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Commons Chamber

Volume 172: debated on Tuesday 15 April 1924

House of Commons

Tuesday, April 15, 1924

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

Private Business

PRIVATE BILLS [Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:—

King's Lynn Docks and Railway Bill [ Lords ].

Bill to be read a Second time.

PRIVATE BILLS (Petition for additional Provision) (Standing Orders not complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for additional Provision in the following Bill, the Standing Orders have not been complied with, namely:—

Rotherham Corporation Bill.

Report referred to the Select Committee on Standing Orders.

City of London (Various Powers) Bill,

Read the Third time, and passed.

Harrogate Corporation Bill,

As amended, considered; to be read the Third time.

MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 5) BILL,

"to confirm certain Provisional Orders of the Minister of Health relating to Bridlington, Brighton and Hove, Halifax, Oldham, and Pembroke," presented by Mr. WHEATLEY; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 114.]

Oral Answers to Questions

Questions

Mixed Arbitral Tribunal (Enemy Debts)

asked the President of the Board of Trade how many of the 1,467 cases lodged with the Anglo-German Mixed Arbitral Tribunal, and not disposed of on 29th March, are held to be ripe for trial?

The number of cases lodged with the Anglo-German Mixed Arbitral Tribunal which were ripe for trial on the 29th March was 711.

Can the right hon. Gentleman assure the House that these cases are being pushed forward as much as possible?

In view of the large number of cases ripe for trial, will the right hon. Gentleman take steps to see that a third tribunal is appointed?

I cannot accept the statement that there is a very large number of cases, relatively to the total, ripe for trial. The question of the third division of the tribunal is under consideration, and steps will be taken as soon as it is considered that a suitable time has arrived.

asked the President of the Board of Trade if he will state how many cases regarding claims for compensation now before the Anglo-German Mixed Arbitral Tribunal have been before that body for over one year and how many for over two years; and what are the similar figures for cases respecting enemy debts?

The number of claims for compensation under Article 297 presented to the Anglo-German Mixed Arbitral Tribunal before the 1st April, 1922, and not yet finally disposed of, is 138. The number of claims in respect of debts under Article 296 in a similar position is 33. The number of claims for compensation presented before 1st April, 1923, and not yet finally disposed of, is 592, including the 138 referred to above. The number of claims for debts under Article 296 in a similar position is 293, including the 33 referred to above. It should be borne in mind that in a large number of these cases proceedings have been stayed or suspended at the instance of the claimants, who do not wish to go to trial.

Can the right hon. Gentleman give us any idea how soon these claims, or a portion of them, will be settled?

asked the President of the Board of Trade if he is aware that during last month the second division of the Mixed Arbitral Tribunal sat on 15 occasions while the first division sat only on four occasions, and can he explain this discrepancy; whether more is paid to the members who sat four times than to the members who sat 15 times; and, if so, how much; and also whether the fact that the British Government does not actually control the Anglo-German Mixed Tribunals prevents it from inquiring into the reasons for the first division sitting only 15 times during the three months of January, February, and March last, thereby delaying the settlement of a very large number of outstanding British claims amounting to about £60,000,000?

The figures quoted in the first part of the question are those which I gave to the hon. Member on 8th April. I am informed that the reasons for the small number of sittings by the first division are the temporary absence of the President, the absence through illness of the German member, and the fact that on certain occasions cases down for hearing were withdrawn and it was not possible to arrange for other cases to be heard. As regards the third part of the question, the salaries paid to the Presidents and British members of the two divisions of the tribunal were stated in my reply to the further question asked by the hon. Member on the 8th April. The figure for outstanding claims given by the hon. Member appears to include German claims amounting to £15,990,000; and it is probable that a large proportion of the outstanding British claims will be settled by negotiation between the two clearing offices without the necessity of a decision by the Mixed Arbitral Tribunal.

Does not the earlier part of the right hon. Gentleman's reply point to the absolute necessity for a third divisional tribunal?

Enemy Action Claims

asked the President of the Board of Trade whether, in claims made to the Royal Commission on Compensation for Suffering and Damage by Enemy Action during the War, provision is made for those British subjects who owned property in Belgium to be allowed rent for their premises which were occupied by the Germans?

In dealing with claims by British subjects in respect of War damage suffered in Belgium, the Royal Commission took into account all damage within the provisions of Annex I to the Reparation part of the Treaty of Versailles, including compulsory dispossession of property by the enemy, but I would refer to the observations of the Commission in paragraph 23 of their First Report, Cmd. 1798.

Will the right hon. Gentleman answer my question clearly "Yes" or "No," whether persons who own in Belgium property occupied by the Germans during the War are entitled to rent.

That is not an easy question to answer. I will inquire and see if I can give a specific answer.

asked the President of the Board of Trade if he is aware that a large number of seamen and their dependants are anxiously awaiting from day to day information as to when they may expect the extra £300,000 for belated claims to be distributed; and will he, therefore, make a statement fully explaining the position and indicating approximately when distribution may be expected to begin?

As to the first part of the question, the answer is in the affirmative. As to the second part of the question, upwards of 23,000 belated claims have been received. The final date for the reception of belated claims is 1st June, and some little time must elapse after that date before all these claims can be examined and payment in respect of them be commenced.

Is the right hon. Gentleman aware that that answer will cause great disappointment to a large number of poor people who are in urgent need of their claims being met?

I am sorry, but in face of the fact that there are 73,000 separate claims, and that these people might have applied two or three years ago, I cannot offer any hope that their claims can be dealt with in a few days.

The sum of £300,000 is an ex gratia award by the Treasury, comparable with the £5,000,000 which has already been allotted and distributed.

Can the right hon. Gentleman say whether the investigation of belated claims is proceeding before the last date for the lodging of claims?

The investigation is already in hand with regard to such claims as have been received. But it must be remembered that the awards cannot be made until the whole lot has been examined.

Do we understand that the belated claims will receive the same proportion from the £300,000 as the original claims got out of the £5,000,000?

I cannot foresee what the examination will bring forth, but, as far as can be foreseen at present, the procedure will be on the same principles as those laid down by Lord Sumner's Committee with regard to the original claims.

asked the President of the Board of Trade whether he is aware of the slow progress that is being made with respect to the settlement of enemy debts with this country; and whether he is able to set in motion any machinery by which the claims may be more speedily adjusted and the administrative costs of the Department be substantially and quickly reduced?

A very large proportion of the claims lodged with the Clearing Office has already been settled, and the balance still outstanding represents the more contentious claims, most of which are contested by the German Clearing Office, and in respect of which delay is unavoidable. Every effort is being continually made by the Clearing Office, by arranging personal interviews between creditors and debtors, and by other means, to expedite a settlement of these outstanding claims, and considerable progress is being made in this direction.

Is the right hon. Gentleman aware of the very serious dissatisfaction that exists, and that yesterday, as reported in the "Times," there was a protest meeting held in the Cannon Street Hotel?

I can accept no responsibility for the organisation and arrangements which were made by a preceding Government. It ought to be known that the total amount already recovered and actually paid out to these further claimants up to 18th March was just about £70,000,000.

Were the special police at this meeting at the Cannon Street Hotel?

asked the President of the Board of Trade whether, in view of the widespread dissatisfaction at the rejection of claims by the Royal Commission for Loss through Enemy Action, the Government will consider the provision of further funds in order to permit the review of cases where ex-gratia payments have been refused?

I would refer to the answer given by the Financial Secretary to the Treasury to the hon. Member for the Isle of Thanet on 24th March, 1924.

Do I understand that the Government are unable to do anything more than they have foreshadowed for those who have failed to secure redress up to the present?

The Government have, after very considerable sums have been already paid out, granted a further sum of £300,000. This is being dealt with as fast as possible.

asked the President of the Board of Trade how many claims for compensation in respect of damage caused by illegal enemy action have been rejected by the Royal Commission; and whether, in cases where there was a reason for the rejection of a claim, the claimant can be told what was the reason for its rejection?

As to the first part of the question, the Royal Commission have recommended that no ex gratia payment should be made in respect of 10,355 claims against the £5,000,000, a large proportion of which were claims for damage excluded from the consideration of the Commission by their Terms of Reference. As to the second part of the question, I would refer the hon. Member to the answer which I gave him on the 8th April, and to the answer given to the hon. Member for the Isle of Thanet (Mi. E. Harms-worth) by the Parliamentary Secretary to the Treasury on 31st March. I am, however, inquiring further into the question, and I shall be glad to communicate with the hon. Member on the subject.

Does the answer given to me last week deal with the question as to whether these poor people should not know the reasons why their claims are rejected?

I can only say it is extremely difficult for any Department or any member of the public to explain the reasons which lead the tribunal to reject a claim, and I am afraid it would not be possible to give a specific answer in each case. I recognise the force of the suggestion of the hon. and learned Member, and I am going further into the matter to see if anything can be done to meet the reasonableness of the hon. and learned Member's desire.

asked the President of the Board of Trade the number of claims which have been received by the Reparation Claims Department since it was announced that the date of receipt would be extended until June next; and what is the exact number at present of all such claims which rank for treatment under the promised allocation of £300,000.

As to the first part of the question, the number of claims received since the announcement referred to is 495. As to the second part, the number of claims lodged with the Reparation Department is 23,228, but until the claims have been examined it is not possible to say how many will be admissible against the £300,000.

Is the right hon. Gentleman satisfied with the publicity given to the revised date on which claims could be put in, and will he consider advertising it through the Post Office?

I think the fact that these claims may be put in up to June has received extraordinary publicity and advertisement, and the fact that so small a number of new claims has been received is to be accounted for by the fact that 2,000 had already been received during the past two years.

Patents Office

asked the President of the Board of Trade what was the excess of revenue over expenditure in the Patents Office for the years ending 31st March, 1923 and 1924; and whether he will consider' the advisability of reducing all fees and charges with respect to applications for renewals of patents to the actual cost, so that inventors may be encouraged to use their abilities to the fullest possible extent?

The figures for the financial years ending 31st March, 1923 and 1924, are not readily available. The excess of revenue over expenditure in the Patent Office for the calendar years 1922 and 1923 was as follows:

Washington Convention (Eight Hours' Day)

asked the President of the Board of Trade whether, in view of the additional handicap that may be imposed on British industry by the ratification of the Washington Con- vention with respect to the eight hours' day, he will state how German conditions compare with those in Britain in the follow respects, namely: index figure for food-stuffs for 1913 and at the present time, rates and taxes per head of the population, and weekly hours of labour for workers in mines, coke ovens, and steel mills?

I have been asked to reply, and, as the answer is rather long, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Without discourtesy, may I ask the hon. Member whether she will give some answer in detail before she circulates the information?

Is there any reason to suppose that as the majority of English working people work eight hours, the ratification of the Convention will place any handicap on industry?

The answer is as follows:

In Great Britain and Northern Ireland retail food prices at the beginning of March, 1924, stood at 1·76 times the pre-War figure; in Germany, at the same date, they stood at 1·19 billion times the pre-War figure.

As regards the comparative incidence of taxation in the two countries the figures are as follows:

Taxation.

1913–14:

United Kingdom, £3 11s. 4d.

Germany (Reich), marks 31·3( a ) (at par=£1 10s. 8d.).

1923–24.

United Kingdom, £16 6s. 3d.( b ).

Germany (Reich), gold marks 81·34( c ) (at 20=£4 1s. 4d.).

Rates.

1913–14:

England and Wales, £1 18s. 11d.

No information for Germany.

1922–23:

England and Wales, £4 3s. 4d.( d ).

No information for Germany.

( d ) 1922–23 Estimates.

The hours of labour worked in Great Britain at the present time in coal mines, coke ovens and steel mills respectively are as follows:

Coal Mines:

Underground workers, 7 per shift; surface workers, 46½ per week.

Coke Ovens:

Shift workers, 8 per shift; day workers, 46½ or 47 per week.

Steel Mills:

Shift workers, 8 per shift; day workers, 47 per week.

The most recent relevant official information available for Germany is set out below.

Hours of labour in Germany at the beginning of 1924, us fixed by collective agreements:

Industry and District.

Hours of Labour. Per shift.

Mining:

Ruhr District:

Underground

8

Surface

10

Upper Silesia:

Underground

Surface

10

Lower Silesia:

Underground

8

Surface

8

Metal:

Per week.

North-Western Group

57½

Berlin

54–60 *

Hamburg

54

Breslau

54–60 *

Stuttgart

54–60 *

Magdeburg

56

Mannheim

54–60 *

Hagen

57

* Lower limit at the order of the employer; higher limit by agreement of the works council. Lower limit at the order of the employer; higher limit by agreement of the works council.

Safeguarding of Industries Act

Artificial Flowers (Imports)

asked the President of the Board of Trade whether his attention has been called to the fact that artificial flowers of German production are at present being sold in this country at from 1s. 4½d. per dozen to 2s. 6d. per dozen, while the cost for wages alone at Trade Board rates of the manufacture of the same flowers in this country amounts to from 3s. to 5s. 7d. per dozen; and what action he proposes to obviate the unemployment in the artificial flower-making industry which is certain to result from the figures given above if no legislation is introduced to extend the duration of Part II of the Safeguarding of Industries Act after the 19th of August next?

I would refer the hon. Member to the answer given on the 3rd April to the hon. Member for Kings-ton-upon-Thames, a copy of which I am sending him.

Is the right hon. Gentleman aware that the rate of wages for flower-makers in Germany is 18s., as against the Trade Board rate of 32s. a week in this country? Does he not think that some protection should be provided to prevent British workers being thrown out of employment?

The supplementary question raises, as the hon. Member probably knows, extremely difficult questions of economic controversy on which expert opinion is extremely divided. I shall, therefore, not be rash enough to make a reply now.

Is the right hon. Gentleman aware that these flowers, samples of which have been distributed to Members of this House, are absolutely rotten flowers, and would not be made by British workers?

Complaints (Part Ii)

asked the President of the Board of Trade how many complaints have been received by his Department, under Part II (1) ( a ) of the Safeguarding of Industries Act, alleging that goods are being dumped into this country below the cost of production; and, if he has received any, what action has he taken?

During the three years since the passing of the Act five complaints of the nature indicated by the hon. Member have been received. Of these, two were referred to committees constituted in accordance with the provisions of the Act, but the committees' reports were in each case adverse to the complainants. In the other three instances the Board of Trade were of opinion that the evidence submitted was not such as to warrant reference to a committee.

Photographic Cameras

asked the President of the Board of Trade the number of photographic cameras imported into this country since the imposition of the duty under the Safeguarding of Industries Act; and whether he can also state if the imposition of this duty has led to any new factories being established for the production of these goods?

The number of photographic cameras registered as imported into the United Kingdom during the period 1st October, 1921, to 31st March, 1924, was 798,772. I am not aware that the imposition of duty under the Safeguarding of Industries Act has led to the establishment of new factories for the production of cameras; but, owing to Wartime requirements, protographic plant and equipment in this country had already been considerably extended.

Parcels Examination (Mount Pleasant)

asked the Chancellor of the Exchequer whether he can state the number of staff, amount of salaries, and other expenses incurred at the Mount Pleasant parcels office in connection with the examination of parcels in reference to the Safeguarding of In- dustries and Import Duties; and whether he can give similar figures for the period before the imposition of these duties?

The total number of Customs officials employed at Mount Pleasant in connection with the examination of parcels for the purpose of the Safeguarding of Industries Act, 1921, and the new import duties is approximately 52. The average salaries and expenses of this staff are estimated at £21,000. If these duties had not been imposed the examination of these parcels for general Customs purposes would have required some eight officials at an estimated cost of £3,150.

Is the right hon. Gentleman aware that a former President of the Board of Trade said that no extra officials have been taken on?

I am not aware of what a former President of the Board of Trade said on this point, and I think, therefore, that my hon. and gallant Friend will exonerate me from any responsibility for it

Is my right hon. Friend aware that I believe him in this matter?

Trade and Commerce

Catgut and Furniture Castors

asked the President of the Board of Trade the amount of catgut and furniture castors imported during the year 1923; and whether he can state what proportion of such imports was liable to import duties?

I regret that the information asked for by the hon. Member is not available.

Scottish Shale and Oil Industry

asked the President of the Board of Trade if he has made any representation through the Government representatives to the executive board of the Anglo-Persian Oil Company as to the position of the Scottish shale and oil industry, in terms of the promise given some time ago in an interview with the workmen's representatives; and, if so, what action is he now lkely to take in the matter, in view of the anxiety which prevails in the shale and oil districts?

I have been in correspondence with the company on this subject, As my hon. Friend is, however, aware, the Government have no legal right to control the conduct of this1 industry and can only draw the attention of the company to the various points which have been raised. I have previously intimated that any danger of an early closing down of operations is happily removed, and I am assured that no such step will at any time be taken without adequate notice.

Pig Iron (German and British Prices)

asked the President of the Board of Trade if he will ascertain and state the current listed German price (gold marks into sterling) for pig-iron, on trucks, and the price of British pig-iron of similar quality?

I am informed that the price of foundry pig-iron of Luxembourg quality, free on truck in non occupied German territory, has recently been raised to 90 gold marks per metric ton, the equivalent of which at 19 gold marks to the pound sterling is 96s. 3d. per ton avoirdupois. The quoted prices of foundry pig-iron on 10th April were: 92s. 6d. per ton for Northamptonshire No. 3, and 95s. per ton for Lincolnshire No. 3, Derbyshire No. 3 and Staffordshire No. 3.

Yarns (German Purchases)

asked the President of the Board of Trade whether his attention has been called to the refusal of the German Government to allow German manufacturers to buy sterling to pay for yarns purchased in Bradford and district; whether he is aware of the interference with trade and the unemployment caused thereby in both Bradford and Germany; and whether he will make representations to this effect in the appropriate quarter?

My attention has already been called to this matter, and I am making inquiries with a view to considering whether any action can usefully be taken by His Majesty's Government.

Money-Lending

asked the President of the Board of Trade if he is prepared to appoint a Committee to inquire into the present method of the conduct of the business of money-lending and the rates of interest and investigation fees charged, and to report what steps can be taken to guard borrowers against unfair interest and conditions while assuring the lender of reasonable security for the practice of his business?

The question of introducing legislation to amend the Moneylenders Acts with a view, inter alia, to compelling money-lenders to disclose the rate of interest and the expenses charged, has received the consideration of the Board of Trade, but it will not be possible to introduce such legislation at present. I do not think that the appointment of a Committee at the present time would serve any useful purpose.

WAR CHARGES VALIDITY (No. 2) BILL

asked the President of the Board of Trade the sum collected during the late War by certain Government Departments under powers conferred upon them by the Defence of the Realm Regulations and now proposed to be made valid under the War Charges Validity (No. 2) Bill; and the sum collected under orders for the control and supply of milk under the same or similar Regulations?

My hon. Friend will find the information he desires in the Memorandum, Cmd. 2080.

British Army

Northern Ireland (Legal Advice)

asked the Secretary of State for War, in view of the serious responsibilities which are imposed on competent military authorities in the Northern Ireland district in administering the Restoration of Order in Ireland Regulations, what arrangements are now made to ensure that qualified legal advice is always available to assist them in dealing with the legal, as distinct from the military, requirements of those Regulations; what is the estimated cost of such legal advice; and will it be available in case of a conflict of opinion on a legal matter between the military authorities and the Government of Northern Ireland?

The Regulations referred to are not at present being actively operated by the local military authorities, nor does any disagreement exist between those authorities and the Government of Northern Ireland. In these circumstances, none of the specific points in this question arise. I may, however, say that the local military authorities can always in ordinary course obtain the assistance of all the legal advisers, both of His Majesty's Government and of the Government of Northern Ireland, as occasion may require.

Will the military authorities have to import a legal adviser, if any difference of opinion arises between them and the Government of Northern Ireland?

Royal Artillery Barracks, Ipswich

asked the Secretary of State for War whether, in view of the recent closing of the Royal Artillery Barracks at Ipswich, he is in a position to state for what purpose it is proposed to utilise the barrack premises?

As my hon. Friend is aware, these barracks were only vacated on the 2nd of the present month. In view of so recent a removal, no decision has been reached as to their utilisation, but the matter is under consideration.

Army and Air Force Act (Amendment)

asked the Secretary of State for War whether, in addition to consulting the Army Council and Admiralty on the subject of the penalty of death, he will ascertain what restrictions can, in their opinion, be imposed upon the terms of penal servitude which courts-martial can now inflict?

In reply to my hon. Friend, as I indicated in debate and also in answer to a question yesterday, the inquiry will be confined to the questions affecting the discipline of the Services which were raised by the Amendments on the Order Paper of 2nd April.

asked the Secretary of State for War the Terms of Reference to the Committee which is to inquire as to the suggested Amendments to the Army Act?

I would refer the hon. Member to the reply which I gave yesterday to the hon. and gallant Member for Blackpool (Lieut.-Colonel Meyler).

Central Ordnance Depot, Chilwell

asked the Secretary of State for War if, as only 43 per cent. of those employed at the Central Ordnance Depot, Chilwell, are labourers, he will arrange to absorb the supervisory, clerical and tradesmen grades at other depots whose staffs will have to be increased with the influx of stores received consequent upon the evacution of Chilwell?

The reply which I gave to the hon. Member on 1st April as regards labourers applies also as regards the other grades. As I there indicated, I cannot give a promise of continuity of employment, but the question of the re-organisation is receiving close attention, and every effort will be made to find alternative employment for as many of the surplus men as possible.

Is the right hon. Gentleman aware that much ill-feeling has been caused amongst these people in this depot because they are classed as labourers?

asked the Secretary of State for War the number of men employed at Chilwell Ordnance Depot, now classed at labourers, who have had previous experience of different trades and who are in their present position because of the depressed condition of the staple industry of Long Eaton?

The number of men employed at the Chilwell Ordnance Depot who are employed as labourers but who have had experience of different trades is 145. It is impossible, as the hon.

Member will understand, to say to what extent the depression at Long Eaton is responsible, but 112 out of the 145 have been previously employed at Long Eaton.

Officers (Cost of Messing)

asked the Secretary of State for War the number of Army officers serving at home and on foreign stations respectively; the average daily cost of messing at home and abroad in 1914 and at the present day in the artillery, cavalry, and infantry; the average cost at the same periods of full uniform and equipment on joining the same branches of the service; and what figures he can adduce to show that the cost of living for an officer has been reduced since 1919?

The numbers asked for in the first part of the question are: At home, 7093 officers; abroad, excluding India, 2505; and in India, 3576. It is impossible to give the average daily cost of messing for officers abroad in 1914. Such information as I possess indicates that the average cost of officers' messing is about 3s. a day now as compared with 4s. before the War, when officers at home were not entitled to free rations; whilst the average cost to the line officer of uniform and equipment is about £50 now as compared with £100 or over before the War when an officer received no outfit allowance. With regard to the last part of the question, I can adduce the cost of living index figures published in the Ministry of Labour Gazette. That figure averaged over 110 in 1919, and under 80 for the first three months of this year.

Attack on British Soldiers, Queenstown

asked the Secretary of State for War how the soldiers wounded at Queenstown are progressing; whether any further deaths have occurred; and whether he can give the House any further information bearing on this outrage?

Of the 23 (including five civilians) wounded, seven were treated locally for slight injuries. The remainder have been removed to Netley, and in the first instance eight of the patients were reported dangerously ill. I regret that the condition of Lance-Bombadier Boniface is still reported to be very critical, but I am glad to be able to say that no further deaths have occurred, and that, according to the latest report received yesterday, all the other wounded are making satisfactory progress, although Gunner Copestake is still dangerously ill, and Gunner Knight is very seriously ill.

Have the negotiations for the payment of compensation been carried through?

Can the right hon. Gentleman give me any answer to the last part of my question?

The latter part of the question, as to whether I can give any further information bearing on the outrage, is really a question that ought to be directed to another Office—I think, to the Secretary of State for the Colonies.

asked the Secretary of State for War whether he can give any further information with regard to the case of the British soldiers who were murdered at Queenstown?

I have been asked to reply. With the exception of the one case which I had the sad duty of announcing to the House on 24th March, I am glad to learn from my right hon. Friend that none of the victims of this outrage have succumbed to their injuries. The Wood-Renton Commission, who are charged with the duty of assessing the compensation to be paid by the Irish Free State Government, have already interviewed the next-of-kin of the murdered man, and I understand will make their award very shortly. The Commission have also arranged to deal with the cases of the injured men as they become convalescent.

Can the right hon. Gentleman tell us if any clue has been found as to the murderers? If not, I think it is time another Oliver Cromwell arose!

That kind of suggestion will not help, because, as my hon. Friend knows, there are difficulties in connection with such a question. I am satisfied that the Irish Free State Government are doing their very best to deal with it.

Will the right hon. Gentleman say whether, in fact, anything has yet been done, and is he hopeful that anything will be done, and, if nothing is done, will he see that it is done?

No one should know better than my hon. Friend that he ought not to ask me that question. [HON. MEMBERS: "Order!"] It is not a question of dignity, but of tracing murderers, and, prior to what I hope will be their arrest, I certainly would not help by saying what had been done. I content myself by saying I am satisfied that the Irish Free State are doing their very best.

On a point of Order. I should like to ask whether it is your ruling, Mr. Speaker, that the question asked by my hon. Friend the Member for Eastbourne (Mr. Gwynne) was out of order, and, if not, whether it is not your place to describe a question as out of order, and not that of a Minister?

The question was not out of order. I allowed it to be put, and it was answered by the Minister, as all Ministers answer questions, within their discretion.

Might I call your attention to the fact that the Colonial Secretary described the question of my hon. Friend as being a question which ought not to be put?

What. I desire respectfully to ask is whether it is not a fact that it is your duty, Mr. Speaker, rather than that of a Minister, to describe questions as out of order.

I do not agree at all. It is the commonest thing, and quite right, for Ministers in certain cases to say that in the public interest a question cannot be answered.

We have so many points of Order which are not points of Order that I think I am entitled to raise one that is a point of Order. Can I not ask the Minister whether he is satisfied that certain things have been done without it being said that it is a wrong question to ask?

The hon. Member for Eastbourne (Mr. Gwynne) put his question, and I allowed it. An answer was given—a proper one—and it did not in the least call for my interference.

Scotland

Harris (Marine and Road Works)

asked the Secretary for Scotland whether he has given his attention to the conditions in the Island of Bernera, Harris, as recently brought to his notice; and is he now prepared to make a statement?

On inquiry I learn that the Board of Agriculture for Scotland have received a petition from the inhabitants of Bernera similar in its terms to that to which the hon. Member directed my attention. The Board have replied to the petitioners pointing out that the application for grants for marine and road works should be made through the local authority in order to secure maintenance in the event of approval, and stating that the application for assistance for fencing will be considered along with other similar applications before the Board.

asked the Secretary for Scotland whether he has now received from the Harris District Committee an application addressed to the Unemployments Grants Committee for a grant for the construction of a road from Amhuinsuidhe to Huisinish; and, in view of the urgency of the scheme and the fact that Viscount Leverhulme has offered to contribute 50 per cent. of the cost, is he now prepared to make a statement?

The application to the Unemployment Grants Committee has been received and will be dealt with as speedily as possible.

Lewis (Relief Schemes)

asked the Secretary for Scotland whether his atten- tion has been called to the fact that men employed on relief schemes in the island of Lewis have been paid at the rate of 4d. per hour for collecting and breaking stones on their holdings and carrying the broken metal in canvas sacks on their backs a considerable distance to the roadside; whether he is aware of the conditions under which these men were housed when making and repairing roads away from their homes; whether he has completed his investigations; and, if so, what steps he proposes to take to improve the conditions under which these men work?

I have inquired into this matter and find that the men were not paid at a rate per hour but on a contract basis. I recently looked into the question of the rates of payment and decided that some increase was justified. An addition of 20 per cent. to the contract rates has, therefore, been approved. The particular men to whom the complaint referred lived in their own houses while engaged on this work. Owing to the fact that some of the roads on which men are employed are distant from the men's houses, it has been necessary to accommodate the men in some instances in tents and hutments. About 40 of the total number of 1,500 men were so accommodated last week.

Do I understand the right hon. Gentleman to say that a contract wage which works out at 4d. per hour per man has been increased by 20 per cent., thus raising it to something under 5d. per hour?

No, I did not intend to give that impression. What I said was that I had inquired into this matter and found that the men were not paid at the rate of 4d. per hour, but on a contract basis.

I gathered that that was the right hon. Gentleman's reply. Might I ask him if he said that that contract basis is to be increased by 20 per cent., and if that will mean an increase on the 4d. by one-fifth?

Is there not some regulation affecting the matter by which the men are not allowed to take a wage of 4d. per hour?

Teachers' Training (Draft Regulations)

asked the Secretary for Scotland if he has now replies from education authorities, teachers' organisations, and other bodies interested with reference to the draft Regulations for the Training of Teachers (Scotland); and whether, in view of the replies received, he intends to proceed further with the Regulations in their present form?

The representations received are being carefully considered, and the Regulations, with some modifications, will be laid before Parliament at an early date.

Deer Forests

asked the Secretary for Scotland whether, in view of the Deer Forest Commission Report, he has taken any steps to make deer forest land available for sheep and cattle grazing; and, if so, what he has done?

Certain schemes, carried out by the Board of Agriculture under their general powers relating to land settlement, have embraced about 13,500 acres formerly used as deer forests, and the land will be used mainly, if not entirely, for sheep and cattle grazing. The Bill, which has been introduced by the Government for the purpose of assisting in the collection of agricultural returns, contains a special provision, giving the Board of Agriculture power to require returns of stock in respect of land used as a deer forest.

Is the right hon. Gentleman aware that the attention of his Department has frequently been drawn to the fact that the deer come long distances, and eat up the farmers' crops, and that the farmers get not a penny of compensation for it; will he say what steps his Department intends to take to deal with the findings of the Heather Burning Committee?

Is the right hon. Gentleman aware that this Deer Forest Commission is composed of men of all parties who came to an almost unanimous finding, and in view of that fact will he not take steps to put the main recommendations into effect?

I have already pointed out in my reply to the main question that we are collecting information in the Bill which is now before the House.

Is the right hon. Gentleman aware that this Report is now about two years old? Have the Government yet no policy on the subject?

I am perfectly well aware that this Report is two years old, and I would remind the hon. and gallant Gentleman that there are other Reports that are four times two years old.

Fishermen (Replacement of Gear)

asked the Secretary for Scotland whether, in view of the importance of launching his scheme for assistance to fishermen in the replacement of lost and damaged gear in time to enable the greatest possible number of boats and crews to participate in the summer fishing, he is yet in a position to make an announcement of its terms?

The matter is still under consideration by the Departments concerned, and I am not yet in a position to make a statement.

Are the Government not aware that fishing begins on the West Coast of Scotland in the middle of next month and on the North Coast of Scotland towards the end of the month, and is it not essential that the fishermen should know whether they may get this assistance or not?

I beg to give notice that to-morrow on the Adjournment we shall raise this question.

Is it possible for the right hon. Gentleman to make some arrangements under the Trade Facilities Act to give these fishermen what they need?

School Teachers (Superannuation)

asked the Secretary for Scotland whether the Government have framed a permanent school teachers' superannuation scheme to replace the present temporary Measure; whether it is proposed to prolong the life of the present Superannuation Act after its expiry on 31st May next; and, if so, for how long?

I hope at an early date to bring forward a Bill to extend the present arrangements for superannuation for a further period not beyond 1st April, 1926. As I stated recently, in reply to the hon. Member for Aberdeen, South, a Bill to authorise a permanent scheme will be prepared in the near future.

Is it not the case that the right hon. Gentleman was strongly urged from Scotland to introduce such a permanent Bill, that his Department were ready to introduce such a Bill, and has that purpose not been destroyed by the introduction of a Bill dealing with England and Wales?

I am perfectly well aware of the point put by my right hon. Friend, but I would remind him of this also, that the very parties whom he names were quite satisfied with the reply I gave.

Will the right hon. Gentleman consider the advisability of having a temporary Measure until 1925 only, instead of till June, 1926?

If there is a Bill in draft, why is it necessary to have a temporary Measure extending for two years?

Education (Advisory Council)

asked the Secretary for Scotland how often the advisory council, established under Section 20 of the Education (Scotland) Act, 1918, has met and the date of its last meeting; whether it has been consulted by the Scottish Education Department as regards recent and prospective changes in educational policy embodied in Circulars 60, 61, and 62 and the regulations for the training of teachers; and whether he will undertake to see that the advisory council is consulted before any further changes in educational policy are determined upon?

Forty-six meetings of the advisory council and of its sub-committees have been held. The last meeting was on 14th December, 1922. The general views of the Council on the matters dealt with in Circulars 60 and 62 were before the Department and were fully considered. There is no intention of departing from the practice hitherto followed, of consulting the council on broad questions of policy.

Is it the case that no important questions have arisen for discussion by that council since 1920?

In view of the recent change of Government, will the right hon. Gentleman take an early opportunity of discussing educational policy in Scotland with the advisory council?

Pensions Appeal Tribunals

asked the Secretary for Scotland if the regulations governing procedure at the pensions appeal tribunals in Scotland are the same as those governing such tribunals in England?

There are separate regulations governing procedure at the tribunals in Scotland, which were made on the 17th January, 1920, by the Lord President of the Court of Session. They are published in the series of Statutory Rules and Orders, 1920, and I am sending a copy to my hon. Friend.

Secondary Education, Arran

asked the Secretary for Scotland if he has now got information regarding the failure of the local education authority to provide educational facilities for secondary education within the Island of Arran?

Ministry of Reconstruction

asked the Prime Minister whether any of the organisation of the former Ministry of Reconstruction exists; whether the information, statistics, documents and plans accumulated during the lifetime of this Ministry of Reconstruction are still in existence; and whether the researches of the former Ministry of Reconstruction can be utilised in the present crisis of bad trade and unemployment?

The answer to the first part of the hon. and gallant Member's question is in the negative. As regards the second and third parts, the functions of the Ministry of Reconstruction were of an advisory nature. On the dissolution of the Ministry in 1919, its records and the results of its researches were distributed among the administrative Departments responsible for the different subjects investigated.

Could any of these plans and schemes be utilised now in view of the grave emergency that exists?

I am certain that these Departments have all these suggestions before them, and will deal with any of the problems that may arise.

Is the right hon. Gentleman aware that the function of the Ministry of Reconstruction left the country with a million and a half unemployed, and is there not a danger if the plans were now utilised we might have more unemployed?

Slades Green Explosion

asked the Prime Minister if he will consider the advisability of appointing a Committee of three Members of this House to investigate the conditions and circumstances under which the Disposal Board placed the contract with the firm at Slades Green for breaking down high explosives when it was known to the officials of the Disposal Board that that firm had not had any previous experience of that class of dangerous work?

The answer is in the negative. I would refer the hon. Member to the reply given to the hon. Member for St. Georges on the 25th February last. Since then the matter has been fully investigated by the Chief Inspector of Explosives and the Senior Engineering Inspector of Factories (Home Office), and their Report is contained in Command Paper 2099.

Is the Financial Secretary aware that in Command Paper 2099 no mention is made of the fact that in all the previous operations connected with the breaking down of Verey lights the workers were protected both on the benches and on the floors as a condition of the manufacture, and that this was never apparent during the whole time, and that consequently no mention of it means that this is a whitewashing Report.

Will the Financial Secretary give us later on some information as to what is now being done with explosives not yet broken down?

Is the hon. Member not aware that this Report is entirely unsatisfactory, because it evades the important issue as to why 20 girls were crowded into one factory, which under the Explosives Acts should not have contained more than two? Is this not really a whitewashing Report?

Can we have an assurance now that, in the further breaking up, prickers will not be used for opening up the cartridges and the lights?

The position is that I was asked whether a Committee of three Members of the House would be appointed. My reply is "No," because we have just got this Report from the two inspectors in question. There is no doubt whatever that the Report makes certain recommendations whereby an accident of this kind may be avoided in the future. Beyond that I cannot make any statement to-day, but if hon. Members wish to discuss the Report they must take any Parliamentary opportunity open to them to do so.

asked the Chancellor of the Exchequer the contract price fixed between the Disposal Board and the firm at Slades Green at whose premises the recent explosion took place; whether the quantity of explosives thus bandied by the firm was advertised for public tender; and, if so, how many firms tendered?

I would refer the hon. Member to the reply which I gave to the hon. Member for St. Georges on the 25th February last. As regards the second part of the question, it was considered that, having regard to the nature of the goods, their sale by private treaty would be likely to produce better results than sale by public tender. The sale was only carried out after extensive efforts had been made to obtain other offers.

Poor Law Reform

asked the Prime Minister if any steps are being taken to introduce legislation to effect the reform of the Poor Laws; and if he is going to act on the suggestion that a Committee of Members representing all parties in the House should be formed for the purpose of seeing if an agreed Measure could be produced?

Communications are being made through the usual channels with a view to ascertaining whether it is possible to obtain a substantial measure of common agreement on which to base a scheme of reform.

Trade Facilities Act (Schemes)

asked the Chancellor of the Exchequer how many schemes for transport, light railways, and drainage have been put forward since the beginning of the year for assistance from the Trade Facilities Fund and how many of them have been so assisted; and whether the fund admits the applications of existing railway companies ready to carry out such work on condition that financial assistance is afforded them by the Government?

There is no Trade Facilities Fund, but power was given by the Trade Facilities Acts to guarantee loans for expenditure calculated to promote employment in the United Kingdom on capital undertakings. That power lapsed on 9th November last. The Government is seeking, in the Trade Facilities Bill, consent to its renewal and extension and, so long as that consent is delayed, no further assistance by way of guarantee to such undertakings can be given. Some informal inquiries have been made, but so far no formal applications of the kind referred to have been received. It will be open to railway companies to apply for guarantees to their loans for expenditure within the terms of the Acts.

Budget

Entertainments Duty

asked the Chancellor of the Exchequer if his attention has been called to the hardships placed upon horticultural societies by the imposition of the Entertainment Duty; if any representations have been made to him as to the position of village societies; and what steps he proposes to take in the matter?

The existing law already authorises the grant of exemption from Entertainments Duty for horticultural shows under conditions similar to those applicable to industrial and agricultural shows.

asked the Financial Secretary to the Treasury if he is aware of the closing to the public of the Zoological Gardens at Paignton owing to a fine being imposed on the owner for non-payment of the Entertainments Duty; and, if so, whether the decision of the Tax Commissioners will be reconsidered in order that the public may have access to a place of educational value which is not run for the private profit of the owner?

I am informed that the owner of the Zoological Gardens in question was recently fined for failure to pay Entertainments Duty on the payments for admission to the gardens, and that it has been announced in the public Press that he has decided to close the gardens to the public. His claim for exemption from Entertainments Duty was very fully considered, but could not be allowed because the case did not come within the scope of any of the statutory reliefs from the duty.

( by Private Notice ) asked the Chancellor of the Exchequer whether he has seen a circular signed by the managing director of a motion picture company, dated 11th April, and circulated to all Members of Parliament this morning, in which it was stated on that day authentic assurance had reached the writer that the Theatre Admission Tax will soon be greatly reduced by and at the expense of the British Government; whether any such assurance has been given by or on behalf of the Government, and, if so, what were the terms and to whom it was given?

I have not seen the circular referred to, and no such assurance, or any assurance, has been given to this or any other interest affected by taxation.

If this were so, is there not a precedent in the statement made, half an hour before the Budget of 1921, by a Member of this House?

Income Tax

asked the Chancellor of the Exchequer whether, in view of the fact that wounds, disablement, and disability pensions granted on account of military service are exempt from Income Tax, he will consider the advisability of extending this concession to police service?

The Income Tax liability of a police pensioner is governed by the rates applicable to taxpayers generally, and the various statutory deductions (relief for earned income, personal allowances, etc.) are, of course, available to him. I do not think that there is any ground for extending to this particular class of pension the special Income Tax exemption afforded by statute in the case of the wounds and disability pensions to which my hon. Friend refers.

asked the Chancellor of the Exchequer whether, in view of the real grievance likely to arise in respect of Income Tax payable on 5 per cent. War Loan which an investor has converted into new 4½ per cent. stock, he will consider the desirability of making provision in the new Finance Act to relieve such investor from being called upon to pay a higher rate of tax than he would otherwise have to pay?

I would refer the hon. Member to Section 25 of the Finance Act, 1919, as amended by Section 30 of the

ESTIMATED amount of tax due to be paid but not paid by 31st March.

Income Tax.

Super Tax.

£

£

1921

United Kingdom

51,139,000

16,287,000

1922

70,265,000

24,243,000

1923

Great Britain and Northern Ireland

44,600,000

23,047,000

1924

39,628,000

25,972,000

An analogous estimate cannot be made for Excess Profits Duty (including Munitions Levy), but the approximate amount of duty in assessment (less arrears shown due to be remitted) at 31st March, 1924,

Finance Act, 1920, which is precisely to meet his point.

asked the Chancellor of the Exchequer whether he can now inform the House the amount of Income Tax, Super Tax, and Excess Profits Duty assessed and due for payment but unpaid on 31st March, 1924; whether he expects to have to make any material repayments of Excess Profits Duty, other than amounts already agreed upon; and what the total amount is now agreed upon but not repaid to the taxpayer?

As the answer is a long one and contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

The hon. Member will be in possession of those figures within the next hour.

The answer is as follows:

After careful consideration, the basis on which the amount of Income Tax estimated to be due to be paid, but not paid, at any date has been changed. In answer to previous questions on this subject, the estimate has been based upon the charge of tax for the year of assessment. Revised computations have now been made on the basis used for the estimate of arrears of Super Tax, namely, an estimate has been made of the amount which has become payable and been demanded by the date dealt with; but which remained unpaid at that date. On the latest information available, the revised estimates for the last four years are as follows:

was £161,000,000. These arrears are subject to adjustment on appeal or otherwise, and the duty to be ultimately received by the Exchequer is expected to fall far short of the amount stated. The adjustments will be made partly by writing off duty in assessment and partly by repayment, but I am unable to forecast the amount that will fall to be repaid. Repayments found to be due are made as soon as the amount has been finally ascertained.

Poor Rate, Middlesbrough

asked the Chancellor of the Exchequer whether he is aware that the recovery of trade and industry in the Middlesbrough district is seriously retarded by its excessive poor rate of 7s. 4d. in the £, due mainly to abnormal unemployment in a munition centre after the War; and, in view of the Government's pledges that these charges should be borne nationally and not locally, if he will say what assistance he proposes to give in the current year in this and similar cases?

Before the hon. Member answers this question, may I ask if he is aware that what is suffered by Middlesbrough in this respect is suffered no less by Sheffield?

My right hon. Friend is aware of the rates levied in Middlesbrough, but he is advised that the financial position of the guardians is improving, and he has now under consideration an application for sanction to a scheme for funding their present overdraft.

Does the hon. Gentleman consider that what the Government propose is calculated to carry out their theory of making these charges national instead of local?

In answer to a similar question, it has already been pointed out that the effect of the Unemployment Insurance Bill that has been introduced will be to increase the national charge and reduce local charges.

Government Departments

Accountancy

asked the Chancellor of the Exchequer whether, in view of the Report of the Lawrence Committee on the Accounting Methods and Administration of the War Office, he will take steps to appoint similar Committees to investigate the accounting methods of other Government Departments; and, if so, will he provide that there is adequate representation of recognised outside business experts on such Committees?

The Lawrence Committee was appointed to consider certain questions peculiar to Army Accounts, and I see no ground for a similar Committee in other Departments where these particular questions do not arise. There is already sitting a Committee, including professional accountants, to consider whether Government accounting processes can be simplified.

Admiralty (Accountant-General's Department)

asked the Chancellor of the Exchequer whether he is aware that certain civil servants, who were recruited by competitive examinations into the intermediate class on the understanding that they would serve at the Admiralty and at the dockyards, and who were appointed before the 5th January, 1912, to the Department of the Accountant-General of the Navy, are permitted to serve only at the dockyards and are thus debarred from promotion to the highest posts in that Department, whereas other members of the same class, who were recruited under exactly the same conditions or were promoted from lower grades, but who were appointed after the 29th May, 1912, are eligible for promotion both at the Admiralty and the dockyards, while a third group, promoted in the Department at the Admiralty between the 4th January and the 30th May, 1912, into the intermediate class on condition that they became liable to be transferred to the dockyards, have been, save only in one exceptional case, allowed to remain at the Admiralty, with the result that the inconveniences of more frequent removals from one naval establishment to another fall upon the remainder of the Department; whether in this Department he intends to put into practice the recommendation made by the Reorganisation Committee of the Civil Service National Whitley Council, at paragraph 55 of its Report, dated 17th February 1920, to the effect that artificial barriers to promotion, where they exist, should be removed and that material hindrances must not be allowed to block merit and ability; and, if so, whether he will avail himself of the opportunity afforded by the reorganisation of the Civil Service to take steps to remove the barrier which now exists to promotion in the Accountant-General's Department of those appointed to the intermediate class before the 5th January, 1912, and to prevent their experience and length of service placing them under any disadvantage as compared with their juniors in the Department?

I have been asked to reply, and, as the answer is somewhat long, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

I think there ought to be.

The reply is as follows:

The first part of the question does not quite accurately state the facts. As a necessary corollary of the re-organisation of the Department of the Accountant-General of the Navy in 1912, before which time its directing staff at headquarters was recruited not from the Intermediate, but from the Class I examination, it was decided that it would be-necessary to differentiate, as regards normal interchangeability with headquarters staff, between officers entered at the dockyards before the completion of the re-organisation (on the 29th May, 1912) and officers entered after that date. The question whether, with fairness to the staff as a whole, that decision could be modified in the direction suggested, has been very carefully considered, but it has been decided that this is not possible. It has, however, also been decided that any officer serving at the dockyards, whenever entered, may be regarded as eligible for appointment to a higher post at headquarters should an occasion arise when such an appointment would be for the benefit of the service as a whole.

High Sheriffs (Expenses)

asked the Chancellor of the Exchequer whether he will give a return showing the expenses entailed upon high sheriffs in each county during the past year of office?

That would be well-nigh impossible, because we should have to ask them all individually, and as I said to the hon. Member on the last occasion, this expenditure depends very largely upon their own discretion.

Will the hon. Gentleman ask the Under-Sheriffs to state the amount expended in each county?

I will consider that point, but I hope the hon. and gallant Member will not press me for a definite undertaking, because there are many difficulties in the way.

Old Age Pensions

asked the Chancellor of the Exchequer whether the Government accepts the principle of old age pensions for everybody, irrespective of means, or whether it favours the abolition of the thrift penalty on incomes below a certain agreed-on maximum; and, if the latter, what is that maximum?

As has already been announced, the Government's proposals for dealing with old age pensions will be introduced into this House as soon as possible, and I must ask the hon. Member to await their introduction.

British Currency (Foreign Hoarding)

asked the Chancellor of the Exchequer whether his attention has been called to that part of the experts' Report on reparations dealing with German hoarding of foreign currency; whether he can make any estimate of the amount of British currency hoarded by Germany and other countries of depreciated exchange; and whether he can give the House any information as to the effect of the large withdrawal of British currency from circulation caused by this hoarding?

The experts' Report estimates the value of all kinds of foreign notes in Germany at the equivalent of £60 millions. They mention dollars, florins, Scandinavian crowns, Swiss francs, pounds sterling, and, more especially in the occupied territory, Belgian and French francs. But it is probable that sterling only forms a small part of the total. I have no figures relating to countries other than Germany. I am not disposed to think that the amount of British currency held abroad is of serious importance.

Has the right hon. Gentleman obtained the information which comes to us commercial men, that there is a very large amount of British currency in every Continental country, and will he consider the effect that this hoarding of British currency has on the stringency of British circulation at home?

If there were a very considerable amount of British currency hoarded abroad, it might be a matter for inquiry as to the effect here, but, as I stated in reply to the main question, I have no reason to believe that the amount of British currency held abroad is of serious importance.

Munitions (Disposal)

asked the Financial Secretary to the Treasury the original contract price agreed on by the Disposal Board with Messrs. George Cohen, Sons, and Company; what modification, if any, was subsequently made in the contract; whether the Disposal Board relieved Messrs. George Cohen, Sons, and Company, of the bulk of the gas ammunition and dumped it in the sea at the public expense; and whether he can state the value of this gas ammunition and the actual cost of the dumping operations?

As the answer is a long one, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

I presume the contract referred to was that for the sale of loaded ammunition for breaking down. That contract was made between the Government and a number of British steel companies. Messrs. George Cohen, Sons, and Company, acted as managing agents for these companies.

The contract price for ordinary shell was £4 12s. 6d. per ton, except at one depot, where the price was £4 per ton; for gas shell, the price was £1 per ton.

The contract was for 150,000 tons of shell and such additional tonnage as became available after the date of the contract. Owing to the reduction of War Office and Admiralty reserves, the quantity, which ultimately became available for breaking down, much exceeded what was originally anticipated by these Departments, and when it became clear that this quantity would exceed 400,000 tons, the purchase prices mentioned above were made to apply to the first 200,000 tons only, the balance being charged for at £1 per ton, the Government to share in the net profits on the whole transaction to the extent of 65 per cent.

Of the gas shell, 8,000 tons were broken down; 7,000 tons were dumped on the recommendation of a technical committee, representing the Government, which advised that that was the only method of disposing of the material without danger to human life. The value of this gas ammunition was nil, as the cost of breaking down of these 7,000 tons would, it is estimated, have exceeded the value of the residuals. The approximate cost of dumping was £4 per ton.

I may add that, apart from this gas shell, it has been necessary to dump at sea, approximately, 200,000 tons of gas shell, etc., since the Armistice.

Housing (Evictions)

asked the Secretary for Scotland whether he will obtain a Return as to the number of ejection warrants which have been applied for, granted, and executed, respectively, in the principal industrial areas in Scotland, in the case of unemployed tenants, during the year 1923 and during the present year?

For the reasons stated in my reply to the hon. and learned Member on the 9th April, it is not possible to give separate figures for the cases in which the tenant was unemployed.

Cannot the right hon. Gentleman collect statistics which are available and which are referable to other industrial areas, such as Glasgow and Clydebank, for the information of the House?

We cannot get the information from any of the areas that the hon. Member mentions.

Cannot the right hon. Gentleman do what is being done in England, namely, communicate with the Courts and get a proper return, so that we may know the magnitude of this evil?

Is not the right hon. Gentleman aware that many of these figures have already been published, and why is it that he cannot get the information which other people are able to publish? [HON. MEMBERS: "Answer!"]

Reparation Commission

Committees of Experts (Reports)

Prime Minister's Announcement

( by Private Notice ) asked the Prime Minister whether the Government can make any statement on the Reports of the Committees of Experts appointed by the Reparation Commission?

His Majesty's Government have learnt with the greatest satisfaction of the unanimous signature of these Reports by the experts of America, Belgium, France, Italy and this country. The Reports constitute, in our opinion, an unbiased and carefully-thought-out endeavour to aid the Governments concerned in their task of reaching a settlement of this vital and longstanding problem.

The practical value and applicability of the experts' conclusions, and of the methods which they recommend, have, moreover, received prompt and unreserved recognition, by their unanimous adoption by the Reparation Commission on 11th April, subject to the willingness of the German Government to collaborate in their execution.

His Majesty's Government feel that Reports, supported by such authority, must command general assent, and that there will be a universal desire to use the opportunity which such authoritative documents give to end the existing unsettlement.

One feature deserves special emphasis. It is explicitly stated in the Report of the First Committee that it is an indivisible whole, and the signatories in terms renounce all responsibility if certain of their recommendations are adopted, and others rejected.

His Majesty's Government attach so much importance to agreed recommendations, which can be brought into immediate operation, that they are prepared, for their part, to support the scheme in its entirety, provided that all the other parties concerned are willing to take the same course, and on the 10th instant they communicated that view to the Governments concerned, including the United States.

May I ask the right hon. Gentleman if he is not aware that in the attitude he is taking up he will have the united support of the British people?

I imagined that that would be so, but I am exceedingly obliged to my right hon. Friend for making it vocal now.

Can we have an assurance that there will be no further importation of goods by way of Reparation receipts without an equivalent export to pay for them, in view of the terrible situation which has arisen in the Clyde and other districts as the result of the last receipt of Reparation payments?

If my hon. Friend will look at the Report to which I have just referred, he will find that an exceedingly effective economic machinery is set up to prevent what one might call, shall we say, an uneconomical export of goods for Reparation purposes.

Is the right hon. Gentleman yet in a position to give any information as to the attitude of the German Government towards these recommendations?

No. I have no communication that I can give the House, but the House will have seen certain statements in the newspapers this morning, which I may be able to supplement some time during to-morrow, but I am not yet sure.

Does the Prime Minister realise that in the Report there is no statement as to the full amount of the liability or the duration of the annuities, and, that being so, does the amount stated in the Pact of London of May, 1921, of £6,600,000 still stand good?

I am fully aware that the Report only makes provision for six years, and beyond that certain machinery continues to operate, so far as the Report is concerned, for an unlimited period. If all the Governments agreed to put the Report into execution, then the total amount to be derived by way of reparation from Germany would be a matter of arrangement.

Has the right lion. Gentleman noticed, so far as the importation of German goods is concerned, that all that we shall get from reparations will have to go to America?

Notices of Motion

Civil Service

On 7th May, to call attention to the growth of public expenditure on the Civil Service, and to move a Resolution. —[ Sir John Marriott. ]

Poverty

On 7th May, to call attention to the poverty of the working classes, and to move a. Resolution.—[ Mr. Dunnico. ]

Ministers' Speeches

On 7th May, to call attention to the character of statements made by certain of His Majesty's Ministers in speeches outside this House, and to move a Resolution.—[ Captain Hacking. ]

Bills Presented

Rent and Mortgage Interest Restriction Acts (1920 and 1923) Amendment Bill,

"to amend the Rent and Mortgage Interest Restriction Acts, 1920 and 1923, in regard to permitted increases of rent in respect of rates," presented by Mr. TREVELYAN THOMSON; supported by Mr. Masterman, Captain Wedgwood Benn, Mr. Ernest Simon, Mr. Foot, Mr. Ernest Brown, and Mr. Harcourt Johnstone; to be read a Second time upon Tuesday, 29th April, and to be printed. [Bill 115.]

Public Health (Scotland) Amendment Bill,

"to extend the powers of local authorities under the Public Health (Scotland) Act, 1897," presented by Mr. WILLIAM ADAMSON: to be read a Second time To-morrow, and to be printed. [Bill 116]

Town Councils (Scotland) Bill,

"to amend the law relating to disqualifications for the office of town councillor in Scotland," presented by Mr. WILLIAM ADAMSON: to be read a Second time Tomorrow, and to be printed. [Bill 117.]

Guardianship of Children (Scotland)

I beg to move,

"That leave be given to bring in a Bill to amend the Law of Scotland as to the rights and responsibilities of parents with respect to the guardianship, custody and maintenance of their legitimate children."

This Bill covers exactly the same ground for Scotland as was covered by the Bill introduced by the hon. Member for Louth (Mrs. Wintringham) which was given a Second Reading on 4th April. I cannot expect anything else but that the House, which gave a unanimous Second Reading to the other Bill, will be content to let this Bill pass also. I should have been very pleased as a Scotsman if I could have said that in Scotland there was less need for this amendment of the law than there is in England. As a matter of fact the practice in Scotland has been rather wider and more liberal, but the law in Scotland in relation to parents and their relationship to the children is practically the same as in England, and there is thus the same necessity for an amendment of the law. The main Clauses of the Bill are 3 and 4, the first of which provides for establishing equality in the rights and responsibilities of parents towards their children and the second provides that it shall be the equal duty of both parents to maintain and educate their children. It may be asked why we in Scotland should have introduced this Bill, in view of the fact that on the last occasion the Government blessed the principle, although it declared its intention of introducing a Bill with the same principle. Our purpose in suggesting a Scottish Bill is to stake out a claim to the same recognition of the need for an alteration of the law in Scotland as in England, so that the Government may not come forward with a Bill exclusively covering England and Wales and leaving Scotland out. We desire, when the Government brings forward its own Measure dealing with this important matter, that it will either see to it that there are separate Clauses covering Scotland or that a separate Bill is introduced. For these reasons I hope the House will grant me permission to introduce the Bill.

Question put, and agreed to.

Bill ordered to be brought in by Mr. Murray, the Duchess of Atholl, Mr. Thomas Johnston, Mr. Raffan, Mr. Neil Maclean, Mr. Frederick Martin, Mr. William Watson, Mr. Phillipps, and Mr. Dickson.

Guardianship of Children (Scotland) Bill,

"to amend the Law of Scotland as to the rights and responsibilities of parents with respect to the guardianship, custody, and maintenance of their legitimate children," presented accordingly, and read the First time: to be read a Second time upon Tuesday, 29th April, and to be printed. [Bill 119.]

RATING OF LAND VALUES (No. 2)

I beg to move, time it often fails to secure for the community that contribution which ought to be made from land value created by the efforts of the community as a whole, and particularly by the expenditure of money out of the rates. The object of the Bill, therefore, is to encourage building and improvements by relieving those who undertake them in the future from the burden of the additional rates caused thereby and further to introduce a system of valuation which would enable a proper contribution to be secured from land values. At the present time, as the House is aware, the value on which a property is assessed for rating is the rent which a tenant might reasonably be expected to pay for it, taking one year with another, if the tenant paid the rates, taxes and similar outgoings, and if the landlord paid the actual repairs and similar expenses, with certain arbitrary deductions which are supposed to cover the expenses of repairs.

In the majority of cases, no doubt, the rent so arrived at does include the full annual value of the land as well as the value of the buildings upon the land, but there are a number of cases in which, under the present law, properties either escape valuation or rating altogether on the ground that they are vacant or derelict, or are rated on an assessment which is substantially less than the full annual value of the land, because the use to which they are at present being put is altogether inadequate, and the rent which is obtained for them bears no relation to the true value which would be realisable if the property were sold. We who support this Bill believe that it is unjust that these values, which are not due to the efforts or expenditure of any individual but are due to the activities and the expenditure of the community, should escape in whole or in part the burden of the rates which falls on other property, and the first effect of this Bill would be to set up a valuation which would secure that, in future, rating should be based on a sounder principle. We believe that this would not only be fair, but that it would in itself have a considerable effect in bringing land into use, in encouraging building, in promoting the production of houses, and thereby in reducing the level of the rates.

The present system we believe to be wrong for a second reason, a reason perhaps even more important. It is wrong because it operates as an extremely heavy tax upon production. The present system of rating is equivalent to a direct tax on the output of those industries which are concerned with building and with the improvement of land, and indirectly, therefore, to a tax upon the industries which are carried on upon the premises which the buildings or improvements are intended to complete. It is sometimes supposed that though this is true in towns it is not true in relation to agricultural land. I should like to put before the House a very brief extract from a great authority, an agricultural witness whom I call, the Duke of Bedford. The Duke of Bedford, in a book which he wrote on the story of a great agricultural estate, stated as follows: equal the additional cost of erecting buildings or carrying out improvements. It would have been better if the reform could have been carried out at the time of the Armistice, and the Bill proposes an adjustment for the intervening period. I will not delay to describe certain adjustments in the method of arriving at the rateable value and the abolition of the gross value, but the Bill proposes to exempt from rating all machinery which is not permanently attached to the property. The annual value of the land is defined in the Bill to be 5 per cent, of its capital selling value, and it is proposed that that should be assessed at the request of the rating authority by the Land Valuation Department of the Inland Revenue, the operations of which were so improvidently suspended last year. We contend that the two main proposals of this Bill taken together will give an immense stimulus to new building and development of every kind. Today, a man who fails to develop his land or holds it up for an increased price hereafter is allowed to escape from the burden of rates. We only begin to punish him when he develops the land, and we punish him by rating him upon the money which he spends and the labour which he employs in development. Under this Bill, he would be rated upon the full value of the land, whether he developed it or not, but, if and when he develops it, he will pay no more rates upon the improvements and the buildings he sets up. It will have the effect of stimulating re-building and indeed will both force and encourage the removal of slums, because the slum owner will find that in any event he is rated upon his land value, and, if he sweeps away his slums and erects proper buildings, he will not have to pay any more rates.

This Bill will go a long way to render unnecessary other forms of subsidy, and at the same time it does not call for the actual payment of any subsidy by either the taxpayer or the ratepayer. In the vast majority of cases, there will be no loss of potential rates, because without the assistance in this proposal the new buildings and improvements would never have come into existence. That is the actual experience in the city of New York, where this system has been tried. In Greater New York where in the three years before the Tax Exemption Law on similar lines was brought into force in 1891, the total number of dwellings, the plans for which were submitted for filing, amounted to 34,323, and in less than three years after the change was made that number went up to 92,295, or nearly three times as many. For these reasons, I invite the House and all sections of the House to give me leave to introduce this Bill. It is a Bill, the principle of which has been affirmed by Members of all parties, and it is one which I trust will make some small contribution towards solving our present difficulties.

I do. I can hardly congratulate the right hon. and learned Gentleman on his speech in proposing this Bill, and I must admit that many of us on this side of the House regarded him with deep sympathy while he was doing so. When the right hon. and learned Gentleman has any sort of case to put as an advocate, we greatly enjoy listening to his able advocacy, but in this case, I think, it is fair to say that the right hon. and learned Gentleman was making very heavy weather indeed, and I was expecting him at any moment to throw up his brief and to admit that he did not really agree with the. case which had been put in his hands. It seems curious that the right hon. and learned Gentleman should have forgotten the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), and the remarkable experiment which he made in the direction indicated by the Bill which he now asks leave to introduce. It is also remarkable that the childish and puerile fallacies of Henry George should be brought forward by a gentleman of the ability of the right hon. and learned Member. For example, we heard that

very old catch-word of the'eighties—that phrase which says that the value of land is created by the community. As if the value of every other thing was not created by the community! Take, for example, the value of the right hon. and learned Gentleman's brain, which is enormous. Without the community, what would be the value of the right hon. and learned Gentleman's brain?

But to come to the practical point of the matter, which is this. I am one of those unfortunate people who are going to be relieved from the selfish landlord by a Measure of this sort. I buy land and put up houses and works and buildings upon it, and everybody knows who has had any experience whatever of building either houses or works that the rates that those buildings are going to carry subsequently is invariably discounted in the price of the land. In my own district, land goes on perpetual chief rent of about 2½d. per yard. Supposing, this Measure were passed, it would simply mean that the whole of the rating which is at present paid on the buildings erected would be transferred to the land value. This would mean that one would have to pay a very much larger chief rent in exact proportion to the relief from rates on the buildings. The whole thing is a childish fallacy. Surely, after the experience of the land values taxation of the right hon. Member for Carnarvon Boroughs, this House would be stultifying itself in agreeing to the introduction of a Bill of this sort. I do hope, therefore, that leave will not be given, so that this House may at any rate make some endeavour to rehabilitate its reputation for intelligence.

Question put,

"That leave be given to bring in a Bill to provide for the valuation of land, and for the rating of land values and other purposes connected therewith."

The House divided: Ayes, 244; Noes, 119.

Division No. 62. ]]

AYES.

[ 4.14 p.m.

Ackroyd, T. R.

Barker, G. (Monmouth, Abertillery)

Brunner, Sir J.

Adamson, Rt. Hon. William

Barnes, A.

Buchanan, G.

Adamson, W. M. (Staff., Cannock)

Batey, Joseph

Buckle, J.

Allen, R. Wilberforce (Leicester, S.)

Benn, Captain Wedgwood (Leith)

Burnie, Major J. (Bootle)

Alstead, R.

Black, J. W.

Buxton, Rt. Hon. Noel

Ammon, Charles George

Bondfield, Margaret

Chapple, Dr. William A.

Asquith, Rt. Hon. Herbert Henry

Bonwick, A.

Charleton, H. C.

Ayles, W. H.

Bowerman. Rt. Hon. Charles W.

Clarke, A.

Baker, W. J.

Briant, Frank

Climie, R.

Banton, G.

Broad, F. A.

Clynes, Rt. Hon. John R.

Barclay, R. Noton

Brown, A. E. (Warwick, Rugby)

Collins, Sir Godfrey (Greenock)

Compton, Joseph

Keens, T.

Samuel, H. Walter (Swansea, West

Comyns-Carr, A. S.

Kennedy, T.

Scrymgeour, E.

Cowan, D. M. (Scottish Universities)

Ken worthy, Lt.-Com. Hon. Joseph M.

Scurr, John

Darbishire, C. W.

Kenyon, Barnet

Sexton, James

Davies, Rhys John (Westhoughton)

Kirkwood, D.

Shaw, Rt. Hon. Thomas (Preston)

Davison, J. E. (Smethwick)

Lansbury, George

Sherwood, George Henry

Dickie, Captain J. P.

Law, A.

Shinwell, Emanuel

Dickson, T.

Lawrence, Susan (East Ham, North)

Short, Alfred (Wednesbury)

Dodds, S. R.

Lawson, John James

Simon, E. D. (Manchester, Withington)

Dudgeon, Major C. R.

Leach, W.

Simon, Rt. Hon. Sir John

Dukes, C.

Lee, f.

Simpson, J. Hope

Duncan, C.

Lessing, E.

Sinclair, Major Sir A. (Caithness)

Dunn, J. Freeman

Lindley, F. W.

Sitch, Charles H.

Dunnico, H.

Linfield, F. C.

Smillie, Robert

Edwards, C. (Monmouth, Bedwellty)

Livingstone, A. M.

Smith, Ben (Bermondsey, Rotherhithe)

Edwards, John H. (Accrington)

Loverseed, J. F.

Smith, T. (Pontefract)

Egan, W. H.

Lowth, T.

Smith, W. R. (Norwich)

Falconer, J.

Lunn, William

Snowden, Rt. Hon. Philip

Finney, V. H.

McCrae, Sir George

Spence, R.

Fletcher, Lieut.-Com. R. T. H.

MacDonald, Rt. Hon. J. R. (Aberavon)

Spencer, H. H. (Bradford, S.)

Foot, Isaac

M'Entee, V. L.

Spero, Dr. G. E.

Franklin, L. B.

Macfadyen, E.

Spoor, B. G.

Gardner, B. W. (West Ham, Upton)

Mackinder, W.

Stamford, T. W.

Gardner, J. P. (Hammersmith, North)

Maclean, Nell (Glasgow, Govan)

Starmer, Sir Charles

Gavan-Duffy, Thomas

Macpherson, Rt. Hon. James l.

Stephen, Campbell

George, Rt. Hon. David Lloyd

Maden, H.

Stewart, Maj. R. S. (Stockton-on-Tees)

George, Major G. L. (Pembroke)

Marks. Sir George Croydon

Stranger, Innes Harold

Gilbert, James Daniel

Marley, James

Sturrock, J. Leng

Gosling, Harry

Martin, F. (Aberdeen & Kinc'dine, E.)

Sullivan, J.

Gould, Frederick (Somerset, Frome)

Masterman, Rt. Hon. C. F. G.

Sunlight, J.

Graham, W. (Edinburgh, Central)

Maxton, James

Sutton, J. E.

Gray, Frank (Oxford)

Meyler, Lieut.-Colonel H. M.

Tattersall, J. L.

Greenwood, A. (Nelson and Colne)

Millar, J. D.

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

Grenfell, D. R. (Glamorgan)

Mills, J. E.

Thompson, Piers G. (Torquay)

Grigg, Lieut.-Col. Sir Edward W. M.

Mitchell R. M.(Perth & Kinross, Perth)

Thomson, Trevelyan (Middlesbro. W.)

Groves, T.

Mond, H.

Thurtle, E.

Grundy, T. W.

Montague, Frederick

Tillett, Benjamin

Guest, J. (York, Hemsworth)

Morris, R. H.

Tinker, John Joseph

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

Morrison, R. C. (Tottenham, N.)

Toole, J.

Hall, G. H. (Merthyr Tydvll)

Morse, W. E.

Trevelyan, Rt. Hon. C. P.

Hamilton, Sir R. (Orkney & Shetland)

Mosley, Oswald

Turner. Ben

Handie, George D.

Moulton, Major Fletcher

Turner-Samuels, M.

Harris, John (Hackney, North)

Mulr, John W.

Viant, S. P.

Harris, Percy A.

Muir, Ramsay (Rochdale)

Vivian, H.

Hartshorn, Rt. Hon. Vernon

Naylor, T. E.

Walsh, Rt. Hon. Stephen

Harvey, T. E. (Dewsbury)

Nichol, Robert

Warne, G. H.

Hastings, Sir Patrick

Nixon, H.

Watson, W. M. (Dunfermline)

Haycock, A. W.

O'Grady, Captain James

Watts-Morgan, Lt.-Col. D. (Rhondda)

Hayes, John Henry

Oliver, George Harold

Webb, Rt. Hon. Sidney

Henderson, T. (Glasgow)

Oliver, P. M. (Manchester, Blackley)

Wedgwood, Col. Rt. Hon. Josiah C.

Henderson, W. W. (Middlesex, Enfield)

Paling, W.

Weir, L. M.

Hillary, A. E.

Palmer, E. T.

Westwood, J.

Hirst, G. H.

Parkinson, John Allen (Wigan)

White, H. G. (Birkenhead, E.)

Hobhouse, A. L.

Parry, Thomas Henry

Whiteley, W.

Hodge, Lieut.-Col. J. P. (Preston)

Perry, S. F.

Wignall, James

Hoffman, P. C.

Pilkington, R. R.

Williams, A. (York, W.R., Sowerby)

Hogbin, Henry Cairns

Potts, John S.

Williams, Lt.-Col. T.S.B. (Kenningtn.)

Hogge, James Myles

Pringle, W. M. R.

Williams, Ma]. A. S. (Kent, Sevenoaks)

Hore-Belisha. Major Leslie

Raffan, P. W.

Williams, T. (York. Don Valley)

Hudson, J. H.

Raffety, F. W.

Willison, H.

Isaacs, G. A.

Raynes, W. R.

Wilson, C. H. (Sheffield, Attercliffe)

Jackson, R. F. (Ipswich)

Rendall, A.

Wilson, R. J. (Jarrow)

Jewson, Dorothea

Richards, R.

Windsor, Walter

John, William (Rhondda, West)

Richardson, R. (Houghton-le-Spring)

Wintringham, Margaret

Johnston, Thomas (Stirling)

Ritson, J.

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

Johnstone, Harcourt (Willesden, East)

Robertson, J. (Lanark, Bothwell)

Wright, W.

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

Robertson, T. A.

Young, Andrew (Glasgow, Partick)

Jones, Rt. Hon. Leif (Camborne)

Robinson, W. E. (Burslem)

Jones, Morgan (Caerphilly)

Romeril, H. G.

TELLERS FOR THE AYES .—Mr. Vivian Phillips and Mr. Walter Rea..—Mr. Vivian Phillips and Mr. Walter Rea.

Jones, T. I. Mardy (Pontypridd)

Rose, Frank H.

Kay, Sir R. Newbald

Royce, William Stapleton

Kedward, R. M.

Rudkin, Lieut.-Colonel C. M. C.

NOES.

Agg-Gardner, Rt. Hon. Sir James T.

Blundell, F. N.

Cautley, Sir Henry S.

Barnston, Major Sir Harry

Bowater, Sir T. Vansittart

Cecil, Rt. Hon. Sir Evelyn (Aston)

Becker, Harry

Bowyer, Capt. G. E. W.

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Beckett, Sir Gervase

Brass, Captain W.

Chamberlain, Rt. Hon. N. (Ladywood)

Benn, Sir A. S. (Plymouth, Drake)

Briscoe, Captain Richard George

Clayton, G. C.

Berry, Sir George

Buckingham, Sir H.

Cobb, Sir Cyril

Betterton, Henry B.

Bullock, Captain M.

Colfox, Major Wm. Phillips

Bird, Sir R. B. (Wolverhampton, W.)

Burman, J. B.

Conway, Sir W. Martin

Blades, Sir George Rowland

Butler, Sir Geoffrey

Cope, Major William

Courthope, Lieut.-Col. George L.

Huntingfield, Lord

Samuel, A. M. (Surrey, Farnham)

Craik, Rt. Hon. Sir Henry

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

Sandeman, A. Stewart

Crooke, J. Smedley (Deritend)

James, Lieut.-Colonel Hon. Cuthbert

Sassoon, Sir Philip Albert Gustave D.

Davits, Alfred Thomas (Lincoln)

Jephcott, A. R.

Shepperson, E. W.

Davies, Maj. Geo. F. (Somerset,Yeovil)

Kindersley, Major G. M.

Smith-Carington, Neville W.

Davies, Sir Thomas (Cirencester)

Lamb, J. Q.

Somerville, A. A. (Windsor)

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

Lorimer, H. D.

Spender-Clay, Lieut.-Colonel H. H.

Doyle, Sir N. Grattan

Lyle, Sir Leonard

Stanley, Lord

Eden, Captain Anthony

McLean, Major A.

Steel, Samuel Strang

Edmondson, Major A. J.

McNeill, Rt. Hon. Ronald John

Stuart, Lord C. Crichton.

Elveden, viscount

Marriott, Sir J. A, R.

Sueter, Rear-Admiral Murray Fraser

Eyres-Monsell, Com. Rt. Hon. B. M.

Mason, Lieut.-Colonel Glyn K.

Sutcliffe, T.

Falle, Major Sir Bertram Godfray

Meller, R. J.

Sykes, Major-Gen. Sir Frederick H.

Ferguson, H.

Milne, J. S. Wardlaw

Thomson, F. C. (Aberdeen, S)

FitzRoy, Captain Rt. Hon. Edward A.

Mitchell, Sir W. Lane (Streatham)

Thomson, Sir W. Mitcheil-(Croydon,S.)

Fremantle, Lieut.-Colonel Francis E.

Morrison-Bell,Major Sir A. C.(Honiton)

Tryon, Rt. Hon. George Clement

Galbraith, J. F. W.

Nesbitt, Robert C.

Waddington, R.

Gates, Percy

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

Ward, Lt.-Col. A.L. (Kingston-on-Hull)

Gaunt, Rear-Admiral Sir Guy Ft.

Nicholson, William G. (Petersfield)

Wells, S. R.

Gibbs, Col. Rt. Hon. George Abraham

Ormsby-Gore, Hon. William

Wheler, Lieut.-Col. Granville C. H.

Gilmour, Colonel Rt. Hon. Sir John

Pennefather, Sir John

Wilson, Sir Charles H. (Leeds, Centrl.)

Greene, W. P. Crawford

Perkins, Colonel E. K.

Windsor-Clive, Lieut.-Colonel George

Gretton, Colonel John

Phillpson, Mabel

Winterton, Rt. Hon. Earl

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

Raine, W.

Wise, Sir Fredric

Gwynne, Rupert S.

Reid, D. D. (County Down)

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

Hacking, Captain Douglas H.

Renter, J. R.

Worthington-Evans, Rt. Hon. Sir L.

Hartington, Marquess of

Remnant, Sir James

Yate, Colonel Sir Charles Edward

Harvey, C.M. B.(Aberd'n & Kincardne)

Rentoul, G. S

Yerburgh, Major Robert D. T.

Henn, Sir Sydney H.

Richardson, Lt.-Col. Sir P. (Chertsey)

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Ropner, Major L.

TELLERS FOR THE NOES .—Mr. A. Hopkinson and Sir William Bull..—Mr. A. Hopkinson and Sir William Bull.

Howard, Hn. D. (Cumberland, Northrn.)

Roundell, Colonel R. F.

Howard-Bury, Lieut.-Col. C. K.

Russell, Alexander West (Tynemouth)

Bill ordered to be brought in by Sir John Simon, Mr. Masterman, Captain Wedgwood Benn, Mr. Comyns Carr, Mr. Jowitt, Mr. Atholl Robertson, Mr. Raffan, Mr. Trevelyan Thomson, Mr. Herbert Spencer, Mr. Duncan Millar, Mr. Graham White, and Mr. Ernest Simon.

Rating of Land Values (No. 2) Bill,

"to provide for the valuation of land, and for the rating of land values, and other purposes connected therewith," presented accordingly, and read the First time; to be read a Second time upon Thursday, 1st May, and to be printed. [Bill 120.]

Business of the House

Ordered,

"That the Proceedings on the Trade Facilities Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[ Mr. Clynes. ]

Motion made, and Question proposed,

"That this House do meet Tomorrow, at Eleven of the Clock; that no Questions shall be taken after Twelve of the Clock; and that at Five of the Clock Mr. Speaker shall adjourn the House without Question put."—[ Mr. Clynes. ]

May I ask the Deputy-Leader of the House what Motion he proposes to put down to be taken after Questions tomorrow? Presumably, we shall require some Motion which fixes the day on which we are to resume. May I point out that there is possibility of some difficulty arising over the Trade Facilities. Bill tomorrow, if it is not foreseen? It is agreed that the Committee stage shall finish to-night, but it is possible there may be a Report stage. There will be the Third Reading to-morrow. If there be a Report stage, the right hon. Gentleman will have to have a Motion tomorrow to allow the Report stage and Third Reading to be taken on the same day. I presume the Government are conducting their business on the assumption that they will admit no Amendments on Report. I raise these points because, if they are raised tomorrow, there may be recriminations and charges between the different sides of the House, whereas I believe there is only one desire, and that is to get the Bill through. If there be a Report stage, is it wise to limit tomorrow's Session to five o'clock? Would it not perhaps be well to adopt the older plan and allow the House to go on in the normal way, so long as discussion takes place, or, if there is to be a time limit, would it not perhaps be well to make it rather later than five o'clock?

I oppose this Motion, as I have opposed a similar Motion on many previous occasions. I presume the Motion tomorrow, after Questions, will be the normal one, "That this House, at its rising this day, do adjourn until Tuesday, 29th April." That will enable the Government—

Royal Assent

Message to attend the Lords Commissioners.

The House went, and, having returned,

Mr. SPEAKER reported the Royal Assent to:

1. Army and Air Force (Annual) Act,1924.

2. Unemployment Insurance (No 3) Act, 1924.

3. Treaty of Peace (Turkey) Act, 1924.

4. Chatham and District Light Railways Company Act, 1924.

5. Birkenhead Corporation (Ferries) Act, 1924.

Business of the House

Question again proposed,

"That this House do meet To-morrow, at Eleven of the clock; that no Questions shall be taken after Twelve of the clock; and that at Five of the clock Mr. Speaker shall adjourn the House without Question put."

As I was about to say when we were interrupted, the meaning of this Motion is that it relieves the Government of the necessity of maintaining a House on the day on which we adjourn. During the War, when we had Coalition Governments, there was not the same necessity for raising questions on the Adjournment, and the Motion for the Adjournment used to be simply," That this House do now adjourn," but ultimately, I think, a year ago, the figure of five o'clock was introduced. According to my experience, the Adjournment Motion has, in the past, been one of the very few occasions on which the private Member of this House can secure the presence of a Minister of the Crown to deal with a question which is not a party question, but which is personal to him and to his constituents. Apart from the question raised by my right hon. Friend the Member for Central Sheffield (Mr. James Hope) with regard to the Trade Facilities Act, assuming that things take their normal course and questions cease at 12 o'clock tomorrow, the meaning of this Motion is that we shall only have five hours in which to discuss questions on the Adjournment.

As the House is well aware, that means that the time is distributed between the two front Opposition Benches. I understand that hon. Members opposite tomorrow are going to raise a question of great public importance, which I am certain cannot be discussed inside two or three house, and if the party to which I belong raise any question from the Front Bench that would occupy the remainder of the time until five o'clock, when the House would adjourn automatically. I am very jealous of the rights and privileges of private Members of this House. If we approach you and intimate to you that we desire to raise the question of pensions or any other administrative affairs of the Crown, and represent that the Minister should be there to reply, I do not think that I am putting it too high if I say that we should probably be told that we should have to take our places behind what are better known as the party issues or the issues raised by the recognised Front Benches. I think that the time has come to revert to the original practice.

On the day of the Adjournment in my view it is the duty of the Government to maintain a House so that on an Adjournment Debate no private Member could be counted out, because if that device were resorted to the Government could not adjourn on that day over a vacation period as it would be necessary to call the House together on the following day. On the other hand it might be said that on the Adjournment questions are raised which are frivolous and which are wasting time. If that is so the Government have sufficient protection in the fact that they can closure any particular Member, but in order to do that they must retain in the House 100 of their supporters. The real reason that this Motion for Adjournment has been altered to its present form is that it has suited the Whips of all the parties. I have been a Whip myself, and I know exactly what has been talked about on these various occasions. A form of adjournment which, if passed, means that within an hour every Member of the House can get away if he likes, does not interfere at all with the convenience of the Whips, but I do not think that that ought to be allowed to stand in the way of the private Member who, during the rest of the Session, is deprived of the opportunity of raising questions. I would ask the Leader of the House whether the time has not now come to revert to the old practice whereby the private Member on the Adjournment was afforded the opportunity, which was his by right, of raising questions of importance for the discussion of which the Government of the day were required to preserve a House.

Like a great many private Members, I have a great deal of sympathy with what has been said by the bon. Member for East Edinburgh (Mr. Hogge). It is a melancholy reflection that the Prime. Minister, before he met this House, announced in the public Press that this Parliament was going to be a great one for the private Member, who was about to come back to his own again. One of his statements which gave a considerable amount of satisfaction was that he reconciled himself to being in a minority in the House because, for the first time, the private Member would be able to assert himself. I suppose that the difficulty in this matter is that of keeping in the House a number of Members on occasions to hear people whom they do not want to hear. But I rose simply to ask the Lord Privy Seal whether, in accordance with the notice which I gave to him, he is now able to inform the House whether we may have tomorrow the presence of the Minister of Health, and whether the right hon. Gentleman will tell us on that occasion something about the position of the housing question, and generally make any statement concerning it?

If I may, I will reply to the points that have been put to me. In the first instance, in reply to my right hon. Friend the Member for Central Sheffield (Mr. Hope), there will be on the Order Paper tomorrow a Motion that will fix the date for reassembly, that date being already understood, having been the subject of an announcement. In like manner, the Motion will afford an opportunity to meet whatever may be the necessities of the situation in respect either to the Report stage or the Third Reading of the Trade Facilities Bill; that is to say, there will be an enabling Motion, in the event of the Bill being in any way changed in its Committee stage. With regard to the observations of my hon. Friend the Member for East Edinburgh (Mr. Hogge), I have with those observations a very great deal of sympathy, but the terms of this Motion, so far as I know, have evoked no objection from the usual responsible quarters—[An HON. MEMBER: "That is what we are objecting to?"]—what I may term the usual channels. These things must be subject, as near as can be, to prior arrangement and agreement. It is impossible, in these matters, to meet every individual view that Members may entertain, or even to meet the view of groups of individual Members who may wish to bring their, questions forward. For myself, I would say, if it be found in practice that definiteness as to time in the Motion is undesirable, then we could revert to the more elastic terms of previous Motions, but there is, in the view of many hon. Members, an advantage not only to Ministers but to private Members in knowing when they might be likely to be freed from service in the House.

I hope we shall not have cause tomorrow to object to the length of speeches which may be delivered from the Front Benches, because essentially an Adjournment day should be a private Members' day. But let private Members remember that in recent days they have been requiring Ministers to make speeches on various questions, and may I, in reply to the hon. Member for West Woolwich (Sir K. Wood), observe that private Members must not only ask Ministers to be fair to them, but that private Members in the use of the time of the House must try to be fair to each other, and try to apportion the time accordingly. Finally, I may say it is the intention of my right hon. Friend the Minister of Health to avail himself of the opportunity of1 the Adjournment tomorrow to make a short statement on the housing question.

Question put, and agreed to.

Resolved,

"That this House do meet To-morrow, at Eleven of the clock; that no Questions shall he taken after Twelve of the clock; and that at Five of the clock Mr. Speaker shall adjourn the House without Question put."—[ Mr. Clynes. ]

Prevention of Eviction Bill

Reported, with Amendments, from Standing Committee C.

Report to lie upon the Table, and to be printed.

Minutes of the Proceedings of the Standing Committee to be printed.

Bill, as amended ( in the Standing Committee ), to be taken into consideration upon Tuesday, 29th April, and to be printed. [Bill 118.]

Message from the Lords

That they have agreed to,

Unemployment Insurance (No. 3) Bill, without Amendment.

That they have passed a Bill, intituled," An Act to unite the Hackney College Foundation and the New College, London, Foundation in one corporation to be called Hackney and New College; and for other purposes." [Hackney and New College Bill [ Lords. ]

Also, a Bill, intituled," An Act to confer further powers upon the Mayor, Aldermen and Citizens of the City of Wakefield with regard to the construction of waterworks and the consolidation of parishes, and to make further provision with regard to their electricity undertaking and the health, improvement and good government of the city; and for other purposes." [Wakefield Corporation Bill [ Lords. ]

And also, a Bill, intituled," An Act to provide for the amalgamation of the unions wholly or partly in the City of Leeds and of the parishes in that city: to confer further powers upon the Lord Mayor, Aldermen, and Citizens of the city in relation to their water and tramways undertakings and the construction of street improvements, and to make further provision for the health, local government, and improvement of the city; and for other purposes." [Leeds Corporation Bill [ Lords. ]

Hackney and New College Bill [ Lords ],

Wakefield Corporation Bill [ Lords ],

Leeds Corporation Bill [ Lords ],

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

Standing Orders

Resolutions reported from the Select Committee:

1."That, in the case of the London, Midland, and Scottish Railway (Superannuation Fund), Petition for Bill, the

2."That, in the case of the Manchester Ship Canal Bill, Petition for additional Provision, the Standing Orders ought to be dispensed with: That the parties be permitted to insert their additional Provision if the Committee on the Bill think fit."

3."That, in the case of the Lancashire Asylums Board [ Lords ], Petition for Bill, the Standing Orders ought to be dispensed with: That the parties be permitted to proceed with their Bill."

Resolutions agreed to.

Orders of the Day

Trade Facilities Bill

Considered in Committee.—[Progress, 14 th April. ]

[Mr. ROBERT YOUNG in the Chair.]

CLAUSE l.—(Increase of amount of loans which may be guaranteed under 11 & 12 Geo. 5. c 65, and extension of period for giving of guarantees.)

Amendment proposed [14

"subject to the proviso that the Treasury shall require, in the case of guarantees in respect of loans raised by limited liability companies, an annual independent audit of the accounts during the period of the guarantee."—[ Mr. Graham White. ]

Question again proposed, "That those words be there added."

With the permission of the Committee, I wish to withdraw the Amendment.

I understand that permission last night was refused.

Amendment negatived.

I beg to move, in page 1, at end of line 16, to add the words

"subject to the proviso that a company or individual who obtains a Government credit makes a Return to the Treasury of the business position every six months."

The Amendment in my name is not quite the same as the Amendment that was in the name of my hon. Friend the Member for East Birkenhead (Mr. G. White), but I can assure the Financial Secretary to the Treasury that my Amendment will not cost any extra money. I quite realise what the Financial Secretary said last night in regard to these reports, but I brought this forward last year, and I do think it essential that some reports should be made, either to the Treasury or to the Advisory Committee every six months. It is very easy to guarantee on account of somebody else, and it is with that in view that I put down this Amendment. We have, as the Financial Secretary knows, directors on the Anglo-Persian Oil Company and on the British Dyes Company. We actually have directors when money has been put into concerns of that sort, and I should like seriously to put before the Financial Secretary the importance of this Amendment. In reading the report of the experts to the Reparation Commission on the position of Germany, one noticed a paragraph stating that rules should be laid down for the rendering of periodical reports. With these few remarks, and considering the necessity of looking after other people's money, I sincerely hope the Financial Secretary to the Treasury will accept this Amendment.

I do not know whether the Treasury is going to accept this Amendment, but there is a good deal of substance in what my hon. Friend has said. It must be remembered that we are dealing—and the Financial Secretary knows very well I am whole-heartedly in favour of this Bill; I have tried to work it, as far as I can—but we are dealing with a sum of £91,000,000. I do not think the Committee realise the enormous sum at stake here. That sum is equal to the whole revenue of the United Kingdom when I was at school. What my hon. Friend said is perfectly true about it being necessary in some cases to put directors on boards of concerns in which we have put money, but I would go further and remind the Financial Secretary that in Germany, before the War, when the great banks financed industry in a way we do not do, they invariably put a member of their own staff upon the board. Although I do not think my hon. Friend will press this matter to a Division, the position in which the Treasury stands to those concerned is such that I do hope sufficient supervision will be exercised. I do not think it would be too much to ask for an auditor's return every six months; but even if the Treasury do not accept my hon. Friend's proposal, they should take the sense of the Committee as expecting the Treasury to keep a watchful eye on these large sums of money.

I indicated last night, in dealing with the Amendment of the hon. Member for East Birkenhead (Mr. G. White), that there could be no difference of opinion between us as regards this question before the Committee, and the reply which I then gave was that, in fact, all the protection which hon. Members can rightly seek is already in force. The actual position is that, first of all, the auditors are approved by the Treasury, and there may be, and is, a call for periodical reports from time to time, it may be every six months, in order to point out exactly what the undertaking is doing. Every effort is made to see that the undertaking adheres strictly to the conditions of the guarantee, and that the guarantee is strictly applied to the work in connection with which it is given. There is, I think, from every point of view, the fullest protection at the present time. Moreover, hon. Members know we have the additional protection of the Advisory Committee itself before any kind of guarantee is given.

I would refer to the answer which I gave to a similar Amendment of the hon. Member for East Birkenhead last night. I do assure the Committee there is every protection at the present time, and this Amendment is quite unnecessary. Having regard to that statement, I hope the hon. Member will not consider it necessary to press this Amendment.

I quite understand the advice of the Advisory Committee when the guarantee is first given, but I did not quite gather from the Financial Secretary to the Treasury whether, during the continuance of the guarantee, the Treasury has the advantage of the continued watchfulness and advice of the Advisory Committee, or whether there is a periodical investigation into the way in which the loan is being spent. Is the function of the Advisory Committee ended when the advice is given, or is it a continuing function?

Perhaps I did not make that point perfectly plain, but. during the term of the guarantee there is a continual relationship between the Treasury and the Advisory Committee, and, in all cases, there is a constant supervision, and a constant watchfulness to see that the terms of the guarantee are strictly observed. I can give a complete assurance upon the point put by the hon. Member.

Have the Treasury any access to the books in any form, and is the close liaison indicated in his speech taking the form of any inquiries of the accountants from time to time on points on which they desire to be enlightened, and does it take the form of having investigations by their officials actually in the offices of the companies to whom the guarantees are given?

I cannot, offhand, speak as to access to books and so on, but the Treasury and others can call for any information.

I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

I call upon the hon. Member for Macclesfield (Mr. Remer) to move the second Amendment standing in his name.

I do not want to move the. next one standing in my name. May I substitute the first?

Is it out of order because this country has a depreciated currency?

It is not a question of being out of order or not. I have selected the second one.

I beg to move, in page 1, at the end of line 16, to add the words

There has been a great deal of dissatisfaction among the people of this country, whether it is justified or not justified, who think that Lancashire textile machinery is going out to the Far East for the purpose of building up competition. There is no doubt that a good deal of competition has been raised through the fact that British textile machinery has gone to India, China, and Japan, with the result that trade which used to come to Lancashire does not come now, and this is causing unemployment in our own country. I have evidence that this matter is receiving the attention pf the present Government, because, speaking on the 10th March, the Parliamentary Secretary to the Ministry of Labour used these words:

I can give the Committee a little information in regard to the Amendment which my hon. Friend has proposed. If it were carried, it would have the effect of excluding from the scope of the guarantee any cotton mill outside this country, and my hon. Friend bases his Amendment upon the possible effect upon employment in this country of competition of that kind. Let me make it perfectly plain that it is a fact that no guarantee has been given to any such undertaking outside this country at all. Clearly what my hon. Friend has in mind is the guarantee given to the Tata Power Company in Bombay. It is true that the power they provide may be used in part by cotton mills in that locality, and in that rather remote fashion it may be said that, by providing a guarantee, we are assisting some of our competitors. Whatever may be the fiscal or the economic views of the House on problems of this character, we should find it very hard indeed to rule out a guarantee of the kind given to the Tata Power Company. I should also say, and this is a point of substance, that, in fact, that company has placed orders in this country for about £1,000,000 worth of goods of one kind or another, and so afforded employment here. But the real problem behind this Amendment, and, if I may say so, behind the other Amendments of the same character on the Paper, is the problem of immediate employment in this country under the guarantee versus what I may call the long view of employment, that is to say, the giving of such guarantees as would lead to competition with industries at home, and in the last resort make employment more difficult for this country. That is almost exclusively a matter for the Advisory Committee.

I would say to-day that the Advisory Committee, in the discharge of its duties, must take all the circumstances into account, and I cannot believe that in giving guarantees of this kind the Advisory Committee would exclude that longer view of larger problems of employment which my hon. Friend has raised in this Amendment. I hope I have said sufficient in reply to assure the Committee on this point, but I should say that, if the Amendment were carried, it would involve the definite exclusion from this Bill of enterprises of this kind. There might be a case in which it was very important to help enterprises of this kind in some other part of the world, an enterprise which would provide considerable employment of another kind in Great Britain. May I remind the Committee that, on an earlier Amendment, I drew attention to the very great danger of importing into this legislation restrictive or exclusive Clauses. I think we must give the Advisory Committee the widest powers of discretion. Their duty is, first, to assist capital expenditure to provide employment here, and, in the second place, to assist such capital expenditure as will lead to orders coming from abroad. These are the two considerations we must have in view. In view of that explanation, I think my hon. Friend will see that his difficulty is quite met in advance, and he may not find it necessary so to tie the hands of the Advisory Committee as this Amendment would do.

I entirely agree with what the Financial Secretary has said, and I think my hon. Friend the Member for Macclesfield (Mr. Remer) has done a good service in moving the Amendment, since he has elicited from the Financial Secretary the very important statement he has just made. I do not suggest for a moment that the practice the Financial Secretary has foreshadowed would not have been adopted in the future by the Advisory Committee as it has governed their actions in the past, but it is just as well that it should be stated that it is part of the business of the Advisory Committee to look at both sides of the problem, the side which he has described as the shorter view of employment and also the longer view, which is the ultimate effect upon employment in this country. I think my hon. Friend will agree that, having moved the Amendment and having obtained the statement from the Financial Secretary, he has sufficiently achieved his object.

I am not altogether satisfied with the reply. While I quite agree with the Financial Secretary that the contracts to which he has referred did find work in this country, every one of the textile machinery manufacturers in this country are not only working full time now but are working overtime, and they have been for a very long time. All the great textile people, such as Messrs. Asa Lees, of Oldham, and Messrs. Mather and Platt, and all the other great textile people are working full time and overtime on this textile machinery. Although I agree that there is possibly some cogency in what the Financial Secretary said, and I am very much obliged to him for his reply, the point is sometimes overlooked, that of all the people who are busy in the country at the moment, the textile machinery manufacturers are the most fully occupied, and therefore they do not want any guarantee or Government assistance. They are making plenty of money. Therefore that portion of his observations did not quite satisfy me, and I feel the point should be very carefully considered by him.

My hon. Friend the Member for Macclesfield (Mr. Remer) has raised one of the most important economic and business points possible. It is whether you want this country to abandon the making of the most highly complicated and highly valuable machinery for other countries or not. For many years the making of textile machinery has been one of the most profitable industries both for capital and labour in this country. In making this textile machinery, we have at the same time been adding to and increasing our own. My hon. Friend seems oblivious of the fact that if we do not export textile machinery other people will. One of the great troubles in China is that during the War the Americans got hold of a considerable amount of our textile machinery trade, and we are now trying to recapture it. We know that, owing to the fact that there is a Socialist Government in Russia, the textile mills there are more or less derelict. We know that they are producing only a fraction of the textiles, both wool and cotton, that they used to produce. We have good reason to suppose that, if the Russians are able to give a satisfactory proof, anything that we can work on, that they will pay for what they get and honour their undertakings, Russia is to be an immense market for textile machinery within the next few years. If they can take this textile machinery it is to be good for us, it is to be good for Russia, in that the great production of raw cotton and raw wool, which Russia used to give to the world, will once again revive. Yet my hon. Friend the Member for Macclesfield suggests that the Government should pick and choose in this Bill and take out what is about the most valuable export trade we have in machinery. I hope he will press his Amendment to a Division.

Amendment negatived.

I beg to move, in page 1, at the end of line 16, to add

"(3) To all guaranteed loans under this Section there shall be attached conditions (in such form and terms as may be drawn up by the Treasury) providing that there shall be added to the rate of interest payable on such loans an additional one-half per cent. per annum, so as to provide a reserve fund to meet any possible losses under Sub-section (1) of Section one of the Trade Facilities Act, 1921, as amended by the Trade Facilities and Loans Guarantee Act, 1922 (Session 2) and this Act."

My only object in moving this Amendment is to give the Advisory Committee greater latitude in selecting capital undertakings for this purpose. Otherwise, the Advisory Committee might all the time be thinking that they must not pledge the taxpayers' credit if there were any possible reason to expect that they would ultimately be called upon to make good the guarantee. If there were a half per cent. margin to be paid to the reserve fund it would provide for any loss that the Advisory Committee might have to face in the event of any of these guarantees being called upon. This is not a new principle. In the Exports Credit part of the scheme it has already been done. Under all Export Credits guarantees the exporter is called upon to pay one half per cent., and that half per cent goes into a fund which is used to meet any loss on the scheme. I fail to see why we should not have something like that under the Trade Facilities part of the scheme. The net result of all the guarantees yet given has been to enable great firms to raise their money on the open market at rates of interest very much below the rates that they would otherwise have had to pay. For instance, it is fair to assume that a debenture issue on the financial market could not be issued under 6½ per cent. in an ordinary speculative industry. Under this guarantee scheme they get their money for 5 per cent. I think they can reasonably be called upon to pay an additional half per cent., making 5½ per cent., which then would be 1 per cent. less than they would have to pay in the ordinary way. With such an arrangement the Advisory Committee could take a risk, and they would have the confidence which is essential to pass schemes which otherwise might be turned down. It would make the Act very much more workable.

Here, again, I reply with some difficulty, because there are probably many hon. Members who agree with the principle of the Amendment. I want to show that the situation is probably quite safeguarded at the present moment, and that the Amendment is not necessary. There is, of course, a clear distinction between the Export Credits scheme, which is part of this Measure, and the Trade Facilities which we are now discussing. There is provision under the Export Credits scheme for a reserve fund on a premium basis. As regards Trade Facilities there is no provision for a reserve fund. I am afraid that it would be very difficult to make any provision of that kind at the present day. There may be a little misunderstanding regarding the exact method of operation. The Committee knows that this money has to be raised by the undertaking in the open market. All that the undertaking gets is the guarantee which the State affords. It is part of the scheme that the State should enable the undertaking, perhaps, to raise money in the open market at a little less than the rate at which it would otherwise be raised, in order to facilitate work which we want to see undertaken, and so to provide employment. The Mover of the Amendment suggests that there should be added one half per cent. in order to provide some kind of reserve fund, or for the purpose of enabling the Advisory Committee to be rather more elastic in its treatment and to take some greater risk.

There are very definite limits to an argument of that kind. In the first place, if we take the £26,000,000 which are available under the scheme as it stands—probably a little less—one half per cent. on that amount would provide £130,000 per annum. The Amendment would introduce a discrimination between all the people who have obtained guarantees without paying the additional half per cent., and those who would obtain the guarantee with the additional payment of half per cent. In all the circumstances it would be impossible to defend an anomaly of that character, unless there were very strong reasons to show, first of all, that the Advisory Committee was too strict in the use of the guarantee, and, secondly, that there were being kept outside the scheme people who could be brought in if a little wider scope were given. Whatever the state of affairs, the Advisory Committee would have to exercise caution in order not to encourage enterprises which have not a chance of success. The Amendment, moreover, would tend to raise the price at which the money had to be raised in the open market. Quite frankly, the Treasury might welcome an arrangement of this kind, but the argument is more largely on the side of the exclusion of the Amendment from the Bill.

I am disappointed at the Financial Secretary's decision not to accept the Amendment. I had an Amendment earlier on the Paper, and I did not move it because I preferred the wording of the Amendment now before the Committee. There could not possibly be any hardship to those who got money through the Trade Facilities scheme having to pay this additional half per cent., because if they have the guarantee they will obviously be able to borrow money at a lower rate than the ordinary rate, even with this half per cent. added. On their own credit they would have to pay, probably, 7 per cent. or 8 per cent., but with the Government guarantee they could borrow at 5 per cent. So far as the Government is concerned, the Amendment would put them in a much safer and sounder position. They would be able to regard the guarantees without any risk. It would be in the nature of an insurance fund. There would be no loss at the end of the period. What I am afraid of in this Bill is that in 10 or 15 years' time we may be faced with a serious loss. If we had a sum of money such as is provided by this Amendment, it would go a long way to remove those misgivings, and would enable us to feel that when these guarantees were given the Treasury of the future would not be called upon to provide a very large sum of money which would have to be provided out of the revenues of the country. I am not satisfied with the Government's reply, and, much as I want to help this Bill through, I hope that my hon. Friend will, if necessary, press the Amendment to a division.

I am very glad that the point has been raised, because it is1 a very important one and one which not only the Financial Secretary to the Treasury but everyone who has had to administer this Act has considered from time to time. It was considered because, on the face of it, the proposition is a very attractive one and appears to be very businesslike and likely to yield good results. It has been stated that there is what, at first sight, looks like a parallel case in the premiums which are charged under the Export Credits scheme. I know that those considerations led us, when we were in office, very seriously to consider whether it would not be possible and desirable to charge a premium under the Trade Facilities Act. We came to the conclusion that it would not be desirable and that the thing would not be practicable. I think I am justified in saying that we took the advice of the Committee that was then administering the Act. I remember the Chancellor of the Exchequer and myself getting their advice on the point. The reason why we found it to be impracticable was substantially this: Under the Export Credits scheme you do not charge a flat rate of premium; you charge a rate of premium which varies with the risk. If you are doing a risk in a market which is fully established, the rate of premium which is charged is very low. If you are doing a risk in a risky market, with, perhaps, a long term of credit, the risk is correspondingly high. It would defeat your object to charge the same premium with every kind of risk. If we charged a premium at all, we would have to adjust it as scientifically as we could in order to meet the different kinds of risk.

Would not this be practically the same thing under every one of these loans.

No, because the loans which have been taken have been substantially by safe business. The point of the hon. Gentleman was that he wanted the Advisory Committee to feel that they could take rather more risk than they take al present. I am, perhaps, a little inclined to sympathise with him in that view. But if the risks are to vary we ought to charge a higher premium in respect of the more risky business which you want to see done. What would happen if you did not vary your rates of premium? You would be charging the same premium to a risky undertaking as to a perfectly sound concern, which put up an unimpeachable security and which came to you simply for the reason that it wanted to borrow at a lower rate of interest than it could get without the Government guarantee, and the whole inducement to which to anticipate its work lay in the fact that with the Government guarantee it would be enabled to raise this money at ½ per cent. or 1 per cent. lower rate, and would be able to face a higher capital cost of construction, than if it had to borrow at a higher rate of interest. If you are going to charge that firm the same rate of premium as you charge on risky undertakings, two things will happen. In the first place you will make a charge upon that undertaking for a risk which is non-existent. You will also, although you are incurring no risk in respect of that transaction, make them pay ½ per cent. more for raising the money—½ per cent. more than the rate of interest at which the firm would otherwise be able to raise it. While there may be something attractive—if it could be worked out— in a scheme which would enable the Advisory Committee to enter into more risky business than they feel themselves at present justified in undertaking we have to consider the difficulties. Without wishing to commit myself, I may say that I could understand an arrangement being made for premiums at varying rates, but to put on a flat rate premium would prevent you getting just the kind of business that you most want to get, and I doubt whether it would have the result which my hon. Friend desires to achieve. For those reasons I strongly urge that the Amendment in this form ought not to be accepted, and that it would be much better to leave the matter in the hands of the Advisory Committee with the assurance which was given by the Financial Secretary that, wherever there is a sound business, and wherever the risk is reasonable, they will be prepared to entertain applications.

I think this is a very important Amendment, and the Committee should consider it carefully before rejecting it. I am not going to say that the Financial Secretary ought to accept it, but it is worthy of his consideration. I made a suggestion similar to that contained in the Amendment during the Debate on the Second Reading of the Bill. I asked the hon. Gentleman in charge of the Bill to give careful consideration to the suggestion which I then made with regard to the difficulty in the Lancashire cotton-spinning industry. The suggestion then was that ½ per cent. should be put on one side as a set-off or reserve against possible losses. Whether the present Amendment should be accepted or not depends on whether the Advisory Committee agree with the Government in making this scheme as elastic as possible so as to give as much help to industries in this country as possible. The Committee have just rejected an Amendment which would have had the effect of preventing assistance being given for the erection of cotton mills abroad, and the argument used in regard to that Amendment was that in this country the machinists are exceedingly busy. Had I had the opportunity of doing so at the time I should have said that such is hardly the case at the present time. They were very busy, but they are much slacker now. The Advisory Committee should realise that some elasticity is desirable in helping with credit industries that are outside this country, and I hope when the time comes when they are asked to give a. little more elasticity to this particular Measure, with a view to helping an industry which requires assistance from the financial point of view as much as or more than any industry in the country, the Advisory Committee will take the same view of the needs of the Lancashire cotton spinning industry that seems to be taken at present with regard to other industries. It may be that the Financial Secretary refuses to accept the Amendment, because he knows there is no real need for any guarantee fund or reserve fund, as the losses in the past on the guarantees have been almost nil.

From past experience, therefore, the Minister is perfectly justified in declining to accept the Amendment. The very fact that there is no guarantee fund required may also mean that this scheme has not been as successful in helping to reduce unemployment as it was intended to be. The members of the Advisory Committee will easily understand that it may be necessary at some time to take a greater risk than at others, and to protect the taxpayer, when we do so, it is worth considering some provision such as is suggested by the Amendment.

After the speeches, particularly those from the two Front Benches, I see the difficulty of putting this proposal into operation. My only object was to permit of the Advisory Committee exercising greater power regarding loans to which risk might attach. I think the Amendment indicates one of the ways in which this difficulty might be got over. The Advisory Committee, however, might have instructions from the Treasury to charge a premium, if a premium were necessary to secure a guarantee. The Advisory Committee might be somewhat hesitant about giving a guarantee in a case where they did not consider the scheme sufficiently secure, and the attachment of a premium to the guarantee might help the Committee to extend their assistance. Perhaps the Financial Secretary will consider accepting some suggestion of that sort. In the meantime I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

I beg to move in page 1, at the end of line 16, to add

"(3) To all guarantees given under this Section there shall be a condition limiting the dividends payable in any one year in connection with the capital undertaking concerned to a maximum of eight per cent. during the continuance of the guarantee."

I do not think the taxpayers' credit should be used for private gain. During the continuance of the guarantee a return of 8 per cent. ought to satisfy the shareholders in any concern which comes to the Government for assistance. If a maximum of 8 per cent. is fixed, any further profits made should go to improve the security covered by the guarantee. That, I think, is a perfectly reasonable suggestion, and it would also have the effect of assisting the Advisory Committee in coming to its decisions. In the discussion on the Second Reading we were told of one case in which no less than 35 per cent. was paid. That was in connection with the Sudan loan. I am anxious that nothing of that sort should happen in connection with the guarantees given under this Measure. Shareholders who put up money, in addition to the guarantee of the Government, ought to be satisfied to limit their return to 8 per cent. during the continuance of the guarantee.

I am not clear as to the reasons given by the hon. Member for this Amendment. I understand he wishes to prevent shareholders in any undertaking which borrows under this Bill from benefiting from such borrowing. Under the Government guarantee most of these big concerns can borrow at about 5 per cent. The Amendment proposes to limit the profits to 8 per cent. The hon. Member would be more consistent if he made the limit on the profits 5 per cent. instead of 8 per cent.

I do not think this Amendment ought to be accepted, because the hon. Member has not made clear what it really means. Does he mean that the firm concerned should only pay a dividend of 8 per cent. as an average over five or 10 years, and does he suggest that the shareholders should be prevented from receiving 8 per cent. in one year, even though they may have had a loss of 20 per cent. in the previous year?

The hon. Member did not deal with that point himself, and I do not think the wording of the Amendment makes it clear to the Committee.

I regret to stand at this Box opposing Amendment after Amendment, hat it is my painful duty to oppose this Amendment because I think it would be quite unworkable. The Committee will be reassured if I tell them that of the £28,000,000 guaranteed up to the time the Act expired on 9th April last, practically all was subject to a restriction of some kind with the exception of, I think, about £600,000, so that the Mover of the Amendment will see that, in the carrying out of these proposals so far, his case has been practically met. As hon. Members in criticising this Amendment have pointed out, it is not by any means clear. It simply proposes that the dividends of an undertaking are to be restricted to 8 per cent. during the time the guarantee is in operation. Having regard to the fact that many of the undertakings which have been assisted are public utility undertakings and are already subject to a rate which is less than 6 per cent. the Amendment is scarcely necessary in reference to them, and as regards other undertakings which come within the scope of the guarantee, everybody knows that when a limit of this kind is laid down the tendency is to work up towards that limit, and it would be a ease of working up, in many of the instances which come under review. Consequently my hon. Friend would probably defeat the object he has in mind ii the Amendment were accepted. Apart from that circumstance, there are other reasons which I think are final in this connection. If this Amendment were carried, it would mean that the dividend of any undertaking, over all its enterprises—both those guaranteed under this scheme and those unguaranteed—would be limited to 8 per cent. Let us suppose that an undertaking came forward which was prepared, on an unguaranteed basis, to go ahead with certain work to provide useful employment and to help the country. There is not the least doubt you would have difficulty if this restriction of 8 per cent. were imposed on any such part of its operations as was covered by this guarantee. It is a restriction which we would not be justified in imposing. After all, the State is not guaranteeing the whole of a concern but only that part which may be covered by the guarantee and which receives the benefit of this provision under the Trade Facilities proposals. The Amendment is quite unworkable and practically the whole of the ground which the Mover has in mind has already been safely covered.

I entirely agree that the Amendment is absolutely unworkable, but I would like to put this point. There is a danger of a company which gets a guarantee under the Bill, when it makes profits in a boom period, distributing the whole of them to its shareholders without creating any reserve. The Financial Secretary has previously stated, in reply to a former Amendment, that he very carefully scrutinises the accounts of the company, and I should like to ask whether this specific point is one which is carefully watched by the Treasury, and whether inquiries are made to see that not more than a moderate proportion of profits are distributed.

I am grateful to my hon. Friend for raising that point, which I omitted to put in reply, but, in fact, the arrangements which we have made for insurance and depreciation and for provision towards reserve form together, perhaps, the best reply I could have offered to this Amendment. That provision itself is a restriction on the distribution and, therefore, a protection as regards any extravagant distribution which might take place, and I trust that that explanation meets the point of the hon. Member, while it is an additional argument in opposition to the Amendment.

The Committee, as I explained in reply to a previous Amendment, would not give a guarantee, first of all, unless they were satisfied on conditions of this kind, and, moreover, they have power to interfere unless the conditions are strictly observed during the time the guarantee is in operation.

Amendment, by leave, withdrawn.

I beg to move, in page 1, at the end of line 16, to add the words fostered ships to be put on the water, for they will prevent those old ships being first got out of the way by being worked out in some method or other. We ought not to build until we have cleared that surplus amount of tonnage off the water. The increased competition of new ships keeps freights down, too, and discourages the use of the old ships and the building of ships by private capital without guarantee.

I have further looked into this matter, and I find that out of £38,000,000 worth of credit already guaranteed under the Trade Facilities Act—and I think this figure will surprise hon. Members—no less than £9,700,000 has already been devoted towards shipping, a further £3,000,000 has been provisionally agreed to for guarantee, and a further £3,000,000 is still under consideration, making £l5,700,000, out of £38,000,000 of guarantees, for shipbuilding. One might get up and1 justly call this Bill the Shipbuilding Guarantee Bill. The shipping industry have therefore had more than their share out of these facilities, and so strongly do I feel about the matter that I propose, if I can get an hon. Member on this side to tell with me, to divide the Committee on this Amendment unless the Government will meet us with concessions. I am driven to feel this—I may be wrong—that so large an amount of this £38,000,000 has been devoted to shipbuilding that the Government may have been inducing shipbuilders to borrow Government credit. If so, I think the Government are very short-sighted in their policy. It is true that a large amount of these guarantees may have been used for internal-combustion engines, for Diesel engines, for motor ships or for passenger ships; but who, in the name of reason, will use his own money or credit with which to build ships while he can get the Government to lend him its guarantee, or rather, I should say, while he can get the Government to grant him such facilities that he can borrow the money at a less rate than his own credit is worth?

This guarantee, therefore, does not effect the object at which it is aimed. It does not increase the amount of building, that is the point, increase; because, in my opinion, those people who have been borrowing with Government help would certainly have built the ships themselves with private credit if they had not had this guarantee of cheaper money as a bait dangling before their eyes. I say again, Why should they, if they are reasonable and careful business men, use their own credit to borrow money if they can get the guarantee of the Government which will allow them to borrow at a less rate? They would be very foolish indeed. I have received from the Shipowners Parliamentary Committee, 28, St. Mary Axe, a resolution, which was passed unanimously, as follows:

The Resolution is issued by the Shipowners Parliamentary Committee, and some of its members must have borrowed the Government's good name for the back of their paper. What are their names? Presumably the Committee is representative of most of the great lines. There is the Royal Mail Steam Packet Company, borrowing £2,300,000 for the construction of three ships; the Union Castle Mail Steamship Company, £1,000,000; the Glen Line, £200,000; the Liverpool, Brazil, and River Plate Steam Navigation Company, £200,000; Harland and Wolff, £95,000; and the Bank Line, with what I believe is an amalgamation or a merger of interests between Harland and Wolff and Messrs. Weir. If they are parties to this Resolution, it means that they resolved that no more of this credit should be given to help the building of ships which they themselves, to the tune of some millions of money, have already been borrowing. As I say, I pay no attention whatever to this Resolution. I base my objection to the inclusion of shipbuilding in this connection on what I regard as merely the ordinary commonsense view that we do not need to put ships on the water until we have got rid of the surplus that is already there, otherwise we depress freights, discourage new buildings and delay healthy recovery in the shipyards.

It is now sought by some shipbuilders to borrow this credit from the Government in order to build ships for Denmark. What does that mean? A shipowner comes along from Denmark, and, by means of this Bill, seeks to get credit to have ships built in British yards, which will, with British credit, and cheaper money, consequently, sail against our own ships, all the while we are battling with bad times and low freights and having 600,000 tons at least, and perhaps 1,000,000 tons, of shipping laid up. That sort of thing ought to be severely criticised by the House. An hon. Member on the Treasury Bench said in the last Debate that we must leave this matter to the Advisory Committee. I would like to say this about that Committee. I have not the slightest thought in my mind other than praise, gratitude and respect for the Committee, but the function of that Committee is not to deal with policy beyond helping employment. That lies with the Cabinet and, from them, with the Treasury. The Treasury lays down a policy as to whether, and how much in all, the Committee should lend credit to shipbuilding undertakings, and it rests with the Committee to see that the security given is sufficient. The Treasury guides the Committee as to the channels of trade into which the credit should flow.

The hon. Member did not say that when an hon. Friend of mine moved that the Committee be instructed to give guarantees to small undertakings. That was also a matter of policy.

6.0 P.M.

I do not want to be drawn off my argument, but that presupposes that the Committee does not give consideration to small people, and I deny, so far as I know the facts from personal observation of the Exports Credits Committee—and there sits the Parliamentary Secretary to the Overseas Trade Department, who will bear me out —that any applications made by shipowners, if they did apply, or anybody else to the Export Credits Committee are turned down in any way because they happen to come from small men. I can see the hon. Gentleman nodding his head, confirming my reply to the interruption of the hon. Member for Penistone (Mr. Pringle). The point has nothing to do with the subject at issue, but I am glad he interrupted, because it has given me the opportunity of saying what I know about the consideration always given to the little man in need of help. I, therefore, think the Treasury Bench must dismiss from its mind that the matter is disposed of if it is going to tell us that the Committee is perfectly competent to deal with these matters. I submit that it does not ultimately lie with the Advisory Committee to say whether it will lend credit to shipbuilding companies or to any other companies to a larger or smaller total. After a policy has been passed by the Treasury, or the Treasury has silently acquiesced in a policy followed by the Committee, its function is one, an only function, and that is to take care that the credit of the British Government is lent in as secure a manner as possible. It has not the originating function of deciding to whom that credit shall be lent only so long as it is on good security. I do not know that I need say much more, but looking through this official document sent to me by the Vote Office I see that under the Trade Facilities Act there is a sum of £2,000,000 credited to a Newfoundland corporation. I do not know what the company is. I dare say it is all right, but after the recent disclosures about Newfoundland I think the Committee might have a hint of caution from the Treasury before they touch anything connected with business in that quarter.

There is a sum of £1,800,000, principal and interest, guaranteed for 20 years for the construction of 19 vessels for the Bank line. Does anyone really think that Messrs. Harland and Wolff and a firm like Messrs. Weir require to> borrow this credit in this way? Does anybody think that these firms would not have built these ships unless they could have got the Government guarantee? I do not believe for a moment they would have not done so, but they borrowed this money in such a way, or it was borrowed for them, till 1944, at 98½ at 5 per cent, interest, and that makes a yield of £5 2s. 6d. due. At the time they raised this loan they had the whole borrowing power of the British Government behind them. The loan was issued at such a price that it yielded, as I say, £5 2s. 6d. Conversion 3½ per cent. at 75 yielded, say, £4 12s. It was throwing money away. On the top of the Government guarantee these people had charged the ships, yet the underwriters were getting a picking of ⅓ per cent, on a British Government guaranteed loan of £1,800,000! What was the result of this guarantee being given to Messrs. Harland and Wolff and the Weir Company? I take the view of the hon. Gentleman sitting below the Gangway on the other side that they might have borrowed the money through their own bankers or by public subscription, but it would have cost them 1½ per cent. more. The difference between that percentage and what they were paying under the guarantee of the Government on nearly two millions of money amounts, roughly, to nearly £30,000 a year; so that the Government by this guarantee have given the people, who no more want it than the sea wants water, a present of £30,000 a year on these 19 ships. In other words, a gift in interest and of about £1,500 a year per ship, the absence of which, had they not secured it, would, in my opinion, never have prevented the building of those 19 ships by the two firms in question. How then did the guarantee in this case add to employment? For that reason I beg to move the Amendment.

This is the first time that I have opened my mouth on this Bill, and I trust, therefore, that the Committee will bear with me for the few moments in which I shall endeavour to answer the very able and slim speech of the hon. Member for Farnham (Mr. A. M. Samuel). That speech, when we see it in cold print, will be seen to be the best speech that could be really made against the Amendment. The hon. Member talked about the great number of derelict ships laid up. That is perfectly true. Then he gave us figures, quoted by the so-called Shipowners' Parliamentary Committee. I do not know of whom it consists. I have spoken to one or two shipowners in this House, and they say that the Committee did not consult them before they sent out these documents. These ships which are laid up to-day are, to a very great extent, obsolete or unsuitable. Many of them were built during the War when speed was required. Others are of a type now-become obsolete, and, therefore, what the hon. Member for Farnham; said is perfectly true when he talks about these ships being derelict. He has made quotations. I have a number of quotations here, but I will only trouble the House with a couple or so. Mr. Archibald Hurd, an expert on shipping matters, writing in the "Daily Telegraph" on 6th August last, dealing with world shipping, said:

"It is calculated that at least 3,000,000 tons of shipping are more or less obsolete and therefore inefficient."

The "Times Trade and Engineering Supplement (Shipbuilding Section)," on 15th September, 1923 (part 16), draws attention to this fact:

"It is well known in shipping and shipbuilding circles that employment has been found since the close of the War, particularly in the British mercantile marine, for runny ships which are so near the obsolete stage that in normal circumstances they would have been consigned to the scrap heap by this time. It may be regarded as certain that much of the tonnage now laid up will never see the blue water again."

Then you have to add a number of ships that are probably run at an economic loss for various purposes, including that of keeping men in employment. The hon. Member for Farnham went on to inquire why should ships be built to-day? Why should we keep our unemployed workmen building ships for Denmark and other countries in view of the tonnage laid up? That is his argument.

The hon. Member is right so far; we are not building because we have so much unemployed tonnage. I submit it is folly to go on subsi- dising foreign owners so that they may use the British Government's credit to compete with us while we are not in a position to build ships because we are so overridden with the derelicts.

There are firms who run liner ships which certainly are not passenger vessels, but regular liners carrying on a regular trade which has been built up over a number of years, and if we do not get their orders here, as we have done, the orders will go elsewhere. It may be said: Why cannot we get the orders here? It is perfectly true that these foreign liners will probably be considerable competitors of British ships; at the same time they have to contend against the depreciation of the currency in the countries like Belgium and France. Before the War, in the case of any respectable shipbuilding firm on the Continent which placed an order with a British shipbuilding firm of repute, and had the support of their foreign bank, the British bank would advance 70 to 80 per cent, of the value of the ship to enable it to be built here. The British banks will not do that now—

Because the state of finance and the economic situation in Europe is such that they cannot do it. It is too great a risk. Therefore, you have either to use Government credit to help our shipbuilding concerns in this country, or to go on paying out-of-work benefit to these thousands of men engaged in the shipbuilding industry. It is all very well for the hon. Member for Farnham to criticise the Government —his own Government, and the Committee set up by his own Friends—for granting credit to the Bank Line. Look at the situation in the shipyards and in the shipbuilding industry generally. In July of last year, the latest figures I have, no less than 268,000 men and 4,000 women, which includes insurance workers, were engaged in shipbuilding and of these figures, in October, 1923, 115,879 men and 396 wo0men were unemployed.

Can the hon. and gallant Gentleman assure us of this: that if the Government had not come along and guaranteed the loans, these people would not have built the ships with their own credit?

Yes, in the case of one of the lines, the Royal Mail Steam Packet Company. But I will go back to the banks. I was assured by a director, who was formerly a Member of this House, and whom I went to see in view of the fact that I was putting questions in this House—and I thought it only right to go and explain—that the passenger ships laid down would not have been required for some years,, normally, and they were put down only because they got this money. The ships to which I refer were big passenger ships for the South American trade. It is easy to criticise. At the same time this is an administrative question, and because of this particular example the hon. Member for Farnham wants to segregate one of the greatest industries in this country, saying they shall have no Government assistance, because they have had £9,000,000! It is one of the greatest industries. It is one of the most hard-hit industries at the present time. These foreign liner companies prefer to come to this country for their ships, even if they pay a little more, because of the reputation of the English shipbuilding yards. They could go to other countries where shipbuilding is subsidised or assisted by the Government.

In Holland the shipbuilding companies receive a subsidy on the wages paid for their work, and in Germany the replacement of ships to take the place of those handed over for reparations is subsidised by the Government. In France and Italy the State help, and work can be taken cheaply there by the shipyards because they are always sure of a certain amount of work for the State subsidised lines. The same thing applies to the United States and Australia, although neither are competitors for the work in our yards in the same way as Holland and other countries I could mention.

There is, however, still a great falling off in the amount of shipbuilding under construction in the works. In June, 1923, there was only 2,282,000 tons actually under construction, which was 1,164,000 tons less than the corresponding period of 1913. With the great number of obsolete ships laid up, the unemployment in our shipbuilding industry, and the present state of trade in the country, I think it would be most unfair to segregate this great industry, and to say no help shall be given to shipbuilding because, perhaps, certain wealthy shipowners, who could have got credit otherwise, have taken advantage of the Government scheme and in doing so have anticipated their programme. Let me say a word about the shipowners—for those whom this Ship-owning Committee represents. There are great numbers of shipowners in the country who are pursuing exactly the same policy which the hon. Member for Farnham condemned in the bricklayers and other trade unionists, and that practising limitation of output. Because they have a certain number of ships that they cannot run at a profit, they do not want any more built.

Will the hon. and gallant Member be good enough to say where, when, and how building trade unions have limited output?

I am talking about the hon. Member for Farnham condemning this practice. I can give chapter and verse in regard to orders for ships from foreign companies who need the ships, and they will get the ships somewhere else if they are not able to have them built in this country. They are now waiting for this Bill to go through in order to get those ships built.

Do I understand the hon. and gallant Member to say that there are a large number of foreign companies waiting for this Bill to go through in order to get British credit.

A large number of foreign companies are waiting to give their orders for ships, and the shipbuilders of this country are waiting for these facilities to enable them to get on building those ships. Does my hon. Friend, who has just interrupted me, object to us making goods in this country such as boots and machinery for foreigners?

I merely ask the question whether there were a large number of foreign companies waiting an opportunity for getting the credit of the British Government.

The point is that if we can offer credit for a certain number of years we can get the orders for these ships. We cannot go to the British banks and get those facilities at the present time, but if we can get the British Government to guarantee these facilities the ships will be laid down in British yards. Personally, I cannot see any argument that can be advanced against that policy.

Then we should have the pleasure of paying a certain proportion of the price for the foreigner.

The foreigner pays for them, and he pays one or two per cent, more than the bank rate left on interest. The Government Js only called upon to pay if the foreign firm or the shipbuilding firm defaults, and even then we have a mortgage on the ships. There is no risk about it, but the banks will not do this business owing to the unsettled state of Europe. It is admitted that the state of affairs in Europe has made cerain nervous people have very cold feet indeed.

I can understand the hon. and gallant Gentleman's argument on a falling market, but he says it is not a falling market, and that the real reason is because of the state of Europe. Will the hon. and gallant Member be a little more definite on that point?

Ships are the most movable form of property. If you have a mortgage on a ship the fact that a country gets into disorder does not affect you so long as you can move the ship. The English banks, however, exclude the guarantees of foreign banks because of the state of unrest in those countries. Therefore I do not think the risk is so great in view of the particular commodity with which we are dealing. The English banks will not do this business for various reasons. I dare say that my arguments on this point are faulty, but I am sure that this attempt to revive trade will give employment to a much larger fleet of vessels than is available now.

At the present time shipowners are prepared to run on a paying basis ships of the most modern type, and it has been shown that they can be run on a paying basis. When they are willing to build such ships, surely the House is not going to say that those orders shall not be placed in British yards in order to provide work for British workers. I am obliged to the hon. Mem- ber for Farnham for exempting a large class of vessels, but I think he is mistaken in saying that a certain type of modern cargo vessel is not wanted.

The more I hear the hon. Member for Farnham on this subject, the more unconvinced I am of the necessity for legislation of this character. If I take his speech at its true value, then the hon. Member has proved that this Measure is no solution, and not even a partial solution of the problem of unemployment. If this legislation had found its origin in the fertile mind of the President of the Board of Trade, we should have heard a series of wonderful arguments from the opposite side of the House that would have convinced hon. Members that no good purpose, would be served by this Bill. Last night I questioned the wisdom of giving guarantees to companies which I thought could raise the money themselves in this country. I also questioned the desirability of pursuing such a policy, and I did so on the strength of the standing of the companies, and not upon the particular industry concerned. I could not myself be a party to the exclusion of any particular industry from the consideration of any schemes that may be promulgated, and brought to the notice of the Advisory Committee. It may well be that the experience we have had proves the wisdom, or otherwise of bringing to the aid of private enterprise these artificial methods of support. We may reasonably question such a policy, and it may be a matter of controversy as to whether it is good or bad, but the fact is that we have embarked upon this type of legislation, and we have said that we will give guarantees under certain conditions to certain companies or utility companies if they satisfy the Advisory Committee. My hon. Friend the Member for Farnham said this was a question of policy.

The policy of this Bill is to find work ultimately on sound lines for our working people.

I am aware that that is the aim and object of this kind of legislation. I understood the hon. Member to suggest that this was a question of policy. Under the provisions of this Bill we have handed over the business to an Advisory Committee of Experts. I suppose they are capable men, and are we to understand that the point to which the hon. Member for Farnham has called attention about derelict ships, and the holding up of ships, is unknown to the Advisory Committee.

The Committee have to deal with a number of other industries besides shipping, but their only function is to see that the security offered to them is a good security. They have one single job to do, and it is to see that they get good security for the credit given by the Government.

I agree that there is some point in that argument, but I cannot close my eyes to the fact that the Advisory Committee must take all relevant facts into consideration, and the Financial Secretary to the Treasury has used that argument in regard to another Amendment. My point is that the Advisory Committee must know these conditions, and if they are capable men they would not be a party to continuing a policy that would have the dire effects which have been suggested by the hon. Member for Farnham. If we were to carry an Amendment of this character it would limit the free exercise of the judgment of the Advisory Committee., and it would exclude from their consideration a great industry. What is the position of the shipping industry? It may be true that there are a large number of ships derelict and held up. If these ships are of no use I should have no objection to them being scrapped. I have no interest myself in the shipbuilding industry except the benefit derived by those engaged in the industry.

Shipbuilding is one of the greatest industries in this country and at the end of March this year, out of some 359,198 members of trade unions we find that there was a percentage of 16·6 unemployed, or about 59,625 unemployed. If we take the total number of workpeople in this industry who are registered under the Insurance Acts, we find the total is 29·7 per cent., or 80,867 people unemployed. If this legislation does what it is suggested it does, if it be an instrument for the promotion of employment and the absorption of unemployed people, there seems to me to be in this great shipbuilding industry a great deal of room for assistance. Therefore, it would appear to me to be folly on the part of this Committee to follow the advice of the hon. Member for Farnham. He suggests that we should exclude from consideration, under the provisions of this Bill, all reference to the shipbuilding industry with the exceptions which he sets out in his Amendment. That, in my opinion, would be violating the design and purpose of the legislation. It would be an unwarrantable exclusion, and it would not be in the public interest. Therefore, I hope the Financial Secretary will do as he has done in the case of other Amendments founded upon a similar principle, and oppose this one also.

The hon. Member for Farnham (Mr. A. M. Samuel) is luckier than I am with regard to my Amendment, but I propose to speak to his Amendment as you, Sir, kindly gave me permission to do. I do not wish anything I have to say to convey in any way the idea that my suggestions should afflict the unemployed. I quite appreciate the magnitude of the number of people unemployed in the shipbuilding and shipping industries, and I also appreciate, as I am sure the Committee appreciates, what the Advisory Committee have done in regard to this Trade Facilities Act. In certain cases, however, they might be in a very difficult position. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) has referred to the foreign shipowner borrowing on our credit, that is to say, the credit of the British taxpayer. What would be the position of the Advisory Committee, who have to discuss the position from the point of view of unemployment, if a German shipowner came to them, and said, "You can lay down 10 ships, provided I receive the credit of the British Government"? Surely, it would be absolutely against our principle to lend money in that way to the German for the purpose of building ships in competition with us, even if it gave employment to our men for, say, a year or two. It would be giving away cur credit. We have only a certain amount of credit, and only a certain amount of investments, which are the savings of the people; and those investments ought to be made in good British or Dominion securities first.

I was interrupted myself, and I am sure the hon. Member will not mind my interrupting him. I quoted the foreign case, because it had not been dealt with before, but I did not say that this should only be given to foreigners. If British owners will place orders, I would give them preference, but, if a German owner is prepared to build 10 ships in England, is not that better than building them in Germany? Do not we get the employment, wages, and everything else? The ships would be built in any case if they were wanted.

I do not recommend the British Government to subsidise the German shipowner. I think it is absolutely unsound, both economically and from a business point of view. I contend that, if a German comes here and gives an order for ships to be built on our credit, it is absolutely unsound from our point of view.

Does the hon. Member know of any case in which ships built in this country have been given as a present to any other nation, and have not been paid for?

I am not a shipbuilder, and have no knowledge of this matter; I am only interested in protecting the taxpayer and in protecting, perhaps, the ordinary shipowner if he has to compete with the German ships which receive a subsidy at the expense of the British taxpayer. With regard to shipping, let me tell the Committee the enormous amount of tonnage that there is afloat at present. Comparing 1914 with the present time, there are 15,000,000 tons more shipping in the water now than there was in 1914. That is the world tonnage. With regard to the world tonnage laid up in January of this year, the amount of gross tons was 6,000,000. In the United Kingdom, in January, 1922, there were 403 ships laid up of a gross tonnage of 1,064,000, as compared with January of this year, when there were 317 ships totalling 1,008,000 tons. There has been a very slight improvement in the freight market, and surely it all depends on the freightage. The improvement we had in the freight market last year was in January, 1923, when, owing to the fact that the Reparation Commission in 1923 were unable to come to terms, France and Italy purchased coal, and that improved our freightage. There was also an improvement at the time of the terrible earth- quake disaster in Japan. But since then freightage has not improved. I have here the Annual Report of the Chamber of Shipping of the United Kingdom, which includes the following statement:

"TRADE CARRIED AT A LOSS.

The course of freights has once more illustrated the irresistable working of the law of supply and demand. The world is doing much less trade than before the War"—

that is a point that has to be remembered—

"but there is much more tonnage, with the result that there has been a great volume of tonnage already ready for sea when freights have shown signs of rising, thus preventing any effective recovery of the market."

I looked up the freights of yesterday, and I find it stated, with regard to the freight market, that:

"London the week opened with a limited inquiry. In Liverpool steam rules very dull. Newcastle: market quiet. Cardiff: market quiet but with rates steady."

What is the good of subsidising foreigners or others when you have a freight market like that I As soon as freightage improves you will get, not altogether derelict ships, as the hon. Member for Farnham says, but some of these ships moving about again. That, however, can only take place when there is an improvement in freights, which will come about when there is demand for them. With regard to shipbuilding, the total world output last year, 1923, was 1,640,000 tons. We can construct in our yards up to 3,000,000 tons, but our total construction last year was only 650,000 tons. Who is next? Germany, with 400,000 tons, and then the United States with 220,000 tons. And yet the hon. and gallant Member for Central Hull approves or subsidising German shipowners with our credit. That is unsound. With regard to the Bank Line, which was referred to by the hon. Member for Farnham, I think the main point in regard to that is that, while it may have given employment, the security, as stated in the prospectus, is only £1,795,000 against a loan of £1,800,000. I would urge upon the Financial Secretary to the Treasury that that is not sound; it is not business. They are lending more than the ships are worth. I think, perhaps, that £1,500,000 would have been ample, and I do criticise the Advisory Committee in regard to that prospectus. The issue was underwritten, and I cannot remember ever hearing of an issue of that sort being underwritten. Moreover, the debentures have been at three premium. I was going to refer to the letter written by Sir Alan Anderson, which was referred to by the hon. Member for Chislehurst (Mr. Nesbitt) on the Second Reading of this Bill, but I will leave that for him, as I am sure that anyone who reads that letter from Sir Alan Anderson must appreciate that, as far as shipbuilding and shipowning are concerned, anything in this Trade Facilities Bill with regard to those two points must be artificial.

I should like to support with appropriate brevity the Amendment that has been so ably moved by the hon. Member for Farnham. His speech was interesting and cogent, but it was, above all, bellicose, and, if the Government do not see their way to yield to his bellicosity, I hope that, at any rate, they will yield to my conciliatorness; for I think I shall have no difficulty in convincing them that, upon every sound principle of Socialism and of Labour doctrine, they are in honour and in conscience bound to accept this Amendment. It is, indeed, difficult to understand, as has been already said, how a Labour Government can find itself in a position of bolstering up private enterprise in this way. But, while some excuse may be found for bolstering up private enterprise where no national counterpart exists, no word of excuse can be found for the heinous sin of bolstering up the competitors of Government enterprise. In the shipbuilding industry you have national dockyards, and, if you pursue this very long list of guarantees which the Government have up to this date expressed their willingness to give to firms, it will be found that every one of these ships could have been built in national dockyards. I submit that there is some substance in this point, for the reason that these dockyards have been built with the taxpayers' money. Why should the taxpayer be put to additional risk in order to guarantee the competitors of those, dockyards? Every one of these firms that have been given guarantees is entitled to put in a tender for the new cruisers. The "Nelson" and the "Rodney" are being built, and £14,000,000 is being spent for the purpose in private yards. How can a Labour Government possibly justify such a course as that when the national yards are to a great extent idle?

I appeal to my hon. Friend who speaks for the Government to accept this Amendment. It only seeks to prevent him from doing that which he abhors, namely, fostering and fondling private enterprise which is acting in competition with the taxpayers' national enterprise. Last night the Leader of the House said that while we were discussing this Bill men were walking about the streets praying for the Measure to be passed. Does he think that in the national dockyards they are walking about praying for another grant to be given to Messrs. Harland and Wolff, which is going to take the money out of their pockets? The whole thing is preposterous. I appeal to the Government to accept the Amendment because it has become apparent in the course of this discussion, as the result of the speeches of those most qualified to speak on the subject, that these ships are not needed at all, and therefore the Government is making no practical sacrifice, in accepting it. In my constituency when I am opposed by members of the Labour party, they say in previous Governments you have had private shipbuilding interests represented, and that is why the national dockyards are neglected, and Harland and Wolff and other firms get all the money. When you get a Labour Government in office we shall stop all that and we shall build ships in the national yards. [An HON. MEMBER: "Not in power!"] Every quarter of the House will support the hon. Gentleman if he will accept this Amendment, except my hon. and gallant Friend the Member for Hull (Lieut.-Commander Kenworthy) who likes to preserve an independent attitude in these matters. I sincerely hope the Government will not refuse to accept the Amendment because it is a vindication of their principles and it will prove conclusively to the country that they really mean what they say.

The hon. Member who has just sat down doubted whether the Amendment would commend itself to the Committee because of its bellicosity, and he asked the Committee to accept the persuasive language which he was about to use. I think the descriptions were misplaced. I have rarely heard a more-bellicose speech than that which has-come from the hon. Member for Devonport (Major Hore-Belisha). I sympathise with him, having regard to the constituency which he represents, and I should like to see the work of which he speaks find its way to the national dockyard. I am not well versed in the work of the national dockyards, but I rather doubt whether they build the kind of ships which are built by the firms which have received facilities.

The point is that they could, but they have not been fortunate enough to get these guarantees.

I do not know how that may be. I rather doubt whether they could, according to my information. May I now bring the Committee back to the real situation in which we find ourselves. This Bill is going to extend the amount which the Government may guarantee from £50,000,000 to £65,000,000. It is really an extension of the original Act, and therefore I think it is not inappropriate, after the considerable discussion we have had, if we see what the terms of the original Act are which are being extended, and what were the expectations of the Government when they introduced the original Bill, and in particular what were the views in respect of this matter which were expressed by the then Financial Secretary "to the Treasury. The only justification for this Bill is that it is going to relieve unemployment and to do it by enabling work which would not be done in the ordinary course now, but which would be done later, to be done now. It is the function of the Advisory Committee to see that those two essential conditions are fulfilled. It was suggested during the Debate on the original Bill that combinations would get the guarantee who really did not want it, and who could get the money perfectly well without it. Mr. Hilton Young said: it would have been, and that the money will go to those who do not need it. What has happened since Mr. Hilton Young's speech, and since the Bill became law, makes me apprehensive. I should like to read what Sir Alan Anderson said at the Chamber of Shipping. I do not apologise for reading it, because it seems to be very germane to some of the rather looser arguments which have been addressed to us to-day: been already guaranteed. It is true that about a quarter of the amount which has been guaranteed has been given to the shipping industry—£9,700,000.

7.0 P.M.

Let me now turn to the functions of the Advisory Committee, and let us visualise what it would be if this Committee were in fact the Advisory Committee under the Act. The problem they have to consider is whether an undertaking which asks for a guarantee is going to provide an amount of work and is going to undertake work now, because of the guarantee, which, without the guarantee, it would not undertake for some years, if at all, and is the security satisfactory. If those commissions are fulfilled I apprehend the Advisory Committee will sanction the guarantee. What class of undertakings should receive the guarantee it is not for the Advisory Committee to consider. I believe their functions do not end there but that, having sanctioned the guarantee, they keep a watchful eye on the security and the way the business is going, as the directors of an insurance company or bank would do, so that it is perfectly safe. We heard last night from the hon. and gallant Gentleman the Member for Uxbridge (Lieut.-Commander Burney) that there was an attractive coal mine in Burma, and it seemed a great pity when a large amount of machinery could be supplied in this country to develop the coal mine in Burma, that there did not seem much prospect, in his judgment, of that undertaking obtaining a guarantee. He moved, in order to test the feeling of the Committee, to alter the wording and apply it to "new undertakings." He did not pursue that very far. It is very difficult to know what a new undertaking is, how long it remains new, and whether it is not some old undertaking which is rejuvenated. At all events, picture the situation of the Advisory Committee pressed to guarantee a loan in respect of the purchase of machinery in order to develop a coal mine in Burma. Suppose this Advisory Committee, having satisfactorily disposed of the question of the coal mine in Burma, either by granting a guarantee or by rejecting the application, was then harassed by an application from the hon. Member for Harborough (Mr. Black), who said it was very hard that undertaking, which could not obtain money from their banks because they were already much overdrawn, should not be able to demonstrate to the Advisory Committee that they were really, in essentials, very sound, and to ask for a guarantee. Then there was the hon. Member for Central Hackney (Mr. Franklin), who is going to make some contribution to this Debate of a helpful character. He pleaded for the small men. The Financial Secretary to the Treasury was perfectly right in the view he took in regard to all these Amendments. I do not think a ease was made out for any of them.

The hon. Member cannot discuss Amendments which have been passed. He must restrict himself to the Amendment under consideration.

I regret that I have been betrayed into wandering. You interrupted me at the moment when I was going to mention the word "shipping." I differentiate the shipping industry from all those other undertakings to which I.have referred. I was merely drawing illustrations from the very interesting discussion yesterday for the purpose of emphasising the point which I want to make. The Government ought to assist the Advisory Committee in the matter of policy by saying to them: "No, so far as we can judge the security which you have guaranteed has been ample and admirable. No question arises about that. You have very wisely picked out the securities, among those submitted to you, which contain practically no element of risk and you have given guarantees which the country was not likely to be called on to fulfil; but we think, having regard to the origin of the Bill, that Messrs. Harland and Wolff and the other persons should no longer have a guarantee. We do not think it is good for the industry, for the reasons given by Sir Alan Anderson. You should devote your attention, so far as the rest of the applications for guarantees are concerned, to other industries than shipping." The Financial Secretary has a large conversion scheme proceeding. He has £200,000,000 of 5 per cent. War Stock which people are invited to convert into 4½ per cent. Stock. Is it a wise thing to put into competition with the Government securities of that character the stock of the Bank Line? Only the other day some people said to me, "We do not think much of this conversion scheme. Why should we not sell our War Stock and buy stock in the Bank Line? It is guaranteed by the Government and is just as good." That is rather a dangerous thing to happen. For the reasons which have been given us by the hon. Member for Farnham (Mr. A. M. Samuel) and the hon. Member for Ilford (Sir F. Wise) and also by the hon. Member for Devonport (Major Hore-Belisha), I do ask the Financial Secretary to the Treasury to consider whether this is not a case where the Advisory Committee should have the guidance which we suggest, and that they should carry out the real duties put upon them by the Act.

I heard the name of Sir Alan Anderson mentioned very frequently by the hon. Member for Chislehurst (Mr. Nesbitt), and he seems to place considerable reliance on that Gentleman's ability. I want to quote from Sir Alan Anderson's speech a remark or two which might help the hon. Member to modify his views. They are from the same speech that the hon. Member himself quoted. Sir Alan Anderson says:

"No less than 7,500,000 tons, or 12 per cent, of the world's tonnage is over 25 years old, and 4,500,000 tons, or over 7 per cent, of the world's tonnage consists of ships built in the United States during the War, which are now laid up. The United States Government has been advised that the greater part of these ships cannot ever engage in commerce with success."

Finally, he says:

"Individual shipowners who have had such hard experience from time to time of the eruption of Governments of various nations into trade will unite in hoping that the Governments of the world will endeavour to arrange in the financing of international trade, to set the stage, and then leave international trade to look after itself."

First of all, the Governments of the world have to find the finance and then leave the world and the shipowners to themselves. As far as this Bill is concerned, it is not finding the finance; it is1 merely guaranteeing certain sections. It is in order to engage in useful employment men who otherwise would be signing on at the Employment Exchanges in those constituencies where shipbuilding is a particular industry. The Bill as far as it applies1 to shipbuilding will supply a very great want. There is one other point in Sir Alan Anderson's speech. He says:

"I hope we may, without impropriety, suggest to the owners of this immense mass of obsolete or unsuitable tonnage, that they would be doing not only the world, but themselves, a service if they gave full employment to the ship-breakers."

In other words, they would be doing good if they broke up this obsolete tonnage, which amounts to about 16 per cent, of the world's tonnage of ships. I suggest to my hon. Friend that he should consider these particular points in the speech from which he has quoted. The hon. and gallant Member for Devonport (Major Hore-Belisha), who, like other Members in this House, only does what he ought to do in regard to his constituency in endeavouring to get as much for it as possible, has broken out in a new place. He wants all the ships that are going to be built under these guarantees to be sent down to Devonport. Why guarantee ships in Govan? Why guarantee the taxpayers' money on the Mersey, on the Tyne, or at Barrow? Because there are taxpayers in Govan and there are workers in Govan. If we have to go to Devonport, it will be a 615-Member constituency and not a one-Member constituency.

May I point out that the private yards are allowed to tender for these cruisers and other Government ships, while the national shipyards are left idle or only partially employed? Either you preserve the national yards for national ships, or you make it a matter of reciprocity.

National yards do all the repairing for the Fleet. The private yards do repairs very rarely; only when there are far too many ships requiring repair for the national yards to cope with. In that matter reciprocity is all the other way. When the hon. and gallant Member is so anxious about national yards, and is importuning the Labour Government and suggesting that it is not carrying out its principles of nationalisation by not giving all this work to the national yards, I want to ask him if he is prepared to follow the Labour Government in, say, the nationalisation of farms, of land, of the milk supply? The hon. and gallant Member for Devonport shakes his head.

The hon. Member may be interested in the views of the hon. and gallant Member for Devon- port, but it is not in order to discuss them on this Amendment.

I was suggesting that the hon. and gallant Member, in saying that the Labour Government was not carrying out its proper policy by not giving work to the national yards, was not consistent in not applying it in a wider fashion.

My plea is that there should be commercial enterprise in the dockyards.

I rather fancy the people in the dockyard towns would be very much opposed to that if it were put forward in the way the hon. and gallant Member is putting it forward in this House. The hon. Member for Ilford (Sir F. Wise), with his usual manner of speaking—[ Interruption ]—I do not say that in any way slightingly. In regard to every subject on which he addresses this House, he speaks with a manner of imparting knowledge, and does indeed impart knowledge, and that was what my reference to his manner of speaking meant. The hon. Member's suggestion was that the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) was doing a dis-service to this country in suggesting that foreigners should have guarantees under this Bill. He was horrified at the idea of German shipowners having ships built in this country under British guarantees. I hope the hon. Member will consider that particular question of guaranteed funds when we come to the Sudan Amendment. I know he voted in favour of money going to foreigners on the last occasion this Bill was before the House. It was not only a few millions such as have gone to the shipbuilders of this country, but a considerable number of millions that have gone to one particular Government. It was not doing work inside this country but outside this country. I hope the hon. Member will remember the argument that he used against shipbuilding in this country, and the giving of guarantees to foreigners for that purpose, when we come to the Sudan Amendment on this Bill later in the evening. With regard to the point that has been raised as to shipbuilding, I thank the hon. Member for Farnham (Mr. A. M. Samuel) for limiting the Amendment in such a manner that it allows passenger liners which are being built, and the other classes of vessels enumerated, to be brought under the Trade Facilities Act and to receive guarantees. It is obvious that shipbuilding in this country is in a very bad position.

I exempted certain types of vessels for this purpose, that I wish the Trade Facilities Bill to apply to those vessels that we want. I maintain that mercantile tramps are not wanted; the supply is abundant already.

It is only to apply to those vessels which the hon. Member considers, or the Advisory Committee will consider, are in sufficient numbers already. The hon. and gallant Member for Central Hull put the point clearly in regard to those firms which are opposing the grant of further facilities to shipbuilding companies. There are thousands of men in shipbuilding centres waiting for this Bill to go through, so that the shipbuilding companies will receive the guarantees for which they have applied. I know of one district where, if this Bill were to receive the Royal Assent tomorrow, there would be, immediately after the Easter holidays, close upon 3,000 men taken from the Employment Exchanges and set to work upon ships which I hope will receive the guarantee. The same thing applies to other parts of the country, and I want the hon. Member for Ilford to realise that the 3,000 men I have mentioned are to be employed, not upon building1 ships for Germany or Denmark or any other foreign country, but by a British company for passenger liners to travel from this country to Canada and America.

Even if we were building ships for Germany or France or any other foreign country it would not be the foreign ship-owning company that would get the guarantee, but the shipbuilding company in this country. The shipbuilding company in this country would be able to proceed with work as a result of the guarantee, and we should not be subsidising a foreigner. I can well imagine that the shipbuilding company would see to it that before their ship was handed over to the shipowning company of Germany, France or elsewhere they had sufficient security for payment so that there would be no occasion to come upon the fund for the guarantee from the British taxpayer. By this means we should be giving employ- ment to British workmen and we should be employing the machinery which might become obsolete or damaged through non use. Why should hon Members grumble if a German shipowner, thinking that the British shipbuilder is the most efficient shipbuilder in the world and that British-built ships are the best class of ship in the world, comes to this country and gives an order to a shipbuilding firm here, and that firm, owing to a long spell of bad trade, finds that it is impossible for them to place the orders with sufficient guarantee to the steel yards and the various other works to whom they must go for raw material for their ships, they come to the Advisory Committee and ask for a guarantee in the amount necessary? Does the hon. Member for Ilford suggest that they should be denied the credit that should be given to them under this Act?

My point is that the foreign shipowner might come to this country, and get the credit.

I think the hon. Member is stretching the point beyond where the Bill intends to go. Surely, if a German shipowning company came to the Advisory Committee they would refuse immediately to grant any form of guarantee or credit. They would give it only in a case where it was a British company that made the application, even it might be for the building of a German ship. They would not recommend that a guarantee should be given to a French, an American or a German shipowning company. I do not think that any of the previous Bills gave power for that to be done by the Advisory Committee. It would be outside the scope of operations for them to do so. In the guarantee that was given to the Sudan Government, a special clause had been inserted in previous Acts to give that, and it does not appear in the general body of the Bill. Before the same thing could be done in regard to a German or other foreign shipowning company, a special Act would be required setting out the foreign nation or the other nations that were to have the benefit.

I hope the Committee will vote in favour of the guarantees being given to shipbuilding companies in this country and that they will not accept the suggestion made by the Parliamentary Committee who do not sign their names on the manifesto which they have issued, but only subscribe the names and the companies which they claim are represented upon the Committee. Many of them have taken advantage of the Fund in the past and are seemingly desirous, now that they have had the credit, that no other shipbuilding company should have similar credit. I hope we shall pass the Clause and give to the shipbuilding companies of this country the credit facilities to which they are entitled.

There is a fundamental objection to this Amendment in that it sets out to discriminate between one set of industries and another. It singles out a solitary industry, and the one which it has selected for attack is an industry which we are used to know as a pivotal industry and one that brings a large amount of employment into the country. There is the material brought into the shipyard, which comes from the steel works and the rolling mills, and no industries are more freely consumers of coal than are these two great industries, the steel works and the rolling mills. After the materials have reached the shipbuilding yards a very large amount of labour is necessary and large numbers of trades have to be employed in the shipbuilding yard before the material is turned into the finished ship. Therefore, in these days, when unemployment is rife in the coal mines, in the steel works, in the rolling mills and in the ship yards, these credit facilities will be of great value. On these facts, so far from there being no case for exclusion, there is a strong prima facie case for inclusion of the industry of shipbuilding in its fullest sense within the scope of the Trade Facilities scheme.

This Amendment is supported mainly on two grounds—one, that there is a great deal of idle tonnage marooned in our harbours. Since that charge has been made, it has been definitely stated, and figures have been adduced to show, that a very great deal of that tonnage is obsolete or obsolescent. It is argued that while there is so much idle tonnage the building of more tonnage would depress the industry still more, and that that would, in the first instance, be detrimental to the shipowners. Of course, it would in the long run also depress the shipbuilding industry, because the interests of the shipbuilder and the shipowner must in the long run be largely identical. Another objection that has been raised to the shipbuilding industry has been in regard to the issues of capital and the different guarantees that have been given. That matter has already been dealt with fully, but I should like to say a few words in regard to the Bank Line. I have no particular knowledge of the Bank Line, but I was very much struck by the fact that one of the conditions governing the guarantee to the Bank Line was that the ships must have Diesel engines. On the Second Reading Debate it was objected that the Diesel engine was, for this purpose, still in its experimental stage, and that by imposing that condition we were adding considerably to the risks of loss that the Government were running.

It seems to me that that is precisely a reason why the Government should give their guarantee, for the development of the Diesel engine for marine purposes is one of the greatest developments that we have in sight. A development of that kind can only be obtained by experiment and experience, and experiment and experience are very expensive things to buy, and at a time like this, in lean years, we can hardly expect individual firms to find money upon a scale large enough to accelerate the development of the Diesel engine for marine purposes. It, therefore, seems to me particularly suitable that the Government should come in with quite a large guarantee for such a purpose, and even if some of the money were lost, the experience would be bought at a cheap price if the Diesel engine was established. We should look upon this particular expenditure as being a little in the nature of research work. If we can develop the Diesel engine successfully, it will go a. long way to maintain for many future years the supremacy that we have enjoyed in the past in shipbuilding. A very large number of ships, owing to the large crews they have to carry, have to recruit those crews from cheap foreign labour. There would be a reduced personnel required to work a Diesel ship, but we must remember that a more highly skilled personnel would be required, and that the Diesel engine development would produce a very important increase in employment for our highly skilled English engineers.

On the question of aggregate tonnage, I would remind the Committee that a great deal of it is already obsolete. I would impress on the Committee all the facts which I have mentioned with regard to the Diesel engine, and the fact that a restriction of the kind contemplated by the Amendment would not reduce the amount of tonnage built, but would divert it from one yard to another. It would drive it from British yards to foreign yards, and instead of diminishing the amount of tonnage we should simply add to the list of lost opportunities. If we refrain from tying the hands of the Advisory Committee, but merely draw attention by this Debate to the arguments that have been used and the uneasiness that is felt, I am confident that the Committee will in future advise as clearly and as wisely as they have done in the past.

We have had a very long discussion on this Amendment, of which no one can make complaint, because, if it is not the most important, it is at least one of the most important Amendments before the Committee, and I will, therefore, mention one or two facts to the Committee and then ask them to come to a decision, in view of the very large number of other Amendments which fall to be debated. The broad facts regarding shipping under the Trade Facilities Act are, that up to about November last we had given guarantees of about £7,900,000, and guarantees had been recommended which would probably bring the amount to £9,800,000. I agree that even taking the aggregate, not at the sum of £38,000,000, at which it stood when the Act expired, but at, approximately, £42,000,000, which has been provisionally guaranteed, £9,500,000 out of £42,000,000 appears to be a very high proportion. I agree entirely, therefore, that it is our duty to justify this guarantee to the shipping companies' undertakings, and also, if we can, to meet the reasonable fears of hon. Members in this connection.

The problem appears to be stated quite simply, I think, if we put it on the basis of employment as against the cost of unemployment. The ground for a considerable guarantee being given to the shipping industry was that this was undoubtedly one of our leading industries, and that it had been exposed to very great difficulties for reasons with which all hon. Members are familiar. There was a considerable amount of unemploy- ment in the shipbuilding and engineering and allied trades, and one of the most pathetic features of that unemployment was the steady loss of skilled men with the very great doubt as to whether they could be replaced in the event of a revival coming about, and it was found, on looking into the schemes under the Trade Facilities Act, that this was one which would provide employment at the earliest possible moment.

Let me here recall that the broad objects of this legislation were, first, to accelerate employment; second, to provide something which would be by way of permanent contribution to the economic resources of the State; and, third, to place both upon a foundation of some kind of reasonable security of such a -character as the Advisory Committee would approve. Those conditions were fulfilled, at all events for a very considerable part of the time during which those shipping guarantees were promoted and were given. But now we come to the second part of the argument, namely, that we have arrived at a stage when many hon. Members, with the best will in the world towards this scheme, reasonably ask the question whether we should go further, and whether by giving an additional guarantee under this part of the Trade Facilities Act, we are not going to endanger employment in the future.

On that point I am bound to put the facts which have been supplied to us as carefully and as lucidly as I can before the Committee. All kinds of statements have been made, partly by people who are honestly, genuinely interested in this matter, and partly by outsiders, and two sets of figures have been circulated indicating the amount of tonnage in this country and in other countries. In any event, whatever the actual figures are, there is no doubt that there is a very large amount of surplus or unused tonnage at the present time, and controversy at once arises as to whether by giving further guarantees we are not making provision for what might be called stock, which might not be used at all or might not be used at the present time, and would absorb money which might be more profitably used for providing employment in permanent and more acutely depressed industries, which would be of benefit to industry in this country in time to come.

Against that we are bound to keep in mind a possible recovery in overseas trade and an increase in our commercial relations throughout the world, such as would, in part at least, absorb a considerable amount of this tonnage, and we are also bound to realise that a great deal of the existing tonnage is uneconomical and useless and might never again be employed. Those two considerations when borne in mind strengthen the argument to some extent for a policy of caution with reference to shipping guarantees. In my opinion, viewing the whole situation and all the facts I feel that they fall short of what would justify us in definitely excluding a guarantee of this character wholly from future action under the Trade Facilities Act. There is of course a great deal of misunderstanding, I do not say in this House but certainly outside, as to the functions of the Advisory Committee, but whatever may have been the view regarding the duty of the Advisory Committee in the past, in the sense that they directed attention to the provision of employment alone, there is no doubt to-day that they have got to take not only the more immediate but also the long view regarding employment in the future.

In giving a guarantee they have got to weigh up the kind of employment which will be provided immediately—and under this scheme a great deal of employment will be provided immediately—and they have also got to consider what will be the effect on the industry in years to come, in the event of our producing a considerable amount of tonnage which cannot, in the existing condition of things, be usefully or economically employed. I am able to state to the Committee that the Advisory Committee will keep both those considerations clearly before them, and while it is also true that it is the primary duty of the Advisory Committee to give an opinion upon the financial aspects of these schemes, a necessary consideration of any financial problem by a Committee of this kind includes the commercial and economic factors.

That is technically true, but under this legislation we have entrusted very large and very important duties to this Advisory Committee, and we could never procure the services of these great experts unless we entrusted them with very great power and discretion. They will safeguard us in this connection. But there is another safeguard within the limits of the shipping industry itself. No doubt there is a certain encouragement to go ahead with shipping schemes if a guarantee of this kind can be given, and even if a company is able to say, "After all in the last resort if there is any loss the State is behind the loss," yet I cannot believe that any company worth the name is going to run a risk of that kind. There is a certain safeguard in the shipping industry itself. Accordingly I take refuge in the discretion of the Advisory Committee, which will now make a very careful inquiry, and also in the sound policy which, in the main, is followed by the shipping interests in this country. But if there is any doubt in the minds of any hon. Member regarding this aspect of the guarantees, I am able to-night, without any prejudice, to add this, that beyond question the Advisory Committee will look with very great care, and I might say with caution, upon any future request made for any guarantee affecting shipping at the present time, and there is full protection in the circumstances which I have described and in the kind of caution which the Advisory Committee will undoubtedly exercise.

In the last place, hon. Members might say to me that, while I reassure them up to a point, it is advisable to have restrictions of this kind in the legislation. But it would be very difficult to draw an exact line as to the kind of interests that would be covered if this Amendment were inserted. Almost the first thing that would happen would be that some perfectly sound scheme would come up, which' would be entitled to a guarantee, taking into account, not only the immediate conditions, but the future prospectus, and that would be excluded.

There is some misunderstanding on this point. The Trade Facilities Act does come to the assistance of people who can raise the money in the outside market, but this scheme will assist them to raise the money a little cheaper and thus facilitate employment.

While that was debatable in the earlier stages of this legislation, it is broadly assented to to-day. I ask the Committee not to approve this restrictive Amendment. It would be inconsistent with all the antecedent legislation. I ask hon. Members to accept my assurance that the Advisory Committee will look with the greatest caution upon any future applications. That, however, is a very different question from the imposition of restrictions on a sound, healthy concern and the consequent prolongation of the results of unemployment.

The Financial Secretary to the Treasury has met us in some degree. I do not want to go to a Division, if he can meet us in any way; I will meet him more than half way. Can he say that it shall be an instruction, or a request, to the Committee that they shall not increase the proportion given to shipbuilding beyond a certain sum, let it be very wide, if you like, even up to £20,000,000 out of £65,000,000. There is now £9,700,000, and £6,000,000 more, making £15,700,000. If the hon. Gentleman will give us some assurance that he will request the Committee not to allow, at any rate for the next year, so large a proportion of these guarantees going to cargo shipbuilding as in the past, I think that my hon. Friend and I might see our way not to go to a Division.

I am obliged to my hon. Friend for offering to meet us on that point. Clearly, it could not be an instruction to the Committee, because we have definitely laid it lown that we will not interfere with the Committee in these matters. On the facts as stated by my hon. Friend, I do not think there can be any difference of opinion between us. He has said that the amount of credit might be as much as £20,000,000 or some sum like that. In my judgment it is high, but deducting the amount of £11,000,000, as against, approximately, £22,000,000 or £23,000,000, or, perhaps, £26,0000,000 available under the remaining portions of the scheme—

I do not quite agree with the figures. The sum of £9,700,000 has already been guaranteed; £3,000,000 is accepted provisionally, and, I understand, a further £3,000,000 is under consideration. That means that £15.700,000 is already earmarked. We are going to give £65,000,000 under this scheme. I should not have troubled very much if, out of the total of £65,000,000 authorised, it went up to £20,000,000 or £22,000,000, that is, one-third. I say that, without the House giving instructions to the Committee, we might say that while freights are so bad a greater proportion than one-third of the £65,000,000 to shipbuilding is not desired by this House. If the hon. Gentleman gives us some assurance on those lines, I think we shall be prepared to meet him.

I think the hon. Member could very well give such an assurance, but I do not think he is quite right in saying that it is outside his province to give an instruction to the Committee. It is within his province to give an instruction to the Committee on what is a matter purely of general policy. What I understand is not within his province is to intervene where the Committee has decided on financial grounds that a scheme ought not to be supported, and for him to say for some reason it should go forward. But I think it is perfectly within his province, and within the limits laid down in this Bill, to give such an undertaking as my hon. Friend desires.

I do not differ from what the right hon. Gentleman has said. What I meant, of course, was that it was not within my province to interfere with a decision of the Committee, and, consequently, the difficulty and, indeed, the impossibility, of segregating any part of the guarantee. I could not, of course, give an undertaking of that kind, but I can say, in reply to the right hon. Gentleman and to the hon. Gentleman, that there is a desire, and, indeed, a determination, to take the sense of the House of Commons on this matter, provided we do not tie ourselves in strict terms by the Statute. I can say no more than that. I think there is no danger of the limits which the hon. Member has laid down being exceeded.

The hon. Gentleman can say no more, and as he has given expression to the views that have been stated here to-night, I will fall in with his wish, and ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 2.—(Power of Treasury to contribute towards interest payable on certain loans.)

In view of the late hour, and the desire to get the Bill before a quarter-past eight, I will not move my Amendment—in Sub-section (1), to leave out the word "three-quarters," and to insert instead thereof the word "one-half."

I beg to move, in page 2, line 19, to leave out from the word "loan" to the word "so," in line 21.

I would like my hon. Friend to offer some justification for the retention of the words which I move to delete. Does he suggest that these words are necessary in order to secure an increase of employment in this country? I take it he would accept the view, so far as concerns loans raised in this country for the purpose of development in the Dominions, that they involve, inevitably, work in this country, because the only form in which such a loan could be exported, either directly or indirectly, is in the form of commodities. One raises an objection to these words, partly on the ground that they exclude freedom on the part of the Dominions to deal as they might wish in regard to any development under this Clause. Paragraph (a) of Sub-section (1) says that money may be used connection with those undertakings. Another objection is that, in regard to any commodity required, this Clause tends to put those laying out the money at the mercy of combines or organisations which have engaged to take a fixed price for the commodities of which they have to dispose.

I do appeal to the hon. Gentleman. I am sure that he does not agree with these words and that he knows that those words are of no effect so far as finding employment in this country is concerned. I know he is aware that any loan raised in this country can only be transported or used effectively under this scheme by being transferred abroad, not in the shape of money at all, but in the shape of commodities. That in itself involves employment in this country. But I emphasise this very strong objection. Suppose, for example, money is going to be used to develop a scheme in Canada, Australia or any part of the Dominions, it might be advantageous, in the first instance, for the Dominions to have some control over the expenditure of this money, and it might result in their being able to secure a portion of the material required for the contract advantageously if some other part of the world, in the first instance, although we know the transaction could not be finally completed until a loan in the shape of goods had been exported from this country. On the whole, therefore, our Dominions would get greater utility out of the loan, and the money would go further, and would not put these organisations at the mercy of combines and price rings.

If the Financial Secretary to the Treasury is not rising to accept this Amendment, I would like to give some additional reasons why he should accept it. I think the presence of these words in Clause 2 is really fatal to the Clause operating. I cannot believe that a public-utility undertaking in any Dominion would accept a loan under Clause 2 while these words remained in the Clause. My reason for saying so is the declaration made by the representatives of the Dominions at the Imperial Conference when this matter was very fully discussed. This is not an appeal coming to us from the Dominions. The hon. Member, in the Second Beading Debate, said we should probably not object to it, because it came from the Imperial Conference. It is quite true it came from the Imperial Conference, but it was put into the Imperial Conference by the late President of the Board of Trade, and I am really surprised that the Labour Government, in introducing this Bill, should have gone out of their way to introduce this entirely new Clause and new scheme in their Bill. I can understand their extending Clause 1 for a longer period, and increasing the amount. That is one thing, but this new Protectionist proposal is utterly contrary to the declaration of the Government, and the policy of the Government expressed at the General Election. It is really surprising that we should find the Government advocating the passing of a Bill with this Clause in it. Let me read the reception which was given to the proposal of the right hon. Gentleman opposite by the representatives of the Dominions. He put it before them in his persuasive way, and they were very polite with him, but they were also very firm. The representative of Canada, who spoke, I think, first, said:

"As to the extent of capital and guarantee of interest, we are happy to say that Canada in the last year and for years has been able to borrow all the necessary money for any of her undertakings on her own credit…. As you make it a condition for such an advance of capital or guarantee of interest on the capital that we should come to the British market or to the British manufacturers for our machinery, we are not sure that this proposition would be welcomed in our country, because we produce; we manufacture our machinery ourselves and all that is necessary for such development."

So Canada will have nothing to say to these schemes if you retain these words "to produce the machinery in this country." Australia is next. Mr. Bruce is very eager for the closest relations with the Home Government and with our policy, but Mr. Bruce said:

"We are not going to injure our own industrial development in order to get in advantage in interest and place orders in Britain which we could well fill in our own country."

That is the voice of Australia in reply to this scheme. The representative of India pointed out that, when it was proposed to place a similar condition on the East India Railway Bill last year, it was utterly rejected not only by India but by the Noble Lord who was then the Under- secretary for India (Earl Winterton). It was also rejected by such a keen Protectionist as Sir F. Banbury, who pointed out that it was not in the interests of the Dominions that we should compel them to buy their machinery and material elsewhere than in the cheapest markets. The representative of India said, "We buy in the cheapest market." Then they went on to point out that, in spite of the fact that the East India Railways Act was passed without this Clause being put in, nevertheless 90 to 95 per cent, of the materials were purchased in this country. As a matter of fact, it is really playing with the scheme to suggest to the Dominions, who are protecting their own manufacturers and who are desirous to seeing those manufacturers grow, that you will pay their interest on schemes only on a condition which is utterly contrary to their policy. It is a mere pretence to suggest that you will be doing anything to help unemployment in this country or to help the Dominions to develop. I still appeal to the hon. Gentleman to withdraw Clause 2, which I think is of no advantage to the Bill, which will give no employment in this country, or at any rata I ask that he should take out this condition which is contrary to Free Trade, which means definitely that you are to make the development schemes more expensive than they would otherwise be. Do not let him stultify the Free Trade professions of the Labour Government by passing a Protectionists Bill which emanated from right hon. Gentlemen opposite, and which has already been rejected beforehand by the Dominions.

The right hon. Gentleman the Member for Camborne (Mr. Leif Jones), has given an entirely erroneously account of what happened at the Imperial Conference. He has appeared before us on many occasions as a Prohibitionist, but I hardly expected to find him carrying prohibition into a new sphere of action to the extent of prohibiting us giving work to our own working people.

May I ask the right hon. Gentleman one question. Is it not the case that if loans are granted in this country the money can only be exported from this country in the form of commodities?

This scheme is carrying out what the last Government did and what the present Government are doing in regard to public utility companies in this country. As the right hon. Gentleman the Member for Camborne is probably aware, we have in this House already sanctioned giving special facilities and assistance to public utility companies and undertakings in this country who are to anticipate their work, on one condition which is that the orders1 are placed in this country. Yet the right hon. Gentleman and one or two other hon. Members are found to get up in this House and say that we should use the taxpayers' money, but that we should not place the orders in this country. The hon. Gentleman the Member for West Middlesbrough (Mr. T. Thomson) said by all means' let us take the taxpayers' money, but do not let us spend it on British cement; let us spend it on Belgian cement. The more you take the British taxpayers' money to buy foreign goods, apparently the more you are going to relieve unemployment in this country.

I must ask hon. Members to allow the right hon. Gentleman to make his statement.

The sole issue is whether you are to employ the taxpayers' money for the relief of your own unemployed or use that money in order to buy foreign goods. Therefore, what is proposed here is simply carrying out in the case of public utility works in the Dominions precisely that policy to which the Government are very properly committed in regard to public utility operations in this country. The right hon. Gentleman the Member for Camborne led the Committee to believe that this proposal was rejected by the Dominions. So far is that from being the case, it was warmly welcomed by the Dominions. Let me read what the Prime Minister of Australia said. These are his words:

"From every point of view we certainly welcome this scheme greatly, and we are now very anxious to discuss concrete propositions with you, and see whether an arrangement can be come to to bring the Australian Government and the British Government together. But until you shed a ray of hope and light on the situation yesterday, I was doubtful whether there would be anything we would be able to do. But your having given us that earnest of your intention to do everything possible to try and help us in the direction I suggested, I am fairly confident there are a number of very sound schemes we would be able to put before you which will fulfil all the conditions you are asking for, and which, if they are put into operation, will greatly help in the development of Australia, and will, I hope, be of considerable assistance to you at a time which you have described as one of very dire distress in Great Britain."

I take the Prime Minister of New Zealand. He said that from the point of view of the country to which he belonged he believed

"great good may result from the scheme. I welcome it unreservedly. I believe New Zealand will welcome it; I am sure it will, and I believe if it is brought into operation it will do a lot of good, not only in developing the country, but also to Great Britain, itself."

Will the right hon. Gentleman allow me? All those and similar remarks about this scheme turned on the fact that we had said we were to pay the interest for a more or less long period. They replied that it must be something substantial; it was not to be ½ per cent. or something of that kind. Then they said that the relief from interest would be welcomed.

The right hon. Gentleman is completely misinformed. A general proposal was submitted and they said they welcomed it substantially. Then we went into committee at the Treasury, and we settled the details of the scheme, which is the scheme before the House. Every one of the Dominions accepted it and said it was exactly the kind of thing they wanted. So far from India, rejecting the scheme, the Indian representative said:

"I think everybody must recognise that it is a very liberal scheme and the Indian Delegation will make it their business at once to place the scheme before the Indian Government and the local governments and I hope some of the local governments may be able to make use of it for particular concrete schemes now held up for lack of funds."

In addition to that, I think I am right in saying that schemes have been submitted from New Zealand, although the scheme is only now coming before the House. It is an absolute travesty of the truth to suggest that it was not welcomed by the Dominions, and I trust the Committee will vote for it.

The hon. Member who proposed this Amendment (Mr. Vivian) laid it down as an axiom that the only form in which this money could be exported is in commodities. Did I understand him properly?

That is the rule he has laid down. His sweeping assertion is wrong. I will give him a case which he can think over. It will knock the bottom out of his axiom. If Queensland or any other debtor Colony comes here and borrows money under this Bill and it is mot imposed upon her as a condition that she shall take that money in goods, she could leave that money here and use that money to pay interest here on old loans and by so much reduce the amount she would have had to remit from Brisbane to London for interest and use the money she does not thus remit, to carry out the work in Brisbane for which she had borrowed the money from this country, using Brisbane labour and non-British imported materials. The other case is this. Supposing Mexico produces silver and wishes to send silver to London to pay interest on another loan here, and supposing the London and Brazilian Bank in London says: "We will give you a credit in London of £500,000 for that silver but retain this silver in Mexico to our order—"

It being a Quarter past Eight of the Clock, further Proceeding was postponed, without Question put, pursuant to Standing Order No. 4.

India

I beg to move, that, in consequence, there will be a number of omissions from the remarks which I had intended to make. I can, however, with confidence leave those omissions to others who will follow me on this side of the House. There is one special point I wish to make at the outset. The turn of the wheel of chance, in the shape of the Ballot, has pushed me into a position of prominence in connection with India—a position which I certainly have never sought. Despite the fact that I served many years ago upon the East India station, I do not claim to be an authority upon India. I did not come back from India and try to write a book, as most people do. It so happens that my name is one which is already associated with India to a very large extent. Before I say anything else it should be made quite clear that I am not the Lord Curzon who is associated in the mind of the public with India. It is very necessary that that should be explained, because we are always told that everything we say here—I think it is true—goes out to India, and it may possibly lead to confusion in the public mind in India if I did not make this disclaimer in regard to my name.

It is essential that anyone who endeavours to speak upon India should, as far as possible, not bring any heat into the discussion and should not say anything which others might think to be mischievous or provocative. It is true, that I am identified with one side of this House and that hon. Members opposite are identified with another side, but I appeal to them, in the best interests of our great Indian Empire, not to look upon things too much from a party point of view. I will do my best to refrain from making any party remarks, and I am sure that hon. Members opposite will not be slow to follow suit. The point of view which I desire to take in regard to India is this: I look upon India, not as an expert, but as a "man in the street." Many things have happened and are happening in India which have made those of us who value the good name of England and its great traditions, who value the Indian Empire as "one of the brightest jewels of the British Crown," a jewel beyond price, feel profoundly anxious with regard to that jewel. We feel sometimes that the jewel is getting a little loose in its setting, and we want, as far as possible, to be reassured in the matter. That is the main purpose of my motion.

It has been obvious for many generations past that firm government and wise statesmanship have brought India to a very great position in the world. All of us can say that we desire that the position which India holds to-day in the world shall not be weakened, but shall be strengthened, and that is the point of view, I imagine, of the ordinary sane Englishman. What makes many of us profoundly anxious is a combination of many circumstances. There have been many curious happenings in India. We have had certain utterances by the Secretary of State in another place, and we have, of course, the advent to power of a Socialist Government. I am sure that right hon. and hon. Members opposite will not think it an unfair remark if I say that anyone holding the views which they must know that I hold, would have profound anxiety with regard to India in view of the professions of opinion to which members of the Socialist party have given vent in the past. I say that only in order that right hon. and hon. Members may understand the anxiety which many of us feel in the absence of an authoritative declaration in this House upon the subject of India.

Let me deal with the position of India as I see it. I will go as far back as 1919. One might go back much further, but I am not sure that it would be found a very fruitful line of search. I go back to 1919, when the Government of India Act was passed. I opposed the passage of that Act, because I did not think that it would contribute to the good of India in the long run. I thought the Measure was likely to bring about such a state of affairs as has occurred—a state of unrest and anxiety, and possible harm to the Services in India. My point of view now, however, is that that Measure is on the Statute Book, that it was accepted by India, and that it is the duty of every true constitutionalist to do his best to uphold that Act in the letter and in the spirit. As soon as that Act was passed, what I will call the Left wing in India denounced the Measure as utterly inadequate. They took the point of view which I expected them; to take. In the year 1920 we had the first common use of, or common allusion to, the names of Mr. Gandhi and the Ali brothers. They were undoubtedly the leaders of the Left wing in Indian politics. They said that the Act was inadequate and that nothing less than certain demands would meet with their approval. Their chief demands were (1), a settlement of the Turkish peace in accordance with Moslem ideas; (2), a settlement of the wrongs in the Punjab; and (3), the grant of complete Home Rule to India. I am putting these facts forward, not in any party spirit, but as a reason for the anxiety which many of us feel on the advent of the Socialist party to power. The next thing that happened was the visit to India of the right hon. and gallant Gentleman the Chancellor of the Duchy of Lancaster and of the hon. Gentleman the Parliamentary Secretary to the Treasury. They gave specific assurances to the extremists in India that the Indian Nationalist movement had the full support of the Socialist party. Speaking at Allahabad in December, 1920, the Chancellor of the Duchy of Lancaster said:

Can the Noble Lord give me the authority for that quotation?

I will give it to my right hon. and gallant Friend before the Debate concludes if he wishes. I wish to quote now from the "Pioneer Mail" of the 28th March, 1924. There is a passage relating to the Bolshevik conspiracy trial which is going on at Cawnpore at the present time. In it is a quotation from a letter signed "R.," dated 23rd January this year. The initial "R." presumably refers to Mr. Roy, who is well known as being in close touch with Moscow and with extremist opinion in India, and this is what he says:

"The Labour party has come to power…. There is some disillusionment in store for a section of the Indian politicians, particularly Baptista, Chacha, and Lajpat Rai. They banked upon their patron Wedgwood's advent in the India Office. But MacDonald had to buy the right of resident in 10, Downing Street, with high price. The Liberals made it sure he would not do anything to tamper with the Empire before they consented to put him in a place from which they can pull him down at any moment…. Wedgwood, who has committed himself too much in supporting the Indian Magna Charta, had to be put away in favour of an ex-Colonial pro-Consul whose membership of the Labour party was hardly known until yesterday. A scion of the aristocracy who ruled Jamaica to the satisfaction of Imperialism, in which he has a large stake, can be entrusted with the trusteeship of India."

That is a quotation from a letter written by a Moscow extremist, and I am quite certain it could not meet with the approval of the Chancellor of the Duchy of Lancaster, and I only quote it because I think these things should be known not only to right hon. and hon. Gentlemen opposite, but to the country as a whole, in order that we may get a fuller appreciation of the situation. It must also be remembered that the Chancellor of the Duchy and the Parliamentary Secretary to the Treasury, when at Nagpur in the same year, were present at the extremists' Congress, and I am sure the right hon. and gallant Gentleman will not deny that at that Congress the most violent anti-British and seditious speeches were made. I do not know that the right hon. and gallant Gentleman made any very active protest.

On the contrary, I did make a protest, and it was noted in the Press of India.

I am very pleased to hear it, but my researches have not brought that fact to light. However, I have no doubt the right hon. and gallant Gentleman will take the opportunity this evening of explaining matters. In 1921 the Government of India Act came into operation, and that year also marked the end, or the failure shall we say, of the non-co-operation movement. That movement was instituted by Mr. Gandhi, and hon. Members know what it was. The year 1921 also saw the trial and conviction of the Ali brothers. Nothing to which I wish to allude happened until 1922, which was signalised by the arrest of Mr. Gandhi. Mr. Gandhi was convicted for sedition and was awarded a sentence of six years' imprisonment, and his position was quite straightforwardly summed up by Mr. Gandhi himself at his trial when he said:

To make India the sport of party politics is one thing which will render it quite certain that India will be plunged into depths of misery and suffering which she has never hitherto plumbed. Her life has been fairly quiet up to now. [HON. MEMBERS: "Oh!"] Well it has, been. I submit to hon. Members opposite that from the Mutiny until just before the Reforms Act we have comparatively peaceful times in India. There have been outbreaks, but not of a serious character. But if you make India the sport of party politics it is a desperate gamble, and one which will never pay whoever tries it. I notice that Mr. Gandhi was released with the advent to office of the Socialist Government, and I want to know if that release was political or for reasons of health. The Government have only to say, and if the Government give me an assurance that it was for reasons of ill-health, I shall undoubtedly believe it; but as we see it to-day, we see this curious concatenation of circumstances: the advent of a Labour Government and the release of Gandhi. I would also point to the fact that we have in India now a great Pro-consul who was a former Lord Chief Justice, and I can hardly believe that a former Lord Chief Justice could sacrifice justice to expediency. With regard to the possible association of the Socialist party with it, there is another thing I notice, and that is that in the "Daily Herald" of the 8th February this year, there are the following passages:

Then hon. Members opposite associate Gandhi's release with the advent to power of the Socialist party. The next thing I notice is the Labour Manifesto of 20th February, which states that the National Council once more fully associates itself with the people of India in their demand for political and economic liberty. It assures the Indian workers of its sympathy and support in their struggle against the inhuman conditions of their labour; welcomes the release of Gandhi; calls for the unconditional release of other Indians imprisoned for purely political offences, dissociated from acts of, or incitement to, violence; and reiterates its view that the Kenya decisions as affecting the relations between white and Indian settlers should be reconsidered.

I suppose from Eccleston Square. It urges that the Commission to be set up for revision of the Government of India Act should not be delayed for five years but should be immediately appointed; and, in view of the adoption of Mr. Moti Lal Nahru's resolution in the Legislative Assembly, asks the British Government to consider the advisability of inviting representatives of the various parties in India to consult with it regarding the acceleration of full self-government, which should be impeded by no claim that Britain is the rightful ruler of India.

I would like to pass from those topics to a little more direct allusion to the state of affairs in India to-day. With regard to the moderates, you have, first of all, the Moderate or Liberal party, who profess co-operation with the British Administration, who thereby secure power in office, but who all the time are working steadily to displace the British element in Indian Administration. I would take, first of all, as representative of them, Mr. Sastri. I think he will be taken as being a moderate man. On the 28th February he said, in the Council of State, that the British members of the Service are there "on sufferance," and he rejoiced to see them humiliated. None of the three Indian colleagues of the Viceroy, who were present on that occasion, made the smallest protest or repudiated his views, and Sir T. B. Sapru has publicly expressed his adherence to Mr. Sastri's view.

In regard to the extremists, first of all you have them divided into four groups. You have the revolutionary Akali Sikhs of the Punjab, you have the small faction of the Ali brothers, who are preaching the gospel of sedition and non-resistance to Afghan invasion, you have the Hindu extremists, who want to expel the British from India by "non-violent" methods, and you have those who still adhere to Gandhi. In every case the extremists have made the most wild promises to each of those to whom they make their chief appeal, and in every case they have represented that the only thing that stands between their followers and what they want is the existence of the British Empire, and although those interests are absolutely in conflict in many cases, these promises should at the same time foe taken into account. In the last four years, while this intensive agitation has been going on, there has been more bloodshed, more loss of life and property, and more damage done to India than there has been during the previous 60 years. In fact, I do not think it would be exaggerating matters to say that as the British power becomes weaker, India lapses deeper and deeper into anarchy.

I would like to say a few words about the Services. I know that a Commission is sitting and is going to report, and that the Government have given a pledge that a day will be given to the House of Commons for the discussion of that Report, but when the Commission will report and that discussion take place is quite uncertain. What is certain is that all is not well with the Services in India, and all is not well for, I believe, a very clear and distinct reason, for just one thing, namely, that the Services have no sort of guarantee under present conditions with regard to their future. How can anybody entering the Indian Civil Service, anybody putting his son into the Indian Civil Service, say what the position of that boy or that official will be in the next 10, or even five, years' time, without an authoritative declaration from the Government as to where they stand in the matter? I say that that declaration should not be delayed one minute. The Government ought to make it at the very earliest possible moment. Up to now, every year, some 60, I believe, of our best students, from places like Oxford and Cambridge, used to go in to the Indian Civil Service, but I believe that now we get about four or five, and those not of the best type that we used to get. I am sure hon. Members opposite will not think that that is a gain to India. If we send people to India to help out our administration there, surely we ought to send our very best. Second-rate men will not do, and you can only get the very best if you give them a satisfactory assurance in regard to their future. In my opinion, we must tell them what is going to be the position of the Services in India, not in 10 years' time or in 15 years' time; you must say what is going to be their position within the next 25 years. If you do not, you cannot expect to get the best type of Englishmen, and nothing but the best, I say, is good enough for India.

With regard to the Indianisation of the Services, hon. Members here know probably as well as I do that the Government of India Act limited the Indianisation of the Services in India to a little over 30 per cent., but they may not know that the Indianisation of the Services has gone to something like 60 per cent, at the present time, the reason being that you cannot get the Britishers. They are not to be had under present conditions. It has gone much further than the Government of India Act ever contemplated, and I say that it merits the most serious attention of His Majesty's Government. I do not altogether absolve previous Administrations from blame in this matter. I want to be quite fair, and I do not want to put the blame for the present position of affairs entirely on the present Government. They have not been in office long enough, but they have a great opportunity to make their position quite clear, and if they would only do that, I believe they would be doing a very good day's work for India.

There is one other thing I should like to touch upon, that is in regard to the election in India. We see a tremendous demand for some enlargement of the Government of India Act. Do hon. Members opposite realise that the ordinary educated Indian forms about 2 per cent, of the population? If you take the all-Indian electorate it is about one in every 280. The remainder have no votes at all. When you talk about India having the vote you are talking about an infinitesimal portion of the population: 97 per cent, or 98 per cent, of the population, the agricultural classes chiefly, are absolutely without the franchise at all. Whatever we may do in India we cannot divest ourselves of our responsibility in regard to these classes in India. This was clearly shown in the recent debate in the All-India Assembly on the Tariff Resolutions. The British member in charge of the proposals which have been forced upon the Government by the great majority of the Indian members—mainly urban members —against the protests of the few representatives of the rural masses, had the candour to say this: people thought that the present extremist campaign in India was likely to lead to an alteration in the action of this country that they were making a great mistake.

There is another reference, and that is of Lord Reading. A few days before the passage of the Budget, Lord Reading said: claim in the same word that extension of self-government—how can they possibly justify it—when by their action they are demonstrating their total unfitness for anything of the sort? The result of the rejection of the Budget was that the Finance Bill was reintroduced on the narrowest possible lines to ensure safety and tranquility and the interests of British India, and the Government were enabled to give much needed relief to the Provinces of Madras, the United Provinces, and the Punjab. You have the same state of affairs in Bengal; there are the Swarajists who refused to grant the salaries of the Ministers and to vote vital supplies. This is what the Calcutta correspondent of the "Daily Telegraph" said when talking about the state of affairs in Bengal: February. He said on that occasion one or two things which those who have studied his speech have found to be somewhat misleading. One thing he said was: Interruption. ] An hon. Member opposite who interrupts me is a member of the Communist party.

If I were a member of the Communist party, I should not mind owning up to it, but the Noble Lord has made a great mistake.

When you make a charge of that kind, the onus of proof rests on you.

9.0 P.M.

I thought you were at their meeting on Sunday morning. Mr. Gandhi has recently stated that he realises the consequences of his action, and he would do the same thing again. I would now like to sum up. I want, and those who think as I do want, a specific and a clear statement from the present Government as to where they stand as far as India is concerned. I want to know whether the present Government endorse the declaration of Sir Malcolm Hailey in the Debate on the rejection of the Finance Bill in India. I think it is important that declarations like these should be backed up by the Government. I am certain the Government do not approve of the action of the extremists in India, and they do not want to depart from the letter and spirit of the Government of India Act. I want to hear a declaration from the Government with regard to the services in India. It will not be enough for the Government to promise us a day for discussion at some uncertain date which may be provided if Parliamentary conditions permit. I would like the Government, now that they have a chance to-night, to tell us what steps they are taking to carry out these declarations. I ask the Government is it too much to hope that the Prime Minister's declaration when he first took office will be translated into action and that Indian problems will be regarded not as party questions, but as national questions. I want to look at them from the national point of view, and whatever party is in power I hope it will assert and give effect to the principle that Great Britain will, in no circumstances, relinquish her responsibility to India. Such a policy would at once rally to our cause not only the Indian masses, but the best section of the educated classes, hearten the Services now depressed and disorganised, and enable Britain's work in India, which has been shamefully neglected since politics overshadowed administration, to be pressed forward with renewed hope and vigour.

I beg to second the Motion. My Noble Friend began his speech by appealing to the House on account of a physical disability which I, think his vigour to-night has belied. I have to appeal to the House for indulgence owing to the more solid reason of a great permanent disability owing to the weight of long years, during which I have perhaps lingered superfluous on the stage. I feel doubly the sense of that responsibility which we must all feel, however insignificant we may be, about uttering words in this House which may be spread, and may have an effect which we do not desire them to have. I do not want to range over the whole sphere to which my Noble Friend has addressed himself, but I wish to speak with that sincerity of feeling and eagerness for the good of India which I desire to inspire in others. It has been my luck to ask several questions of the Undersecretary of State. I think he will acquit me of any want of consideration in the questions which I have put, and I recognise in him most fully and abundantly that courtesy which counts for a great deal in this House, and, what is much more, that sense of responsibility which rests upon him and upon those who are associated with him in the Government of India. So far as I have been able to see, he has reflected faithfully and, I believe, sincerely, the words, which gave confidence to many of us, uttered by the Prime Minister on his accession to office. I believe the Under-Secretary has acted in that spirit, and I trust he intends to do so.

While, however, I speak with all moderation, I do not think I should be acting quite fairly if I refrained from giving expression to the doubts and misgivings which were felt by many of us when this movement first began. It was started in 1917 by a declaration suddenly made from the Front Bench from the Government of the day, a declaration that could not be discussed and could not be answered, made at the end of the Session, when there was no other opportunity of discussing it; and it was followed immediately by decisive action, in spite of the doubts that we felt. We were often told that we had no right to object, because Parliament was committed by this declaration, unanswered and un-discussed, of the Secretary of State of that time, Mr. Montagu. That announcement of 1917 was followed by inquiries and by the visit of Mr. Montagu to India, which, in turn, was followed by the concoction of a scheme for reconstituting the Government of India. The main principle of that scheme was the extraordinary piece of machinery called dyarchy, a spider's web spun out of the brain of a doctrinaire pedant, full of all sorts of traps and catches—the sort of brain that would produce a written Constitution which looks very well on paper, but lacks altogether the imagination that tries to realise that scheme in actual work. The Bill came in 1919, and I had the honour of belonging to the Joint Committee of the Lords and Commons which considered it. I was in the minority in that Committee. Of seven Members of this House, I was the only one on that Committee who had spoken against the Bill; the others had all given it more or lees cordial support. I do not think that that Committee was a very well constituted or balanced Committee. We heard very full evidence of all kinds. We heard evidence, among the rest, from the extremists in India. Our choice was very catholic. We even included amongst our witnesses one whom I do not think even hon. Members opposite will consider to have been a good representative of India—the notorious Tilak.

Hear, hear! I think he was. He was one of the best Indians you ever met.

I am not surprised to hear that, because, really, the hon. Member has passed that period when I am surprised at anything he utters. I do not know if he knows anything about the facts, but I think the right hon. Gentleman the Chancellor of the Duchy of Lancaster will, perhaps, even there, not completely support him, broad as his sympathies are.

I do not think that anyone who knows India, or is a great friend of India, will think that Tilak was exactly one of whom Indians in general would approve. We heard all this evidence, and we heard, besides, a great many members of the Indian Civil Service. We heard evidence on the part of the extremists and of many other Indians. We listened with patience, and of those members of the Indian Civil Service who gave evidence before us, there was—and I say this without reserve or exception—scarcely one who did not profess himself ready to do his very best to make any scheme of change work well. I am perfectly certain, and I think that other Members who sat on that Joint Committee with me will confirm what I say, that not one of them showed the slightest hesita- tion in saying that he would do his very best to make these changes a success. I was out-voted, but am I not entitled to have a little doubt as to whether I was so entirely wrong, when I hear the verdict of several of the Ministers who were responsible for that Bill?

I look to their utterances only last week. It was on that occasion last week in the House of Lords that that Marquess Curzon of Kedleston, from whom my Noble Friend wishes to be distinguished, stated that he abominated the system of dyarchy, and that there were many things in that Act of 1919 which he profoundly disliked; but, nevertheless, he was not only an assenting party, but one of those who were responsible for the Bill. I do not want to use strong language, but it seems to me that that is a piece of that self-complacent compromise which the late Coalition Government sought to identify with broad-minded statesmanship. I find, too, the utterances of another of the authors of that Act of 1919. In the House of Lords, only a week ago, Lord Balfour excused himself by saving that, when the Act was passed, he was much occupied with other things, and happened for a large part of the time to be absent from England; and yet he proceeded, in a long, elaborate and philosophical speech, to prove what I think is hardly to be denied, that the whole movement was a hazardous experiment of a gigantic character. Am I mis-describing his speech in the House of Lords last week? Another Member of that same Coalition Cabinet—I will not give his name, because it would be unkind—to whom I privately expressed my own misgivings, answered me that he really knew nothing about India or about the proposals which were being made. That was a specimen of Cabinet responsibility under the Coalition Government.

We loyally accepted the Act when passed. We recognised, and I still recognise, the honesty of purpose that actuated Mr. Montagu, who is a friend of my own, for whom I have great respect, much as I differ from him in some respects. We recognised his honesty of purpose, and, although we were entitled to doubt the measure of composite wisdom that had been brought to bear on the question in the Cabinet, yet we loyally accepted these proposals, and we have no wish to depart from the enactments in that Act of Parliament. We must, however, remember the essential point, and it was a point upon which the Joint Committee were absolutely unanimous in their decision, without a single dissentient. The Preamble of the Bill says:

I am not going to follow my Noble Friend in raking up all the disagreeable things that have emerged since the Act was passed. I think in some ways the less said about them the better. We have to look forward with hope, although with anxiety. What are the two extremes of opinion as to the action now before us? The one is: Scrap this scheme, resume your authority, let there be no longer any playing at this representative Government, exercise the old authority over them. The other extreme is: Abdicate your responsibility, give up the great task which has been imposed upon you, and for which you are responsible before the eyes of the world and leave India to its fate.] believe both of these extremes are equally fraught with danger. To scrap the scheme now would be to go back upon our word. It would be an act of cowardice, if we really analyse it, the cowardice of the man who attempts to use his great force to curb an inferior opponent. Let there be no thought of that. It may be that anarchy, disorder and trouble may so grow, in spite of ourselves, that we may be compelled to exercise a greater authority than we wish and to use more drastic measures. But do not let us by one word of ours hasten that time, and do not let us contemplate it as a probable result of the present situation. But equally, I say, the other extreme of abdicating our position is wrong. We have to choose our course of action. The worst course of all is indecisive drifting. That succeeds nowhere, either in business, in politics or in life. Let us be clear that we know where we are moving and what we intend. We are ready, I can assure hon. Members opposite, and they will find those in India amongst the administrators also ready, to co-operate in pursuing a clear and definite course. We shall suggest nothing that is inconsistent with their principles, so far as I am able to understand them, nothing inconsistent with their patriotism, and nothing inconsistent even with that prevalent distrust of officials which seems very common amongst the benches opposite.

We ask them to advance, but to advance gradually, because that is the only safe way, and we ask them to declare their adhesion to the principles laid down in the Preamble of the Act, that that advance has to be determined by the British Parliament alone. We ask them to have no tampering with any part of the provisions of the Act and not to close down certain Sections of the Act as if they had less validity than other Sections. That Act provides in several of its Clauses a clear course of action in the case of a breakdown in certain administrative parts of the machinery. It provides for certification by the Governor-General should that certification, after due consideration, be felt to be the only way out of a difficulty that threatens to plunge the country in misery and in anarchy. Do not consider that as if it were something exceptional, not to be used on ordinary occasions and to be looked upon with horror. It is equally a part of the Act which this House of Commons agreed to and it is in fact in the very forefront of the Act. Do not think you can put that Act justly into operation if you select certain parts of it which are popular with certain extreme parties and neglect alto- gether the other Clauses which conflict with the objects of these extremists. Then I ask you if you have to modify—you have plenty of powers to do it—modify only by using your powers of drafting new rules within the terms of the present Constitution. That gives you very wide powers indeed. That also is a part of the Act and I have no wish to shirk it or avoid it, but do not be so rash as to go beyond that power of making rules which the Act provides and begin a process the end of which is absolutely uncertain. Thirdly, I would ask you to support your administrators. I do not think anyone who speaks for the Government will deny the loyal action evinced by the administrators of India, even though many of them, I know, must have doubts, misgivings and anxieties and are sorely troubled. I wonder if I could tell the House a not uninteresting anecdote about a certain relative of my own, placed in a very responsible position, when the Sikh troubles were arising. He urged on the native Minister that the only way of dealing with these Sikh troubles was by legislation in the Legislative Assembly. The answer of the Minister was: by the love and friendship of those whose work they were trying to do, and whose friendship they often successfully gained. To-day they are met with frowning brows, and downcast eyes, and suspicion on every side. They look to you, the Government, to sustain them in the difficulties of their task. Do not let them be disappointed. If they are disappointed, the loss, the discredit, will fall on you, and loss and injury will fall on India. Lastly, having urged these three courses on you—courses which are not inconsistent with any of your principles—I ask that you do not utter a word, or do an act, that gives any indication of support of the opposite extreme, that of abdication. What does that abdication mean? Are you content to leave the 320,000,000 people, various in race, in sect, in birth, in character, in habits, and in deeply engendered peculiarities, and to thrust suddenly on that varying mass the task of founding a representative system according to Western methods? Was there ever an experiment attempted in the whole annals of history so rash, and So rash on a gigantic scale? We have to guard our responsibility. While you choose your course here, avoid giving any encouragement to that most fatal of hopes in India; that one day the British people will abdicate their duties and their grave responsibilities to the great millions of India, and will shrink back from a heaven-sent task.

I think the whole House will be grateful to the Noble Lord the Member for South Battersea (Viscount Curzon), who has sacrificed his right in the Ballot in order to give the House a chance of discussing Indian affairs. I think it reflects very curiously on the Government that a Debate of this magnitude should be granted to the House by virtue of a private Member's Motion. The Government have been in office for three months. We have had a statement of policy in the House of Lords, which, in effect, was not a statement of policy at all, and instead of the Prime Minister arranging to give this House an opportunity of debating Indian affairs as they ought to be debated, we have succeeded in securing a Debate only by virtue of a private Member's Motion, and even so we have not the Prime Minister here to give us his own policy in this matter. [ Interruption. ] I felt great sympathy with the Under-Secretary of State for India as he sat there under the eloquence of my right hon. Friend the Member for the Scottish Universities (Sir H. Craik). He reminded me of the rabbit sitting under the fascinating eye of the snake. [ Interruption. ] I do not for one moment compare the right hon. Gentleman with a snake, I was only referring to the Under-Secretary's feelings.

I think, in listening to the two previous speeches, we have, rather got away from the Motion. The Motion before this House is:

I want, as far as I can, to avoid anything that might make things difficult for the Government of India. They have had a very difficult time, they still have a very difficult time, and the main burden falls on them. At the same time we here, in Parliament, are the ultimate authority, we are ultimately responsible for the Government of India; the Act of 1919 is an Act of Parliament, and we here are the people, if that Act requires amendment, who have to amend it. With regard to the existing state of affairs in India, my own information is that affairs in the districts are very much better than they were. The relations between the district officers and the residents are everywhere, according to my communica- tions, in a much better condition than they were in 1921. That is all to the good. At the same time, recent events have not only very seriously affected the Government of India but they have alarmed Members of this House. The Akali movement was referred to by the Noble Lord as one of the extremist movements. I do not look upon it in that light. The Akali movement is a puritan religious movement and it has now taken a political tinge, for reasons which I hope to examine. The Maniktala conspiracy was a sequel to similar conspiracies which hon. Members will remember took place at the time of the partition of Bengal and at the time of the passing of the Act in 1919. The fact that these conspiracies exist among ordinary common people in the villages seems to contradict the statement of the Noble Lord that these people are not politically influenced at all. At the time of the Debate on the Second Reading of the 1919 Act, Mr. Montagu said:

The Noble Lord referred to the Act of 1919 and to its breakdown in Bengal and the Central Provinces, and I think he also mentioned the United Provinces. We all know that the Act has broken down in its working in the Legislative Assembly. In the Provincial Legislatures there are two reasons for the breakdown. The first reason is that the Indian Ministers have not got the entire charge of their portfolios that India anticipated they would have under the Act. The second reason is the very natural disgust at the failure of the diarchical system. The Diarchy has been anathematised by my right hon. Friend opposite, and quite rightly so. Diarchy is a horrible word.

Quite so. It is a system which is unworkable, and a system which has broken down. Is that not proof positive that the Act under which the diarchical system exists requires amendment? Hon. Members admit that the diarchy is a failure and that it will not work, and yet they say, "Stick to the Act, do not amend it." How are we to get rid of the diarchical system unless we amend the Act? It is essential that the Act should be amended if we are to get rid of the diarchical difficulty. In the Legislative Assembly we find the same state of affairs. The Governor-General has to certify. How long is he going to certify? Is certification a satisfactory method of administration? If not, surely we want to evolve some other method by which the Governor-General can carry on his functions if the Legislature is not going to support him. Nothing could be worse for this attempt at reform in India than for the Swarajist, or whoever he may be, to say that all he has to do is to reject the Budget in order that the Viceroy shall certify. He says: "It does not matter, we shall get the money anyhow."

This is a radically bad system and one that requires amendment in the interests of the Indian Government itself. In Lord Reading we have a man of liberal mind who has been patient and who has been thorough in his desire to give the reforms a real trial, and in Sir Malcolm Hailey we have a man of the greatest talent, of whom possibly no Parliamentarian in this House is an equal. The experiment has been given the best opportunities under these two men, it has had its best chance and has failed, and yet hon. Members say, "Leave it alone."

The Noble Lord's description of the Swarajists is not quite correct. The Swarajist is much like other men. He is a Swarajist because he can see no other way out. May I read a few words from a speech of one of the most notable Swarajists, Mr. Moti Lal Nahru, when he was moving his Amendment that complete self-government should be granted to India. He said:

It may be a marked change of opinion, but a man is not an extremist if he is willing to change his opinion. Hon. Members opposite will not believe that these men can change; they believe that every man of them is a Conservative and that he never changes. It is not so. These men are open to reason. There are Swarajists in India to-day who are open to reason, and if you treat them fairly they will treat you fairly and help you in your difficulty.

In regard to the Act of 1919, there seems to be a belief in this House that Section 84 a of this Act is exclusive, and that there cannot be a Commission before 1929. May I read the relevant words:

The idea that this is a law of the Modes and Persians is a complete mistake. If we in this House decide that we shall have an inquiry before the 10 years are up, then we shall have our inquiry and nothing can stop it, and if the Law Officers of the Crown hold that it cannot be undertaken under the Statute, even that would not stop it, for it would not take the House very long to amend the Section. This Act was not intended to frame a Constitution for India. Mr. Montagu said about it: what we want to find out is what these imperfections are, and to put them right? The only way in which we can put them right if they are due to this Act is by amending the Statute. Therefore the path of the Government is plain. What they have to find out is where the Act is not working rightly, and to amend the Act. The only way to do that is to send out a Commission to find out what the defects are. It appears that the Government of India think that if the machine requires small repairs, such as may be effected by rules under the Act, we should repair it, but if the machine requires major repairs, which cannot be effected by rules under the Act, then we should leave it alone. Is it a logical thing that if there is a small defect we are to amend it, but if it is a great defect we are to leave it alone for the next five years?

Our very difficulties seem to me to be the measure of our success. It is owing to the intense interest of the Indians in politics that we are having this difficulty. Whatever may be said about the interest of the British, we have got to remember all the time that the people to be considered are the Indians. We have got to encourage the Indians to think that we are going to give them within a measurable time Dominion self-government. That has been promised. They believe that this Act will prevent them for 10 solid years from having any chance of advance in that direction, and will prevent them from advancing at the end of the 10 years if the machine is not put right. Let us put right the failure of the Act and let us make such amendments of the Act as may be necessary to go forward without fear towards the end which has been put before us since 1917.

I congratulate the Noble Lord the Member for South Battersea (Viscount Curzon) on bringing forward this Resolution. I also regret that there is not a greater opportunity of discussing this important question of the future of India. Every Member of this House will agree that it is of supreme importance to the whole future of the British Empire, or, as I prefer to call it, the British Commonwealth. I agree with the Noble Lord who brought forward this Motion that India is the brightest jewel in the British Crown. I agree with him also in the desire that India shall always be asso- ciated with the British Crown, but if the policy, pursued at the present time, of simply regarding every expression of opinion from India as being merely the expression of opinion of extremists to which no consideration should be given at all, is continued, if we meet all the demands that are made by refusing, then in no circumstances shall we be able to preserve India to the British Commonwealth.

It is rather remarkable that, despite the whole history of the development of the British Empire, despite the fact, as we know, that it was always by the extension of the blessings of self-government to other parts of that Empire that the Empire has been preserved and consolidated, we still find taken up the attitude that we ought not to go any further along that road, that the people who are asking for self-government are not in any sense of the word qualified for it either because of reasons of education or for some other reason, and that, therefore, we are the only people who are able to look after them, and they are unable to look after themselves. Against that attitude I desire to protest in the strongest manner. So far as we are concerned, we put forward in that declaration, which has been quoted for us to-night, of Her Majesty Queen Victoria, plainly before the Indian people the desire that they should take their place as equal co-partners in the British Empire.

This movement going on to-day asking for full self-government in India is in no sense a new movement. It has been going on gradually and increasing steadily for a large number of years since the institution of the Indian National Congress in 1885, a Congress which, I agree, was very largely called into existence by the friendly efforts of those in India who recognised that it was their duty to try to carry out the declaration of Her Majesty. That Congress has developed as years went on, until the time came when, during the War, we had that slogan, which was sent out to the whole world, that Britain was fighting for the self-determination of nations. The Indians have accepted that slogan. They want self-determination, because, as was once said by a late Prime Minister of this country, self-government is far better than good government when that govern- ment is opposed by the inhabitants of a country. And so the movement has developed, and we have had the various reforms, down to the Montagu-Chelmsford Act, which recognised all the way through the gradual development that was going on in India.

To-day, what do we find? We find that, after that declaration in regard to self-determination, when the Indians put forward their claims, assisted by people of English birth, their demands were not met. We remember how Mrs. Besant was deported, and threatened with imprisonment, because of the ideas which she put forward when asking for a gradual development of self-government for India, until it achieved Dominion Government. Then we had the Press Act, the Rowlatt Act, imprisonments, deportations and, finally, the supreme tragedy of all—that of Amritsar. I happened to arrive in India immediately after that great tragedy had happened, and realised the feeling which had been aroused. I had extreme difficulty in trying to convince my Indian friends whom I met in all parts of India which I visited, that the Government were sincerely desirous in the Montagu-Chelmsford Report of giving local self-government. But, after the Amritsar incident, I had great difficulty in convincing them that there was any sincerity at all about it. With regard to further developments, what do you find, for example, with regard to the handling of the question of Kenya? When you find Indians who had been migrating to that part of the Empire even before we went there, put into an inferior position, and an agreement entered into by which they were brushed aside, can you wonder if you find what you are pleased to term extremism developing?

10.0 P.M.

In so far as India is concerned, if you are not prepared to face the issue, and immediately say that you will examine into these grievances—because that is all that is being asked for at the present time—do not say that all we have to do is to stand by the 1919 Act. That Act is not a law of the Medes and Persians, but simply an Act of the British Parliament, passed in all sincerity, and when we find mistakes have been made, it is our duty to remedy those mistakes as quickly as we possibly can. But, of course, the majority of Members of this House, like the majority of the British people them- selves, are, unfortunately, totally ignorant' in regard to India. They are, unfortunately, ignorant regarding the desires and wishes of the Indian people and of their development. As the hon. Member for Taunton (Mr. Hope Simpson) said, he was there seven years ago, and he would not be prepared to say to-day how the opinion of India had altered since that time. And that is perfectly true since I was there four years ago. There is a development in that country; there is a consciousness of nationality which is bound to find expression, and we who have been the creators, to a very large extent, of many nations in the world, and of which we can be proud, ought also to be proud to help this great nation once more to regain its position, as the majority of the Indian people desire at the present time, in co-partnership with this country. Britain and India together would make a strong force in the world, that, in my opinion, would make for peace throughout the whole of the world, an association of two great peoples—a great people of the West, and a great people of the East. All we desire at the present time is to start an inquiry, to send out to India a Commission which will be able to go through all these grievances that have been put forward by the Indian people. Are you going to say, because people put forward grievances, because they do not happen to belong to our nationality and race, that they are to be brushed aside? Are you going to make the same mistake with regard to India that you made with regard to Ireland? Years and years ago you could have settled the Irish question, and now, to-day, you have the awful tragedy that is taking place there, only because you did the right thing too late. Do not let us do the right thing too late in regard to India. Let us appoint this Commission, in order that it may inquire and produce a scheme whereby we shall get a revision of reform at the earliest possible opportunity, and, at any rate, not later than 1926. Let us have an endeavour to secure Provincial autonomy at the earliest time. If Provincial autonomy had been granted, and responsibility had been placed on Indian Ministers for India's domestic affairs with regard to the Provinces, we should not have had the trouble with which we are faced to-day. We want this inquiry to determine the lines to be followed in the inevitable Indianisation of the services. Only yesterday the Under-Secretary of State for India told us that not a single Indian was being trained for a Commission in the Air Force or the Tank Force, and so on. What is the good of saying these people are unable to defend themselves, and urge that as an excuse for no further development of self-government, when you will not even allow them to take the opportunity of training themselves in order that they may defend their own country?

Will the hon. Gentleman explain what he means by the statement that Indians are not trained to defend their own country?

I was giving the reply of the Under-Secretary of State for India yesterday, that no Indians were being trained for the Air Force and for other forces. There are some being trained for the Army, I know, but for the Air Force, and all the most up-to-date forms of warfare, Indians are not being trained. I say, therefore, they are not having an opportunity of being trained for the defence of India. I think that follows from the reply of the hon. Member. That is the position. I had an Amendment on the Order Paper, but I do not propose to move it, because there would not be a proper opportunity of discussing it in the time at our disposal. But I hope the Government will take their courage in. their hands, and will say they will appoint this Commission to go out and inquire, and be able to call the politicians of India of all parties together, is that they will be able to see how far we can go on the road to meet them. If we do that, I feel that India will be friendly to us in every sense of the word, and that the two peoples will unite together to benefit the whole world.

I am sure we are all very grateful to those who have taken part in the Debate, because of the excellent spirit that has been shown with regard to what is, after all, one of the most difficult Imperial problems facing any Government at the present time. One rejoices to find, at any rate, that we are unanimous upon one thing, and that is the declaration of August, 1917. I would remind my right hon. Friend the Member for the Scottish Universities (Sir H. Craik) that that particular declaration, although I believe it was read by Mr. Montagu in this House, was prepared by the right hon. Member for West Birmingham (Mr. A. Chamberlain). I am sure that every party in this House subscribes unreservedly to the desire that some day India will be a full-fledged Dominion attached to the great Commonwealth of British nations. I should like, if I can, to try to consider this problem in all its bearings, and, if I may say so, from the true perspective. I would suggest to my hon. Friends behind me, in the first place, that one of the great difficulties about India is that it is not a homogeneous unit. We are not dealing with a single country in. the European sense of the term: we are dealing really with a subcontinent into which for many generations different races have been pouring, who in many cases have been unable to get out again, the last subduing the one that preceded it. You have then very distinct strata of society in India to start with. You have the Primitives, the Aryans, the Scythians, the Mongolians, the Europeans. This is not the only difficulty, because, cutting right across and through this strata, you have great religious chasms or fissures which have tended further to keep these races from assimilating with one another. But that is not all the difficulty. These different nationalities, we are all willing to admit, are at various different stages of development, from the savage tribes on the North-West frontiers to the highly intellectual dwellers on the plains and in the river basins.

It is into this kind of society that we, with the best intentions, I believe, have attempted to introduce the democratic institutions of the West which we have evolved in this very place after a strenuous struggle extending over a thousand years. I would remind my hon. Friends behind me that we, even in this very place, have not yet been able to reduce this struggle for constitutionalism, info a system. At any rate, the Members of the Government will agree that nobody seems to know exactly how our constitution is working at the present time, and we feel that Government in opposition is much easier than it is from these benches. I remember a phrase in which it was said that

The Indian Legislature consists of two Chambers. There is a Council of State, which consists of 60 members and not more than one-third of these are official members. There is the Legislative Assembly, which is probably the more interesting body, which consists of 145 members; 105 of these are elected, the rest are nominated, and not less than 26 can be officials. The reason for the 10 years' experiment apparently was that we should have three consecutive Parliaments upon which to base our decision as to the future. The Indian Legislative Assembly has power to make laws for all persons within British India, for all British subjects within the native States, and for all native Indian subjects in any part of the world. The assent of both Chambers is necessary for the passing of a Bill, and differences of opinion between them are got over by a joint session of the two Houses. The Governor-General may, however, certify that a Bill is essential, I and the Bill shall thereupon become law without the assent of both Chambers. But when the Governor-General is driven to enact laws in this way copies of these must first be placed on the Table of the House of Commons here. In regard to Provincial Governments, the Act of 1919 contains elaborate provisions for further decentralisation and for the development of the organisation and powers of the Provincial Governments. The provincial subjects have been handed over to the Provincial Governments, subject to general control by the Government of India, and there is a further distinction being made between what we call the "reserved" and the "transferred" subjects. The Governor-General in Council retains unaltered powers of control over the Provincial Governments in regard to "reserved" subjects, but in regard to "transferred" subjects he only interferes in cases where interference is necessary to safeguard central subjects. Transferred subjects are local self-government, public health and sanitation, education, public works, agriculture, fisheries, excise, registration, development of industries, weights and measures, religious and charitable endowments. The Provincial Governments are formed on a plan of dyarchy or dual form of government, by which certain functions are discharged by one body, the Governor in Council, and the other functions by another body, the Governor acting with Ministers. Each is responsible for his own share of the work of administration, and the Governor simply acts as the connecting link. In the case of the transferred subjects, the Governor is guided by the advice of his Ministers, and so there is a certain degree of responsible self-government possible. It may be in time extended. The financial budget is laid before the Legislative Council each year. The Council may refuse assent to a proposed grant, or may reduce the amount, provided (1) that if it relates to a reserved subject the Governor may "restore" the amount reduced; (2), that the Governor in an emergency may authorise expenditure which he certifies to be necessary for the safety or order of the province.

I am sorry to weary the House with the details of the reforms that were passed in 1919, but when we are discussing the breakdown of this very difficult Act—it is agreed that it is not, at any rate, easy working—it is important that I should say something about the attitude of India towards the Act at the time when it was passed. There is no doubt at all that the attitude of India, almost from the beginning, has been one of extreme suspicion. My noble Friend in another place, when he made a statement earlier in the year, attempted to analyse the causes of this suspicion, and I shall merely refer to them to-night. Some of them have been referred to to-night already. There is, first of all, the unfortunate Amritsar affair. Secondly, I understand that my own distinguished countrymen's gift for vivid phrase led them to believe that the steel frame of the Indian Civil Service was riveted on the shoulders of India for ever. Thirdly, I understand that the certification of the Salt Tax caused a great deal of heart-searching in India last year. There is, of course, the eternal Kenya problem. The attitude first taken up by what we may call the Nationalist party in India was to boycott the thing altogether. They were out, that is to say, to boycott the British courts, the British form of education, and British goods of all kinds. It was really a movement to dewesternise India.

That was the first attitude. In view of that, of course, the Indian Home Rulers took no part in the first elections in 1920. The next move was to abandon the attitude of non-violent non-co-operation, and to go into the Councils and into the Legislative Assembly and to make the Constitution, as they very definitely put it, unworkable from the inside. I do not think that there is any doubt about this, because in October of last year there was a very interesting manifesto issued by the Home Rule party under the signature of Moti Lal Nahru, in which he points out quite clearly that their attitude is to destroy the constitution as outlined in the Act of 1919. I would like to read a paragraph or two of this manifesto, which was issued just before the elections of last year. That was the attitude, rightly or wrongly, taken by this party. When the elections came on, this party achieved a very remarkable victory. The figures for the Assembly are as follow: There were 41 Swarajists returned to the Assembly, seven Independents, two Sikhs, and three Burmans. The result in the Central Provinces is still more striking. Out of a total membership of 70, 54 of whom are elected, 44 Swarajists were returned. In Bengal, out of an Assembly of 140, 114 of whom are elected, 37 Swarajists were returned. Having thus secured a good representation by perfectly constitutional methods, they proceeded to bring their point of view to the notice of the Assembly, and a Motion was moved early this year, to which reference has b en made to-night, and was carried. The Motion proposed: a ), Section 72D of the Act. The interesting question, as far as this House is concerned, is this. Is it true to say that the Government of India Act has broken down completely? On the one hand it appears that the intention of Parliament in 1919 clearly was that Indians should co-operate with us in working this scheme. So far that has not been achieved, but it is perfectly true to say that, in addition, other provisions were made in the Act of 1919 for contingencies, and all that has happened hitherto is that the powers which have been held in reserve have merely been put into operation.

I think it is also true to say that th9 Government of India recognise that the Act is not working exactly in the way they would have it work, because everyone would prefer to have the active cooperation of this politically active people in working the reforms, rather than that they should stand aside and merely attempt to destroy, and I venture to suggest that before we can say the Act has actually broken down, it is important that a real generous attempt should be made to work this very difficult legislative machinery. References have been made to the fact that the Government of India, as stated by Sir Malcolm Hailey, are investigating the working of this Act with a view to their removal of any deficiencies which may exist. If the Act is not working smoothly, if there are deficiencies in it as has been suggested, it is obviously the duty of the Government which has to try to administer this machinery to see exactly where the difficulty is and, if possible, by good feeling to get rid of it. Consequently, an investigation into the shortcomings and deficiencies in the Act is being carried out by the Government of Inda at the present time. I have explained the action which is being taken by the Government of India, with the full concurrence of His Majesty's Government, with a view to investigating the present constitutional situation and determining whether any grounds exist for deciding that the question of further modifications should be considered; and I may add that it appears to His Majesty's Government important, for the purposes of this inquiry, that the views of representative Indian politicians, who have come to the Assembly in a perfectly constitutional way, and who advocate modifications of the Constitution in regard to any practical defects in the provisions of the 1919 Act, should be given full opportunity of constitutional expression and consideration before the recommendations of the Government are finally formulated. It is the desire of His Majesty's Government to arrange, in concert with the Government of India, how best such opportunities may be provided. His Majesty's Government view with grave concern the estrangement between Great Britain and the elected representatives of the Indian people, and we, therefore, desire to establish contact with them in the hope that a way may be found, by a full and frank interchange of views, to establish a lasting peace and enduring co-operation for the well-being both of India and of the Empire as a whole.

I was not clear, in the hon. Gentleman's otherwise very clear and explicit statement, whether he was referring to those who have announced that they are prepared to co-operate with the Government or to those who have hitherto said they will have no co-operation of any kind. It is a very important distinction.

I was referring to those who are prepared to co-operate. It is one of the acknowledged objects of His Majesty's Government, and definitely in accordance with the principles of the party, to assist the Indian people to Dominion self-government. As to the appointment of a Commission, as proposed in the Amendment on the Paper, such a proposal is, in the opinion of His Majesty's Government, premature at this moment. As I have already indicated, an inquiry is actually being carried on by the Government of India into this very question.

On a point of Order. I understand that no Amendment has been moved.

I am referring to the Amendment on the Paper. Accordingly, the terms of the Amendment on the Paper are, in the opinion of His Majesty's Government, not appropriate to the situation at this date, and whether or not it is adopted by the House, it must not be taken as committing the Government to any particular method of dealing with this very difficult problem.

I find myself in the position of being in as complete disagreement with the speech of the hon. Member for Taunton (Mr. Hope Simpson) as one Member can be with the speech of another. I am going to say a word about that speech in a few minutes, but I am doubtful of being; able to characterise it in Parliamentary language. Referring to the speech of the hon. Member for Stepney (Mr. Scurr), I am also in complete disagreement, as are, I think, the majority of the House, with the view suggested. I find myself in the unfortunate position of only being in very partial agreement with the speech of my right hon. Friend the Member for the Scottish Universities (Sir H. Craik); and I find myself in the most unfortunate condition, for one who thinks as I do, of being largely in agreement with the speech that has just been delivered by the Under-Secretary of State for India.

In the first place, I think that, without exceeding the bounds of courtesy, I may remark that the Opposition have justified themselves in asking that there might be a Debate which would disclose the intentions of the Government towards India. There has been abundant need for a long time past for a statement of the Government as to how the exceptionally difficult situation is being faced. I should be the last person to underestimate the responsibility of the Secretary of State or Under-Secretary at the present moment, because I have had recent official experience, and I am quite prepared to agree that in such circumstances caution and reticence are to a very large extent a virtue, and should be as much a part of their attitude towards both Houses as that of the representatives of any other Government office, including even the Foreign Office. But I am bound to say that I think that both in the case of the hon. Member and the Noble Lord in another place that caution and reticence have been so unduly extended that these good qualities themselves have been turned into a vice. It is not until to-night that we have had any clear indication at all of the intentions of the Government towards the course of events in India. I think that is quite wrong, and I should like to make a protest, which I think really would be echoed by the whole House, irrespective of party, against the assumption which is growing up in some quarters, especially some Press quarters, that this House as a House is not as much concerned with the affairs in India, or has as much right to be interested in them, as it had 10 years ago.

One sees the most amazing statements, and although I do not wish to mention individual papers, or quote from them—which would be out of order—I have noticed a tendency, even in such newspapers as the "Times," to suggest that the Government of India, and the officials in India are being handicapped both by the control which this House desires to exercise over affairs in India and by the control which, it is said, the Secretary of State and the India Office do exercise over it. It cannot be too much reiterated that under the new system, under the reforms, the Government of India is, admittedly, only very partially responsible to the Assembly, and that the Assembly itself, as has been pointed out, is elected on a very narrow franchise basis. If it is not to be in any respect responsible, through the Secretary of State, to this House, then the Government of India would soon tend to become, what some say it is, a complete autocracy. It should be recognised that the Act provides that there shall be dual responsibility by the Government of India to this House and to the Assembly. Therefore, I say in this transition stage, Parliament should not only take as much interest as it did before but more, and these complaints made in the Press to the effect that any Secretary of State and the India Office exercises an unfair and an undesirable control over the Government of India, is really an absurdity.

I would like to come back to my main theme, and that is the question of the present position of the reforms in India. I find myself, as I have said, only in partial agreement with the right hon. Gentleman the Member for the Scottish Universities (Sir H. Craik), but I should like to pay a tribute to the sincerity and frankness with which he has stated his attitude on the subject of the Government of India Act. It is undoubtedly true that my right hon. Friend and others were amongst the strongest opponents of the India Act when it was brought into operation in 1919, when the hon. Member for Stafford (Mr. Ormisby-Gore) and myself were supporting the then Government against the attacks made on the Bill.

My right hon. Friend went on to say that the Act, having become a constitutional Act, and he might have added a binding pledge by this House to the people of India, he considered it was his duty, and the duty of all those who at the time disagreed with the Act, to do their best now to see it carried to a successful issue. That is a perfectly correct attitude, but what is the attitude of the party opposite, as represented by the hon. Member for Taunton (Mr. Hope Simpson)? I always had the idea that the hon. Member was, in principle, a supporter of the India Act, but he stated to-night that his view as that, at the time the Act was passed, he considered it was an experiment, and now the hon. Member for Taunton, apparently, is prepared to destroy the machinery of the Act and substitute something entirely different in its place.

I do not think the words which I used bear that construction at all. I suggested that the time had come for a Commission to inquire into the working of the Act to see if it-required amendment.

That is a statement very different to the terms of the Amendment that the hon. Member for Taunton has put on the Paper, which is as follows:

"the failure of the Government of India Act, 1919, in certain of the Provinces of British India, and the increasing divergence between the administrative systems in the Native States and those of British India, considers that immediate steps should be taken to examine these problems, and to this end requests the Government to appoint a Commission with wide terms of reference to inquire into the facts on the spot, to review the working of the reforms, and to report what action, whether legislative or administrative, is now required to carry out the expressed intention of the British Government that the reforms shall constitute a definite step towards fulfilment of the promise of ultimate Dominion self-government within the Empire."

If anybody has ever produced an Amendment more damning an Act than that, I should like to see it. The extraordinary thing about this matter is that this Amendment was to be seconded by the hon. and gallant Member for Oldham (Lieut.-Colonel Sir E. Grigg), who for a very long period of his life has been, and I believe is still, closely associated in a political sense with one of the people who is as much responsible for the Act as anybody in this House, that is, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). Not only is that right hon. Gentleman not present, but the hon. and gallant Member for Oldham is not here to explain the extraordinary discrepancy between the views of himself and the chief under whom he served so long.

The Noble Lord probably is not aware that there are very strong personal reasons why my hon. and gallant Friend is not here. I think the Noble Lord is putting a very controversial construction, to say the least of it, on this Amendment.

Of course, if my hon. and gallant Friend tells me that there are personal reasons why the hon. Baronet is not here, I accept that. I think, however—and I assure the House that I am not trying to make a party point of this—that for one of the most distinguished ex-Indian civil servants that we have had in this House, with a fine record of service in India behind him, to come down to the House and speak on the Act which his former colleagues are doing their utmost to work in India in the face of tremendous opposition and misunderstanding—to speak as he did, amid the cheers of the extremists of the Labour party, was something of which he should riot be proud. When I speak of extremists, I distinguish between the Government, their immediate supporters, and those who are opposed to the Government on this matter. Of course, it is obvious to anyone that there is the most complete divergence of opinion in the ranks of the Government supporters. We have had a speech by the hon. Member for Mile End (Mr. Scurr), which was very effectively answered by the Undersecretary.

Having dealt with the speech of the hon. Member for Taunton, which I still think he will regret when he reads it in cold print to-morrow, in view of his previous record on this question, I come to the speech of the Under-Secretary. I shall only occupy a few minutes more of the time of the House, because I have promised the Chancellor of the Duchy that I will give way to him at three minutes to eleven, in order that he may make a personal explanation concerning a statement made by my Noble Friend at an earlier period. As I understand the statement which has been made by the Under-Secretary, it is this. I understand him to say—but the word "understand" is putting it too mildly and not sufficiently definitely, I am sure, from the Under-Secretary's speech—that he has made it quite clear to-night, to this House and to India, that he definitely rejects proposals for destroying the existing machinery of the Government of India Act; that he does not contemplate a departure from the hitherto existing policy of successive Governments, of carrying out that Act to the best of his ability and that of his chief and of the Government; and that any form of inquiry which may be set up, whether it be a Committee of this House, or a Committee of the Government of India, will be an inquiry merely into the existing machinery of the Act; that before such a Committee of Inquiry there will be welcomed evidence from those who are interested in seeing the Act worked successfully, but that those who have from the first set their hands—indeed, the whole of their bodies—against this Act being made a success, will not only not be encouraged but will not be allowed to give evidence before that Committee. If that is what the Under-Secretary and the Government propose, there will certainly be no abjection taken to it on this side of the House. That it is necessary to have such a Committee at present I am myself not fully persuaded. I am not sure that the Under-Secretary has not allowed himself to be unduly influenced by certain events which have occurred in India. The hon. Gentleman referred, as did the Secretary of State in another place, to such incidents, for example, as Amritsar. I do not want to say much at this length of time on what is admitted on all sides to be a very unhappy incident, but I cannot accept, without much further evidence than has been given by the Under-Secretary or by the Secretary of State, "that that incident to-day takes any foremost part in causing the difficulties which have arisen in India. Again the Secretary of State referred to the salt tax as apparently one of the causes of the irritation. Again, so far as my experience and knowledge go, the raising of the Salt Tax last year has had a very small effect in increasing the general difficulties of government in India, and I think those difficulties go far deeper than either of those things. Still, if the Government believe it is necessary to have an inquiry into the machinery of the Act, if they, unlike the hon. Member for Taunton, are not anxious to scrap that machinery and put something else in its place, if, unlike the hon. Member for Taunton, they are willing to trust the engineers, Indian and British, who are working that machinery at present, I, for one, and most of us on this side of the House, would have no objection, and we welcome the Under-Secretary's very definite statement that it is not proposed to depart from the spirit or letter of the Act, and we welcome the implied rebuke which he has given to some of his hotheaded friends on the benches behind him.

Is the Noble Lord in order in referring to anyone here as"hotheaded"? If that be so, should I be in order in referring to him as "fatheaded"?

When the hon. Member has been longer in the House, he will realise that the Noble Lord is well qualified to speak.

I accept the compliment with great pleasure. However hot-headed I may be, I hope I am not as thin-skinned as Members of the Labour party. May I address one or two remarks to those same hon. Members— I will not describe them as hot-headed —who sit on the back benches and who have views so much, if I may say so without offence, on the extreme left as regards the situation in India. What is the only real alternative to some such system as you have in India to-day under the Montagu-Chelmsford scheme? I am the last to say that the earnestness of a man like Gandhi, misguided, dangerous and, in some respects, criminal as it is, is to be met merely by sneers and jeers. The House will acquit me of ever having said that, but the philosophy preached by Mr. Gandhi, and largely supported by hon. Members on that side of the House, including the hon. Member for Bow and Bromley (Mr. Lansbury), can be met by the logic of indisputable fact. What are those facts? They are, as the Undersecretary himself said, that there is in India nothing like homogenity of race. That there are divisions of race, divisions of religion and, above all, there is diversity of aim among Indians themselves. Either you have to support a system of cooperative government such as we have in India to-day, or else you have to fall back on the complete Swaraj preached by men like Mr. Gandhi and indirectly, at any rate, by those who sit on the benches opposite. There is no real mean between the two extremes.

If the ultimate aim of the Swarajists, and of those who support them in this country, were suddenly to be obtained, and absolute independence reached, how would India meet these difficulties? Would Mahommedan mobs suddenly fraternise with Hindu mobs? Would the causes of offence to Hindus by Mahommedans, such as cow killing, suddenly be tolerated Would the highest castes by a wave of the hand suddenly embrace the depressed classes in India? Would the Indian leaders of opinion in British India in a flash see the merits of government as practised, for example, in the territory of His Highness the Nizam of Hyderabad? I am the last to deny that that Government has many merits, but they are not of the nature that the Indian intelligentsia support. The most important question and the hardest for hon. Gentlemen opposite to answer is: Would the stern rigid India of the north suddenly view with benevolence the soft and subtle Indian of Bengal? Would all these racial difficulties, these religious difficulties, be suddenly swept away if you granted absolute Home Rule to-morrow on lines which supporters of the Government urge in every speech they make on the subject? The logical and ultimate end of what they say must mean that.

Again and again we have heard from hon. Members opposite, when speaking on public platforms, that the Labour Government are going to give complete home rule to India. What is our plain duty? [ Interruption. ] If hon. Gentlemen interrupt me, then the Chancellor of the Duchy will not get an opportunity of making his reply. I ask, in conclusion— and I shall have an affirmative reply from nine-tenths of the House—what is our obvious duty in these admittedly very difficult circumstances? Is it to take the hopeless view of the hon. Member for Taunton, throw up our hands in despair and say everything is lost? Is it to take the view of those who sit above the Gangway, who differ from their own Government, who believe that it is possible by a stroke of the pen to sweep away all the safeguards put in the Act of 1919? If because of discordant cries from a handful of extremists in India, because of ignorant and fatuous criticism at home, this great Empire, which was capable of all it did in the Great War, were to throw in its hands and say: "We are no longer going to carry on this task of co-operating with Indians in the Government of India," if that is the attitude, it will, indeed, be true to say that we have lost our power of being an Empire-making and an Empire-governing nation. We shall, indeed, cease to merit that title. I say this, and I challenge anyone to deny it, and I am sure that no Member of the Government will, that no better right for this country to be considered the greatest Empire-building organisation that the world has ever seen can be found than in the free, willing declaration that was made in 1917, which was carried out in the Act of 1919, and in the face of contumely and misrepresentation is being carried out by the servants of the Crown in India to-day by co-operation with Indians, to help them along the path of self-development so as to become an eventual self-governing unit within the Empire. No better title for this Empire to be called the best Empire-building Empire that has ever existed could be found than in what we did then. I welcome very warmly what, in the circumstances, is the courageous stand which the Under-Secretary and the Government have taken to-night against the action of some of their own supporters behind them (and, I am sorry to say, some Members of the Liberal party) in the direction of destroying the system of government in India.

I have always been a great admirer of the Noble Lord. I admire not only the ability with which he differs from people but the ability with which he agrees with people. I have never been more overwhelmed by his ability than I have been to-night, because he has shown marked ability in reading into the speech—

I have admired the ability with which the Noble Lord has read into it things that were never said. I would remind the Noble Lord that if he reads the speech to-morrow, and if he reads the speech delivered by my dear friend Moti Lal Nahru in the Assembly at Delhi, he will find that Moti Lal Nahru is prepared to co-operate with those who are prepared to cooperate with him.

Yes. It was distinctly understood in the speech of the Noble Lord that he gave way for three minutes to enable the Chancellor of the Duchy to make a personal explanation.

If there is anything dishonourable in the action I am taking, the Noble Lord will see to it, and not my hon. Friend. May I ask the Noble Lord the Member for South Battersea (Viscount Curzon), as an old Member of the House, whether he appreciates the value of evidence. He quoted two things, of which he complained, which I said in India. He quoted also something that the Patronage Secretary to the Treasury (Mr. Spoor) had said. One statement was this:

"The British Labour party,"

said Colonel Wedgwood at Allahabad in December, 1920,

"is with the Indian people in their desire for a democratic Swaraj."

We all are, on both sides of the House. There is nothing terrible about that. On another occasion, he said, Colonel Wedgwood added that

"It was immaterial whether it was Home Rule or independence"—

It being Eleven of the Clock, the Debate stood adjourned.

Electricity Supply Acts

Resolved,

"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1922, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the urban district of Hitchin, in the county of Hertford, which was presented on the 7th day of April 1924, be approved."—[Mr. Gosling.]

Trade Facilities Bill

Again considered in Committee.

[Mr. ENTWISTLE in the Chair.]

CLAUSE 2.—(Power of Treasury to contribute towards interest payable on certain loans.)

Postponed Proceeding resumed on Amendment proposed on consideration of Clause 2.

Question again proposed, "That the words proposed to be left out stand part of the Clause."

I was endeavouring when the Debate was interrupted to address myself to the statement made by the hon. Member for Totnes (Mr. Vivian)—I took down his words—that the only form in which money can be exported is in the form of commodities.

What I said was that the only form in which a loan could be transferred to another country was in the form of commodities.

Very well, if the Committee will grant me its patience I venture to say that I can show that that axiom will not hold water. The basis of the hon. Gentleman's argument is the old, old fallacy of a sooner-or-later export of goods or services. We have in that a specimen of theoretical economics which, as I shall show can be utterly disproved by practical experience. The hon. Member says that if a loan be granted without any conditions, the money will sooner or later go out in the form of goods. I deny this sweeping generalisation and say therefore the basis of his Amendment is not justified. Supposing a self-governing Dominion, which owes Britain a large sum of money, on which she pays interest, says to the Trade Facilities or any other Committee, "We want half a million with which to create some improvements in Brisbane," and supposing she is granted that half million credit by a British institution in London or by the Trade Facilities Committee without any condition that she shall spend the money upon goods in this country, what does she do with it? Let us say, she puts it in her bank in London, and uses it for the purpose of paying interest on her old loans here, contracted, perhaps, 40 years ago. She is, therefore, able to reduce the amount which she would otherwise have to remit from Brisbane. [An HON. MEMBER: "She would not be allowed to do that under this Bill."] I am very much obliged to the hon. Member. That is what the hon. Member for Totnes (Mr. Vivian) would have.

Will the hon Member for Farnham (Mr. A. M. Samuel) address the Chair, as I have great difficulty in hearing what he says?

If the Amendment of the hon. Member for Totnes were carried, and a Colony, let us say Queensland could borrow money in London under this Bill, there would be no obligation on her to send out any form of goods. The hon. Member says the export of goods would result. I say no. The money having been procured here and lodged in London, Queensland or any other such borrower is able to use it to pay interest upon an old loan contracted in London 40 years ago, and, inasmuch as she uses that money as interest in London, by so much less she can remit money from Brisbane than she would otherwise be compelled to remit, and she can use some of the unremitted money, in Brisbane, to pay Brisbane labour for the improvements for which she borrowed money in London, and finally can spend the other part of that money for buying, if necessary, steel rails in Japan. How then is employment now helped, by the export of our goods or services? That, alone, I think shows that there is no basis for the argument of the hon. Member.

I will give three instances to prove he is wrong in theory and practice and not necessarily in relation to this Bill. Supposing Mexico wishes to send Mexican silver to London to pay interest on an old debt, and a London firm says to Mexico, "We will buy the silver of you, but we will leave it in Mexico, and put up half a million in London which you can use to pay the interest on your debt." The silver is left in Mexico. Then China comes along and says if permitted by the Act to the Trade Facilities Committee or to lenders in London: "We want half a million to pay for constructing a new railway in China, will you lend it?" Under this Bill's conditions that money would have to be spent in this country, but according to the Amendment, there would not be any conditions as to the way in which the money should be spent if provided by lenders here. Therefore the credit would be lent without restriction in London, to China. She says in London to the London firm that has bought the silver and left it in Mexico: "Here is £500,000 which London has lent me, let me have the silver you have in Mexico that belongs to you there, and we, the Chinese, will ship it to China via San Francisco and use it to pay the wages in China of our coolies." Will the hon. Gentleman (Mr. Vivian) tell us how, sooner or later, in respect to this loan an export of goods or services takes place from this country?

As this is a Bill to help employment, I would like to know what object is to be attained by this Amendment if it permits this silver transaction as well as the interest example I have given. I will now give the third and the most simple example. Supposing the free export of gold were allowed from this country. At present it is not. Supposing any country or colony obtained a loan of £500,000 in London, without any condition that the borrowers should spend it on goods. Supposing the borrowers went to the Bank of England, where that gold had been lying for twenty years, paid for a parcel of gold with the borrowed credit, and exported the gold abroad. Will the hon. Member for Totnes tell me that any export of goods will result from that? No. The other thing that might happen is that, supposing annual interest on that loan were to come back, it might come back in manufactured goods, and in addition to the fact that the capital did not originally go out in our goods.

May I ask the hon. gentleman if he will make that point clear? Do I take it that he means that the goods going in payment of interest on money from abroad would lessen employment in this country? Is that precisely what happens to every investment of British capital in India or anywhere else?

No. There is a hole in the argument of the hon. Member for Totnes (Mr. Vivian). I will explain what I mean about gold. Supposing Italy came to London, and said she wanted to put down a hydro-electric installation in the centre of Italy. If she came to the Trade Facilities Committee for a loan, and the Committee, having the powers under the Act, made no condition that the money was to go out in the form of goods, so that the Government of Italy could then take that loan to Italy in the form of gold, there would be no export of goods or services; merely the metal would go. Interest must be paid on that. If the loan is £500,000, interest would amount to £25,000 a year. Supposing that no employment by export of goods has arisen out of that capital loan of gold to Italy, and that Italy remitted annually back as exports to England £25,000 worth of manufactured silk goods for interest, then by so much has she denied employment to our people, although we receive the interest in goods. There is a rather more recondite argument which I must use, if I have the Committee's permission, because I do not like to leave uncontradicted the dogmatic argument used by the hon. Member for Totnes. It ought to be nailed to the counter as incorrect every time it is used. Germany recently, and perhaps even does so now, used diamonds cut and uncut as currency and for hoarding. Supposing Italy desired to put down again a hydro-electric installation, and that she went to the Trade Facilities Committee to borrow £500,000, or to any other lending institution in London; assume that no condition is laid down that that loan should be represented by export of goods. She borrows the money here; she has credit for it put up at her London bank. She goes to the de Beers Company in the City of London and says, "I will take £500,000 worth of your rough diamonds now in South Africa. What does she do with the diamonds? They do not come here or provide one single hour of employment for our people here. Italy takes the diamonds at the Cape, not here, ships them to Hamburg, and uses them as currency or goods to pay for the German steel which she buys and sends back to Milan. I submit, therefore, that, in face of my interest-on-the-loan-argument, of the silver argument, from Mexico, and of the gold argument, the unqualified assertion that the loan of money can only be exported in the form of commodities is not correct. That is my case. Where is the axiom of the hon. Member for Totnes now?

I hope I shall not reply to the last speaker in the way that he referred to me earlier in the Session. If I treated an opponent in the way that he tries to treat his opponents, I should be ashamed of myself, as I am perfectly certain he must have been ashamed of his attempt to throw mud at somebody else. It can only have stained the reputation that he has built up. I feel very much the aptness of those lines of "Bombastes Furioso," somewhat altered to meet the present situation—

I will deal with the hon. Member's arguments. In the first place, following the indiscretion that he committed when he addressed the House before, in dealing with Queensland and Queensland's credit, he seems to have overlooked the point that Clause 2, Sub-section (1, a ), has been passed, and that we are dealing with the Clause somewhat later on. It there says that the proceeds of any loan to which the section applies are to be applied by way of capital expenditure on, or in connection with, public utility. Therefore, that beautiful supposition of his, that Queensland could pay her interest out of the proceeds of this loan, has absolutely no existence, except in the hon. Member's imagination. What would happen if Queensland did this? The money, it may be said, would not come to this country for payment of loans; but the balance of trade in Queensland would be in her favour, and she would be able to buy goods with this money and give something in exchange for it. I am not now adopting the pontifical attitude; I am not trying to dictate to the House, but simply stating the facts. The fact of Queensland or any other country having that extra trade balance makes it possible for her to use that credit in the purchase of something else and thus it is, goods pay for goods and whether it is direct or indirect, goods go in respect of these loans and employment is created in that way.

I will give another instance which occurs every single day. I will take the case of France because it is somewhat easier to understand and as this is an operation I performed every day before I came to this House, possibly I may know something about it. We will say that France has to remit to this country suddenly. By the fact that she has not had to pay interest on small amounts of loans she gets an extra credit there in France. That credit is reflected in the exchange and if she does not want the £ naturally will go down in value and the French exchange will go up. That enables people who are called arbitrageurs —those who buy abroad and sell here—to buy these things and so not only is the exchange affected and regulated by instances of that kind, but whichever way you look at it, directly or indirectly, we pay for goods by goods or services. Now comes another point. Most people consider that the question of exchange is one with which you can do what you like.

On a point of Order. The Financial Resolution made it perfectly plain that this gift of three quarters of the interest applied only to such portion of a loan and as expended within the United Kingdom. The Amendment would have the effect of making it apply to the whole of the loan, and I submit with respect that in doing so it increases the charge, and that therefore the Amendment is out of order.

As paragraph ( c ) of Sub-section (1) still stands and provides that loans must be expended in a manner calculated to promote employment in the United Kingdom, I submit it covers the point.

I have been studying this matter while the Debate has been in progress and I was about to raise the point as to whether the Amendment is not contrary to the title of the Bill. The Title states that the Bill is to promote employment in the United Kingdom, and the Amendment seeks to exclude words which authorise the expenditure of the money in the United Kingdom.

The Title of the Bill states that its object is to authorise the Treasury to contribute towards the interest payable on certain loans the application of which is calculated to promote employment in the United Kingdom. These loans must, under Subsection (2) of Clause 2, be raised in the United Kingdom, and I submit they cannot be raised in the United Kingdom without creating employment here.

The Title of the Bill, as has been pointed out, states that its object is to authorise the Treasury to contribute towards the interest on loans the application of which is calculated to promote employment in the United Kingdom. The Amendment is to leave out the words to the effect that the proceeds of the loan are calculated to promote employment in the United Kingdom. Therefore, the Amendment is to leave out the exact words which are in the Title of the Bill.

The Noble Lord has misread the Amendment. The words proposed to be left out are "in respect of such portion of the loan as is to be expended in the United Kingdom."

The point of Order, which, I submit, is correctly taken by the Financial Secretary, is not in relation to the Title of the Bill but in relation to the Ways and Means Resolution upon which the Bill is founded. That Resolution in terms was actually the words set out in Sub-section (1) of Clause 2, that this House should authorise the grant of interest in respect of any loan for a particular purpose. The effect of the Amendment is to strike out the particular purpose which is authorised by the Ways and Means Resolution, and to make it general.

On the point of Order. May I submit that there is some confusion in the minds of those who make the submission? Is not the confusion this? It is not, I apprehend, any part of the rules of the House or of the Committee that we have to ask, when money is provided by vote of the Committee, whether it is spent in a way which gives relief to A or B or whether it is otherwise spent, and the rule that no private Member can move an Amendment which, will increase the burden means an Amendment that will increase the burden on the taxpayer or ratepayer, and has nothing to do with the question as to whether ultimately the general population, according to one economic view or the other, will gain or lose by the way in which the money is spent.

I have had numerous points of Order raised, and I have given due consideration to them. I think there is some confusion as regards the various points of Order. I do not think the Amendment is out of Order as going beyond the scope of the Title of the Bill, because it is clearly to promote employment in this country, and I presume the arguments of the hon. Members who are supporting the Amendment are that it will promote employment. The point as to the Financial Resolution is in quite a different category, and there the House has passed a Resolution that it will authorize the payment of three-quarters per cent, interest on such loans as are expended in the United Kingdom. If that guarantee of three-quarters per cent, is to apply to loans which are not to be expended in the United Kingdom, then I am of opinion, after hearing the points submitted to me and the Debate, that that would increase the charge which has been already authorised by this House under the Financial Resolution, and therefore I regret to say I must rule this Amendment now out of order.

Do you, Sir, rule out of order my Amendment on page 2, line 20, after the word "expended" to insert the words

"on goods wholly or partly produced or manufactured."

My ruling does not cover the Amendment of the hon. Gentleman, but I have not selected it. I call upon the hon. Member for Farnham.

I beg to move, in page 2, at the end of line 24, to insert the words

"Provided that any interest remitted under this Section shall be funded as a capital obligation against the said Government and shall be redeemed in London at par on the same date as that on which the original loan is redeemed, and till so redeemed shall bear interest at the same rate per cent, per annum as the original loan, such interest to begin five years after the date upon which each remission of interest was granted."

The Amendment is very plain, as shown on the Paper, but to give an illustration: A million pounds has been borrowed at 5 per cent., that means £50,000 for annual interest. Under the Bill the arrangement is to forgive £37,500 to the borrower, or three quarters of the annual interest. We on this side of the House think that that is too great a gift to give the borrower, and, therefore, we suggest that this interest so forgiven should be funded, and after five years shall bear interest at 5 per cent., and that borrowers should only begin to pay interest on the unpaid funded interest at the end of the five years, and finally that that interest money so funded shall be repaid to us when the main loan is repaid. I understand that there is now some suggestion of an arrangement by the Government, I am bound to say that had I known that I should probably have thought twice before putting down my Amndment. None the less I think the arrangement made by the Government does involve us in too great a sacrifice, and is not justified. I should like the Financial Secretary to explain the Government's position, and say to what extent we are committed by any pledge to the Colonies.

I think that very few words of explanation are required in connection with this Amendment in order to make it perfectly clear what is involved in this part of the Bill. We agree to pay three-fourths of the interest on a loan raised in this country in so far as it is expended here in connection with an undertaking of a public utility character in the Dominions. Among the conditions were that the scheme should operate for a period of five years and up to a total expenditure of £5,000,000, that the work should be accelerated and that it should provide employment in this country. The effect of this Amendment would be to reduce these advances from a grant to the position of a loan, and it would amount to a kind of cession of the interest on the interest for the five years during which that charge was to be made.

Not only the interest on the interest but as the Bill now stands the interest on the £1,000,000, which means that about £37,500 is forgiven, and that is too great an advantage to give.

It is only a grant of the interest on the lines laid down in other measures before the House, and this proposal would put these transactions in the position of a loan. I am afraid that we are bound by the agreement arrived at with the Colonial representatives at the Imperial Economic Conference subject to the approval of the House. Unless that agreement goes through in this form I have very little hope of this Bill doing any good at all. A very fair volume of employment depends upon this provision because amounts between £25,000,000 and £26,000,000 would be covered. Therefore, I think it is undesirable to raise this issue now because it would undoubtedly undermine if not completely destroy the second part of the present Bill. I cannot believe that the Committee would wish to go back upon the position very clearly reached in the terms submitted to the Imperial Economic Conference.

I would like to point out that this is hardly sound finance. I am anxious that we should cooperate with the Dominions in financial matters but Canada did not want this, the Union of South Africa was not very anxious about it, and Australia and New Zealand were the only countries who were anxious to accept this offer made by the right hon. Gentleman the Member for Hendon (Sir P. Lloyd-Greame). I want to point out that this is not sound finance, and comparing our taxation with the taxation of the Dominions, it does not appear fair to our taxpayer. Our taxation works out at considerably more than that of any of the Dominions, and, taking our per capita amount of National Debt, it will be found that in the United Kingdom we have £167 per head, whereas in Canada it is only £54 per head, in Australia £59, and in New Zealand £160. These things must be considered. We cannot go on taxing our people and giving money away. We are giving three-fourths of the interest on the money expended on manufactured goods in this country. It is a large amount. The Financial Secretary states that it is £1,000,000 for one year, or a total of £5,000,000 over five years, but worked out on a capital basis it represents about £100,000,000, which is a very large sum. Although I must, I suppose, agree— I certainly would not divide the Committee on it—I must point out to the Financial Secretary the unsoundness of this, although I know he is not responsible for it. With our very heavy taxation at the present time, we really cannot afford to give these bonuses away to our Dominions.

Perhaps I might just add a few words in reply to my hon. Friend. I do not deny the point of view that he has just put, and it is only fair to say that representations substantially in the sense of this Amendment were made at the time, but in the long run it was agreed, and of course it was the agreement that was embodied in the Bill. Beyond that I do not go. I simply present it to the Committee, with the intimation I was bound to make, that, unless it goes through in this form, I do not think it will be put into operation, and we should lose any advantage from employment forthcoming under this part of the Measure.

Am I right in understanding the Financial Secretary to say that this Committee has to accept this arrangement because it was come to at the Imperial Conference? I was under the impression that all the understandings come to at the Imperial Conference were to be subject to the approval of the House of Commons. With regard to this Clause and the 3¾ per cent., I do not think that any of these Colonies will want to raise money under these conditions. We have been told by the ex-Prime Minister that railway companies in this country have been buying goods in Belgium and other countries 20 or 30 per cent. cheaper. What colony is going to raise money here, and save itself 3¾ per cent, for five years, or 18¾ per cent, in all, if it has to pay 90 or 25 per cent, more for its goods here? It is obviously of no advantage to the Colonies at all to borrow money on the terms of this Clause.

There is one point that I should like to make in reply to my hon. Friend the Member for Ilford (Sir F. Wise). This is not a new proposal for the benefit of public utility companies. In fact, it is less favourable than the proposal to which he and his friends assented on a previous occasion when we were dealing with unemployment in this country. I think he will remember that in the case of the unemployment grants made through the St. David's Committee, which amounted to a considerable sum of money, one of the regulations laid down was that there might be a grant to a public utility company of half the interest for a period of 15 years. The proposal here is to give a similar facility, though not on so great a scale, to a similar undertaking in the Dominions. Therefore the proposal is not at all a novel one. It is giving to a public utility undertaking which anticipates its work in the Dominions less assistance than is already extended to such undertakings here.

After the expression of opinion of the Financial Secretary and the statement of the late President of the Board of Trade that we are under an obligation of honour, I ask leave to withdraw the Amendment.

Can we have a reply to the point of my hon. Friend behind me—whether the House is bound by the decision of the Imperial Conference?

I made that perfectly plain. This Bill is submitted for the consideration of the House.

Amendment negatived.

I beg to move, in page 3, line 5, after the word "communications," to insert the words "(including harbours, docks, and wharves)."

This is a very modest Amendment. There are schemes already being brought forward for the purpose of using these loans for harbours, and it is doubtful whether the word "communications" can be construed, even by the Treasury, as including harbours. I want these words included to make it clear that they are covered. I hope I need not say anything as to the merits of the proposal, because I am sure the Financial Secretary will agree that a harbour is a very desirable work of public utility to be encouraged by the procedure adopted by the Bill.

I am informed that the words in the Bill cover docks and wharves and the Amendment is therefore unnecessary. But even if that were not so I think I could give an undertaking without any fear at all because there is no danger of the difficulty the hon. Gentleman foresees. It is quite provided for and I hope after that assurance the hon. Gentleman will not find it necessary to persist with the Amendment.

I am conpletely satisfied with the hon. Gentleman's assurance, and ask leave to withdraw.

I understand the word "communications" has the required meaning. If the Treasury say so, I think everybody ought to be satisfied.

Amendment, by leave, withdrawn.

I beg to move in page 3, line 6, after the word "water" to insert the words

"or an undertaking of a co-operative society or trade union to advance deposits for house purchase for its members."

I urge this Amendment as a possible solution of the housing problem. I almost anticipate the reply of the Financial Secretary to the Treasury to the effect that I should wait till to-morrow and hear the Minister of Health. The housing problem was not only one of getting houses built but of who was to own them when they were built. I hope I am not out of Order if I saw a few words on the housing problem—

I cannot allow hon. Member's to enter into general discussion of the housing problem. They must restrict themselves very carefully to the limits of the Amendment.

I will endeavour to comply with your ruling. So long as the nation's credit is to be used to encourage employment at home I see no reason why certain of the credits may not be earmarked to finance our own workpeople to enable them to obtain the deposit money with which to purchase their own cottages. I consider the organisation of trade unions and co-operative societies provides the machinery by which working people could be assisted to purchase their houses. There were already facilities provided under the Acquisition of Dwellings Authorisation Act and building society mortgages, but it was always the first ten or fifteen per cent, deposit which was the bugbear to a would-be purchaser. I urge the merits of ear-marking a credit of £10,000,000 for the purpose of advancing deposit, money to those who desired to buy their houses. By these means in a very short time we should have £100,000,000 worth of houses building.

On a point of Order. Are we in order in discussing house building in this country, when the Clause which is being considered applies to His Majesty's Dominions?

I am afraid the hon. Member for Westbury (Mr. Darbishire) does not realise that Great Britain is part of His Majesty's Dominions. [ Interruption. ] I appeal to the Committee seriously to consider this very serious proposal to help men who had no savings, who depended on their weekly wages, and who are now regarded as men who can only rent houses. If they were able to get credit facilities to obtain the necessary deposit money, which they could repay in 20 or 25 years at 1s. a week, as they do in their trade unions, they would rapidly become purchasers of property in the open market. I see no reason why credit facilities should not be placed at the disposal of our own workpeople and I appeal to the Financial Secretary to the Treasury seriously to consider my proposal.

It would be impossible to accept this Amendment. This is a Clause which deals with the Dominions, and the granting of credit facilities for house building here does not come within that category.

This deals with a grant of three-quarters of the interest in respect of loans in connection with public utility undertakings and has no application to this country except in so far as it provides employment here. My hon. Friend is seeking to import something into the Measure that could only have effect in the Dominions, if it had any effect at all. I think, on reflection, he will agree that his proposal is impossible in a Bill of this kind.

12 M.

The Preamble of the Bill says that the money is to be advanced only in cases in which it is to be used to promote employment. In this case it is proposed that the money should be advanced to enable houses to be purchased. The purchase of a house does not necessarily create employment.

I think that it is unnecessary to argue about the question of employment, and that the Committee is now ready to come to a decision.

Amendment negatived.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

What has become of the Amendment standing in my name, in page 3, line 6, after the word "water" to insert the words "or any municipal undertaking"?

The Amendment is out of order, as it is outside the scope of the Bill.

I am afraid that it is on the authority of the rules of the House that it is outside the scope of the Bill, and not on the authority of any individual.

Before this Clause is added to the Bill I desire to express regret at the ruling which you gave which prevented us from taking a Division on the issue of Protection and Free Trade which, I think, is raised in an acute form by this Clause. I must also enter a protest against the suggestion by the Financial Secretary to the Treasury that because this scheme was agreed to at the Imperial Conference, therefore, we are bound to pass it into law to-night.

The hon. Gentleman undoubtedly indicated that there would be some disappointment, as there had been, if not an agreement, some understanding with the Dominions, if we did not pass this Scheme. I protest against the interpretation of the Imperial Conference. This is not the only one which the House will have to consider, and it is necessary on this first resolution coming from the Imperial Conference that we claim from this House the fullest liberty to agree to or reject any of the resolutions which come from the Imperial Conference. I cannot part from the Clause without congratulating my right hon. Friend opposite on the triumph which he achieved in securing the passing into law by a Labour Government of this protectionist Clause as to which he and the protectionist Prime Ministers from the Dominions arrived at complete agreement at the Imperial Conference. The right hon. Gentlemen may demur to my description of the proceedings at the Imperial Conference in regard to this Clause.

I would challenge any one to read the whole discussion of this question of the payment of interest on loans for public utility purposes in the Dominions without realising that it emanated from the fertile brain of the late President of the Board of Trade, that it was met with a somewhat cold reception at first for the representatives of the Dominions, that he, by his eloquence, his much speaking, and his persuasive power, induced them not to refuse the offer of gifts of money which we were to make, and that, finally, they reached unanimity.

The greatest poets are those who are able to plagiarise with success and make the world accept as theirs what they have borrowed from no doubt more obscure persons. I must congratulate the right hon. Gentleman who induced a Labour Government, committed by all their platform declarations, at the General Election against Protectionist schemes—

I am afraid the right hon. Gentleman is out of order. The Financial Resolution limited the scope of this charge, and he is now arguing that Clause 2 ought to go beyond that Financial Resolution, and it is out of order to do so.

On the contrary, it is surely in order to say that the Government ought not to have spent as much as the Financial Resolution allows. I am arguing that the Clause ought not to be in the Bill, which would save the country £5,000,000.

On a point of Order. If the right hon. Gentleman persists in stating that a certain party are committed, or are not committed, to Protectionist proposals, will that not allow a Member of that particular party to point out that from his particular point of view he neither accepts nor rejects Protection?

I cannot allow any discussion on whether a party is or is not committed to Protection. It is quite outside the scope of this Clause.

I do not dispute your ruling. I congratulate my right hon. Friend opposite, I condole with the Government, and I protest against this Clause.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause 3 (Extension of period during which guarantees may he given and remain in force under Overseas Trade Acts, 1920 to 1922) Ordered to stand part of the Bill.

CLAUSE 4.—(Amendment of Section 3 of 13 Geo. 5, c. 4.)

The following Amendment stood on the Order Paper in the name of Major M0ULT0N :

In page 3, line 34, after the word "shall," to insert the words

"subject to the Sudan Government making satisfactory provision for the sale during the period of the loan of the cotton grown on the irrigated land exclusively for the purposes of manufacture within the British empire."

I called on the hon. and gallant Member (Major Moulton), but he was not here to move the Amendment.

Clause ordered to stand part of the Bill.

Clause 5 (Short title) ordered to stand part of the Bill.

NEW CLAUSE.—(Provisions as to Advisory Committee.)

There shall be added to the Advisory Committee nominated by the Treasury under Section one, Sub-section (1), of the Trade Facilities Act, 1921, two representatives of British industries nominated by the President of the Board of Trade and two representatives of labour nominated by the Minister of Labour. —[ Sir Beddoe Rees. ]

Brought up, and read the First time.

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

My only point in moving this new Clause is that I think the Committee that administers the Trade Facilities Act should be extended. That is not a criticism of the three very distinguished gentlemen now forming that Committee. My criticism of the administration of the Act is that it has been from far too narrow a point of view. I think that if we had two representatives who would take the business point of view, and two other representatives who worked at every proposition from the point of view of labour, we would have a much fairer representation, more in keeping with the spirit of the Act, and, I think, one that would make fairer and more generous grants of loans to help industry in this country. "Safety first" is all very fine, in times of fair weather, so far as our industrial system is concerned; but, if we are to try to create jobs, and to reduce unemployment, surely we want to consult the heads of the great industries and the leaders of the great trade unions. If this Act is to be administered in the spirit in which it should be, I fail to see why the Government should object to this Clause.

I strongly object to this proposal. I have just read the report of the meeting of representatives of capital and labour on housing, and I wish to urge my strongest opposition to the addition of two representatives of capital and two representatives of labour to this Committee to spend the taxpayers' money. I would much rather leave it as it is.

I think I have only to state the case in a very few sentences to get the Committee to agree that it would be impossible to accept an Amend- ment of this kind. Strictly speaking, the duty of the Committee of three representatives, all very distinguished men, is to advise the Treasury with regard to the financial character of the proposals which come before them. If we add representatives of either capital or labour, it is perfectly clear that we are adding representatives who are interested directly or indirectly in getting a guarantee. This Amendment would put on the bench, in relation to these schemes, the people who ought to be in the witness-box. That is a short reply to the proposal, and I ask the House not to accept it.

I must confess that I am not satisfied with the reply of the Financial Secretary. In the Debates there has been a great deal of criticism from all parts of the House of the policy pursued by the Advisory Committee. Of course, every critic has been careful to say that he did not desire to cast any reflection upon those who compose the Advisory Committee. I join them in that point of view. Nevertheless, in two cases, to give only two, criticism has been offered in connection with the guarantees that have been given to various companies. It has been suggested from all sides of the House that guarantees have been given to companies which were in a position to raise money in the open market without the support of the credit of the Government or the country. The criticism has been levelled seriously, and has not been answered by the Financial Secretary. On the other hand, we have had proposals by way of Amendments which have suggested that certain industries ought to be excluded, and that other industries might very well be brought in. It seems to me that there is good ground for asking that there should be an extension of the personnel of the Advisory Committee. I see no reason why we should not have upon this Committee some representatives of labour and of capital, as distinct from those who are now on the committee. It is all very well for the Financial Secretary to say that it would be giving a partial character to the Committee, by putting on it those who had some direct interest. The Labour movement, having regard to its growth and the large number of people who have come into it from the outside rather than from the inside, that is from the purely trade union point of view, could obtain such representatives as would satisfy Labour and yet not comply with the peculiar point of view of the Financial Secretary to the Treasury. It would be quite possible to secure representatives from organised industry, from the Capitalist class, who would take an impartial view of their duties. Consequently, having regard to the criticism that has been offered, in the most kindly way, of this Advisory Committee, and the dissatisfaction expressed on all sides of the House with the general policy pursued—[HON. MEMBERS: "No!"] I do not know why hon. Members interrupt me. I put no Amendments on the Paper. I have not withdrawn or failed to move any. I do not propose to be interrupted by those who, at any rate, have not carried out that of which they gave notice on the Paper. I have attended the Debate throughout last night and to-night, and I have taken more than a passing interest in the Amendments, and I am very anxious that the experience that has been gained from the administration of the Acts since the inception of this peculiar type of legislation—legislation which I have never looked upon with great favour because it is mere bolstering of the capitalist system and private enterprise—should not be forgotten. Nevertheless, having regard to the experience we have gained from the administration of the Advisory Committee and from the application, generally speaking, of this legislation, I am anxious we should improve upon the existing arrangements, and the only way in which we can do so is by improving the Advisory Committee itself. It is useless to seek to ignore the importance and value of the Committee. Full power rests with the Committee; it is the Committee which decides whether a scheme is worthy of support or not and whether the credit of the State is to be extended to a particular undertaking or not.

The Committee, in the last analysis, is the deciding body, and that being so, it is desirable that it should be a fully competent body acting in harmony with the experience gathered from past administration. That fact remains and no one can deny it—certainly not the Financial Secretary to the Treasury. [HON. MEMBERS: "Agreed!"] If hon. Members agree with me, they will support me. I am quite willing to Have the support of hon. Members below the Gangway. The Government, on occasion, are equally willing to have it, as indeed they are also willing to have the support of hon. Members opposite. As this Committee has such power it is important that the power should be exercised satisfactorily, but dissatisfaction has been expressed tonight with the policy followed by the Committee in the past. How can that dissatisfaction be removed? It can only be removed in my opinion—[HON. MEMBERS: "Move the rejection."] I do not understand why the hon. Member for Dumbarton Burghs (Mr. Kirkwood) should object to Labour representation on the Committee.

Then why interrupt me? I should have thought my hon. Friend would be one of the first to rise and demand representation for Labour upon this Committee. I may not be as loud as others in my advocacy of Labour principles, but I understand them, and have always stood for working-class representation on every Committee on which it was possible to secure it. I am not moved in any way by the speech of the Financial Secretary. I see ho has left the House. I am informed he has gone to catch his last train, but that is no excuse. I have a train to catch myself. [HON. MEMBERS: "It is gone!"]Despite the interruptions of hon. Members, I do not propose to be diverted from the object which I have risen to support. Hon. Members have referred to Protection, but I want protection for the working classes. I have listened to the speeches of many hon. Members who occupy seats on the benches opposite, and they have increased the doubts in my mind as to the wisdom of many of the provisions in legislation of this kind. If that be so, and if doubt exist in the minds of the hon. Member for Farnham (Mr. A. M. Samuel) and the other hon. Member who sits behind him—

When our Government brought in this Bill, we were urged to bring it in by the members of the hon. Member's party, and it was to please them that we brought it in.

I am not in a position to reply to that, but I know my own views on this matter. I do not know who is going to reply for the Government to my argument. They might think it is not serious, but it is serious from my point of view, and I am entitled to as much consideration as any other hon. Member. The point that I would emphasise is this, that there has been the greatest dissatisfaction expressed in connection with the policy of the Advisory Committee. We can only remove that dissatisfaction either by changing the personnel of the Committee—[An HON. MEMBER: "Sack the lot!"] No, I would not do that, because I would not cast any reflection on what they have done. I believe they have tried—

On a point of Order. Is the hon. Member justified in making the statement that there has been dissatisfaction expressed with the Advisory Committee?

I do not think that is a point of Order. I said there is dissatisfaction, not with the Advisory Committee, but with the policy pursued, and I think we have had two very able illustrations of that in the debate to-night. I am anxious that we should have that representation, which I think it is our right to have, in these matters. We cannot overlook the fact that we are now in office, and that there is a growing volume of opinion in favour of Labour.

The hon. Member should not forget that he is in this Amendment advocating the representation of Capital as well as of Labour.

I am not denying it, I am being generous, and am supporting the Amendment.

If I may say so, finally, and with all seriousness, having regard to the dissatisfaction that has been expressed on the Committee stage of this Bill, the dissatisfaction at the policy pursued by this Advisory Committee; having regard to the great power that rests in their hands, we can only change the policy on the one hand or remove the dissatisfaction on the other by either changing the personnel of the Committee or adding to it. I do not in any way desire to change the personnel of the Committee, but I desire to improve and to increase the representative character of the Committee. I think it can be done by this new Clause.

May I ask whether the Government would give careful attention to this Clause. I think it is a very useful and reasonable one. The question of adding Members is very important. The present personnel of the Committee has worked well, and it has been proved to be very good. The reason of this Bill and of the first Act is to try to reduce unemployment, and who could know better the bearings of a particular proposal than representatives of the two sides engaged in industry? Listening to the views that have been expressed, nobody would ever dream that there was such an industry as the cotton industry in this country. We have heard a great deal about shipping, but nothing about cotton. If we were to have some representatives of capital and labour on this Committee I think they would be of real help. We have decided that no particular section of ships should be segregated from the orbit of this Bill. All ships must be built under it. But not a word has been said about the factories that have been stopped for two years which, after all, ought to be making goods to fill the ships that were going to be built.

I think it is only fair that I should say a word on behalf of my hon. Friend the Financial Secretary to the Treasury. He has had a very hard day in the business of the House from the beginning of the sitting, and at half-past twelve, realising that we had got through all the Clauses of the Bill, he felt he should not miss his train to get home. He had actually replied to the Mover of this new Clause before he left the Committee, and expressed the opinion of the Government upon it I can only say that, whilst I am not even aware of the persons who constitute the Advisory Committee under the Trade Facilities side of this particular Bill, I know, personally, all the Export Credits side. As this Clause does not touch that, I cannot deal with that particular point. I will say to my hon. Friend, who has been so persistent in regard to this Clause, that I agree lb is within the power of the representatives of the Government to consider what additions should be made to the Advisory Committee. I will call the attention of the Financial Secretary to the Treasury to what has been said since he left the House with the idea of seeing if it is possible to add to the Advisory Committee; perhaps not to the full extent of this Clause, but if he wishes to do that he may consider the position in all its bearings. I can only promise to do that.

The Advisory Committee ought to be a perfectly impartial Committee, advising the Government as to what is best to be done in the interests of the State, and I protest very vigorously against any imputation being cast on the work the present Advisory Committee has done. So far from dissatisfaction being expressed, the whole opinion of the House, and especially of those who have been closest in touch with it, has been that every Member of it has done his work exceedingly well.

I have only one point to make on this new Clause. We have had from the Government Benches again this evening further promises of inquiries and further statements by the Financial Secretary to the Treasury. I may say that at the very beginning of the Debate on the Committee stage of the Bill I had promises of a similar kind under which I withdrew an Amendment. Those promises were most adequate, and have never been complied with. The Financial Secretary to the Treasury said at that time he would make further inquiries into the matter and make an additional statement at a later proceeding on this Bill as to what steps he will take. That has never been honoured, and I do not see why we should again take the word of the Government on this point. The Financial Secretary to the Treasury has been unable to remain to deal with this Clause, and I think it is time that these promises with which the Government have passed off so many Amendments of this Bill should no longer be taken seriously.

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

NEW CLAUSE.—(Small Guarantees.)

In order to encourage applications for guarantees of ten thousand pounds or under from limited companies or persons domiciled or residing outside London, provision shall be made for the investigation of the application locally without necessitating the attendance of the applicant or his witnesses in London.—[ Mr. Franklin. ]

Brought up, and read the First time.

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

This Amendment will help the Government to carry out the principles which they propose to stabilise.

On a point of Order. Is the second new Clause—( Provisions as to guarantees )—to be ruled out?

This Clause is proposed with a view to help the Government to carry out their policy, as in the same way Liberals will always be able to find a way to carry out what they tell us they believe. It was said the other day that there is discrimination against those people who are only what I may call small men. We are also told that the small men and big men get equal consideration. As a matter of fact, I daresay they do. Those who act on the Advisory Committee are some of the biggest, most important and best trusted men in the City. But what happens? £25,000 alone has gone to the small men and vast sums have gone to the big. £l to the small man; £2,000 to the big man. I know it is quite possible for the small man to come to town from the country, pay his witnesses and put them up in a first-class hotel if he wants to have a £1,000 or £2,000 guarantee. The expense that all this entails is so great that I venture to propose here that inquiries should be made locally. Matters should be brought up to London after the inquiries have been made. It happens that the only loss that was made was in connection with a brickfield, and I am told, although I cannot vouch for it, that had proper local inquiries been made, instead of having to bring people up to London, we should not have had this loss. I do beg of the Government to accept this Amendment so that it may be possible to have an equal division of the benefits of the credit of this country; that his share may be made possible for the small man, and that we shall not confine our energies to the very large man.

I think I am quite safe in saying that my hon. Friend is under a delusion with regard to what he understands to be the attitude of the Advisory Committee regarding small people. There is no discrimination whatever shown in this matter. The small man has an equal chance.

I did not say discrimination. What I say is that the machinery is in such a state that it is impossible for the small man to get a guarantee.

I may just deal with the point raised by my hon. Friend. On the Second Reading he dealt with Export Credits and said that the business of the State was to help the small man.

I cannot accept the Amendment in its present form, and my hon. Friend may take it that his point is met.

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

Bill reported, without Amendment; to be read the Third time To-morrow.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Tuesday evening, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Ten Minutes before One o'Clock.