OVERSEAS TRADE [CREDITS AND INSURANCE].

HC Deb 12 April 1920 vol 127 cc1395-443

Considered in Committee.

[Progress, 23rd March, 1920.]

[Sir E. CORNWALL in the Chair.]

Motion made, and Question again proposed, That it is expedient to authorise the granting of credits and the undertaking of insurances for the purpose of re-establishing overseas trade and the payment, out of moneys provided by Parliament, of any sums required for granting credits for such purpose up to an amount not exceeding at any one time twenty-six million pounds and of any expenses incurred by the Board of Trade in connection with the granting of such credits and the undertaking of insurances so far as those expenses are not defrayed out of sums received by the Board by way of commission in respect of credits or by way of premiums in respect of insurances."—[Mr. Baldwin.]

Sir D. MACLEAN rose—

Sir F. BANBURY

On a point of Order. I want to move an Amendment before the hon. Member (Mr. G. Locker-Lampson) moves the Amendment which stands in his name. He desires to leave out the words "twenty-six million" in order to insert another figure. I desire to leave out some words before we get to the words "twenty-six million". I want to leave out the words "at any one time" in order to insert the words "in all". As the Resolution stands it may sanction at various times an overdraft of £26,000,000, or whatever sum may be put in afterwards. My object is to put in words which will ensure that, whatever sum this House agrees upon, that sum cannot be exceeded. That would not in any way interfere with the hon. Member's Amendment. In view of the present financial state of the country we ought to be very careful before we give even my hon. Friend (Mr. Bridgman)—in whom I have very great confidence—power to spend millions of money on these various experiments.

Sir D. MACLEAN

I understood that the right hon. Gentleman rose on a point of Order.

Sir F. BANBURY

I understood that the Deputy-Chairman had accepted my Amendment.

The DEPUTY-CHAIRMAN

It is true that the right hon. Gentleman rose to a point of Order and to explain his point, and as no other hon. or right hon. Member got up to move an Amendment in front of the right hon. Gentleman's-Amendment, he has a right to go on I take it there are no hon. Members who wish to make an Amendment in front of the right hon. Baronet's Amendment.

Sir D. MACLEAN

I am quite willing to waive the fact that you called upon me first in favour of my right hon. Friend.

Sir F. BANBURY

I will give way to my right hon. Friend if he wishes to move an Amendment. If not, I beg to move to leave out the words "at any one time" and to insert instead thereof the words "in all".

Lieut.-Commander KENWORTHY

I hope the Government will accept the Amendment. It is worthy of notice that this Committee stage, which has already produced two interesting Amendments, one from the right hon. Baronet and one from the hon. Member (Mr. G. Locker-Lampson), was attempted to be smuggled through at the end of our last sitting at a late hour, apparently as a small matter in which the House would not be interested. If I read the Amendment correctly, the £26,000,000 could be granted six times or more in a year. There seems to be no limit to the sum of money, except that no one firm, or no one undertaking, or no one export trade, must have more than £26,000,000 at the particular time. If that is the case, it is a very large sum to put at the disposal of the Government. The Committee ought to support the right hon. Gentleman's Amendment.

Lieut.-Colonel J. WARD

As one who remembers the thousands of millions that have been voted by the House of Commons during the last five or six years for destructive purposes, for destroying the trade not only of our own country but that of other countries as well, I consider it an anomaly that therepresentative of the City of London (Sir F. Banbury), who is more interested in the revival of our oversea trade than any other community in the world, should be pressing a limitation of this proposal for the rehabilitation of our oversea trade. Surely the right hon. Baronet, if he were speaking on behalf of the City of London—

Sir F. BANBURY

I am speaking on behalf of economy which is absolutely necessary.

Lieut.-Colonel WARD

As far as the hon. Baronet's constituents are concerned, it is certain that they will look askance at his opposition to the principle of this Motion. No one in the City of London, I am certain, is in favour of reducing the sum from £26,000,000 to the miserable sum of £300,000 a year. There is not, I imagine, a labour representative who will support the principle involved in the right hon. Baronet's Motion. Those who want to see the oversea trade of the country rehabilitated, and who want to see our industrial position restored to what it was before the war, will be in favour of in creasing the amount. If the right hon. Baronet could show that the sum now asked for is going to be spent in a way that will not secure the desired result everyone would agree with him, but, having seen the terrible condition of our trade all around the world, owing to our inability to carry on our trade during the last five years, I would not in any circumstances give a vote for limiting within reason the sum to be devoted to this particular purpose.

Sir D. MACLEAN

My hon. and gallant Friend (Lieut.-Colonel Ward) has indicated—a result which comes from the flinging about of thousands of millions of pounds during the War—how difficult it is to bring ourselves back to the fact that we have arrived at a time when we must consider these things not from the point of view of appeals to national sentiment, but from the point of view of the business man. It is as a business man that I understand my right hon. Friend has moved this very proper Amendment. For that reason as a business man I propose to support him. On the general proposal it is quite impossible for export trade, with the wholly disorganised commercial entities now in existence in many parts of Europe, to be restored to normal business conditions. Therefore, if this is to be done, we must take some abnormal steps, and I think it good business to do so. I have not any fundamental objection to the proposal of the Government, but I want to approach it from the other point of view, as to whether it goes too far. I think that it does.

As far as I can gather from a hasty perusal of the Report of the Debate which took place on the 24th of March, the proposal was made in the first instance on the 8th of September, and more than six months afterwards, on the 24th of March, there had only be advanced under the authority granted by the Supplementary Estimate a sum of £13,334. There was a Supplementary Estimate in round figures for a sum of £300,000. Now the Government come before us on these figures and as their original proposal stands, subject to the Amendment of my right hon. Friend, they are asking us, on a state of facts which has not altered in any material degree since the 24th of March, to give them authority at any one time to advance up to £26,000,000. I am not prepared to do that. I am prepared to support a proposal to give a reasonable and moderate sum, or a proposal which on the broad outlook from the business point of view appears to be sound, but the sum of £26,000,000 is far too much. Let the Government take an amount which might reasonably be expected to carry them over the year, on any reasonable expectation founded on the experience which they have already had during the last six months, of what is likely to be required, and then come back later on with their further experience and ask for any further money that may be necessary to carry on. I understand that that is the object of my right hon. Friend, and it ought to be the object of everyone who considers these things from the business point of view, with the larger view which we must take in these matters. I hope that, if my right hon. Friend's Amendment is not accepted, another Amendment will be moved to modify materially the sum which is now being asked for.

Sir F. BANBURY

I do not think that the hon. and gallant Gentleman (Lieut.-Colonel Ward) quite understood my Amendment. It is simply this—I am not at all sure that it is not also the intention of the Government—to make it quite clear that in no circumstances can the Government make advances of more than £26,000,000, unless they come first to the Committee and ask for more. With reference to the £26,000,000, I agree with my right hon. Friend (Sir D. Maclean) that it is a great deal more than seems necessary. All I desire to do is to preserve to this House the right of saying how much money is to be spent, and not to give the Government a free hand. The latter course might have been right during the War, when we were fighting for our lives and did not want to be killed because of lack of sufficient ammunition or guns. If ever we are to get back our commercial supremacy we must get it back by our own unaided efforts and not by the help of subsidies taken out of people's pockets. I have never been in favour of subsidies; they are the worst form of Protection. I do not think the hon. Member wants more than £26,000,000, but his words are not clear. My words are clear. I am sure the representative of the Government will agree that it is far better, in a Resolution of this sort, to have everything so clear that it is capable of being understood even by foolish people like myself.

Mr. G. LOCKER-LAMPSON

I should like to ask, on a point of Order, whether on this Amendment one can deal with the whole Question raised by this Resolution or whether it will be necessary to wait until my Amendment is moved. I put down my Amendment solely for the purpose of raising the whole Question.

The DEPUTY-CHAIRMAN

I do not think the hon. Member can discuss the whole question on this Amendment. In so far as he refers to the leaving out of the words "any one time" and the inserting of the words "in all," or refers to what "in all" means, or what "any one time" means, he would be in order.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE: (Mr. Bridge-man)

The intention of the Government is exactly that of the right hon. Baronet (Sir F. Banbury). The intention is that "there should never be at any moment, outstanding, more than the £26,000,000. The words that are put in the Resolution are, I admit, somewhat ambiguous. They were put in in order that if a part of this money was repaid it could be re-issued again to the total amount of £26,000,000, and used over and over again until the end of the six years, which terminates the arrangement. I do not think it would quite do to put in the words "in all," for that would probably prevent the money being re-issued. If the hon. Baronet would leave out the word "one" I think it would meet his view.

Sir F. BANBURY

I beg to ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Amendment made: Leave out the word "one" ["at any one time"].—(Sir F. Banbury.)

Mr. G. LOCKER-LAMPSON

I beg to move, to leave out the words "twenty-six million" and to insert instead thereof the words "two hundred and ninety-nine thousand".

I move this Amendment in order to raise a more general Debate. I object very much to the way in which this proposal is being made. A White Paper was issued the other day purporting to explain exactly what this was intended to do. I do not know whether hon. Members have-seen it. It covers only about half a sheet of paper, and is very much on the same lines as a White Paper, issued recently, purporting to give information about the Unemployment Insurance Bill, which practically copied, word for word in facsimile, the memorandum at the head of the Bill itself. There is absolutely no information in this White Paper. It simply gives the total sum, it talks a little about insurance-against risks, but it does not tell us for whom this money is wanted or what articles it is supposed to cover. After reading the White Paper one would be no wiser than at the beginning. Apart from that, no information has been given in any Government speeches. On two occasions before Easter this resolution was brought in very late at night. On the first occasion a representative of the Treasury was present, but he gave only about a quarter of a column to this very important Resolution. In fact, he gave so little information that the House insisted upon the postponement of the Resolution. On the second occasion, three days later, my hon. Friend who represents the Board of Trade made rather a longer speech than that of the representative of the Treasury, but practically he gave us no information whatever. The Financial Secretary to the Treasury in the short speech he made told us that in all probability this expenditure of money would lead to a charge upon the State. I hope hon. Members do not think that we are merely advancing money which will be repaid in full at some future date. It is quite clear from what the Financial Secretary said on the first occasion that that probably will not be so. These are his words: It is only fair to remember that, owing to unforeseen circumstances through the prolongation of disturbed conditions in these countries, it may be possible that there will be an ultimate charge on the Exchequer. That is a subject that may be argued and discussed when the Bill is before the House. The representative of the Board of Trade also made it quite clear that there would be a considerable period of time before even the good debts were paid, because he said: This scheme was devised for lending money to sellers in those countries to enable them to wait for three years before they got payment from the countries to which they were exporters. Therefore it is quite clear that not only will there very likely be an ultimate loss, but that for many years at least we shall not see the money repaid by the people to whom it is advanced.

We have not been told by the Government who these traders are to be. We have not the slightest idea as to the type of person to whom this money is to be advanced, whether they are to be substantial men or people who have been failures at home and want to dispose of goods which they have failed to sell in this country owing to lack of business ability.

Mr. BRIDGEMAN

I did mention that all these transactions were to be done through a bank.

Mr. LOCKER-LAMPSON

After all, the Government really must take responsibility in these cases. We are being asked to spend public money. It is the Treasury which is responsible and not some bank.

Mr. BRIDGEMAN

The hon. Gentleman was trying to make out that there was no safeguard against lending this money to quite irresponsible people, who wanted to get rid of goods they could not sell anywhere else. That could never be the case, because no advance can be made to them without getting the bank first of all to recommend it.

4.0 P.M.

Mr. LOCKER-LAMPSON

When a bank is lending other people's money, it probably will not be quite so careful as it would be in lending its own money. We do not in the least know what they are going to export. We have been told about one or two items. I think the Government mentioned that they were going to export locomotives. I should have thought that it would have been much more useful to have made use of the locomotives in this country than to export them at the present time. We were told the other day by the hon. Member who represents the Board of Trade, that £299,000 had already been sanctioned by the Government. His words were these: Sanction has so far been given for advances of £299,000 odd, of which the amount actually taken is £13,000; and the amount which has lapsed and in respect of which there is no longer any liability is £168,000 odd. In addition to this, provisional sanction has been given for over £1,250,000, and it is not yet known if the applicants can secure the necessary guarantees. What sanction has the Government for giving leave to advance this money? I asked that the other day, and the hon. Gentleman said that I must look at the Estimates. I looked at the original Estimates and there was nothing there. I then looked at the Supplementary Estimates, and on page 80 I found among the unclassified services a sum of only £100,000. It seems to me, therefore, that the Government ought not to have gone beyond £100,000 in sanctioning advances. After all, surely the Government ought to-get the leave of this House before sanctioning advances to any taxpayers, whoever they may be. The Government, however, has already given leave, and I suppose there is nothing more to be done. They have already promised, and they will advance this money, and to the extent of that sum, therefore, we are more or less in their hands. The Chancellor of the Exchequer, not so long ago, said that he was watching the way in which the Departments were spending public money He said: I cannot help thinking, after listening to the speeches of hon. Members, that if they saw the work in progress they would be both astonished and pleased to see how much knowledge and zeal is applied to the consideration of these matters, and how much care is given to them. They would then, I believe, have a more comfortable feeling about financial control. I have not at all a comfortable feeling about financial control at the present time. I believe that there is very little financial control over the various Departments by the Chancellor of the Exchequer, and I do not believe that you can ever have control unless you have in every Department a Treasury official who cannot be dismissed except with the consent of the Chancellor of the Exchequer himself. I should very much like to ask my hon. Friend, the Parliamentary Secretary to the Board of Trade, whether any more money has been spent than that which he mentioned in answer to a question the other day. How much money has been actually spent? If he can tell us, we shall be able to see the extra money to which this House apparently has given no sanction. This Amendment will give my hon. Friend an opportunity of telling us really rather more about this question than he told us the other day. I have no wish to divide, if he can satisfy the House that this enormous sum of £26,000,000 is really necessary and is going to be properly spent.

Major Sir PHILIP LLOYD-GREAME

I think that the speech of the mover of the Amendment, if I may say so, was a singularly short-sighted one. He seems to have made a certain number of researches, but if he had inspected the "Board of Trade Gazette" week by week he would have seen the circumstances under which these advances are made. They show the security for which the Government calls from the foreign country. It is a very stringent security indeed. There is the guarantee of a foreign bank of very considerable repute and on the top of that there is a deposit of the currency of the country of 15 per cent. in excess of the sterling equivalent of the amount advanced. Therefore, the risk which we are asked to take really is not a very considerable risk. I ought to say that, because this has been presented to the Committee as if the Committee were asked to sanction a gift of £26,000,000 of the taxpayers' money. The proposal is nothing of the kind. The proposal is that up to £26,000,000 there should be a revolving credit, and that revolving credit is being safeguarded in the most strict way possible in these various countries. The speech of the proposer of this Amendment would lead one to think that this country was simply being driven back into paying its way by taking in its own washing. It is impossible to get the trade of Europe going without doing something of this kind, and it is untrue to suggest that this is backing a lack of initiative on the part of traders in this country. The traders have to go out and make their contracts in those countries, they have to send out their circulars, and they have to satisfy the purchasers in those countries, in the keenest competition with America and other countries, that the goods which they are sending are of a quality and price which are fair. It is only then that the Government steps in.

I am absolutely opposed to the Amendment, and I think, when you look at what has to be done, when you look at the condition of the whole of Central Europe, £26,000,000 is really not a large credit. One wants to be sure that the money is going to be expended on the most essential articles to get those countries going. All the States in Central Europe are reduced to a condition in which they can only be got going again in one of two ways. Of course, you can give them unlimited credit through the British Treasury, but the only result is that they come back time after time and say: "We really cannot get going, and you must extend the credit a little longer." That is imposible. When you get beyond that, one of two things must happen. You either get into a pure system of bargaining, and have to exchange the commodities which we send for the commodities which they have or which they can make at a comparatively short notice, or you can supply them with raw material and get them to manufacture, as has been done on a small scale, the proceeds being shared between the vendors in this country as suppliers of the raw material, and the manufacturers in those countries. Whichever of those two courses you take, it is absolutely essential to get the transport system in those countries going. You have to make those countries see that the false economic barriers between them must be broken down. I want to be sure that is being done in the spending of this £26,000,000. Take Poland, for instance. There is a superfluity of raw wool in this country. If you get the raw material manufactured on the Continent of Europe, it is going to make the woollen goods in this country cheaper for the constituents of the hon. Member for Wood Green (Mr. Locker-Lampson) to buy.

Mr. LOCKER-LAMPSON

The hon. and gallant Gentleman speaks as though I were opposing this Vote. I have merely moved the Amendment, in order to get some information.

Sir P. LLOYD-GREAME

I am glad to hear it, because from the Amendment on the Paper I gathered that it was the intention of the hon. Member to limit this to £299,000.

Mr. LOCKER-LAMPSON

That is the exact sum that they have already spent.

Sir P. LLOYD-GREAME

I quite accept what my hon. Friend says, though I do not think he expressed it in such a way as to convey that he was altogether in favour of the proposal. I was taking the case of Poland. You want to get your wool manufactured on commission in Poland. The whole key of the Polish situation is the financing of the railway to Danzig. Until you have that railway working the position is impossible. You have in other parts of Europe commodities which can be brought to this country practically for barter and exchange. The thing that is holding it up is the lack of rolling stock, and any rolling stock which you send to these small countries is not going to be used to real advantage unless it can be sent over the borders of those countries to bring commodities from the places where they are and thus have a general movement. I am quite sure, with the jealousies which exist at the present moment between those small countries and with the economic barriers which they have set up, that the last thing in the world which they would be prepared to do without some form of control would be to allow their railway arteries to be used as real railway arteries.

Mr. A. M. SAMUEL

Would the hon. and gallant Gentleman say what commodities we can get out of these Central European countries?

Sir P. LLOYD-GREAME

Certainly. From Rumania we can get maize at once, probably corn in a very few months, flax, and a very considerable quantity of oil. I understand that the Rumanian Government are prepared to sanction the export of a certain amount of those commodities. Unless some control is going to be exercised, I do not believe that this £26,000,000 will be spent to the best advantage. There are two possible ways in which the Board of Trade could make these advances more effective. It could either limit the articles for which advances are to be made to real essential articles of reconstruction, or it could make it a condition, in the case of rolling stock at any rate, that it is to be used for the general purposes of Europe and not for purely isolated cases. There is a much wider alternative, and I should like to know if the Government have considered it, and that is whether, during this period of transition, as far as rolling stock is concerned, it would not be better to sell these commodities direct to the Economic Council of the League of Nations so that they could be used during the period of reconstruction in Europe for the whole of Europe and then earmarked afterwards for the various countries when those countries got established. I have only risen to raise the general question. I am perfectly certain that the Government ought to give this credit, and that it is not only reasonable but absolutely necessary. I do not think that the sum asked for is in any way excessive. I am not in the least surprised that only £299,000 or £300,000 has been used in the actual period to which my hon. Friend referred as it always takes a considerable time to get schemes of this kind going. Secondly, as I understand, the Government advances are only made against shipping documents from this counry, so that the trader has got to go out, make his contract, place his orders in this country where the goods have to be manufactured, and it is only when those goods are actually exported to the foreign country that the advance comes to be made. Therefore it is really no test to say that only £300,000 has been spent. I think that 26,000,000 as revolving credit is a perfectly reasonable sum. I hope that the President of the Board of Trade will let us know if he has considered what steps can be taken to confine this 26,000,000 to the really essential articles, and to make sure that they are going to be used for the reconstruction of Central Europe as a whole, and not for isolated countries.

Mr. SUGDEN

I rise to support the proposal made by the Government, and I do so as representing not only an industrial constituency, but a constituency which is the very centre of the principal export trade of this country. If we are to have that equipose of the exchanges which is vitally essential for the well being, not only of our own country, but of the countries of our Allies who have supported us in the stress and strain of War, then it is necessary that our Government should at any rate bring forward certain financial proposals that shall make it possible for us to trade with our Allies who have been hardly stressed during war-time, and also to open out once again the great industries which exist in the county Palatine of Lancashire. Something has been said about the necessity of opening out certain industrial work on behalf of the labour in some of our Allied countries, but I suggest that we have labour in our own country which desires to be utilised in the production of those things which are essential for other countries, and which I think we can make use of to the full without sundry certain raw materials as an hon. Member suggested, namely, wool to other countries. There are cotton, wool, leather, and the great machinery trades, four of the greatest industrial trades and industries upon which vitally hangs the industrial prosperity and well-being of this country, particularly of the working classes, and also the well-being of our Allies. What, may I ask, is being done by the workers themselves in respect of these matters? There is more money being put into the cotton trade by the working classes than in any industry in any other country in the world. Again the employing classes are now formulating plans to the amount of £20,000,000 to ensure supplies to such industry, and what then is this 26,000,000 which the Government propose to utilise for guaranteeing payment for the products of industry and labour when they are produced, which some hon. Member seemed to think was too much when we recollect that one section of a great industrial community is prepared to find the money I have mentioned. As well as the employing classes, the labouring classes are putting up the same amount in that industry and are joining hands with the employers to produce and send forth the goods which are wanted. But if the cotton goods are to be made and cotton yarn to be exported, we have got to be sure that when they get to Bulgaria, Turkey, Serbia, and many other European States, that they will be paid for. As also woollen goods and machinery.

Lieut. - Commander KENWORTHY

What about Bulgaria?

Mr. SUGDEN

I prefer to pursue the subject in my own way, and I think I know a little more about this than the hon. and gallant Gentleman does. The credit which is being brought forward by the Government is distinctly for the type of trade to which I am referring, and it is both for the small countries and our Allies, such as France, who are prepared to take our goods if we can arrange for a solid method of prompt payment. If the great cotton trade which is one of the greatest export trades in the country is to be in a position to fight cheap labour in late enemy countries as well also in Eastern countries, and which is being utilised on the Continent then we must have our credit assured in the Balkans and elsewhere as well as in the Eastern markets. I therefore suggest that this sum of 26 millions is by no means sufficient to do the work. Something has been said about wool, but we are to-day in the position that while we can get wool we cannot sell unless credit is properly protected, and that remark applies also to leather goods and to the machinery trade which is, I need scarcely remind the House, a tremendous trade. In respect to suggestions which have been made I can assure the House, speaking as a plain ordinary business man, that in the conduct of our business we do not require assistance from either pro-Consuls or the Consular service, and if they give us freedom then with our practical business training and with the goodwill of our labour (the best in the world) we can enter into competition with even the great American business experts. We certainly do feel that it is absolutely essential that this financial credit should be established. If that is done, there will be a near and a surer day coming which will make it possible for the great splendid heroisms of the war days to be applied in the more prosaic days of peace, and which will lead to greater usefulness and a larger output which will be for the benefit of all sections of the community. It is for those reasons that I submit this credit is desirable.

Sir D. MACLEAN

The speech to which we have just listened is one of which I hope my right hon. Friend and his colleagues will take note as an illustration of some of the dangers of proposals of this kind, because the hon. Gentleman is very anxious not only to get his 26,000,000 but possibly 260,000,000 or 2,600,000,000 more in order to help the cotton trade or other industries in their efforts to have a monopoly of the world's business. If every hon. Member representing an industrial constituency makes a similar claim, what is to be the position? That is not the Government proposal at all, and as the hon. Member for Hendon (Sir P. Lloyd-Greame) pointed out, this proposal is not to subsidise the cotton industry or any other industry, but to enable certain specified areas of Europe which are now utterly incapable of getting themselves going commercially to do so once again. That is the proposal, as I understand it, and on those lines there is a very great deal to be said for it. You cannot trade with them on the assumption that you will not give them any credit unless they pay in cash or in six months or in a year. The thing is to put them on their legs again, from the larger view of the development of an area in Europe which is at present helpless and hopeless. I would remind hon. Gentlemen who have spoken of the great danger there is as to the use to which any credits of this kind may be put. We, unfortunately, know that credits which have already been granted for commercial usage have been promptly handed to military forces who are starting little wars of their own.

The PRESIDENT of the BOARD of TRADE (Sir R. Horne) indicated dissent.

Sir D. MACLEAN

I am quite sure that any sums which are being utilised in that way were very carefully safeguarded. I am only indicating the dangers which at present exist, and what has been done, and I know what I am speaking about. I have some knowledge of the matter, and I say that is going on in these countries and requires the very greatest care to prevent its perpetuation. I am sure that the Committee as a whole is indebted to the hon. Member for Wood Green (Mr. G. Locker-Lampson) for the Amendment he has moved. But I think he will agree with me, on the assumption that one has some amount of agreement with the proposal, that the amount which he proposes is rather too small., If the hon. Gentleman would withdraw his Amendment I propose to move another which I think would put the discussion upon a real practical basis. I would propose to substitute ten or twelve millions instead of twenty-six millions, and then, as the thing develops, the Government can come back to the House again and get further necessary sums if the work achieved justifies such a course.

Mr. LOCKER-LAMPSON

I am quite prepared to withdraw my Amendment, and thus make way for the right hon. Gentleman.

Sir H. COWAN

Will the right hon. Gentleman mind telling the House how the figure of 26 millions is arrived at?—

The DEPUTY-CHAIRMAN

It is better to dispose of this Amendment first.

Amendment, by leave, withdrawn.

Sir D. MACLEAN

I beg to move to leave out the words "twenty-six" and to insert thereof the word "ten."

The Committee is in a rather unfortunate position, because we cannot have the terms of the Bill before us while discussing this Resolution. I think there is some justification for the complaint that a reasoned and complete statement was not made to the Committee in the first instance. I propose that the sum should be limited to £10,000,000, and when we have the Bill before us we will see as far as we can that the measure is adjusted to the purposes upon which I think the majority of Committee desire the principle to be applied. What need is there to subsidise the export trade of this country at the present moment? Instead of canvassing for orders, all merchants who export anything which the world really wants have to brush away the buyers from their doors. On the basis upon which, as I understand it, this proposal is made, that it is essential that these distressed communities should be assisted upon their commercial feet, and on that basis alone do I give any measure of support to this proposal, reserving, of course, all my rights when the Bill comes before us to move any Amendments which I may think necessary in order to limit the scope of the operations of the measure. I hope the Government will meet what I think is a very reasonable proposal. You have not advanced more than £30,000 at the present moment, and by this time next year you cannot anywhere near exhaust the sum I propose to grant, but even if you do you can bring up a Supplementary Estimate, and next year, with the whole of the experience be-hind you, you can come down here with a businesslike proposal in a businesslike way.

Lord ROBERT CECIL

I think, in the first place, my hon. Friend opposite, the Member for Wood Green (Mr. G. Locker-Lampson) is to be congratulated on having raised this question, because it is evident that, however much you may sympathise with and approve of the general policy involved in the Resolution—and I am one of those who do approve of it—yet it is quite clear that it is very important that every financial transaction in which this House is engaged should be very carefully watched. I rather hope in spite of that that my right hon. Friend opposite will not persist even in his Amendment. I think it is quite right to limit the amount of money to be spent on this to what ultimately proves to be necessary, but it is very difficult, it seems to me, to foresee how much is required in the course of the next year, and it might well be that it will be desirable to lay out even as large a sum as the Government are asking for. Moreover, all that this Resolution does it to put an external limit beyond which you cannot go in the Bill, and if when we come to discuss the Bill we find it really is incredible that they can want as much as £26,000,000, I apprehend that it will be quite possible for the House in Committee on that Bill to limit the amount that may be spent. It cannot increase it beyond the sum in this Resolution, but it can always bring it down, and I should be very sorry to do anything at this stage, and until we have had the thing thoroughly thrashed out, to hamper this policy in any way. I am so profoundly convinced that it is of the first interest—to put it only on that ground, though I would put it higher myself—to the prosperity of this country that we should restore the stricken countries in Europe to something like a normal condition that I should be prepared for very drastic and extensive proposals of the Government if they saw their way clear to bring them forward.

I do not think it is possible to exaggerate the economic dangers that threaten Europe at the present time. You may use the most extreme and apparently exaggerated language, and you will still be short of the truth. At least, that is my view, and therefore I should look with great apprehension—indeed, I could not do it—to supporting any Amendment which limited the proposals which the Government thought necessary to bring forward. I most fully agree with what my hon. and gallant Friend behind me (Sir P. Lloyd-Greame) said, that it is well worth the Government's consideration whether they should not take the opportunity of using this grant in order to induce a more reasonable behaviour on the part of some of the smaller States in Central Europe. That is a thing which I personally, if the Government saw their way to giving themselves that kind of power, either directly or through the League of Nations, should welcome. I am sure it is fantastic for us to try and help financially some of these countries which are simply throwing their money into the sea with warlike preparations on account of reasons which have not the slightest foundation in good sense or good policy, and I should be very glad to see considerable restraint put upon the exaggerated views of these powers. I do not agree with the policy which the Leader of the House has more than once apparently committed himself to, that we have no interest in whether peace is made or is not made in Central Europe, and that we can stand by and allow these countries still further to drive themselves into ruin. Therefore I should be glad to see some conditions of that kind put on this grant. I also agree that it would be very desirable—and I hope the Government will consider whether it is possible to do something of the kind—to insist on the breaking down of tariff and other similar barriers which these new States have erected between themselves. What they are doing is insane. They are cutting their own throats as hard as ever they can. They were already very nearly cut by the operations of the War, and if somebody could snatch the knife out of their hands, by this means or any other, I am sure it would be a most desirable thing to do. I also agree that anything that can be done to improve transit is of importance, but I do not quite see how you can use the grant to do that.

I am thinking of the general restoration of European trade and the general re-establishment of normal peace conditions. It is not a question of artificially increasing the exports of any of these firms. There is one other matter which I think will have to be considered. I do not know whether it is part of the policy—I hope it is—to furnish these credits for the purpose of renewing trade with such countries as Austria; but if it is, the Government will have to consider the effect of the reparation terms of the Treaty. There is no doubt that we shall discuss this question on Wednesday, and I shall not do more than mention it now, but at the present time you have so arranged your financial terms that until the Reparation Commission takes some action everything you put into Austria or Hungary simply goes into the Reparation Fund and becomes useless for any purpose of restoring normal economic conditions. That is a matter which I hope the Government will consider very carefully in connection with this grant. I venture to hope that the House will approve of the general policy of this proposal and vote for the Resolution as it stands, leaving any further limitations and conditions to be imposed by the Bill, and I trust, if my right hon. Friend (Sir D. Maclean) does not think me impertinent in doing so, that he will consider whether he cannot withdraw his Amendment in that sense. I quite agree that very little money has yet been granted, but you have hardly began to restore peace yet. You have not ratified the treaties which affect Central Europe at all. With the exception of Poland, they are all still in the condition substantially in which they were left at the time of the conclusion of the Armistice. Once you begin to get things going, I hope they will go fairly rapidly. If they do not, we are face to face with economic disaster, for unless you can get things to move rapidly the condition is hopeless, and therefore I hope my right hon. Friend will not at this stage think it necessary to cut down the sum proposed by the Government. I trust the House will accept the Resolution, which I am sure is in the interests of this country, of Europe, and of the world at large.

Sir J. BUTCHER

I think the Committee as a whole are clearly in favour of the principle of this Resolution, but, speaking for myself and for some others, we should like a little more information as to the exact modus operandi when this money is granted. We have not got the Bill before us, and I do not know whether it is in order for the Bill to be brought in—

Mr. BRIDGEMAN

It cannot be introduced until we have got this Motion.

Sir J. BUTCHER

Then that makes it all the more necessary that we should know what we are voting for now. To whom are these credits to be given? The Resolution does not say and does not limit in any way the persons or firms or Governments to whom they are to be given. Do I understand they are only to be given to British firms, or are they to be given to foreign firms as well, or are the credits to be given to foreign Governments? Would it not be well to put into the Resolution some words to show to whom the credits are to be given?

Sir R. HORNE

The Bill will do that. It is perfectly clear that credits will only be granted to British firms.

Sir J. BUTCHER

That removes a doubt. If the credit is to be given to a British firm, I presume in most cases it will be given to a British seller of goods in this country, in this way, that the solvency of the foreign purchaser will be guaranteed, or that, at any rate, it will be made certain that the British seller of goods will get his money from the British Government if not from the foreign purchaser. If my hon. and gallant Friend the Member for Hendon (Sir P. Lloyd-Greame) is right, I do not see the necessity for this guarantee at all, for he claimed they are going to give the most stringent guarantees for the payment of the money.

Sir P. LLOYD-GREAME

For ultimate payment. The point I made was that payment to the exporter is made on the spot against the goods exported. The security that the purchaser will pay is very strict, but the actual payment will not take place till two or three years later.

Sir J. BUTCHER

As I understand, the British seller is to be guaranteed by the guarantee of foreign banks, in addition to which a like currency of that foreign country is to be deposited in the bank with a certain margin—15 per cent. or so—in order to secure the payment when the date of payment arrives. If that is the arrangement why should not the British exporters be satisfied with that? My hon. Friend will no doubt explain why this guarantee is necessary in addition. Then I should like to know, also, whether advances are to be made to British purchasers as well as to British sellers. If the British purchaser desires to get goods from a foreign country, can he have money advanced to him to enable him to purchase the goods? Under the terms of the Resolution it seems to me that can be done, because it says "granting of credits and the undertaking of insurances for the purpose of re-establishing overseas trade." Perhaps my hon. Friend will tell me whether the purchaser in this country is to have money advanced to him in order to enable him to buy or not.

Mr. BRIDGEMAN

The seller.

Sir J. BUTCHER

I am glad to learn that the credits are not to be given to British firms who want to purchase goods in foreign countries. We are whittling it down gradually, and I am very glad to know the exact nature of the liabilities we are undertaking in this Resolution. I think we should also be glad to know as to the sort of articles which are to be exported under this Government guarantee. I think someone in the course of these Debates said that locomotives were to be exported. If that is so, I think it is a little dangerous. We want locomotives very badly in this country. I see the Minister of Transport here, and I know he is anxious to get as many locomotives and wagons as possible in order to remove goods from the docks. When complaint has been made of the great congestion in some of the docks, we have been told that it is due to want of locomotives, to want of wagons, and, in some cases, I grant you, to want of drivers. Therefore, I should be glad if the Board of Trade would tell us the sort of articles which are to be exported, payment for which they are going to guarantee. I think there are a great many articles which would pay the exporter to export, but it would not pay us as a nation very well that they should be exported. Therefore, no doubt, my right hon. Friend will indicate that nothing will be exported under the guarantee which is required for our own necessities. When we hear, as I have no doubt we shall, an explanation from the Government upon these points, we shall perhaps be in a better position to judge whether £26,000,000 is too much, or whether we should limit it as is proposed.

Mr. MYERS

Every speaker upon this question up to now has given support in general terms to the principle embodied in the proposals. I rise to take the other side, and strike the other note. I do hope that no Member in this House will support these proposals on the ground stated by the hon. Member, namely, that they will have the support of the working-class population of the country. If I understand working-class sentiment in this country, they would not support a proposal of this character.

Mr. SUGDEN

And we speak with equal assurance.

Mr. MYERS

If it is contended that proposals of this kind should be put into operation for the purpose of meeting competition of cheap labour on the Continent, it strikes me as a dangerous innovation, and an exceedingly wide door to open. I think we are also entitled to ask for some measure of consistency on the part of hon. Members of this House. When the hon. Baronet, the Member for the City of London (Sir F. Banbury), and the right hon. Member for Peebles (Sir D. Maclean) are in agreement upon any particular question—

Sir F. BANBURY

You may be certain it is right.

Mr. MYERS

The plain man may be pardoned for enquiring what is going to happen. During the past few months we have heard at various times, on both sides of the House, protests and objections of every kind against Government interference with trade, embargoes, control, restriction, and interference of every sort. I suggest that these proposals are generally the same in principle as many of the things to which objection has been taken. We have not been told whether there has been any demand made by the traders of the country for these proposals to be put into operation. I would rather suggest that trade and industry of the country object to be spoon-fed by proposals of this character. But the basis of my objection is on other lines. The Select Committee on War Wealth, in its Report, set forth the fact that 340,000 people have increased their wealth during the period of the War by over £4,000,000,000. That is the product of trade and commerce of this country. The necessities of the community and the requirements of the State have been made the hunting-ground for profiteers in every department of industrial and commercial activity, and, after these colossal profits have been made, we have a proposal put before this House to cover the traders of the country to the extent of £26,000,000, or whatever sum may be accepted—an insignificant item in comparison with the great profits that have been made during the War period. It comes to this, that at a time when these profits could be made, these profits were accepted, and now when it is a question of an element of risk entering into trading operations, Government assistance has to be procured. Is it contended that the trade and commerce of the country, from a private interest point of view, have broken down? Are we to understand that trade and commerce can only work now under favourable conditions, and that as soon as unfavourable circumstances arise, the Government has to come to the assistance? If we are to understand that, it is as well the House should know. No, I rather suggest that it has been a question of the traders of the country taking the profits under favourable conditions, and that now the Government have been called upon to cover the losses when conditions are not quite so favourable. I want to suggest that, under the present conditions of trading in this country, the Government are not called upon in the name of the taxpayers to undertake any such obligation.

Mr. BRIDGEMAN

Perhaps it would be better if, at this point, I were to answer some of the questions that have been put in the course of the discussion this afternoon. My hon. Friend the Member for Wood Green (Mr. G. Locker-Lampson), who moved the first Amendment, complained very much that the White Paper was too short, that the speech of my hon. Friend the Secretary to the Treasury was too short, that my speech on a previous occasion was too short, and he was altogether dissatisfied with the brevity of everything. I have already apologised for the fact that when this Resolution first came forward, I was not aware it was coming on, and I was not here, and, the Financial Secretary, understanding there was no opposition, undertook to try to pilot it through the House. On the second occasion it was taken some time between 10 and 11 o'clock, and I did then explain, at as much length as was possible, most of the points which hon. Members who have come here for the first time to-day, like my hon. and learned Friend the Member for York (Sir J. Butcher), represent as having been carefully concealed from them up to this moment. If they had been here that evening they would not have had to ask nearly so many questions. The same remark applies to the hon. Member for Wood Green, and as he is not here I think I had better pass to the general Debate which has taken place. There seems to have been a fear in the minds of some people that there is going to be a very great loss on this scheme. My hon. and gallant Friend the Member for Hendon (Sir P. Lloyd-Greame) explained that the conditions of the advances had already been in the "Board of Trade Journal," and were such as to secure, as far as possible, that there would be no loss on these transactions.

Mr. KILEY

Cannot the information be circulated to Members of the House?

Mr. BRIDGEMAN

Anybody can read the "Board of Trade Journal" who has the mind for it. I should have thought it was one of the works which the hon. Member would have read every morning. The matter has been explained by my hon. and gallant Friend. The purchaser in a foreign country has to take up a Bill of Lading, and make a deposit with an agent approved by us in the currency of the country, calculated on the basis of the exchange, plus a margin which has been stated roughly at 15 per cent., which will have to be maintained. That will be held as security. They will have to pay interest at one point above Bank Bate, so that the hon. Member is quite wrong in assuming that we should be sending out the whole of the money without any interest. Those who get the advances made to them—the sellers in this country—have to pay a commission, which commission is intended to be used to meet the expenses of the Department which works it, and any possible losses that may accrue. It is impossible to say there will not be any losses, but we feel that very great and adequate safeguards are inserted in these rules. Really, the question is not so much—

Sir F. BANBURY

Who is going to do this discounting business?

Mr. BRIDGEMAN

A Department under the Board of Trade, coupled with a gentleman in the banking world who. I have no doubt, is well known to my right hon. Friend.

Mr. KILEY

What is his name?

5.0 P.M.

Mr. BRIDGEMAN

Mr. Davis. But the real question is, are we, or are we not, to extend a helping hand to these countries which have been crushed by the War? There is also the question of it being advantageous to our trade. It might lead us to get a footing in the trade of countries where we had not got one before, and it might be very valuable later, at a time when those countries are recovering, and when, possibly, trade with other countries from here is falling off. I should also like to remind the Committee that a similar advance is to be made by the United States, only a much larger sum—$1,000,000,000. This has been set aside for the purpose by the Government of the United States, to be administered by' the War Finance Organisation, to grant assistance to the export trade. So that they are already engaged in the very same operation as ourselves. I should also like to add that the Supreme Council emphasise very strongly the need of giving credit to these shattered countries in order to give them some chance of restarting The hon. and learned Member for York asked whether this would be limited to British firms and sellers in this country. Yes, the advances will be so limited. The hon. Member for Spen Valley talked about spoon-feeding trade and so on. When it appears that up to the present moment, as has already been said, only a very small sum has been advanced, it does not seem that the traders of the country are tumbling over one another for this assistance. That does not, however, prove that at some coming time applications will not be much more numerous than now. There are other markets very much easier to get at by the traders of this country. So far, the articles on which money has been lent have been mainly textiles, cottons, woollens, iron and steel manufactures, rubber manufactures, leather goods, and electrical goods. One hon. Member spoke about rolling stock and made a very interesting suggestion on this subject. If it were possible in any way to make use of these credits m order to see that the goods supplied were used not for selfish and purely internal purposes in the countries to which they were sent we should be very glad; certainly this aspect of the matter will be considered. So far I do not know that any actual money has been spent on the export of rolling stock, but there are agricultural machinery and other things which we hope will be useful.

Now, as regards the amount. Those who are keenly interested in this subject, like the Noble Lord (Lord R. Cecil), would have liked a very much larger sum, but the Treasury is the final arbiter in these matters, and the figure of £26,000,000 was put down, after consideration, as a reasonable sum which we might expect to be spent in the course of the six years for which these credits will run. I am bound to say that if we are giving this money to be of any use in these countries we cannot very well ask for less; and if the traders of this country do not come and ask for this assistance, then the money will not be spent. In any case, the whole transaction, as will be seen in the Bill when presented, will be terminable in six years. The separate credits are for three years. To come with a supplementary estimate, which is what the right hon. Gentleman opposite suggests, if the £10,000,000 proposed is not enough, is, as he knows perfectly well, a very inconvenient method of proceeding. When he comes to think that this money is supposed to be revolving credits for a number of years, I hope he will agree that £26,000,000 is not an excessive sum, especially when he takes into consideration the fact that assistance will only be granted after very careful scrutiny in each case, and only if there is a genuine demand for trade. I hope, therefore, he will not press the Amendment, but will allow the House to pass this Resolution. Further discussion may take place on the Bill, which cannot be introduced until this Money Resolution has been passed.

Mr. GEORGE ROBERTS

I think it to be made perfectly clear that by this Resolution it is not contemplated to assist British traders. It is not desired at all for that purpose. I have some Know ledge of its inception, and this money is for the purpose of assisting various shattered countries in Europe to rehabilitate themselves.

Mr. MYERS

It does not say so!

Mr. ROBERTS

If my hon. Friend will listen to me. I think I shall be able to show him how the thing stands. Immediately the Armistice was signed, charity had to be bestowed upon these peoples, and it looked as if that was going to be a continuous process. As a Member of the Supreme Economic Council, I can say that that Council very soon became aware of this fact, that unless these people could be persuaded to settle down and work for themselves there was no hope for them, but their destruction was absolutely sure. We have asked time after time for these credits to be given. The Supreme Economic Council is not a body interested in the British trader as such. It is a body representative of every Allied nation and contains amongst its number men holding all shades of political opinion. They were at least agreed upon this: that the Allied countries ought to give credits in order to restore these other countries. Mr hon. Friend opposite opposed this Motion because he felt it was detrimental to the British working classes. I approve of the Motion from the opposite point of view. It is certain that until Europe is settled, and these countries get down to the position of maintaining themselves and of having surpluses to dispose of the cost of living in this country can never lower. That is the main fact to keep in mind, and the reason why, therefore, I support this Motion is that it is in the direct interests of the British working classes. Until these various countries, by our help, are able to cultivate their own soil and produce in their own factories and so to diminish the shortage in the world there is no possibility of the cost of living lowering in this country. Might I express the hope that my right hon. Friend the Member for Peebles will withdraw his Amendment. It would be a very graceful act on his part. I am certain it would have a very good effect on opinion in every European country, for let us keep the point perfectly clear in our minds: that it is not a British demand behind this Motion; it is an Allied demand. It originally emanated from the Supreme Economic Council, a body which has done extremely valuable work in assisting these distressed countries in recent times. A Bill founded upon this Resolution is absolutely necessary if these countries are to be restored to anything like their normal productive capacities. As the Noble Lord, the Member for Hitchin pointed out, even though this sum is passed to-day, it does not bind the House. When the Bill is introduced, and the whole question discussed, if it appears that the sum asked for is not fully justified the House can reduce it. The main fact for which the right hon. Gentleman opposite is fighting is that the House should maintain its control over finance, but that can be assured without carrying opposition to its extreme. As a late Member of the Supreme Economic Council, and as one having been brought into direct contact with the needs of these countries, and with, I think, a full appreciation of the facts, I desire to say that simply to dole out charity to these countries is absolutely useless. What help, however, we can afford them, to inspire them to settle down themselves; and to produce what is needed for home and export purposes we ought to do. I hope the Resolution will be unanimously adopted.

Colonel WEDGWOOD

It is perfectly delightful to listen in this year 1920 to this series of beautiful free-trade speeches from Members opposite. I do not know how the Member for Hendon will be able to reconcile his speech to-day with that, for instance, of his co-director Mr. Dudley Docker, but that is a matter, I suppose, of domestic concern. After listening to the right hon. Gentleman the Member for Norwich I can only hope that he will repeat these beautiful sentiments about building-up German trade and imports into this country and the cheapening of the necessaries of life in this country, when he stands up for further protection for that industry with which he has recently become associated. After all, these speeches are matters of universal application, and not merely when this particular Government measure is brought forward. I am particularly interested in this Government measure for a reason which has not been noticed by any previous speaker, though it is reasonable on the face of it. Here we have the great anti-Socialist, anti-Bolshevik Government introducing —what? Introducing a State Trading Bill with a capital of £26,000,000. They are talking about a revolving credit, a beautiful new term of £26,000,000. What is it in effect? In effect it is nothing more or less than starting a Government Bank, a State Bank, for assisting foreign trade, with a capital of £26,000,000. The proposal has this little difference from a State Bank proper—that in the first place it is run at a loss, though I see no reason why it should be, but we will talk about this later; and, in the second place, the administration of this Bank is curtailed to six years. No doubt there are certain circumstances in which a State bank may prove useful, but I think the directors should be elected by the community, and we should know their names. A State bank controlling £26,000,000 is an extremely dangerous instrument. You may have any amount of favouritism and a direction of the funds towards supporting industries like the cotton industry, or the leather industry, or the manufacture of railway wagons, and all those who are loudest in their demands in this House and the privacy of the Board of Trade may get more assistance than they ought to get from a State bank. I think this State bank should have representatives of the public upon it from this House, who will be able to portion out with some fairness the amount of assistance they are to get from the bank.

Why is this new State bank to be run at a loss? Why should it not be run like any other bank? I see that they are charging the minimum of 6 per cent. on the discount business and making arrangements for security which seem to be fairly good, although a margin of 15 per cent. with the exchange fluctuating as it is in France, may involve the Government in severe losses. Still, it is run upon ordinary business lines as far as possible. Certainly the bank ought to arrange to make sufficient profit to cover its losses and the expense of management. I think a State bank should be made a self-supporting institution with the risks and the cost of management taken into account, and there ought to be a certain amount of public control and not simply an official of the Board of Trade, and then you would have an institution which might not only assist the smashed countries through our export and import trade as producers, but it would give us a hint as to the road by which we might ultimately break that great banking monopoly in this country which is strangling not only trade but the whole industry and commerce of this country. I welcome this measure not only because I think there is something to be said for a State bank, but because it is the first word that has been said by any of our successful Allies in a practical direction for re-establishing the east of Europe. I hope this may be a forerunner of better things. The parallel of America which has been drawn is not accurate, because that is not a State bank but an amalgamation of the banks themselves. This is the first time one of the Allies have taken in hand the development of Germany industry in order that we may get cheaper German goods in this country, and I am very glad that the hon. Member for York supports this proposal.

Sir J. BUTCHER

I did not say a word about Germany, and I was only thinking of other countries.

Colonel WEDGWOOD

We want cheap goods and to keep down the cost of living, and to-day the Tariff Reform Members have made Free Trade speeches. I congratulate the Government upon the establishment of a State bank to break the banking monopoly.

Sir F. BANBURY

I suggest to the hon. and gallant Member who has just spoken that he has given a misnomer to this new institution, because I should call it more of a discount house than a bank. What is going to be done with the assistance of the expert gentlemen who are supposed to receive a good salary is to discount certain bills present to members of the cotton trade who sell goods at a high price to somebody else, and this proposal is in order that they may have the guarantee of the Government to get a good profit and run no risk. I do not understand this propsal from the taxpayer's point of view and I do not see where he comes in. I should have thought that the cotton trade had made enough money during the last few years without bringing in the taxpayer to their assistance. That is one reason why certain Members support this Bill.

I know there are other reasons apparently totally different which have been brought forward by the right hon. Gentleman the Member for Hitchin (Lord R. Cecil) and the right hon. Gentleman the Member for Norwich (Mr. G. Roberts), and they are mostly charitable reasons. They say they are anxious to support distressed countries, but they did not tell us whether they desired to support such countries as Bulgaria, Turkey or Germany. I should like to know why the British taxpayer should be called upon to support people who have killed most of our relations, and caused us a debt of £8,000,000,000. They brought this trouble upon themselves, and why should we be called upon to support them. I believe the right hon. Gentleman opposite is right when he said that the true reason is not to assist British trade, because that is merely by-play, but it is to advance money to these foreign countries for charitable reasons. I was under the impression that this proposal was going to do some good to British trade, and I intended to support it with the addition of safeguards. I do not approve of the Government interfering with trade and business. At first I did not thoroughly understand what the Government meant to do and I was willing to give a small amount to see whether they could make a success of something in the trading line. Now I understand that this proposal is for charitable purposes and that it has something to do with the League of Nations and the Supreme Economic Council and is to be devoted to rescuing struggling people abroad.

I object to the taxpayers' money being squandered in this way. If the right hon. Gentleman the Member for Norwich wishes to help these people abroad let him put his hand into his own pocket, and not into other people's pockets. We now know the real reason why this Bill has been brought forward. I could not understand why the right hon. Gentleman the Member for Hitchin (Lord R. Cecil) supported this proposal. I thought it was a Protectionist scheme to assist certain trades in England, and I was surprised to see that the right hon. Gentleman has now become a Protectionist. This proposal is connected with the League of Nations in which we know the right hon. Gentleman takes a good deal of interest, and it is to promote that object and not any Protectionist principle that the right hon. Gentleman is in favour of this proposal. I shall support the Amendment of my right hon. Friend opposite because I think £10,000,000 is quite enough to experiment with in this way. If my hon. Friend had made it £500,000 or proposed to drop it altogether and leave the League of Nations and the distressful countries who deserve to suffer to get out of the mess into which they have got themselves, I should have supported him. I should like to know what is the real object of this proposal. Is it to assist the countries who fought against us, or is it intended to do something for British trade or something for both? If my Noble Friend can assure me that this proposal is to assist distressed countries and the League of Nations I shall have much pleasure in voting against the whole thing.

Lieut.-Colonel ARCHER-SHEE

I wish to ask my hon. Friend to give us some assurance that one of the purposes of this loan is not what has been mentioned by the right hon. Gentleman, the Member for Hitchin, namely, that of supplying raw materials to other countries. If that is one of the purposes I for one shall most certainly vote against this proposal. If it is only for the purpose of establishing credits for the purchase of manufactured goods in this country by people in other countries who cannot afford to pay owing to the loss of exchange, then I am in favour of it, and I presume that is so. Instead of supporting the Amendment of the right hon. Gentleman, the Member for Peebles, I should like to see this sum very greatly increased, because I am certain there are very large areas in Europe where people are really in possession of great potential wealth and who are unable at the present moment to pay for our manufactured goods. I believe this measure is a good one to improve our trade in Europe. Rumania is not an enemy country and she is one of our friends, and yet that country is unable to pay us for manufactured goods at the present moment, although no one will deny that Rumania is one of the richest countries in the world, and in a very short time she will be able to pay. Therefore, instead of £26,000,000, I think we ought to vote £250,000,000. I cannot imagine a better investment for this country than to help our traders to provide work and wages for the working people of this country. I would ask my hon. Friend to give some assurance that this sum is not going to be spent for the purpose of supplying raw material to other countries?

Lieut.- Commander KENWORTHY

When this Motion was introduced by the President of the Board of Trade late at night I made the suggestion that these credits should only be given to certain countries specified by name, and was informed that they were only to be granted to States on the borders of Russia. If I remember arightly they were Jugo-Slavia, S.E. Russia, Poland, Finland, and the Baltic Provinces. I understood the hon. Gentleman who speaks for the Board of Trade to say that these were the only countries to which this precious scheme of the Government was to apply, and that the object was not to assist former enemies at all. But the Government had not the courage to say so, and they carefully camouflaged their intentions by leading the House to believe on the last occasion when they attempted to smuggle this measure through at a late hour of the night, that these credits were only required for the border States named. But we have now from the right hon. Member for Norwich (Mr. Roberts) a declaration that the credits are to be impartially applied to all countries according to their needs, and not according to their policies during the last five years. I think this matter should be cleared up at once. We ought to be told if these credits are to be applied impartially according to the wish of the League of Nations, and apart from any idea as to which side the people fought. If they are to be so applied, then I shall vote against the Amendment of the right hon. Gentleman the Member for Peebles (Sir D. Maclean), and if also the object is only to bolster up an artificial trade in those countries which owe their present ruin to the direct policy and action of this country, I shall support the Chairman of the party to which I belong I do not think it is fair the Government should leave us in doubt on this point, because there might, as a result, be a good deal of voting under a wrong impression.

I again ask, are these credits' to be applied to trade in any markets where they may be required, or are they only to be given to certain favoured and special States, some of whom were recently our enemies? Is it the case, for instance, that the Jugo-Slavs, because they were traitors to the Austrian Crown, are now to be bolstered up in this way, while a country like Austria is not to be helped, although her need is infinitely greater? If that is the case I shall vote against the proposal, because I look upon it as a totally wrong policy, and one which will even injure the countries to which the credits are to be applied. May I, in passing, point out that the United States is not as a Government supplying credits of this nature, but it is being done there by private bankers, Mr. Hoover, who is a great authority on questions of credits and supplies, particularly objected to Government assistance. I would remind the House that this proposal may lead to great developments in the future. I am opposed to the Government taking over banking business. They have too much power as it is, and if they should get a banking monopoly, why then an unprincipled Government—I do not for a moment suggest that this is an unprincipled Government—might use the credits for political purposes, and thus get into their hands a power which none of our Governments have had, at any rate in recent times, and which they should not have.

Again, why should we go forward alone to supply this £26,000,000? Are we in such a flourishing, financial condition that we can afford to scatter this gold over the suffering wastes of Europe? Why should we not invite' the Allied Powers to take part in this work? If we show our willingness to shoulder all these burdens, and if we fail to insist on the co-operation of the other countries, the impression will gain ground that we are so terribly rich a country that we can be left to look to supply the needs of all suffering countries throughout the whole of Europe, without any assistance or co-operation from our Allies. May I again point out what a terrible confession of failure this whole Money Resolution is? The right hon. Gentleman the Member for Norwich told us that the Supreme Economic Council had again and again pointed out the necessity for some such system of artificial credit, and the hon. and gallant Member opposite, who is a member of that Supreme Economic Council, has suggested that it was their policy to come to the aid of the ruin and misery now prevalent throughout Europe, which is one of the results of the blockade of the coasts of Russia and Germany which we carried on for nine months after the Armistice. I know I would be out of Order if I were to attempt to pursue that argument, but I do want to point out that we are asked to vote this £26,000,000, because of the shattered condition of the markets in those countries, a condition which is directly due to the action of the Supreme Council. Indeed, I wonder that any honest man like the right hon Member for Norwich was able to remain so long a member of that Council.

May I say one word about the countries which the representative of the Board of Trade told this House this money is required for? Take the case of Poland. We are asked to vote credits in order to enable British manufacturers to export manufactured goods to Poland, goods which the Poles cannot themselves pay for. I can quite understand that they cannot, for the Polish mark is now worth less than one halfpenny. Poland is racked with typhus and cholera, and half "the country is seething with revolution; yet an army of nearly a million men is being maintained there. No wonder the ordinary British merchant is not able by ordinary commercial methods to sell his goods in that country. No ordinary bank would supply the necessary credit, and therefore this House is asked to vote £26,000,000 of the taxpayers' money. Poland, I repeat, is in an appalling condition, and no sensible business man would open up a big trade there on credit, because it suffered under part of the "barbed-wire" policy followed till quite recently by this Government and its Allies. I say we are responsible directly for the present state of Poland. Had it not been for that policy we could have had a peaceful Poland with its inhabitants at work cultivating the soil and there would have been no need to ask for British credit. But having created this general misery and danger we are asked now to apply sticking plaster in the form of £26,000,000!

Do hon. Members think that £26,000,000 sterling will be sufficient? Does the right hon. Baronet the Member for the City of London (Sir F. Banbury) think so? Once a man begins to take drugs he goes on taking them, and this artificial stimulus for trade, once started, will have to be continued, and again and again there will be demands for more and more money. Once give Government subsidies and they will always be needed. You have only to bear in mind the case of the armour-plate works in Sheffield. Those firms still need the Government subsidy given years ago to enable them to keep up their plant, and the same will be the case with overseas trade in Europe. If artificially started by means of subsidies those subsidies will have to be renewed time and again, just as a man who takes morphia needs more and more of it as time goes on.

Captain ELLIOT

But people can be cured of taking drugs.

Lieut. - Commander KENWORTHY

Yes, by cutting off the drug and by taking some anti-toxin. I want to know if this money is to be supplied to other parts of Russia as distinct from those I have mentioned. Take Siberia. There is a great possibility of trade there. Will firms be entitled to ask for credit for exports there, or will it depend on the colour of the Government in Siberia? Will the fact it is pink or red mean that this country will be unable to supply it with credit? This is a very important question. During the brief recess I have taken the trouble to consult a number of successful business men upon this scheme, and they have all given me much the same reply. They say the one great objection to such a system is the opportunities it affords for corruption, or what is very much like corruption Of course; I am sure the Government will take every possible step to prevent corruption, but the point is that these credits usually are not given to firms impartially. They are given out by permanent officials who have the handling of them to firms which they know. Favouritism is perhaps a better word to use in this regard than corruption. They favour certain firms which they know of; by the very nature of the case they must do that. They could not grant credits to every firm that applied, and as a leading Manchester man said, "in these things kissing goes by favour." Whether the suspicions of these business men are justified or not I do not know. It gives possibilities for favouritism, and, of course, it gives enormous political power. For that reason, it is extremely mischievous.

This is the third occasion on which I have criticised this Resolution, and I shall probably criticise the Bill when it comes before the House. I now want to make a constructive suggestion, and to put forward a plan which I think the Government ought to have adopted instead of coming to this House. To ruin foreign markets does not help us, even if they were enemies, because they were good customers of ours in the past, and we hope they will be again in the future. The great need of these countries to-day is raw material, and this scheme, apparently, applies only to manufactured goods. I think one hon. Member to-day said that charity was not sufficient for these countries; they must expect to work. If we supply them with manufactured goods on credit they will not work. What is required is raw material, to enable them to get their factories going and produce their own goods. [An HON. MEMBER: "And machinery!"] I quite agree that they want machinery, but the greatest need to-day, particularly in Vienna, according to the statistics I have seen, is raw material. In Vienna there are many great factories that have not been damaged, if my information is correct, but they cannot get the raw material to start them. I only mention that one case, but there are many other semi-allied countries which, I daresay, would come in as well. If they could get raw materials under this scheme I think there would be something in it, but it should not be undertaken by this country alone; it is par excellence a matter for international action. There ought to be an agreement among all the Powers that credits should be given to these shattered countries on certain rigid conditions, and those conditions are that the countries themselves should put their own financial house in order, and should apply a real system of taxation. My hon. Friend takes this matter lightly. I suppose he thinks we cannot do that; but the whole of the Powers of the world, combined together, could do it, especially if they said that credits would only be given on those terms. We could insist that those credits should only be given to countries which economise and adopt a sound system of taxation, and, above all, cease making war on their neighbours and demobilise their overgrown armies. A scheme on those lines, which should have been undertaken, of course, fifteen months ago, might, if pushed through in a large way, with vision and imagination, and a little forgetfulness of hatred and vindictiveness, have gone far towards saving a great deal of misery and suffering abroad, and, in the long run, helping the best interests of this country. To come to this House with this petty sticking plaster, this £26,000,000, which can be swallowed up forty times over and make no difference, and to suggest that we alone should undertake it, is, as I said on the last occasion when this Resolution came before the House, an affront to the intelligence of the House of Commons.

Mr. KILEY

If I thought that this scheme had the advantages mentioned by the right hon. Gentleman the Member for Norwich (Mr. G. Roberts), I should feel inclined to give it a certain amount of support, but any belief I had in that direction has been killed by the Parliamentary Secretary to the Board of Trade, who has informed the Committee that, before these goods are received by a purchaser, the purchase value will be put up to the cash value of the goods plus 15 per cent. How that is going to restore these war-stricken countries passes my comprehension. We were told that only £15,000 had been taken up, and that is the real explanation of the failure of the scheme up to the present. It is difficult enough to do business in the ordinary way when you demand payment from your customer, but, when you demand payment plus 15 per cent., I do not know of any commercial firm or buyer who would do business on those terms. If that method is to be continued in the future, the scheme will not be worth the time that the House has given to it. I would remind the Parliamentary Secretary to the Board of Trade that he is embarking on a dangerous course in trying to get this Bill through. Export trade is not limited to trade done on the lines of these proposals. A very large overseas trade is done in which merchants and traders take considerable risks. I know of no reason why I myself should take risks when certain other people can go to the Government and, so long as they ship to certain countries, can get guarantees. I should demand that the scheme should be extended to cover all risks which the merchants and traders of this country are taking. The Government will have considerable difficulty in refusing that. If they do refuse it, traders will seriously consider whether they should continue incurring certain risks when they know that, by putting pressure on the Government, they will be able to obtain some security which at the present time they lack. Another point which I would commend seriously to the Board of Trade is the method by which this Committee passes or approves of discounting bills presented to them. Is this done by special selection, or by what method is it decided who shall have credit and who shall not? Is it open to any trader, so long as he has a banker's recommendation that he is a man of substance, to obtain the necessary credit from the Board of Trade; or, if not, what is the procedure? Is the matter left entirely to one individual? If so, that is indeed a very dangerous course for any Government Department to encourage, or even to support, and before giving my vote on this Resolution, I should like to know that the Government will seriously consider some amendment or limitation which will prevent the entire power being placed in the hands of any individual, however able or conscientious he may be.

Sir D. MACLEAN

I do not wish to put the Committee to the trouble of a Division on this matter, but I regret that I cannot see my way to withdraw my Amendment. Whether the object is a philanthropic one under the ægis of the League of Nations, or whatever the object may be, I do not think this House ought to let go its control of finance, and it was with that object that I moved my Amendment.

Major HAYWARD

I am rather sorry that my right hon. Friend has made that statement, because I think this Amendment should have been accepted by the Government, and I am sorry that they do not see their way to accept it. Although the discussion has revealed a general sympathy with the object which the Government hope to attain by means of this Bill, it has revealed also that the transactions about to be undertaken by the Government are of such a character that they ought to remain under the constant and jealous control of Parliament. If that is desired, I do not see how Parliament is to maintain any control if the Bill is to be passed with the Resolution as it stands. I listened very carefully to the explanation of the Parliamentary Secretary to the Board of Trade why the Government do not accept this Amendment, and the only reason he gave was that, as everybody knows, it is very inconvenient to come to the House again on Supplementary Estimates. All I can say is that that inconvenience has not been a very effective deterrent in the past, because we have had Supplementary Estimates of every conceivable kind. I am sorry that my right hon. Friend is not going to press the Amendment to a Division. I know that he probably would not obtain a very large amount of support, but I do think the Government might consider the advisability of accepting the Amendment, so as to give and retain Parliamentary control over this matter and over the transactions which the Government will carry out under the scheme.

6.0 P.M.

Major MOLSON

I should not have intervened in the Debate had I not thought that the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) was exaggerating the case against the Government. I think we ought to support the Government in helping to develop our overseas trade, and I think we ought to regard it, not as a matter of philanthropy or charity, but as a purely business transaction. Moreover, I do not think we ought to confuse the business that we should do with these young States with the business that we ought to do with Austria. Surely it is a good business transaction for this country to advance a certain amount of capital to protect its own traders when they are exporting machinery to young countries which have raw material to trade with. On the other hand, it is not so necessary to export machinery to Austria as it is to help Austria to get the raw material with which to carry on her manufactures. The last speaker also raised what I thought was a very fair criticism, in asking how the Government intends to select the traders to whom it will give credit. I would also like to refer to the speech of the Financial Secretary to the Treasury on 23rd March, in which he distinctly said that he foresaw that it might be possible that there would be an ultimate change on the Exchequer. I see that the hon. Gentleman is here, and perhaps he can give us some sort of indication as to what the extent of that charge may be. The two Ministers do not seem to be quite in agreement on that point. I think the House has a perfect right to keep some sort of control on the finances. I do not wish to oppose overseas trade in any way, but I think they ought to give us information and not ask for too much of a free hand. From those points of view, I think the Government might accept the Amendment and limit it to £10,000,000.

Lieut.-Colonel MALONE

I wish to ask one or two questions before opposing what appears to me to be a most iniquitous measure. I am not opposed in the least to measures for the reconstruction of those countries in the South of Russia, where reconstruction is so urgently required, but surely it is not a question for one nation to deal with by herself. Is it a fact that this measure has been proposed sporadically, and perhaps philanthropically by Great Britain without any consultation with the other Allies? Surely if we are going to supply money to purchase rolling stock or machinery or supply other requirements of those countries, there ought to be some co-ordination amongst the Great Powers undertaking the work. We are informed that America is also providing a similar loan. Surely we should see that a conference is called and measures taken to prevent overlapping in the provision of rolling stock. One country might be called upon to provide locomotives, another rolling stock, another machinery, and so on. I should like to ask whether this proposal has been before the Supreme Economic Council, and, if not, would it not be better that the measures for pro viding credits for these countries should be directed by the Economic Council, or preferably, perhaps, by a Committee of the League of Nations? This measure ought to be dealt with on a much wider scale than that on which, as far as we can see from the very scanty information provided, this credit is to be administered. I would press the right hon. Gentleman to inform us whether it is intended that Siberia is to be included amongst the countries to which this credit is to be supplied, and, if not, why not? We were informed last Session that credit was to be supplied to the south-east part of Russia. I am sure it is not the intention to provide money to trade with the Bolsheviks, but politically there is no objection to trading with Siberia.

In my judgment the whole matter ought to be dealt with from a much wider and more fundamental point of view. It would be far better to provide credits not for this or that firm which happened to get the ear of the Board of Trade or some other Department, but to the Governments responsible for administering those States. But before that can be done, those countries must be recognised. May I call attention to their position. The boundaries of Poland have not been defined, and the political condition is still very unstable. The only country which has a status which can be called a status, and the only country which has been recognised by the Allies and has any degree of stability at all is Finland, and Finland is ruled by reactionaries and is probably the poorest of all these countries. Esthonia, abounding in riches, has been recognised de facto but not de jure. She has been recognised by Italy. Italy, being a democratic country, had the foresight to see the need for stabilising all these smaller States and putting them on a firm basis. Before we supply money to these countries to assist them to build up their industries, we should recognise them both de facto and de jure. Look at it again from a business point of view. We are supplying many millions of the British taxpayers' money to a country which has not been recognised by us. It may be absorbed by Soviet Russia, or these countries may amalgamate with one another. Political conditions may occur which may upset the whole commercial and economic stability, and from the business point of view it would be far better to give them complete economic and political recognition before we provide them with money in this form. No one denies that they are in need of money to build up their industries, but instead of supplying it to this or that firm or bank, perhaps a Greek or a German bank, it would be far better to supply this credit as a Government loan or a currency loan to the Government of the country. All these new Governments which are struggling for existence and are tottering on the brink of the abyss of economic dissolution are anxiously in need of Government loans, and it would be far better, after we had stabilised them by recognising them completely, to supply this money through the medium of the Government. I wrote a fortnight ago to the Department for particulars concerning the machinery for distributing this money. Perhaps it is due to the Easter Holidays that I have not received them.

Sir W. RUTHERFORD

The last speaker, in common with almost all the critics of the Vote, has assumed that this country is being called upon to provide money for Finland, Esthonia, and a number of places which "have been mentioned, and the criticism has proceeded upon that basis. Nothing of the sort is intended. This is to give credits to British people for British trade, and to assist our overseas trade, and not the overseas trade of a number of Rumanians, Esthonians, Ukranians or people like that. This is to help to establish British trade with these places which have been desolated and, owing to the exchange and the destruction of their machinery and their property, practically cannot establish their trade without having some credit. I am the Chairman of the largest British company which has to do with Rumania. At present our exchange is 240 to the £ instead of 25. That means that the Rumanian money which is coming to that country, and which is still the current coin there, when compared with our currency and our prices here is only worth a tenth of what it was before the War, though undoubtedly that wealthy country, producing as it does enormous quantities of grain and oil, will in a few years be normal again. Rumania wants clothes, boots, machinery, tools of all descriptions and particular small steel tools, which our manufacturers can supply, and which would immensely help its production, but it cannot afford to pay for them at present because it would mean paying out ten times the normal prices. What is required is a system of assisting credit under which the acceptances for the goods supplied by British manufacturers and traders could be renewed two or three times until the situation became normal and the bills could be taken up. If I understand these critics correctly, they also assume that we are not only going to give this money away, but that we are going to give it in cash. Nothing of the sort is intended. It is simply a question of credit. This sum of £26,000,000 in the shape of credit would probably enable £150,000,000 worth of business to be done. It is not a question of providing £26,000,000 in cash, but of a sufficient Government guarantee to cover the extraordinary position which has been created by the War in order to enable the bills to be financed until things become normal. It may be some advantage to these other countries to get these goods, but the idea of the Resolution is to help British manufacturers and merchants at this critical juncture in the history of oversea trade to secure, possibly for ever, markets which have been German, and which now we ought to use every possible effort to keep for ourselves.

Sir F. BANBURY

Am I to understand that what is going to take place is this? A certain amount of goods are sent out to Rumania, they are paid for at the exchange of to-day. The Government, instead of remitting that money to England, keeps it out in Rumania in the hope that the exchange will change. If so, that is nothing but a gamble in the exchange.

Sir W. RUTHERFORD

I know nothing about the actual way in which the Government is going to carry this into effect. I am speaking as one practically acquainted with the trade of a particular country the details of which I have known for the last 20 or 25 years. I have not been consulted by the Board of Trade. There have been a number of pour-parlers going on and there has been considerable discussion, and one would have thought that some Board of Trade officials might take the trouble to ask some of the people who know something about this country, but they have not. There is complete misapprehension in the minds of all the critics I have listened to as to what the scheme really is intended to do. In answer to my right hon. Friend's question, that is not the way it is to be done. The way in which it will be done is this. Supposing £5,000 or £10,000 worth of new ready made clothing or boots is sent out to Rumania next week, if the scheme is not as I describe it, it will be wanting in the best way of carrying out its purpose. In that opinion I may be egotistical. If I understand the scheme aright the Rumanian purchaser will give an acceptance. [HON. MEMBERS: "Money!"] He cannot give money. He will give an acceptance for the price of the goods. He has to pay freight, cash and insurance in this country. How is that acceptance to be met? The difficulties of the banks at the present moment is—and I have been to some of the banks about it and know what I am talking about—is that they want to know how many times you will require that six months' Bill renewed. That is a question you cannot answer at the present time, and that is the reason why a considerable amount of business that might be done in this country to-day is not being done, because there is no possibility of stating definitely when the amount is going to be paid. If you could tell the bank that it was going to get its money after two or even three renewals, they might do business, but when you cannot give any estimate as to the date when the Bill is going to be met, then the bank will not do business. That is the reason why we are being asked to pass this Resolution, in order that there may be these credits and some security given to the banks that they will get their money.

It seems to me that this scheme is simply a repetition of the German system of advancing and supporting their trade which they adopted with success at least twelve or fourteen years before the War. The system was this. When their Consular Trade Agent in Rumania, for example, found that a British firm was supplying a certain class of goods to Rumania, information was transmitted to Berlin and an agent was sent down at once to try and sell German goods instead. He succeeded for the reason that the British manufacturer had to ask for cash, because his bank, in nine cases out of ten, would not discount an acceptance by a mere Rumanian purchaser of any goods. Therefore, he had to fix his price on the basis of cash payment. When the German agent could not undercut the British price, he cut it by giving credit on the acceptance of the Bill for the goods. That Bill was submitted to the local German Trade representative—similar to the Trade representatives which this Board of Trade Department are going to send overseas—and if he approved of it, it was discounted in Berlin by the Bankers' Committee for Overseas Trade, which consisted of the Dresdener Bank, the Deutsche Bank, and three or four others, and had behind it a guarantee of 75 per cent. of the amount of these Bills by the Government. The consequence was that in this perfectly simple way Germany cut us out of supplying Rumania with very nearly all the iron and steel goods, and practically all the clothing and the boots and other things which could be made in Germany. In that way they succeeded in stealing our trade. This business is now open to be got by somebody. The business of supplying these Eastern nations, and particularly our Allies who helped in the War, with these goods, can be secured for the benefit of British manufacturers and for the benefit of British trade generally, and we ought to support this Motion as being one of the most intelligent Motions and one of the best ways of advancing British trade ever suggested to this House.

If this scheme is worked with discrimination and ability by those who are carrying it out, and if they will take the trouble of consulting some of the British people, some of their colleagues who know something about these countries, it will not cost the British Government one sixpence. These Bills represent British goods, and they will be paid for ultimately. They will require to be renewed probably for some few seasons until these places begin to produce again such commodities as wheat and oil, which are articles required all over the world. I do not think it will cost the British Government sixpence, because the Bills will be taken up and paid for ultimately. It is merely a question of establishing these series of credits in order to help British traders to secure markets which otherwise may go elsewhere. I have the greatest possible satisfaction in being permitted to say a few words in support of the Resolution.

Mr. KILEY

Can the representative of the Board of Trade clear up one point in his speech? He gave us to understand that the goods which were to be exported would be paid for before they are delivered. The hon. Member for Liverpool now says that they are not paid for, but that the receiver will give a Bill of acceptance, or a promise to pay.

Sir F. BANBURY

I should also like to call attention to that particular point. I thank the hon. Member for Liverpool for his clear exposition of what will take place if we pass this Resolution. He has dealt with Rumania because he knows about Rumania. So far as Rumania is concerned, she was an Ally and, therefore. on that account we should have no objection; but there is nothing in the Resolution limiting it to Rumania, and from the speeches that have been made it would appear that there are other places which would be equally favoured. The hon. Member for Liverpool says that Germany some years ago did this sort of thing with successful results to German trade. Does he forget that when Germany did that the exchange was normal? The exchange is not normal now. If the Government do what my hon. Friend says he understands they will do in regard to Rumania, and if after a certain number of months—possibly a year or two—there is a good harvest in Rumania, it is possible that the exchange may be righted, and that these Bills which the Discounts Department of the Board of Trade hold at the bank may be discounted at a better rate of exchange than now. Suppose there is a bad harvest—what will happen then? The exchange will go against the Government scheme and the result will be a very large loss. It must be remembered that these bills which are given against the goods do not represent goods, because the goods will have passed away. What you are going to do is to gamble on the exchange. [HON. MEMBERS: "No, no! The bills are paid in sterling."] These bills will be merely pieces of paper, and if the exchange goes against this country one of two things must happen: either the Government will have to make a loss by taking payment at a lower exchange or the people will not be able to pay. Am I to understand that there will be, say, a bill for £1,000 in sterling, and that that bill will be drawn on somebody in Rumania? Supposing the exchange goes against this country, will that bill be met? [HON MEMBERS: "Yes."] They will not be able to meet it. I start upon the premise that there is not a good harvest.

The DEPUTY-CHAIRMAN

The right hon. Baronet must bear in mind that we shall have a Bill based on this Resolution, and it is not desirable, after the long discussion we have had, to go into questions which can be discussed when the Bill is brought in.

Sir F. BANBURY

I was only replying to hon. Members. I would not like it to be thought that I was not able to meet the argument. The Bill will have to be considered very carefully. This Debate has shown that there are no two persons who agree as to the real object of the Resolution. Under these circumstances, as it is a novel departure, it will be necessary to view the Bill with very great care.

Lieut.-Commander KENWORTHY

On a point of Order. I think I am entitled to ask the representative of the Board of Trade whether he intends to reply?

The DEPUTY-CHAIRMAN

That is not a point of Order.

Amendment negatived.

Lieut. - Commander KENWORTHY

May I ask the representative of the Board of Trade if he will be courteous enough to give a reply to the questions put to him, before we go to a Division? I asked whether these credits will be given to any country or only to the countries he mentioned—of which Rumania was one—when the Motion was introduced before we rose for the Easter Recess. Will these credits be given to any firm which satisfies the Government as to its standing or bona fides? I desire to know about Siberia, in which German and American firms are trading. Is this very beneficial advantage to be given to Siberia?

Mr. BRIDGEMAN

I do not think that there is anything in the questions which have been raised which cannot be raised, and ought not to be raised, on the Bill when it comes before the House rather than on this Resolution. There is nothing in the Resolution to limit the application of this money to any particular country, and it will be open to Members, when they see the Bill, to move Amendments admitting or excluding any particular country, or in various ways altering the machinery of the measure. At present we are merely discussing whether we ought or ought not to vote this money for this general purpose.

Lieut.-Commander KENWORTHY

If we pass this Resolution now, will it enable this money to be paid out? I understand that £290,000 have already been applied for or paid out. Will it be possible to pay the £26,000,000 if we pass this Resolution?

Mr. KILEY

I would also like a reply in reference to the statement of the hon. Gentleman that customers paid for the goods before they got them.

Mr. BRIDGEMAN

The Regulations are in the "Board of Trade Journal," and if my hon: Friend will read them he will see that the point is made perfectly clear.

Main Question, as amended, put, and agreed to. Resolved, That it is expedient to authorise the granting of credits and the undertaking of insurances for the purpose of re-establishing overseas trade and the payment, out of moneys provided by Parliament, of any sums required for granting credits for such purpose up to an amount not exceeding at any time twenty-six million pounds and of any expenses incurred by the Board of Trade in connection with the granting of such credits and the undertaking of insurances so far as those expenses are not defrayed out of sums received by the Board by way of commission in respect of credits or by way of premiums in respect of insurances.

Resolution to be reported To-morrow.