Wednesday, 17th June, 1925.

The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.

Marcus, Lord Bearsted, having been created Viscount Bearsted of Maidstone, in the County of Kent—Was (in the usual manner) introduced.

The Right Honourable Sir John Lawrence Baird, Bart., C.M.G., D.S.O., whom His Majesty has signified his intention of promoting to be a Knight Grand Cross of the most distinguished Order of St. Michael and St. George, having been created Baron Stonehaven of Ury, in the County of Kincardine—Was (in the usual manner) introduced.

The Viscount Leverhulme—Sat first in Parliament after the death of his father.

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The noble Lord said: My Lords, the transactions which are the subject of my Question to-day are of grave moment. They have never been debated or adequately explained in either House of Parliament, and I hope I shall have the assistance of the Government and of your Lordships' House in unravelling these very strange transactions. So far as my own investigations have gone, they have led me to these conclusions. Moneys were voted by the British Parliament last year to compensate innocent persons who had suffered injury to their property by the action of the Crown Forces in the disturbed times preceding the truce of July 11, 1921, but by an arrangement made between His Majesty's late Government and the Free State Government behind the back of Parliament, and without any sanction whatever from Parliament, a considerable part of these moneys voted by Parliament for one purpose was diverted to pay compensation to men who were in active rebellion against us, whose property was injured as a direct and necessary result of their own lawless and rebellious action, and who had no conceivable claim to compensation from the British Government.

It is a strange story, and for a proper appreciation of the situation will your Lordships allow me to recall very shortly some notorious facts? In the years 1919, 1920, 1921 and 1922 large parts of Ireland were in open rebellion, and an organised campaign of murder and outrage was carried on by Sinn Feiners and the Irish Republican Army against the Forces of the Crown and the adherents of the British Government. During that time many houses, large and small, belonging to loyalists were burned and looted, and a vast amount of property was destroyed. On the other hand, as indeed was inevitable, injuries were done prior to the truce of July, 1921, by the Crown Forces to the property of non-combatants, and in some cases, in the course of defensive operations, there were reprisals. For these injuries the Malicious Injuries Acts then in force in Ireland—may I remind your Lordships that these were Acts of the British Parliament?—provided compensation, and consequently an Agreement was made in the year 1922 between the British Government and the Free State Government for the assessment and payment of compensation for such malicious injuries.

The substance of the Agreement was this. As to the assessment of the compensation the Wood-Renton Commission was set up and it was to make awards—this is of considerable importance in view of what came afterwards—in cases of

malicious injury, but in cases not coming under that category no compensation was to be paid. I will not trouble your Lordships by reading the whole terms of reference, but I will give the substance of the original terms. This, again, is of great importance, because you will find that these original terms of reference, which were strictly limited, were extended by the late Government without, so far as I can gather, any justification or excuse whatever. The original terms of reference to the Wood-Renton Commission were in substance these—to make awards for fair compensation for injury done to property which would give rise to claims for compensation under the Malicious Injuries Acts, and injuries which were the result of action taken by the military authorities under Martial Law and which, but for the existence of Martial Law, would have been the subject of such claims. That is the provision as to the assessment of compensation.

As to the payment of these awards, the agreement was: That the Free State Government should, in the first instance, pay the total amount of the awards made by the Wood-Renton Commission, but that the British Government should refund to the Irish Free State Government so much of the sums so paid as was attributable to damages done by the Crown Forces or their adherents.

The Wood-Renton Commission sat and made a considerable number of awards, some of which the British Government were clearly liable to pay, and did pay, under the arrangement to which I have referred. But amongst the awards recently made by the Wood-Renton Commission which the British Government have been made liable to pay, and which the British Government have paid, are sums which I think your Lordships will, say are of a very amazing character. I will give your Lordships three illustrations. The first is the case of Padraig O'Maille, who is, I believe, at present the Deputy-Speaker of the Dail and a prominent member of the Free State Government. His house, which stands on a hill near Galway, was used—this was in pre-truce times—to ambush a party of policemen, with the result that one policeman was murdered. My information rather goes to show that several policemen were murdered, but I am quite content to take it that there was only one. Reinforcements come up, drove out the rebels and destroyed the house. When the case was originally brought the British Government objected, that it was not a case of malicious injury at all, but of injury incurred in rebellion; and the claim was disallowed. Under the new terms of reference to the Wood-Renton Commission, on which I shall say a word in a moment, the Commission has awarded and paid Mr. O'Maille £4,000 for the house which was destroyed in the circumstances to which I have referred. This man's house was used to murder policemen and was most properly destroyed by the Forces of the Crown, and the British Government, out of the moneys of the British taxpayer, now pays £4,000 for the house which is so destroyed! I shall await with some interest the explanation of the noble Earl who is to reply on behalf of the Government.

Let me give another case. There is the case of Mrs. Pearse, mother of one of the rebels executed in 1916 for his share in the Rebellion of that year. Her dwelling house, near Dublin, was raided by the military on June 29, 1921, and although it purported to be a school, it was found to be a sort of fortress containing a secret chamber and the headquarters of the present General Mulvaney. Papers were discovered proving that it was the headquarters of the Irish Republican Army, which, as we all know, took part in the campaign of murder at that time; and it was accordingly dismantled. Under the new terms of reference to the Wood-Renton Commission Mrs. Pearse has been paid a large sum of money. I have not been able to ascertain the amount and perhaps the noble Earl will tell me how much it is.

The last case is this. It is the case of Keys MacDonald, a leading rebel, whose whole case was that he was the organiser of a band of rebels, that as the result of his activities as a rebel leader he had to go "on the run," that he suffered damages as a director of certain companies—that he suffered loss because, being on the run, he was unable to attend directors' meetings—and that he incurred expenditure in sending his wife to Germany. He put in a claim that, being on the run, he lost his director's fees and he has been awarded and paid a sum of £8,000.

I wonder how the British taxpayer, when he knows this, will enjoy this application of the money drawn by taxation from his pocket? Each one of these cases was reported in the Morning Post on March 17, 1925, and they have never been questioned in any way. I have made every investigation I can, and I find that they are accurate in all their details. There are, no doubt, other cases, and I hope the noble Earl will furnish us with the details of these other cases. But the fact is that none of these awards were authorised by the original terms of reference to the Wood-Renton Commission. The damage, in respect of which this compensation was granted, was not in the nature of malicious injuries at all, and the question that naturally arises is how these awards ever came to be made. They were made as the result of a transaction which, if it had not occurred, would be almost incredible.

May I tell your Lordships the facts so far as I have ascertained them? It appears that in the Estimates submitted to the British House of Commons in the early part of 1924 there was included a sum, subsequently voted by the House, of nearly £3,000,000—£2,800,000—to meet the liability of the British Government for compensation awarded by the Wood-Renton Commission. This, of course, was for compensation to be awarded by them for malicious injury in accordance with the terms of their reference, which only allowed compensation in cases of malicious injury. The change occurred later. Later in the year claims for compensation to be paid by the British Government were made to the Wood-Renton Commission by rebels, or their dependents, which were not for malicious injuries at all but which arose out of acts necessarily and properly done by the Forces of the Crown in the course of operations against men in active rebellion. I venture to think that claims of that sort were absolutely and wholly unjustifiable from the point of view of equity or of justice. But see what happens. If such claims were to be paid by the Commission it was necessary that the terms of their reference should be altered and extended. The Free State appears to have demanded from the British Government that these terms should be extended so as to take in such cases, and the British Government of that day surrendered to that demand.

The next thing that happened was this. In August, 1924, two members of the then Government went over to Ireland and made an Agreement with the Free State. The precise terms of that Agreement have never been disclosed either in this House or in the House of Commons or, indeed, elsewhere, but this is the substance of it, so far as I can gather. In the first place, it was agreed between the two Governments that the terms of reference to the Wood-Renton Commission should be extended so as to enable them to do that which they could not otherwise have done—namely, to award compensation to rebels whose property, owing to their own actions, had been properly and necessarily destroyed by the Forces of the Crown. In the second place, it was agreed that the British Government should pay the Free State £900,000 in full settlement of all claims upon the British Government for damage done to property in Southern Ireland by the Forces of the Crown.

I have said already that the terms of that Agreement were never disclosed. I presume that they were reduced to writing; an Agreement of that sort could hardly be made by any Government or, indeed, by any individual without being reduced to writing. That Agreement was never sanctioned by or, indeed, even submitted for sanction to, Parliament, I have looked at the records of the House of Commons, and I find that on two occasions Questions as to this Agreement were asked in that House, one on October 2, 1924, and the other on December 16, 1924. I have carefully examined the replies that were given. I do not like to use language stronger than is necessary; suffice it to say that those replies did not disclose the real facts. In particular, they did not disclose the wide and sweeping changes that were to be made in the terms of reference by virtue of this Agreement, nor did they disclose the real nature of the cases which these changes were designed to meet.

I therefore ask His Majesty's Government if they will now publish the terms of this Agreement; I ask if they can tell your Lordships' House why terms of agreement of so far-reaching a character were never submitted to Parliament and never received the sanction of Parliament; and I ask further how this sum of £900,000 was arrived at. This is a large sum, even in these days, to pay over for injuries done by the Forces of the Crown. Who made the estimate? How was it got at? That, no doubt, we shall hear. May I also ask the noble Earl who will reply for the Government how much of this £900,000 has already been paid over to the Free State, and when was it paid? There is another detail which I have no doubt the noble Earl will be able to give us. Was there any correspondence between the Wood-Renton Commission and the Free State Government or our Government when the Wood-Renton Commission found that they could not make these astounding awards under their original terms of reference? If there was such correspondence, I hope that the Government will be good enough to lay it upon the Table.

I told your Lordships that the new terms of reference were never disclosed to the House of Commons or to this House, and it was not until January of this year that these new terms of reference were in any way disclosed to any one. They then appeared, not in any Paper communicated to either House of Parliament, but in a Proclamation, dated January 7 of this year, which was issued by the Governor-General of the Free State. That Proclamation purported to be issued in pursuance of an Agreement with the British Government—no doubt the Agreement of August, 1924—and in point of fact, in an answer given in the House of Commons on February 23 this year, it was stated that this Proclamation of the Governor-General was issued in pursuance of an Agreement between the Free State and our Government. The provisions of that Proclamation are remarkable. They contain new terms of reference to the Wood-Renton Commission on which they would be enabled to make awards which were never contemplated in the original terms of reference or by Parliament when they voted money for paying awards founded upon those original terms of reference.

This matter is, I venture to think, of real constitutional importance, and I hope I may be allowed to tell your Lordships very shortly the main respects in which those original terms of reference were altered. In the first place, the Commission were, in effect, directed to award compensation for injuries to property which were not malicious injuries, which were the only injuries which they could consider under the original terms of reference. That is a very wide change, and not merely a change in substance. This is not a matter of mere money, but a matter of principle, and this is a change of principle. The original terms of reference were to award compensation for malicious injuries. That provision is swept away. The Commission are to award compensation for injuries, whether they be malicious injuries or not. The next alteration was this. The Commission was directed to assume that which was a direct falsehood—namely, that Martial Law prevailed before the truce over the whole 26 counties of Ireland. As a matter of fact Martial Law prevailed, if my memory is right, over only six counties of Southern Ireland. Nevertheless the Commission were told to assume, what is entirely contrary to the fact, that Martial Law prevailed over 26 counties, and the scope of the Commission and its jurisdiction to award compensation were thereby largely increased.

A third alteration made in the terms of reference is in some respects the most surprising of all. The Proclamation materially altered a provision of a British Act of Parliament, which is still on the Statute Book—namely, the Indemnity Act of 1920. That Act specifically provided that compensation should not be payable to any one whose conduct was of a nature—and here I use the words of Part II of the Schedule—

"rendering it necessary for public security that his legal rights should be infringed."

The Proclamation, in effect, repeals this provision, this vital and essential provision of a British Act of Parliament and empowered, and indeed required, the Commission to award compensation to persons who, by the Indemnity Act, were deliberately excluded from compensation altogether. In other words, it gave the Commission power and authority to award compensation to persons whose houses had been used to ambush and murder policemen and whose houses had

been necessarily and properly destroyed in consequence.

On what principle of the Constitution a Proclamation by an Irish Governor-General, even if sanctioned by Government, can repeal an Act of the British Parliament I know not, and the situation is all the more extraordinary in that the effect of that repeal is to cause payments to be made out of the pockets of the British taxpayers to rebels in Ireland which otherwise never could have been made. We now know how these extraordinary awards came to be made. They came to be made by reason, first of all, of the Agreement of August, 1924, between the two Governments, and, secondly, by reason of the Proclamation of the Irish Free State Governor-General.

Upon this set of facts I submit that a most serious position arises. In the first place, it appears that money of the British taxpayer has been applied in paying compensation to rebels in arms against them—payments to those who have been murdering the forces of the Crown, payments which, according to no known rule of equity and justice, were ever paid before or could rightly be paid. In the second place, money was voted by the British Parliament as compensation for malicious injuries. In point of fact, considerable sums out of the money so voted were diverted from the purposes sanctioned by Parliament and applied without sanction to wholly unauthorised purposes for injuries which were not malicious at all. This raises a very serious constitutional question. I thought one of the greatest and most sound principles of our Constitution was that all moneys voted by Parliament should be devoted solely to the purposes for which Parliament intended them, and I was under the impression that it was a grave unconstitutional act for any Minister, behind the back of Parliament, to divert money voted by Parliament to purposes which Parliament had not sanctioned. That is exactly what appears to me to have been done in this case.

The third consideration which arises is even more strange, and that is that after the Indemnity Act, 1920, a British Act of Parliament was partly repealed in order to pay compensation to persons who, by the Act, were expressly prohibited from receiving compensation. Again, I ask what is the justification for this?

May I, in conclusion, ask His Majesty's Government how much British money has been applied to these unauthorised purposes and will they give us an assurance that no more money shall be so applied without the sanction of Parliament? It is quite true that neither this nor any other Government can completely undo the past, but they can, and I think they ought to, ensure that no further misappropriation of money of the British taxpayer shall take place in circumstances such as these. The Papers I move for are:—a copy of the Agreement to pay £900,000; a copy of the Proclamation of January 7, 1925; a copy of the correspondence between the Wood-Renton Commission and the British Government or the Free State Government with reference to the extended terms of reference; and, finally, a Return of the awards made by the Wood-Renton Commission under the new terms of reference, which could not have been made under the old terms of Reference. I beg to move for Papers.

I will not pursue that part of the subject further, because I hope we shall have a full debate upon it on the Motion of the noble Earl, Lord Selborne, on July 2, or whatever be the date on which his Motion comes on. I think the noble Earl will then find that the result is something like this. So far as the compensation granted to loyalists in Ireland is concerned, claims amounting to something like £50,000,000 have been reduced by the Wood-Renton Commission to about £6,000,000 by the various devices which were resorted to for the purpose of making the liabilities of the Free State less. Coming to the claims of those who say they were injured by the British Forces, I would ask your Lordships to note the admission of the noble Earl. That admission justifies completely the course that my noble friend has taken in bringing this matter before the House. The noble Earl had to admit that, at all events as regards two of the cases mentioned by my noble friend, the British taxpayer had to pay, and it is solely as a British taxpayer that I speak upon this subject, because I have given up all interest whatsoever in the Free State. I despair of putting clown Motions and Resolutions in order to get any facts of any kind that are reliable from the Government. But I would ask your Lordships to mark the admission of the noble Earl, and I hope the British taxpayer will mark it, because it is his money that is being spent. It shows that all this talk of the Chancellor of the Exchequer about money being short is all nonsense.

Look at what is being done with the money. Here is the first case, the case of Padraig O'Maille, Deputy-Speaker of the Dail. His house stood on a hill near Galway, and that house was used to ambush a party of policemen, with the result that some of the policemen were murdered. Thereupon reinforcements of the Crown came up and destroyed the house, which had been the ambush of murderers. A claim was made against the British Government to pay for the destruction of that house as a malicious injury. The Wood-Renton Commission refused to award anything, saying it was not a malicious injury. I do not suppose there, is a lawyer in the world who could honestly find otherwise. Thereupon, under the new arrangement made by the Government last year, a claim was made by Mr. O'Maille, and he was awarded the sum of £4,000 for the destruction of his house in which were ambushed and murdered a number of British policemen. And the British Government pay him not only without remonstrance, but at the same time pay a compliment to the Free State Government and the Wood-Renton Commission for the manner in which they carry out their work. I venture to say that that is an unparalleled transaction in the history of any country.

When I used the word "unparalleled" in that connection I overlooked the next case that I am going to quote. Really, if it had not been admitted by the. noble Earl, I myself, imaginative Irishman that I am, could not have believed it to be true. But it is admitted; and here it is. Keys MacDonald was a leading rebel. His whole case was that he was the organiser of a band of volunteers and that as a result of his activity as a rebel leader he had to go "on the run." He suffered damage by search; that is to say, that the police were looking for him; and as a director of certain companies he suffered loss because, being "on the run," he was unable to attend directors' meetings. Also he incurred expenses in sending his wife to Germany. He made a claim against the British taxpayer before the Wood-Renton Commission and they refused it. But the late Government having entered into the Agreement of June, which changed the whole matter, he made a renewed application, and he was awarded for the loss of his fees as a company director and the loss of his breath through being "on the run," a sum of £8,000, to be paid by the British taxpayer. And it has been paid, I understand.

That is not all. What was it to be paid out of? It was to be paid out of a sum of money voted by Parliament in respect of compensation awards for malicious injuries. The Wood-Renton Commission hold that it was not malicious injury, whereupon the late Government enter into a new Agreement in order to bring it within the terms of reference to the Wood-Renton Commission and, without going back to Parliament, take £8,000 for this man and £4,000 for the other of the British taxpayer's money and pay these amounts out of money voted for an entirely different purpose. They have never explained this fact to the House of Commons up to this time; and for this reason: It was not necessary for them to go back and get the money from the House of Commons, they had it in their hands, voted for a particular purpose, and they paid it out for an entirely different purpose, as the noble Earl has just observed.

In any sort of business, if the share holders' money was applied in that kind of way the directors would be in the dock, but, of course, great and omnipotent Governments, Liberal, Labour and Tory, can do what they like. Each backs up the other; one is just as bad as the other, or worse, when it comes to matters of this kind. The whole truth is that all Governments put over every Department of Government this one motto "Peace in our time, O Lord!" Rather than have a row with the Irish Free State Government and the man "on the run," they give him £8,000 and shut his mouth. Surely that would satisfy him—and it did. But no eloquent verbiage, no mixing up of these Agreements, or any long statements, can get over the real facts of this matter. I cannot understand why the Government does not state squarely and fairly the real facts. Everybody who has had any connection with Ireland, any one like myself, who has at least on an average fifty or sixty complaints per week from Ireland to deal with, knows what the facts are quite well. The only people who never seem to know the facts are the Government; at least they never state them.

What are the facts in this case? An Agreement was entered into, as the noble Earl rightly said, under which fair compensation was to be paid under enactments relating to malicious injuries. It went on to say that the Irish Government should first pay all the awards and that the British Government should undertake to reimburse the Irish Free State Government such portion as may be agreed upon betwen the two Governments as the amount of damage done to property on account of the Irish political movement being brought into account. Then came the Wood-Renton Commission, on which we had that eloquent panegyric from the noble Earl, and it has on the face of it these words: "being destruction or injuries of such a nature as would give rise to a claim for compensation under the Acts relating to compensation for criminal or malicious injuries in Ireland." The Wood-Renton Commission proceeded with their work, and I will tell your Lordships now what was done. I know the whole story by heart. They proceeded with these compensation cases. The British Government had certain representatives on the Commission; why do they not ask those representatives whether this is not the truth? Parliament voted nearly £3,000,000 in 1923 for the purpose of paying anticipated compensation for damage clone by British troops in eases of malicious injury.

Compensation cases came practically to an end, as the noble Earl has said, somewhere about last June, but then suddenly there arose a new idea in the Irish Free State; and it was this—" Why should we not get compensation for injuries that were done, not malicious injuries, but injuries done in carrying out the law of the country?" And so Mr. O'Maille puts forward his claim for his ambush house, just in the same way as did another man, I forget his name, who had a stable at the back of Merrion Street—I know the spot quite well because I used to live in that district myself—which he turned into a place for the manufacture of bombs for blowing up British troops. And they blew up several British troops and police. Unfortunately the British soldiers and police got wind of the fact that the bombs which were blowing them up came from this house, and they went and blew up the house and the bombs. He said: "Why should I not be paid for malicious injury to my bomb manufactory?" He put in a claim for £800. I do not know whether this case has been disposed of. Great ingenuity was shown—I could give you the name of the counsel employed in the case. He said: "Why this is a good point to make." They argued it all out, and got all the facts before the Wood-Renton Commission and the Government. There is a shorthand note of the whole proceedings from beginning to end. Perhaps the noble Earl will put these notes on the Table of the House, but first of all have them put into longhand, as most of us would rather read them in that form.

It was held that these were not malicious injuries. That did not suit them at all and they began to kick up the usual now with the British Government. They always know that the softest thing in the world is the British Government when they are dealing with British taxpayers' money and are afraid of the Free State in Ireland becoming a Republic. They come up to the Government and say: "We shall never be able to prevent a Republic unless you give us more money, and we have a ready way of using it now. There are a lot of very decent fellows who had bomb factories and ambush houses for shooting your police and your soldiers, and these poor fellows have suffered. Their houses were actually blown up. Just think what your troops did! Far better had they allowed themselves to be shot and murdered. Now we want you to let these poor people come in under the Wood-Renton Commission." "Right you are!" reply the British Government. "Rather than have a Republic, of course we will. How much will it cost?" I suppose figures were

bandied to and fro. My noble friend says that there was so much correspondence that the British Government cannot afford to publish it. I do not wonder, after the payment of that £8,000 to the man who lost his director's fees. At all events, in the end it came down to this. They said: "Let us wind up the whole thing. What do you say to £900,000? It will look better than £1,000,000." It is the kind of thing you see in a shop—11¾ d. instead of a round Sum.

The noble Lord opposite (Lord Arnold) had a good deal to do with these financial transactions or, at any rate, he had something to do with Ireland. I do not know exactly how they divided the business, but I know, for one thing, that he was always most just in trying to remedy any cases that were brought before him. I will say that. His Government arrived at a round sum which, after all, was not much—only £900,000. I ask my noble friend Lord Clarendon this: Will be lay upon Table of this House the claims that were before the Government for this £900,000? There were two great men meeting together, probably the President of the Free State and, I suppose, somebody from the Treasury or the Colonial Office. I do not suppose the conversation by which they arrived at a fixed sum ran like this: "What do you say to £100,000?" To which the other replies: "Oh, make it £200,000." And at last one of them suggests £900,000. "Done," says the other, and the matter was over. Will the noble Earl tell us what they had before them upon which to base the figure of £900,000? I challenge him to do this, because it will disclose, or ought to disclose, the real natare of the transaction upon which the £900,000 was based—the arrangement for giving away the British taxpayers' money to recompense men who used their property which was destroyed in Ireland for the purpose of murdering British troops and British police. You may go round and round this case over and over again; you may wrap it up in discussions of these Agreements and these disagreements; but the broad fact remains, as everybody in Ireland knows, just as well as they know there is a Free State, that this money is allocated for the very purpose of compensating these people.

There is another point which I will reserve for the discussion on Lord Selborne's Motion. All this was going on at a time when every device was being put forward, without the slightest protest, so far as I can make out, from the British Government, to prevent compensation to any reasonable amount ever reaching those who had lost their property, not because they were rebels against this country, but because they were foolish enough to be loyal. This is a Question which is long overdue. It has never been properly discussed, and, for my own part, I am bound to express my personal dissatisfaction at the manner in which the Colonial Office, which, I suppose, has charge of this matter, has ventured to put this information before the country.

Motion, by leave, withdrawn.

Moved, That the Draft Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the British Gas Light Company, Limited, with respect to the Trowbridge undertaking of that company, which was presented on the 20th May and published, be approved. —( The Earl of Clarendon.)

On Question, Motion agreed to.

Moved, That the Draft Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Mayor, aldermen and burgesses of the Town and County of Haverfordwest, which was presented on the 11th May and published, be approved.—( The Earl of Clarendon.)

On Question, Motion agreed to.

The noble Lord said: My Lords, those of your Lordships who take an interest in the revival of the penny postage and in my efforts to bring it about in the interests of trade, commerce and employment, will notice that I have no longer directed my Question to the representative of the Post Office in your Lordships' House, because it is admitted on all hands that all recent Postmasters-General, with the exception, perhaps, of my noble friend Lord Illingworth, required no pressure, but unanimously declared in favour of the policy of an immediate restoration of the penny post. This question is no longer one for the Post Office or the Board of Trade, because both Departments are strong supporters of an immediate return to the penny postage. It seems to me now to be purely a question to be decided by the Treasury and the Chancellor of the Exchequer, and all future responsibility in the matter must be placed upon them. If I read my Question to your Lordships, you will see clearly that it is with the Chancellor of the Exchequer alone that the prospect of success rests.

In thanking the present Postmaster-General for receiving a deputation upon this subject from the Chamber of Commerce, it may interest your Lordships to know that I said:—

"We have a really good strong Chancellor of the Exchequer, and if he is as courageous in office as on the platform, you will not have much difficulty in persuading him not to wait six months, but to let us have a restoration of the penny postage at once."

I said those few words to encourage the Postmaster-General, who was thoroughly sympathetic with and enthusiastic for the penny postage. So far, unfortunately, I have been disappointed; but I hope that the answer I shall receive from the noble Lord who is to reply to my Question this afternoon will show that I was justified in my original high confidence in the Chancellor of the Exchequer.

As I have already told your Lordships, my Question is directed to the representative of the Chancellor of the Exchequer and not of the Postmaster-General. With my colleagues who are members of the Chamber of Commerce I have had a good deal to do in almost educating several past Postmasters-General from the state of no particular knowledge of the penny postage to becoming real converts to it. My Question is in these terms:

"To ask the representative of the Chancellor of the Exchequer whether his attention has been drawn to the recent remarks of the President of the Board of Trade in which he stated that there never was a time when advertising, real advertising, was more urgently needed by British industry, and would pay it more certainly than to-day; and whether in view of this statement and of the representations made by Chambers of Commerce and other bodies throughout the country the Chancellor of the Exchequer will state what further evidence he desires to assure him that the restoration of penny postage will prove not only advantageous to commerce but remunerative to the Treasury and to the country; and whether, in view of the fact that high postage is such an impediment to commerce, he will take steps to remove this impediment and so enable the suggestions of the President of the Board of Trade to be carried out by the commercial community; and whether the Chancellor of the Exchequer has not now sufficient evidence to enable him to reintroduce penny postage, and, if so, on what date he proposes to re-introduce it."

I believe that the advisers of the Postmaster-General and the Advisory Committee which he or his predecessor set up are all in favour of this reform, and that the only obstacle to it is to be found at the Treasury. I would like to suggest that the Chancellor of the Exchequer should take a long view of this question. By restoring cheap postage he will find a means of bringing more income into the national Exchequer. Trade has declined in various directions, as nobody knows better than himself. One has only to look at the published returns of unemployment to find that during the week ending June 1 there were an additional 60,000 persons unemployed. It was stated in this morning's paper that the return during the week ending June 8 showed that a further 43,894 men, women or children, whatever they may be, were unemployed. It is my opinion that high postage rates do not mean relief to unemployment. On the contrary, I think that high postage rates bring about unemployment.

Whenever we ask for a return to a cheaper postage we are invariably told that it will cost £5,000,000 a year. On the other hand, competent business men, members of chambers of commerce all over the country, have come to the unanimous conclusion that they do not believe it. From time to time we have asked for an explanation of the statement about the £5,000,000—because that is the only objection, so far as I have been able to gather, that has ever been made to putting a penny postage into immediate operation—and we have received no information. This afternoon I am to have the pleasure of being answered by another noble Lord, and I dare say he also has been told something about this £5,000,000, and I most earnestly hope—I cannot say that I conscientiously believe that he will be able to do it—that he will give us information as to how this £5,000,000 is made up, because really competent men of business in the country disbelieve the statement altogether.

I intend to give your Lordships a few figures to show the effect of doubling the postage on the one hand and of reducing it on the other. They are rather interesting figures. I know, of course, that the advisers of the Chancellor of the Exchequer still believe that if a penny postage is introduced it will result in a loss; but I would like to draw your Lordships' attention to the fact that the New Zealand Government restored the penny postage at a time when a deficit was anticipated and that there was no deficit at all. On the contrary, there was a profit. Your Lordships will no doubt remember that the suggestions of Rowland Hill were regarded as madness and that very great success followed his efforts. In those days there was opposition from the Post Office authorities. I am not saying anything about them now because they are all in favour of an immediate return to a penny postage.

As I say, in New Zealand its restoration was a real gain to the Exchequer, and the business men of this country believe that the Treasury would gain in the same way, instead of there being a loss. They believe that it would enable 300,000,000 more packages to be sent through the post—this is the estimate of the Postmaster-General himself—and would assist in bringing about what we all desire—a restoration of good trade. It will be remembered that in 1921 when the postage was increased to 2 d. the nation's correspondence fell by 389,000,000 packets in one year. That was a terrible blow to commerce, and those who really appreciate what a great commercial carries the Post Office is will see that such a reduction in the number of packets sent through the post must considerably reduce the business of the country which, as the President of the Board of Trade has said, "requires real advertising." In 1922 the postage was reduced to 1½ d. The Post Office that year had a surplus of £4,500,000, and in 1924 there was a surplus of £5,000,000.

As regards this estimated loss of £5,000,000 the business men of the country would like to know how the Chancellor of the Exchequer arrives at that figure. They would like to know also whether, in arriving at his decision, he has taken into consideration that this figure is only an estimate. We have no definite information, and if the noble Lord is going to give me that information to-night I shall he very grateful for it. This estimate of £5,000,000 has been given to the country for three or four years, but when we ask how it is made up we can never get any answer, although it is admitted that it is quite possible the estimate may be wrong. In arriving at his decision, has the Chancellor of the Exchequer taken into account the increased revenue that would be derived from the better trade which would result from penny postage? Even if there were a loss in one direction would not that loss be more than compensated for by a gain in another direction? One Postmaster-General has admitted that there would be an increase of 300,000,000 packets sent by post. At the same time he said that was an estimate, and that it was possible the number might be 600,000,000 packets.

I know, of course, that there are a number of people who do not want penny postage. The noble Duke opposite says: "I do not want a penny post; I want it to be half-a-crown; I do not want any letters." I realise that there may be certain great industries which have no use for the penny post. On the other hand, there are millions and millions of people who do appreciate penny postage, and who would like to see it reintroduced. Those who want to see the Dominions and the Mother Country brought closer together advocate it, knowing what a great advantage it would be for that purpose, and knowing also what a potent influence it is in bringing together members of families residing in different parts of the Empire, and also in bringing together people of different nations. There is no doubt whatever that penny postage has been the greatest possible blessing and advantage to our country.

I do not propose to occupy the time of your Lordships much longer, but before I sit down I should like to quote a few of the opinions of men whose views on this subject are well worth having. I will not quote again the opinion of the President of the Board of Trade. He is a Minister who has taken a very active part in connection with our overseas Dominions for many years. He came in contact with the business men oversea and, as President of the Board of Trade, I should think he would cordially approve of the observations which I have made this afternoon. He realises how hard it is for him, as President of the Board of Trade, to increase the trade of the country without the assistance of penny postage. I do not know whether he has brought any influence to bear upon the Chancellor of the Exchequer. I once took the liberty of saying to a Chancellor of the Exchequer: "I hope you will kindly look into this matter of the £5,000,000 yourself, because to a business man it is a ridiculous suggestion."

Sir Edward Manville, who formerly represented Coventry in Parliament, and is an ex-President of the Associated Chambers of Commerce, Chairman of the British Imperial Council of Commerce, and one of the Postmaster-General's Advisory Committee, is reported to have said this two or three days ago:—

"That the commercial men of the Empire set a very high value on Imperial penny postage could not be gainsaid. Disappointment that the home Government had not seen their way to grant penny postage was general, but the feeling was unquestionably more acute amongst those whose business it was to trade with our Empire oversea, for it could hardly be doubted that the Dominions oversea would soon follow the lead of the Mother Country. For the time being, however, New Zealand, Jamaica and Bermuda stood alone in setting an example to the rest of the Empire."

All those countries have adopted penny postage, and they cannot understand why we do not do so. Sir Edward Manville went on:—

"So far as Great Britain was concerned one observation observation might be allowed. There did not appear to be any logical reason why a national service like the Post Office should show a profit. It was cheering, no doubt, from the point of view of the Chancellor of the Exchequer, but by far the largest contribution to the postal revenue was made by the commercial community, upon whom the so-called profit was, therefore, in reality a tax."

I am sorry Sir Edward is not now a member of the House of Commons, for he is a great commercial man, and I am sure it would be an advantage to the country if he could be returned to Parliament.

Then Sir Felix Schuster, at the Bankers' dinner, proposing the toast of His Majesty's Ministers a few days ago, referred to the Budget and said—

"The Government, without seriously reducing Revenue, might have returned to penny postage and a penny cheque stamp."

I may state that a return to the penny cheque stamp is desired by the commercial community. It is considered in financial quarters that it would be of the greatest possible service in trade. At the annual meetting of the London Chamber of Commerce a few days ago, Mr. Barclay, one of our great bankers, said:

"A penny post would make the Post Office a better paying concern, if only the Post Office would reorganise itself on the lines of modern businesses. But that was almost a sine qua non. They were keeping the penny post away from them not because it was in itself a bad bargain to make, but because their system was so bad that they could not command the resources with which to manage penny post. This, however, could be remedied."

I have given your Lordships the quotations from these business men because their opinions are really worth having upon the subject.

I hope that His Majesty's Government will consider this as a serious question. I do not make this kind of speech for any advertising purposes myself, but because, having been much associated with chambers of commerce, and having been president of the London Chamber and Vice-President of the National Chamber, I know how keenly business men feel on this subject, and how much they desire that the great work they are doing should be assisted by a return to penny postage. It would have been of much greater advantage to the country to have returned to penny postage than to have relieved the Entertainments Tax to the extent of £5,000,000. When £5,000,000 were at disposal it would have been of the greatest possible advantage to the country to have utilised that sum by reducing the rate of postage, thereby doing something to reduce unemployment.

The Government do not seem to realise what a great advantage cheap postage may be to the commercial community. When these millions and millions of postal packets are circulated they make business. There is no doubt that the President of the Board of Trade is quite right in telling the people of this country that business and trade will not increase and develop unless they put energy and activity into it, as well as advertising, and I suggest that the Postmaster-General should back up the President of the Board of Trade and come to the conclusion that in the best interests of this country, in the best interests of the trade and commerce of this country, penny postage should be restored.

House adjourned at twenty-five minutes to seven o'clock.