TARIFF TRUCE.

HC Deb 04 March 1930 vol 236 cc278-398

Sir PHILIP CUNLIFFE-LISTER

I beg to move, That Item Class VI, Vote I (Board of Trade) be reduced by £100. 4.0 p.m.

My first duty is a very pleasant one in which, I am sure, the whole Committtee will join, and that is to welcome the President of the Board of Trade back to his place on the Front Bench. We regret his absence from our Debates, however much we may differ from him, and when he is absent on the ground of ill-health through hard work he has the sympathy of the whole House. He has our sympathy so much that we do not only want to see him back more or less restored to health, but we sincerely hope that he will spend his convalescence in a less enervating atmosphere than that to which he went a fortnight ago at Geneva.

The issue which the Committee has to debate to-day is one of enormous importance. It is the whole of the negotiations which the right hon. Gentleman has been conducting at Geneva in order to commit this country to a Tariff Truce, and the negotiations which he proposes to continue when, as I understand, he returns to Geneva in a fortnight's time. When the Committee comes to consider the proposal for a Tariff Truce, I think it is important that we should base our judgment on two sets of considerations. We should first of all consider what are the merits and the demerits of this proposal taken as a project by itself, and, secondly, we must consider the time at which and the circumstances in which these negotiations are undertaken and the Truce is proposed. It is not altogether easy to follow all the details of this particular project, because, as far as I am aware, there is no Government publication of any kind, no White Paper, no Paper laid in which the records of the discussions at Geneva can be found, or even in which the draft of the Tariff Truce itself is set out. I am well aware that a committee has been set up to reconsider the existing draft and may produce a future one, but I do think this Committee would have been in a better position to engage in its discussion to-day if we had had in a White Paper the draft of the Tariff Truce which has been under consideration at Geneva. I am not asking him that in anything which is out of due time, but, after all, there were negotiations. A truce, or the draft of a truce, was produced by a committee of the League of Nations in November. There is the basis of the discussions which have taken place at the last conference, and I think it would have been convenient to the Committee that we should have had, before our discussion to-day, the terms of that draft truce and any proposals which the President of the Board of Trade is going to put forward for the amendment of the truce, if there be any amendment which he proposes when he returns to continue his negotiations.

I have been at pains to discover such documents of the League of Nations as I could, and I am obliged to the right hon. Gentleman himself for one of them. I have here the actual draft which was prepared in, I think, November, 1929, and which is, I understand, the only draft which is before the committee of the League of Nations to-day, although that draft may receive some amendment. The President of the Board of Trade in his speech will correct me if I am wrong in any respect, but I think that this Committee should have before it as plainly as possible, in the first instance, what are the terms of the truce to which the President of the Board of Trade is anxious to commit the Government and the country. The first project is that this truce should begin in October, 1930, and should last for two years. I am very much obliged to my right hon. Friend here for a correction, which shows how important it is that we should get the matter clear. I have read the draft as meaning from October next, but the idea is that it should be retrospective and run as from last October, and as from last October we should be committed to a truce which says that there shall be no increase in tariffs for a period of two years.

It does not stand on that alone. The draft truce contains a number of qualifications even upon this. It excludes from its purview, in Article VIII, all duties of a purely fiscal character. I understand from the speech of the President of the Board of Trade which I saw reported, that he himself has some anxiety as to how fiscal duties should be defined, because it is very apparent that the truce may not enable a country to impose duties which are called fiscal duties, but, in effect, are not entirely fiscal or revenue duties put on for revenue, or said to be put on for revenue, but which are of a protective character. Would those be fiscal duties? It is apparent that Article VIII of this Convention, unless precisely defined, might very well leave a country in a position to put on new duties merely by calling them fiscal duties. There are other exceptions. There is Article X, which allows a certain amount of latitude. In Sub-section 3 of Article X there is the latitude: To establish fresh tariff rates for new products, provided such rates are proportionate to the rates already applicable to similar products. That is a very remarkable provision. Supposing this truce, which the right hon. Gentleman says is going to prevent any foreign country putting on a fresh duty at a future time, had been in force before the Artificial Silk industry came into existence. It would, apparently, have been quite possible, although some great new industry was being developed, for a country to put any duties it liked upon the whole range of articles of the new industry, provided those duties did not exceed the high rates of duty for the time being in force in that foreign country. That, obviously, is a tremendous loophole, for, with the advance of science in industry, we may easily at any time find some new range of articles in an industry in which one would hope that with our scientific training and manufacturing processes we could easily be pioneers and competitors in the van of progress, and this Tariff Truce would leave it open to a foreign country to put any duties it liked on this new range of articles, provided they did not exceed the high duties in force for an analogous commodity or the nearest analogous commodity that might be found. Then there is Subsection 4: If through the denunciation, by a non-participating State, of a commercial treaty whereby a Contracting State had granted tariff reductions, the latter feels that it could not continue to grant the other Contracting Parties the benefit of conventional duties for which it has no longer any compensation, it may request the Secretary-General of the League of Nations to convene within a month a meeting of the Contracting Parties, at which the latter undertake to participate, for the purposes of obtaining their consent to an alteration in the above-mentioned conventional duties. Should no agreement be reached, the applicant State shall be allowed the right to denounce the truce as far as it is itself concerned, such denunciation to take effect three months later. That is rather a vague Clause, but, as I understand it, that means that if we enjoy, by virtue of some bi-lateral, or, it may be, multi-lateral treaty which is in existence, an advantageous tariff rate, and that treaty is denounced by the original party or one of the original parties to the treaty, we shall not even under this Tariff Truce be able to maintain the advantage which we enjoy under a mostfavoured-nation clause in that treaty today. If that threaty is denounced we may not even keep the relatively small advantage we have to-day, but the country which made the treaty is to be free to put a higher rate of duty on our goods. Then we come to Article XI, which is a very interesting test of the enthusiasm with which other countries are likely, not to reduce their duties, but even to agree to maintain the present high rate and not raise it higher. Article XI reads: The high contracting parties recognise that the full execution of the obligations contained in Articles I and II may cause some of them serious difficulties, and that it would therefore be advisable to allow the high contracting parties the right to make certain exceptions. The annex to the present Convention contains the exceptions which, in pursuance of the foregoing paragraph, are granted on to-day's date to the contracting parties named in the annex who have signed the Convention on to-day's date. Therefore, not only are there the loopholes to which I have alluded, but there is a general exemption clause which enables the parties who already have the high tariffs to make a number of exceptions where they find it convenient to put the tariffs a little higher in the future. My right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) draws my attention to Article XII. This Article reads: If a high contracting party is obliged to take measures, applicable to the products of a third country, it must apply these measures in such a way as to injure as little as possible the trade of the other contracting parties. That requires a good deal of explanation, because, apparently, it would be open to a State on some ground and in certain circumstances to discriminate. It might very well be that when a duty is raised it might be raised against all other countries as well. Certainly, one wants to be sure that that is a clause which gives us some protection. Then we come to Article XIX, which is the condition of ratification: The high contracting parties agree that the Convention shall not come into force until it has received either the ratification referred to in Article XVI …. the accession referred to in Article XVII from at least …. members of the League of Nations or non-member States. I would like very definitely to know from the President of the Board of Trade how many ratifications have to be received from the great industrial competitors of this country in Europe and in America before he proposes to commit this country to that proposal. I have dealt at some length with what I think are the more important clauses in the Convention, because that Convention has never been presented to the House of Commons. Those are, roughly, the terms of a Convention which the President of the Board of Trade is asking the Committee to give him authority to conclude. I venture to say that a project in those terms, a project of that kind even in amended terms, is a thoroughly bad bargain for this country to enter into at any time. The President of the Board of Trade is giving away almost everything, and he is getting practically nothing in return. Let me justify that statement. I think I can do so up to the hilt.

Under this Convention the President of the Board of Trade does not obtain a farthing of reduction in any tariff in any foreign country. If this Convention goes through, every single one of our foreign competitors can, for the whole period of the Convention, maintain its duties exactly where they are to-day, and indeed use the exceptions under the Convention to raise those duties in certain circumstances, and this country will be absolutely bound never to put on a duty in any circumstances. The President of the Board of Trade says that he wants to enter this Convention because it is the first stage. He hopes that if we sign this Convention it may lead to a reduction of tariffs in other countries. Someone once wittily said that hope was the only commodity which was not yet taxed. Certainly the President of the Board of Trade has that asset of hope in a very large measure.

What prospect is there of these foreign countries reducing their tariffs? What is the spirit that they have shown, at any rate in the months which preceded the November negotiations? One would have supposed that these countries, if really they were going to take the next step—to which they are not committed—of a reduction of tariffs, would certainly not have raised their duties, and probably would have shown some evidence of goodwill by some reduction of duty. What is the position? In the few months which preceded the negotiations of last November no fewer than 13 countries have put up their tariffs—Germany, Peru, Algeria, Finland, Austria, Poland, Portugal, Rumania, France, the United States, Morocco, Egypt and Italy. Every one of those countries increased its tariffs in the few months before the negotiations. What does that show? It shows—and some of the delegates made it plain in their speeches that this was very much in their minds—that while they might be quite ready, when they had all got their tariffs as high as they wanted them to be for their own purposes, to sign a tariff truce which would bind us, so far from looking forward to any reduction of duties in the future, they were very anxious quickly to raise their tariffs in the months before the negotiations took place, in order that when they came to this Convention they might come in with their tariffs already raised to a level high enough to satisfy even the most extreme Protectionists in their own country.

That is not an elaboration or explanation of mine upon their action, though I think that it is an explanation which will occur to everyone. I think the President of the Board of Trade will agree that in his discussions at Geneva there were countries—I think there were Portugal and Spain, but certainly there were not a few countries—which said that, while they might join in a tariff truce of this kind, they could only do so provided that they had time to get an increase in their tariffs before they signed the Convention. Then, as I have said, there are the exceptions which could be pretty widely and generously used, if need be, by a foreign country to raise its duties even higher than they are now. The whole defence by the President of the Board of Trade of the truce is this: That it is only the first part of a great negotiation and a great move. Part I, he says, is the tariff truce, but an integral part is Part II, and Part II is the negotiation for the reduction of tariffs which is to take place after Part I has been completed.

The President of the Board of Trade has, an another occasion, put before this House a Measure which contains a Part 1 and a Part II. They were inextricably bound up together. On that occasion the right hon. Gentleman, I am not sure whether altogether wisely, acceded to a proposal that Part I should be postponed until Part II had been dealt with. If ever there was a case where Part I might properly be postponed until Part II has been dealt with, it is in the case of this tariff truce. I put it to him as a business man and a practical man, that to put the cart before the horse as he is doing here he is tying his hands. He is giving away all bargaining power under Part I, and then, with tied hands, is entering into negotiations on Part II. I do beg the right hon. Gentleman not to be guilty of so obviously unwise an action as to give up the whole of his bargaining powers. That is the first argument against this project as it stands. The right hon. Gentleman gets nothing in return; he gets no sort of guarantee.

But look what else is involved. For two years he is asking this country to give up all right to protect itself by any duty, whatever the circumstances. There are no conditions in this draft which would enable the right hon. Gentleman, or his successors, or the Chancellor of the Exchequer, or the Government, to impose any duty in future, no matter how severe foreign competition may be, no matter how unfair the conditions of labour in those countries with which we have to compete, no matter how bad unemployment may be in this country in future. The Government contemplate that unemployment must inevitably get worse. No matter how bad that unemployment is the right hon. Gentleman will have tied his hands. He cannot put a duty on a single article. No matter how damaging the dumping of foreign goods may be in this country, no matter how contrary to all principles of Free Trade, bounty fed goods and dumped goods may come into this country and be sold here at any price. If he signs this tariff truce this country is absolutely forbidden to put a single duty on any article in this country, however clamant the need of Protection may be for our own industries. And it does not end there.

We close the door on our industries in our own country. But we do some-thing which is even worse—and this is perhaps the most serious side of the whole business—we close the door on the possibility of any common action with our Dominions and on any power to negotiate effectively with our Dominions. I shall show later how every single Dominion has absolutely refused to enter into this bargain. Moreover as I read the Export and Import Convention, until there has been ratification by the requisite quorum of 18 countries, it would still be open to foreign countries to add prohibitions to the high duties which would be stabilised under this truce. It would be open to them to adopt any measure of prohibition that they liked, unless and until the full quorum of assents to that export and import prohibition Convention had been obtained. They, therefore, while we are absolutely dependent, will have a double line of attack. I submit that if our circumstances were very different from what they are at the present time that bald statement of the conditions to which we expose ourselves would be enough to make us mistrust and reject this project on its merits.

When you turn from the project itself to the time and the circumstances in which this proposal is made, the project becomes even more unreasonable and more unthinkable. If ever there was a time when foreign countries are turning away from the general most-favoured-nation treatment idea to special agreements among themselves, I believe that is true of the present time, and I do not think the President of the Board of Trade himself would deny that. Certainly all the evidence that I have seen shows that the feeling grows in Europe, sometimes by the desire to form a United States of Europe, or a European cartel in which this and that adjustment will be made between one European country and another, or more frequently by the desire to drive a particular bargain which will suit this or that industry in this or that country.

He knows, as I knew during the years when I was at the Board of Trade, how increasingly difficult it is becoming to make a most-favoured-nation Clause a really effective instrument, that even when you relied on it under a treaty, yet always there was a negotiation going on between this or that country, which had a bargaining power, to make the adjustment of their tariffs such that it would serve their mutual accommodation and make a most-favoured-nation Clause as little valuable to us as possible. Indeed, a case arose where we could not get the most-favoured-nation Clause, where tariffs were raised. There was a schedule with three columns in it, and whereas in the old days automatically we should have got the most generous treatment, we could not be sure, even we, with all the generous opening of our markets, of getting the right to go in the lowest column of that schedule. It is certain that more and more in the future are these countries going to drive bargains which they find suit themselves and which they find to their mutual convenience.

Take the speech made by the Italian delegate, Signor Bottai. He said himself that he did not disguise the fact that Italy considered the objects of the present Conference premature. He strongly advocated bilateral agreements as against collective agreements. The fact that many non-European States were absent led him to fear that any agreement would lack the necessary universality. The co-operation of the United States and the South American countries was indispensable for the economic life of Europe. I have no reason to suppose that the French attitude is different from that of the Italians, and there was not one single American country there. I believe one or two South American countries had observers there, and I believe the United States had an observer too, but in sending him they made it plain that they had not the least intention of becoming a party to any tariff truce that might be negotiated on any terms.

Therefore, you know that if you make a truce of this kind you go into it with European conditions as I have outlined and with the certainty that no country in either North or South America will become a party to it. You go into it at a time when never did your industries need the assistance and the free hand—I do not put it higher—of a Government more than at the present time. Can anybody with the responsibility of Government upon him to-day say that he does not look at the future of British industry with profound disquietude and uncertainty? You know that in the world to-day there is an enormous potential producing power—nobody has said it more eloquently than the President of the Board of Trade himself—in industry after industry, far in excess of the capacity of the world to absorb.

You know, we all know, that the effect of the recent slump must be a curtailment of purchasing power. We all know that businesses organised on a great scale to give mass production can only give mass production effectively if they are able to work to 80 or 90 per cent. of capacity, and that it will pay those businesses to produce as nearly as possible to the limit of their capacity and to sell their surplus product anywhere they can, at any cost. Where are they going to sell it? If you enter into this tariff truce, there is only one place which will be always open to receive the surplus output of these other countries, and that place will be this country; and you propose to bind yourselves for two years, whatever your conditions, to receive that surplus at any price.

If we stood alone, I should have thought that that would be enough, but I come back to what is, to me, the most serious and the most sinister part of the whole of this negotiation. You are directly dissociating yourselves from the Empire in action at Geneva and in the possibility of making any arrangements for the future. You are directly dissociating yourselves from every Dominion in the Empire and from India at a time when the need for inter-Imperial arrangement was greatest and at a time when the opportunity also happily was greatest. What consultation has there been with the Dominions? I should have hoped that it was axiomatic that in all negotiations which this country conducted in the field of foreign affairs every effort would be made to make it an Imperial negotiation and not an insular negotiation.

Certainly, the President of the Board of Trade has not been taken by surprise. At the earliest stage of this negotiation, away back in last November, and before last November, even before he went to Geneva for the first time, every one of the Dominions—Canada, Australia, New Zealand, South Africa—and India also made it absolutely plain that in no circumstances would they be a party to this Convention and that in no circumstances would they go to Geneva to negotiate it. The President of the Board of Trade, knowing that he is acting alone, against the whole intention and desire of the rest of the British Empire, so far as they are concerned, knowing that he has got another Conference coming on, if he is still there to conduct it, next autumn with these Dominions—a Conference which must be more than anything else, if it is to be real, an Economic Conference—goes to Geneva directly and deliberately dissociating himself from every one of the Dominions whom he is going to meet later. What a prelude to the Imperial Conference which is going to assemble in the autumn!

I would beg of him to reconsider this. It really is a matter which transcends party interests absolutely and wholly. If this country is to have its opportunity for export trade, for development, for the common development of trade and resources, it is absolutely vital that the Empire should act together, in commercial treaty negotiations, in facing cartels of foreign countries; it is absolutely essential that the industries of this country should not only have the opportunity, but should be directly encouraged by the President of the Board of Trade, whoever holds that office, to go out into the Dominions and try to make arrangements with their opposite numbers in those Dominions. The only really bright spot which you can see, where you can hold your own, and where you have a possibility of advance, is the British Empire.

Surely, it is the plain duty and the plain interest of everybody who holds office in this country to encourage inter-Imperial arrangements. You could get them. You could get to-day, in a large number of industries, and I believe throughout the Dominions, arrangements under which you get common agreement for manufacture, common development of raw materials, combined research, combined selling organisations, common standards, common action in commercial treaties, common action against foreign cartels. It is the most enormous opportunity, and it is not a remote vision; it is an actual reality which, industry by industry, this country could achieve in negotiations with the Dominions at the present time. But you cannot achieve that, you cannot fortify and complete these agreements, if you are going to Geneva in the face of the opposition of every Dominion to tie your hands and prevent your giving effect to those agreements if you are able to make them.

It is not merely the Unionist party which is against your entering into an arrangement of this kind, it is every single commercial organisation in this country that I have been able to find, people many of whom may be Free Traders—I do not know what their politics are—but people whom the President of the Board of Trade has consulted or should have consulted. Has he consulted them? I do not know what consultation there has been. I know that, as long as I was at the Board of Trade, no international conference of any kind took place without the fullest consultation not only with the Dominions, India also, but in our own country with the great representative organisations of industry and commerce. Indeed, they used to go to Geneva as representatives so that they could talk with their full business experience in any negotiation or convention that was under discussion; but has the President of the Board of Trade consulted them, and, if so, what were the results of his consultations? I have asked the most representative organisations that I can find what their opinion has been—the people who, almost of routine, on far less important occasions than this, any President of the Board of Trade would consult—and every one of them that I can find is absolutely dead against this proposal.

I find the strongest denunciation of all coming from Sir Arthur Balfour. I should have thought that, if there was one man whom the President of the Board of Trade would have consulted, it was Sir Arthur Balfour. Sir Arthur Balfour was the chairman of the British branch of the International Chamber of Commerce. I think he was the chairman of the whole of the International Chamber of Commerce; he was the man who has done more work, I suppose, than anybody else in the International Chamber of Commerce; he was the man whom the Prime Minister appointed, when he was in office before, to conduct an exhaustive inquiry into the whole of the export trade of this country—and very ably he conducted it—and he was the man whom the Prime Minister, if I remember aright, invited to become the chief, the chairman, of the great new Economic Council which is to assemble at Downing Street in order to teach the Government how we are to get back our foreign trade. If there was one man who was entitled to be consulted, and whose views it would have been wise to weigh well, it was Sir Arthur Balfour. What has he said on this subject? He presided over a meeting of the executive of the British National Committee of the International Chamber of Commerce, which represents over 70 of the leading industrial and commercial associations and chambers of commerce of Great Britain. The chief matter for discussion was the Customs tariff truce, which was proposed at the Assembly of the League of Nations last September, and the meeting passed the following resolution: The British National Committee of the International Chamber of Commerce, being fully representative of the British export trade, desires to impress on His Majesty's Government that, in its view, the adhesion of this country to the proposed tariff truce would definitely limit the possibility of exercising British influence on the general reduction of tariffs"— so much for Part II— and would prove disastrous to British industry and commerce. Moreover, in view of the impending Imperial Conference such adhesion would be likely to prejudice the development of Imperial trade and, finally, would prove an additional handicap to the solution of the unemployment problem. That was not a resolution passed by a body of extreme Protectionists. It was a resolution passed by a representative body of British traders who exist and have been created for the purpose of furthering British export trade all over the world, and that resolution was put forward by the man whom the Prime Minister has selected as the best economic adviser to His Majesty's Government that he could find. What attitude has been taken by the Association of British Chambers of Commerce, who represent the whole of the chambers of commerce in this country. The executive of the Association of British Chambers of Commerce has adopted a resolution expressing the view that, while it is anxious to see a reduction of tariffs by all countries now imposing them, it objects to the ratification by the Government of the proposed convention to conclude a tariff truce with other countries, as this course would do nothing to reduce tariffs and would stabilise the present handicaps under which British industry labours. Then there is the Federation of British Industries, which has had very wide experience, is representative of every industry in the country and has always been consulted hitherto. I understand that they have written a letter to the President of the Board of Trade, in which they said that: It is their belief that the proposal for a tariff truce is under present circumstances inimical to the attainment of the recommendations of the Economic Conference which occasions their opposition, and they desire to remind you that they recorded this opposition in the following resolution, which was passed and communicated to you at the earliest possible date after your proposal had been given publicity: ' That in view of the existing high level of foreign tariffs, the general economic position, the imminence of an Imperial Conference and the imperative necessity of this country preserving complete freedom as to any possible means of developing inter-imperial trade, the Executive Committee of the Federation of British Industries consider that it would be against the interest of this country to become a party to a convention for the establishment of a tariff truce.' I will give one further example—I could quote many—which is very interesting, because it is the view expressed by the British Chamber of Commerce in Paris, who are engaged in trying to do trade for this country. They are in day to day touch with all the difficulties that the President of the Board of Trade is trying to overcome in regard to foreign trade, and they are as anxious, probably more anxious, than he is to break down any difficulties in the way of international trade, because that is their daily bread; that is how they live. What do they say? Mr. Hennessy Cook, in reviewing the year's work, said: The Chamber had unanimously decided in favour of rejecting the proposed tariff truce. The present situation was unfair. The doors of Great Britain were wide open to the majority of foreign products, but the doors of foreign countries were barred and shuttered against every class of British goods. At the Congress of the International Chamber of Commerce at Amsterdam he had heard foreigners from 32 different countries discuss business conditions. Uppermost in their minds has been the hope that Great Britain would continue to let their goods in free, while they raise their own tariff walls against British products. A tariff truce would mean that, for two or three years, the trading doors of the world would be closed as they were now, yet foreign nations would be able freely to import into Great Britain the surplus of their industries without even the possibility of reciprocity. That is the view of the Paris Chamber of Commerce, the people who are trying to live by international trade, which the President of the Board of Trade is trying to promote by this lop-sided policy. There is not a word that can be said to defend it. The circumstances of the time make it more damaging still. If this country stood alone, if we were not part of a great Empire—our future lies in our Empire and not in any united or disunited States of Europe—if this country stood absolutely alone as an island country, it would be folly, but to sacrifice our freedom and to dissociate ourselves from the Empire and from the opportunity of Empire co-operation in trade negotiations and in trade, is nothing short of madness.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham)

I must acknowledge in the warmest possible terms the kindly references made by my right hon. Friend in introducing his speech, and I should like also to thank hon. and right hon. Members in all parts of the House for the references they have made to recent events. I am sure that the House this afternoon will forgive me if I speak briefly in simple explanation of this subject, without my usual violence and without the enthusiasm which on Thursday night had such unfortunate results. In order to make the position plain I should like to summarise the events which led up to the tariff truce conference at Geneva, and to-day's discussion, because I think that in that review a great many of the doubts and difficulties which have arisen will tend to disappear.

The Motion which has been made by my right hon. Friend—and as to the manner of his speech I take not the slightest exception—takes us right back to the World Economic Conference of 1927. Whatever may be our fiscal faith, there was general agreement at that time that grave danger lay in the economic nationalism which had followed on the War, and in the growth of restrictions in Europe and other parts of the world, and there was a widespread feeling that if the nations generally were to bear and to discharge their War liabilities, if international commerce was to be restored and employment safeguarded, we should work back at the earliest possible moment to the maximum of freedom in trade. Accordingly, while our predecessors were in office in 1927, that most representative conference was held. It is true that the delegates were not sent to that conference as Government delegates, but they were sent by Governments, and they were representative of an enormous range of industrial and commercial interests. They reached various unanimous conclusions of the highest importance. I need not detain the Committee with a summary of those conclusions. They were not recommendations in favour of Free Trade, as we understand it, but they were certainly recommendations in favour of freer trade. The whole burden of the argument was to the effect that at the earliest possible moment the nations generally should move in a downward direction in tariffs, in other words that the maximum of freedom should be attained.

During the two years which followed, the results were, admittedly, disappointing. So far from our having a downward movement in tariffs, the tendency was to some extent in the opposite direction, and we went to the Assembly of the League of Nations in September, 1929, with a desire to ascertain whether any practical results could be obtained from the Conference of 1927. We differ in fiscal policy from hon. Members opposite. It would not be in order for me this afternoon to use in argument any of the differences which exist in the ranks of the party opposite as to the extent to which they can carry the tariff system. We were simply pledged to do everything we could at Geneva in the direction of freer trade and, accordingly, the question at that Assembly of the League was to find, if we possibly could, practical means of attaining that end. One would think from a great deal of the discussion that has taken place that this proposal was a purely British proposal. I must remind the House that at that most interesting assembly in September of last year there were two large propositions put up by representative European statesmen which excited widespread discussion.

5.0 p.m.

The late Dr. Stresemann and M. Briand outlined a scheme, admittedly in somewhat vague terms, which came to be known as the economic United States of Europe scheme which, in substance, suggested some scheme of European economic federation or, at least, of European economic co-operation. Side by side with that wider ideal, which I frankly recognise has not take concrete form in the subsequent months, and is still under discussion, there was a proposal by the Foreign Minister of Belgium to the effect that we should try to outline some programme in which we could, in practical form, attack the tariff question, and see whether a downward movement could be started. In the speech which, on behalf of the British delegation, I delivered in the Assembly of the League I endeavoured to put that idea in plain and practical form, in what has been described as the tariff truce proposal. That proposal was very cordially welcomed in all parts of the League Assembly. It is true that the trend of the discussion was in general terms, but there was no opposition at that time and the Assembly passed a unanimous resolution which fell into two parts. One part was that European and other nations who were members of the League of Nations and nations which were not members of the League should engage at the earliest possible moment in discussions bearing on that wider economic co-operation to which the two statesmen had referred, and, side by side with that effort and, indeed, as part of that effort, to instruct the appropriate committee under the League organisation to frame an agenda for the discussion of a tariff truce. The object of that truce was to secure an understanding that for a period of two or three years, what-ever might be decided, the nations which were parties to it would agree not to move in an upward direction, but would come to an understanding that tariffs would not be increased pending a discussion of such diminution as could be obtained. That was the unanimous recommendation of the League Assembly. In the subsequent months we had to work out the terms in which that could in practice be applied. The machinery of the League of Nations on its economic side was devoted to the preparation of the draft Convention which formed the basis of our discussions in the plenary session at Geneva a week or two ago and which is still under detailed committee investigation. I pass on to deal with the widespread misunderstanding of this tariff truce. A very large part of the attack which has been made has been due to the quite mistaken notion that we propose to stabilise tariffs for a period of two or three years at their present level. That was never suggested by any speaker in the League Assembly as far as I can remember, and certainly, was never proposed by anyone capable of understanding the proposal in its plain sense. That was not the idea at all.

The idea was that there should be the simple understanding that I have described—no stabilisation of these tariffs—a decision to arrest the upward movement and then a systematic investigation on the proposals which should be made for reduction. The right hon. Gentleman is quite right that as soon as this plan was mooted there have been tariff increases in certain European and other countries, but only in two or three of these cases can the tariff increases be said to have been in any way due to the proposal for a Tariff Truce. In the great majority of cases the increases were already under consideration and they would have been applied whatever had happened in the present proceedings at Geneva. But in any case that does not for a moment arrest our desire to secure a reduction if we can.

Now I come to the Conference at Geneva and to the text of the actual draft Convention. It is only a draft for consideration by all the nations which participated there and for any others that we can later on persuade to take part. I should like to explain, in reply to the right hon. Gentleman's criticisms, one or two of the features of that draft. The idea was that this agreement should be concluded for a period of two or three years and, quite plainly, if it was to be concluded it was desirable that it should date as closely as possible to the League Assembly of September, 1929. That is the explanation of the date 1st October of last year; but in my speech at the plenary session of the Tariff Truce Conference I recognised that in all the circumstances it might be difficult to secure agreement in regard to that date, and we suggested that a compromise might have to be found on the 1st of January of the present year or some date between the League Assembly of last year and the opening of the present Tariff Truce Conference on the 17th of February last. That point is at the moment under discussion.

Another Clause in the draft Convention suggests that we have to recognise the exceptional circumstances, or what are sometimes called the catastrophic conditions, under which it would be impossible for participating countries to agree to bind themselves for any period at all. I have never thought that there was any great difficulty or drawback about that Clause. There are various other Clauses of that kind, some of a more technical nature, which do not for a single moment go to the root of the controversy this afternoon.

Sir AUSTEN CHAMBERLAIN

Which Clause does the right hon. Gentleman mean?

Mr. GRAHAM

I cannot give the number of the Clause, but it is that which deals with the period of exceptional or catastrophic conditions. I can assure the right hon Member for West Birmingham (Sir A. Chamberlain) that it is not important in the Debate this afternoon. Far more important are two other Clauses, one of which makes reference to the definition of fiscal duties. I quite agree that it is not easy to arrive at agreement on a problem of that kind, but the definition which I attempted to give to the Plenary session of the Tariff Truce Conference was in these terms, that a fiscal Duty should be regarded as one which was plainly imposed for revenue purposes and as regards which, assuming it to be Customs in character, there was an effective countervailing Excise Duty within the country of imposition. In other words, that the protective element in it was small or plainly limited. The right hon. Member for Hendon (Sir P. Cunliffe-Lister) suggests that under that head there may be introduced a protectionist element, and I can only say that in so far as any protectionist element accrued at all it would lose the benefit of a clause of this kind which is designed to give a watertight definition of a fiscal duty.

The other Article—I cannot pledge; myself to the number—of outstanding importance, perhaps of the greatest importance in the controversy surrounding this draft agreement, is that dealing with exceptions, with those commodities in respect of which the countries would, so to speak, contract out of a scheme of this kind, because for a variety of reasons they were unwilling or unable in the existing conditions to bring them within. Those who believe in fiscal freedom and who quite honestly and sincerely take the view that the industrial and commercial needs of this country will not be best met by a tariff controversy would like to see an all round and comprehensive Convention; but we have also as practical people to recognise that that is not possible under existing conditions and that there are countries which are willing to go a very long way in supporting this draft Convention and truce, but nevertheless, for urgent reasons might wish to keep certain classes of commodities outside. Both prior to the conversations at Geneva and certainly during the discussions which took place there it was plain that the commodities which most of those countries would seek to exclude were likely to be agricultural commodities. In other words, they may be willing to reach agreement in other spheres but they are afraid that for the time being they could not bring some agricultural products within the scope of this Convention. A difficulty of that kind would never have entitled this country to wash its hands of the possibility of securing this Convention, and for my part I shall be prepared to go on, and to go a long way—and I propose to continue in this course—if we can only get agreement on negotiations for reduction, perhaps, on the basis of groups of commodities or some other basis.

When I come to describe the two committees which have been set up, I hope to be able to point clearly to the House the line which the discussions may follow. The two committees, apart from all the sub-committees, were set up after the first week of the plenary discussion. The first committee was devoted to the Tariff Truce itself; that is to finding out whether we could get any basis at all for agreement, to arrest the upward movement of tariffs in Europe, to fix a date to that truce, the period of that truce and the conditions which should be attached to it. The right hon. Gentleman has been perfectly fair on that point. We on our part never suggested, and I am afraid that is the explanation of a great deal of the misunderstanding that has arisen—that that truce was anything more than an incident, so to speak, but an important one, in this campaign. If I may change the figure, it was only the door through which we were to pass to the second and far more important duty—namely, the negotiations which were to occupy next year, maybe two years or three years, as the case may be, in which we should work out, and I hope will work out, a practical programme. Why should the right hon. Gentleman, harking back to the Coal Mines Bill, which has had such disastrous results for some of us in these Debates, draw a parallel between Part I of that Measure which was postponed and the rest of the Bill and say, "Here you have an overwhelming case for postponement of your Tariff Truce, and you should look to the other part of the Bill if you are determined to go on." I say in this connection, as I said in regard to the other legislation, that Part I is fundamental to the success of this scheme.

Sir P. CUNLIFFE-LISTER

Can you rely on your allies this time?

Mr. GRAHAM

If it was possible for European countries, during the time we were engaged in these detailed negotiations, to go on increasing tariffs here and there, the whole House will agree that you would get no foundation whatever, no environment in which you could in sympathy and understanding conduct the negotiations, and we might rest assured that they would break completely in our hands. Part of my difficulty this afternoon in discussing the work of the first committee at Geneva turns on the fact that I dare not allude to the speeches of other delegates in the later stages of the Conference, and I must not say any- thing on the Floor of this House which will interfere with the admittedly delicate negotiations in which the sub-committees are now engaged. Perhaps hon. Members opposite might have preferred to bring this Motion on at a later date when the Conference was concluded. I make no complaint. But, meeting as we do when the Conference is sitting, my tongue is to some extent tied. I can say this: that I hope we shall get widespread acceptance of the truce itself, that is our earnest desire, or at all events of the spirit, purpose and principle of the truce. It is quite true that two countries have made, one a public statement and one a statement that has been reported against the idea, but I want to remind hon. Members that this proposal obtained a volume of support—

Sir P. CUNLIFFE-LISTER

Is that France and Italy?

Mr. GRAHAM

Yes—obtained a volume of support at Geneva far in excess of anything which was expected. The newspapers at home devoted very little attention to the Geneva Truce Conference being much more interested in certain tariff proposals at home. I was amazed by the amount of support which this idea obtained and by the desire which existed to reach an understanding and even if we do not get a form of truce in the terms in which it was proposed in the Draft Convention, I still hope that we shall get an understanding within which we can work for the arresting of this upward tariff movement. Then we shall devote our attention over the next year or two years to the detailed negotiations which, in my judgment, are by far the most important part of this plan.

The questions then arise, what form will these negotiations take and is it worth while for this country to engage in them? Undoubtedly they must take the form particularly of the wider economic co-operation which the late Dr. Stresseman and M. Briand had in mind at the Assembly of the League of Nations in September; but we have to give them concrete form and they may turn, I think, upon the analysis of groups of commodities. For example, many of the best students of the possibilities of freedom in European and world competition strongly urged at Geneva that the shortest route to our goal would be an analysis, say, of a great group of commodities like iron and steel or machinery and plant, or textiles, or any other comprehensive group, always with the understanding that we should use the word "comprehensive" as it is intended to be used, to cover, not only textiles or machinery and plant or iron and steel products, as the ease might be, but also all the adjacent and allied commodities bound up with those commodities, in order that, over as wide a field as possible, we should get agreement in these negotiations, and reduce tariffs progressively as rapidly as we could, and contribute to freedom of competition in that part of the field.

I believe there is a definite hope in that direction, and I will come in a moment or two to the suggestion that it ties our hands. But plainly whatever view we take of the tariff conference there must be agreement at once to the plain business proposition, that, if there is any hope at all in Europe and in other parts of the world, of restricting the upward tendency and, within that understanding, of promoting a downward tendency, it can only be to the advantage of British trade and it must minister to the removal of that narrow economic nationalism which, in my view, has been one of the disasters of post-War Europe and has seriously retarded the recovery, not only of Europe but of a large part of the industrial world.

What reasonable objection can be taken to our embarking upon negotiations of that kind at Geneva or anywhere else? Believe me, that is an integral part of this scheme, and I should consider it disastrous if anything were said this afternoon to belittle that effort, to pour cold water on it or to suggest now when we are approaching, for the first time, a practical programme following the Conference of 1927—to suggest now that it would lead to no useful result. I do not think any hon. Member even if he holds tariff views very strongly, would dissent from that statement. While I have never shared those views, I understand the feelings of hon. Members opposite who hold them, but I should have thought, quite apart from that consideration, that it was worth while to make this effort. Accordingly I say at once, speaking for the Government, that whatever may be said in all sincerity in criticism, we intend to keep our hands to the plough and to get results from this effort if we possibly can.

The next question which arises is: Does a truce of that kind tie our hands? I do not know how all these commercial associations and other bodies have reached that conclusion. Their resolutions, in nine cases out of 10, have been based on the assumption that we were going to stabilise these tariffs on the existing level and accept that as a proposition for Great Britain which we could not alter. I have tried to show that that is not the case. There is the fullest freedom for this country, during that downward movement, to review its position at any time, and I found at Geneva that even many Protectionist countries desired to recognise that the post-War economic nationalism had gone too far, and that the time had come to seek other ways. This view was pronounced in the speeches, for instance, of the German delegate. We do not tie our hands; we have the benefit of any advantage which can come from this downward movement in the groups of commodities which affect most the industry of this country.

What is really at the backs of the minds of hon. Members opposite? I should be out of order on this occasion in referring to anything which involved legislation, but I cannot help thinking that much of this discussion turns on the value of what may be called the retaliatory tariff, or some power in the Government's hand to bargain with other countries, a power expressed in terms of more Protection. That leads us at once to the difference between the two sides of the Committee in this matter. If after an experience covering a fair number of years, I were able to admit that this country in its island position, with its entrepot trade, with the enormous importance of its invisible exports, with all the insurance and the shipping and the other services which we have rendered to the world, would gain by retaliation, if I thought that it would help to deal with unemployment in this country, I should be the first to recognise it. But that is the difference between us. Hon. Members opposite, with perfect sincerity, advance that argument and accordingly attack this truce. We, with equal sincerity, feel strongly, and the feeling I think is shared on the Liberal benches, that that is the wrong way to go about it and that, so far from bringing any benefit at all to the industry and commerce of this country, the only effect would be to restrict the aggregate volume of the commerce of this country. That is the conclusion which I have reached and, holding those views as we do, we are bound during our term of office—which will not be so short as my right hon. Friend opposite somewhat pessimistically anticipated—to do everything in our power at Geneva and elsewhere, to promote this faith. I suggest that I have advanced sufficient reasons for that view.

In the last place, I do not intend to dispute that both at the Conference and at the Assembly the Dominions have indicated that they cannot be partners to this discussion. I am not going to be drawn into saying a single word which would seek to segregate the Empire as an economic unit from the rest of the world, and if I make any reference at all to outside controversy, it is to say that I do not believe that the idea of the Empire as a self-contained economic proposition is practical politics. I would prefer to state the Geneva problem in these terms—that we have got to take Europe, and any other part of the world that we can approach, and the British Empire with us, in one united effort against economic restrictions and against tariffs wherever they may be found. If we rest our case on that basis we minister to the freedom of commerce over the widest possible field, and we do not become involved in any of those controversies which are manifestly misleading in this case. All that we have discussed at the Assembly and during the present debates at Geneva does not preclude the very best co-operation within the Empire that we can obtain, but it must be co-operation based upon mutual effort to get rid of tariffism and not to increase it. I have stated this case, perhaps all too briefly this afternoon, and under a handicap, but I trust I have said sufficient to show the principle on which the Government proceeds and on which we intend to proceed, I am perfectly satisfied that out of this Conference we can get practical results-which will be of value to our industry and commerce, and, above all, to the 1,500,000 of our fellow-countrymen who are to-day unemployed.

Sir J. SANDEMAN ALLEN

I desire to approach this question from a nonparty point of view, because I feel sure that the Committee are agreed that it is a national and not a party question. I desire to express the view of the business community upon it. I listened with great interest to the speech of the President of the Board of Trade, as we all did, but I noticed that he made no reference to the resolutions communicated to him from the business world on this subject except to assume that they misunderstood the effect of the proposal. I would point out, in the first place, that the British National Committee of the International Chamber of Commerce, on whose behalf I think I am entitled to speak, being one of the leading officers, represents commerce and industry throughout this country, and that it is a body whose members belong to all three political parties and hold all sorts of fiscal ideas. Some are wedded to the old fiscal ideas, whether of full-blooded Protection or anæmic Free Trade, and many, on the other hand, take the view, as I do, that the fiscal question is a purely business question. But they are all of one mind on the question of this tariff truce, and, in the circumstances, I may be allowed to state what has led up to their decision.

To the business world this is no new question. It was agitating us long ago and it is more than seven years since we in the International Chamber of Commerce considered the possibility of international action to arrive at economic agreement. We took action in this matter years before the Governments decided to proceed on these lines. We started in 1923 at Rome and we have carried on the movement ever since. We had a special committee which studied this question constantly. I have been a member of that committee since it was started and I have been chairman of its transport section and I am acquainted with its proceedings. We met our opposite numbers from different parts of Europe and of the world regularly every month or two each year. I mention these facts because this Committee ought to understand that this was a business question long before it became a Government Question, and the work which was carried on in the way I have described has been continued since. In the year 1925, when the League of Nations decided to endeavour to secure agreement in the sphere of economic politics—that sphere which has been and is still greatly embittered by various differences—they started comparatively well, and, invited, among others, the International Chamber of Commerce to help in preparing the ground. The Committee is familiar with the fact that the International Chamber of Commerce co-operate with the League of Nations; they are the commercial counterpart of the League and prepare everything for them.

We have over 40 nations on our body, and we are continually discussing these questions, which ultimately come before the League of Nations to be officially discussed. The representatives of the different nations on the League are often actually the same men who have taken part in our discussions beforehand. What are the words of the spokesman of the League of Nations in regard to this matter? He said that it was the report of the International Chamber on the reduction of tariff barriers which formed the foundation of the Conference's great achievement. It was not merely that the Chamber's recommendations were wise, skilful, far-reaching and well-timed, but their value consisted largely in the fact that they came with the collective authority of the business representatives of all nations. In point of fact, they were representatives on the Conference as well. What did this Conference decide? Many important and valuable decisions were arrived at. The aim of the League of Nations was first to arrive at a common agreement, and then at common action. The World Economic Conference in 1927 arrived at common agreement. On many matters of importance we were able to carry them out subsequently. The most important was on tariffs, and what was that common agreement? The Conference declared: that the time had come to put an end to the increase of tariffs and to move in the opposite direction. The International Chamber of Commerce met in congress later in the year and affirmed this agreement, and urged every international body to proceed to the second stage, namely, common action. This was three vears ago. We have been seeing what could be done all the time to get common action, and what was the result? Every effort that we have made has brought more and more home the entire futility at the present time of obtaining common action. At that time, three years ago, we agreed that everybody should stay his hand for a time and not raise tariffs in any way.

What has been the effect of that agreement? Every nation worth while has been busy putting on its tariffs all the time. Now, forsooth, we are asked to go into this open door and shut ourselves in for some years to come. During the last three years there has been a great retrogression and not progress at all on that issue. Thank God, we have made great progress in clearing away many trade barriers, but directly you come to tariffs it would seem that many countries refuse to entertain it at all, saying that tariffs are their sovereign right, and that they will not discuss it with anybody else. The League has found, as we found before the League considered it, that the attempt to produce results by direct arrangements of this kind has had to be put on one side more or less, in order to try to see how far we can work on different commodities. I do not know what the League has done lately, but the business body which prepares things for the League has studied one and then another, and put it on one side as hopeless of arriving at an arrangement. They are still working at it, but hope is dwindling all the time.

Here we are to-day not one single step nearer than we were three years ago. This Tariff Truce was discussed three years ago. There was an informal agreement then that we should have it, but what has happened? We are worse off than ever, and no progress has been made at all. In face of this situation, and without the slightest evidence of a change in the state of mind of the important countries concerned, we are invited to stabilise these high and often outrageous tariffs in other countries for a period of years in the hope that something may turn up. With regard to the word "stabilise," I am prepared to accept the way in which it is put by the President of the Board of Trade, that is to say, that if we do not agree to crystallise these tariffs at a given figure, what we do is to agree that they will not be put higher. Those of us who have had years of experience in dealing with these foreign countries know exactly what that means. They have no intention of reducing their tariffs.

People who do not realise fully how these things are worked, think that it is a reasonable proposition, but those who know what has been going on for years, and who know the state of the mind of the business world—and the business world governs the countries of Europe more than it does this country—know how utterly hopeless it is to imagine that there is the slightest intention of reducing tariffs which have been put on expressly to bolster up industry, very often totally regardless of its economic value to the countries concerned. I do not propose to trouble the Committee again with the resolution of the Association of Chambers of Commerce, but there is a point in it worth noting in case the President should be successful in his desire; I earnestly hope from the non-party point of view that he will not be successful, and the business men of this country hope also that he will not be successful. In case he comes to any sort of agreement, however, I will point out what is said by the British Chambers of Commerce— If, notwithstanding, His Majesty's Government agree to such a Convention, the Executive Council are of the opinion that ratification should be subject to ratification by the Governments of France, Germany and Italy on the same terms and conditions, and subject to the same interpretation of its provisions as those on which it is ratified by this country. That is a vital point. We have experience in another Convention of the total misunderstanding of the true meaning of the words, and we refuse to ratify for that reason, because it is so easy to have misunderstanding unless you have not merely the words but an explanation of the words clearly defined. There has been a tendency under certain sentimental influences for the Government in recent times to give away freely many things without due regard to their true economic value to this country. If we are about to sacrifice our interests again for sentimental ideas, let us remember that the other nations are not influenced by sentimental ideas at all. Those of us who deal with this matter day by day, month by month and year by year, know that that is the very last thing that enters into their calculations.

If the worst comes to the worst, let us be guarded, and let us take care that whatever arrangement is made is clear and fool-proof. When you come to study the resolution of the National Com- mittee of the International Chamber of Commerce, you will realise that there is a great deal more to be said about it. I would like to take up each of their arguments separately. They first say: The proposed tariff truce would definitely limit the possibility of exercising British influence for the general reduction of tariffs. The President of the Board of Trade did not refer to that. It is a much more important thing than people realise. We are the lowest tariff nation in Europe. I have been for many years a confirmed Free Trader, but in recent years, while I do not for a moment accept general Protection, I realise that there is a line beyond which you cannot go, and that there is a point of endurance beyond which, if tried, we must be driven to taking certain steps. A country like ours, the largest trading country in the world, with the lowest tariffs in the world, is in a position to exercise continuous pressure on other nations. I know that they live in fear of us.

I remember well a conference two years ago when a European nation had been very aggressive in the matter of prohibition, and their leading representative at our Conference made a truculent speech. I was asked to see him afterwards to see what I could do. In talking to him, I reminded him of the fact that during the War one of the important points that was considered before a forward movement was made was the condition of the ammunition dumps. He looked rather puzzled, and I said, "Apply that to the tariff war which you are suggesting. Let me remind you that the British nation is the most patient in the world; it puts up with more than any two nations puts up with for a long time, but there is a moment when it will stand no more, and we are getting near that moment." I said, "Look at your tariff dumps; you have shot away 90 per cent. while we have still 90 per cent. of ours left. What are you going to do?" That entered that gentleman's mind, and next morning he made a completely different speech, and the question was settled through the influence of what had been going on in the Conference. What could we have done if we had locked the door and said we will do nothing? It is the fear of what we can do that keeps people in order in that respect. Here we are going to throw that away for two or three years, and we are doing it after the two or three years' experience we have had with this question. It is that which brought the International Chamber of Commerce representatives in this country to the unanimous decision that this is a foolish and an unwise proceeding. I ask the question quite seriously, are we for the next few years to have no weapon to keep other people in order and to protect ourselves?

I turn to the second point. On this point my right hon. Friend has spoken very clearly and very simply as to the question of the Dominions and the danger which there is in the minds of business men to-day of disturbing our arrangements. We are considering all possible means of making economic arrangements of various kinds apart from tariffs, but we know how much value the Dominions put on tariffs, so that even if we do not accept their suggestions we should discuss them fairly. If this proposal is adopted, we start by shutting the door and slamming it in the face of the Dominions. What sort of atmosphere shall we create by this discourteous conduct? I feel that this question of Imperial relations will be dealt with in an abler fashion by others, but it is a very strong reason in the minds of business men and I have a certain authority to express their point of view, because I am also one of the leading officials of the Federation of Chambers of Commerce of the Empire, and we are to have a congress in this country in May next to discuss the possibility of developing relations with the Empire. How can we talk to those people when we have shut the door in their face? We have been working for three years in close intercourse with the business men of Europe and we have a much shrewder idea of what there is to gain, and I venture to submit that even my right hon. Friend the President of the Board of Trade—because he is my right hon. Friend—whose ability and integrity are so much admired by all of us, does not realise the danger he is in of walking into a real trap.

Lastly I come to unemployment. Here we are on more debatable ground—in our own body, the Chamber of Commerce, it is debatable ground—but what we feel is that while it is one thing to say that safeguarding will not help or that safeguarding may help, it is wrong to slam the door in the face of any possibility of doing what many people, and I will venture to say the majority of people in this country, are firmly convinced whether they are courageous enough to say so or not, provides our one real hope of dealing with the problem of unemployment. If we slam the door on that possibility and say that for three years we will do nothing we are only entertaining a chimera for people who have so far failed to profit by the experience of the past. It is all very well to say that the sole object of the Truce is to provide a breathing space during which negotiations can be carried on between countries for the removal of barriers to trade and the reduction of Customs tariffs, but the whole system of international relations is so complicated and so bound up with treaties and arrangements, all reacting in different ways according to the interests of different countries concerned, that it really is altogether far too optimistic to imagine that the mere signing of the ratification will suddenly open up a new era during which the various countries will tumble over each other in their haste to arrange reductions in their tariffs which have been deliberately built up to foster local industry, whether it has been economically wise or not to shelter such industry.

Meanwhile we are left in the lurch with our hands tied. If countries in declaring their desire to give effect to the recommendations of the World Economic Conference really do genuinely mean business, there is ample machinery provided by the League of Nations and otherwise for more serious attempts to be made to realise those aspirations without having recourse to such a convention as the proposed Tariff Truce, which at best is riddled with opportunities for reservations and for the evasion of the true spirit in which its sponsors possibly hope that its objects will be carried out. I do not put it outside the region of possibility that some at least are hoping we, will walk into this trap.

Much as I, in common with many, respect the President of the Board of Trade we feel that he has been misled by sentiment in this matter, and I submit that not only has no case been made out that it is in the interests of this country to enter into such an arrangement but that it is clearly to our disadvantage and no answer has been given to the protests of business men on this point. This view is supported by the representatives of trade and industry in this country irrespective of politics or parties. It would therefore be a grave and fatal mistake to make, and I hope it will not be approved by the Committee.

Mr. BUTLER

In rising to oppose the Tariff Truce I must express the opinion that we are considering something of vital importance to this country at the present time. The President of the Board of Trade has chosen to introduce this question at a moment when there is an unprecedented wave of feeling in this country in favour of some extension of tariffs. I think that somewhere in his writings the late Sir Robert Peel declared that the day would come when this country would return to an increase of tariffs, reversing the decision that he himself took in the days in which he lived. I have not been able to find his exact words, but I remember them distinctly from studying his works. It seems to me that the prognostication of Sir Robert Peel has come true to-day, and that our people are realising that they have only one weapon left which they can use to improve the dreadful economic conditions prevailing not only in industry but in agriculture. To-day we may see the role reversed. We have to-day our Cobden playing a different game from the game which Cobden played in his own day. At the moment when there is an unprecedented feeling for an increase in tariffs the President of the Board of Trade is trying to initiate a scheme for a Tariff Truce. I am cure the country will be against any proposal to tie our hands in this matter. Those who have spoken before me have been able to show much more clearly than I can hope to do how very wrong it would be to tie our hands now.

The wave of feeling going through the country just now is supported by facts. I am afraid I cannot share the optimism of the right hon. Member for Hendon (Sir P. Cunliffe-Lister) as regards the present development of our Empire trade, and would like to see it growing faster than it is, but I agree that it is the only bright feature in our export trade. The balance between exports and imports changed from an advantage of 1 per cent. in 1926 to a loss of 16 per cent. in 1928. As regards our trade with our Dominions I have had the doubtful pleasure of looking through the statistical abstracts recently published. In those somewhat dry blue books one finds that between 1925 and 1927, in the cases of India, South Africa, Nyasaland, Nigeria, Hongkong and Kenya there was a definite reduction in the balance of our overseas trade. Faced with that serious condition of affairs, it is absolutely essential for us to use the weapon of increased tariffs, the only one we have not yet used to advantage in order to try to improve our overseas trade. The French delegate to the conference which the President of the Board of Trade attended referred to "agonising circumstances" in France which led to an increase in French Protectionist feeling, and possibly led to the French point of view that the Tariff Truce was not a good thing. I am sure that we have circumstances much more agonising than those which prevail in France.

As representing probably one of the most depressed arable areas in this country I can say that the circumstances there are sufficiently depressed, and though I have not had much personal experience of the industries of this country we can see from the figures of unemployment the agonising circumstances which exist there. If we were to support the tariff truce at this moment it would mean a stabilisation of depression—I think I may be allowed to use that term "stabilisation"—and if I may use a military metaphor, seeing that "truce" is a military metaphor, it would be a truce to bury our industrial dead who have been shattered and annihilated by the cannon of the artillery of the foreign countries who use those weapons. In the face of this condition of things I cannot support any tariff truce and I must oppose it with all the power at my command, not only from my own personal experience in my own district but from my experience of the difficulties which this country has to face. Before leaving the question of our internal conditions I want to mention a fact which Canada has realised and which we and European countries will realise, that the American slump in financial prices will affect the question of the selling of American goods overseas and makes it even more inopportune to introduce a tariff truce at this moment.

When we come to the international sphere I am tempted to quote the words of Prince Lyautey in the "Europäische Revue" in which he expresses these views: The foreigner considers that the Labour Government, being faced with this wave of Protectionist feeling in the country, and being obliged at the same time by its own supporters not to raise tariffs, has been compelled to seek refuge in the device of the tariff truce. I do not necessarily share the view of this distinguished writer, because I think we can all give credit to the President of the Board of Trade for his ideals and his idealism in building up a new era. I propose to follow him on the line of his ideals and not to take up the somewhat sordid considerations of party politics. When we consider this question from the ideal point of view and from the point of view of the growth of international law and international co-operation can we feel that we shall be developing the growth of international co-operation and international law? I was reading to-day an excellent article in the American Law Journal by Mr. Kuhn about the growth of the tariff as an international factor. The writer said the tariff was growing greatly as an international factor, and he quoted examples from American history of where remonstrances had been made in the international sphere and where the tariff had entered into the international sphere as a weapon of international importance. A recent example of that was provided by the action of this House in asking the Foreign Secretary to make representations abroad on the question of the dumping of foreign produce. At the same time we find in international law, starting from Grotius and Martens, opinions about tariffs borne out by Signor Pirelli as late as July, 1929, when he said that a tariff is a matter of national sovereignty. I think international law claims that a tariff is a matter of national sovereignty. In May, 1927, the late Dr. Stresemann said: Commerce is par excellence a matter of international concern. 6.0 p.m.

Therefore, on one hand we have the fact that a tariff is a matter of national sovereignty, and on the other hand the very important fact that commerce is a matter of international concern. How are we to reconcile those things? I maintain that the tariff truce is not a way to reconcile those two facts and to secure progress. Here I would like to make two constructive suggestions for the progress of international commerce on international lines and the progress of international economics. The advice given by the International Chamber of Commerce in 1928 was that much good could be done by bringing the interpretations of the most-favoured-nation Clause more nearly together. The second suggestion was that the advice of the Danish delegate to the conference which the President of the Board of Trade has been attending should be followed, namely that it would be much better, instead of waiting for a tariff truce, that a commercial division should be added to the Permanent Court of International Justice. I believe that both of those suggestions would be much more effective in promoting commerce and establishing better international relations. Signor Bottai considers that we have not been ideally successful in the way our international commerce has been run since the War up to the present moment and I agree. We cannot say that the directional force is running it in the right way. I believe that commerce is a matter of private initiative and not a matter of collective arrangement. Just as in old times in religious controversy it was found that freedom of conscience was the essential, so, in considering economics to-day, we ought to realise that individual initiative is the essential thing. We ought not to tie our hands by a tariff truce, but we ought to develop individual arrangements such as those I have mentioned, which I believe would be much more effective in developing our international commercial affairs.

Mr. PERRY

Some hon. Members have opposed the proposal for a tariff truce on the ground that there is nothing in it and therefore they contend that nothing can come out of it. I would suggest to my hon. Friends opposite that they cannot have it both ways. The argument that there is nothing in it and that no good can come out of it cannot both hold good at the same time. Hon. Members opposite defend the protectionist policy purely on its merits. I have listened to many Debates on tariffs and the favourite argument has generally been that tariffs should be used as a weapon of retaliation against those who are erecting tariff walls against us.

A strong point has been made in this Debate upon the question of unemployment in this country, but surely hon. Members opposite must recall the fact that in many protectionist countries they have a very acute problem of unemployment. Even in one of the most highly protected countries in the world, the United States, the employment figures show that at the present moment the percentage of unemployment in the United States is over 22 per cent. Hon. Members opposite know perfectly well that in the United States there has been an acute fall in prices which those concerned with commerce in this country are looking upon with fear and trembling, because that fall in the United States is bound to have a reaction in this country.

With regard to our Dominions, only a few days ago we listened to a speech from one of our Australian representatives who was attending a conference in London. Australia has often been quoted as one of the best examples of our highly protected Dominions, but the Australian representative to whom I have referred said that there was no prospect of the emigration policy from this country to Australia being successful on account of the unemployment existing in Australia. In face of statements of that kind hon. Members cannot ride off with the plea that there is no unemployment in protectionist countries. I remember on one occasion listening to a remarkable speech which was made by the Noble Lord the Member for Oxford University (Lord Hugh Cecil), which was one of the most remarkable speeches that it has ever been my pleasure to listen to, in which the right hon. Gentleman laid down that the only successful policy in the end was a policy of abundance. The Noble Lord also pointed out that you can never increase consumption by a highering of prices, and that the only successful economic policy was that which enables each country to produce that which God and nature had best fitted it for.

In dealing with international tariffs, one cannot forget their effect upon international relations. Many of us believe that the great jealousies created by tariff walls often lead to bitter disputes between nations, and I hold very strongly that the more steps we take to open the door of international friendship the more we shall add to the benefit of the whole community. I am associated with the consumers movement which has no interest to serve but the interests of the consumers, and we should not be fighting to break down international tariff barriers if we were not convinced that that policy would not only benefit this country but other countries as well, and I am sure it would effect a better feeling between nations.

The President of the Board of Trade said that there was no intention of stabilising the present system of tariffs, but I think it would be a wise thing to take steps to prevent any increase in tariffs between various countries, and still leave the door open for negotiations between the representatives of the various nations. I believe that the Labour party have a mandate in favour of the lowering of tariff walls, and for strengthening international relations. I am certain that those behind us will appreciate that the first step in preventing any further increase in tariffs and leaving open the door for negotiations for the lowering of tariffs in the meantime would be a step in the right direction. I do not think that we are going to fall into a trap. I think a wise step has been taken, and I wish the President of the Board of Trade success.

Commander BELLAIRS

I have no intention of criticising the statement that the President of the Board of Trade has made, to the effect that he has no intention of stabilising our tariffs and leaving us defenceless. That is not our criticism. Our criticism is that there is every intention of stabilising our present position, and therefore leaving us defenceless. That danger has already been pointed out from these benches. I will take America as an example. America produces about 50,000,000 tons of steel every year, and we produce about 7,500,000 tons. Suppose that America reaches the saturation point, and there is a spill-over of 10 per cent. of her steel. That is not going to France or Germany where they have tariffs, but it will come to this country. The 10 per cent. spillover of steel production means 5,000,000 tons, and that would simply put every steel manufacturer in this country out of business. If we had had a truce of this kind in former days, I do not be- lieve that Cobden could have negotiated the French Treaty, and I am perfectly certain that Gladstone could not have brought Greece to her senses in regard to her tariff by saying that he would put a tariff on Greek currants.

The Mover of this Amendment began by pointing to the Tariff Truce. The fundamental objections he brought against a Tariff Truce were very important, and I do not think that the President of the Board of Trade gave any answer whatsoever to them. The President referred to the world Economic Conference as if it was constituted of representatives of a highly scientific type, but they were not official representatives in any shape or form, and, to my own knowledge, some of them were notorious free importers, and did not represent British industries in this country. I should not call the editor of the "Economist" a representative of this country on this question, and I know that, at any rate, he would be up against our party if we obtained a mandate to bring in a tariff. The President of the Board of Trade was not able to point to any support from industries for his proposal. I know it has been said that industry has complained about the Tariff Truce. The Chancellor of the Exchequer said that the National Union of Manufacturers had sent in a memorial in favour of the truce, but all that they did was to bless any movement downwards of tariffs. They never recommended a Tariff Truce, and since then they have repudiated the Chancellor of the Exchequer.

I remember that last December I asked the President of the Board of Trade a question, which, like many questions in this House, was designed to give information, and which pointed out that the Empire was not co-operating with us; and I asked the right hon. Gentleman whether, in addition to obtaining the sanction of Parliament, he would bring this question before the Imperial Conference and be guided by that. I was met with a blank refusal. It does seem to me that this proposal, if it be carried through, is going to be a cause of the Empire and this country drifting apart. The hon. Member for Kettering (Mr. Perry) spoke of what he had heard in a room across the hall from one of the Australian representatives in reference to these discussions. I would like to point out what I heard from General Smuts. He pointed out that there was only one tie binding the Empire to us now, and that was the King, and he pointed out the extreme danger of the situation. I think that, if we are not in a position to bind the Empire by negotiations in the future in regard to tariffs, we may meet that danger which General Smuts pointed out, namely, that, through no will of their own, but through the mere accident of circumstances, parts of the Empire will drift apart and drift out of the Empire.

It is to my mind a very serious thing for the Government to try to bind this country for two years so that we cannot really actively negotiate with our Empire and bind the Empire together. I believe that our free imports system is the basis of half the protective tariffs in Europe, because we add a free imports market of 45,000,000 people to the population of every country in the world. I remember that Herr Zimmerman, a German statesman, said that the foundation of the power of Germany was the free imports market of Great Britain, and that they had made much money from that free imports market. I cannot give my authority, but I remember distinctly reading a telegram in the "Times," before the War, in which the Austro-Hungarian Minister of Finance stated that every tariff in Europe was designed with the object of hitting England hardest, for the simple reason that England had nothing to offer. We want to know, in regard to the promises which hon. Members made at the last General Election, where this tariff truce is going to keep out in any way the sweated goods of other countries. That was the promise that was conveyed in nearly all the election addresses of hon. Members opposite. I have extracts here, and I will take some of the most cautious of hon. Members opposite—Scottish Members. The hon. Member for Dunfermline (Mr. W. M. Watson) said during the General Election: Where goods were produced under conditions different to what prevailed in this country … it was the duty of the Government to prevent the goods entering the country at all. The hon. Member for Newport (Mr. Walker) said that he would prohibit the import of goods where they were produced under conditions worse than in this country, and, as I see on the oppo- site benches the hon. Lady the Member for Blackburn (Mrs. Hamilton), I will read what she said. In answer to a question, she said: Safeguarding was not the way Labour would keep sweated goods out of this country. Labour had an effective plan for doing this. They did not merely want to keep out goods produced by sweated labour, but also to raise the general standard of working conditions all over the world. How are you going to do that by a tariff truce which forbids you to put a tariff on goods imported from Belgium, where the wages are only 40 per cent. of what they are in this country? How are you going to raise the level of British conditions against that?

It is perfectly obvious that this Tariff Truce is going to place us at the mercy of sweated goods coming into this country. You are not able to keep them out. If you think it is due to the Prohibition Treaty, why do you not denounce the Prohibition Treaty of 1927? That is simple enough. The representatives of 30 nations were present at the Conference, including our own, but only eight of those representatives had permission from their Governments to do otherwise than take part in the discussion, and it is perfectly obvious that a nation like Denmark, for instance, which has an enormous excess of imports into this country as compared with the exports that we send to her, wants to stabilise her tariff at scratch. That is perfectly natural. And not only does she want to do that, but she wants to place us under the International Court, so that we cannot make any increase of any sort outside the Treaty. Then there is Belgium, whose wages, as I have pointed out, are only 40 per cent. of ours. Italy, seeing that we are deeply pledged to free imports at present, wants to go much further, and to have bilateral treaties all round. Bilateral treaties necessarily mean that we are left out in the cold, because we have nothing to offer; we can only make bilateral treaties with countries that have tariffs.

In spite of all these considerations, the Government last September rushed in to propose a tariff truce. The President of the Board of Trade took credit to himself that he was the proposer of it. What has happened since? I think that my right hon. Friend under-estimated what had happened among the nations of the world. At any rate, the German repre- sentative at the Tariff Truce Conference pointed out that, of 27 European countries, 14 had raised their tariffs in the seven and a-half months since the Tariff Truce was proposed, and he went on to say that no less than seven were proposing to raise their tariffs still more. I think we might have been taught, by the failure of the 1927 agreement in regard to prohibition, that we were not likely to get nations into an agreement of this kind. We never got more than 14 nations into the agreement against prohibition of exports or imports. Let me add that when, on the 18th February, the President of the Board of Trade met the representatives of these 30 nations, he himself must, I think, have been surprised that only eight of them were to be allowed to sign the Tariff Truce or to do anything but take part in the discussion. For myself, under these conditions, although I may not carry the support of my own party in saying this, I think that, if this agreement is ever concluded and is ratified by this Government, but is not ratified by both Houses of Parliament in a constitutional way and by the Imperial Conference, we should be justified as a party, when we get into power, in repudiating it.

Mrs. HAMILTON

I am grateful to the hon. and gallant Member for Maid-stone (Commander Bellairs) for giving some very sound sentiments of mine a free advertisement. I want to say a very few words to recall the Committee to one very important set of facts which govern the whole of our discussion, namely, that this country is, and has been for 10 years, a member of the League of Nations, and that the whole of this economic effort towards an international agreement and an international understanding, and the use of the method of international conference to bring about greater economic mutual agreement, is governed by the League of Nations procedure, and arises directly out of the fact that this country is a member of the League. The particular economic effort of which this Tariff Truce proposal is a stage, was initiated and supported and carried through various stages in the years during which the party opposite was in power, and what was done at Geneva last autumn is simply one further stage to which I cannot believe anyone who accepts the fundamental principles of the League—the principles of mutual agreement and method—can seriously object.

Sir P. CUNLIFFE-LISTER

That is a challenge in regard to the period during which I was personally responsible. This matter very often came up, and there were actual proposals for agreements as to the stabilisation of tariffs. I always made it perfectly plain that I would enter into no sort of tariff arrangement unless I got very large reductions in return.

Mrs. HAMILTON

As regards what the right hon. Gentleman said about the stabilisation of tariffs, there is no difference between his policy on that point and the policy that is being pursued and advocated by the President of the Board of Trade. I am sure that the right hon. Gentleman does not misapprehend what is being done at Geneva so far as to think that stabilisation is what is there being aimed at. I want to suggest, in addition to that general point, that this effort to secure a Tariff Truce with a view to freer trade is governed by the recognition of a fact which was admitted, and, indeed, stressed, by the Balfour Committee, namely, that the tariffs of Europe at their present level are injurious to us and are injurious to the world, and that the present state of competition between European countries for limited markets is a major cause of unemployment both here and there. The Balfour Committee, summing up the evidence on this point, took the view that the aggregate burden of tariffs on our trade was a very serious one, and that means should be taken, if possible, to reduce that burden.

I want to add to that brief and rather categorical statement by reminding the Committee of the great importance to this country of Europe as a market for our goods, and a market which cannot and ought not to be disregarded. The League of Nations, in the Survey of Foreign Trade which was recently published, laid particular emphasis on the fact, which is within the knowledge, I am sure, of the majority of Members of the House, that it is in Europe that we, as one of the nations which make goods of high quality, representing high wages, have to look for our markets. For the bulk of crude products the case may be different, but for the finer qualities of manufactured goods, which contain a large element of that quality of craftsmanship and workmanship which is so important to us, and which we can offer to the world in such large measure, Europe remains a market of primary importance, a market of great qualitative importance in addition to its quantitative importance. This is illustrated by the fact that not only do we get 73 per cent. of our imports from there, but we send thither 59 per cent. of our exports, and well over 85 per cent. of our re-exports.

From the point of view of Europe, this effort towards common organisation, by understanding, of European markets, is surely of enormous importance, and of an importance which becomes all the more salient when we look at the problem of Europe and of ourselves in comparison with the problem of the United States. The immense advantage which, as we all know, the United States possess, is that of being able to apply the technique of large-scale production over a wide area, and the circumstance from which Europe mainly suffers—and we share that suffering—is its incapacity to apply the new technique over an area of sufficient size. You have a scramble for markets, adding to costs, and that is a most important and powerful factor in keeping down the standard of living of the wage-earners in all the European countries.

As a contribution to this central problem in our world economy of how to make expanding production not an evil to the world, but a good, how to control it and at the same time raise the standard of our workers, to arrive at an understanding between the European nations, seems to me to be of vital importance economically, to threaten in no way other associations, whether economic or international, and to be of even greater importance if one looks at it as part of the general effort towards international organisation. We cannot proceed effectively with the world disarmament which we desire if we do not ally with that effort economic disarmament. We are not attacking one of the great root causes of war if we leave out this side. We are allowing a development of competition, of struggle, of hardship and difficulty to go on, which we ought to try to control, and I think that this Committee ought to congratulate the President of the Board of Trade and others who are making a courageous effort which has behind it a reasoned optimistic belief in the possibilities, firstly, of this country economically, and, secondly, of what can be done by international agreement between this country and the world at large.

Sir CLIVE MORRISON-BELL

I do not feel that I should be quite honest with myself or with the Committee if I did not take some part in a Debate on the Tariff Truce considering—I may as well confess it straight away—that I suggested a Tariff Truce some three years ago. The idea is one which for the last three years I have put before some 20 different official bodies, conferences or Parliaments which I have been invited to address on the subject. I first made the suggestion of a Tariff Truce when addressing the members in the Parliament house in Vienna in 1927. I should like the Committee to realise, and to admit with me, that had the Tariff Truce materialised at that date—it is a very big "if," of course—obviously it would have been to the enormous advantage of this country. I took the view, which time shows to have been correct, that there was no very great likelihood of this country for the next three years—that was in May, 1927—raising its tariff, but I knew, and events have proved it, that in the meantime every other country would raise its tariffs against us, some by as much as 25 or 30 per cent. Other countries have raised their tariffs against us since this proposal was put forward, and since 1927 there is hardly one country in Europe which has not raised its tariffs anything between 20 and 40 per cent. If you can imagine that that idea which gave me at the time something positive to say had been adopted, it would have afforded our manufacturers tens of millions of pounds in their exports.

I was present, as I think was the hon. Lady who has just spoken, on that tropical afternoon when the President of the Board of Trade addressed the Tenth Assembly and introduced the question of the Tariff Truce or tariff holiday as I always called it. Curiously enough I see there are some objections to the word "Truce." It is connected, somehow, with war. So tender are the consciences of some hon. Members that they prefer even the word "Truce" to be eliminated, so that it is completely divorced from the question of war. But whether it is truce or holiday, I heard the right hon. Gentleman on that hot afternoon. It does not say much for the efficiency of the Assembly as a body that they consent to have their meetings in a hall which is so absolutely divorced from all ventilation or any current of air. An efficient body would at least have got a few electric fans during the last 10 years. Anyhow I heard the right hon. Gentleman introduce this matter and, naturally, I was very interested to hear that he was proposing what I may call my Vienna bantling—the Tariff Truce. I take an entirely realistic point of view on this question. I, naturally, do not agree with the right hon. Gentleman in the views he has put forward about the merits of Protection, or retaliation. I hold very strongly that this country will never be able to get these tariffs down until it has something definite to bargain with. If there is one man who can claim to have tried the powers of steady persuasion for the last four years, I can claim to be that man. I have put the suggestion forward in nearly every capital in Europe, apparently without result. I have done no harm. I have injured no interests. I have tried, if anyone has tried, to suggest on behalf of our manufacturers that these tariffs should be lowered, but I see no signs of any tariffs coming down. In nearly every case they have risen. In theory everyone is a Free Trader. Everyone wants free trade. But you cannot work this theory in a Protectionist world. Therefore, it will be necessary to have some form of weapon with which we can bargain or even threaten other nations which have put these high tariffs up against us.

When we are dealing with commercial questions, there need be no great principle involved. It is a matter of expediency. Obviously, the suggestion was right three years ago. I have shown how it would have saved our manufacturers millions of pounds, but we are discussing whether it is right now. I think the country would make a mistake in depriving itself of any weapon in this war, for economics to-day is a war, and as I can foresee a situation when a party in this House would be anxious and in a position to use this weapon, it would be a very great mistake for the House to deprive itself of it. It would need a majority of something like 70 in this House to impose a tariff, so I come back to a position which is really almost electoral rather than commercial. If the Conservative party were ever in the near future to have a majority of 70, it would certainly be handicapped by having signed a Tariff Truce; but if the party opposite was to be in office for the next four or five years, in my opinion a Tariff Truce would be a good thing to have, for I am certain that they would not want to raise our tariffs any higher, but that our foreign competitors would be raising their tariffs all the time without this truce. Therefore, I look upon this purely from a realistic point of view. "Which is the most likely? That is very difficult to forecast. We shall know definitely this day two years, or three years, whether a Tariff Truce would be a good thing or not. I do not intend to put myself in what would be the unenviable position of parricide, but I am afraid that is all the forbearance the right hon. Gentleman can expect from me to-night.

Mr. JOHN JONES

Some of us are neither Tariff Reformers, Protectionists nor Free Traders. We say, "a plague on all your houses." This proposition, moved from the benches opposite, regarding this attempt to create a Tariff Truce is simply an attempt to equalise conditions between competitive forces in Europe. I have many times heard hon. Members opposite protest against conditions prevailing in Continental countries. We of the trade unionist movement have always fought against the low standard of wages in other countries. Some of us have had to negotiate with international firms who have factories in Belgium, France, Switzerland and other countries, and we have met the employers, who are the same, people, and we have found the same kind of people sitting on each board of directors. It is most extraordinary. The same people have told us that, if we attempted to enforce our conditions and to ask for higher wages or better conditions in those countries, they would be compelled to use their influence in countries where wages are lower, hours longer and conditions of employment worse. Surely we have a right to ask what hon. Members opposite really mean. Capitalism is becoming international, whether you like it or not. I do not believe there are many Members opposite who care where their money goes as long as they get their dividend. Their stockbrokers will see to that.

We have heard this argument about the iniquity of the right hon. Gentleman using his position as representing this Government to try to get other countries to relieve the situation against us. What crime has he committed? He is trying to make it easier for us to hold our markets and to improve upon them, and they say this is wrong. We have been through a great War. We invited all the allied countries to join with us in the military warfare, and it is no crime to ask them to join us in trying to obtain some realisation of unity in the economic war. No argument has been advanced, I want to see a United States of Europe. I should like to see economic unity organised between all the countries within Europe and I should like to see in existence later on a United States of the world. But, perhaps, I am too much of an idealist. In this case the argument has been advanced by gentlemen who have gone to Geneva themselves, and have gone to Paris with smiles on their faces and talked about the unity of Europe and about sinking and swimming together. When we ask them to place their cards on the table, they say it cannot be done because our economic interests are different from their economic interests.

We have no economic antagonism towards the people in other parts of Europe. The workers of England have no quarrel with the workers on the other side of the Channel. But whenever quarrels are made we have to fight them. The time has come when we must face the facts. We have been told that trade barriers have been increased. Who have increased them? Who have made the "walls" around Europe? France has increased her tariffs, and other countries have also done so. Who have made them do this? Not the workers. Wages in Europe from the standpoint of real purchasing power, are lower now than they were before the War, and they will go down under Protection. How does it come about, with all our troubles and difficulties, that the standard of living in this country under so-called Free Trade is higher than it is in Protectionist Europe outside of Free Trade England? If Protection is such a solution of all our problems, there would be less unemployment in Protectionist countries than there is in Great Britain. In spite of all our troubles, Great Britain is still the best country in Europe in which to live from the working men's point of view. If this is the truth, then what about Tariff Reform? What about all our talk about Protection? We are going to have a United States of the Empire! That is to say, we are going to have Imperial Free Trade, and the people who are Imperialists will not have it. They are willing to come on to the battlefields of Europe with you and fight for you, but they are not prepared to swallow your medicines, and Beaverbrook's Balsam will not go down.

I do not pretend to be an economist, but I know that there are a lot of economists on the other side. My economics have always taught me that Protection merely means the protection of the people who sell and buy, and not the protection of the people who produce—the workers. If they could find an animal to-morrow covered all over with hair, with such digestive organs that it did not require feeding, and it had sufficient skill to do the work of the workers, every worker in the country would be unemployed. They are gushing, with tears rolling down their shirt-fronts, about the position of the working man. They are like the boa constrictor. They slobber all over him before they finally devour him. They are talking about their desire to provide employment, when, as a matter of fact, they are sacking men and women every day when they have no need to do so. In my constituency men are being discharged when they reach the age of 65 because they have a pension of 10s. a week coming in. They are not sacked because there is any need to do so, but because employers can save some money by not paying them wages after they have served them for 30 or 40 years. Let us get down to brass tacks. All this talk about trying to provide employment is "all my eye and Betty Martin."

We are trying to bring about an understanding. Is that not a good thing? We are talking about co-operation between workmen and employers. Let us all get together, if it is a good thing for this country, and try to solve our difficulties, economic and otherwise; let us approach the people of other countries and ask them to help us to solve our international difficulties. We want international co-operation. Agreement over the fiscal barriers will be one of the best steps in that direction, and, as far as the Government are able to succeed, it will be the best thing that can happen in the affairs of Europe. I wish that the President of the Board of Trade could go over to these other countries and say, "If you will not come in, we will keep you out." We want to abolish sweating all over Europe, and I believe that a right step has been taken in that direction. I believe that if the Labour party continue in office and in power they will be able to bring the other countries into the comity of nations, and be able to establish such conditions in Europe as will make us proud of the fact that we took this step in that direction.

Earl CASTLE STEWART

I ask the indulgence of the Committee for a maiden speech. The hon. Member for Silver-town (Mr. J. Jones) spoke about the unemployment side of this problem. I gather that this is a point which one ought not to develop at length at this particular stage, but I would like to refer to it again in a moment. I would ask the President of the Board of Trade whether I am right in understanding what will happen if this Tariff Truce is signed. Will this truce be signed and agreed to by the Government without our knowing definitely what are our own particular commitments and what are the particular commitments of other powers in respect to a system of tariff levies? Shall we know before it is signed that Germany, France, Austria and those other countries are going to lower their tariffs by some definite amount, and that in return they are asking from us a definite concession on our present small tariffs, or are we signing, as I understand we shall sign it, in the hope and in the expectation that by some kind of conference, which will go on from time to time, these other countries are going to lower their tariffs in the future for our benefit, or most largely for our benefit?

If that is the proposition, I can only say that whatever may be said about the League of Nations, we are confronted absolutely with a definite "No" from the United States of America, and we must take that into account. What shall we be stabilising if we go in for stabilisation? I put a question a short time ago to the President of the Board of Trade asking if he could say at all, in any rough or approximate manner, what is the sum that foreign nations, the Dominions and the Colonies raise by customs duties levied upon goods which we export from this country to them? No one has a notion, but from the League of Nations tariffs pamphlet one can get a beginning of an idea of the kind of barriers that we have to face as compared with the kind of tariffs which foreign countries have to face when they send goods to us. At the present moment, to make a comparison, I think that what we raise from silk duties and motor car duties is something between £10,000,000 and £12,000,000 a year. According to the best calculation which I can make on the basis of the League of Nations figures, 14 foreign countries alone raise £50,000,000 on customs dues on manufactured goods annually exported from this country to them. That is five times the amount of the barrier imposed by us. It does not matter whether it is the consumer who pays the tax or the unfortunate manufacturer here who has to lower his price, from the point of view of comparing, but it is a fact that these countries alone have a five-times greater barrier against us than we ourselves put up against the whole of the rest of the world.

If that is what we are asked to stabilise, no wonder almost every Chamber of Commerce in the country is protesting. I have had from my own division a very strong letter of protest about this Tariff Truce, and not unnaturally because the hosiery trade is our local industry, and last year we imported from abroad 48,000,000 pairs of foreign stockings. Is that what we are asked to stabilise? Are we asked to stabilise on the basis of the importation of 7,000,000 pairs of foreign boots and shoes? That affects my constituency, too. That is why I have ventured this afternoon to make some inquiry of the President of the Board of Trade as to exactly what we are being asked to do, and also to raise some protest against tying our hands to an absolutely unknown future. The point was made by the hon. Member for Kettering (Mr. Perry) that, speaking as a co-operator, he was all for international co-operation. He implied that in some way or another Free Traders are greater co-operators in the field of international economic peace than are safe-guarders, and he threw upon us the burden of being the disturbers of the peace in the economic world. It is one of the things claimed by hon. Members opposite for the Tariff Truce, that it represents a general march towards international peace. But when the Free Trade baby was in the cradle it was not crying for peace. If hon. Members will bear with me I should like to read a quotation from a speech by a Member of Parliament at the time when Free Trade was young in this country. This is what he said: It is well worth while to incur a loss upon first exportations in order by glut to stifle in the cradle those infant manufactures in the United States. That is the Free Trade theory as expounded by an hon. Member in the British Parliament. Another Member of Parliament, again I suppose in accordance with the pacific intentions of Free Traders, said: Other nations know that what we English mean by Free Trade is, nothing more nor less than by means of the great advantages that we enjoy, to get a monopoly of the markets of the other nations. 7.0 p.m.

That is what Free Trade people want, and I think that they have no right to go through the country or to stand up in this House saying that we who believe in the safeguarding of the industries of this country are stirring up foreign jealousies, stirring up jealousy in international economics. If I may come to the question of unemployment, which the hon. Member for Silvertown raised just now, the reason why the United States to-day are so strongly opposed to giving any support to the Tariff Truce is simply and solely because they have learnt from their own past history, not only that their protective tariffs have developed their national industries, but that every time they have taken those tariff barriers down they have suffered most severely and most violently from unemployment. I do not say that tariffs, whether put on or taken down, are the sole cause of unemployment, because there are considerations like higher taxation, shortage of gold and so on, but it may be, and often is, a determining factor. In the case of the United States, the very reason why they went Protectionist was that our aggressive Free Trade manufacturers in this country simply flooded the United States with goods at a time when they were Free Trade just before the Constitution of 1789 was signed, and the very first act which the United States introduced after that Constitution was an Act to protect their own manufactures. Ever since then, with very few exceptions, they have maintained high protective tariffs. Whenever they have let them down, as they did in the years 1816, 1832, 1846, 1894, and just before the Great War, immediately they had recorded a very great increase in unemployment. In 1894, unemployment jumped up to something like 3,000,000 or 4,000,000 in the space of a few months. Exactly the same thing happened when President Wilson became President and introduced his Tariff Bill. They then had between 3,000,000 and 4,000,000 unemployed in the United States within a year. That is why the United States will never come in. I am positive of it. I know a great deal about the United States for matrimonial and other reasons, and I have known and come in contact with many of their business men. Nobody need be under any delusion at all that the United States is likely within the next two or three decades to think for a moment of running into a trap such as this.

This Tariff Truce is part and parcel of a theory that has been over-emphasised in this country, the theory that we have to build up our trade and industry by developing our export trade. That is why the President of the Board of Trade requires lower tariffs from other countries. He is seeking, like the Lord Privy Seal, to develop our exporting industry. Is it not going to be very difficult to further develop our exporting industries? Is it not part of the trouble that we have developed them in the past at the expense of those industries which produce and circulate goods internally? We are often told that England is a small island and must export in order to pay for our foodstuffs and raw materials, but we are already exporting far more than we need to pay for our imports of foodstuffs and raw materials. We are exporting already enough to pay for £200,000,000 of imported manufactures. Over and above that we had before the War an export of capital amounting to £200,000,000.

Could not some of that capital be spent in this country? Would there not be more employment in this country if the capital was spent here rather than in building railways in South America? If it was spent here, we should have the railways here, whereas South America has the railways we have been building so industriously during the last 50 years. I do not suggest we should build railways, but surely we are short enough of houses in this country and, if you build in your own country, you keep your own capital goods here. That is the mistake which we have been making. Back of this Tariff Truce is an over-emphasis of the desire to develop exporting trades which are very near the limit of any very great immediate and new expansion. In any case, if we are to deal with unemployment, let us bear in mind, with 1,500,000 unemployed to-day, that, if we are going to rely on exports and tariff truces, we have to export about £300,000,000 worth of goods a year, which is pretty nearly as much as we send to the Empire.

It is not a question of what we are going to do with foreign nations, because they are not going to come in. They talk glibly. They talked three years ago, but they have done nothing except increase their tariffs. They may talk now, and I am sure the amiability of the President of the Board of Trade is something that would make anybody feel that they do not want to disturb his proposals unnecessarily. He would get from people concessions no one else would get, but nevertheless I am certain he will never get any reduction of tariffs out of the United States in any measurable time, and I doubt very much whether he will get any concessions out of foreign nations. The plain fact is that nations recognise quite well that there are always two principles at work. They seem opposite principles, but really they work together. You have Free Trade in some cases and Protection in others, and that is the system on which all countries are working. There is no reason why, because one country chooses to have Free Trade, they should forego what is their own system designed from their revenue point of view and from the point of view of protecting their own manufactures. Meanwhile, we are tying our hands by these proposals. My constituents feel very strongly indeed that, if this Tariff Truce is signed, a great weapon which we possess will be taken away from us. I am not denying that it is retaliation. If we forego that weapon, we have no means of defending ourselves against these goods that come in from foreign nations who are constantly raising their tariffs against us. I hope the Committee will not allow the hands of this country to be shackled and manacled for an indefinite period for something we know not what it is. It is scarcely conceivable, at any rate, that it can be anything substantial or anything to the benefit of ourselves, our constituents, and our unemployed.

Mr. MacLAREN

I think I am voicing the sentiments of the Committee when I say that we enjoyed the maiden speech of the last speaker. In fact, it did not seem to sound like a maiden speech, but rather like the speech of a well-trained and well-qualified Member of this House, and no doubt we shall hear more from the hon. Member in future Debates. I would warn him, as one who has been here a long time, not to be insistent upon one theme, because it is a very heavy burden to carry. As he was speaking, it occurred to me that it was a great thing that romance knew nothing of artificial barriers and that he was successful in having free trade when he fell in love and got to America.

I find myself in rather a strange position this afternoon. There is no man in this House to whom I would give place in my admiration of the President of the Board of Trade. I do not wish to say anything that would discourage any enterprise he may undertake in the hope of coalescing mankind and removing artificial barriers between nations. Frankly, I know a good deal about Europeans, and I cannot see Europe taking down its tariff walls for the next two centuries unless, of course, some miracle should happen as was hinted at by the hon. Member for Silvertown (Mr. J. Jones). That is not beyond the bounds of possibility with the growth of democratic government in this country and its association with the working classes. A closer understanding arrived at between the working-class movements of this country and the Continent may remove the barriers which exist at the present time. I cannot, however, see France and Italy and Germany and our old favourite, Spain, with the highest tariff wall in Europe, removing their tariff walls even upon the finest Cobdenite arguments. Whatever hopes we may have of the enterprise, whether good, bad or indifferent, it is true to say that, if one takes the common concensus of opinion so far expressed, most Members are anxious that no great impediments should be placed upon trade.

I am intervening in this Debate, because I have heard so much attack made on these proposals this afternoon. The hon. Member for West Derby (Sir J. Sandeman Allen), who made a most interesting speech, a man of wide experience and not obsessed by any strong economic theories, made one or two very telling admissions. He said that in countries where tariffs and Protection exist business magnates had greater influence over the activities of government than in countries where there was Free Trade. That is very significant. He also said that tariffs bolster up industries regardless of their economic efficiency. Those are two telling statements. It is one of the things that we should be very wary about in this House of Commons and in England. If there is anything we can be proud of, it is that we keep in check the vested interests outside this Chamber. It is very true that, once you open the door of Protection and Safeguarding, you will have every little business interest concerned coming here, and our Lobby will become a Tammany Hall before long, worse than it is now, because every little pettifogging interest that will want Safeguarding will be trying to get their case put forward. I quite agree with the hon. Member for West Derby when he said that in countries where you have tariffs business influences Government policy.

I often wonder, when I hear hon. Members opposite, who believe in this policy, speaking, whether they forget that a house of administration and government should be a place as free as possible from the sectional interests of the community and should devote itself as much as possible to a free and impartial view of economics, government, and law. Once you have this coming in you will have the rest. It was very interesting to notice, in the course of the Debate, the various kinds of tariffs proposed. I jotted them down as they appeared in the speeches delivered. One hon. Member said tariffs were necessary to keep out sweated goods; another that tariffs were necessary to raise revenue. Another attribute of the policy of tariffs was that they are necessary as a weapon to beat down tariffs elsewhere. Surely this policy of tariffs is performing as various kinds of personages in this Debate this afternoon. I do not know what will be the next role it will have to perform. The argument mainly put forward is that tariffs will do something for unemployment. I have had reason to deal with this fallacy before in this House, and I challenge anyone in this House or out of it to prove that cheap goods coming into this country cause unemployment.

Mr. CROOM-JOHNSON

Ask the Lord Privy Seal?

Mr. MacLAREN

I will not challenge him because economics are not his strong point. Nevertheless, I will include the Lord Privy Seal and the hon. Member opposite, and I will challenge any man in this House to get on his feet and prove, historically or through the science of economics, that the importation of cheap goods causes or has caused unemployment. Let us have a look at it. [Interruption.] Hon. Members are quite welcome to intervene now and to show me. If it be true that cheap goods are a bad thing, are detrimental to employment and cause unemployment, to make a logical deduction from a premise of that kind you are obliged to say that goods coming in for nothing at all would be worse. Is not that so? [HON. MEMBERS: "Yes!"] There's genius for you! And people send those who hold that view to Parliament.

Sir P. CUNLIFFE-LISTER

Did not the hon. Gentleman and all of his party say that the cause of unemployment in the shipyards was that we got reparation ships for nothing?

Mr. MacLAREN

I know. I give that to my right hon. Friend as a present. I can assure him that economic fallacies are not secluded in one part of the House. But that is the argument—that if goods came in for nothing at all they would cause unemployment. [HON. MEMBERS: "Yes!"] Hon. Members say "Yes." Their forefathers on one occasion were hard up for food, and they called on God for food. We are told that manna fell upon the desert. Should they have told God not to send it because it put the beggars out of a job?

Mr. MOND

They had nothing to beg at the time.

Mr. MacLAREN

According to your logic, it would have been a bad thing for the manna to have come down, because it would have caused unemployment among the nations. You have only to touch a fallacy with a bit of fun and it falls to the ground. You cannot make fun of the statement that two and two are four, because it is true. You can make fun only of that which is ridiculous.

An HON. MEMBER

That is why we are laughing at you.

Mr. MacLAREN

You are not laughing at me. I am giving, as in a mirror, your own thinking, and that is what you are laughing at. The argument has been advanced that it is necessary to do something, that if only we had something that would enable us to bargain with the foreigner, we could get his tariffs reduced. The Frenchman always speaks about egalité, fraternité et solidarité. He probably does not know what it means, but it sounds well. We have had in this country the Safeguarding of Industries, and hon. Members opposite quote the experience of that Act. Before any industry can receive the blessing of Safeguarding it has to prove before a judicial committee that the wages paid in the same industry in a competing country are lower than ours, that longer hours are worked, and that labour is sweated. Because of these facts the safeguarding of the British industry is sought. Is it not amazing that such evidence should have been submitted before almost every committee that has been set up? What does it mean? That in order to get a country that pays lower wages than we pay and works longer hours than we work, those who demand Safeguarding have in almost every instance had to go to a Tariff Reform country. Yet here we are to-day being blandly told what a Messing it would be for England if we had Protection.

Really one wonders why men will play about with the farcical proposition that anything will be gained by tariffs except the making of monopolies more powerful and the trustification of industry. One would wish that men would seriously face the facts apart altogether from the economics of the case. Will any hon. Gentleman opposite stand up and mention any country that enjoys a full institution of tariffs and is free from a social relationship behind those tariff walls in which the worker is not in abject submission to some harsh employer? Will any hon. Member show me some tariff country that has no slums in it, no low wages, and no unemployment? If he will, I shall begin to doubt my own reasoning on the matter and become one of his advocates. But what are the facts? In every tariff country, wherever you like to go, there is the same creature looking for a job, the same person trying to pull wires and secure influence in order to get a better job, the same unemployed keeping down the wages of the employed because they are competing the one against the other.

Mr. MOND

Why do they keep the tariffs?

Mr. MacLAREN

Because vested interests are rooted in the Government of the nation.

Major THOMAS

What about Australia?

Mr. MacLAREN

Were I to open up the book about Australia hon. Members would begin to wonder what Australia really is. For corruption, for double dealing between so-called trade union leaders and men of this party and the other party, for joint meetings behind tariff walls, dividing the spoil and making the consumer pay, there is no country in Europe that can equal Australia. Australia is a vast continent where you have much unemployment, a continent that could embrace a population almost equal to that of Europe. That country is quoted here to-night. Yet the Australians are now talking about the high cost of living and the heavy weight of loans on their hands. Is it any wonder? They will come here and ask us to take their produce, but when we send our farming implements out there, where the farmers are waiting for them—oh, no!—our manufacturers have to jump a high tariff wall in an attempt to overcome vested interests. I would rather not talk like this about Australia, but I have given a hint of what is going on there.

I wish the President of the Board of Trade the best of wishes in anything that he can do to get men of other countries to see the fatuity and the imbecility of allowing tariff walls to divide nations and men. Knowing the type of political minds in foreign countries, I have little hope. A truce might do something; I do not know. My arguments so far have been directed more or less to the contention so blandly and beautifully used by hon. Members opposite, as if we had to assume that unemployment and economic distress really hinged upon fiscal policy. It is to a very slight degree true. But the calm assumption that Protection is the way out is false. This Debate, perhaps, will not encourage the President of the Board of Trade in carrying on his work at Geneva. Whatever else may have happened, this much is true: There is a beginning—the fight will become more intense in this House—of our clearer understanding of the main dividing line between the Opposition side of the House and the Government side. I like to believe that there are hon. Members opposite who seriously and honestly hold that tariffs will do what they claim. Hon. Members opposite have shown us the dividing line, and in this Debate we have had a preliminary canter for the contest that is to come.

Sir RENNELL RODD

I would not have risen had not so much been said about the second portion of this issue at Geneva being so much more important than the first portion, and about the one leading up to the other. If I could hope that by such an advance we should break down the tariff walls which are built up against us in Europe, I should be heart and soul with the President of the Board of Trade, but as I have spent nearly 40 years of my life in looking into these tariff questions between nations, and have had sometimes to negotiate and have certainly had constantly to observe them, I have formed certain very definite conclusions on the subject, and I find it almost impossible to share the optimism of the President of the Board of Trade. In all foreign questions sentiment plays a very small part. There are, of course, moments when sentiment and interest walk more or less hand in hand, when a nation is prepared to stand by another nation and do it a good turn; but in economic questions, I say frankly, I have hardly ever seen this occur. Interests are almost always antagonistic.

Looking back over a long period of years, I can remember one occasion when we, in order to help a small and struggling nation, made an important economic concession in our fiscal system on her behalf. I cannot remember one single instance, in a long experience, in which any other country has ever done it for another country. There may be such instances, but I cannot remember them, and it appears to me, as I have watched it, that any reductions in tariffs must always be the result of hard and bitter bargaining and mutual consent. I do not think I shall be accused of not endeavouring to bring about good will between other nations. In a long career that has always been my particular aim, but with all that, one has always had to leave tariff questions entirely out of consideration, because they at once bring up a hardening. The boundary is almost physical where you begin to discuss them, and you renounce it unless you have something to bargain with. I have been able to convince myself that, without something to bargain with or without the fear of retaliation, it is quite impossible to attempt to make any impression on that physical and material condition brought about by the tariff walls in other countries.

Of course, the President of the Board of Trade is received at Geneva with every sign of welcome; of course, his propositions are listened to with every sign of interest; of course, sub-committees are appointed to study the various points. Let us put it at the worst. What nation is there in Europe that does not want to stave off the evil day when we shall be compelled to make counter-tariffs in order to maintain ourselves against their encroachments? The right hon. Gentleman tells us that our hands have not been tied, that the stabilisation will not affect us, and I gather that our hands are only tied in so far as we may no longer level down. Well, we have very little at the best to bargain with, and what I am afraid of, in what I have heard to-day, is that we shall give away the possibility of using certain assets which we may some day need to use, and come away with an empty formula, with what our Italian friends call a handful of flies.

I gather that hon. Members opposite believe that these negotiations will lead to some definite results. I envy their faith. I can only say that, if they had lived as many years in foreign countries as I have done, and studied the mentality of those nations, they would be much more likely to share my scepticism. Does the right hon. Gentleman really believe that with all his eloquence, which we all appreciate and admire, with his great power of persuasion, of which we saw a remarkable example in the House the other night, in the effect which it had on certain Gentlemen below the Gangway here, he is going to make other nations abandon what they consider to be their interests, and the very system by which they have been enabled to maintain those interests? If he thinks so, I can only say once more that I admire his faith, but I think he is showing there a naive simplicity; and, if that is really the ease, it makes me very anxious to think that the foreign interests of this nation are left in the hands of innocents abroad.

Mr. HARDIE

It is not so long since the ex-Chancellor of the Exchequer, when speaking in the House on this question during the last Parliament, misled the House, if we are to believe what his supporters are saying to-day. On the question of artificial silk, the ex-Chancellor of the Exchequer, as can be seen by reading the OFFICIAL REPORT, said that the one thing that ought to be done in order to improve trade in this country generally, and in order to develop a new industry, was to give a certain sense of protection to the silk trade. The result was that Members believed in sufficient numbers to give that privilege to a certain trade. The Noble Lord the Member for Harborough (Earl Castle Stewart), in a maiden speech, pointed out to-day the large number of silk goods that were coming into this country, and he mentioned stockings. If the ex-Chancellor of the Exchequer had been correct, it would have meant that these silk goods would have stopped coming into this country, because the prices of those goods would have been such that they could not have competed with the goods made in this country under Protection, but what is the reason for these silk goods coming into this country now, in spite of the fact that the silk trade has had this protection?

The ex-Chancellor of the Exchequer, in that speech, said that all this protection given to this trade would be a good thing, because as soon as the silk trade got on to its feet, down would come the price of silk manufactures in this country. Those of us who follow these economics closely remember exactly what happened in the case of a certain firm, which at the end of 18 months placed a sum of £12,000,000, not to a reduction in the price of their goods, but to an inflation of the capital of the firm. Instead of reduced prices, you only got an inflation of the capital and gambling with the Stock Exchange, with the £l shares being raised 5½ times, and in one case, I believe, to £12. You cannot have a reduction in the price if the advantage that you claim to have got by Safeguarding or Protection is going to be put into the gamblers' hands instead of into industry.

The development of industry means that you are not only producing more, but that at the same time you are reducing the cost of the article produced, but in all the illustrations that have been given to-day the very reverse of that has been shown to be the case. It is very remarkable that the Noble Lord who spoke should have forgotten about the statement of the ex-Chancellor of the Exchequer in regard to silk good". It does not make any difference how you protect, if you have not got an honest business that will say, "If we get a privilege from the Government, we will keep our production up and reduce our prices, and in that way increase our whole trade and make it impossible for the other goods to compete against us."

The removing of the tariff barrier is just on a par with the removal of armaments. The real basis of the armaments question begins with your tariff walls, and until you have freedom of intercourse between the peoples, as the hon. Member for Silvertown (Mr. J. Jones) mentioned, you can never hope to have anything in the way of understanding between communities. So long as they are held apart and made to believe, by those who have power in the different countries to distribute bills and control papers, as in this country, and to poison the people by not telling the truth, so long shall we have these nations believing a lie as being the truth and raising enmity against others. The Noble Lord who made his maiden speech referred four times to Belgium, but he seemed to forget that Belgium was a protected country. It is very strange that they do forget these things, but they are so bankrupt of economic ideas that they put forward arguments that contradict themselves.

Take the walls of Protection, as they are known to-day. They do not protect the education of the community which is within those walls, nor do they protect the workers who are within those walls. The conditions in America to-day show exactly what is taking place. They show-that those walls are built up so high that they cannot be maintained, and then they fall down and smother the people inside. We are seeing that now in America, which is a self-contained country. One would assume that common sense would say that the people in a self-contained country like America, with all the food and all the raw materials that it requires, would have no poverty or suffering, but why is America suffering to-day despite all its natural wealth and advantages over many other nations? It is because, as my hon. Friend the Member for Burslem (Mr. MacLaren) said, whenever you get these vested interests growing up under Protection, you get them interfering with the free government of the country; and what is more notable in modern history than the scandals that relate to America so far as the Government is concerned? The Teapot Dome case, and all the other cases relating to oil, and all the manipulations, foul and fair, but more foul than fair, show exactly what can take place inside these huge tariff walls.

Some people seem to think a tariff wall is a good thing for the development of industry, but no matter how high you build tariff walls round inefficiency, you do not by that means make an inefficient nation into an efficient nation. You can only do that by the free application of science to the advancement of industry, by having a clear access to every natural raw material. Instead of being separated by false barriers called Protection duties, instead of being separated from the greatest co-operation of mankind between the different spheres in which it operates, by having these tariff walls reduced and by having nations on friendly terms, rather than watching each other like cats and dogs, by having that freedom of understanding where the producers in the different nations know the truth of the conditions in each country, you will get a basis—and only by that means can you get a real basis—where the whole of the human race the world over, instead of building tariff walls, which mean inevitably the building of battleships to protect those tariff walls, will be building ships that will go between the nations, carrying all that is required for their use and enjoyment.

Mr. HANNON

Of all the extraordinary developments of the policy of His Majesty's Government this proposal for a Tariff Truce is the most disturbing, even to those who wish well to the Government. For some unknown reason the President of the Board of Trade soon after he came into office, perhaps in obedience to the dominating influence of the Chancellor of the Exchequer, proposed this suicidal effort for shattering the industries of this country for an indefinite period of time. The Tariff Truce had its origin at the World Economic Conference at Geneva, in 1927. After an exchange of genial and kindly greetings one to another they proceeded to pass the pious resolution that there should be no increase of tariff barriers between European countries. It was not composed of delegates from the countries of Europe but of representatives of the leaders of industry and commerce, and social life, in their respective communities, but after they returned to their different countries instead of setting forth upon the great mission of inducing their. Parliaments to modify their tariff barriers they actually in many instances encouraged their governments to raise the existing tariff barriers. The present Government enjoy the abounding quality of thinking internationally upon all things. The scope of these islands and the associations of our far flung Empire are not a sufficiently comprehensive subject to which they can devote their attention. They are always thinking in terms of our international relations, and are determined to see how far they can help people in foreign countries at the expense of the people in this country. Therefore, they proposed this new piece of Socialist insanity; the establishment of this tariff understanding throughout Europe.

The President of the Board of Trade embarked upon this extraordinary adventure without taking the trouble to consult any of the outstanding authorities in our industrial and commercial life. [An HON. MEMBER: "Beaverbrook!"] It would have been a good thing if the Chancellor of the Exchequer had consulted Lord Beaverbrook. At all events he would have consulted a man whose knowledge of industry and commerce in this country is greater than the whole combined intelligence of the present Government. I should not have said this much if the hon. Member had not interrupted me. This proposed Tariff Truce means that every small community which has arisen in Europe since the War is taking measures to achieve for itself the highest possible measure of protection before the Tariff Truce can become operative. I spent my Christmas in the enjoyable surroundings of one of the most delightful cities in Europe, Vienna. [An HON. MEMBER: "A Socialist city!"] Yes, it is governed by Socialists; but it is under a strong government of an entirely different character. In that city I had an opportunity of meeting representative men from countries in Central Europe, and the whole outlook of these gentlemen was how far they could develop economic nationalism for themselves and dump their surplus products in the only open market in the world—namely, in this country.

The economic policy of most European countries to-day is to do everything to encourage production within their own boundaries for the needs of their own people and then, having developed and intensified their economic machinery, to look outside and see where they can dump and sell the surplus of their industrial organisation. The only open market to-day where these articles can be sold is in this country; and we have the sad spectacle of the President of the Board of Trade betraying the interests of the workers of this country by handing their future industrial destiny over to an arrangement with Continental nations, who give us nothing whatever in exchange. If the President of the Board of Trade came to this House with some substantial consideration for this concession of an open market there would be some substance in his proposal but the offer of a free market in this country for exploitation to the peoples of Europe, in the face of our present economic situation, is a crime against the working classes of this country. No Government, no President of the Board of Trade, should have been guilty of so monstrous a proposal against the best interests of our own people.

What authority has the President of the Board of Trade for this proposal? Whom did he call into council before going to Geneva? Did he ask the Trade Union Congress or any of the great trade union leaders? Did he go to the iron and steel districts and find out from those responsible for the trade union organisation in those districts whether their members would favour a project of this kind? Not a bit of it. I have asked the question repeatedly, on what general grounds of public policy or public need, or public desirability, he undertook to make this melancholy proposal against the welfare of his own country? The President of the Board of Trade had no reply. He has said that people have been consulted, but we have no information as to the quality of those people or the extent to which they were invited to give their views before this mad adventure was undertaken. This is all in keeping with the whole outlook of the present Government on the welfare of the people of this nation. The right hon. Gentleman did not take the trouble to ask the other States of the British Empire what their attitude was towards such a profoundly far reaching project. I see the wise Secretary of State for War in his place. I wonder how the Secretary of State for War will explain to his people this proposal to place their interests as workers in a great productive enterprise—

The SECRETARY of STATE for WAR (Mr. T. Shaw)

I will tell—

Mr. HANNON

I must finish my sentence. I cannot give way even for the Secretary of State for War. How will the right hon. Gentleman the Secretary of State for War justify to the electors of Preston a proposal to hand over to their competitors on the Continent the destiny of his people for years to come?

Mr. SHAW

I can only say that on Friday I am going to talk to my constituents, and I am quite satisfied with the policy.

Mr. HANNON

If the right hon. Gentleman is satisfied, I shall be very much surprised if his constituents will be pleased to hear that they are going to be tied to the heels of some international arrangement by which the cotton trade, in common with other industries, is to be shackled and will have no means of protecting itself in years to come. The great trade organisations in this country view this proposal with intense anxiety and apprehension. The great wiseacres, the monopolists of economic wisdom on the Front Bench, consulted nobody. They did not even pay attention to great non-political bodies like the Chamber of Commerce. The resolution passed by the Executive Committee of the National Federation of Iron and Steel Manufacturers viewed with great apprehension the proposal for a tariff truce which they believed surrendered the freedom of action of this country in the exercise of negotiating power to secure a general reduction of tariffs at present operating to the great disadvantage of this industry throughout the world. I say that the late Administration made a profound blunder in not safeguarding the steel industry of this country. The present administration is not going to safeguard steel, but they are going to put the steel industry into a situation in which no action can be taken in any circumstances for the next three years. I wonder how the leaders of trade unionism closely-identified with this great industry will justify their vote in supporting the Government in an action of this kind. The resolution goes on: If you cripple production here by giving indiscriminate access to our markets to foreign produced commodities, you are making less effective our competitive power in the world outside. In the opinion of this Federation under present world conditions such a proposal will prove disastrous to the British iron and steel industry and preclude the possibility of an early solution of the unemployment problem in this country. Hon. Members opposite pay lip service to unemployment. They went to the country and told us in many eloquent speeches, none more eloquent than those of the Secretary of State for War, how the Labour Government were going to deal with the unemployment problem. I wonder what reflection are wandering to and fro through the capacious brain of the Secretary of State for War when he reflects on the record of the Government. Is this the way to solve the unemployment problem? Go into any great city in this country and look at the shops. You will find them packed with foreign goods dumped by people whose standard of living, and hours of work are much less than any one in this country would commend for our own people. Are we to be tied to this new international juggernaut so that we cannot intervene on behalf of our people at any time. I protest with all the energy I possess against this attack upon the best interests of the working classes of this country.

8.0 p.m.

It is no use coming to this House and saying that you are going to do this, that and the other to help to reduce unemployment and to give facilities for getting more people to work, when you want to prevent us from taking any steps in the next two or three years to prevent our people who are engaged in productive industry from being swamped by cheaply produced foreign commodities which come into this country. How any party that professes to be a leader of labour and how anyone who professes to have the interests of the working classes at heart can go in for this economic madness is more than I can understand. All the representations that have been made by great organisations engaged in industry have been disregarded by the President of the Board of Trade, without a moment's consideration. In my wanderings through Europe—and I have been in every country in Europe since the War, except Russia, and I would have gone to Russia but for the fact that I did not want a sudden by-election in my constituency—I have found that the outlook has been how much they could produce to sell in England? They cannot sell their products anywhere else, because of the highly developed system of tariffs.

In the face of that situation, with which no man is more familiar than the President of the Board of Trade, and in face of the fact that not a single one of our Dominions would tolerate that there should be a tariff truce, and in spite of the fact that the United States of America are looking with a sort of winking the other eye attitude at what is happening in connection with these bizarre proposals at Geneva, what justification is there for taking the proposed course? The whole process of economic development in Europe since the War has been adverse to the interests of the productive industries of this country. We do not find fault with these nations for protecting themselves, but we do say that when British statesmen, having the whole facts present to their minds, proceed to make an economic arrangement in consequence of which no step can be taken in the interests of our own people to give them a reasonable right to produce and sell goods in their own markets, that Government is guilty of an economic crime against its own people.

The world to-day is faced with the problem of the orientation of great economic groups—the great European States on the one side and the great United States of America on the other side. It has been suggested by the distinguished Foreign Minister of France, M. Briand, that we ought to proceed steadily with the development of a United States of Europe. Any positive success in the achievement of that object would mean the dislocation of Great Britain in relation to the rest of the Empire. We ought to fix our eyes more upon our own Imperial estate. If we are to have any sort of re-examination or re-arrangement of tariffs, let us put our thoughts into the question how far we can, by steady development, by better mutual understanding and by examination of each other's conditions, work within our own Empire rather than work on this madcap international project.

I regret more than I can express the attitude of the President of the Board of Trade, because in my association with this House for the past 10 years there is no one for whom I have greater respect than the right hon. Gentleman. He has been a great friend of mine during those years, and again and again I have bewailed the fact that he has been brought under the unsalubrious influence of the Chancellor of the Exchequer. I am sorry that a man of his broad outlook, his great economic knowledge, and possessing as he does the genius of statesmanship, should be guilty of presenting to this House and endeavouring to carry out on behalf of this country a project which I believe may in its effects strike a deadly blow at the industrial life of this country and weaken dangerously our effective competitive power in the world.

Captain WATERHOUSE

My hon. Friend who has just spoken has dealt fully with one of the statements made by the President of the Board of Trade with regard to the Tariff Truce, which I can only regard as a gesture of acquiescence towards M. Briand's scheme of some large European solverein. That is the first movement for centralising this country and, therefore, centralising this country definitely and permanently in Europe. That is only the first step. During the next two, three or four years in which, with his wonderful optimism, he hopes to remain in office, he is going to develop his scheme still further. Industries are to be examined by groups. There is going to be an analysis of trade and tariffs, we were told are going to be rapidly reduced. He instanced iron and steel, and said that he had little doubt or, at any rate, he had great hopes, that within a few years the tariffs on iron and steel might be reduced in Europe. On what does he found such hopes? With his knowledge of industry, with his great economic thought, with his years of experience, what can make him think that there is any chance of persuading the other countries of Europe to bring down their tariff walls and to open their markets to us?

We in this country are in rather a fortunate position, if only we are willing to exploit it. We have probably the best average plant of any country in Europe, with the exception of the quite new plant in Northern France. We have certainly the best personnel manning that plant of any nation in the world. We have the best managerial talent, and we have the best climate for working operations. These are tremendous advantages. We have behind us the experience of six or seven generations of industrial life, and our operatives have at their fingers' end six or seven generations of manipulative skill. We have an overwhelming power in our factories, if we are allowed to use it in a clear field. We have, of course, very definite disadvantages. We have, for example, to import practically all our raw materials. We have the highest taxation burden of any country. These are heavy disadvantages. We have two other disadvantages, which we have placed upon ourselves gratuitously and unwisely. We have got the idea into our heads that no self-respecting Britisher ought to work more than 48 hours a week, or 44 hours, or, still better, 40 hours. I entirely agree that it is most desirable that men should have every bit of leisure they possibly can, but when we have such good conditions in our factories, such good climate and such good arrangements generally in our industries, why should we seek through the trade unions to tie our hands in that direction? Far more serious than that is a movement which I think is going out of trade union life, and that is the movement of ca' canny.

The CHAIRMAN

The hon. and gallant Member is getting rather wide of the subject.

Captain WATERHOUSE

I was trying to develop the argument that, in spite of all our advantages, we have certain disadvantages, but, on the balance, we have tremendous advantages in the competition for trade. Why then should we expect that other countries are going to be so foolhardy as to throw open their countries and reduce their tariff walls in order to let us sweep in, with the tremendous impetus of a revived trade? That is the aim and object of the right hon. Gentleman. He does not seek so much to open up new markets, but by means of this tariff truce and by the conversations that are to follow he seeks to persuade them to allow us to enter existing markets.

Perhaps the most serious aspect is that this movement is confined entirely to Europe. The United States of America will not come in, and one could not expect them to come in. Worst of all, our Dominions will not come in. How could we expect them to come in? They are young, striving and thriving countries, and they are not going to be so foolish as to allow their right hand to be tied behind their back in regard to future negotiations for trade.

In this connection, I should like to mention Australia, and I should like to put a question to the Parliamentary Secretary to the Board of Trade. The question is, perhaps, not directly connected with the Tariff Truce but it is definitely connected with his Department, and indirectly connected with the Tariff Truce, because it is connected with the Australian tariff. Is he aware of the tremendous increase in the Australian tariff on hosiery, stockings and knitwork, which so injuriously affects the cities of Leicester and Nottingham and the districts around there? Has his Department made any communications to Australia in this regard? We do not blame, certainly I do not blame, the Australian Government for taking this line. Why should they not do so, when the hon. Member's right hon. colleague is going to Geneva to sign or hoping to sign an agreement which is going to put this country and Australia at a disadvantage? Why should we, under those circumstances, expect Australia to give us greater preferences than they are giving us already? I would ask the hon. Member to devote his attention to that aspect of the matter, and to realise that while we are seeking to get facilities in markets that are already crowded we are neglecting a chance, by negotiation, by amicable arrangement, of coming to some agreement with our own Dominions, which would open up a far better avenue for our trade than we can hope to get in Europe.

Another subject which is not directly connected with the Tariff Truce, but which I think can be mentioned on the Board of Trade Vote, is the doubt which exists about the position of the silk and artificial silk trade owing to the statements of the Chancellor of the Exchequer. The Chancellor of the Exchequer has said, in the House of Commons and elsewhere, that he is unable to give any indication of what he proposes to do in his Budget, but the House of Commons and the country are aware that when the present Chancellor of the Exchequer was not in office he was, for years, announcing what he was going to do in this first Budget, and declaring that he was going to sweep away these Duties. Does not the Parliamentary Secretary to the Board of Trade agree that these statements have had a most injurious effect on trade on those industries?

The CHAIRMAN

I fear that this subject is very far from the Board of Trade Vote. The Board of Trade is in no way responsible for the Chancellor of the Exchequer and the Budget.

Captain WATERHOUSE

Surely, the trade of the country in all its ramifications can be discussed on the Board of Trade Vote, and, if I cannot put a question to the hon. Gentleman dealing with this subject, on this Vote, then on what Vote can it be done?

The CHAIRMAN

I think there will be a number of opportunities of raising questions of that sort with the Chancellor of the Exchequer himself.

Captain WATERHOUSE

I am not seeking to influence the Chancellor of the Exchequer. I should not be so foolish as to make such an attempt. All I want to find out is whether the Board of Trade have made any representations to him on this matter?

Mr. J. JONES

On a point of Order. Is it not the general custom for Members to ask questions in anticipation of the Budget and is it not the case that every time we are told that there is "nothing doing"?

The CHAIRMAN

I have already pointed out to the hon. and gallant Member that he is going very wide of this Vote.

Captain WATERHOUSE

I am seeking your guidance on the matter, Mr. Young. The point which I wish to raise is essentially one concerning the trade of this country and if one may not raise a trade matter on the Board of Trade Vote I am at a loss to know what is the use of this Debate at all, or, for that matter, what is the use of the Board of Trade.

The CHAIRMAN

I have been in the Chair during a couple of hours of discussion on this Vote. During all that time the discussion seemed to be entirely in order and no reference was made to the Budget.

Captain WATERHOUSE

I bow to your Ruling, Mr. Young, but I hope you will allow that I am in order in mentioning certain figures given to me by constituents showing the tremendous growth in an industry which has enjoyed some measure of protective duties. I use that as an example to support my view that it is an outrage that the right hon. Gentleman the Chancellor of the Exchequer and his colleagues should preclude any extension of these duties in other directions?

The CHAIRMAN

The hon. and gallant Member must make his arguments relate to the Board of Trade and to the question which is before the Committee, and he must not in any way infringe on matters requiring legislation.

Mr. J. JONES

Are we entitled to raise the question of the Beer Duty in connection with this discussion?

The CHAIRMAN

Certainly not.

Captain WATERHOUSE

In Derby, Leicester and Nottingham under the existing duties tremendous strides have been made in employment and in the installation of machinery. I am informed that during the last four years £330,000 has been spent on new machinery by 12 representative firms alone, and that those firms are now employing over 1,800 men more than they were in 1925, and paying over £250,000 a year in wages more than they were paying in 1925. That naturally entails tremendous prosperity in the ancillary trades, such as dyeing and finishing and the making of box containers. That is an example of what can be done by a duty and of the opportunities which we are losing by going to Geneva and tying our hands in that respect. The Government came before the people of this country as the representatives of the working men. Their candidates proclaimed themselves as people who were going to stand for the rights of the working men for better wages and better facilities to earn wages. I urge on the Government that before taking any step of this sort they should weigh the results carefully and think of the responsibility which rests on them as the governors of this nation and of the Empire.

I ask the Government to remember the people who sent them here with high hopes and to remember that thousands and millions of people outside this country who look to the central Government and to the House of Commons for guidance in these matters. I ask them when they go to Geneva to bear these things in mind and to put first and foremost the prosperity of this country and not some theoretical consideration with which they have been imbued from youth onwards. I ask them not to take any line by themselves which might even give the impression to the outer world of dissociation from the other parts of the Empire, and, finally, I ask them when they go to Geneva—if they must go to Geneva—to make no agreement on behalf of this country which they are not clear will be equally and truly reciprocated by other nations in the world.

Mr. SANDERS

I am sorry that the hon. Member for Moseley (Mr. Harmon) is not in his place, because I think that we on this side enjoyed his speech more than any other. There was no nonsense in it about scientific safeguarding or scientific tariffs. It was a good full-blooded platform oration in favour of general Protection, and was a tribute to the power and influence of the compaign of the Lords Rothermere and Beaver-brook. It was an indication that we are going back to the old weary campaigns, waged between 1906 and 1910, on the question of Free Trade versus Protection. We on this side attach no particular importance to this old battle. We have no illusions about the value of Protection or Free Trade, from the point of view of working-class prosperity, and, in this matter, we are, I suppose, where every economist is, relatively speaking.

I do not deny that a case could be made out, at a certain time and in a certain place, for a policy of Protection for a particular industry or set of industries at the expense of the other industries. It all depends on what you want. Australia says rightly or wrongly, "We want to build up secondary industries," and they are building them up at the expense of the agricultural population of Australia and of the general consumer. That is Australia's business, but we find, after a course of years of that process, that Australia is in an economic state which is far from satisfactory, and that they are having troubles with unemployment and other problems similar to those which we have in this country. Then again, from the general point of view of unemployment, it has been said, quite rightly, that in protected countries you will find that unemployment is practically as rife as it is in our country. Just before I came into the Chamber to listen to the hon. Member for Moseley—whose speech I again say I enjoyed very much, as I always do people who are sincere in their beliefs, and who have no fine shades in their speeches—I read on the news tape that there is great anxiety on the part of the Government of America with regard to the enormous masses of unemployment now raging—if I may use that word, because they do rage in America when they are unemployed, because they have no system of dealing with their unemployed as we have. They are so anxious about it, that there is a proposal to start a big Government fund of millions of dollars in order to provide relief works. What is the attraction to us therefore, in the old programme—old according to substance, but new according to name—that is now masquerading under the name of Safeguarding? None at all.

Let us come to wages. I know something about international wages, because it was my business for a number of years to be connected with an interesting organisation which hon. Members on the other side have done their best to cripple. I know that the facts gathered by that organisation on wages and hours are as scientifically sound and reliable as can be obtained anywhere. I find that, generally speaking, the best conditions of labour in Europe are to be found in the countries where the trade is most free—in countries like Sweden, Denmark, Norway and Holland. Their conditions approximate very much to our's. In a highly protected country, such as France, you get a real wage, according to the latest statistics compiled by the office to which I was lately attached, of not much more than 55 per cent. of the real wage of this country. In Germany with its protective policy, you find that not only have they a very severe unemployment problem, which may bring down the present German Government, but that the real wages are considerably lower than the real wages in this country. In the rest of Europe you will find that generally speaking, the same prevails.

No wonder that we cannot on this side of the Committee concede for a moment the case put forward on the other side that the putting up of tariff barriers, similar to those which other countries have placed on their trade, will help the problem in which we are deeply interested. Moreover, we are not prepared, although we consider this more or less as a sham kind of battle, to allow ourselves to be drawn away from our real job, which is to bring into the world, as we are trying to bring into our own nation, the elements of co-operation in place of the prevailing elements of competition. You may, if you like, build up your tariff walls, but you will want to produce goods to sell outside. There will be world crises in unemployment and intense competition in all spheres of industry more than ever if we attempt to follow this policy. What we are doing with regard to the coal industry, that is, to come to an international arrangement with regard to hours, and ultimately, we hope, with regard to wages, and still further, possibly, with regard to markets, must, if we are to have world peace and world prosperity, be done to all the great industries. It is on that line that I believe my party are going, and that is why I support with the rest of my friends the admirable efforts of our representative who goes to Geneva.

Mr. GRANVILLE GIBSON

With regard to the remarks of the hon. Member for North Battersea (Mr. Sanders) about the anxiety of the United States over their large army of unemployed, it will be admitted that they have this large army, but what has to be borne in mind is the important fact that this condition has been brought about, in the main, as the result of the financial crisis which occurred towards the end of last year. They have been suffering from unemployment in the United States since last September; we have been suffering from it in this country since 1920. They have had four months of it; we have had nearly 10 years of it.

I want hon. Members on the other side of the Committee to realise that we on this side are just as earnest and sincere in our desire to see the abolition of the army of unemployed in this country as they are. The hon. Member said that we appeared to be fighting a worn-out battle, but I would remind him that it is not worn-out yet. We are fighting the battle all the time, and we shall keep on fighting until success attends our efforts in the direction of obtaining Safeguarding or Protection for many of the industries of this country. That is the only solution before the country which would lead to any considerable diminution of the great army of unemployed which we have with us to-day. I am one of those Members who admire the President of the Board of Trade in many respects. I believe he is honest and sincere in all that he does, but at the same time I am going to say this, without any offensive intention, that in my humble opinion if ever there was an idiotic idea emanating from the brain of any prominent politician or statesman it is this idea of a tariff truce.

Mr. HAYCOCK

Who started it?

Mr. GIBSON

I am expressing the opinion that it is an idiotic idea and has no chance of becoming an accomplished fact. The hon. Member for North Battersea suggested that, instead of competition, we ought to work towards co-operation in all our industrial activities, but we might have to wait many years—we would have to wait many years—before we could hope to attain any measure of co-operation throughout the industrial and commercial activities of the world, and in the meantime our people would be suffering. Instead of that, we must apply ourselves to finding some solution of our unemployment difficulties in the near future, because our people are suffering day by day and month by month.

Mr. J. JONES

And night by night.

Mr. GIBSON

I have heard the President of the Board of Trade say that a Tariff Truce means that over a certain period of time there shall be no increase in tariffs. That does not preclude any country which desires to do so reducing its tariffs, but if any Member is foolish enough to believe that any country, either in Europe or out of Europe, will consider a reduction of its tariffs, he will believe anything. On the 18th of February, I asked the President of the Board of Trade a question in this House, which was answered by the Secretary of the Department for Overseas Trade. I asked for a list of countries participating in this Tariff Truce Conference, and I was given a list of the countries participating and another list of the countries and of the Dominions of our Empire that are not taking part. To me it was significant to notice that amongst those Dominions were Australia, Canada, New Zealand and South Africa. Outside the British Empire, the United States of America was the most important country not taking part in the Truce Conference, though they were sending to Geneva an observer or observers. Apart from the United States, all the countries not taking part in the conference are young countries who are looking forward to establishing secondary industries, and rightly so. When I was in South Africa just over a year ago I noticed, time after time, that when a new industry appeared in the country and asked for Protection, it was immediately granted to it. I cannot blame them for looking after their own industries, but, unfortunately, we appear to be in the position of thinking that every country in the world is wrong except ourselves, and we allow them to flood our markets with goods produced under conditions as to labour and wages which would not be tolerated for a moment in this country. [Interruption.] If the hon. Member will allow me to carry on without interruption, I shall be much obliged.

Two or three weeks ago two gentlemen representing a certain firm in Northampton came to see me with regard to a certain concern of which I am a member having the selling rights of boots for the North of England. This particular firm have the sole selling rights of goods made in Prague, where the conditions of labour and the wages are much worse than in this country. I asked those gentlemen what was the rate of wages being paid to the skilled workmen who were making this particular article in Prague, and they told me that skilled men were paid from £l to 25s. a week. I want to remind the hon. Members opposite, who have 290 Members in their party, that there are at least 250 of them who wear boots made from leather which is imported from Continental countries, made under conditions of labour and wages which would not be tolerated in this country.

Mr. J. JONES

Do not talk rot.

Mr. GIBSON

I am not talking rot. I am talking about a matter of which I know something.

Mr. JONES

What about the miners?

The CHAIRMAN

Order, order! We must not have these persistent interruptions. Hon. Members must be fair to the hon. Member who is addressing the Committee.

Mr. GIBSON

For nearly four years I had the pleasure of representing the owners' association in my particular industry in this country. We dealt with questions affecting labour and wages, and another hon. Member who is not in the House at the moment was one of the re presentatives of the trade unions in those negotiations. In that particular industry to-day the minimum rate for skilled men on piece work is £3 15s. a week—

Mr. HAYCOCK

In Free Trade England!

Mr. GIBSON

—and the minimum rate for time workers, skilled, is £3. I ask hon. Members opposite how they expect any master in this country to compete with the goods produced in countries where they pay 20s. to 25s. a week, the goods coming to this country free of duty?

Mr. HAYCOCK

What—

The CHAIRMAN

Order, order! Hon. Members are overstepping the bounds of Order with these interruptions.

HON. MEMBERS

He asked us a question.

The CHAIRMAN

If an hon. Member has anything to ask, he should rise to his feet and ask the hon. Member who was addressing the Committee if he will give way.

Mr. GIBSON

I do not mind. I am simply stating the facts, which apparently hon. Members opposite do not appreciate.

Mr. HAYCOCK

May I ask if it is not a fact that there is Protection in Czechoslovakia and that low wages are paid in Protectionist countries?

Mr. GIBSON

I would answer that question by stating that in those parts of the world where standards are highest and wages are highest there is Protection. Take the case of Australia, Africa, New Zealand, Canada and the United States. Those are the countries where the wages paid are the highest and where the standard of living is the highest. There is no point in the hon. Member's argument. [Interruption.]

The CHAIRMAN

Order!

Mr. GIBSON

I did not take the point I have just mentioned as part of my argument, because there is no argument in making that particular point. One can argue this particular case of tariffs with illustrations from countries where standards of living and wages are high or from countries, such as Continental countries, where they are low. It would mean that for two or three years there would be no possibility of introducing into this country any Safeguarding or Protection for the woollen industry in the West Riding of Yorkshire. Is the woollen industry to keep on year after year being bled white, as is happening to-day, through the imports of millions of pounds worth of woollen goods produced by low wages every year from the Continent? During the past three months at least 15 more mills have gone out of existence in the West Riding of Yorkshire. The cause of all this is the importation into this country of millions of pounds worth of goods which fix the price against which the woollen industry of Yorkshire has to fight. At Roubaix they pay £l 2s. 11d. per week to a skilled worker against £2 14s. 10d. per week in Yorkshire in the same trade. How can the manufacturers in the West Riding of Yorkshire compete against that state of things? Will hon. Members opposite answer that question, and explain how they can meet unfair competition of that description?

That system does not give the men or their masters a fair chance. Only last week, as the result of this unfair competition—other countries are protected while we have no tariffs in this country—there was a mill put up for sale near Bradford which at one time employed nearly 2,000 hands, and which had been in the ownership of one family for the last 100 years. I noticed that the biggest drop in the clearing house figures in any industrial centre in England last week, as compared with a year ago, took place in Bradford where the drop was nearly 20 per cent. Hon. Members opposite will realise the terribly parlous condition of the textile industry when I say that in Bradford there are 20,000 unemployed textile workers. In the West Riding of Yorkshire more than in any other part of the country the textile trade is in the hands of the banks.

I do not desire to go into details in order to prove where Safeguarding or a tariff has been successful in this country. Hon. Members know those instances as well as I do, but I would like to give just one fact. A gentleman desired to sell to me a particular machine last year, and he told me that he had sold one of them to a firm in the suburbs of Paris. At that time my own firm were paying £3 15s. per week piece-rates, while women who were operating the same type of machine in Paris were paid only 15 francs a day, or, roughly, 12s. 6d. per week. Overy £1,000,000 worth of that particular article is coming into England every year from France. Again, I ask hon. Members opposite how they propose to meet competition of that description?

I sometimes wonder why we have not taken up the same attitude in this country as Canada and the United States in regard to these questions. It so happens that in this country we are divided in our opinions on the tariff question, and a tariff system is not the creed of any political party. For instance, the Labour party are wedded to Free Trade. [HON. MEMBERS: "No!"] If that is so, why do hon. Members opposite not come out into the open and face the situation? You can only meet some of these difficulties by putting up against other countries the same tariff barriers which they put up against us. In Canada, there are Protectionists in both parties. In the United States you have the Democratic party, but it so happens that they have realised the enormous benefits which have accrued to that great country as a result of protecting their industries against the markets of the world. In 1028, for the first time in their history, the United States passed our export figures by £100,000,000, and last year the United States exported £200,000,000 more than she imported.

I notice that the President of the Board of Trade has returned to the Treasury Bench, and I would repeat what I stated at the commencement of my remarks, that I cannot conceive that from the brain of any statesman of the standing of the President of the Board of Trade there, should emanate such an absurd and idiotic idea as that of this Tariff Truce which has not the slightest chance of coming to fruition. I think, in following this will o' the wisp, we are wasting our time, and striving after something which is unattainable. I put it to the Committee that we should be striving in the direction of bringing about some of those things which we can attain and which are likely to bring back to this country the measure of prosperity which we all desire to see.

I am willing to grant that hon. Members believe in a tariff truce, but on this side of the House we feel that they are going the wrong way about it. We feel that the best way to serve the people of this country is not by a tariff truce, when other countries with high tariff walls are laughing up their sleeves at our puny efforts. Let us concern ourselves rather from this point of view that we should protect our own industries, get down overhead charges, and reduce the conversion and manufacturing costs in our industries, so that we shall be able to produce our goods more cheaply because of our increased turnover. That would give us better opportunities of competing more successfully in the foreign markets of the world than we have been able to do in the past. It is along those lines and not along the lines of Utopian ideas of a tariff truce that we shall be successful in this country.

Mr. ERNEST WINTERTON

I wish to add my congratulations to the President of the Board of Trade on the inception and carrying out of this idea of a Tariff Truce. If I had had any doubts about the advantages of such a truce, they would have been resolved by the speech of the hon. Member for Pudsey and Otley (Mr. G. Gibson). The word "truce" implies on this side of the House a disbelief in the possibility of carrying on the trade of the world on the lines of war. The other day we heard a speech from the Leader of the Liberal party on the Coal Mines Bill, in which he endeavoured to persuade the House that any increase in the price of coal under that Bill would be disastrous, because we could not fight our competitors in this field or in that field. Our chief criticism of the present order of society in the economic field is that under Capitalism the mutual exchange of articles between one nation and another is carried on with exactly the same conception, with exactly the same strategy, and exactly the same watchwords, as any naval or military operation might be. Instead of welcoming, as in these days we might expect people to welcome, the idea of ceasing this warfare and the use of these terms, we have hon. Members on the other side of the House lamenting that we have not the means to carry on an even more drastic and ruthless warfare against other nations.

If it be a good thing for the traders of one nation to fight against the traders of another nation with such weapons as tariff walls, why should it not be a good thing in our own country for one county to fight against another county, for one section of traders to fight against another section of traders? As a matter of fact, our business in this country is built largely on the idea of one trader fighting another trader, and it is this conception that trade must be carried on in terms of war, that another man engaged in the same industry is a potential enemy to be bested, to be defeated—this is the kind of theory which permeates the whole of the schemes of those who are crying out for more tariffs. I am not going to argue as to the economic results, but I am going to say that politically there is nothing more disastrous than to disseminate in the world the idea that one nation must be the enemy of another nation in the region of trade. While we are dependent upon interchange between nation and nation for the maintenance of the means of life, we on these benches, as was so admirably said by my hon. Friend the Member for North Battersea (Mr. Sanders), are going to strive to introduce the spirit of cooperation among the nations of the world, rather than this fratricidal and internecine conflict.

9.0 p.m.

There are tremendous political consequences if we do not follow this line of a Tariff Truce. I remember reading, in the War memories of Lord Haldane, his account of a conversation with the Kaiser of Germany. He relates that he found the Kaiser very well disposed to this nation at the time when the naval preparations of the European nations were being discussed, but that on a certain morning, when Lord Haldane visited the Kaiser, he found that his attitude had very much changed, because Mr. Joseph Chamberlain had announced his raging, tearing tariff campaign aimed at the German Empire. It might reasonably be argued that the seeds of war between ourselves and the Germans were very largely sown in the days of that raging, tearing tariff campaign of the father of the late Foreign Secretary. It is because of such arrangements for carrying on the tariff war that we on this side, at any rate, welcome a truce to the stupidity of thinking that we can always be playing the game of beggaring our neighbours.

Some allusion has been made to the opinions of the manufacturers of this country, but of course you can build up a ease for any particular industry if you regard every other man or every other nation engaged in that industry as an enemy. We are trying, I hope, to discuss this question from the national, and even the international, point of view, and I suggest that the efforts which are being made by traders of various kinds do not seem to be evoking, even from the trading community, the response which those who believe in breaking down these suggestions of the President of the Board of Trade would expect. I was favoured with a letter from the Leicester and County Chamber of Commerce, from which I find that the President of the Board of Trade was being bombarded with telegrams, and it even suggested the wording of the telegram, thus: To the President, Board of Trade, Parliament, London.—Strongly protest against proposed Tariff Truce. Then, such, I suppose, being the need for instruction of the business community, the most accommodating and obliging Secretary suggested that underneath that wording should be given the signature and the name of the town. I am informed that 900 members of this Chamber of Commerce were asked to save the Empire and to save the trade of the Empire by sending a shilling telegram. I asked my right hon. Friend how many people responded, and I found that less than 25 per cent. were prepared to spend a shilling to save the Empire by sending a telegram to the President of the Board of Trade.

I rose rather with the object of suggesting some bigger and broader aspects of the question which we are now discussing. If the last speaker believes, as he said he did, that this scheme of co-operation is a dream, and that to try to intro duce understanding among the peoples is impracticable, he at any rate cannot show very much success for any of the experiments in Safeguarding or Protection which are to be found in various quarters of the world. Indeed, he was fain, in response to an interruption from this side, to confess that as a matter of fact you can draw no inference whatever as to the results of Protection in the countries where it has been tried. He admitted quite frankly—

Mr. G. GIBSON

I did not say anything of the kind. What I said, in response to an ton. Member opposite, who pointed out to me that in the continental countries which are protected wages are low, was that on the other hand I could point out such countries where wages were high.

Mr. WINTERTON

I have no desire to misrepresent the hon. Member. He has emphasised the point I was going to make. Protection of itself will not give you a guarantee of low or high wages.

Mr. GIBSON

My contention is not that it will give high or low wages, but that it will give more continuous employment to our people.

Mr. WINTERTON

Let me put the point another way. The hon. Member has admitted that in some Protectionist countries there are low wages, and he has suggested that in some Protectionist countries there are high wages. I suggest that Protection has very little to do with it in either case, and that if it could achieve the remarkable results that are suggested, you would have a stable, settled result in both cases. I do not think it is wise to take any particular factor in any particular nation and say, "This is the prime factor which accounts for the prosperity of this nation." It is true that there are 5,000,000 unemployed in the United States, and I should agree largely with the hon. Member who suggested that that was to a large extent due to the financial crisis which has overtaken America and the highly organised capitalistic system of society. But if you ask me what other factors account for these high wages, I should say the fact that the United States is largely an undeveloped country, a young country with a very resourceful people, and very largely a sober country which has found out that the spending of money in other ways than in wastefulness was the means of encouraging trade and producing high wages. It is a very risky thing to say of any nation that its prosperity is due to one or another factor. The prosperity of America, in so far as it has been prosperous in the past, is in spite of and not because of the Protectionist tariffs it has set up.

The President of the Board of Trade has been paid compliments on his reappearance, but he has also been attacked because of his mission at Geneva. We are wholeheartedly congratulating him not only upon his reappearance in the House but upon what is believed to be a very effective step towards the rationalisation of the industry of the world. This is not a problem for Manchester or Liverpool or New York or Brussels or Amsterdam. This is a world problem. There is a conference of the nations sitting at present to rationalise their implements of destruction against each other, to find a standard and from that standard, having called a truce, to proceed, let us all hope, to reducing their implements of war against each other. In the world of commerce we want to establish' a truce, and we want to see a new spirit of co-operation amongst the nations of the world, and we want to see the Economic Council of the League of Nations so operating, that it will say, "Here are the needs of the world, here are the products of the world. Instead of this senseless fighting with each other, let us ration the products of the world. Let us find out what the real needs of the world are and bring peace into our economic borders."

Mr. HAMMERSLEY

In one of the facile speeches that we are accustomed to hear from the President of the Board of Trade, he made some reference to a topic which is of great political importance at present. He referred to the United Empire and said it was an impracticable ideal. It may very well be that the ideals of the British Empire party lie in the remote region of the future, but in endeavouring to take steps to arrive at that ideal we shall not be doing any harm to the industries of the country, whereas with the other ideal, which is equally praiseworthy, that of economic freedom and Free Trade throughout, we are going to do something which will be of immediate and practical harm to the industries of the country. The hon. Member for Blackburn (Mrs. Hamilton) pointed out that naturally the world ought to move towards the removal of barriers and that tariffs on the whole must act to the disadvantage of the community as a whole, but she did not key those remarks to the practical situation in her own constituency. In Blackburn, weavers are being put out of work in increasing numbers as the weeks go by because of the importation of sheetings and so forth from Belgium. You have to deal with these things not as a matter of ideals, but as a matter of practical politics. While we are agreed on both sides of the House that economic freedom and the removal of bar- riers is an ideal, if we stick to that ideal and do not have regard to the practical consequences of our conceptions, we may be doing a great deal of harm to those whom we represent and adding to the volume of unemployment. Tariffs are being put up against British manufactures all over the world. They have been increased during the time this very tariff truce has been discussed and that, at a time like this, we should be asked to bind ourselves irrevocably for a period of years, not to put on any Protective duties on any article whatever is to deprive us of every vestige of industrial defence which we most require if we are going to look after the employment of our people.

We are passing through a very difficult period. This is a most inopportune time to put forward these proposals. Every trade association of which I have any knowledge has suggested that this tariff truce is ill-advised. They have put forward unanimous expressions of opinion suggesting that it ought not to be proceeded with. I make no apology, in the light of the evidence that is put forward, for suggesting that we ought to consider the matter in a much broader view that the mere aspect of tariff proposals. We ought to consider it from the broad aspect of what we are to do to protect our trade The President of the Board, of Trade has a great responsibility. He has to look after the trade of the country, and the trade of the country is getting gradually worse. I read in the Board of Trade journal last week that the volume of production was up by something like 5 per cent. As the years go by, with the increase of invention and mass production and so forth, if you are going to maintain your position, you have to have an increase of something like 15 per cent. each year in order to provide employment, and an increase of 5 per cent. only shows that we are not holding our position in the world. When you come to examine the figures in a little more detail and see that it is trades like gas and electricity that are providing the increased production, and that the textile trades are getting gradually worse, we require to examine the position.

Is the suggestion of the Tariff Truce the only policy which the Board of Trade are going to put before the country in this time of intense difficulty? This proposal, looked at from the most optimistic point of view, is a suggestion that we are putting up a safeguard to prevent us from becoming worse. That is the best that can be said of it. If we are going to retain our present position we shall become a second-class Power. We must improve our industrial position How are we going to do it? What is the policy of the Board of Trade? There is, in the Vote with which we are dealing, an item in respect of the Economic Adviser. The Economic Adviser of the Board of Trade is a responsible official, and I would like to ask the hon. Member who is going to reply for the Board of Trade this specific question: What relationship is there between the Economic Adviser of the Board of Trade and this new Economic Advisory Council which has been set up by the Government? I do not suppose that anybody should know more about the practical problems and about industry as a whole than the Economic Adviser of the Board of Trade. Is he to work in co-operation with this new Economic Advisory Council? Is he going to be brought into consultation? What is he going to do? What is the function of these new 15 individuals with their staffs? Here we are, a great industrial nation, faced by tremendous difficulties requiring some guidance, and the only proposition which is put before us is some suggestion that the best that we can do, is to stop ourselves from getting any worse. That really is not good enough for this country.

The crux of the problem, as has been stated over and over again and not contradicted—it has been stated by the President of the Board of Trade himself, and by the Lord Privy Seal—lies in our export trade. If we are to be shut out of the markets of the world, as we are being shut out—each succeeding year sees greater barriers put against us without any protest—what are our prospects? We have no assured markets, and therefore we cannot get confidence, and because we cannot get confidence we cannot get capital. When one learns of an increasing tariff in India against our goods, and knows that behind those barriers new trades are to be built up, what is the prospect for our workers? The best of them are going to some foreign country and there practise their trades and earn their own livelihood, and the worst workers are to be left at home on the dole. It is a most unfortunate and terrible prospect which lies before us.

Now that we are dealing with this question of the export trade, may I give the specific example of the cotton trade? In this industry it has been stated very frequently that we have to reduce the cost of production in order that we can sell more and sell at world competitive prices. If side by side with reductions in our costs of production—reductions which we make by means of hardly-won economies—we are to have a simultaneous reduction in the purchasing power of our customers, then those economies will not increase our potential demand by one iota. Here we are being ground down to reduce our prices by, say, 5 per cent., and we see the price levels going down, 8 per cent. last year in France, and, I think, even last month in this country the price level came down by something like 3½ per cent. If the economies which we can make by reducing our prices and by reorganisation and so forth are not going to keep up with the reduction of the world's purchasing power, we are not going to increase the effective demand. It is clear that we have to do more than merely keep prices down. [HON. MEMBERS: "Hear, hear!"] I am glad that there is, apparently, a unanimity of opinion on all sides of the Committee. We have to do two things. We have to introduce our economies and reduce our prices, and side by side with that we have to control the volume of our production. How are we going to help in that by a Tariff Truce? The point I was making is that rationalisation, if we are to control output, must necessarily deal with our whole industry, and we have to consider the fact that those trades are not uniformly depressed all over.

In the case of the cotton trade, at least one-third of that industry at the present time is profitable. We have to use our rationalisation process not merely in order to reorganise our inefficient and tin-profitable industries, but we have to use rationalisation to protect the profitable section of our trade. As I conceive the economic policy which is being carried out by this Government—and it is similar to the economic policies carried out by every other Government and by all parties since 1919—we are working in a vicious circle, and nothing but a wisely administered and controlled finance will get us out of that circle. We have to reorganise, and reorganisation requires new capital. You can only get new capital if there is a chance of earning a good profit, and that profit again requires reorganisation; and we go round on this vicious circle, and cannot get out of it. I suggest that if we are to allow this eternal competition to exist and to persist, in the cotton trade at any rate, the whole of that industry will be turned from a national asset into a national liability.

This emphasises the question which I am asking the President of the Board of Trade. What more have they to offer us than the Tariff Truce? We get again to this fundamental aspect of the problem—the apparent divergence between the interests of finance and industry. In Germany, when they were dealing with problems of this character, as they had to deal with them in 1925 and 1926, they dealt with them by means of a wise cooperation between finance as represented by the joint stock banks and industry, and they got over their troubles. The President of the Board of Trade has a great duty to perform in impressing upon the Lord Privy Seal the problems of the trades with which he is in close association and endeavouring to get, through the Lord Privy Seat, some of this wide co-operation in finance. Unless we can break this vicious circle, our position will be extremely grave. If we do so we shall get confidence. It was in a speech at Manchester that the Lord Privy Seal stated that any scheme which is industrially desirable and financially sound will receive the backing of the Government and of the joint stock banks.

I suggest that it is the duty of the President of the Board of Trade to look into these schemes and see whether in this condition of grave industrial depression we cannot try to find the way out. Certainly the idea that this country should maintain its position as the dumping-ground for the world's excess production is not going to help us. We have got to have something more from the President of the Board of Trade than this proposal of a Tariff Truce. There is one specific suggestion I should like to make in connection with the relationship between finance and industry. There is a committee sitting, the Macmillan Committee, and I should like to ask the President of the Board of Trade whether he will instruct the Economic Adviser to the Board of Trade, who knows the whole problem of industry to give evidence before the committee. It seems to me that his opinion should be valuable and very helpful. Certainly in these times when we are forced to stress so much the economic situation as against the political situation, the views of the Economic Adviser to the Board of Trade should be of value to a committee sitting to deal with the relationship between industry and finance. Industry has been asking for help, and we get nothing except this abortive Tariff Truce.

Mr. SEXTON

I will preface the few words I have to say with an open confession. Confession is said to be good for the soul. I am not enamoured either of Free Trade or Protection, because neither touches the fringe of the social evils from which the nation is suffering. As I understand the situation, the right hon. Gentleman makes a suggestion for a Tariff Truce. The idea is that tariffs are a danger to this country, and that if we can only get on to a level with other countries and have fair-play in the markets of the world for the British workman, who is the best workman in the world, then all our troubles will be gone. If the right hon. Gentleman's suggestion is accepted and tariffs are swept away, why complain? The difficulties will be gone. The unfair competition of which hon. Gentlemen opposite have been talking will no longer exist. Why should they object even to a trial of this experiment? I have sat in this House for many years and have heard these things debated at length time after time. Even under the last Government we heard nothing but tariffs and safeguarding from the ex-Chancellor of the Exchequer, who tried his hand at safeguarding. Amongst other things, too numerous to mention, were knives and forks, scissors, razors, paper-bags, underwear and buttons. He stopped short of button-holes. I have often thought that he missed a chance before the fair sex bobbed their hair so that he could not tax hair-pins. Experiment after experiment has been tried in that direction. A duty of 33⅓ per cent. was imposed on these things; nevertheless imports valued at no less than £287,000,000 of the very things that they wanted to keep out, came into this country.

Mr. LOUIS SMITH

Is it not a fact that in the trades the hon. Member has mentioned employment has increased during that period?

Mr. SEXTON

I can quite understand that this appeals to the man whose shoe pinches. I can quite understand even the idea of Empire Free Trade is an attractive thing to the man who has lost his wealth. I can sympathise with him, and it is not to be dismissed cheaply by sneering or abuse or ridicule. You want to face the thing and intelligently criticise it, and if I had evidence that Protection was going to put an end to all the evils of our economic system, I should join the ranks of those hon. Gentlemen without any hesitation. As a student of economics, however, I find that hon. Gentlemen opposite forget we are an insular nation whose life-blood is in our exports and imports. I could quote case after case where it might happen in trades protected by safeguarding that you might get one man in, the manufacturer, but you would put two men out, in transport. I speak from experience. You cannot have it both ways.

One hon. Member in a very eloquent speech complained that the President of the Board of Trade had not consulted the authorities on this question before he made his suggestions at Geneva. The authorities are all round us. The argument applies to all protected countries, for they have all got their own unemployed problem and most have a lower standard of living than we have. All the evils of which we have heard complaint to-night are present in protected countries. We could to-morrow adopt the protected tariffs of other countries and so get on a level, but here is an opportunity to get on a level without protected tariffs. Supposing we adopted protected tariffs and said we would protect this and that in order to get on a level. The same thing would go on as is going on in protected countries. What did they do? They said to the workmen that here is a job, and they can go on producing at a wage upon which they can exist. The workman has a living wage only. I want something more than a living wage, and so does the working man. The working man is told, "We will keep you alive while you produce goods." Gradually the warehouses are filled, and when the artificial market that has been created has been fully supplied, the man is thrown upon the street because there is no further demand for the commodities that he produces, and he is denied the means of purchasing the very goods that he originally produced, while he and his dependants are the natural demand.

We hear a lot about the textile trade nowadays. The troubles of the textile trade are well known, and speculators are mainly responsible for them. A speaker who preceded me spoke of a vicious circle. Certainly we are living in a vicious circle under our present economic conditions. Recently, another political idea has been brought to the front, and the right hon. Gentleman who leads the Opposition has not yet made up his mind about it. From my experience I would suggest to him that he be very careful about this latest experiment. There is only one solution of the problem that confronts the country—the man, able and willing to produce and add to the wealth of the country, ought to be given an opportunity of doing so. That is what neither Free Trade nor Protection gives him to-day. The human waste of raw material is going on in every country. We on this side of the Committee are a little bit uneasy because of the handicap of our present situation in this House. But eventually we shall come back here to work out the real solution of the poverty of this country. There is no use denying the fact that the present economic system is breaking down from sheer overweight. We ourselves, as a Government in a minority are handicapped by that fact, but we shall come back eventually strong enough to apply the real solution as sure as the rising of to-morrow's sun on the flood tide. There may, perhaps, be moments when the tide seems to recede; but who among us has not paused as if in doubt whether we were looking at the ebb or flow of the tide. It does not take long to tell. A few brief moments and the doubt resolves itself into a certainty, and the tide which for the moment seemed to recede comes back with a rush carrying everything before it. In vain may right hon. and hon. Gentlemen opposite build themselves an ark of the new Covenant of Tariffs and Safeguards and send forth their dove of Empire Free Trade, past experience of the right hon. Gentleman the Leader of the Opposition was not a happy one. Some of his species lost their passage, and now, as then, the dove will return, not with the olive branch of better times, but with the news that in the wild waste of our present lop-sided economic system there is no resting place and that they were doomed to float about a mere speck on the political waters for all time to come.

Sir ROBERT HORNE

The hon. Gentle-man who has just spoken has made, as he always does, a refreshing speech which contains nothing of hidebound theory and only the views which the hon. Gentleman has himself formed as a result of long experience. I confess that I am glad to follow that speech. If only we could have this matter dealt with as a practical issue, rather than as one of moral principle to which it seems to be elevated from time to time, we could as practical men arrive at some sound conclusion. I am one of those who confess to be neither a Free Trader nor a Protectionist—one who would be content to deal with each situation as it arises, and to do what is best in the interests of our trade in the times in which we find ourselves, and according to the conditions which mankind has imposed throughout the world. I am indeed one of those who believe it is just as foolish to say that you will never put a tax on anything as it is to say that you would always put a tax on everything.

The speech which was delivered by the hon. Member for Loughborough (Mr. Winterton) was of a somewhat different order. We are accustomed on this side to be regarded as somewhat antiquated in our views, and very unwilling to change from any of the practices of our forefathers, but in this matter one listens with some amazement to speeches which re-echo, even after all the experiences that we have gone through, doctrines of Cobden, whose predictions have long ago been falsified in the history of our country. We have arrived at a time when we ought to re-examine this problem. I agree entirely with the hon. Member for Loughborough that if we could get Free Trade throughout the world that would be the best system that mankind could have. But we do not have it, and we have to recognise the fact. We might believe that the proper way to play football is to play it only with the feet, but if every other team in the world with which we contend allows the use of hands as well as feet, it is about time that we began to use our hands also.

I do not propose to discuss this question of tariffs in that wide form, because what we are dealing with here is a particular aspect of the problem, namely, the Tariff Truce which the President of the Board of Trade sought to effect within recent weeks on the Continent of Europe. I confess that I should find it difficult to talk with bitterness or harshness of the policy which the right hon. Gentleman initiated and tried to carry to fruition, because, indeed, the life of his child has been short and has not been very merry. He brought forward his project, I think, last year, and to-day we know that for all practical purposes the project which he initiated has come to an end. In fact, it brings to my mind an old epitaph about a child that died a year old. On the tombstone ran these words: If thus so sudden I was to be done for, I really wonder what I was begun for! So far as the right hon. Gentleman's proposal is concerned, it was designed to bring about a reduction in the tariffs of Europe, but its only effect was to compel a rush of many nations to raise their tariffs, in order that when the moment came for fixing, shall I call it, the quota of the tariffs, they should be provided at least with a tariff which would effectively defend them against the incursions of all other nations. The project has now almost disappeared. France has effectively torpedoed the idea of the right hon. Gentleman, and I do not think we are likely to hear any more of it from a practical point of view.

If that were all that was involved in this matter, I confess that I would not have risen to-night to burden the Committee with any views that I have, but it seems to me that there is a principle behind all this matter which is far greater than the particular design. What I ask the Committee to observe is this that in this particular matter we became entirely dissociated from the Dominions of the Crown. Whereas Great Britain was urging this design upon the nations of Europe, every one of our great Dominions expressed their complete dissent from the proposal, and turned their backs on it and rejected it. The question that I wish to put to the Committee is, What is going to be the policy of this country in such matters?

One, of course, cannot forget Cobden's remark about the Free Trade system, that one of its benefits would be that it would gradually and imperceptibly loosen the bonds which bound us to our Colonies. I want to know, Is that the policy of His Majesty's Government? Is their design to dissociate this country from its Dominions in matters of tariff policy, and rather to become associated with the Continent of Europe? I ask that, because no man can believe that if we are to make arrangements with Continental nations, so far as tariffs are concerned, we can by any chance keep those bonds which unite us to our Dominions. That is acknowledged even by the most extreme of Free Traders, and accordingly I ask the Committee to consider upon what course we are bound in this matter. Are we going to make common cause with Europe, or are we to combine with our Dominions in seeking to make our views effective in the world and to make our position stable and well founded?

Mr. MILLS

Why not combine all?

Sir R. HORNE

I quite agree, and the whole question between us, therefore, is how we are going to get a practicable scheme in which we can combine all. At the moment the people who treat us not merely with consideration but with kindness are our Dominions, and the people who invariably shut out our products are, among others, the nations of the Continent of Europe. The question is, With which of these are you going to ally yourselves, and how are you going to build up the prosperity for which we all hope? I should imagine that if there is one thing which we have been taught in modern times, it is that those who can the most successfully sell their products are those who can by very large production produce at a cost per unit which enables them to meet their rivals in all the markets of the world. That is a proposition which has been made irresistible by the experience of the United States of America, but in order to go in for the mass production which will give you these cheap prices, you must also have mass consumption. Unless you have an assured market in which you are going to sell your mass production, it is useless.

The question is, Where are we going to find our assured markets? America has prospered by her mass production and the extent of the market which she secures for herself as against all invaders. She has succeeded with high wages in producing at a cost per unit which has enabled her to sell not only in her own markets, but in world markets also: and it is just such a position that we would desire to obtain for ourselves. How are we going to obtain it? [An HON. MEMBER: "Markets here!"] That is exactly what America does. It secures its market at home, but what is our position? [An HON. MEMBER: "We have lower wages!"] If we adopted America's plan, we could pay higher wages. The real fact is this, that if we could, like America, secure a large consuming market, we could go in for that mass production which would enable us to reduce our costs and compete with our rivals in every market of the world. How are we going to do it? It is perfectly evident that, so far as most of the countries of the world are concerned—in fact, all of them—they impose upon us a penalty in selling our goods to them.

Where is our own best market? It is in our Dominions, because there are two points about that market which are specially favourable to us. One is this, that they have not yet developed their manufactures to any large extent, and accordingly they have to import very largely their manufactured goods, making available to us therefore a market for our manufactured goods which we cannot find in any of the older countries of the world where they are rivals of our manufactures. In addition to that, they favour us in that the Dominions give us a preference which enables us to maintain a position in their markets which otherwise we should not do.

There is one thing with regard to that which I wish to point out. I see it constantly being asserted by critics of Imperial Preference that the Dominions in fact put up high tariffs against our goods to such an extent that their markets after all are worth very little to us. That is commonly how the argument is stated. Now where is the highest tariff country of all our Dominions. It is in Australia. Does the Committee realise that of all the goods which we send to Australia, one half, namely, £30,000,000 worth, goes into that market absolutely free of any duty at all, and that on those same goods there is an average duty against the foreigner of 12½ per cent.? It is true that in some directions the Dominions protect their markets for their own manufactures. I remember being asked by the Steel Association of this country to complain that the tariff that was being imposed against British steel in Australia was so high that it prevented our manufactures from going in there as against the Australian manufactured steel. I represented the case of the British steelmakers, and the reply that I got was this, "How can you expect us to protect our market for your steelmakers against our own steelmakers, when you do not make any attempt to protect your own market against foreign steelmakers?" I should be very glad if any Free Trader could furnish me with any kind of answer to that argument which was presented to me, because I confess that I could think of none. Apart from these things that enter free of duty, there is a large variety of goods on which we get such a Preference as makes our position very favourable. Many manufactured goods that are very badly hit in this country are entering the Australian market under a system of very high Preferences.

Let me take an example where we do not get all the market. Consider the case of motor cars. There is no market in the world where we do so well in respect of motor cars as we do in Australia. Australia takes one-fourth of the whole of our export of motor cars in a year. We get on these motor cars a Preference of 30 per cent. An assembled chassis from any other part of the world goes into Australia with a tariff on it of 35 per cent., while we get in with a tariff of 5 per cent. Hon. Members must be well aware that but for that Preference we could not hold the Australian motor car market for a day. [An HON. MEMBER: "We do not hold it now!"] We do not hold it now, but we hold a very considerable proportion of that trade in the Australian market. If we do anything by which we lose that Preference, the immediate result will be that the Australian market will be absolutely swamped with American motor cars, and the British motor car maker will not have a chance.

Mr. AYLES

Motor cars are protected here.

Sir R. HORNE

I agree that they are protected here to the extent of 33⅓ per cent. In face of the enormous effect of mass production of motor cars in America, if one of two things were to happen, either that the protection given to our motor cars were taken off or that we lose the Preference in Australia, either of those things would be sufficient to kill our trade.

I am not going over figures which are very familiar to most Members of the Committee, but I would point out that the Dominions at the present time take practically 50 per cent. of the whole of the manufactures of this country. We find that a small population such as that of New Zealand and Australia, amounting to 10,000,000 between the two, takes £75,000,000 worth of our goods in a year. Next to India that is the greatest market we have in the whole world. Each inhabitant takes about £10 worth of our goods, whereas a German or a Frenchman takes 12s. 6d. worth of our goods and an American 7s. 6d. worth. I give these figures with the object of proving to the Committee that these Dominion markets, of all the markets we have, are the most important. Although at the present time it is true that we are exporting more goods to foreign countries than to our Dominions, the fact remains that we are being more and more shut out by the tariffs of foreign countries and we are being more and more favoured in the Dominions.

10.0 p.m.

That brings me straight up against the problem with which the President of the Board of Trade is faced. I say to him that if he makes an arrangement with Europe antagonistic to what our Dominions believe to be to their interests, he will be striking a blow at the best form of trade which we enjoy in this country. Let me urge another point in answer to some of the things that have been said in the Debate to-night. Our Dominions, frankly, do not understand our position. We still go on murmuring these old shibboleths which we have talked about for so many years, and our Dominions look on, wondering. They see that we are the only country in the world which follows that practice. There is a famous instance of the 12th juryman who said that he had never met 11 such unintelligent men as he had met in the jury box. Surely, it is not to be said as against all the rest of the world that they are composed of people who are either congenital idiots or that they have entirely neglected their economic education.

In a previous Debate in this House I heard the Secretary of State for India wind up with a sentence in which he begged the House to give a lead to the world in the path of sane economics. We have been giving that same lead to the world for 70 years, but we have not found a follower, so far as I know. We started out to dictate to the world the course they must follow, and then we were surprised that they did not follow it. Then we adopted an attitude of lofty contempt that they did not come our way, and now our Free Trade friends have sunk into the condition that they are prone to consider that the rest of the world are either entirely unintelligent or are under suspicion as to their moral character. We have never had a follower in all these years except Turkey, which for a time joined hands with us in maintaining the Free Trade system.

The amazing thing is, that all our children when they have gone forth from this country have immediately started tariff systems of their own. Our great Dominions, one and all of them, have fallen away from the straight path, and even the juvenile Colonies have thought fit to lead a life of their own. The other day, the East African Colonies not only decided to have duties for revenue but to adopt protective tariffs. What about the Secretary of State for India, who is so anxious to lead the world? At the moment, he is in charge of our great Imperial step-child—India. Would it not be a good thing for him to attempt to lead India? Recently it was announced that the great country which is in his charge is going to adopt a tariff on cotton goods which Lancashire fears will be absolutely disastrous to her trade. Why does not the right hon. Gentleman, who comes with his perorations to this House about leading the world, leave the world alone for a week and try to convince India to follow his doctrines of Free Trade? I remember that when Sir Wilfrid Laurier first introduced the preferential system into Canada in favour of our goods, the Cobden Club awarded him its medal. The Cobden Club might award a medal to the Secretary of State for India if he will only produce a system under which our goods might get favourable entry into the great country of which he is in charge.

It is constantly said that our trade in other countries is more important than our trade with our Dominions. I entirely disagree; but I wish to add this: that there is no reason at all why our trade with our Dominions should in any way be detrimental to our trade with other countries. On the contrary, we should be able to make far more of our external markets if we were in a favourable position in the markets of our Dominions. At the risk of wearying the Committee, let me say this, that in spite of the fact that most people are ready to recognise that large production is the secret of cheap prices and of an entry into good markets, they never appreciate the fact that safety in one market will enable you to sell better in another. I subscribe fully to the programme of looking after our home market, as well as paying attention to our Dominion markets; and all the rest of these things will be added unto you. So far from our fate lying with the Continental nations of Europe, as the right hon. Gentleman tried to make out, I am certain that in this matter, as in many others, our destiny lies with the nations which share our blood and our history, and that we can attain prosperity much more by allying ourselves with these young countries which have sprung from our shores and are spreading to the ends of the earth the best traditions of this old country and the sweetness of our civilisation.

Mr. MORLEY

I should not intervene in this Debate but for the reiteration by Members of the Opposition that the cause of unemployment in this country is foreign imports and that the best method of remedying unemployment is the imposition of protective duties upon imports. The United States has been mentioned. The United States has every natural advantage; large territories, every kind of climate, a sparse population, and an employing class with initiative, energy and foresight, far beyond that of the employing class in this country. Yet, in spite of all these advantages, a high protective tariff has not prevented the United States from suffering heavily indeed from unemployment. An hon. Member has said that the unemployment in the United States is due to the financial crisis which occurred there last year. He forgot that there has been unemployment in the United States before last year which was not preceded by any financial crisis. There have been periods of very grave unemployment in the United States during a number of years in spite of the protection of her high tariff wall.

One country has not been mentioned—England. This country a century ago enjoyed the protection of very high tariff duties upon imports. Practically every raw material imported was taxed, and almost every manufactured article. Did that high protection ensure prosperity and employment to the people of this country? So far from doing that, during the period of the first three decades of the last century, when this high system of protection was in operation, the people were so miserable and poverty-stricken that they were on the verge of a physical force revolution. From this argument we can deduce that a protective tariff is no remedy for unemployment. It is said that unemployment is caused by foreign imports. If that was so, then during the curve of highest imports unemployment would be greatest; the highest incidence of unemployment would accrue at a time when there was the highest value of foreign imports. As a matter of fact, in recent years the highest value of imports into this country was in 1924, when we had the smallest volume of unemployment in recent years. The two do not correspond in any way whatever.

The incidence of unemployment in this country is heaviest in the industries which are not affected by foreign imports. It is heavy in shipbuilding, in which the right hon. Member for Hillhead (Sir R. Horne) is interested. Will he say that the depression in shipbuilding can be cured by imposing an import duty on foreign ships? No foreign ships are imported. Another industry particularly depressed is the mining industry, which does not suffer from the competition of foreign imports. Only a very negligible quantity of coal is imported into this country, and a duty upon foreign coal coming into this country would not relieve unemployment in the mining industry to the slightest extent. Then with regard to the textile industry, is it to be argued that an import duty upon raw wool or cotton is going to improve the conditions of the great industries in Lancashire and Yorkshire. So far as these industries are concerned, nothing could be more harmful than a full-blown system of protection, involving as it would an import duty on raw cotton and wool.

In a very eloquent maiden speech, an hon. Member below the Gangway said that the remedy was to improve the home market, and that statement has been reiterated by the right hon. Member for Hillhead. We on this side of the House entirely agree. Of what does the home market consist? It consists of the purchasing power of the people, and we shall never get any cure for unemployment until we effect a better distribution of the national dividends of this country. At present, 5 per cent. of the population of this country have control over 45 per cent. of the annual national income, and the other 95 per cent. have to put up with 55 per cent. We have two nations in this country, one being a small nation of very rich people—people who are rich beyond the dreams of any previous avarice, people into whose pockets, almost without their volition, there flow annually very large sums which they cannot possibly spend upon ultimate consumable commodities. Those sums they are forced to spend, in the main, on luxuries which give very fluctuating and unstable employment. If they do not spend it on luxuries, they invest their surplus income abroad, and it goes to the erection of factories in foreign countries and in our Colonies, which turn out goods in competition with our industries at home; or, if they do not do this, they invest their surplus income in undertakings at home which turn our goods and services of a kind which the mass of the people cannot afford.

We on this side hold that the only basic remedy for unemployment is to improve the purchasing power of the people of this country; and the only method of doing that is by taxing the very wealthy more heavily than they are taxed at present, and by using the proceeds of that taxation to give increased pensions to our aged people and our widows, and better social services to the people generally. We assert that it is along the line of the redistribution of income that the cure for unemployment is to be found, and not along the line of tariffs upon imported articles. That method has been tried before in this country and has failed. It has been tried and is being tried in other countries, and has failed to mitigate unemployment to any extent. I admit, of course, that hon. Members opposite sincerely believe in the efficacy of Protection as a remedy for unemployment. They must be sincere in that belief, or they would not have held to it for so many years, in spite of every sign of popular disapproval. They have advocated that doctrine for the last 50 years. It is true they have advocated it under different names.

The party opposite is very fond of aliases and this doctrine has, at different times, been called Protection and Fair Trade and Tariff Reform and Safeguarding of Industries, and now we have another nomenclature, and it is called Empire Free Trade, but "the more that changes the more it remains the same thing." Every time that that doctrine has been put before the electorate it has been rejected by an overwhelming majority, and from the point of view of electoral advantage I hope that the party opposite will again put that doctrine before the electors when they next appeal to the people. If they do so, I feel certain that we shall be returned to the House of Commons with a bigger mandate than we have at present, and in larger numbers, and we shall be in a position to bring about that better distribution of the national annual dividend which alone can secure the relief of unemployment.

Sir AUSTEN CHAMBERLAIN

I cannot devote the time that I should like to an examination of the arguments used by the last speaker. I must content myself with the briefest references to one or two of them. I think the greatest fallacy which underlay the hon. Member's speech was disclosed in the concluding sentence. He regards the potential wealth of this country as a fixed quantity. [HON. MEMBERS: "No!"] Any improvement, he explained, must be found by taking away from one class to give to the other class. We, on the other hand, regard the wealth of this country as something with infinite possibilities of expansion, and we believe that our efforts should be directed towards that expansion and that that expansion would be of benefit to every class of the community.

The hon. Member made other statements which seemed to me as odd. He said that, if the importation of foreign goods tended to produce unemployment in this country or contributed to unemployment in this country, you would expect the importation of these foreign-goods to be high when the unemployment in this country was great, and vice versa. No reasonable person would expect anything of the kind, and the hon. Member would not expect it if he gave it a moment's further consideration. If there is great unemployment here, there is reduced purchasing power, and the import of foreign manufactures goes down, just as does the production of home manufactures. Then he went on to say that you could not help the coal industry or the ship-building industry or the cotton industry by a duty. Anything which helps the British export trade will help the shipping industry; anything which helps iron and steel will help coal; while anything which prevents India from raising a protective duty against us, or which induces other countries to lower their protective duties on cotton goods, will help the cotton industry. The hon. Member's view is too narrow and too shallow for so great a subject.

This has been a very interesting Debate, covering a wide ground, and it has been all the more interesting, because it has been conducted with calmness, although, I am sorry to say, before, generally, a very scanty audience. I am making no reproaches about the Liberal party, who are engaged on domestic questions of more immediate interest. It has been a very interesting Debate conducted with a calmness and good temper which has rendered it all the more effective, but it has covered a very wide range, which is much wider that the particular issue on which we are going to vote. There have been in the course of the Debate one or two interesting speeches. There was the interesting maiden speech of the Noble Lord the Member for Har-borough (Earl Castle Stewart), which showed us that in him we have one who will make contributions to the Debates of this House of quality and erudition. I agree with the Noble Lord in all that he said of the home market, but I do not agree with him in what he said about the foreign market. Then there was the speech of the hon. Member for St. Helens (Mr. Sexton) who, in a delightful sentence, said, "But if tariffs can be swept away by the right hon. Gentleman the President of the Board of Trade, why do you object?" We should not object if we thought that tariffs could be swept away by his proposal: We should wonder at his innocence, but we should wish him God-speed. A tariff truce does not mean the cessation of tariffs; it merely means their consolidation. I will allude to one more speech, the amusing speech of the hon. Member who sits for Burslem (Mr. MacLaren). He felt that he had disposed of the whole controversy which circulates around the questions of Free Trade, Protection, Safeguarding and the rest, when he secured an admission from the Committee that it was better to feed on manna in the wilderness than to starve in a desert.

I wish the Committee would come back from these large but rather surface appreciations of the problem to the particular point which my right hon. Friend invited us to discuss and on which we shall invite hon. Members to vote. That point is no general question between tariffs and Free Trade, it is a question whether the Tariff Truce, which the President of the Board of Trade still hopes to arrange, is in the interests of this country or is not. What is the nature of that Tariff Truce? It does not mean in itself that any tariffs will be lowered. It may mean that some of the latest increases—a portion of the increases which have been put on since the Tariff Truce was mooted, but only a portion, and not the whole—will be foregone and not take effect. That is the utmost for which the right hon. Gentleman hopes.

But even if we decide upon that basis, which consolidates the existing tariffs of Europe, we are obliged to make exceptions. There is a Clause which the right hon. Gentleman says is known as the catastrophic Clause"—not an unsuitable name. It provides that: In order to meet any extraordinary and exceptional circumstances which may arise, the high contracting parties shall acknowledge each other's right to proceed to tariff adjustments for the purpose of meeting grave emergencies affecting essential factors of their economic life. If one country which had signed and ratified this proposed Truce were affected by a crisis such as passed over the United States the other day, would that be within the catastrophic Clause, or would it not? If our own unemployment figures go up, as they have done in the past six months, by over 250,000, is that catastrophic or not? Certainly such a rise is catastrophic, and nothing else. In my own opinion, if such a condition of affairs arose in any other nation it would be urged that it was catastrophic; and in my opinion we should be justified in treating an unexpected, an unlooked for and an enormous increase in unemployment, as just such an event as the catastrophic Clause was intended to meet. In addition to the catastrophic Clause there is a contracting out Clause. I am not clear whether you have to contract out before you sign, whether all the contracting out has to be done before the Truce lays any obligation upon you, or whether after you have signed the Convention somebdy else may introduce additional or new contracting-out Clauses.

Be that as it may, it is quite obvious that this Tariff Truce does not even bind foreign nations or those who sign it not to raise their tariffs. As was pointed out by my right hon Friend, if by the skill, invention, or the activities of man some product should be discovered which is not yet protected by duty, in spite of a tariff truce, a Protectionist country might apply the nearest existing scale of tariff to that new article, and not even the unborn babe would be safe from the effects of a tariff under this proposed truce. That is the question that we want discussed.

We have had some experience, and I think we may derive a warning from our experience about the danger of signing agreements of this kind without foreseeing the possible use which foreign nations may make of them. We were parties in negotiating a convention for the prevention of export and import prohibition. No sooner was that signed and before all the nations had consented to bring the ratification automatically into force, some of the nations which had signed and ratified proceeded to establish bounties on exports because they knew they were safe, and that this convention would protect them against any bounty measures. I will stand in a white sheet, if it pleases hon. Member opposite, for not having foreseen that it was necessary, when drawing up that Convention, to make the act of prohibition extend to bounties, but I stand in a white sheet on one condition only, that the Government altogether stand in a white sheet too, because they brought the Convention into force although the required number of nations had not ratified after they knew that this advantage had been taken of it.

I want to ask the President of the Board of Trade a question. Is he going to be a party to any tariff truce which has regard only to tariffs, and does not, as one of its features at least, make this bounty system of competition impossible in the future? If we are to agree to a truce at all, it must be a condition that this new system of bounties ceases. After all, this country, under the leadership of the late Lord Salisbury, denounced two rather important commercial treaties in order to deal with bounty-fed competition, and he was successful, and there is no reason why we should sit down under it at the present time.

I have several times used the phrase "consolidation of tariffs." I use the word "consolidation," because the right hon. Gentleman objects to the word stabilisation. Consolidation is used in the report to the council of the 13th Session of the Economic Committee, and it is used three or four times. It is always used in the same sense in which we use it in a Consolidation Bill, that is to say, to denote a stabilisation of the existing state of affairs. Between the "consolidation" of that report, on which the committee is now working, and stabilisation, there is no difference that I can see. If the right hon. Gentleman can find any, I hope he will explain it to us, though perhaps he will permit me to say that I hesitate to ask him to do so, and regret that I am placed in such a position that I am obliged to add to his labours in the present circumstances.

The right hon. Gentleman says that what he wants is in two stages. The idea, he says, was not to stabilise tariffs, but only to arrest their upward movement. Having arrested this upward movement—not brought it down at all—he then hopes that, in the course of the two or three years for which the truce is to exist, he will be able to induce the countries of Europe to make some reduction. You begin, therefore, not by a reduction which you then stabilise by a truce, but you begin with tariffs which you stabilise by the truce, in the hope that you will afterwards get reductions. The process is sufficiently obvious: First, the truce: then the hope; and, later, the disappointment. The right hon. Gentleman has observed that his speech and the resolution were received with widespread approval in the Assembly of the League of Nations. I think that I have had, up to the present, a greater experience of the Assembly than the right hon. Gentleman, and, if he will permit me to say a word of caution, I would say that he will never have any difficulty in carrying a loosely worded resolution in the Assembly, but his difficulties will only begin when he asks the other nations concerned what contribution they are going to make.

What is my objection? Whether you call it stabilisation or not, you do by your truce give a kind of international sanction to the tariffs which now exist. You do, in fact, stabilise those tariffs at their present figure for the time being, and you stabilise them at the highest figure which they have reached, leaving us without any sort of protection or safeguard against them. If the right hon Gentleman gets even as far as that. I venture to say that he will owe it to the fear of foreign Powers that this Government may be short-lived, and that an other may come in which will ask them to justify the favour shown by us to them by granting to us corresponding reductions. "Truce" is a nice word. It sounds well. Someone has called it a holiday, but I think "truce" is a better expression. What, after all, is the nature of the truce which is proposed? It is a truce of the kind which a beaten enemy makes with his victorious foe. What it comes to is this, that foreign countries, having driven us out of their markets, are to remain for the period of the truce unhampered in occupation of a large portion of our own market.

There are three objections which I take to the policy embodied in this draft. In the first place, I say that we ought not to limit our freedom, as between different portions of the Empire, by engagements which we make with foreign countries. In the second place, I say we ought not to associate ourselves with a European economic system of which our Dominions form no part, and in the third place I say we ought not to limit our perfect freedom to deal as we think fit with our own tariffs and our own trade except as the result of concessions already obtained, and not in the hope of concessions which have neither been obtained nor offered nor are within sight.

Mr. W. GRAHAM

I think the Committee will excuse me from trying to reply to the whole Debate, very largely on the ground that earlier to-day I gave a detailed explanation of our proceedings in order that hon. Members might be familiar with what has taken place at the Tariff Truce Conference. I will deal with the points that have been put by the right hon. Gentleman who has just spoken and by the right hon. Gentleman the Member for Hillhead (Sir R. Home), because they appear to cover new and important ground. The right hon. Gentleman raised the question of bounty-fed imports—I think he must have had cereals in mind—into this country, and he asked me, very properly, what steps are to be taken in this Tariff Truce Conference at Geneva, or in any other way. Various questions have been put on that subject in the House within recent weeks, but everyone is aware that it is by no means an easy proposition. If, for example, it is suggested that there should be some simple prohibition of imports into this country under bounty-fed conditions, the first consideration that confronts us is the Anglo-German commercial Treaty. First of all, under that Treaty we are bound to the ordinary mostfavoured-nation treatment, and, if any measure of prohibition were attempted, we could only apply it in the terms of that Treaty to all other countries in the world. I need only mention that to show the wide-spread repercussions of any device which, on the face of it, appears to be simple but which in practice would be attended with very great danger.

In the next place, that Treaty itself—I found this part of my reply solely on the Treaty—contains an explicit prohibition of any step of that kind. So that, first of all, we should encounter the ordinary most-favoured-nation treatment, and, in the second place, we should encounter the specific Clause in the Treaty, both of which I hope make plain to the House the very great difficulties before us. Hon. Members are familiar with the way in which that system was designed to stimulate the export of cereals from parts of Germany and to operate by way of deductions of German Customs tariffs on imports into other parts of the country. And so, from one point of view, quite clearly, it is a bounty upon exports. The difficulty in our treaty relationship which exists I have just tried in the plainest and clearest terms to describe. What is the other difficulty which confronts us in this connection? It is quite proper that the right hon. Gentleman should raise this question and ask what we propose to do about it at Geneva or elsewhere. The other difficulties turn upon the very Convention to which he has just referred. That Convention aims at the abolition of import and export prohibitions, which, it is quite true, our predecessors and we had hoped would be ratified by the requisite number of countries. Under an agreement this was to be brought into force on the 1st January of the present year. That was signed by 16 countries other than ourselves.

Sir P. CUNLIFFE-LISTER

That was an agreement made by you.

Mr. GRAHAM

Yes. Sixteen countries other than ourselves on the 1st January brought that Convention into force. It aims, of course, at the abolition of import and export prohibitions. I should have thought that that was entirely in the interest of the free flow of commerce on which earlier in the afternoon I tried to explain that in our judgment a very large part of European recovery depends. Any prohibition of the kind now suggested would run counter also to that Convention. So that we have to face to-night as practical people, in what is admitted a difficult proposition, the peculiar effect of the Anglo-German Commercial Treaty and the Convention that we ratified with 16 other countries as from the 1st January of the present year. I only mention that to show that any step would of course have exposed us to retaliation or difficulty, with the scope of which, in a very brief reply, I should hesitate to deal, or even attempt to discuss. My right hon. Friend who has spoken was good enough to mention this to me personally, and I think many other Members have mentioned it, but there is not the slightest reason in the world why I should not say to the Committee to-night quite frankly what was said at the Conference a fortnight ago. We had no means then of formal representation, and I wish to make it perfectly clear that no formal approach to the German Government was made. But informally I discussed it with the Ger man delegates, and they were good enough to say that they would make most complete representation of what we had said to their Government. I have not the slightest doubt that that has been done, and I trust that it may lead to some useful result. As regards the proceedings of the present Truce Conference—

Sir A. CHAMBERLAIN

There was one question which I put to the right hon. Gentleman which remains unanswered. It was that he should make the withdrawal of these bounties and their prohibition a condition of any fresh concession from this country in connection with the signing of a Tariff Truce Convention.

Mr. GRAHAM

In all these discussions at Geneva, and certainly in the Sub-Committee's detailed analysis of the present Conference, we have always recognised that, if there were artificial devices of that kind, stimulating there perhaps, but operating unfairly to the interests of other countries, that was running counter to the whole spirit and purpose of these negotiations. I cannot for a single moment to-night in any way bind the Sub-Committee's discussions at Geneva, but I can say that it is certainly the view of the Government that, unless there was an end to these artificial aids and devices of this character, there would be very little chance of a Convention such as we now seek and very little chance of ratification by the parties to it. So if the Committee will not press me to go beyond that, I trust that I have made our attitude perfectly plain as regards those artificial devices which were condemned at the Conference in 1927 which were abhorrent to the whole spirit and purpose of the speeches in the Assembly in 1929, and which are in my judgment utterly inconsistent with what we discussed a week ago at the Geneva proceedings.

The right hon. Gentleman put two or three other questions, with which I will deal very briefly, about the draft Convention. It is not easy to describe the precise way in which the Clause he referred to would work, but, broadly speaking, the catastrophe suggested is in the nature of an act of God and the Clause would provide that a country might contract out of the strict terms of the Convention or to make a special arrangement until the effects of the catastrophe had worn away. I should imagine that in practice, assuming we get a result from the Geneva proceedings, it will never be difficult to decide the terms and conditions under which that clause should operate. Far more important is the other clause to which the right hon. Gentleman directed attention, namely, the clause under which nations might contract out of the Tariff Truce or any agreement. The clause relates to exceptions, and in my earlier speech this afternoon I explained that there were numerous countries which clearly wished to make an exception of some agricultural products. They said that they would be able to agree, or hoped to be able to agree, regarding a wide range of manufactures and other articles, but that agricultural conditions in their countries, and over a large part of Europe, were such that they could not promise to bring them within the scope of this truce or draft Convention.

I have tried to be practical, and I ask the Committee to believe that it has been a practical proposal. We recognise that in all likelihood that would be, in the main, the class of exception. Under this Clause leading speakers at the Conference insisted in the most emphatic terms that these restrictions must be kept in the narrowest possible limits. I want in this matter, as in other legislation, to be perfectly frank, and say that if the number of exceptions under the Clause increased to a certain point, there would be no basis for a Tariff Truce at all, or for the negotiations, covering the next year or year or two, which I hope we will get in the interests of all parties. So that it is to the interests of parties who are in sympathy with this movement to keep these exceptions within these narrow limits and to schedule them. The matter must, of course, receive the consideration and verdict of this House before it can be brought into operation.

The Committee would hardly expect me to give more than this very brief explanation, which is perhaps as much as the condition of my throat will permit. I will add only two general observations. First of all there is no reason for the very pessimistic note which has been struck in some of the speeches of this very interesting and remarkably well-conducted Debate. Only one country was definitely against the Truce, and very largely on the ground that it was premature. Another country, it is true, was unsympathetic, but both countries were most willing to take part in the subsequent negotiations, and I expressly explained to them, both at Geneva and in this House, that the Truce is only a formality which is to open the door to negotiations, it may be particularly on specific groups of commodities—textiles, iron and steel products, machinery, whatever may be the group agreed—covering the next year or two years or three years, in which a very large number of European countries have expressed their desire to try to get practical results. It is quite true that there is talk of tariff consolidation, but consolidation only in the sense that they agree not to increase their tariffs above that level, and to work from that point

in a downward direction. What is the choice before the House of Commons at the present time? I know that hon. Members opposite are deeply engaged in a great controversy on the tariff issue.

Mr. HANNON

We are all agreed on it.

Mr. GRAHAM

This is a great economic proposition which we have all to consider. There is not the least doubt that lying behind all these speeches, there was the feeling that we were going to give up, in the discussions at Geneva, a bargaining power of a material kind. The note of the speeches has not only been that of bargaining power but of material for retaliation; hon. Members opposite are thinking in terms of a retaliatory tariff. In this country that can only mean in practice a considerable duty over a wide range of important commodities such as, in my judgment, will reduce the aggregate volume of trade of this country, and so far from relieving unemployment will actually aggravate it. My time is up, and I merely add in reply to the right hon. Member for Hillhead that in all these discussions and proceedings at Geneva there was never any idea of our allying ourselves with a European bloc either against the Dominions or against the United States of America. We refuse to be parties to any form of economic discrimination.

Question put, "That Item Class VI, Vote 1, be reduced by £100."

The Committee divided: Ayes, 212; Noes, 286.

Division No. 200.]	AYES.	[11.0 p.m.
Acland-Troyte, Lieut.-Colonel	Bowater, Col. Sir T. Vansittart	Christie, J. A.
Ainsworth, Lieut.-Col. Charles	Bowyer, Captain Sir George E. W.	Churchill, Rt. Hon. Winston Spencer
Albery, Irving James	Boyce, H. L.	Cockerill, Brig.-General Sir George
Alexander, Sir Wm. (Glasgow, Cent'l)	Bracken, B.	Colman, N. C. D.
Allen, Sir J. Sandeman (Liverp'l., W.)	Braithwaite, Major A. N.	Colville, Major D. J.
Amery, Rt. Hon. Leopold C. M. S.	Brass, Captain Sir William	Courtauld, Major J. S.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Briscoe, Richard George	Courthope, Colonel Sir G. L
Astor, Viscountess	Brown, Col. D. C. (N'th'l'd., Hexham)	Crichton-Stuart, Lord C.
Atholl, Duchess of	Brown, Brig.-Gen. H. C. (Berks, Newb'y)	Croft, Brigadier-General Sir H.
Atkinson, C.	Buchan, John	Crookshank, Capt. H. C.
Baillie-Hamliton, Hon. Charles W.	Buckingham, Sir H.	Croom-Johnson, R. P.
Baldwin, Rt. Hon. Stanley (Bewdley)	Bullock, Captain Malcolm	Culverwell, C. T. (Bristol, West)
Balfour, George (Hampstead)	Butler, R. A.	Cunliffe-Lister, Rt. Hon. Sir Philip
Balfour, Captain H. H. (I. of Thanet)	Butt, Sir Alfred	Dalkeith, Earl of
Balniel, Lord	Cadogan, Major Hon. Edward	Davidson, Rt. Hon. J. (Hertford)
Beamish, Rear-Admiral T. P. H	Carver, Major W. H.	Davidson, Major-General Sir J. H.
Beaumont, M. W.	Castle Stewart, Earl of	Davies, Dr. Vernon
Bellairs, Commander Carlyon	Cautely, Sir Henry S.	Davies, Maj. Geo. F. (Somerset, Yeovil)
Berry, Sir George	Cayzer, Sir C. (Chester, City)	Davison, Sir W. H. (Kensington, S.)
Betterton, Sir Henry B.	Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Dawson, Sir Philip
Bevan, S. J. (Holborn)	Cazalet, Captain Victor A.	Dixey, A. C.
Birchall, Major Sir John Dearman	Chadwick, Sir Robert Burton	Duckworth, G. A. V.
Bird, Ernest Roy	Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Dugdale, Capt. T. L.
Bourne, Captain Robert Croft	Chapman, Sir S.	Eden, Captain Anthony
Edmondson, Major A. J.	Lamb, Sir J. Q.	Samuel, A. M. (Surrey, Farnham)
Elliot, Major Walter E.	Lane Fox, Col. Rt. Hon. George R.	Samuel, Samuel (W'dsworth, Putney)
Erskine, Lord (Somerset, Weston-s.-M.)	Law, Sir Alfred (Derby, High Peak)	Sandeman, Sir N. Stewart
Falie, Sir Bertram G.	Leighton, Major B. E. P.	Sassoon, Rt. Hon. Sir Philip A. G. D.
Ferguson, Sir John	Lewis, Oswald (Colchester)	Savery, S. S.
Fielden, E. B.	Little, Dr. E. Graham	Shepperson, Sir Ernest Whittome
Fison, F. G. Clavering	Llewellin, Major J. J.	Simms, Major-General J.
Ford, Sir P. J.	Locker-Lampson, Rt. Hon. Godfrey	Skeiton, A. N.
Forestier-Walker. Sir L.	Locker-Lampson, Com. O. (Handsw'th)	Smith, Louis W. (Sheffield, Hallam)
Fremantle, Lieut.-Colonel Francis E.	Long, Major Eric	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Galbraith, J. F. W.	Lymington, Viscount	Smith-Carington, Neville W.
Ganzoni, Sir John	MacRobert, Rt. Hon. Alexander M.	Smithers, Waldron
Gauit, Lieut.-Col. Andrew Hamilton	Margesson, Captain H. D.	Somerville, A. A. (Windsor)
Gibson, C. G. (Pudsey & Otley)	Mason, Colonel Glyn K.	Southby, Commander A. R. J.
Gilmour, Lt.-Col. Rt. Hon. Sir John	Meller, R. J.	Spender-Clay, Colonel H.
Glyn, Major R. G. C.	Merriman, Sir F. Boyd	Stanley, Maj. Hon. O. (W'morland)
Gower, Sir Robert	Mitchell, Sir W. Lane (Streatham)	Steel-Maltland, Rt. Hon. Sir Arthur
Grace, John	Mond, Hon. Henry	Stewart, W. J. (Belfast South)
Graham, Fergus (Cumberland, N.)	Monsell, Eyres, Com. Rt. Hon. Sir B.	Stuart, Hon. J. (Moray and Nairn)
Grattan-Doyle, Sir N.	Moore, Sir Newton J. (Richmond)	Sueter, Rear-Admiral M. F.
Greaves-Lord, Sir Walter	Morrison, W. S. (Glos., Cirencester)	Thomas, Major L. B. (King's Norton)
Greene, W. P. Crawford	Muirhead, A. J.	Thomson, Sir F.
Grentell, Edward C. (City of London)	Newton, Sir D. G. C. (Cambridge)	Tinne, J. A.
Gretton, Colonel Rt. Hon. John	Nicholson, O. (Westminster)	Titchfield, Major the Marquess of
Gritten, W. G. Howard	Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)	Todd, Capt. A. J.
Guinness, Rt. Hon. Walter E.	Nield, Rt. Hon. Sir Herbert	Train, J.
Gunston, Captain D. W.	Oman, Sir Charles William C.	Tryon, Rt. Hon. George Clement
Hacking, Rt. Hon. Douglas H.	O'Neill, Sir H.	Vaughan-Morgan, Sir Kenyon
Hamilton, Sir George (Ilford)	Ormsby-Gore, Rt. Hon. William	Ward, Lieut.-Col. Sir A. Lambert
Hammersley, S. S.	Peake, Captain Osbert	Wardlaw-Milne, J. S.
Hanbury, C.	Penny, Sir George	Warrender, Sir Victor
Hannon, Patrick Joseph Henry	Percy, Lord Eustace (Hastings)	Waterhouse, Captain Charles
Hartington, Marquess of	Power, Sir John Cecil	Wayland, Sir William A.
Harvey, Major S. E. (Devon, Totnes)	Pownall, Sir Assheton	Wells, Sydney R.
Haslam, Henry C.	Preston, Sir Walter Rueben	Williams, Charles (Devon, Torquay)
Henderson, Capt. R. R. (Oxf'd, Henley)	Ramsbotham, H.	Windsor-Clive, Lieut.-Colonel George
Heneage, Lieut.-Colonel Arthur P.	Rawson, Sir Cooper	Winterton, Rt. Hon. Earl
Hills, Major Rt. Hon. John Waller	Reid, David D. (County Down)	Withers, Sir John James
Hope, Sir Harry (Forfar)	Remer, John R.	Wolmer, Rt. Hon. Viscount
Horne, Rt. Hon. Sir Robert S.	Rentoul, Sir Gervais S.	Womersley, W. J.
Hudson, Capt. A. U. M. (Hackney, N)	Reynolds, Col. Sir James	Wood, Rt. Hon. Sir Kingsley
Hurd, Percy A.	Richardson, Sir P. W. (Sur'y, Ch'ts'y)	Worthington-Evans, Rt. Hon. Sir L.
Hurst, Sir Gerald B.	Roberts, Sir Samuel (Ecclesall)	Wright, Brig.-Gen. W. D. (Tavist'k)
Iveagh, Countess of	Rodd, Rt. Hon. Sir James Rennell	Young, Rt. Hon. Sir Hilton
James, Lieut.-Colonel Hon. Cuthbert	Ross, Major Ronald D.
Jones, Sir G. W. H. (Stoke New'gton)	Ruggles-Brise, Lieut.-Colonel E. A.	TELLERS FOR THE AYES.—
King, Commodore Rt. Hon. Henry D.	Russell, Alexander West (Tynemouth)	Major Sir George Hennessy and Captain Wallace.
Knox, Sir Alfred	Salmon, Major I.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Burgess, F. G.	Forgan, Dr. Robert
Adamson, W. M. (Staff., Cannock)	Burgin, Dr. E. L.	Freeman, Peter
Addison, Rt. Hon. Dr. Christopher	Buxton, C. R. (Yorks. W. R. Elland)	Gardner, B. W. (West Ham, Upton)
Alexander, Rt. Hon. A. V. (Hillsbro')	Buxton, Rt. Hon. Noel (Norfolk, N.)	George, Rt. Hon. D. Lloyd (Car'vn)
Alpass, J. H.	Caine, Derwent Hall-	George, Major G. Lloyd (Pembroke)
Ammon, Charles George	Cameron, A. G.	George, Megan Lloyd (Anglesea)
Angell, Norman	Cape, Thomas	Gibbins, Joseph
Arnott, John	Carter, W. (St. Pancras, S. W.)	Gibson, H. M. (Lancs, Mossley)
Aske, Sir Robert	Charleton, H. C.	Gill, T. H.
Attlee, Clement Richard	Church, Major A. G.	Glassey, A. E.
Ayles, Walter	Clarke, J. S.	Gossling, A. G.
Baker, John (Wolverhampton, Bilston)	Cluse, W. S.	Gould, F.
Barnes, Alfred John	Cocks, Frederick Seymour.	Graham, D. M. (Lanark, Hamilton)
Batey, Joseph	Cove, William G.	Graham, Rt. Hon. Wm. (Edin., Cent.)
Bellamy, Albert	Daggar, George	Granville, E.
Benn, Rt. Hon. Wedgwood	Dallas, George	Gray, Milner
Bennett, Captain E. N. (Cardiff, Central)	Dalton, Hugh	Grenfell, D. R. (Glamorgan)
Bennett, William (Battersea, South)	Davies, E. C. (Montgomery)	Griffith, F. Kingsley (Middlesbro' W.)
Benson, G.	Davies, Rhys John (Westhoughton)	Griffiths, T. (Monmouth, Pontypool)
Bentham, Dr. Ethel	Day, Harry	Groves, Thomas E.
Blindell, James	Denman, Hon. R. D.	Grundy, Thomas W.
Bowen, J. W.	Dudgeon, Major C. R.	Hall, F. (York, W. R., Normanton)
Bowerman, Rt. Hon. Charles W.	Dukes, C.	Hall, G. H. (Merthyr Tydvil)
Broad, Francis Alfred	Duncan, Charles	Hall, Capt. W. P. (Portsmouth, C.)
Brockway, A. Fenner	Ede, James Chuter	Hamilton, Mary Agnes (Blackburn)
Bromfield, William	Edmunds, J. E.	Hamilton, Sir R. (Orkney & Zetland)
Bromley, J.	Edwards, C. (Monmouth, Bedwellty)	Harbord, A.
Brooke, W.	Edwards, E. (Morpeth)	Hardie, George D.
Brothers, M.	Egan, W. H.	Harris, Percy A.
Brown, C. W. E. (Notts, Mansfield)	Elmley, Viscount	Hartshorn, Rt. Hon. Vernon
Brown, Ernest (Leith)	England, Colonel A.	Hastings, Dr. Somerville
Brown, James (Ayr and Bute)	Evans, Capt. Ernest (Welsh Univer.)	Haycock, A. W.
Buchanan, G.	Foot, Isaac.	Hayday, Arthur

Hayes, John Henry	Marcus, M.	Scott, James
Henderson, Arthur, Junr. (Cardiff, S.)	Markham, S. F.	Scurr, John
Henderson, W. W. (Middx., Enfield)	Marshall, Fred	Sexton, James
Herriotts, J.	Mathers, George	Shaw, Rt. Hon. Thomas (Preston)
Hirst, G. H. (York W. R. Wentworth)	Matters, L. W.	Shepherd, Arthur Lewis
Hirst, W. (Bradford, South)	Maxton, James	Sherwood, G. H.
Hoffman, P. C.	Melville, Sir James	Shield, George William
Hopkin, Daniel	Messer, Fred	Shillaker, J. F.
Hore-Bellsha, Leslle	Middleton, G.	Short, Alfred (Wednesbury)
Horrabin, J. F.	Millar, J. D.	Simmons, C. J
Hudson, James H. (Huddersfield)	Mills, J. E.	Sinkinson, George
Hunter, Dr. Joseph	Milner, J.	Smith, Alfred (Sunderland)
Hutchison, Maj.-Gen. Sir R.	Montague, Frederick	Smith, Ben (Bermondsey, Rotherhithe)
Isaacs, George	Morgan, Dr. H. B.	Smith, Frank (Nuneaton)
Jenkins, W. (Glamorgan, Neath)	Morley, Ralph	Smith, H. B. Lees (Keighley)
John, William (Rhondda, West)	Morris, Rhys Hopkins	Smith, Rennle (Penistone)
Johnston, Thomas	Morris-Jones. Dr. J. H. (Denhigh)	Smith, Tom (Pontetract)
Jones, F. Llewellyn. (Flint)	Morrison, Robert C. (Tottenham, N.)	Smith, W. R. (Norwich)
Jones, Henry Haydn (Merioneth)	Mort, D. L.	Snell, Harry
Jones, Rt. Hon. Leif (Camborne)	Moses, J. J. H.	Snowden, Rt. Hon. Philip
Jones, Morgan (Caerphilly)	Mosley, Lady C. (Stoke-on-Trent)	Snowden, Thomas (Accrington)
Jones, T. I. Mardy (Pontypridd)	Mosley, Sir Oswald (Smethwick)	Sorensen, R.
Jowett, Rt. Hon. F. W.	Muggeridge, H. T.	Stamford, Thomas W.
Jowitt, Rt. Hon. Sir W. A.	Nathan, Major H. L.	Stephen, Campbell
Kedward R. M. (Kent, Ashford)	Naylor, T. E.	Strachey, E. J. St. Loe.
Kelly, W. T.	Newman, Sir R. H. S. D. L. (Exeter)	Strauss, G. R.
Kennedy, Thomas	Noel Baker, P. J.	Sullivan, J.
Kenworthy, Lt.-Com Hon. Joseph M.	Oldfield, J. R.	Sutton, J. E.
Kinley, J.	Oliver, George Harold (Ilkeston)	Taylor, W. B. (Norfolk, S. W.)
Knight, Holford	Oliver, P. M. (Man., Blackley)	Thomas, Rt. Hon. J. H. (Derby)
Lang, Gordon	Owen, Major G. (Carnarvon)	Thurtle, Ernest
Lansbury, Rt. Hon. George	Owen, H. F. (Hereford)	Tillett, Ben
Lathan, G.	Palin, John Henry	Tinker, John Joseph
Law, A. (Rosendale)	Paling, Wilfrid	Toole, Joseph
Lawrence, Susan	Palmer, E. T.	Tout, W. J.
Lawrie, Hugh Hartley (Stalybridge)	Perry, S. F.	Townend, A. E.
Lawson, John James	Peters, Dr. Sidney John	Trevelyan, Rt. Hon. Sir Charles
Lawther, W. (Barnard Castle)	Pethick-Lawrence, F. W.	Turner, B
Leach, W.	Phillips, Dr. Marlon	Vaughan, D. J.
Lee, Frank (Derby, N. E.)	Pole, Major D. G.	Viant, S. P.
Lee, Jennie (Lanark, Northern)	Potts, John S.	Walker, J.
Lewis, T. (Southampton)	Price, M. P.	Wallace, H. W.
Lloyd, C. Ellis	Pybus, Percy John	Watkins, F. C.
Logan, David Gilbert	Quibell, D. J. K.	Wellock, Wilfred
Longbottom, A. W.	Ramsay, T. B. Wilson	Welsh, James (Paisley)
Longden, F.	Rathbone, Eleanor	Welsh, James C. (Coatbridge)
Lovat-Fraser, J. A.	Raynes, W. R.	West, F. R.
Lowth, Thomas	Richards, R.	Westwood, Joseph
Lunn, William	Richardson, R. (Houghton-le-Spring)	White, H. G.
Macdonald, Gordon (Ince)	Riley, Ben (Dewsbury)	Whiteley, Wilfrid (Birm., Ladywood)
MacDonald, Rt. Hon. J. R. (Seaham)	Riley, F. F. (Stockton-on-Tees)	Whiteley, William (Blaydon)
MacDonald, Malcolm (Bassetlaw)	Ritson, J.	Wilkinson, Ellen C.
Macdonald, Sir M. (Inverness)	Roberts, Rt. Hon. F. O. (W. Bromwich)	Williams, David (Swansea, East)
McElwee, A.	Romerll, H. G.	Williams, T. (York, Don Valley)
McEntee, V. L.	Rosbotham, D. S. T.	Wilson, C. H. (Sheffield, Attercliffe)
Mackinder, W.	Rothschild, J. do	Wilson R. J. (Jarrow)
McKinlay, A.	Rowson, Guy	Winterton, G. E. (Lelcester, Loughb'gh)
MacLaren, Andrew	Runciman, Rt. Hon. Walter	Wood, Major McKenzie (Banff)
Maclean, Sir Donald (Cornwall, N.)	Russell, Richard John (Eddlsbury)	Wright, W. (Rutherglen)
MacNeill-Weir, L.	Samuel, Rt. Hon. Sir H. (Darwen)
McShane, John James	Samuel, H. W. (Swansea, West)	TELLERS FOR THE NOES.—
Malone, C. L'Estrange (N'thampton)	Sanders, W. S.	Mr. Allen Parkinson and Mr. T. Henderson.
Mander, Geoffrey le M.	Sandham, E.
March, S.	Sawyer, G. F.

Original Question put, and agreed to.

It being after Eleven of the Clock, the CHAIRMAN proceeded, pursuant to Standing Order No. 15, to put forthwith the Question necessary to dispose of the Vote.

Resolution to be reported upon Monday next, 10th March; Committee to sit again To-morrow.

The remaining Orders were read, and postponed.

c398
1. ADJOURNMENT. 17 words