scheme will be a dead letter. Representing the agricultural co-operative movement, the Agricultural Organisation Society has recently made inquiries through a very large area of the country to ascertain what is the highest amount farmers are likely to be willing to pay for these short-term credits. The answer we have had everywhere is, five per cent. Knowing farmers, I am quite willing to say that when they said five per cent, possibly they meant a shade more—I will assume that, against my own case—but very little more than five per cent; and if it be the case that the farmers are not likely to borrow if they have to pay more than five per cent., then this scheme is bound to be a complete fiasco if the credit societies under the scheme are put in such a position that they are obliged to demand substantially more than five per cent, from their borrowers.

The scheme is that credit societies are to be formed in which members shall take£l shares paying up 5s., and therefore having an uncalled liability of 15s. There is little temptation to become a member of the society to any man who thinks that he will never want to borrow. A few philanthropists and a few landowners may take a certain number of shares, but only a few. The strength of a society must rest on large numbers of members who want to borrow, or who put in money because they think that, whether they want to borrow now or in the future, they ought to join in order to help the society which will give the credit facilities when they do want them. My own impression of farmers' human nature is that they are more likely to take the shares when they want to borrow than when they do not want to borrow. Consequently, you have forces actively operating to limit the numbers who join. If you are only going to have limited numbers joining because of the possible uncalled liability of 15s., and if you are not going to get many members to join who do not want to borrow, surely if you add to that rather unattractive policy a deterrent rate of interest, farmers simply will not work the scheme at all. If you put on a rate of interest that is more than farmers think reasonable, the whole scheme will be a dead letter.

I believe that the scheme is capable of being made gradually into some thing of the highest value to the agricultural community. I believe that it is on right lines. But I do appeal to the Government to let us know here today that they will lend the money to the societies at a rate which will enable the societies to lend to the borrowers at a rate which the borrowers are willing to pay. Now as to the relation between the rate at which money is to be lent to the societies and the rate which the societies charge to the borrower. A credit society will in effect be a banking institution, and like every bank it makes its profit out of the difference between the rate of interest which it pays on the money which it borrows and the rate of interest which it receives on the money which it lends. Out of that difference it has to pay all its working expenses, interest on share capital taken by its members, and in addition, if the society is to be made stable and solvent, it must have enough to put by for reserve.

Unless these societies are going to be on a wide basis with a large area and a large membership, and putting by annually for reserve, I, for one, should prefer not to see them started at all. I do not want this House to take any step which will not encourage the farming community in habits of business. These societies should be run soundly as business concerns or not at all. It will be said by the Financial Secretary to the Treasury that, when you are considering the rate at which the Treasury is to lend, you must apply the principles of business soundness. Theoretically, and in the long run, I agree that that is true, but if it be true, and I believe it to be profoundly true, that to get the scheme started in the first year or two, until farmers become accustomed to its working and recognise its utility, you must be prepared to lend to them at a low rate of interest, then I submit that, for purely educational purposes, to educate the farmers into the adoption of this scheme, the Treasury should lend the money to the societies at a rate which will enable the societies to lend to their borrowers at 5 per cent.

If you put the margin, between the borrowing rate and the lending rate, at one per cent. I am certain that you put it at the lowest figure which will allow working expenses interest on share capital and something to reserve, even if you assume as essential such management, accountancy, reporting and auditing as will ensure solvency. Therefore I appeal to the Government to find money for these societies at not more than 4 per cent. The amount proposed to be advanced on short-term credit facilities during the first year is £500,000. One per cent, on that is £5,000. The difference to the Exchequer, between lending at a figure which would enable the societies to lend at 5 per cent., and insisting on the figure which I understand the Treasury is insisting on at present, of 5 per cent, is, a sum of £5,000. On that figure rests the difference between possible, and I would say probable success for this most useful scheme, and certain failure. Yesterday the representatives of agricultural organisation societies, who are farmers elected by different societies all over the country, had a largely attended meeting and passed a resolution unanimously that if more than 5 per cent, had to be charged to borrowers the scheme was a dead letter. And they said that if that were so they did not see how the Agricultural Organisation Society could usefully help in any attempt to make the scheme a success, and they felt certain that it was bound to fail.

I do not want to make threats. I would much rather say, as I said on the Second Reading, that the whole of the agricultural co-operative movement is ready to give every help it can to make this scheme a success in the interests of all parties. To ascertain whether they were willing to help, I have had inquiries made through a large number of our societies, as to whether they would go into the scheme, and have had answers, from societies representing nearly 17,000 farmers, with a turn-over of nearly£5,000,000, during the last week or two, indicating willingness. This shows that there is a very large number of farmers who are anxious to make the scheme a success. I appeal to the Government in some way or other to find this money at a rate which will enable us to make the scheme a success, and to vindicate the claim, rightfully made on behalf of His Majesty's present Government, that they are doing the best they can to help agriculture in this country.

I crave the indulgence of the House which, I know, is always given so readily to one who, like myself, is about to make a maiden speech. My only reason for taking part in the Debate to-day is that I have the cause of the agricultural community very much at heart and I have the great honour to represent a very large agricultural community. I think that most hon. Members have, like myself, the welfare of the agricultural industry very much at heart. I welcome the passage of this Bill, not because I think it is a practicable Bill—in fact I think that the Clause now under discussion is a most impracticable Clause—but because I believe that the Government, living up to its Conservative ideal, is doing its best to help the farmer on the road to prosperity. I have said that this Clause is impracticable. Its ideals, no doubt, are right, but in practice it will prove difficult to administer. A great time will elapse before it begins to function, and when it does function I am afraid that it will be of very little practical use to the people whom it is meant to help. To benefit farmers the loans should be made at as small a rate of interest as possible, but under the existing conditions I cannot see that any benefit will come about, because the Public Works Loan Commissioners are to lend money to what are called approved societies, and the approved societies in their turn are to make loans to the farmers. Surely that cannot tend to lower the rate of interest, for I presume that both the Public Works Loan Commissioners and the approved societies will make a profit before the farmer gets the money.

In my humble opinion the money is going through too many hands before it gets to the farmer. A better system of administering these loans would be, as has been said, through the existing banks and county agricultural committees. The procedure would be perfectly simple. Suppose, for argument's sake, that a farmer wanted a loan of £100 for the cropping of his land. All he would do would be to apply to the county agricultural committee. That committee would consider his case, and if the security was good the local bank would be informed that it was good, and the loan would be given. In order further to safeguard the State, I would suggest that the bank should be made responsible for 25 per cent, of the loan and the Government for only 75 per cent. The farmer wants help now. It is no use waiting six months or a year for all these approved societies to get to work. I put these criticisms forward in a very humble spirit, and I shall have great pleasure in voting for the Bill, not because I think it is very practicable, but because I think it is an honest attempt on the part of the Government to help the farmer in his present-day difficulty. I hope that the House will delete the Clause under discussion and substitute for it the Clause which has been so admirably moved and ably seconded.

The House has listened to two maiden speeches with great acceptance and pleasure, and also to a speech from the hon. Member who moved the deletion of this Clause. The three speeches have followed the same line, on the whole, namely, that instead of the scheme which seems to be contemplated in this Clause, the Government should undertake a scheme to assist short-term credit to the banks. In none of the speeches, however, have we heard any reply to the criticisms as to the applicability of banking to all the needs of farmers and cultivators for credit, which were made in the Report of the Credit Committee. It seems to me that we cannot be expected suddenly to switch round to a method totally different from that contemplated by the Bill, unless the very definite criticisms and explanations, and the almost inevitable limitations of our banking system have been dealt with adequately. Therefore, I will not pursue that side of the question, but rather take up the point that my hon. and learned Friend made as to this scheme standing or falling entirely on the terms which can be offered to cultivators for short-term credit. As Members know, I have been out of the House for some time until about a week ago, and I have been devoting such time as I had to trying definitely to help the Government to work out the best scheme that could be framed for getting this short-term credit going.

What one finds, first of all, if one goes to any conference of farmers, is that the farmers are rather slow in confessing that there is very much need for them to be helped. No one likes saying anything which may be taken as an indication that he is in difficulty and wants extra facilities in regard to money. But if one goes into things in more detail, one finds that things are not too satisfactory, and that there is a great need of money, and quickly, as hon. Members have said. That is shown by the fact that the trade which the farmer does is tending, more and more, and steadily to pass into the hands of the people who are willing to give long credit. In the long run that may be all right for the people who give credit, but it is not right for the farmer. The more the farmer gets into the hands of people who, for a consideration of one sort or another, will give long credit, the worse it is for him in the long run. The number of stock which one sees on the field, which are not really owned by the farmer, but by some auctioneer, who has a call as to the date at which they shall be sent into the market, because he is giving credit or something of that kind, is increasing. The more that goes on the worse it is for the agricultural community in general. As the Credit Committee Report pointed out, there is quite a number of small deserving men, smallholders, allotment holders and labourers, right down to the humblest agricultural labourer, whose grounds for credit are considerable and well worth meeting, but whose needs cannot be met by the banking organisation as we know it now.

Having established the need, what was the general opinion which one found with regard to the scheme as put forward by the Credit Committee? That scheme depended on a large new Government propaganda. The Credit Committee said that the propaganda was as necessary as were the credit facilities. They recommended that there should be a very big scheme of Government propaganda, conducted by a new Department attached to the Ministry of Agriculture. One found that that aspect of the scheme was very unpopular in every quarter. No one wants a great many new Government officials to be set up, and if one looks into it one finds that, although the Government have given general approval to the scheme of the Credit Committee, the Treasury have no intention whatever of allowing the necessary propaganda to be set on foot or the necessary officials appointed to get the matter going.

If the bankers are rather ruled out on the one side, and a large independent new scheme of Government propaganda is ruled out on the other, what remains as the best means of getting a scheme of this sort at work? There remains the possibility of forming new co-operative credit societies on the basis of and through the same machinery as the existing cooperative trading societies, and covering, the same areas—not, of course, in any way confined to the same membership as the trade societies, because that would not be fair, but open to everybody, and, one hopes, under the management of small committees on which would serve men whom the farmers are accustomed to trust on the committees of the trading societies. One hopes also that prominent members of the local branches of the National Farmers' Union might be willing to lend a hand and give their judgment and experience in helping to make the credit societies a success. A little investigation shows that getting machinery of that kind at work depends solely on the rate at which the money can be advanced. There is great hesitation. The farmers do not like a new thing, a thing to which they are not accustomed, and they would have hesitation in joining any new organisation and unless the better class farmers come in, those whom everybody will trust, those with regard to whom, once they join, everybody will know the thing will be conducted in a first-class way, then the scheme will not go. It must be made attractive to the men of reasonable stability, to the man who, if he does not want to borrow immediately, will, at any rate, join the committee and assist in working it in a way which will help his brother farmers and the smaller men in the community. If the thing cannot attract these men, as ordinary members and as committee men, then it will be left to two classes only. One class is that of the people who are not sound, and with regard to whom it is known that nobody would be willing to lend them money at 5 per cent. because their unsoundness is notorious. In that case the societies which these men may form will themselves not be sound, and will very soon come to grief. In the other case it will be left to small efforts in villages on a very small scale, which are not likely to succeed very well because there will not be the experience and the stability of the larger and more substantial men brought into the scheme.

That leads up to the point which I wish to make strongly to-day—that if the thing is to float at all, the figure at which the money is to be offered to the borrower must be a reasonable one. You cannot say that a figure will be considered reasonable if it is over 5 per cent., and I do not believe you can, regard any figure exceeding 1 per cent, as giving a sufficient margin between the money as advanced by the Government to the society and the money as advanced by the society to its members. That means that if the Government cannot see their way to advance the money at 4 per cent. to the societies, the Clause had better be scrapped. I wish to say a word supplementing what has been said by my hon. and learned Friend the Member for the Exchange Division of Liverpool (Sir. L. Scott) about the attitude of the Agricultural Organisation Society, of which I happen to the chairman. They are comcerned in this matter, because it was proposed that this should be done through the co-operative societies, and that has been the body which hitherto has organised the co-operative societies. They have, however, plenty of other work to do, and they do not want to take up this matter without some prospects of making it succeed. A great many of their societies are very doubtful about it and the general attitude seems to be that even if the rate is moderately low, the bigger farmers can already get all the credit they want through the banks and the smaller men are not worth helping at all. Yet they would avail themselves of this proposal if there were a prospect of getting it taken up. That has hitherto been their attitude, but yesterday when my hon. and learned Friend reported that he had failed to get any assurance from Ministers that the rate at which the societies would be able to lend would be under 6 per cent. they concluded unanimously that they would have to decline to take it up altogether because the thing would be certain to be an entire fiasco, and had much better be dropped; that it was not worth while putting on the Statute Book a Clause which would be pure eyewash and from which there would be no real result.

With regard to the rate I am sure we shall have illuminating information placed at our disposal by the Financial Secretary to the Treasury, and there are one or two things which I wish to say in that connection. When I was Financial Secretary and was exploring this matter in the middle of the War—and it has been the experience of other people who have been Financial Secretaries since—I found that the Treasury has been all along most tremendously hostile to this sort of thing in any shape or form whatever. I feel sure, if they really put their minds to the work, it would be possible or them to show that money would be forthcoming without appreciable risk at a lower rate than 5 per cent. to-day. One does notice certain things which makes one think that the Treasury sometimes takes rather a different line. When it is a case not of their lending money but of having other people's money entrusted to them on which they have to pay interest, it is different. One would think that when money is entrusted to them not to make a profit out of it, but simply to take care of it for other people, they would pay 5 per cent., if that is the lowest rate at which they can lend, whereas one finds that they actually pay a considerably lower rate on other people's money of which they are taking care. It seems only reasonable that there should be an option of the same rate being charged when they are lenders and not holders. I think probably many Members of the House will be aware of the fact that with regard to money standing to the credit of societies under the National Health Insurance Act, part has to be deposited with the Treasury and that on those sums the Treasury recently has only been paying 4 per cent. They do not want to make a profit out of the National Health Insurance societies, and it seems to me if they only pay 4 per cent. in the one ease they should not charge more than 4 per cent, in the other case. I believe that with regard to the reserve values account of those societies, they only pay 3 per cent., and if that be true, again it seems to me to be rather hard to ask for 5 per cent. when it is on the other side. If it be the fact that in some cases when they are in the position of having the money to handle, the Treasury only pays 3 per cent. or 4 per cent. and that when it is a question of their lending the money they require 5 per cent., one can well understand why on a historic occasion the tables of the money-changers were upset. One does not like to think that the Treasury in one case give only 3 per cent. or 4 per cent. and at once say it is impossible to charge less than 5 per cent, when you come to the other side of the picture. I, therefore, join in the appeal that we may get, either now or later, as favourable an answer as we can on this matter, because, quite frankly—and I speak, having done a good many weeks' and even months' work on this question in the country—unless the rate to the borrower can be made 5 per cent., the Clause is going to be scrapped, and the sooner the better.

I think it is very unfortunate that we have had no enlightenment from any banker who is a Member of the House on this question.

I did get up on several occasions.

It seems to me that the position we are in is this, that, whether the banks get advances as proposed in a later Amendment or not, the banks are quite capable of making advances as it is, and they are making advances, and what I am afraid of is that this Clause will fall to the ground, because the banks will get all the good business, and only the bad business will be left to the organisation which is proposed to be set up here. When it comes to the rate of interest, the man who is prepared to offer the highest rate is the man who is in the worst straits. The man who is doubtful whether he is able to repay or not will not stick at 6 per cent., but the man who has good security and is able to repay is very careful of the interest he pays. If he can get the money from his bank at 4½per cent., he is not going to pay 6 per cent. to the organisation that is being set up under this Bill. Therefore, it seems to me that the danger you run is that, unless you keep your rate of interest down to a level which will tempt the good business as well as the bad business, you will have all the good business going to the banks and all the bad business left for these societies.

That is the particular aspect of the case as it presents itself to me, and I think it would be very unfortunate if this House were to legislate for a new proposal of this kind unless they really felt that there was some value to be got out of it. I do not think it would be to our credit that we should pass this Clause 2 if we felt in our minds that it was going to be ineffective when it was passed, and, therefore, if it can be made effective, or if there be a fair chance of it being made effective, by a very small alteration in the rate of interest, I heartily endorse the appeal which has been made to keep this rate of interest as low as possible. If that be not done, the banks, as I say, will get the good business, and the societies the bad business, and our work in passing this Clause will be rendered quite nugatory.

2.0 P.M.

As I was for many years a banker, though, owing to advancing years, I have retired at the present moment, I should like to say a word or two on what I believe to be the view of a banker at the present time, and what certainly would have been the view of a banker when I was a banker. Banks, first of ail, have all the organisation. They have offices, they have clerks, they understand the business, and they are always perfectly willing to advance money to farmers, or to allow an overdraft to farmers, if those farmers are in a good position; and in nine cases out of 10 the advance is made on very reasonable terms. At the present moment, I should think that probably the advances made by the banks to a good farmer would be at about 4½ per cent., and certainly not above 5 per cent. Well then, what is the advantage which would be gained by passing this Clause? The result of that would be that the Government would, as my right hon. Friend the Member for Chelmsford (Mr. Pretyman) said, be competing with the banks, but only competing in this way, that the banks would get the better business. A good farmer would go to his bank, he would know the manager and that the account would be kept secret, and there would be no trouble about it at all. On the other hand, the man who went into a bank parlour, saw the manager, and was put off, would be able to scrape together 5s., invest it in a co-operative society, and thus borrow the money from the State, the consequence being that the State would get all the bad borrowers and the banks all the good borrowers. It must not be forgotten that these credit societies would have to be financed by somebody, and it must be somebody without business experience, or, at any rate, without experience in this direction. I speak as an ex-bank director, and I say that we, as bank directors, have to look out for the interests of our shareholders, and have to justify our position at the annual general meeting. It is the shareholders' money we are dealing with, and if we lose their money, they come down upon us for being careless, or for not carrying on the business in a proper way. But, in the case of these co-operative institutions, it is not the money of the shareholders but of the Government, and consequently it will be very probable that they will not exercise that care which is exercised by the directors of banks. Consequently, there is a danger that a great deal of this money will be advanced to people who are not really quite solvent. I could not make out whether the right hon. Gentleman the Member for Tiverton (Mr. Acland) was in favour of the Clause or against it, but I am strongly against it, because I do not believe it will do any good to the farmer. I believe that if the farmer is a sound man, he can get what he wants now, and if he is unsound, nobody wants to advance money to him. Therefore, I think it would be wise on the part of the Government to drop this scheme altogether.

There is another reason which I should like to mention. In these days, whatever may have been the case in the past, everybody says, "Because Jones has got something, I ought to get something as well," and the result of a scheme like this would be that somebody like my hon. Friend here, the Member for Stockport (Mr. W. Greenwood), who is interested in the cotton industry, which is very prosperous at the present time, or somebody interested in another industry, would, if it were not prosperous, come to the Treasury and say, "Look here, you have done this for the farmers, why not give credit to us?" This is a new departure, which I do not think will advantage the farmer, and which may lead to very great commitments on the part of the taxpayer. I sincerely hope the Government will drop it.

There are two accusations made against this Clause, one by my hon. and Noble Friends who have made those very interesting maiden speeches, and the other by my hon. and learned Friend the Member for the Exchange Division of Liverpool (Sir L. Scott) and the right hon. Gentleman the Member for Tiverton (Mr. Acland), who has just come back to the House as Member for Tiverton. In regard to the first point, the question of banking, though it would not be in order for me to go into the full details of the proposed Amendment on the subject, it is totally against the spirit of the Bill. The effort of this Bill was to do something through co-operation for the benefit of the smaller farmers throughout the country. It may be that there are difficulties in the way. It may be that the co-operative societies may want their money at a cheaper rate than I think they ought to have it. But the proposal of my hon. Friend behind me is of an entirely different character, namely, that the goby should be given altogether to all the work done during the last few years by the Agricultural Organisation Society, and by the great effort which is being made, and is going to be made, I am sure, under this Bill to promote co-operation among farmers. My hon. Friend wants to substitute for that loans by bankers. That may or may not be good. My right hon. Friend the Member for the City of London (Sir F. Banbury) says the banks are prepared to lend to good borrowers more than is wanted at the present moment. I would prefer to substitute for the adjectives "good" and "bad," the adjectives "large" and "small" as applied to farmers.

The proper principle in banking is not to advance money to a man because he is either large or small, but because he is an honest, hardworking man. I would far sooner advance money to a small man who I knew was straightforward, hard-working, and prudent than I would to a rich man who I knew was extravagant.

My right hon. Friend has had great experience as director of a bank. I could not presume to put my experience against his, but I was solicitor to a large bank for a good many years, and I know the methods of banking, and, with out using the adjectives, "good" and "bad," I am quite prepared to admit that the object of this Clause is to help a large number of farmers who are not able to get the necessary facilities through their bankers at the present time, and it is believed by the Government and, as I understand, by all friends of farmers and the co-operative movement that some good can be done by using this Clause as an experimental Clause. May I explain to the House that the proposal hon. Members have made simply comes to this, that the Government should lend to the bankers, who are in just as good a position as the Government themselves, in order that they may re-lend to the farmers. If that means anything at all it really means a subsidy to the bankers. There is no object in our lending to the bankers unless we lend at a cheaper rate than they can borrow at the present time, as they have vast sums which the right hon. Baronet said they are now prepared to lend to farmers on approved security. Anyone who knows anything of the position of the great banks in the country, knows that it is not necessary to subsidise them to get them to lend to farmers on such security. That is outside the scope of this Clause, which is to establish a scheme of cooperative banking for the benefit of farmers. Everything comes down to the point raised by my hon. and learned Friend the Member for the Exchange Division of Liverpool and my right hon. Friend the Member for Tiverton in regard to the rate of interest. It has been understood throughout the proceedings on this Bill, and the negotiations which led up to this Bill, that the Government would do their best to provide credit facilities, but that no subsidy was to be provided. It was laid down the first time this discussion took place, that we would give credit as much as we could arrange for, but no subsidy. If the Government are to lend money to a cooperative society at less than it costs them to borrow money, that is a subsidy, look at it how you like. My right hon Friend opposite made remarks about the Treasury which come, I think, with ill grace from him. It used to be said that a poacher made the best gamekeeper, but in this case the right hon. Gentleman is an instance of a gamekeeper turning poacher. Since he has left the Treasury, he has tried to get out of it more than he would have given, I am sure, when he was at the Treasury. He used the well-worn argument about the 2½ per cent. in the case of the Savings Bank.

No, I said they were only paying 4 per cent. on deposits of the societies under the national insurance scheme.

With regard to approved societies, the rate is to be put up to 4½ per cent. I want to lend this money at the lowest possible rate which the Treasury can afford. The Treasury is borrowing money to-day on nine-year bonds. The suggestion is that this is to be a five-year loan. Efforts are made to call it short money, but it is not short money at all. Treasury Bill money, as everybody knows, for three months' borrowing is short money, but this is not short money. Undoubtedly it will last for five years, and it may last for a good deal more, for if it be a success I should say it would certainly be extended. The nearest approach we have got to a loan of this kind is the nine years' bonds which the Treasury has recently been issuing. They are something under 4½ per cent. That is the cheapest money we are borrowing to-day, leaving out the Treasury bills. We have got, in the first place, to borrow the money. There are expenses connected with that. Then we have to lend the money to these credit organisations. Next, we have got to consider the possibility of loss. I am not going to suggest that every farmer is going to repay the whole of the money he borrows. If that were certain, the right hon. Member for the City of London would lend the money to-morrow. If anybody could guarantee the Treasury against all loss under this scheme, then it would be possible for us to lend money at a lower rate than has been discussed between myself and my hon. and learned Friend the Member for the Exchange Division. But I do want the House to understand this. We want to lend it at the lowest possible price, in justice to all the other taxpayers of the country. We should not be doing right in taking money from the general taxpayers and lending it at a loss to any particular people. I do not think my hon. Friends who represent the farming interest would want me to do that. I cannot fix a rate, as the price of money may go up or down.

I can give this assurance to the House. On the one hand, we cannot, and the House cannot expect us to lend this money at a rate which will involve a loss to the Treasury, and a subsidy to this particular industry, I am sure nobody would ask us to do that. If that be accepted, I will give this further assurance, that, acting for the Treasury, and on behalf of the Treasury, we will lend this money at the lowest possible rate at which we can do it, provided we do not involve ourselves in a loss. That rate may go up higher, as there is a possibility, but if, on the other hand, in the course of a year or two, by an improvement in the financial position of the country, the Treasury is able to borrow at a lower rate than to-day, the agricultural community will get the benefit. I have tried to put this matter perfectly fairly before the House, guarding, on the one hand, the, interests of the taxpayer, and helping, as far as we can, to make the scheme a success. I cannot imagine that my hon. and learned Friend the Member for the Exchange Division, or the right hon. Member who has posed here as a friend of the farmer, and who is a friend of the farmer—he is Chairman of the Agricultural Organisation Society—is going to tear up this Clause of the Bill, for which farmers have been asking for years, after the declaration I have just made. I ask hon. Members and the House to give a chance to the scheme which the Government believe will be helpful to the farmers, and that they will not, at the same time, expect the House to make an arrangement which would involve the Excheqer in a loss

I have been very much surprised to see on the benches opposite Member after Member get up and object to the whole principle of this Bill, for, after all, this Clause, as one right hon. Gentleman on this side has said, is the principle that agriculture has been fighting for, and that those interested in agriculture have been fighting for, that is, that co-operation amongst farmers should be encouraged, that we should get them together and get some form of assistance. I am sorry to say that I do not believe that this Bill will do great things, but I hope I have realised what it means. It means that we are going to get something for which we have been asking. I quite agree that if farmers have to pay a high rate of interest, the thing will not be of any use to them. We know that. But they cannot get money now from the bank, and if some such Clause as this will help some men who could not otherwise get help, they may be able to make farming pay when they otherwise would not be able to make it pay. "Oh," but some of them say, "we want the banks to be put in a position to lend the money." It has been said, too, that the farmers want a subsidy through the banks, while others have suggested that it should rather be a subsidy to the banks. That is exactly the thing to which we on this side of the House would strongly object.

We are all wishful to do what we can for agriculture, but I think most hon. Members, and certainly the hon. and learned Gentleman the Member for the Exchange Division of Liverpool (Sir L. Scott) and other hon. Members on the other side of the House, supported practically the establishment of this Government because they were so anxious for economy. The economy they are advocating now is a grant out of the public money! Really it is childish to suggest that the Government has to supply money out of the taxpayers' pockets to subsidise the banks so that they may lend to the farmers. That is not the principle of the Bill. It is exactly the opposite. The principle is to try to get farmers together and encourage them to help one another and to help those interested in farming. If this Clause be left out, the whole construction of the Bill is destroyed. The hon. and learned Gentleman the Member for the Exchange Division of Liverpool, in a very eloquent and learned speech, pointed out that he did not want this thing to go through the banks, and he also condemned this Clause. I did not quite realise what he was going to substitute for it, and I do not think he stated, but he made a distinctly destructive speech on this particular Clause. I hope the House will agree to this Clause as it stands. It is giving the farmers not a great deal; I do not believe it will do them very much good; but it is giving them what they have been asking for, and some opportunity for co-operation. I hope this Clause will be passed as it is. There has been the suggestion of a perfectly new scheme, but that would require a new Bill, or, at all events, the recommital of this Bill, and probably new Financial Resolutions. That would mean that nothing would be done till next Session. Let us attempt at all events to do something. I am sufficiently interested in agriculture to say that I am always anxious to welcome a Bill that tries to do something for it. This Clause is an essential part of the Bill, and if you strike it out you will ruin the Bill altogether.

Is it not somewhat unusual for the Financial Secretary to the Treasury to make a reply on a Debate without having heard what has been said in support of the proposal by various hon. Members? However, we on these benches, at any rate, in respect to this Clause will support the point of view of the Financial Secretary that no subsidies should be made or money lent at less than it costs the Government to get it. So far as I am concerned, and I think I can speak for a good many co-operators in the country, my concern is for the advancement of agriculture by co-operative method, but I appreciate the point put forward by the hon. and learned Member for the Exchange Division as to the actual cost of lending money by the State. On the Second Reading of this Bill the hon. and learned Gentleman offered very freely to the Government the whole of the organisation with which he is connected, and free of charge, I think, for propaganda and other purposes in connection with this matter of credit facilities. If there is going to be that particular help, if the local Agricultural Societies are to be used so far as offices and equipment go, it seems very difficult for me to understand that there is going to be required a marginal profit of at least one per cent. I have considerable knowledge of the costs of advancing money through a large parent organisation like our Co-operative Wholesale Bank and the distribution of it over the country for house building and other similar purposes. We have never had any difficulty on the part of our local societies in working the whole cost of the advancement of money by the parent bank to the local society at a margin of a quarter per cent. It is true we had no local offices and establishment to provide——

And no interest to pay!

Oh, yes, we did have interest to pay. I do not think that argument holds good at all. It is perfectly true we had all our local establishments. An offer was made to us on the Second Reading of the Bill by the hon. and learned Gentleman the Member for the Exchange Division of Liverpool (Sir L. Scott) that the establishment and officers of the Agricultural Organisation Society would be available. I think the argument put forward by the Mover and Seconder, and also by the hon. Member who made a maiden speech, was that the money would go through too many. It would be far easier for the money to go direct to the individual borrower through the bank, and if they work it out they will see that if the Government lend money to the bank and the bank lends it to the individual borrower, the same process will have to be gone through as will be the case under the machinery of this Bill. I know that our industrial societies, and the industrial co-operative movement, will do their best to work this section, which does provide for bringing in the farm labourer who wants merely credit for pig farming or allotment work, which no bank would be prepared to negotiate with him. My hon. and gallant Friend who moved this Amendment would hardly suggest that the country branch banks are going to say to a farm labourer earning perhaps 24s. or 25s. a week: "We will give you an advance of money to buy a pig, and guarantee it in the case of you making a loss."

If you are going to have a co-operative credit society where you have members not composed entirely of farm labourers, and you have some common interest of the different grades of agriculture, including farmers and labourers, then there is a real opportunity for the labourer to come along and get the assistance which he so badly needs. I hope my right hon. Friend the Member for Tiverton (Mr. Acland) will not press the point of view which he has placed before the Minister. Surely the farmer is going to be far better off under this Section than having to take very long credit from traders who will bleed him not to the extent of 5 per cent, interest, but probably nearer 10 or 15 per cent. If he has got the opportunity of obtaining this Government guaranteed credit at the charge of not more than 5 or 5½ per cent, then he will be considerably better off. From these benches we want to stand absolutely on this point, that if these credits are going to be given by the State they must be given on sound business lines, and not as a subsidy to this or that industry with a loss to the State. From that point of view we are prepared to support the Government.

I wish to support the argument which has been put forward by the hon. Gentleman who has just sat down. I have some sympathy with the idea that the banks might have done the business, and they did the business of the Ministry during the War with considerable success. In dealing with the present proposals, which take a much wider scope than anything the agricultural committees had to do, it seems to me a matter of impossibility that anything other than the proposals brought forward by the Government will meet the case. It will require an enormous amount of organisation on the part of the Minister to establish these credit societies, but if they can succeed in establishing them they will have achieved, something of real value to the agricultural industry. Amendment, by leave, withdrawn.

I beg to move, at the end of Sub-section (7), to insert the words

"except so far as the Minister may in the case of any society for any special reason otherwise direct."

I hope that the assistance rendered in regard to the working of this Bill will not be confined to the agricultural co-operative movement, and that the other side of co-operation may be brought in with great advantage to the State and to agriculture generally. The provisions of the Bill make it rather difficult for us to help to the fullest possible extent. It is possible that in many localities the existing industrial co-operative societies may be prepared, according to local circumstances, to set up separate credit societies on the same lines as the agricultural co-operative societies, but in other districts that might be exceedingly difficult. I think it would be very much to the advantage of the scheme to have the help of some of the larger industrial societies, with their very secure financial position and backing, and their wide experience in dealing with such matters generally. The difficulty would arise in consequence of their constitution. This Amendment suggests that the Minister should say definitely in the Bill that he would regard such cases, not in a hostile spirit, but try and meet us in every possible way. In Part II of the Schedule, paragraph 6, provision is made that

"a society shall not accept deposits, and shall not borrow money without the consent of the Minister."

If there were any danger of that Clause being used arbitrarily by the Minister it would preclude any industrial society, although operating in an agricultural area, conforming to the provisions of this Bill. With regard to paragraph 7 of the Schedule, it provides that

"not more than 5s. shall without the consent of the Minister be called up in respect of each pound of the share capital except for the purposes of winding up or dissolving the society."

In the case of industrial co-operative societies, in most cases the capital is fully paid up. In the case of my own members, it is true they only pay a small sum at first, and allow their benefits to accumulate towards the payment of each £1 share, but the majority of the capital is fully paid up on the qualifying number of shares, but that ought not to prevent those societies from functioning under this Bill. The fact that they are so stable financially would be an additional security against any possible loss in the working of this Bill. I trust that the Minister, knowing that he is just as anxious as we are that both sides of the co-operative movement should come to his assistance, that he will meet us in regard to this Amendment.

I beg to second the Amendment.

I wish to draw the attention of the Minister to a subject which I know that he has under his consideration, and that is drawing the industrial sections of the community into closer communion with the agricultural interests of the country. I think this is an opportunity which may be used for that purpose, and if by any possible means you can interest the great co-operative movement in the industrial centres in agriculture, I think it would be a real benefit if both agriculturists and industrialists better understood the difficulties with which each section of the community are faced, and especially would it be good in the interests of agriculture if you can bring them into closer relationship with the great industrial interests.

I quite appreciate what has been said as to the advantage of trying to interest the industrial classes in the prosperity of agriculture, because that is more to their benefit than to anything else. I quite realise for what the Mover of the Amendment is asking, and I certainly want to enable these societies with which he is con- nected to lend what part they can towards making this matter a success. The object of the Amendment is to enable co-operative societies which could not conveniently reorganise their constitution so as to conform with the provisions of Part II of the Schedule of the Bill, to take part in the extension of the agricultural credits movement. I have been carefully into this matter, and, so far as I can see, the only difficulties which might occur are the requirements alluded to by the hon. Gentleman in paragraphs 6 and 7 of the Schedule. These provide, first, that a society shall not accept deposits and shall not borrow money without the consent of the Minister, and, secondly, that not more than 5s. shall, without the consent of the Minister, be called up in respect of each pound of the share capital, except for the purpose of winding up or dissolving the society. The difficulty with regard to each of these provisions can be overcome under the terms of the Bill by obtaining the necessary consent of the Minister. If any society can show me that it has such ample powers as will enable it to give full security for any loan which may be made to it, I am prepared to undertake to give favourable consideration to an application by the society for the consent of the Minister to waive these requirements. I am most anxious to obtain the assistance of all co-operative societies, whether industrial or agricultural, so far as they may be available for facilitating advances to farmers for the purposes indicated in this Clause, and, if adequate security be available, there is no reason for the Minister to insist on the stipulations referred to. I hope, in view of that statement, that the hon. Member will not press his Amendment.

If that be the attitude of the Minister and his Department, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

CLAUSE 3.—(Amendment of Land Improvement Acts.)

(2) This Section shall apply also to any existing Act of Parliament which authorises a company to execute or advance money for the execution of improvements of agricultural land.

(4) The enumeration of improvements contained in Section nine of the Improvement of Land Act, 1864, is hereby extended so as to comprise, in relation to any land subject and according to the provisions of that Act, the improvements of land authorised in relation to settled land by the Settled Land Acts, 1882 to 1922, but as respects such of those improvements as are improvements specified in Sub-section (1) of Section sixty-five of the Law of Property Act, 1922, only when the application to the Minister is made after the passing of this Act.

Amendment made: At the beginning of Sub-section (2), insert the words "The foregoing provisions of."—[ Sir R. Sanders. ]

I beg to move, at the end of the Clause, to insert a new Sub-section——

"(5) Section eighteen of the Improvement of Land Act, 1864, in so far as it prohibits without an Order of the Court of Session the making of any Provisional or other Order sanctioning the improvement of land where the landowner or the husband of the landowner is an heir of entail in possession or a life-renter and is the father of the next heir, or heirs, or of a succeeding life-renter or life-renters or of the fiar or fiars and such heir succeeding life-renter or fiar or one or more of such heirs succeeding life-renters or fiars is in minority shall cease to have effect."

It sounds rather complicated, but the purpose of the Amendment is quite clear. Under Section 18 of the Improvement Act of 1864, where an heir of entail in possession or a life renter wishes to make an improvement charge on his land and the next heir or the fiar is one of his children, and that child is a minor, he cannot, as the law now stands, get the sanction of the Board of Agriculture for an improvement charge without going to the Court of Session. People in similar circumstances in England had at one time to go to the Courts, but the law has been altered in that respect long ago, and we merely wish to make the provisions in regard to Scotland correspond with those obtaining in England. It is thought that the interests of the minor heirs are sufficiently protected by the fact that the whole matter is gone into by the Board of Agriculture, and that they only grant an order after full inquiry. It is a considerable expense to go to the Court; it is not necessary in England, and therefore we propose that this Amendment should be made to the Bill, bringing the law of Scotland into line with the law of England.

Amendment agreed to.

CLAUSE 4.—(Application to Scotland.)

This Act shall apply to Scotland, subject to the following modifications:

( b ) The provisions of the Settled Lands Acts, 1882 to 1922, relating to improvements shall, subject to the restrictions therein contained, have effect in Scotland in so far as necessary to give effect to Sub-section (3) of Section three of this Act.

Amendment made: In paragraph ( b ), leave out "(3)) and insert "(4)."—[ Sir R. Sanders. ]

Schedule

Part II

ADDITIONAL PROVISIONS APPLICABLE TO SUCH SOCIETY IF IN RECEIPT OF FINANCIAL ASSISTANCE.

(2) The rules of a society shall not be altered without the consent of the Minister.

(8) The rules of the society shall provide for the limitation or restriction of the division of the profits of the society by way of dividends or bonus on the share capital of the society in such manner as the Minister may approve.

There is an Amendment—in Part II, paragraph 2, after the word "shall," to insert the words "be approved by and shall"—standing in the name of the hon. Member for Taunton (Mr. Simpson). Will the hon. Member explain? I do not quite see its purpose.

I beg to move, in Part II, paragraph 2, after the word "shall," to insert the words "be approved by and shall."

This Amendment is drafted with the intention of requiring that the rules of a society which is going to receive advances under this Bill shall require the consent of the Minister as well as the alteration of those rules. It is obvious, I think, that it will be to the advantage of the Minister that he should see the rules in the first instance and that those rules should be subject to his sanction. It is for that reason that I propose the Amendment.

I beg to second the Amendment.

This Amendment goes a little further than is necessary. If my hon. Friend will withdraw it, and move to insert the words "comprise such rules as the Minister may require for the purposes of this Act and shall," I will accept them.

I shall be quite ready to accept those words.

Amendment, by leave, withdrawn.

I beg to move, in Part II, paragraph 2, after the word "shall," to insert the words "comprise such rules as the Minister may require for the purposes of this Act and shall."

I agree with the right hon. Gentleman's statement. I am not jealous about leaving this matter entirely in the hands of the Registrar-General of Friendly Societies, but I should think there is quite ample provision already made in the drafting of this Schedule, in providing that no alteration of the rules shall be made without the consent of the Minister of Agriculture. Personally, I think it would be a mistake to pass this Amendment.

The same thing is done with other rules in the Schedule.

Amendment agreed to.

I beg to move, at the end of the Schedule, to insert a new paragraph——

"(9) The rules of the society shall provide for the acceptance of shares subscribed by any industrial and provident association, allotment association, or trade union, and where such association or union become shareholders in the society any member or body of members of that association or union shall be eligible for assistance as though he were an ordinary member of the society, provided that the association or union gives satisfactory guarantees, and further the rules of the society shall empower the association or union to delegate one or more of their members to represent their interests and sit upon the committee of control."

This Amendment has a twofold object. In the first place we on these benches are particularly anxious that co-operative credit societies should afford assistance to agricultural labourers, allotment holders, and other small people. If these credit societies are controlled entirely or in large part by the big farmers the whole spirit of the Clause will fail. We want the allotment holder and the smallholder to get his £5, and if that is to be done there must be a representative of the labourers or of other small people on the Committee. A Committee composed solely of representatives of the large subscribers would not meet our case. It is pretty certain that a number of labourers will put their money into these credit schemes individually in order to get loans. Very often the people who put their money in these concerns are not people suitable to serve on these committees. They may not be as able to think ot the financial side as people who are trained for that sort of job by the trades union or other organisations. We are therefore asking to put this additional provision into the schedule so that societies approved by the Minister of Agriculture, including industrial providence societies and allotment associations, and agricultural labourers' trades unions may invest their money corporately in the credit society, and then, by reason of that investment, claim a right to put up their nominee for a seat on the Board of Control. In that way you will not only increase the financial stability of the credit societies but you will also enable the labourers to get upon those societies men capable of stating their case and seeing that they have a fair share of the business done. I have gone carefully through the Bill and cannot see any other way in which labourers can get effective representation. In many cases you will have the parson or the squire of the parish sharing in the conduct of the business of these credit societies and looking after the interests of the agricultural labourers, but I feel certain it will be better in the long run to give the labourers themselves a chance of getting the nominee of their trade union on the Board in order to look after their interests. It is with that object in view that I move this proposal. There is no sort of financial risk involved and the object is merely to secure the representation of trade unions, industrial providence societies and allotment associations on these Committees, so that they may be able to state the case for the small man who, if left to speak for himself, might not be capable of meet- ing on equal terms the larger subscriber on the Board.

I beg to second the Amendment.

The spirit of which, I suggest, is in full accord with the statement of the Financial Secretary to the Treasury as to the object of the Bill being to promote co-operation. Up to the present point in both Clauses 1 and 2 the labourer has had no consideration at all. Clause 1 obviously is concerned with the larger farmer and in Clause 2 the farmer also is the person mainly under consideration. If the Minister will accept this Amendment, the smallest man, the labourer and the member of the allotment association, will be brought more within the scope of the Bill, and, in order that the case of the poorest men may be met, I hope the Minister will see his way to accept the Amendment.

I, too, hope the Minister can see his way to adopt something on the lines of this Amendment. May I give an illustration of the need for some such provision. In the Eastern Counties we have practically only one cooperative society. It is true it is one of the largest, but it illustrates the fact that small men have found very great difficulty in taking advantage of the admirable work of the Agricultural Organisation Society. The East Anglian Society, with its headquarters at Ipswich, and a turnover of practically a million and a half yearly, practically does nothing for the very small man, and I can quite imagine that the small men think there is no place for them in the organisation unless they can be directly represented by someone accustomed to the transaction of such business. I submit further that this is in accord with the Government view that the difficulty in regard to this Bill will be propaganda. The co-operative wholesale societies, and the Agricultural Organisation Society are going to do propaganda work, but without this provision, it will not bear the fruit it ought to bear. This would be one way of doing further propaganda, and making the Bill a success.

I should like to correct one mistake. The hon. Member has said that there is only one co-operative society in the Eastern Counties.

I said one main society

There are a great many others. There is, for instance, the society for collecting eggs, which is one of the largest in England. There are bacon factories, and there are hundreds of other societies.

I sincerely hope the right hon. Gentleman will not accept this Amendment, because it seems to me to strike at the root of the whole of co-operation. Surely it is for the members of the societies themselves to say who shall and who shall not be members of those societies. This Amendment provides that the rules of the society shall provide for the acceptance of shares subscribed by any industrial and provident association, and so on. If the members of the society are going to be jointly and severally responsible for their debts to the extent of 15s. on each share, I do not think they should be bound to elect any of these institutions which happens to want to become a member. I do not think it would be fair to the societies, or would give them a chance from the start, unless they had the option in case they did not wish these institutions to be included among their members.

I think that what the last speaker has said is right. It is quite desirable, probably——

Will the right hon. Gentleman read the last two lines of the Amendment, which speak of empowering the association? This does not force a society to accept these people, but merely empowers a trade union or an allotment association to nominate, in respect of any shares they subscribe for, any one of their members as a candidate for the Board.

3.0 P.M.

It would be compulsory on the society to provide for the acceptance of these shares, and I do not see that that is necessary. One society may wish to adopt this course, and another may not. It has been said that there is only one large society in East Anglia, but there appear to be a great many small societies as well. I quite appreciate the desirability of giving facilities for loans to a central society, for the purpose of enabling it to make grants to affiliated societies, and enabling those affiliated societies to make loans to their members; but I understand that that can be done under the Bill. This Amendment goes much further, and provides that, if an affiliated society holds shares in a central society, then all its members are to be treated as though they were members of the central society for the purpose of obtaining loans. In any case, I am afraid I cannot accept the Amendment, because it requires all societies to adopt the scheme therein suggested, and I really do not think, as the hon. Member for Taunton (Mr. Simpson) has said, that that is fair.

I am sorry to say I do not appreciate very much the reply of the right hon. Gentleman. I would point out that, in the case of industrial societies—co-operative societies—we already have arrangements under which local bodies may hold collectively share capital in the society, and I think it would be quite reasonable for agricultural co-operative credit societies to adopt an exactly similar provision. The point has already been made that there will be quite a number of farm labourers who, while they would not be able to take up individual holdings in the credit society, may be members of, and pay a weekly subscription to, one of the organisations named in the Amendment, and, by virtue of their membership of an association collectively holding capital in the credit society, they would be able to partake of the benefits of the credit society. I think there is probably some room for doubt as to the meaning of the first line of the Amendment, which proposes that the society shall provide for the acceptance of shares. I cannot at the moment suggest a form of words which would make it clear that it means only that such associations are eligible for membership, but, if that could be done, it would meet my point, and, perhaps, might influence the Minister in changing his attitude towards the principle of the Amendment.

I hope the idea of doing something of this kind will not be turned down altogether. I think it is rather difficult to say that any society of this kind can simply demand to be taken into membership by any bigger society, but I cannot help being impressed with the substance of the speeches of most of those who have supported this Amendment. If the right hon. Gentleman could say that he will see that further consideration is given to this matter in I another place, and that it shall not be lost sight of altogether, something might be hammered out which would meet the different views. I hope that, rather than negative the whole thing and wipe it out altogether, the right hon. Gentleman will say he will give it further consideration. The whole scheme is so difficult to contemplate that a good deal of consideration is needed before we ought to insert anything in the Bill.

I shall be quite ready to look into the matter. The Amendment is very complicated, and I could not accept it as it stands.

Perhaps we could be assured that something will be done on lines similar to this to get representation of trade unions and allotment associations on these credit boards. That is the important thing—to get someone who will be able to stand up for the rights of the small man. I think that the problem might be solved if the right hon. Gentleman would accept representation without, necessarily, assistance, or something on those lines which would put it within the power of the local organisations of labourers to be represented. In the circumstances, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Bill be now read the Third time."

I myself am only interested to any great extent in Clause 1, in other words, in long-term credits. We recognise the justice of this Measure, which recognises the liability of the State under its promise to the agricultural industry that the Corn Production Act should not be repealed except with four years' notice, by which farmers were induced to buy their holdings at prices which they otherwise would not have paid. Reparation was due to them for that, and this reparation, though tardily, is given by this Bill. On their behalf, so far as I can speak for them, I am grateful to the Government for that. I have tried, ever since the Second Reading of the Bill on the 30th May last, and again in Committee on the Bill, to obtain from the Minister some statement of what the rate of interest will be that the farmers have to pay for this accommodation, and I am perfectly amazed that Parliament is, apparently, willing to part with this Measure without having some statement to that effect. After to-day, the House has no control over the Measure; it is left entirely to the Treasury to decide, and, according to their decision, the farmers will get this reparation which the House is now voting to them. The whole question, to my mind, of the success of this Measure depends upon the rate of interest that an occupying owner who has bought his holding is called upon to pay. The only information that we have had at any time has been that the approved associations will be put in a position to make their advances repayable by an annuity, extending over 60 years, of £5 10s. 7d., and that has been apportioned, so far as I understand it, at a rate of interest of 5 per cent., 5s. for management expenses of the approved associations, and 5s. 7d. is to form a sinking fund, which is to accumulate in the 60 years to repay the principal loan. So far as it goes, that is intelligible. The scheme of Clause 1, which has been altered in Committee, provides two methods of finance. The Government can by means of the Public Loans Works Commissioners advance the money to approved associations, which may make the advance to the farmer on the terms provided in Clause 2. The second part of the Clause gives the Government an alternative scheme of finance. They can make the advances direct to the borrower and take the mortgage direct. Which method is to be adopted.

I take the view that these are going to be good securities. I base that opinion on two facts, that only 75 per cent, of the present-day value is to be advanced, which is a different thing from the price at which the land was originally bought, and, secondly, from the experience the country has had in lending money under the Irish Land Acts, where, I believe, the whole of the purchase money was advanced, in the case of purchases of less than 500 acres—a much larger proportion than 75 per cent—and the losses have been almost negligible. The purchaser has found that the steady reduction of the loan by the payment of his instalments affords him a constant inducement to keep to his obligations, and he has done so. The Government have already stated they can borrow money in the open market at 4½ per cent. It is to the interest of the House that the money shall be advanced at the lowest possible rate that is conducive to safety and no profit to the State. There is no object in the State making money out of the misfortunes of these farmers. The Bill is passed purely to recognise the liability owing to the farmer on the grounds I have stated, and its success depends on making the advances at the lowest possible price. The lower we can make the repayments, the more of these men shall we get to come in, overhead charges will be diminished, the working expenses will be lessened and less money will therefore have to be provided for the working costs of the scheme. Moreover, the more farmers you get to come in, the less likelihood is there, spreading the risks over the whole lot, that there will be any appreciable default. I do not suggest that in the first few years there will not be an occasional default. In spite of the best system of valuation that we may have, it may be that some borrower, through some unforeseen cause, may be unable to meet his obligations. It may happen that, at that very moment there is a slump in the value of land in his neighbourhood and, on a forced sale, there may be some loss.

Those are the only cases that I can foresee in which there will be loss. They will be very few, and they will be wiped off after a few years by the Sinking Fund steadily decreasing the amount of the loans. It has to be borne in mind that whatever reserve fund is set aside to meet any such loss as there may be in the annuity which the farmer has to pay that proportion of the annuity which goes to form a reserve fund will continue for the whole of the 60 years, and if there be a loss in the first year or two, exceeding the amount set aside, it will be made good by the amount which is continued in the annuity borne over the whole period. I hope I have made that plain. The only point of that is that in regard to the reserve fund, which the Government need to provide for in the annuity which they require from the farmer, to meet any such loss—as the losses will be small and few in number, and will altogether disappear after the first few years—that portion of the annuity required to provide a Sinking Fund will be very small.

Can the hon. Gentleman say whether the loss is going to be borne by the association or by the Government?

That is one of the things I want to know. I also want to know whether the Government scheme is now to make the advances direct, or still through the approved associations. If the Government can raise the money—as has been stated to-day, and I know they can—at 4½ per cent., why are they going to require from the farmer 5¼ per cent., including therein the small proportion of the annuity that would go to make the reserve fund? The administration cost of this business will be small, though there will, in the first place, be a considerable amount of work. In that, there will have to be a valuation made by some valuers. If the scheme be carried out by the approved associations, there will have to be one set of valuers approved by the Government, otherwise it will be absurd to have two separate valuations, and there will have to be a legal investigation of the title to complete the mortgage. Again, it is incredible to think that that is going to be carried out by two sets of lawyers, one on behalf of the approved associations and the other on behalf of the Treasury. I have not the least doubt that in the arrangements which will be made, there will be some arrangement for one set of lawyers and one set of valuers to cope with the work.

It seems to me, and I can get no answer from any official, either of the Treasury or of the Ministry of Agriculture, that if the money can be got at 4½ per cent and to my mind 2s. 6d. or 3s., or possibly a little more, is enough for expenses of management and the reserve fund—put it at 4¾ per cent., if you like—there is ample room for a reduction of the annuity. I may be putting that a little too low, but there is a large difference between 5¼ per cent., which is the last figure we have heard is going to be charged to these farmers, and what the Government are going to pay. I ask that that shall be lessened. We ought, at any rate, to have a less sum, and 5 per cent, plus the 5s. 7d. should certainly do the whole thing. It ought to be less than that, and the Government can do it, if they set to work, at a lower rate than that. If they do it at a lower rate than 5 per cent, or a little less, say 4⅞ per cent, most of the farmers will come in and they will be really benefitted.

What do the Local Loans Commissioners charge?

The Local Loans Commissioners borrow at 4½ and, however small or overburdened a local authority may be, they do not charge it more than 4¾. In this particular case, if the valuations be properly made, the instalments will be coming in every year and the money can be used to pay off large amounts of Government borrowings at higher rates of interest. We ought not to part with this Bill until we have heard from the Government what the Treasury and the Ministry of Agriculture are going to do. Farmers to-day are borrowing-money in the ordinary way on a good mortgage security at 5 per cent., and if this is to benefit farmers the Ministry ought to fix a rate considerably less than any we have been told about up to the present.

Before this Measure pass to another place, there are one or two general observations which I wish to make. I do not subscribe to the assertion that it is necessary, by reason of the failure of the Government to honour pledges in the matter of the Corn Production Act for us who are asked to find the money under that Act, to do so. Under that Act there was an expenditure of many millions of pounds which were largely free gifts to the agricultural interests. We do not admit that that Act was for the benefit of the State. We do assert that it was beneficial to a particular industry, and therefore there was no liability on the Government of the day to continue that Act any longer than, in their opinion, was necessary, and there was no obligation placed on the Government of the day to meet any liability arising therefrom. The reason that this particular Measure is said to be necessary is that agriculture is in a distressed condition. This House ought to have evidence of this distress. The only evidence that we have had is a number of very carefully-prepared stunt articles, particularly in the Sunday Press, which always are a pointer indicating what the Government are after during the balance of the week. No evidence has been submitted here by any Minister to show that agriculture is in a terribly distressed conditions.

The fact is, to my own knowledge, that there are certain, perhaps many, farming interests which are to-day in a very profitable condition. I object to this Measure because it is giving preferential treatment to a particular industry. Are we to understand that this principle is to be extended to all industries which tell the Government, without proving it, that they are in a distressed condition? If not, why are we pledging the credit of great industrial communities such as that which I represent—which is in no sense agricultural, but is mining, engineering, and shipbuilding—whose industries have never been in so distressed a condition as they are to-day, of which there is superabundant evidence? Why should we be prepared to meet what has been described as the substantial loss which will be incurred? This House should consider carefully whether it should give this Bill a Third Reading. I am not prepared to deny, strange to relate, that this Measure does contain some good points. It does. I believe that the establishment and extension of agricultural credit societies will be of benefit. I do not share the views of my colleagues that the result of this Measure will be that the agricultural labourer is to have his status improved materially. That idea has weighed with my colleagues considerably. In addition, it has been assumed that, by reason of the State's overruling authority, it will in some way have control over the land and the country. If that theory be correct, I can say specifically that the industries of shipping, shipbuilding and ship repairing, mining, and so forth, will be exceedingly glad to allow such an overruling authority by the State upon identically similar terms to those of this Bill.

The Bill is a very dangerous Bill. It allows unlimited credit. It is admitted by the Farmers' Union that £10,000,000 might not be necessary. Does anyone believe that the Farmers' Union is likely to underestimate how much will be required? The Government, as usual, has given a free hand to those who administer this Measure to act in any lax and easy fashion with the taxpayers' money, instead of fixing a specific sum in the Bill. A question has pertinently been raised as to what protection we are to have against those who may use State money for the purpose of holding up land for speculative purposes. There has been no answer to that question. There are large numbers of persons or concerns entirely beyond the scope of the Corn Production Act, on which this Bill is alleged to be based. I hope that as a result of this Measure we shall have an end to the theory, which has been used so successfully, that farmers ought to have the protection of the State because they cannot keep books of account. The probability is that they, or some organisation on their behalf, will be expected to make themselves acquainted with the rudiments of book-keeping, and we may hope that the farming interests, instead of paying Income Tax merely on rental, will pay, as they ought to pay, upon the actual profits earned. This Measure will give preferential treatment to a particular industry which, during the last 25 years, has taken from the pockets of the rest of the community, many millions of pounds. There is little doubt that there will be substantial public loss arising out of the Bill, and on the whole the balance of evil to the community outweighs the good which may ultimately come from the scheme.

The last speaker has said that he requires evidence of the distressed condition of agriculture. I would suggest that he should go into some rural districts, and see for himself the condition in which agriculture is over the greater part of the country. In agricultural circles it is generally assumed that the Minister of Agriculture has been cast for the part of Shylock. It would be more true to say that he has been playing the part of Portia to a courteous but inexorable Shylock in the person of the Financial Secretary to the Treasury. I feel sure that the right hon. Gentleman has done his best for the agricultural interest, and I could only wish that his prayers had been more successful than they have been. This Bill is to fulfil a pledge given by the Government, The danger, from the point of view of the Government, is that the agricultural community will be apt to say, "Yes, you have fulfilled the letter of your pledge but have not fulfilled the spirit of it. It is quite true you are giving us credit, but it is credit on such terms that we are not able to use it." I would remind the Minister of what has been done in this direction in other countries. In the United States and France, very large sums have been voted by the State in order to assist agricultural credit. In Italy, particularly—a poor country—very large sums have been devoted to the same purpose in the last few years. In Italy the Government has worked through the existing banks, and in two sections of the country, only, through the savings banks—the Bank of Naples and the Bank of Sicily—and 187,000,000 lire have been advanced since 1914 for ordinary agricultural credits and, in addition to that, the State has voted 184,000,000 lire for extraordinary credits arising out of the War.

The late Prime Minister told the House on a memorable occasion that the Government had made the country rich by making the individuals poor, and that observation applies quite as acutely to the agricultural industry as to any other. In fact it may be said to apply almost more directly to it. If a poor country like Italy can find these very large sums for agricultural credits, surely we might put some of our credit behind the British agricultural industry on more favourable terms than the strictly commercial terms which are in this Bill. In Italy the advances through the Bank of Naples are made at the rate of 4 per cent, and the intermediary societies are limited to 6 per cent., allowing a margin of 2 per cent, for the working of the societies. If the terms of this Bill are to apply in this case, the intermediary societies will have to charge over 6 per cent, to the borrowers, and I do not think it can be alleged that that is a very great advantage to the farmer. Furthermore, in Italy in the case of grants for outhouses, stables or cowhouses the maximum rate of interest is 2½ per cent., and the State bears the difference between that and the normal rate. I do not mind personally whether this is called a subsidy to agriculture or not. I should be very pleased to be termed a member of a subsidised industry if I could get the subsidy. As the position stands at present I am afraid that this Bill will be a dead letter so far as short-term credits are concerned. The hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) on the Second Beading of this Bill said that the short-term credit scheme could not be a success unless the local landowners and clergymen were put at the head of the credit societies. At the time I was rather puzzled, knowing his views on the land question, as to why I the hon. and gallant Gentleman should select those people, and the conclusion I have come to since is that he thought these were suitable people to whom to sell a pup. I am rather afraid in regard to short-term credits the agricultural industry is being sold a pup. I urge on the Minister, before he issues these Regulations, to consider whether he cannot give more favourable terms both in long-term and short-term credits in order that the agricultural community may say, "Not only have the Government given a pledge and kept it in the letter, but they have also kept it in the spirit."

I will not detain the House for long, especially as I know the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) is very anxious as to the prospects of her Bill, but I want to urge that this Bill should be given all the assistance possible by the representatives of the Agricultural Organisation Society. I believe we shall see some curious results of this Bill. I do not hope very much from the long term credits, but I hope very much from the short term credits, because I think it is very probable that a class of borrower will be recruited for these short term societies, who at present deal neither with the banks nor with any other society, but with the local money lender, be he tradesman or be he labourer. The proposal made from the benches above the Gangway in regard to membership of these co-operative friendly societies seems to me to be in every way laudable, as long as it is not made compulsory on the credit societies to enlist these subsidiary societies as members. If it be left optional, I anticipate that a very large number of subsidiary societies will join. With regard to long term credits, if the facts are as stated by the hon. and learned Member for East Grinstead (Mr. Cautley) on the Second Reading, it seems to me that there is no necessity for Clause 1 at all. He said that a land purchase company could to-day raise £20,000,000 sterling at 4½ per cent, at 102.

With a Government guarantee.

I did not see any reference to a guarantee in the OFFICIAL REPORT.

Yes, I think there is.

And the hon. and gallant Member for Rye (Lieut.-Colonel Courthope) indicated assent. If it be true that money can be raised at 4½ per cent, by banks at the present time—[HON. MEMBERS: "No!"]—the right hon. Member for the City of London (Sir F. Banbury) stated that the interest on loans to farmers at present was 4½ per cent.

I said that in all probability a banker at the present moment, with the value of money as it is at present, and the bank rate at 2 per cent., would possibly lend to an approved borrower at 4½ per cent.

If the rate of interest is going down so fast that 4½ per cent, is going to be the normal rate at which bankers will lend, then, unless the Government be able to lend at a lower rate, it is clear the business will remain with the banks. I do not think there will be very much business under this Bill under the long-term credit system, because the range is so small. We have to have people whose mortgages are about half the value of the land.

If the hon. Member will allow me to interrupt, I said that the bank rate was 2 per cent., but it is 3 per cent.

The number of people who will borrow will be small, and the amount borrowed will be very much less than is expected. I certainly welcome the Bill, and I hope it will be a great success. I am certain that on all sides we wish it success and that hon. Members will do all they can to assist it.

I want to add whatever little weight can be added from these benches to the plea made by the hon. Gentleman opposite about the rate of interest. In my view, to expect the farming community to get the alleged benefits of this Bill with a rate of interest at 5 per cent, to 8 per cent, is selling them a pup, and you simply do not get——[ Interruption .] A learned authority on Parliamentary manners behind me says that is not a Parliamentary observation. However, I hope the Minister will see that arrangements are made, if you are going to give agricultural credits at all, to give those credits without making a profit. If you are going to give the farming community at the present time any benefits at all, surely the least you can do is to give them their loans on their credits without making a State profit on the business. Give them at the cheapest possible rate. The Bill, however, in our opinion—at any rate, in mine—is like the curate's egg, good in parts and bad in parts. The main purpose of the Bill is, of course, not to relieve the farmers at all, but to relieve the money-lenders, who have been caught with a falling security in a bad market, and these money-lenders, the banking fraternity, at any rate, if my information be correct, got an average of 22½ per cent, profit on their paid-up capital last year—[An HON. MEMBER: "And the reserves!"]—plus the reserves, as another financial authority says. I think the Minister, therefore, ought to have put a provision in the Bill to ensure that the farming interest and agriculture should benefit out of the State credits, and not make it merely a money-lender's relief Bill, disguised as an agricultural credit scheme. However, for my part, I do not propose to vote against it.

I do not think I need go into a discussion as to whether agriculture is in a bad state or not. I think the only question to which I am called upon to reply is that asked by my hon. and learned Friend the Member for East Grinstead (Mr. Cautley). I have been represented as playing the part of Portia to the Shylock of the Treasury, and I can only say that Shylock has told me that he cannot borrow at 4½ per cent. for a period of 60 years. I have had a good deal of discussion on the subject, and I cannot hold out any hope that the total amount for interest and sinking fund for a period of 60 years, can be less than what I said on Second Reading, namely, £5 10s. 7d., and that is a very considerable reduction indeed, on what was first proposed when the Report of the Committee came forward. As to the direct advances, it is the hope and belief of the Government that this Measure will be worked through approved societies, and so the question of direct advances will only come in if we fail to work it in that manner. I cannot, therefore, give the exact figures at the present moment as to what they would amount to. I quite agree with the hon. Member that the losses are likely to be small. I am sure we are all hopeful, on the other hand—Shylock wants to be on the safe side—and that is the minimum amount at which the Treasury is ready to advance the money.

But money can be got at 2½ per cent.?

That is rather a big question to enter into now. I trust, having answered the various questions put to me, that the House will now give the Bill a Third Reading.

I have supported this Bill all through, and I believe it will do something to relieve the present depression in the agricultural industry. I must, however, state clearly and explicitly that I believe it to be rather a tame and half-hearted Measure. In regard to Clause 2 of the Bill, in Scotland we agriculturists have always received a large measure of sympathetic consideration from the banks, and some system surely could have been evolved whereby these credits could have been obtained through these institutions. Under the National Health Insurance Act approved societies were set up in connection with large industrial insurance companies, and I believe some such system could have been created, and the banks set up approved societies to have brought assistance to the agricultural interest. At the present moment I have no doubt this matter of financial assistance is urgent to agriculturists throughout the country, and especially farmers; both have very little ready-money at hand at present, and it is becoming a very serious question as to how they can go on. They have cut down, I believe, every possible source of expense except in one direction, and that is the wages of their labourers. There have been some reductions of these wages in Scotland, but they have not been very drastic, and I am prepared to say that the average wage in cash and perquisites to the agricultural farm labourer in Scotland is somewhere in the neighbourhood of 35s. per week in value. If credits are not brought rapidly to the assistance of the farmers, the only other reduction they can possibly adopt is in regard to the wages of the workers. I do believe it is even yet possible in another place that some system should be evolved whereby credits will be brought to the assistance of the farmers far more rapidly, possibly then they can be bought by these approved societies, which will undoubtedly take a long time to get into working order. I hope something, as I suggest, will be done, and I support this Bill, which I hope will do something to relieve the great depression in agriculture.

I intended moving an Amendment to Clause 2, but owing to my going out to luncheon, I was not present when my Amendment was called. Before we part with the Third Reading, I want to ask the Minister of Agriculture to promise that he will take some steps in another place to limit the amount which may be advanced under Clause 2. Some hon. Members are apparenly under the impression that you are going to save agriculture by advancing to those engaged in that industry money to carry on their business. It is no use advancing money to carry on a business which is not in a prosperous condition. The only thing you can do is to see that the prices obtained by agriculturists are sufficiently high to give them a profitable return on their investments. Being a loyal supporter of the Government, I have not said much upon this Bill, but I am a Protectionist and always have been, and in that respect I am a good trade unionist. I am not, however, in favour of a subsidy, because I believe that that is the very worst form of Protection. Although I have not said anything against this Bill, I do not believe that it is going to do anything to improve agriculture. I also view with very grave concern the fact that you are going to advance sums of money under Clause 2 to new credit societies. That is not going to be much use to the farmers, but very dangerous to the State. I hope the right hon. Gentleman will consider whether or not he can put some words in the Bill in another place which will limit the amount to be advanced under this Bill.

I wish to emphasise the point that I do not think this Measure will be of much assistance unless the rate of interest be kept low—say about 5 per cent. I hope that the instructions which will be issued by those concerned will be on generous lines, so that the valu- ations to be made under the Bill are not put at an excessive figure. I only want to emphasise those two points, because I do realise that they are two vital points in the Bill, and that it cannot succeed unless they are wisely dealt with in that manner.

Let me say, first, not as an agriculturist, but as a manufacturer, that I regard with great jealousy the ability of agriculturists to borrow money so cheaply over a period of a large number of years. I only wish that manufacturers could get money out of the Government to put up large factories in the same way. My hon. Friend (Sir D. Newton) who sits below me has referred to the fact that the agricultural industry would be benefited if they could keep the interest below 5½ per cent, and indeed below 5 per cent. I think the system of this Bill is not a good one. There is a much better way of doing it. I think the money could be raised in a better way, so that agriculture could get it more cheaply. At the present time the public is quite willing to lend the Government £100 for 5 per cent, per annum. There is, for instance, the 5 per cent. War Loan which is repayable at the earliest in 1929. I have not the slightest doubt that the Government could easily raise a loan—my hon. Friend below me (Mr. Wise) knows more about it than I do—on the Stock Exchange at 4¾ per cent.; and perhaps at 4½ per cent.; and they could then lend the money to the farmers at a less rate of interest than 5½ per cent. [HON. MEMBERS: "Divide!"] I am not going to talk the Bill out. I have no intention of obstructing. I am doing what I can to lay a view before the Minister. I do think that the Government should consider the advisability of changing the method of raising the money, and should issue a loan for these agricultural credits, for instance, at 4¾ at 99, so as to give a little money as make-weight for the investor. I am quite certain that in that way they would get the money for the farmers at a less rate of interest.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

I do not propose to select the first Amendment standing in the name of the right hon. Gentleman the Member for the City of London (Sir F. Banbury)—In Sub-section (1), to leave out the word "eighteen" ["eighteen years; and no person"], and to insert instead thereof the word "seventeen."

I beg to move, in Sub-section (1), to leave out the words

"where such liquor is sold, supplied, or purchased only for consumption at a meal to be consumed at the same time in such portion of the premises as is usually set apart for the service of meals, not being a bar as denned in Section one hundred and twenty of the Children Act, 1908."

The object of this Amendment is very clear. The Bill, as amended, permits of a young person under the age of sixteen purchasing beer, perry, cider, and so on, but he or she must have a meal with it. I say that the whole Bill is a gross infringement of the liberty of the subject. It has not been sufficiently modified. During the War many boys of 16 joined up and took part in the fighting. If a young fellow of that age was old enough to fight, he surely is old enough to drink a glass of beer, yet if he has been spending his time on the river or at tennis, and passes a public-house on his way home, he may not assuage his thirst, unless perchance he buys and eats some bread and cheese which he may not want to do. It is absolutely absurd to place him under such a ban.

rose in her place, and claimed to move , "That the Question be now put," but Mr. Speaker withheld his assent, and declined then to put that Question.

I am making this suggestion in a friendly spirit——

Friendly?