SUPPLY.

HC Deb 16 June 1932 vol 267 cc570-659

Again considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

Question again proposed, That a sum, not exceeding £33,525, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1933, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Dominion Affairs.

Mr. AMERY

I was speaking about the great possibilities that exist for the development of preferential relations between the Colonial Empire and the Dominions. I am, of course, aware that the full development of any such policy, as regards most of our African possessions, is at present severely restricted by certain international agreements which it will not be easy to get rid of. At the same time, I am encouraged by the thought that similar treaty difficulties, which in their day were regarded as almost insurmountable, originally stood in the way of any preferential relations between ourselves and the Dominions. I am also encouraged by the thought that it was at the Ottawa Conference in 1894 that the first resolution was passed in favour of the denunciation of the German and Belgian Treaties, and that those treaties were denounced four years later. What Ottawa has done before, Ottawa may do again.

For all these various interests, what is it that our representatives should set themselves out to secure? In the fiscal domain it seems to me that what they should endeavour to secure is such an extension of Empire preference as would definitely encourage the main volume of Empire trade to flow in Empire channels and to concentrate the creative power of our several markets upon mutual development. Whether that is to be done by raising the Dominion duties against foreign trade or lowering them to British trade is to my mind an entirely secondary and a relatively unimportant question. As far as our immediate interest is concerned, it lies much more in securing the maximum amount of preference against those foreign competitors of ours who in normal years sell something like £300,000,000 worth of manufactures to the rest of the Empire every year than in attempting to over-persuade the Dominions, against their conception of their interests, to reduce their duties to us. I admit that, from the point of view of the Dominions themselves as countries largely concerned in exporting primary products, with relatively small markets not always adapted to the effective protection of every kind of industry, they may well have carried Protection too far in many instances and been too indiscriminate in its application. From their point of view, in their own interest, there is a very strong case for a scientific revision of their tariffs in the direction of a larger Empire Free List and of better co-ordination with British industries. We are, of course, perfectly entitled to press that case upon them. In any case, I am. profoundly convinced that we shall be most successful at Ottawa in the agreements we achieve, and secure the greatest permanence for them, if they are so framed as to coincide substantially with what each part of the Empire believes to be in its interest, agreement or no agreement.

It may be asked, In that case why bother about agreements at all? Why not be content to pass a few general resolutions and then go home and implement them each in our own way? Let me suggest the answer. In the first place, I believe it is only in the course of actual, close businesslike negotiations—not huckstering, but frank discussion—that we shall each find out what we can secure without detriment to others and what we can give without detriment to ourselves. Further, what is even more important, is that we should arrive at arrangements lasting for a definite, substantial period of time, such as will enable capital and enterprise to concentrate with confidence upon their task and to go ahead. It is confidence, above all things, that is needed to-day. I trust the agreements arrived at at Ottawa will be not only sufficiently far-reaching but of sufficient duration to enable the farmers and manufacturers of the Empire to go ahead confidently with a Ten Years' Plan of Empire reconstruction and development. Why should we leave all the good ideas to Russia? Why should the hon. and learned Member opposite be so afraid of following the best things in the Russian example? I believe it is essential that the rate, and preferably the amount, of the preference secured by either side shall be made stable and certain for something like 10 years ahead. That, of course, need not prevent changes in the basic rates of the duties nor need it prevent modifications by discussion afterwards. It does not interfere with our freedom to conduct negotiations with foreign countries afterwards, provided always that those negotiations are not for the purpose of diminishing the preference, but only of favouring one foreign country as against others. Whatever preferences we agree upon should not be susceptible of being whittled away by either side as the result of negotiations with foreign countries. To do that would wreck the whole spirit and purpose of the Conference.

There is in this connection one point, an issue of principle, to which I should like to refer. It will arise in any case, even if it were not raised by the action of the Irish Free State. That is whether we should take the line that whatever preference we concede as the result of negotiations to one part of the Empire should automatically be extended to every other part. My belief is that the experience of the most-favoured-nation Clause in international trade does not suggest that such an absolute rule would conduce in any way to the maximum of Free Trade within the Empire, but rather the opposite. On the other hand, I think it would be contrary to the whole spirit of our Empire relations that we should always insist upon the exact equivalent of every concession that we make. I believe the right answer is that we should at Ottawa so frame our different agreements as to leave each party absolutely unfettered freedom to extend the privilege of those agreements to any other part of the Empire, but without any obligation to do so. I believe the normal rule should be that we should extend the preferences arising out of one agreement to all other parts of the Empire which are substantially and effectively cooperating in a common Empire policy, but that we should be free to withhold those advantages from those who are not really playing the game.

The Dominions Secretary dwelt a great deal upon the difficulties before us. He warned us not to be too disappointed if we did not succeed in achieving everything that we hoped to achieve. I should like to add one word of warning myself. Do not let the Committee run away with the idea that the preferences that we have accorded so far under the Import Duties Act constitute in themselves an important bargaining factor for securing additional preferences. The Dominions Secretary spoke of them as "a great contribution and as a "gesture." Do not let us forget that, from the Dominions point of view, all that we have done is to bring ourselves into line with them, and that the preferences that we now give are not more than the equivalent of what some of the Dominions have been giving us for a generation past. If we want to secure something substantially in advance of what the Dominions have given us so far, we must be equally prepared to go a long way further ourselves. I believe we can secure great results from the Conference, but I think we must be prepared to go forward as well as to ask others to go forward. We must shirk nothing.

6.0 p.m.

I think, perhaps, we had better forget some of those qualifications arising out of our party conflicts which have sometimes suggested that there were things ruled out of our discussion or things that could only be done in a particular way, as, for instance, by quota. The Dominions Secretary said he was not prepared to tell us what he was going to do about wheat or meat. He was quite right in so far as it would not be fair to ask our representatives at this stage precisely what they are going to do, but, unless our representatives are prepared to deal effectively with wheat, and above all, with meat—meat in its various forms is the most important agricultural product net only of the Empire but of this country—they had very much better not go to Ottawa at all. Personally I believe the most effective way of dealing with wheat and meat will be by duties. Duties are the simplest and most flexible way of giving preference. They involve, less interference with trade, and inflict less hardship on the consumer than any of the more mechanical means of dealing with it. At the same time, I see no reason why quotas should not be examined if our representatives and the representatives of other Governments think that it is worth while. I only plead that quotas should be examined strictly on their business merits, and not from the point of view of some sort of out-of-date notion that the quota is to be preferred as a convenient political device for dodging the issue of food taxes. In spite of what the hon. and learned Member opposite said, I believe that that bogey is as dead as mutton. The only thing which this country thinks about to-day is that our representatives should bring back the most workable,, the most comprehensive and the boldest scheme of Imperial cooperation.

If our representatives are to make a success of Ottawa, they will have to take the lead. The Dominions Secretary told us this afternoon that they are going there "free and unfettered, with an open mind, prepared to examine everything on its merits, and that they will approach the problem not unmindful of our obligations and keep in mind the bigger view of the situation." That is admirable for this afternoon, but that kind of thing will be no good at Ottawa. At Ottawa they will have to put forward comprehensive and definite policies to their overseas colleagues, and put them forward with the kind of faith which will make others follow. I think that that is true on the fiscal side. I believe that it is even more true on the monetary side. The distortion of the world's monetary values has been the primary cause of the world's disaster. The British Dominions, the Colonies and India have suffered from it even more, if possible, than we have. The whole economic fabric of the Empire is in imminent peril of collapse. Can any of us disregard the effect of this imminent collapse upon the whole structure of India at this time of critical political issues?

Can we fail to recognise to what an extent the fall in prices has imposed an almost intolerable burden upon all debtors in our Dominions and our Colonies? The way in which Australia and New Zealand have met this situation and have honoured their obligations has been simply magnificent. They could not have done it if we had remained on the Gold Standard. They can barely do it as it is. What are we going to do to make it possible for them to continue pursuing a policy of financial honesty and, more than that, of resuming once more those purchases from us which they have only restricted in order to enable them to pay their debts? Are we going to support the Australia which stands for a policy of inter-Imperial obligations, or are we going to justify Mr. Lang and his works? That just depends upon ourselves. It is we who have contributed to this state of things by our monetary policy, and what we have done we are capable of undoing.

When we go to Ottawa we shall be asked what our monetary policy is to be. It is not enough to say that we "do not shirk discussion. "We have to lead discussion. We have to say in definite and practical terms what our monetary policy is, and what it is we intend to do to achieve it, and in regard to which we want to secure their co-operation and support. That does not mean that in a few weeks at Ottawa we can effectually settle all the matters of detail by which it is going to be carried out. But if we state clearly our objective and our intention of getting there, if the Chancellor of the Exchequer is in a position to say at Ottawa that he is definitely aiming at restoring the price level of 1929 in terms of sterling and that he means to neglect no method of achieving that result, and firmly intends to pursue no policy that is inconsistent with that object, we shall have no difficulty whatever in securing the ready co-operation of every Government of the Empire in making that policy a success. More than that, I believe that such a statement of intention by itself will be enough to set in motion all those latent forces of anticipation in the industrial world which are only waiting for the moment when they believe the tide is turning.

I am firmly convinced that we shall fail at Ottawa if we have not got a definite monetary policy as well as a definite fiscal policy. As a matter of fact, each is necessary to reinforce the other. Monetary measures alone will not bring about better prices unless we have the security and the confidence which lead to a demand for credits and currency. It is that security and confidence, and through them the demand for currency, which our fiscal measures ought to aim at securing. Indeed, in so far as the fall in prices has been most severe and in large measure originated with raw materials and foodstuffs, these are, I put it quite frankly to the hon. and learned Member, precisely the articles whose production to-day ought to be effectively secured, and for which we ought to strive most determinedly to obtain a reasonable price level. In this connection it is essential not to overlook the effect upon the price level of imports from Russia. The sale of goods at prices which represent no relation whatever to the cost of production, goods produced under conditions which, to put it mildly, are not the conditions of countries organised on normal industrial lines, is bound to have a disorganising effect upon price levels. It is always difficult in ordinary industry to deal with the products of prison labour. But if your prison contains 160,000,000 prisoners, it becomes a problem of the first magnitude for the whole world. I believe that to deal with the Russian menace is essential, not only to the success of our negotiations at Ottawa but incidentally also to the success of any negotiations we may wish to open later on with either Scandinavia or the Argentine.

I have dealt with the two main items, fiscal and monetary policy, which, while they do not cover the whole field, are at least the main items with which we shall have to deal. There is room for effective co-operation in many other matters, in the direction and control of our investments in order to guide them into Empire channels; in shipping, in aviation, in Imperial telephony and broadcasting, in the supremely important film industry. Migration is bound to come to the front again as soon as economic conditions improve. It will be well worth while, in anticipation of that improvement, to begin studying again how far in the new field of Empire co-operation we can avail ourselves of the experience gathered in the post-War years. I know that there is no chance of all those matters being effectively considered in the few weeks during which our delegates will be at Ottawa. The fiscal agreements themselves may have a good many loose ends left, many details to be settled, schedules to be completed, before the Conference breaks up. That makes it all the more essential that the Conference should not disperse without creating, as the Dominions Secretary very rightly said, at least the rudiments of permanent machinery for carrying on this work. Some sort of permanent secretariat acting as a clearing house for the business arising from the Conference—

Sir PERCY HARRIS

Where?

Mr. AMERY

Where it is is a very minor pointߞbusiness arising from the Conference and leading up to future conferences, as there are bound to be future conferences, seems to me a necessity. Again, you need something in the nature of an advisory research and investigating department. I believe that bodies like the Imperial Economic Committee and the Imperial Shipping Committee, with some greater latitude of power, could very effectively fulfil this requirement. Last, but not least, the Empire Marketing Board, that really remarkable instrument of a new technique in creative Imperial economic co-operation in research, in marketing, in publicity, ought to be put upon a, permanent footing. The Conference of 1930 passed a definite resolution recommending that the Empire Marketing Board should be reconstituted as a body with a fixed minimum annual income, with a provision to enable it to receive such other contributions from public or private sources as it may be willing to receive. No action has been taken upon that resolution so far. I earnestly hope that the omission will be rectified at Ottawa, and that the Empire Marketing Board will be transformed into an effective Empire organisation, constituted, I hope, by Royal Charter and supported by all the Governments which benefit from its activities.

I have said my say and made such criticism as I felt it necessary to make. But I think that all of us, regardless of party, wish our representatives every possible success on their mission. They are undertaking the greatest task of constructive statesmanship which has ever been undertaken in this or any other country. We shall be content to leave the detailed handling of that task to their experience and their judgment. All we would ask of them is that they should address themselves to it in a spirit worthy of its greatness. Let them bring to it that inspired vision which will help others to grasp the measure of our common opportunity. Let them bring to it the courage to take big decisions. Let them bring to it that sympathetic understanding of the outlook and of the difficulties of others, which, coupled with an absolute faith in themselves, constitute true leadership. The spirit which they show will be the spirit in which they will be met. If they succeed they will, I believe, have saved the Empire by their exertions and the world by their example.

Major LLOYD GEORGE

The right hon. Gentleman the Member for Spark-brook (Mr. Amery) referred to the gloom which was created by the speech of my hon. and learned Friend the Member for East Bristol (Sir S. Cripps), but he will forgive me for saying that his speech has not dispelled the gloom as far as I am concerned but has, in fact, rather intensified it. But I am grateful to the right hon. Gentleman for one observation with which personally all along I have been in agreement. He said that Ottawa without taxation of food would be quite useless, and I agree with him. I have always thought that Imperial Preference without taxation of food is impossible. He later made a remark with which I profoundly disagree when he stated that hitherto the Dominions had given everything and we had given nothing.

Mr. AMERY

I said that what we are giving now brings us into line with what the Dominions have given in the past.

Major LLOYD GEORGE

If it brings us into line, all I can say is that it is an extremely handsome way of bringing us into line and later on I shall show that I have a very good reason for disagreeing with that statement. He stated that the Free Trade area such as we could get with the Dominions would help to do a great deal in relieving our economic and monetary troubles. The only remark that I would make on that is that one of the greatest Free Trade areas, the United States of America, has not succeeded in settling its own difficulties, and I see no reason why a similar area in the Empire should have such great influence outside. I regret that we have not been able to get, this afternoon, very much more definite information from the Government as to what they intend to do at Ottawa. Apparently, the Ministers are to be given an entirely free hand. We have had a free hand before, and we have seen the results of it. No one seems to know what is the objective at which the Government are aiming. I am not sure that they know themselves. They have not told us what it is they intend to do, except a very few vague phrases as to more and freer trade. They have not told us exactly how they propose to get that. We have been told that a committee has been sitting ever since this Parliament met, that representatives of the Dominions have been there, that they have been hammering out the details and have been sitting for some months. I should have thought that by now the Government would have been in a position to say exactly how far they are prepared to go at Ottawa, and the House is entitled to know.

It is no exaggeration to say that the decisions taken at Ottawa will affect not only the Empire but the whole world. There is a feeling in this country that the Ottawa Conference is going to lead to great prosperity and expansion of trade. Therefore, it is well to examine the position and the possibilities. When we changed the fiscal system of this country a few months ago various reasons were given by those who supported that change. Some were frankly Protectionist and regarded the duties as such Others who were Free Traders just before the duties were imposed favoured them because of revenue. Others favoured them for bargaining purposes. The Protectionists say that they are entirely in favour of free trade throughout the world but that this country cannot possibly remain a Free Trade island in a Protectionist sea. That is their argument. They say, further, that they hope by means of tariffs to bring about a reduction of tariff barriers throughout the world. That is the case of a good many Protectionists, and I intend to look at Ottawa in relation to that view.

Everybody agrees that we want more trade with the Empire. Of course we do, but I do not think that anyone will agree that we want it at the expense of trade with other countries, because we cannot afford to do that. The most serious aspect of to-day is the enormous shrinkage in international trade in the last few years. We were given this afternoon by the Secretary of State for Dominion Affairs one or two reasons for that shrinkage. One reason which is certainly responsible for that shrinkage has been the attempt on the part of so many countries to become self-supporting. The extent to which that has produced prosperity and well-being in these countries is well illustrated in the report of the Economic Committee of the League of Nations, which states that international trade to-day is less than half what it was in the similar quarter of 1929, and that unemployment to-day is more than double what it was in that period of 1929. The report goes on to say: Imports may be decreased, but this decrease is inevitably accompanied by a contraction of exports. If, as is often argued, goods which can no longer be exported are sold on the home market in place of those excluded, we should not be confronted with the progressive fall in purchasing power and the constant increase in our unemployment. We cannot afford to have any more reduction in our trade with other countries, but there is a real danger at Ottawa of committing ourselves to agreements which will be definitely harmful to this country. Our market is far more important to the Dominions than the Dominion market is to us. We are the people who are going to be hurt far more than any single Dominion by any harmful decisions which may be come to at Ottawa.

We have been told again and again in this House that there can be no negotiations with any foreign country until after the Ottawa Conference. I have said in the House before, and I repeat it now, that by doing that you are tying your hands in regard to any bargain with any other country. Whatever agreement you come to at Ottawa must be come to on the existing position. Let us suppose it is preference on a tariff. The preferential rate will have to be based on the existing tariff in this country. That is decided, and you go to negotiate with a foreign country. The foreigner says: "Are you prepared to reduce your duty, because if you are I am prepared to reduce mine." But you have already fixed the preference with your Dominion, based on the tariff in existence to-day. What happens then? You either have to upset the agreement come to with that particular Dominion on that preferential rate, or there is an end to your bargaining power. What becomes of unity for the Empire?

If it is after the Ottawa Conference that these negotiations with foreign countries have to start, they can only be conducted on the basis of what has occurred at Ottawa, and the preferential rates can only be fixed on the existing tariffs.

Mr. AMERY

You can raise the tariff at Ottawa.

Major LLOYD GEORGE

What happens in that case to the argument that this is going to reduce tariffs throughout the world. I understood that one of the reasons for the tariff was that we were going to get better and freer trade throughout the world. I am now informed by one ProtectionistߞI am very glad that he is not going to Ottawa, if I may say so with great respect, because he is a whole-hogger if ever there was oneߞthat tariffs can be raised at Ottawa. My point of view isߞevery independent authority throughout the world says it, and I do not think anyone can contradict itߞthat one of the great factors responsible for our troubles to-day is the tariff barriers throughout the world. We have been told that the object of many people in supporting tariffs was to use them as levers to lower tariff barriers throughout the world, but I am told by one to-day that my argument in regard to preferential rates is quite wrong because we can raise the tariff if we like at Ottawa. That disposes of the argument that the tariff is to be used to lower tariff barriers. What happens to the freer trade idea, I do not know.

Suppose you have a quota instead of a preference. I understand that some Dominions would like a preference and a quota. How are you going to negotiate, then, with the foreign Power? You have fixed your quota on a definite percentage. You have done it in regard to wheat in this country, and I assume that you will fix the percentage with a Dominion or with Dominions. How, then, with a fixed percentage for your Dominion and for your home producer are you going to bargain? Where are you going to get the increased quota to give in return for the concession from the foreign Power? Are you going back to the Dominion to ask them if they would mind lowering their quota so that you can give a little more to the foreign country? The right hon. Gentleman said that he would like to see it fixed for 10 years. If it is to be fixed for 10 years I can see very little hope that there will be much reduction in that time. You cannot negotiate unless you can lower something.

Some people seem to think that the Dominions are mostly concerned with primary products and that for those products we should exchange our manufactured goods. But the Dominions Secretary said to-day, and I was glad to hear him say it, that the secondary industries have a very great part to play in the future of the Dominions. They have developed their secondary industries very rapidly and they are not prepared to allow competition from this country with any industry in the Dominions. Let me quote from a Canadian newspaper: The most emphatic declarations to this end were made by Professor Leacock in his recent book. I know Professor Leacock better for his humour and, frankly, I prefer his humour to his economics.

He says that 'we must start with the plain understanding that our market for manufactures is our own. Neither the Empire nor the foreigner can have anything more than an incidental or supplemental share in it. Hitherto, the Canadian preference has been to a great extent a humbug.' I seem to have heard that word before, Leacock also goes on to say: It prefers British manufactured goods to American, but it shuts them both out so far as they interfere with our own manufacturing system. That is just as it should be. The paper in its editorial says: These quotations, which might be multiplied, all point to one conclusion. Mr. Bennett is expected to repeat at Ottawa the reservation which he made at London in 1930 on behalf of the Canadian manu- facturers, when he said: 'The basis of the proposal is the adequate protection to industries now existent or yet to be established.' Mr. Bennett's conception of 'adequate protection' has been sufficiently ex-emplified by his actions since becoming Premier. That leaves no doubt in my mind as to the attitude which some of the Dominions take in regard to their manufacturing interests. It is no wonder that the Colonial Secretary, speaking in this House, referred to the great sacrifices which our people would be called upon to make. I am not at all sure that our people have not sacrificed as much as they possibly can. I do not think that this country is in a position at the moment to make any more sacrifices. On all occasions we should come first, the Dominions second, and the outsiders third. I would suggest to the representatives of the Government who are going to Ottawa that that should be their motto and it would do no harm to the Empire. You will have less trouble in this way than if you do not speak plainly. I prefer the line taken by the "Winnipeg Free Press." It gives me great encouragement to think that there is a body of opinion in Canada that takes this view: The British Government in our view will say to the Canadian Government that it wants the removal of Canadian penalties upon British imports, in order that British manufactures may have a chance to compete upon reasonable terms for the Canadian market. This they are entitled to demand and that they can take nothing less. In any such demand they can count upon the backing of Canadian public opinion. 6.30 p.m.

This is a much more comforting expression of opinion than the one which I have already quoted, and I hope the Government will be fortified by it. Canada is principally concerned with wheat. There is to be a wheat quota. That is a very serious thing for this country. Hitherto the price of wheat has been controlled by this country, and a quota for the Dominions might possibly remove that control from this country to one of the Dominions. We should not then be able to control the price of wheat, and it would inevitably lead to an increase in the cost of food to our people. We have heard nothing about prices. Will the Dominions be content with a quota on wheat at world prices? Were the farmers of this country content with a quota at world prices? I should hardly imagine that any Dominion wheat grower will be pleased to have a quota at world prices. Have the Government ever considered a plan for better prices for Dominion wheat? Is there to be a tax or a quota on meat? The Secretary of State said that he would be asked these questions but that he would not reply to them. That is most unfair. The Government are going to Ottawa to discuss matters which are vital not only to the people of this country but to the trade of this country, and when questions are asked on these vital matters, all we get is that there is to be no reply.

How far are the Government prepared to go in putting a quota or a tax on meat? Have they considered it? If so, why should they not tell the House? Apparently they are to have a free hand to decide what they please when they go to Ottawa. What about dairy produce, such as butter and cheese? Are they to be taxed? If you do not tax them, what have you to offer to the Dominions? I agree entirely with the right hon. Member for Sparkbrook that if you do not have a quota or a tax on wheat and meat you might just as well not go to Ottawa at all, and I think that the people of this country should know that there is to be a tax on wheat and meat and dairy produce, and other foodstuffs, coming into this country. They ought to be told. Does anyone seriously contend that the trade of this country is not going to suffer by a tax on these foodstuffs? Does anyone contend that it is not going to injure the international trade of this country? Take the Argentine. In 1930 we imported £50,000,000 worth of goods and £35,000,000 of it was in meat and wheat.

What is going to happen to the trade of this country if you seriously curtail the importation of these commodities, which are the only commodities the Argentine has to export? Have the Government worked out an estimate of the loss to us? What do we get out of the Argentine? [Interruption.] The Argentine took from us in the same year, 1930, about £25,000,000 worth of goods. Half the shipping which entered the river at Buenos Ayres was British. It was about 11,000,000 tons, and, therefore, 5,000,000 tons of British shipping were engaged. Practically every railway in the Argen- tine is owned by British capital, and every bit of steel that is used in the railways is made over here. A thousand and one industries in the Argentine have British capital invested in them, and if you make it more difficult than it is for them to meet their obligations is that a good thing for this country? And what about coal? You get British ships taking coal out to the Argentine. What are they to bring back? The freight charges on coal which goes from this country to the Argentine plays a very vital part in competition with other foreign coal going into the Argentine, and if British shipping have not somethng to bring back it will have an effect on freightage and upon our position in competition. Have the Government considered any one of these things?

What about our trade in Europe, which in normal times is the biggest market we have? Europe is to us what America is to Canada. America is the biggest market for Canada, and Europe is our best market; for the same reason, because it is nearest. Have the Government considered what is going to happen to our trade with Europe? We are entitled to know whether this matter has been considered by anybody. There is nothing that we can do in trade with the Dominions which will compensate us for the loss of the South American trade or the European trade. What about meat? Suppose you tax meat; where is it to come from? Which Dominion is going to supply us with the meat which you stop coming from the Argentine? That is an interesting point. At the present time there is no Dominion which can supply us with the same meat as we get from the Argentine. [Interruption.] It cannot be supplied by Australia. It is a physical impossibility for Australia to supply the same quality beef as we get from the Argentine, for the simple reason that it takes 19 days to come from the Argentine and double that time to come from Australia. One is chilled and the other is frozen; and the frozen meat, with all respect to the noble Lord, is not the same to eat as chilled meat.

Earl WINTERTON

I will give the hon. and gallant Member an answer, and a very good answer I think, when I come to reply.

Major LLOYD GEORGE

The fact remains that we have an enormous market there and also the fact that chilled beef does not come from Australia, and we are entitled to know what investigation has been made in order to find out whether what we may lose from the Argentine we can supply from elsewhere, and what effect it is going to have upon our own trade. I beg the Government to make no arrangement at Ottawa which will make it impossible or more difficult to negotiate better terms with other countries. We cannot afford to lose trade anywhere, and if we can show the way to freer trade amongst the peoples of the earth the British Empire will once again have rendered a service to civilisation. But if the only result of Ottawa is an increase of barriers and the economic isolation of the British Empire, there are many of us who will look back on the year 1932 as one of the most disastrous in our history.

Earl WINTERTON

I consider myself fortunate, Captain Bourne, in having caught your eye immediately after the speech to which we have just listened, from an hon. and gallant Member who has won a rising reputation in this House. For him to have made the speech he has just delivered shows the inherent and essential weaknesses of the Free Trade cause. In view of the advances made in some directions by other members of the hon. and gallant Member's family during the War it is deplorable that he should have delivered a speech which might have been made at the beginning of the 1906 Parliament. Let me take up one or two matters which he discussed. He thought he had caught the Secretary of State for the Dominions and the right hon. Member for Sparkbrook (Mr. Amery) in a dilemma; and anyone who is a skilful debater would, of course, have seen the possible dilemma. But it is not the Secretary of State and my right hon. Friend who are in a dilemma but the hon. and gallant Member himself. The hon. and gallant Member took hold of what was said by the Secretary of State as to the effect of the Ottawa decisions on the general question of Free Trade and Protection throughout the world. The Secretary of State used a perfectly legitimate argument when he said that the effect of the arrangements, the inter-Imperial arrangementsߞand by that I mean the arrangements between this country and the Dominions, the arrangements between this country and the Dominions and the Colonies, the arrangements between this country and India, and between India, the Dominions and the Coloniesߞthe fiscal arrangements between these various entities in the British Empire might lead to a general decrease of tariffs throughout the world, and the hon. and gallant Member thought that he had got the Secretary of State and the right hon. Member for Sparkbrook into a dilemma by saying that, if that were so how could you make an increase in Empire tariffs against foreign goods outside?

The answer, to my mind, is simple. A permanent tariff arrangement between the countries in the British Empire would for the first time bring foreign countries, who have for many years taken every advantage of our markets and the Dominion markets without any reciprocal advantage to us, to their senses. They would be compelled, in order to exist at all, to lower their tariffs against us. We cannot have a better example than that of Denmark recently. As soon as Denmark heard it rumoured in the Press that there was going to be a partial tariff imposed for the protection of agriculture in this country, they immediately started an organisation called the "Buy British Goods Organisation." For the first time Denmark suddenly awoke to the fact that their best customer was Great Britain, and they are considering ways and means how they can encourage trade between Denmark and Great Britain. What the Secretary of State said was perfectly true in that connection, that the result of a fiscal arrangement between the countries of the Empire would probably be to make foreign countries, with which this country and other Dominions do business at the present time, considerably more reasonable than they have been in the past. The hon. and gallant Member said that if you use the argument that within a great Free Trade area, which you want to build up in the British Empire, there will be an immense enhancement of trade, why has it not occurred in the great Free Trade area of the United States of America, where there is such an amount of unemployment to-day? If it is a great Free Trade area it should have no unemployment.

Major LLOYD GEORGE

I took the point that not only trade, but currency problems would be better arranged inside such an area, but that the United States did not seem to be able to arrange it inside its own area.

Earl WINTERTON

Then it is not because of the huge Free Trade area inside the United States that there is so much unemployment?

Major LLOYD GEORGE

It is a self-contained area, and the argument of the Noble Lord is a boomerang which can be used against him.

Earl WINTERTON

Long experience in these matters has proved to me that there is not a single argument to be used in the Free Trade and Protection controversy which cannot come back as a boomerang on those who use it. There is so much theory about the whole thing that it applies to either side. The hon. and gallant Member in regard to this matter stressed the importance of foreign markets. Nobody in this House, not even those like the right hon. Member for Sparkbrook or the hon. and gallant Member for Bournemouth (Sir H. Croft) whom some might describe as extreme Protectionists, has ever denied the importance of the export market of this country. But consistently from the Front Bench opposite, and I am sorry to say also from the Front Bench below meߞ a speech was made by the Home Secretary the other dayߞFree Traders in this House ignore the importance of Empire markets. They entirely ignore two considerations. The first is that the proportion of trade done per head with the Dominions is far greater than that done per head with other countries. Perhaps the Dominions Secretary was not quite happy in that portion of his speech in which he talked as if this was purely a Dominions question. It is not at all. This Conference affects India, and India and the Colonial Empire will be considered together with the Dominions, and they make one of the greatest markets in the world.

I challenge the hon. and gallant Gentleman or anyone else who speaks from the point of view of knocking this Conferenceߞ[Interruption.]Yes, that is what the hon. and gallant Gentleman is trying to do. Both of the speeches made from the Front Bench opposite are the speeches of men willing to wound but afraid to strike. They are like a man playing with a sword. He does not want to hit his adversary but to make it as unpleasant for him as he can. The whole effect of those two speeches was to throw the greatest possible measure of doubt upon the Ottawa Conference, and to put into everyone's mind the feeling that, after all, it really was hardly worth while to go to Ottawa. The argument is purely a defeatist argument in the real meaning of that French word.

The hon. and gallant Gentleman was challenged when he spoke on the subject of Preference. My right hon. Friend used an argument, or a fact, which is not mentioned as often as it ought to be in this House. He said that it is all very well to talk about the preference that we give in this country to the Dominions to-day, but that we forget the many years, more than a generation, during which those Dominion countries have been giving preference to us. I went through the figures the other day, though not exhaustively, and I believe it will be found that the actual value in money of the remission of duty given by the Dominions on our goods over the period of Imperial Preference, is infinitely greater than anything we are giving at this time or that we can give. When challenged on that point the hon. and gallant Gentleman said he would deal with it. It will be very interesting to hear from the opponents of Imperial Preference what their examination of these figures leads them to conclude.

I think this Debate generally has done good. The speech made by the Dominions Secretary and the very eloquent speech made by my right hon. Friend the Member for Sparkbrook have had a distinctly good effect. Some of us felt that there was a danger of this Ottawa Conference being overshadowed by Lausanne and by the impending London Conference. There is no reason why that should be. The Lausanne Conference is intended to find a cure for a most grievous but sudden epidemic, the disproportion between the value of currency and goods. The Ottawa Conference is intended to find a cure for a long-seated malady and to enable Empire countries, including Great Britain, to develop the latent resources of the Empire.

Another thing by which we were frightened or had some feeling of anxiety was that we believed that only grim determination and energy on the part not only of the Dominion representatives but of the delegation of His Majesty's Government, could make the Ottawa Conference succeed. We do not ignore the difficulties at all. We were rather concerned to find that there appeared to be a certain number of faint-hearts about, and too many "ifs" and "buts. "Although it is customary to laugh at two names I am going to mention, I am bound to say, in this connection, that we want something of the all-pervasive enthusiasm of Lord Beaverbrook and of the "Daily Express." If a Conference of this kind is to be carried to success it can only be by a spirit of enthusiasm on the part of all those who go as delegates. There has been a good deal of talk in Government circles of experiments and temporary expedients, and in the Government Press references to Protection at home. If one thing is more certain than another it is that a protective system at home is an inherent and integral, though not the only essential part, of Empire economic unity. It is far better to face that fact firmly and bravely.

In my opinion the Conservative Members of the Government should do everything they can in their public speeches to pave the way for a permanent system of Empire economic unity, by letting the electors understand that an inherent and integral part of that system is a system of protection in this country. I am not complaining about my right hon. Friend now on the Front Bench or other Members of the Government. The only speeches made by Members of the Government more or less exclusively devoted to fiscal subjects arising at Ottawa, have been the speeches, lamentably wrong, I think, of the Home Secretary. That may be just a phase for the moment, but sooner or later it will have to be faced. Any system that is built up must be a permanent system. Once you tell the Dominions that you are going to enter into a system of reciprocal preference on a much wider basis than that of to-day, you cannot say that it is only an experiment, when there is a National Government in power. You have to support it with all your might and main, and, if the present Government will not support it, means will have to be found to get a body of opinion in this country that will support it permanently. No one denies the greatness of the difficulty.

As a former private secretary to Mr. Joseph Chamberlain I think one word ought here to be said. Though he is honoured as a man his policy is frequently attacked even to-day. It is a tribute to Mr. Chamberlain's greatness that that is so, after he has been dead all these years. Again and again Mr. Chamberlain said in his speeches 30 years ago, "If you wait for even ten years it may be too late.The Dominions will have built up their system of manufactures and it will be much more difficult for you to have that arrangement which I contemplate, of the exchange of manufactured articles from Great Britain for the raw materials of the Dominions." It therefore does not lie in the mouths of Free Traders, whether Liberals or Socialists, to ask, "How are you going to get the Dominions to agree to any exchange of goods on a basis which could possibly be profitable? They have their own manufacturers. "Why has this system been built up in the way it has? Why has it not been built up as it might have been built up? Because of the obstruction during more than 30 years of the Liberal, and Free Trade party.

None of us would regard with anything but a good deal of irritation any further attempts at obstruction on the part of any Liberal Free Trader, in or out of the Cabinet, in connection with the decisions at Ottawa. My right hon. Friend the Member for Sparkbrook referred to them in a very tactful manner, more delicately and tactfully than I could have done. But this I say in a sentence. In the first place, of course, the Dominions Secretary was absolutely right in refusing to give an answer as to the Government's policy on meat or wheat or anything else. Any attempts to get him to do so were only attempts, from a party point of view, to embarrass the negotiations of this country.

Major LLOYD GEORGE

I am perfectly entitled, as a Member sent here representing a body of people, to find out what are the Government's intentions. Surely it is of vital importance to the people of this country to know whether their wheat and meat are to come in free or to be taxed?

Earl WINTERTON

If the hon. and gallant Gentleman objects to anything I said I gladly withdraw it. I should not like to say any thing that he regarded as personally offensive. The effect of the Opposition's action, had the Dominions Secretary been so unwise as to answer that question, would obviously have been to have made the negotiating power of the whole British Delegation at Ottawa less than it should be. In that connection I am content to leave the matter very much where the right hon. Member for Sparkbrook left it. It would be absurd for the Government, either directly or indirectly, to say, "We can discuss everything, but because of the attitude of one of our number, a very valued Member of our Cabinet who is a Liberal, we cannot discuss with you the question of the taxation of meat or wheat." It would be almost impossible, with the best will to the Government, for the great bulk of the supporters of the Government to continue in their support, assuming that that had been found otherwise a practicable and desirable course to pursue. Of course the question of meat and wheat must come into the picture. Taxation must come into the picture.

7.0 p.m.

I say with the greatest respect to my back bench friends who do not represent agricultural constituencies, that we who represent agricultural constituencies do not by any means say that it would not be possible to devise certain taxes which would benefit both home producers and the Empire. I do not want to go into details, but neither the spokesman of the Government nor the spokesman of the Front Opposition Bench has quite put the case fairly with regard to meat. I am sure that that has been by inadvertence. The Dominions Secretary, for instance, said that South Africa was not interested in meat. As one who owns some land in Rhodesia I know that there is no part of the Empire which is more interested than the Union and Southern and Northern Rhodesia in the question of the disposal in the British market of the meat it produces in the future. That will become a very important question. The hon. and gallant Gentleman suggested that I was wrong in thinking that the question of the importation of beef from Empire countries could be dealt with on the same basis as that of mutton because the Australian beef always had to be frozen, whereas the Argentine beef was chilled. I told him there was an answer, and I believe there is an answer. I understand that the scientists are at this moment in the process of perfecting a system by which it will be possible to chill the Australian meat and to bring it here in exactly the same condition as the Argentine. If that is so, that is a very important consideration, because there is nothing in the pastures of South Africa or Australia to prevent the beef-producer producing beef of a quality suitable for the British market. As regards mutton, we know what the position is, but we ought not to ignore the possibilities of beef supply.

There is only one other specific item which I desire to raise, and that is the question of forestry. I must not say what has happened in another place, but my Noble Friend Lord Lovat and I have been for some time past agitating on this question of attention being given to the forestry production and timber trade of this country at the Ottawa Conference, and we have been supported in the powerful columns of the "Times" to-day. I ask the Colonial Secretary as representing the Cabinetߞperhaps he would convey the point to the Lord President of the Council, who will reply laterߞ whether it is not possible, even at this late stage, to have an ad hoc advisory committee on British timber and forestry in the same way as there has been an advisory committee on agriculture. I understand that the advisory committee on agriculture has finished its work, has concluded its sittings, and is not required to meet the Minister again. We wish represented on the proposed advisory committee the interests not only of the British saw-mill industry and the import trade, but also of the British forestry industry. That industry is one of growing importance. The Forestry Commission have under trees some 200,000 acres of land in this country, and they contemplate eventually having 1,500,000 acres. The employment is at present inconsiderable, only something like 25,000 or 30,000 heads of families and single men, but, in the opinion of Lord Lovat, it may easily rise to 60,000 or 70,000 men. There is also a good deal of private forestry going on. It will be very difficult, however, to dispose of the products of those forests when they come into production without some form of organisa- tion. Some of them, in Sussex for instance, are already coming to a producing stage. It is very important for British forestry and also for the forestry of the Colonial Empire and the Indian Empire that it should be adequately dealt with at Ottawa. It is important for British forestry that there should be this ad hoc committee. I would like to support my right hon. Friend about the products of Russia. I hope that here again the Government will go to this Conference with a completely open mind and with a free hand. If it be found that there is a demand at the Conference by the heads of other delegations and if the facts point that way, I hope that no consideration will prevent the Government coming back and telling this House that they have decided to take drastic action against these products. There, again, the great bulk of our supporters expect them to go into the matter with a free hand. I will say, in conclusion, that the great majority of the back benchers hold that the Government at the last election asked the electors for a free hand. The meaning of that was that they should be free to take the course they thought best in the national interest and a fortiori in the interests of the Empire. I say that, with great respect, to my right hon. Friend representing the Cabinet. If that be so, the clear implication is that any decision of the Conference which is accepted at the Conference by the majority of British delegates as the right course should be taken. Otherwise, there is no meaning at all in the phrase "free hand." If the Government adopt the tendency which has been shown in some of their speeches recentlyߞon the Land Tax for instanceߞto say that it is quite true that the majority of the Government want to do something but that they must remember the minority and remember that they are a National Government, then that is not what the electors meant at the last election when they gave the Government a free hand.

Sir P.HARRIS

To the Prime Minister.

Earl WINTERTON

Does the hon. Gentleman suggest that one man should be dictator of this country?

Sir P. HARRIS

It was a free hand to the Prime Minister.

Earl WINTERTON

Does the hon. Member suggest that the country made the Prime Minister a dictator? The Prime Minister was only representing confidence in the National Government in that respect. All we ask is that the delegation representing the National Government should go to this Conference with a free hand to take the course that seems right in the circumstances. We do not ask them to pledge themselves now. They will have our support against the attempt of the Opposition to drag them into making premature decisions on policy, but we ask them to go there prepared to take any course which seems right, and to come back prepared to put it into operation as soon as possible.

Viscount KNEBWORTH

I feel very diffident in addressing this Chamber for the first time on a subject of this importance, but it is only because I feel that the subject is the most important which has come before the consideration of Parliament since the Election that I ask the indulgence of the Committee to discard for a moment the rôle of appreciative audience. I shall endeavour to approach this subject from a point of view which, I hope, will be appreciated by the Committee. An hon. Member opposite, in a Debate several months ago, addressed across the Floor of the House some such words as these to the Government, "If you do not tackle this unemployment problem soon, it will break you." I think that that hon. Member was right, but the question at stake is not the continuance or the failure of the National Government. The unemployment problem is the main problem of our age, and upon its solution hangs not the end of this or that political party but the lives of millions of people, and, perhaps, the whole future of civilisation. We are told that the main causes for this continued and ever-increasing problem of unemployment are world causes, that they can only be solved by world remedies, and we ask ourselves what we are going to do about it. Are we going to do what hon. Members opposite did when they were in powerߞnothing? Are we not rather going to take some steps to deal with this problem? Nearly a year after the financial crisis became acute there is a conference at Lausanne to deal with part of the problem concerned. We hope and believe that Lausanne will achieve a great deal, but at best it is proposed at Lausanne to deal with only part of the main question. No matter how much we may expect and hope of Lausanne, we do expect and hope for very much more from Ottawa. At Ottawa we feel that Great Britain will be in a position of leadership, a position of special authority, as perhaps she will not be at Lausanne. There are some of us who in our short studentship of politics have quite frankly grown a little mistrustful of the results of European conferences, and have begun to think that sometimes a little firm action is worth a world of good policies and good talk.

The right hon. Member for Sparkbrook (Mr. Amery) paid a very great tribute to the Imperial economic policy which we are discussing and its past history to the time of that great statesman Joseph Chamberlain. Quite honestly, I have not hitherto found myself a very enthusiastic supporter of that policy. For various reasons I have felt that perhaps it limited too much the scope, enterprise, and energy of our people, but times and circumstances are changing. The hon. and learned Member for East Bristol (Sir S. Cripps) seemed to think that there was no reason why a man should not still say and maintain to-day what he said in 1926. Times have considerably changed since 1926. Among other things we have had two years of Labour Government in this country. We are faced to-day with the most extraordinary situation in the world. European trade is practically at a standstill; in many countries it is practically impossible to deal in exchange at all; barter is actually operating in some parts of the world; the nations of the world have almost returned to the old mercantile system. It is surely incumbent upon this country to take some steps in the present state of affairs to introduce some cure for the world ailments about which we hear so much. One of the causes to which our present troubles have been very generally attributed is the prevalence of ever-growing tariff barriers all over the world. We have been told in this Debate that the representatives of His Majesty's Government are going to Ottawa to open negotiations for the breakdown of those tariff barriers over a very wide and self-supporting geographical area. That is a step which, if successful, will be endorsed enthusiastically by Member so all parties in this House. If we can succeed in creating a larger geographical area within which trade can pursue unhampered its own legitimate course, we shall have achieved a great deal.

There has been universal agreement-I think more universal agreement on this than on any other of these matters-that there is an immediate need to-day to raise the world level of commodity prices. From the Macmillan Report, which was made before we went off the Gold Standard, right down to the inflationary speeches which were delivered in the House of Commons during the Debates on the Finance Bill, there has been almost universal agreement on the need to raise the price level. It seems to me, as one who is purely a student of these matters, that to inflate unilaterally, in England alone, would achieve little. Though we might lower the exchange value of sterling and provide a certain stimulus to exports, we should at the same time bring about just that state of affairs which we fought the Election to avoid. We have to make good our deficit on the visible trading account very largely from the sterling interest which we receive on our investments abroad, and a depreciation of our currency alone would materially affect our position as regards the balance of trade. But we could reduce the purchasing power of sterling in terms of commodities with safety and security, if we were certain that those countries whose currency is at present related to sterling would follow us in that inflation.

Here again—and to a very large extent I only repeat what has been said by the right hon. Gentleman the Member for Sparkbrook—it seems to me that even more important than the negotiation of trading agreements at Ottawa, is negotiation for some form of Imperial currency policy which will have the effect of raising the general level of commodity prices over this very wide area. I do not feel that the negotiations at Ottawa need conflict with anything agreed upon or not agreed upon at Lausanne. Lausanne and Ottawa are complementary to each other. If we succeed at Ottawa in establishing a currency area and a Free Trade area within the Empire we can develop that area still further in the rest of the world, as time goes on, to the advantage and benefit of all. But at this moment, faced with the increasing and disastrous problem of unemployment, unless we start to build up again the world's trade, the world's finance, the world's commerce, unless we build it from the bottom and unless we build courageously, we shall be faced with complete disaster. As a very humble and junior Member of this Committee, I feel strongly that His Majesty's Government are going to Ottawa to take those steps- to take a lead in the solution of the great problems which at present depress the world, for the solution of which they were elected, and on the solution of which a suffering and perplexed humanity is anxiously waiting.

Mr. LUNN

I should like to congratulate the Noble Lord the Member for Hitchin (Viscount Knebworth) upon a very able maiden speech. The confidence which he displayed is, I can tell him, envied by many of us who have been much longer in the House of Commons than he has been, and I hope that, without being considered rude, I may say that I admired his audacity. I sincerely hope he will take a frequent part in our Debates, and that in the future he will be as candid in his expressions as he has been to-night. There has been a sort of unreality about this Debate. Until to-day we had been told nothing of what was likely to happen at Ottawa. To-day we hardly know much more than we knew before. If we except the speech of the right hon. Gentleman the Secretary of State for the Dominions, I think every speech has alluded to the "free hand." Some have justified it, others condemned it. The Noble Lord the Member for Horsham (Earl Winterton) welcomed the idea of the "free hand," but I think when we read his speech to-morrow we shall find in it some very ominous declarations as to what should be done by the representatives of the United Kingdom when they go to Ottawa.

Earl WINTERTON

I am sure that the hon. Member, sitting where he does, will be the last to object to a back bencher attacking a Government, in view of what happened in the last Parliament.

Mr. LUNN

I entirely agree with the Noble Lord. I am only calling attention to the fact that there seems to be a better idea of what is meant by Ottawa and a clearer declaration upon Ottawa, from the back benchers opposite than there has been from the Front Bench. All that we have been told is that a large number of Ministers and a crowd of advisers are going to Ottawa, but I believe there are some who were to go to Ottawa, who were actually appointed, but who are trying to get out of it. Now that we have come to it everybody seems to be helpless and uncertain of what is going to happen, and there is an objection to facing the difficulties of the situation. Coming down to the House this morning I noticed a wayside pulpit message in the Charing Cross Road to this effect: Easy-going optimism is a poor substitute for intelligent action. I think that sums up the present position with regard to this Conference. We have had for many months an easy-going optimism as to what is to happen at Ottawa. Newspapers and magazines in abundance have been publishing hopes of what was to happen at the Conference, but up to this moment we have not seen much intelligent action on the part of the Government in connection with it. If the Conference cannot agree to seek for international co-operation, as has been suggested so strongly by the Prime Minister in his speech at Lausanne to-day, as well as Empire co-operation—co-operation for the economic recovery of the world as a whole—it will not be a success.

I believe that a united British Commonwealth can contribute much to peace and trade recovery in the world, but what is the situation to-day? We have to realise the change of circumstances. As a result of the Imperial Conferences held since 1923, there has been a constitutional revolution within the British Commonwealth of Nations. Up to that time we were regarded as the Mother Country and the other members of the Commonwealth as our children, but to-day we all stand in the relation to each other of brothers and sisters, which is a very different thing. Members of this Committee who are the fathers of grown-up families know the different relationships created when members of a family get married and leave the parental roof and when the mother no longer controls her own children in her own household. It is a perfectly natural development, but the difference is there, and to-day we are a Dominion, no more and no less. The Statute of Westminster set the seal on that matter. We hear a great deal about the generosity of the Dominions. We have heard it in this Debate. I am not able to say, nor has any hon. Member who has spoken up to now been able to say, what is the value of all the generous things that have been done by the Dominions for this country. But it is not all on one side. What about the Navy, which costs this country —50,000,000 or—60,000,000 a year, for the protection not only of this country but of all the other parts of the Empire?

Vice-Admiral TAYLOR

Will the hon. Gentleman also state the contributions which the Dominions have made towards defence?

Mr. LUNN

Perhaps the hon. and gallant Member will deal with that matter. He will make his own speech when he rises.

Mr. LAWSON

And tell us what those contributions are.

Mr. LUNN

Then there is the Empire Marketing Board which was set up to encourage the sale of Empire products in the United Kingdom and which has spent millions in endeavouring to do so. It has poster stations all over the country and changes its posters every few weeks. It arranges exhibitions and shopping weeks and has spent—1,000,000 of the British taxpayers' money on publicity. It has organised a campaign for the marketing of Empire products and has done a great deal to develop the sale of those products in the last two or three years. It has spent more than—2,000,000 on scientific research. I think it may be said that we have done a good deal in the elimination of pests within the Empire, in the improvement, grading and packing of Empire products, and in the improvement of the cold storage arrangements on our ships, to which the Noble Lord the Member for Horsham referred in connection with the Australian meat trade. But there has been no contribution towards the work of the Empire Marketing Board. The money for that work has come from the British taxpayer. The right hon. Gentleman said that no action was being taken with regard to the future of the Board. I would remind him that a committee of which he was a member considered this question and made a report which might be taken up by the Government, if the Board is to continue, under conditions such as we have established this year.

Then there is the question of migration. We have populated parts of the British Dominions with people from Great Britain. We have brought up those people, educated them and made them useful men and women. The Dominions only took the best. Their selective process would not take other than the best. New Zealand is populated largely with British people; so is Australia and to a lesser extent, Canada.

7.30 p.m.

I am one of those who believe that these vast open spaces will give in the future opportunities for an outlet for our people in larger numbers, but there must be an opportunity, and there must be the possibility of a livelihood for the people who go to the Dominions. We cannot have the same position that we have at this moment, when there are scores of thousands of people in Australia who are in want, we are told, who went from this country and for whose return petitions have been presented here. We have a Royal Commission sitting upon what happened to our people who went to Victoria, and I think it is time that that Commission reported, because those people lost their all. We have many of our people in Canada, and last year we had something like 5,000 or 6,000 people there who had to make themselves into semi-criminals so as to be deported from Canada back to this country. This is a subject which ought to be discussed at Ottawa and a subject about which there should be some understanding. Surely some time there will be a change, and with opportunities of a livelihood, I am quite sure that our people will go oversea in the future, as they have done in the past. All these are things which we have done and which have been done at great cost to our people. I am not disagreeing with it, because I have been a supporter of it and a worker in that particular direction.

Let us consider the conference of 1930. There was any amount of condemnation of that conference, and we were told that economic questions were not discussed there to the same extent as they will be discussed at Ottawa. I remember the Vote of Censure on 27th November, 1930, and the speech of the Lord President of the Council on that occasion was really like that of a clairvoyant. It was intelligent anticipation of what, I am sure, he did not believe would be realised so soon as this year. That Debate arose out of a Vote of Censure on the Labour Government, and I agreed with all that the Secretary of State for the Dominions said on that occasion, when, dealing with Mr. Bennett's offer, he said: I say clearly and definitely that if any offer were made that would help the trade of this country, would give employment to our people and not injure them, not only would we have considered it, but it would have been our duty to accept it. I think that that is all that the right hon. Gentleman has stated to-day regarding Ottawa. Some hon. Member interjected on that occasion, "Why did you not do it?" and the right hon. Gentleman replied: For the simple reason, I assure you, that there never was such humbug as this proposal. And he sucked the humbug and swallowed it, and we shall know more perhaps after he returns from Ottawa. He said further that the proposals were: We want you to change your fiscal principles, but we will only change certain details of ours."—[OFFICIAL REPORT, 27th November, 1930; cols. 1550–1, Vol. 245.] Let us take the Chancellor of the Exchequer, who at that time was Mr. Philip Snowden. He gave a further explanation of the offer made by Mr. Bennett in the Conference of 1930, and this is what he said: Sir. Bennett's was the only definite proposal put forward by the Dominion representatives. What did it amount to? It meant … that they will keep on their prohibitive tariffs against the goods of this country, and they will put a slight increase upon the rates applied to foreign imports."—[OFFICIAL REPORT, 27th November, 1930; col. 1653, Vol. 245.] He went on to say: If a policy of this sort were adopted, it would qualify us for the inside of a lunatic asylum … Let the party opposite … declare their policy … We shall be prepared to take the field against them, and I have sufficient faith in the common sense of the people of this country to know that when such an issue is put before them, they will, as they have always done, reject it by an overwhelming majority."—[OFFICIAL REPORT, 27th November, 1930; col. 1657, Vol. 245.] He is a Member of the Government that has carried that policy by legislation, and he was the person who, more than any other man in the General Election last year, was responsible for this Government being in power to-day. We have accepted this humbug, and we have fitted ourselves, as Mr. Snowden said, for a lunatic asylum, and our people are going to pay very dearly for it. "We have given the Dominions and the Empire 100 per cent. Preference until the 15th November next, and we have done more. The Government have given an undertaking not to discuss the revision of commercial treaties with foreign countries until after the Ottawa Conference. With that undertaking, together with the policy of Protection, we are paying dearly in the increase of unemployment month by month, and the Minister of Labour, as we can all see, is quite desperate as to the position in which he is placed to-day. Protection, though, is to be the cure for all our ills. If it is to be all that you say it is, with the 100 per cent. Preference given to the Empire, then surely there need not be much difficulty at Ottawa, but does anyone see it as a possibility? I am afraid not. We want to see the removal of restrictions, we want to see the removal of barriers, we want to see freer trade, even within the Empire, and there is room for a good deal to be done.

A few days ago I put two questions to the Secretary of State for the Dominions, asking him the total amount of British coal imported into Canada during 1931 from this country and from the United States of America. He replied that during 1931 Canada imported 871,000 tons of anthracite from this country and 1,966,000 tons from the United States. Of bituminous coal they imported only 111,000 tons from us and 9,500,000 tons from America. He further said, when I asked him if that would be discussed at Ottawa, that every effort would be made by the British delegation at Ottawa to get reciprocal treatment, and I know of no better subject than coal. In a further answer he told me that Canada had an import duty on coal from this country of 1s. 7td. per ton. There is the position.

Take the coal that has been imported into the Dominions from this country during the last five months—from Australia, nil; New Zealand, nil; South Africa, nil; British India, 6,300 tons; Canada, 388,982 tons; Irish Free State, 958,354 tons. That is all. It is not very much more than 1,000,000 tons out of a total export of 16,392,000 tons. If we could be supplying this coal—and, of course, as has been said in this Debate, we should displace some other people—it would find work for many thousands of miners in this country. Who is to represent coal at Ottawa? I have not heard of anybody. I have seen the Secretary of State quibble on this matter to-day, but I have no idea as to who is to represent coal in the discussion that is to take place at Ottawa.

It is not enough that we should simply buy from other countries or even from, the Empire. We need to sell, and more than 20 times the amount of our coal that is sold to the Empire is sold to foreign countries. While the Government are parading the fact that 123 new industries from, foreign countries have come here and are employing 3,800 workpeople, their tariff policy has thrown out of work 20 times that number in the coal industry alone, and that is a matter which the Government ought seriously to consider. I am satisfied that under the system of private enterprise as we have it to-day any conference that we may have will not solve our economic difficulties in the world. I am quite convinced that there is no possibility of a solution short of the acceptance of Socialism in the various countries of the world. But we are living under a system of private enterprise, and I would say that, if we are to sell more of our goods to countries within the Empire, the British salesman must realise that tariff concessions will be of little avail, unless he will give more attention to merchandising his goods, to the study of suitability and adaptability to the country in which he wishes to sell, and to catering for its peculiar wants. That is one of the things that our salesmen need to learn, and I think that would be confirmed by most people who have had anything to do with business men and their neglect in this country. If I may go further, I would say that, if the Government were prepared to set up import boards in this country, and buy in bulk—

The DEPUTY-CHAIRMAN (Captain Bourne)

That would require legislation. We have so far allowed a good deal of latitude in this Debate, where the matter can be done by negotiation, but for the Government to do that would be quite outside the Dominion Office Vote.

Mr. LUNN

I have no desire to run up against your Ruling, and—

Mr. LANSBURY

On a point of Order. We have been discussing the imposition of tariffs in order to give a preference to the Dominions, and the imposition of those tariffs would mean legislation. We particularly had this Debate in order to discuss what would be proposed at Ottawa, the results of which, I think, would be legislation, and up to the present, with very great respect, I would suggest that nearly all the speeches have dealt with subjects which, if brought to a head, would mean legislation.

Mr. LUNN

Further to that point of Order. May I suggest that we were to hear the agenda for the Imperial Conference at Ottawa, and had this been the agenda which we were discussing for the 1930 Conference, the two points that I have mentioned, namely, import boards and bulk purchase, would have been included in that agenda. I am asking that they should be in to-day.

The DEPUTY-CHAIRMAN

I think the hon. Member is in order in asking the Government whether they propose to discuss that matter, but what he was suggesting was something quite different, namely, that the Government should set up import boards. As regards the point raised by the right hon. Gentleman the Leader of the Opposition, I would remind him that, as a matter of fact, the imposition of tariffs does not require legislation, because tariffs have already been imposed. The question has been one of what negotiations might take place with the Government within the framework of our existing legislation, which is quite a different matter.

Mr. LANSBURY

I would suggest very respectfully, Captain Bourne, that you should, if you could, read the OFFICIAL REPORT. I have been here most of the time, and while it is true that tariffs are imposed, the amount of Preference that has been given to the Dominions is to be a matter for discussion at Ottawa, and you would need legislation to deal with that whenever any agreement was reached.

The DEPUTY-CHAIRMAN

Under Section 4 of the Import Duties Act, I think, a very great deal of Preference could be given without any fresh legislation. We fully realise the desirability of a broad discussion, but hon. Members have been given considerable latitude.

Mr. LANSBURY

We really ought to have this a little clearer. It will be within the recollection of every hon. Member who has been present during the Debate that we have been discussing the advantages which we can give to the Dominions. Parliamentary sanction of any change in the Preference would be required. It is true, of course, that the Tariff Advisory Committee makes decisions about these things, but those decisions have to come to the House to be approved, and I should think that that was legislation.

The DEPUTY-CHAIRMAN

I do not think that the position is quite that. There is no doubt that a great deal could be done at the present time in the way of imposing tariffs which would not require legislation, though it actually requires the confirmation of the House. That is not quite the same thing as legislation. Therefore, we are not so strictly limited in the discussion as we should be if the Import Duties Act were not on the Statute Book. If the hon. Member pursues the line of argument that certain matters should be discussed at Ottawa, he will be in order.

Mr. LUNN

I was going to suggest that the two questions of import boards and bulk purchase of the produce of the Dominions should be on the agenda of the Conference. If these two systems were established, they would be useful to the people of this country and give producers a better return for their goods. I hope that the possibilities in this direction will be discussed. There is a great opportunity at this Conference, but I feel convinced that advantage will not be taken of the opportunity as it should be in the interests of the people of the Empire. I believe in Empire co-operation, and I wish that we had more of it; but may I remind the Committee of the doubts that are even in the mind of the Lord President of the Council? Speaking at Worcester on the 2nd April, he said: If that cannot be accomplished it may well be that we shall be driven to look towards Europe. It may well be with the parts of the Empire that if they do not move to that closer union among themselves, their economic interests may lead them in half-a-century far away from those who are now their brothers. I hope that there will not be any European combination of attack upon this country and upon the Empire, but I believe that we are asking for it in what we are doing in this House and what we are likely to do at Ottawa. There have been thousands of columns in newspapers and magazines hoping for the success of the Conference, but to-day there appears to be doubt as to the realisation of those hopes. The number of people who are going from this country makes it almost impossible for anything useful to be done. I understand that some are trying to get out of it, because they think that it will not enhance their personal reputations. We can no more live as a self-contained Empire than we can live as a self-contained country. We must have relations with other countries. We need the removal of all barriers to trade, and I would like to see a world federation dealing with this subject.

The economic position of all countries calls for a world economic conference; that is far more important than the Conference at Ottawa, important as that may be. To a world conference we can all contribute. There ought to be no restriction of supplies in the raw materials necessary to mankind in any part of the world. They are needed by all, and should be obtainable without fighting or financial struggles as we have seen in the past. If Ottawa can help in the solution of our difficulties, I would say, "God speed!" to it. But I believe that before any real good is done many more countries should get together and deal openly with all questions which vitally affect all peoples. Neither narrow nationalism nor selfish individualism will cure the economic ills of the world. The better way is for co-operation and a clearer understanding between the peoples of all countries.

Mr. de ROTHSCHILD

After the valuable and momentous admonitions which have been given to the Government, to the leader of the Ottawa Conference and to those who will accompany him, I feel that any further restrictive counsel will not be welcomed. I will, therefore, preface the few remarks I have to make by simply reminding those Members of the Government who are going to Ottawa that the temperature there in July and August is rarely below 100 degrees. I venture to deliver myself of the pious wish that the Lord President of the Council, with his sunny disposition and his philosophical outlook, the Dominions Secretary, and the Minister of Agriculture will be able to bear the burden and the heat of the day, and that they will remain inwardly and outwardly, physically and mentally cool. Indeed, coolness will be one of the chief requisites at the Conference, which is of the most vital importance to every citizen of these islands and to the whole world. A year spent in Queensland a long time ago, a year of enjoyable work in charming surroundings where I was able to make many open-hearted and open-minded friends, and later service in the Canadian Army, where also I gained many loyal and delightful friends, confirmed my admiration of the wonderful achievement of this nation's genius in creating this Empire, and, without any apparent effort, ensuring the fidelity and affection of its distant parts.

The importance of Ottawa to the Empire can be judged by the actual figures of our Imperial trade. The year 1929 was the last year of prosperity for this country and for the world. In that year our exports to the Empire countries reached as much as —325,000,000, an achievement which cannot but fill one with pride and satisfaction. This amounted to four-fifths of our exports to the rest of the world. In 1931, which was the year of the crisis, our exports to the Empire had fallen to —171,000,000, which is still about four-fifths of our trade with the rest of the world. These figures show how the prosperity of the Empire is closely bound up with the prosperity of the rest of the world. These figures are given in values, and the shrinkage in the price of commodities has no doubt influenced them a great deal, but even under present conditions this Imperial trade is not a stagnating trade. It is still a vast and stable trade which has grown up of its own vigour along natural lines and under conditions which have prevailed for half a century and still prevailed last autumn. The importance of our trade and our relations with the Dominions and Colonies is shown in a statement made by Mr. W. H. Miner, of Granby, Quebec, who is president of the Canadian Manufacturers' Association. A few weeks ago be pointed out that— There were great possibilities for the extension of Imperial Trade, but perhaps there had been undue concentration upon the question of tariffs. Among other ways of stimulating Imperial trade were improved transport, trade exhibitions, marketing plans, advertising campaigns, and better cable, telephone and wireless communications. Mr. Miner is an important manufacturer and business man in Canada, and the many avenues that he has indicated ought to be explored at Ottawa. But what is chiefly exciting the imagination and curiosity of all the people in the Dominions and what is worrying the minds of industrialists, farmers, experts and politicians in the Dominions—is the question of currency. Experts all over the world are putting down the prolongation of the economic crisis to the question of money. There is no doubt that our own Imperial trade has suffered intensely with the instability of the exchanges in various parts of the Empire. Hon. Members know how trade with Australia last year was practically held up for several months owing to the depreciation of the Australian sovereign. Later, the discrimination which was shown by Canada against our own pound on many occasions greatly enhanced the difficulties that had been besetting our trade with that Dominion. It is not clear what form any proposals of monetary policy may take at the Conference, but there can be no doubt that this country and the Dominions will expect the question of an Empire currency to be raised and debated.

8.0 p.m.

I can imagine no question which is more appropriate to any discussion at the Conference than the consideration of a common Empire currency. It is a matter that has exercised the mind and imagination of leaders and economists in many journals and many Parliaments in the King's Dominions, and it is one that will have to be debated for the satisfaction of the public at large. It is undoubtedly a bold proposal. It bristles with complications, but I trust that neither the boldness of the proposal nor its obvious difficulties will deter the Government from canvassing its possibilities at the Conference, where the discussion will centre on the establishment of a common currency, or, as is more likely, on the establishment of a degree of stability between the exchange rates of existing currencies. If the chaos which exists in international exchanges continues, it is impossible to imagine any more valuable result which may come from Ottawa than some plan for stabilising the exchange rates of the countries within the Empire. Such a plan would benefit not alone the Empire, but might well provide a buoy to which the drifting currencies of the world might in time be moored It is obvious that the difficulties which the mere thought of such a plan conjures up cannot be minimised, especially as it has been shown over and over again that a currency system once adopted cannot be lightly discarded. Whether a common currency or a plan of general stabilisation is adopted, inevitably the question arises of the management and direction of it by a central authority. Would the Dominions be prepared to accept the direction of the home Government and the Bank of England? To my mind that is the first point, but it is not the only one, because stabilisation between the exchange rates of different countries can only be achieved on two conditions, firstly, a considerable degree of equilibrium in trade and finance, and, secondly, a sound budgetary position in each of these countries. To achieve this there would have to be a Government of angels in each Dominion and, presiding in London, a Government of archangels. Whether angles can be found in the Governments of Canada, Australia and New Zealand I do not know, and whether there are archangels to be discovered on our own Front Bench would lead to a most lively Debate in this House. Whatever the solution of the problem, there can be no doubt that some agreement will have to be made by which the currencies of the Empire will be linked either to a commodity index or to some lower gold sterling parity.

But the problems of Imperial trade are just as important as the monetary problems. As regards trade one thing which is well worth achieving is the setting up of permanent Imperial Economic Council, which would correalte and supply the demands of the different component parts of the Empire. The Federation of British Industries, in its report of 1930, said: It is a regrettable fact that better machinery exists in connection with the Economic section of the League of Nations for discussing economic problems with foreign countries than is the case with our sister nations of the British Empire. I believe that is still the case to-day. In all questions there are always two views that can be taken, and on this occasion the first view I want to deprecate is the narrow Imperial isolationist view. Undoubtedly that is a dangerous one. But I also wish to deprecate the short view, which means concentrating on the task of getting what we can out of the present and ignoring those fundamental principles upon which alone the Empire can truly be economically developed. The Conference may be tempted to approach these problems with a crisis mind, but methods of expediency which seem to offer some relief from the immediate effects of the present economic situation may be fundamentally in conflict with the best long-term policy.

The Empire's difficulties at present are mainly due to the fostering, we have heard it said, of uneconomic industries, but it is just possible that the problems facing us at Ottawa arise from the departure in past times from those principles on which the Empire may best be developed. The Free Trade doctrine that a country gains its greatest economic advantage and makes the greatest contribution to the sum total of the world's wealth by concentrating its productive achievement on those products for which it is best fitted still holds the field to-day, and it is the departure from this principle in the past which will cause the Ottawa Conference to be faced with the very difficult problem of reconciling the irreconcilable, i.e., how to reconcile the problem of the so-called secondary industries with the increase of mutual trade. We cannot say in one breath that secondary industries must be protected and that the Dominions must abandon uneconomic industries. The dilemma arises from this departure from the fundamental tenets of Free Trade, from the determination of the Dominions to foster uneconomic industrial development, as, for instance, was done in Australia.

It is just possible that the idea of fostering these secondary industries was brought about by a false analogy with Britain itself. Britain's rise in international prestige coincided with the development of her industrial enterprises, and perhaps for that reason industrialisation and successful progress are regarded as synonymous. But Great Britain's emergence was mainly based on the exploitation of its natural resources, iron and coal. It was a natural growth, and not a hothouse plant. The development was based on supplying that which she was most fitted to produce by the density of her population, by the supplies she had within her soil and by her climate and natural resources. That is the lesson of Britain's progress, and the Dominions have chosen to ignore it.

These considerations are not merely academic. Australia provides a very good instance. Her urge to self-sufficiency has not brought her adequate prosperity. Her policy of fostering uneconomic industries by high protection lies at the root of most of her difficulties. Here I may bring in the case of Western Australia. The House may remember a very interesting letter sent to the "Times" in 1930 by Sir James Mitchell, who was then Prime Minister of Western Australia. In this he discussed the advisability of Western Australia seceding from the Australian Commonwealth because of tariffs. He wrote: We ask for secession because of sheer inability to pay the excessive taxation and shoulder the tariff burdens heaped upon us by the Federation. He goes on: Of our imports—10,000,000 worth comes from the Eastern States. Under the present Commonwealth tariff —3,000,000 is added to the price of these goods without adding one penny to the value of the goods. Our importations from Britain and other overseas countries total—10,000,000. On them we pay roughly—3,000,000 in duties to the Federal Treasury. He goes on to point out that the 400,000 people of Western Australia are thus compelled to bear a tariff burden of —6,000,000, and as the whole value of the exports from Western Australia amounts to—17,000,000, it is no wonder that he concludes by saying: This burden precludes all possibility of undertaking the vast work of developing millions of acres of fertile lands … capable of producing much of what Britain needs. Trammelled by Federation we cannot undertake migration on a scale warranted by our resources. I commend to the House this conclusion to which the experience of Western Australia leads him: If each part of the Empire did that which it was best qualified to do how much more comfortable life would be for all of us. Rather hesitatingly I venture also to commend these words to those who look upon tariffs as a means of ensuring Empire unity. It is no mere coincidence that the Argentine and Denmark, the two countries which have achieved most success as suppliers of primary produce to British markets, have so far been content to be solely primary producers, and have avoided taxing the primary producer to foster secondary industries. By the importation of manufactured goods they have facilitated their own exports, and they facilitate the payment for their primary products. If Australia had adopted a policy of the same kind who knows whether she might not have avoided her present monetary difficulties? If the problems at Ottawa are tackled from this standpoint they may, indeed, lead to the solving not only of Empire but of world problems, such as that which is hindering the formation of a Danubian Customs Union.

When we look further into this matter and examine the question of reciprocal fiscal arrangements in the light that is thrown upon them by the daily Press, we cannot help being startled by the dangerous potentialities which are adumbrated owing, mainly, to the determinatoin of the Dominions to save their secondary industries from the blast even of British competition. An indication of the present attitude of some of the Dominions can be given by what has appeared in the Press lately. Mr. Gullett, Australian Minister for Trade and Customs, has assured Australian manufacturers that they need not fear British competition after Ottawa. I need not refer this Committee to the reply of the Canadian coal interests to the hope which was so ably expressed by the Dominions Secretary in this House that Canada would open her markets to British coal. But more important still is that declaration which was made by Mr. Bennett at a meeting which many Members of this House may still remember, a meeting of the Empire Parliamentary Association which took place in Westminster Hall in 1930, when he developed the policy of the Canadian Government, and explained that their aim was not to export raw materials but to make them up in Canada and make their country more and more an exporting country of manufactured goods. I need not emphasise the obvious dangers for Britain's export trade if that spirit still reigns at the Conference.

Up to now the prosperity of the British Empire and of this country has been founded on the readiness of primary producers to let Britain have their raw materials in exchange for manufactures, but it does appear from several reports from Canada that Canadian copper interests are now pressing for some scheme to be adopted at Ottawa to restrict British manufacturers from the freedom of purchasing their raw material in copper from the United States as they have done in the past. If we find that this supplier of raw materials is not only a competitor in our export market, but also aims at the curtailment of our supply of raw material from other sources, it will be the duty and the very serious duty of the British Delegation to guard the British manufacturers' supply of raw material.

But the highest hope of the Dominions is centred in a preference for their food products in the British markets. I need not elaborate the danger of a rise in food prices here while there is no rise in the rest of the world. It would mean that, with this rise in food prices in this country, there would be either a reduction of real wages and in the standard of life, or an increase in money wages which would still further impair our power of competition with other countries, in the home market, in the foreign markets and in the markets of the Dominions. When we consider that the chief aim of the Ottawa Conference and all the different Conferences which are taking place at the present time is to raise world prices, our misgivings can only increase. Just as the step which England has already taken to restrict her purchases in the markets of the world have reduced the world price by cutting out a purchaser, and a very important purchaser,,so an Imperial policy which would involve some artificial restriction of Empire purchases from sources outside the Empire would further depress the price in the rest of the world. Yet the major proportion of the Empire's raw materials and food supplies must be sold, not within the Empire, but without the Empire. It is estimated that Canada's exportable surplus of wheat will be over 400,000,000 bushels. American grain experts have published an estimate that the most that they can expect Great Britain to take would be 100,000,000 additional bushels. This very likely would mean cutting out the greater supplies of this country from the Argentine. That 100,000,000 bushels form only one-quarter of Canada's exportable surplus and the remaining three-quarters she would still have to market outside.

Mr. HANNON

Great Britain took last year 170,000,000 bushels of wheat from Canada.

Mr. de ROTHSCHILD

I think the hon. Gentleman is wrong in his figures. We took last year something like 50,000,000 bushels from Canada. The figures I am giving I have taken from an article in a newspaper called the "Times" and I cannot believe that the "Times" would give me wrong figures. Secondly, I can hardly believe that the "Times" would be prejudiced in favour of any Free Trade doctrine. The "Times" pointed out that the Canadian farmers would have to market outside the British Empire something like 300,000,000 bushels, and, of course, if the price outside the British Empire is lowered, it means that three-quarters of their produce will be sold at a very much lower price. What will happen will be that the farmer will be tempted to obtain a higher price within the Empire, so as to make up by a tariff or a quota for the loss outside, and that will be, with due respect to the hon. Gentleman who interrupted me, dumping on an Imperial scale. The result will be a gradually rising Empire price and a gradually falling world price. I wonder how long the consumers in this country would be prepared to stand it.

In Australia the position is very much the same, and the Australian Ministers have realised that they cannot place any serious reliance on any benefit from the quota in the English market. They state that Australian wheat must find purchasers outside. The Hon. Charles Hawker, Minister for Markets in Australia, lately addressed a convention, when he said that the Australian Government did not intend to encumber its case at Ottawa by seeking preference on wool and wheat. The Commonwealth's surplus wool and wheat must find markets outside the Empire. It was clearly impossible to look to Great Britain for direct assistance to either wool or wheat.

The position of wool is similar to that of wheat. The major portion of the wool crop in Australia is sold in the world market. A higher price within the Empire will be of no avail if it results, as it must result, in a lower price outside, where the major portion must be negotiated.

It is clearly shown from those figures, and from the considerations I have put before the Committee, that the Dominions cannot gain very much from Empire preferences as regards their chief products, because of their dependence on the world prices. Thus we are left with only a very few products on which preference can benefit the Dominions at a satisfactory price to the British consumer; it is chiefly on meat and pig products, dairy produce and fruit. I would like to remind the Committee that these are precisely the products upon which we desire to see British agriculture concentrate. We are told that British agriculture is capable of producing enough pig products to replace all the bacon that is at present imported from Denmark. I entirely agree, and believe that; but British and Dominion farmers cannot both replace Danish imports; it must be one or the other.

I would now like, briefly, to touch upon the question of dairy produce. Everybody is aware of the present very low prevailing prices, which are mainly due to the competition among the Dominions for markets. The Dominion Governments of Australia and New Zealand are maintaining high home prices in order to allow low export prices. The Press is announcing, as I see by the "Times" of 27th May, that Canada proposes to set up an agricultural exports board with the avowed object of subsidising sales of agricultural products. I am glad to see that the Minister of Agriculture is here, and I hope that he will give this question his attention. I believe that the British Delegation must take up this question in the interests of the British farmer. I am sorry that the hon. Member for Cambridge (Sir D. Newton) is not here, as I should like him to give his help to the Minister when the occasion arises. There is no doubt that the British farmer cannot compete with dumped Dominion produce any more than he can with dumped produce from any other country, and I hope that the Government will be firm in insisting that, as a condition of any preference given to agricultural products which compete with the produce of British farmers, the Dominions must abolish the artificial lowering of the prices at which they export. The interests of the British farmer will require as jealous a consideration on the part of our delegation as the Dominions are determined to give to their secondary industries.

I have no doubt that the delegation will adequately discharge its very difficult and arduous responsibilities. For the sake of Great Britain itself, independently of the Dominions, it must strive to prevent such a result from Ottawa as a fall in world prices, because the interests of Great Britain are bound up with those of the world outside the Empire. Such a fall would greatly imperil the prospects of the future commercial preponderance of our own country, and, if the commercial and industrial strength of Great Britain were sapped in any way, would not the Empire be very much impoverished by the loss of our own world trade?

I believe that we can achieve more enduring unity by making common cause in the interests of the world at large than by striving to hold the Empire together by such methods as we are using, or are told to use, towards the Irish Free State to-day. How many of our Protectionist friends who talked so glibly about the tariff weapon thought that the first country against which we should use it would be one of our own Dominions? I wonder whether Empire unity lies that way. May we not some day see one of our Dominions adopting the converse of our attitude towards the Irish Free State, and demanding more favourable trade preferences in British markets as a price for remaining within the Empire? The bonds of Empire to-day should certainly be strong and firm, but they should be as light as gossamer. Once they were made mercenary, they would chafe, and we should constantly be hearing the clang of the chain. Only as late as the 27th February, the President of the Board of Trade, speaking at the British Industries Fair, said: Highly as we prize the privileges we enjoy in the markets of our kinsmen and fellow Britons beyond the sea, and the extension of their opportunities here, we are also anxious not to lose any opportunity of strengthening our trade relations with other countries. In this House, on the 9th February, in attempting to defend the Import Duties he said: How are you going to negotiate if you do not negotiate with duties which are already imposed? …. I prefer, as a negotiator of some experience to say, 'Here is a schedule of duties which means business. Lower your tariffs, and we will lower ours.'"—[OFFICIAL REPORT, 9th February, 1932; col. 703, Vol. 261.] 8.30 p.m.

The President of the Board of Trade will be a distinguished and most important member of our delegation to Ottawa, and I hope that when he made these two statements, although in both cases he was speaking in the first person, he was expressing the views of the whole Government and of the leader of its delegation. But how could the President of the Board of Trade negotiate with foreign countries and offer to abandon our duties if we had previously entered into an agreement with the Dominions to give them a preference on these same articles? His hands would be tied. I beg the members of the Ottawa Conference who represent this country and who go out from this Government not an any account to tie any dangerous knots at Ottawa. There is, indeed, a number of things that should not be done there, but there is a greater number still that should be done, and I feel that certain of them will be done. I am glad that the Government of India will be represented at the Conference. The Indian Legislature is, as we know, very jealous of its authority in matters of tariffs and trade agreements, but it is vital that it should be a party to this great economic symposium. Three out of every four subjects of the King are in India, and the political solution of the problems which convulsively agitate that great Peninsula would lead to an incalculable improvement in their standard of life and an increase in their power of consumption which would result in the immediate alleviation of the economic difficulties which are besetting us and the world at present.

I well remember, as a very young man, going as the guest of the present Governor-General of Canada to one of the first dinners given by the Pilgrims' Club. It was in honour of Lord Curzon, on his return from his period of office as Viceroy of India, and on that occasion he described, in that magnificent phraseology of which he had such a mastery, how he pictured to himself the great Imperial fabric, like some Tennysonian Palace of Art. The foundations are in this country, where they have been laid, he said, and must be maintained by British hands. The great Dominions and historic Colonies are the pillars, and high above all floats the vastness of an Asiatic dome. A fair vision. But the gates, the doors and the windows of this noble edifice must be open for fresh air to penetrate, for the peoples of the earth to come and go, free to exchange their wares in its spacious courts. There must be no stagnant moat encircling it, no unscaleable wall around it. Otherwise, this Palace of Art, this majestic structure, will be nothing but a mausoleum.

Mr. ROSS

The hon. Member for the Isle of Ely (Mr. de Rothschild), having gone round the world in 40 minutes, has reached a lugubrious destination in a lugubrious way. There is no doctrine of such complete negation as the doctrine of Free Trade, and the hon. Member has combined his preaching of the doctrine of Free Trade with a complete ignorance of the subject. He spoke of the Irish Free State being threatened by our tariffs, and at some time in the future putting up tariffs against us. I shall show in some detail later in my remarks that it has already put up considerable tariffs against us.

Mr. de ROTHSCHILD

What I meant to point out was that we were threatening, or were told to threaten, the Irish Free Sate with retaliatory duties, or with duties that would exclude the Irish Free State from the Empire as not being a Dominion, if the Irish Free State does not adhere to its contract. That was the point that I was raising, and not that it was erecting tariffs against us. The hon. Member knows perfectly well that, if there were a duty on eggs at the present time, it would hamper the Irish Free State, and that is a weapon which it is proposed that we should use against Mr. De Valera.

Mr. ROSS

I am afraid that the hon. Member is going to start all over again. If he will listen to me on Irish tariffs, he will find out much more about them than he now knows. It is depressing at this time to find one who is in the best sense of the word so good an Imperialist, although a member of the Socialist party, as the hon. Member for Rothwell (Mr. Lunn), so unenthusiastic about the fine ideal of building up a world within a world in the British Empire, and of getting a well-articulated group of nations. I should have thought that that was an idea that would appeal to him, and that he would not have sunk back into the slough of timidity and woolly internationalism which is the characteristic attitude of Socialist Members as a whole to such problems as this. At all events, one thing has come out of the present Imperial developments. Whether we are a Dominion, as some people say we are, or not—that is an academic point—we now enjoy an equality with those political entities that are known as Dominions and have been for some time, and that, in approaching any solution at Ottawa, it will no longer be a question of the greater authority of the United Kingdom having to be balanced by a greater material benefit to the Dominions. We can now approach the problems that interest us on terms of perfect equality and comradeship.

The Imperial tariff question is one of great interest to me and those who come from my part of the country, because I am one of the six Members in this House whose constituencies possess a land frontier with a Dominion. We have a border 200 miles long in Ulster, and I propose to bring back the Debate to what I think is the more usual line of a Supply day—the discussion of things as they are rather, perhaps, than things as they should be. There has been an attempt to alter the age-long lines of trade by our neighbours the Irish Free State. It is a policy which, of course, has its political motive. The political motive of their policy against the United Kingdom is known to all, or should be. But I wish to get as far away as I can from the political side of the question and to deal with its actions and reactions. Even before 1932 the Free Trade portion of Ireland, as it then was—Northern Ireland—was having duties put up against it by the Irish Free State. There were duties on almost everything, varying from 33¾ to 50 per cent. There was a preference certainly, but it was difficult to re- cover. The worst feature was the attack on the small trader. I am alluding to the duties put on by the Cosgrave Government. They had a Customs Entry Duty, which was the reverse of preference. It was a duty of 6d. on every article of a separate description. It affected the United Kingdom almost exclusively, because it was placed on small packages sent into the Free State from Ireland or from Liverpool. The foreigner would send his goods in bulk, and he would be unaffected. That is a thing that we have had for eight years. Then the duties were so complicated that much was left to officials. I have reason to believe that the officials were instructed to be particularly harsh in their reading of the duties on goods from Northern Ireland. The consequence is that we have had these considerable interferences with the flow of commerce ever since that time.

Not only have we had that, but we have had all sorts of petty annoyances. For instance, the large number of forms that had to be filled in in order to import goods into the Free State could be printed for 9s. a 1,000 in Northern Ireland. In the Free State we could only get them at 22s. 6d. a 1,000, but traders were compelled to use only forms printed in the Free State. Generally, as a consequence of the Customs Entry Duty, the smaller the consignment, the higher was the duty. Hon. Members may wonder why this serious interference with trade did not bring any spirited protest from myself and others who represent Northern Ireland. I will tell them why. It was recognised as being part of the price that we had to pay for living under the Union Jack. This was at that time a Free Trade country, and it was not possible to take any retaliatory measures. The consequence of this was that the whole of Northern Ireland has been very anxious to get Protection.

Now that Protection has arrived, what is the position? There was an undertaking that no duty should be put on against the Dominions until after Ottawa. That has been alluded to by the right hon. Gentleman as a gesture on our part which would be reciprocated. How has it been reciprocated by that Dominion with which we have most to deal? It has been reciprocated by the most violent tariff offensive that any community has ever directed against any other community with which it is in political association. We have had duties raised in large numbers. We have had over 40 additional duties put on. I asked the Secretary of State in May as to these duties, and I was given a large number. I asked him again in June what further duties there were, and it would have cost over—100 to have them printed in the OFFICIAL REPORT, SO he asked if he might send them to me. That will give hon. Members some idea of what the response of this Dominion has been to the gesture of the United Kingdom in promising to let in their goods without any duties thereon until the Ottawa Conference. Of course, it is clear that one of the reasons that produced this action was the ingenuous hope that, if they put on a lot of duties now and got to Ottawa, they would be able to say, "Look at the duties we have on against you. If you give us certain advantages, we might take some of them off." I think the Secretary of State is sufficiently astute to see round that artifice.

The present situation is that we have these additional duties creating chaos on the border. There are not only ad valorem duties. They have put on an extra Package Tax. It has been calculated that, in the case of that type of sugar each piece or two pieces of which are wrapped up in paper, on—10 worth of sugar the duty would be—800, because it would be 2d. on every bit. Certainly in some cases, as the result of the ad valorem tariffs, the Package Duty and the Customs Entry Duty, 400 per cent, on the cost of the article is by no means impossible. That is the position as it exists now. There is no doubt, of course, that those inside the Irish Free State are also suffering. They are probably having the worst time of all, because their cost of living is rising steadily. [Interruption.] I am a Protectionist, but I would never urge that we should put duties on things that we cannot produce ourselves. That is what is happening to the unfortunate inhabitants of the Free State in many instances.

What is our position in regard to the Free State? Are we to offer trade advantages to a country which deliberately sets its tariff policy against the United Kingdom, and which is so well protected by our honourable pledge to the Dominions as a whole? I have not em- barked upon the more controversial and recent occurrences in Irish policy because it will be more appropriate to-morrow, but solely on the ground of tariff policy I ask hon. Members to consider this fact. The object of the Conference at Ottawa to which we look forward is surely to produce the freer flow of trade between the members of the British Empire. Will it be possible to offer to one country in that body free ingress to all our markets if they persist in doing all they can to block trade in their market? Fortunately for us in our position in this matter there is nothing in the Irish Free State which we cannot get in ample quantities from other sources within the Empire, and the Free State is of no advantage at all as a ground or field for colonisation. If anything, it is over-populated. So that those considerations do not affect us.

I should like to see the Irish Free State have their fair share of trade in this country. In considering whether the country is to consume Irish Free State bacon, as I should like it to do, or Danish bacon, it is impossible to neglect the attitude of those communities towards the trade of this country. We know that in Denmark there is an impost on British trade and that in the Irish Free State, as far as we can judge their policy, they repel British trade as strongly as they can. Personally I have never been attracted by what is described in Southern Ireland as Gaelic civilisation. It seems to imply a state of mind which not only considers it possible to have it both ways, but that it is the inherent right for the Gael to have it both ways if he wants to.

The people in that country, I think, will soon find themselves up against the hard facts of real life in a way they have not experienced before. They will see that there are other views than their own, and other interests than those which they put forward. I only hope that they will be advised to try to get on in a world, which is difficult for all of us, by being reasonable neighbours as we would be to them. I think that otherwise the representatives of the United Kingdom will find many ways of improving their situation vis-a-vis the Irish Free State which one would be reluctant to see. I agree with the hon. Gentleman who has just spoken from below the Gangway that one does not wish to have any kind of economic war between communities in the same system. I should regret to see it break out, but the policy as it exists at present will lead in that direction absolutely without any possibility of escape unless it is very considerably altered.

Earl CASTLE STEWART

The Ministers who are attending at the Lausanne Conference have a difficult enough task in dealing with War debts, which amount to some £2,000,000,000 or so, and involve annual transfer payments in the neighbourhood of £100,000,000. But the task of the Ministers who go to Ottawa will be very much more difficult than that which has to be fulfilled at Lausanne. There Great Britain will be a creditor country, which is owed by the rest of the world, on capital or loan account, a sum of something in the nature of £4,000,000,000 on which the transfer payment and interest amount in a normal year to some £200,000,000. A large part of the money owed on that account is owed by our Dominions and our Colonies.

One of the subjects which must be discussed at Ottawa before any policy on tariffs or quotas can be made effective at all is as to how existing interest payments can be made by debtor countries, and whether the present trade policy of this country is adapted to facilitate payments by debtor countries. Our trade policy at the present moment, as I understand it, and I think it has been so for a generation past, is to desire to build up a favourable balance of payments. Before the War we were able to build up a position in which the favourable balance was as much as £200,000,000 in a year. At the same time it has not been our policy to accept payment in gold because that would have blocked the world's monetary system. What we have done has been to take interest payment clue to us on our favourable balance and re-lend it either to the Dominions or to foreign countries. That might fairly be described as a policy of compound interest. If you take the interest payment in any one year and then re-lend it abroad you are in fact re-lending compound interest.

I believe that that is the fundamental factor to-day in the trade depression throughout the world, for will the Committee consider for a moment what a powerful engine compound interest really is? I asked a friend of mine in the House the other day whether he had any conception of the power which compound interest has as an engine, and whether he could tell me roughly what he thought, say, a penny invested at 6 per cent. compound interest would become in amount if it had been invested at the beginning of the Christian era. A penny is not a large sum. Invested at 6 per cent. at the beginning of the Christian era the general answer I got was, "Oh, it may be £1,000,000,000 or £2,000,000,000." In fact, so powerful and tremendous is the weapon of compound interest that the actual sum is almost past belief. It is ingots of gold the size of the earth arriving at the rate of one a second over a period of three hundred thousand million years. That is the tremendous power of cumulative compound interest.

That is our trade policy to-day. Our trade policy is not one based on a penny invested at compound interest; we have £4,000,000,000 invested which before the War was accumulating at the rate of £200,000,000 a year. I would not like to go into an era of the length of the Christian era but at the end of the century it would involve a capital payment owing to this country of no less than £500,000,000,000, and an annual interest payment of £26,000,000,000. When one realises that we are not the only creditor country, and that the United States of America and France, the other great creditor countries, are probably owed on loan account as much as we are, one can see that by the end of the century,, if we and they pursued the trade policy we are all pursuing to-day we should have accumulated at least double the amount. That is the real crux of our policy, which must be examined either before we go to Ottawa or when we get there. In connection with the private accumulations of wealth, we have discovered that it was disastrous to accumulate private fortunes at compound interest, but we do not seem to have discovered that fact yet in our dealings with international or inter-imperial trade. In this country a private individual named Thellusson attempted to accumulate his fortune on compound interest, but a special Act of Parliament was passed to prevent those accumulations for a period longer than the life or lives in being, and 21 years thereafter. In addition, modern society has put on Surtaxes and Death Duties to prevent great accumulations of wealth; but there is nothing of the nature of Surtax or Death Duties in regard to the compound interest policy internationally.

The only barriers that have prevented these vast accumulations from becoming absolutely insupportable and intolerable in the past have been the very barriers which the world wants to break down—wars—following wars countries have repudiated, as Germany and France did in the Great War—ordinary repudiations or, so to speak, national bankruptcies, where a nation defaults, or cannot pay, or asks for a moratorium. Then there are the bankruptcies of individual companies operating in foreign countries or in the Dominions. These have been the forces up to date which have prevented enormous accumulations in one country of the vast interest payments that have to pass through the channels of monetary mechanism and through the channels of international or imperial trade. The world does not wish to follow the path of war in settling these vast international debts, nor do they want to pursue the policy of repudiation. The number of committees that have been set up recently to follow events in Chili, Brazil or Mexico is clear proof that the modern investor does not particularly favour repudiation. But our trade policy, as I understand it, the classical trade policy of this country, which is to re-lend abroad every year the interest that we receive from abroad, does drive these countries into the very position in which in the end, they must, I think, repudiate, because the sums become larger than they can possibly pay.

One asks the question: Is there no means which the Ottawa Conference can devise to avoid this difficulty? These vast payments are absolutely clogging the new production that the world ought to be making now. We might be paid in gold or in commodities. Strictly, we cannot be paid in gold, because we should have to re-lend it on compound interest, and the difficulty would again arise. We could be paid in two commodities, firstly, those which may be called perishable, which are consumed and the debt is paid. That would be the best form in which we could accept payment. Take such perishables as meat, wheat and so on. But we are anxious now to develop in our own country the production of those commodi- ties. Even if we were to receive from abroad far more than we are now receiving of perishable commodities, it still would not enable either the Dominions or those foreign countries to meet their liabilities to us. I believe that in the end we shall have to face this situation—either they must to some extent repudiate by cutting their interest rates or they must repudiate altogether, or we shall have to find a form of payment which they can make to us, and a form which is not in perishable commodities.

The only thing that I can think of is that the great creditor countries for a time will have to pile up within their own country non-perishable commodities, such as metals of various kinds, anything which is non-perishable, take them in stock and store them. I believe that is the only way in which they can do it. That would be analogous to what happens in time of war. In the old days of war the victorious country took from the vanquished country a valuable piece of territory, possibly containing mines. We no longer do that. We do not take territory, but what we could very well do would be to take the products of mines and accept them as a capital payment. Every year we are exhausting our own coal mines. Every year there is a capital asset which is vanishing. The only thing that we can do is to let these foreign countries and Dominions, who have difficulty in paying what they owe us, to pay us as I suggest on capital account any non-perishable products that they may be able to pay, so that we can store them. If we still pursue the trade policy of re-lending at compound interest there can be no solution other than repudiation.

9.0 p.m.

Many speeches were made during the Finance Bill on the question of raising the price level. No doubt that is a question that will be discussed at Ottawa. In many of the speeches that were made to-day reference was made to the silver question. I have some personal interest in that matter, because I am connected with those who mine silver and other metals, but what I have to say is not of necessity anything which is said merely and solely by those who are interested in the production of precious metals. In any case, as the House knows, the vast bulk of silver that is produced is produced from lead mines. Therefore, people are much more interested in the price of lead than in the price of silver. In regard to silver, I would suggest that the Government might take action even before the Ottawa Conference if they could induce the Indian Government to give a lead to the world on this matter. If the price of silver could be raised slightly there is not the slightest doubt that it would greatly improve our trade in India and the Far East. That is a matter that has been disputed by those who have trade connections with the East. Therefore, I venture to quote from the Report of the Commission which was recently sent to Hong Kong to inquire into the Hong Kong currency. In regard to the question whether or not the value of silver has an effect on our trade with the Far East, the Report says: If, for example, the Straits Settlements dollar had remained on a silver basis, the dollar prices of Malaya's principal exports, rubber and tin, would have remained much steadier than they have been in recent years, and the contrast between the high values of the post-war boom and the low values of the present slump would have been much less pronounced. Similarly, Indo-China's rice crops would to-day be worth nearly as many piastres as they were two or three years ago instead of little more than half as many. That is from the report of a commission which was sent to Hong Kong quite recently.

There is one other way in which the fall in the value of silver has affected our trade in the Far East. The figures of our total export trade for the years 1923 to 1925 were 27 per cent. greater than in 1930. That is to say, that by 1930 the fall in our total export trade had been 27 per cent., but the fall in our trade to China was 52 per cent., to Hong Kong 35 per cent., and to India, 40 per cent. In the case of these three, China, Hong Kong and India, there was a vastly greater fall in our export trade than in our export trade to the world as a whole. Those figures cannot be explained on any other basis that that the fall in the value of silver profoundly affected our export trade to the Far East. The suggestion I make is that if the Indian Government would announce now, or at the Ottawa Conference, that they are prepared for one year to withhold their sales of Government demonetised silver, it would be a lead which the rest of the world might very well follow. A truce declared by the Government which has been the principal seller of silver—it was Great Britain and India which started the sale of Government demonetised silver, followed by France and Indo-China—would be a lead which would be readily followed in the United States and France. The British Empire, according to the latest figures of production, has a greater production of silver than the United States of America, and accordingly we have an interest in this matter; but I think that the lead should be given by the Indian Government, if it is given by anyone.

I was glad to hear the Secretary of State say that we must not be unmindful of our own industries, and that he did not omit agriculture. But he did not mention the one word I should like to have heard him mention, and that is beef. All through our discussions on the Finance Bill and yesterday and to-day we have heard about pigs and milk and mutton and lamb, but beef has never been mentioned. I take it, and I hope, that whenever negotiations are opened for the restoration of agriculture within the Empire beef will not be forgotten; and more particularly the home producer of beef in this country.

For the last five years I have gone about the country working on behalf of an organisation under the leadership of the Noble Lord the Member for Fylde (Lord Stanley) and I have come in contact with the youth of the country. The organisation for which I have been working, the Junior Imperial League, has about 2,000 branches and probably 250,000 members, and if there is one thing in which they are taking a greater interest than any other it is in the development of inter-Imperial relationships and Empire trade, and they are looking to the Government and to the Ottawa Conference to do something in laying the foundation of an inheritance for the future. In the meetings I have held no question has aroused greater interest than the development of the Empire and the Conference that is to take place at Ottawa, and I am positive that if the National Government elected on a national vote can lay the foundation stone of an Imperial building the younger generation of this country, when they come to this House and take our place, will be ready and willing to lay the coping stone of that Imperial building which we hope the Government will commence this year at Ottawa.

Mr. CHARLES BROWN

The Noble Lord the Member for Harborough (Earl Castle Stewart) was very frank when he was talking about the investment of small sums becoming colossal sums at compound rates of interest, and I have no difficulty in understanding his attitude towards the present economic system; but he must bear in mind that it leaves the great mass of the people in relative poverty. The hon. Member for Londonderry (Mr. Ross) took the hon. Member for Ely (Mr. de Rothschild) to task because he wandered around the world in his speech. The hon. Member for Londonderry could not leave Ireland, and if his attitude of mind finds any parallel in the attitude of statesmen from other parts of the Empire, one Dominion against the other, there is not very much hope of anything substantial coming out of the Conference at Ottawa. The Ottawa Conference is a fascinating theme to anyone who is interested at all in the world's economic life and in the economic problems of the age in which we live. One of the questions referred to at the last General Election was Empire Free Trade and how it could be implemented. I listened to the speeches of the right hon. Member for Sparkbrook (Mr. Amery) and the Noble Lord the Member for Horsham (Earl Winterton) when they took the Secretary of State to task with some degree of surprise, because I thought that the Secretary of State had made considerable progress recently and that ho had gone a very long way in the direction which these two right hon. Gentlemen desire the country to go. Indeed, the Secretary of State used with great facility the stock Tory arguments in regard to tariffs and Protection. They slipped off his tongue quite easily, and I thought that he had been very well educated and that hon. Members opposite, the Protectionists especially, were making a very good job of the Secretary of State.

I am indeed very much interested in the question of building up the Empire into an economic unit, but in regard to one or two matters concerning I am very much troubled as to what is to be the ultimate outcome of such a policy. The Secretary of State this afternoon talked to us about this group of free nations that we call the British Empire, these autonomous nations. He painted a picture of the Empire and one is very interested when one hears a description of that kind. He told us that the Conference at Ottawa is the first Conference of a definite economic character to be called. The component parts of the Empire have political autonomy, and it seems to me that when you embark on this task of welding the Empire into an economic unit you are as likely to create frictions as you are to solve problems, and it may very well be that this policy of attempting to build the Empire into an economic unit, if it is not carefully handled, especially under existing conditions, may result in the political disintegration of the Empire. I see that an hon. Member opposite shakes his head. But let me come to my main point.

If you are to make a success of the policy adumbrated in the various speeches we have heard to-day there must lie behind that policy careful planning, planning of production, planning of distribution, not for one nation but for Empire; and it is because in the policies that you seek to pursue there will be no planning that there is very great danger indeed of bringing about a political disintegration of the Empire. Why do I say that? Because the ideas of hon. Members opposite seem to me to move along orbits in which there is no room for the development of machinery for the social control of production and distribution, which are essential if you are not only to have a planned State but a planned Empire.

All that the right hon. Member for Sparkbrook sought to convey to us by the policy which he proposes to carry out at Ottawa, was that we might make trade move in what he called Empire channels more freely than it does now. [HON. MEMBERS: "Hear, hear!"] Hon. Members cheer, but let them remember that production in the Colonies and here at home is still in the hands of individuals, and that production is essentially anarchistic, so far as one industry contrasted with another is concerned, and so far as one part of the Empire contrasted with another is concerned; and so long as that anarchistic factor remains the funda- mental feature of the present productive system, I am certain that your schemes sooner or later will go wrong. It behoves all who are advocating here the policy of Empire economic unity to be very careful lest they engender economic friction by their policy, and lead to a political disintegration which they will have reason to deplore.

Mr. HANNON

I have listened with great interest to the speech of the hon. Member who has just spoken. He talked trippingly of tongue of the disintegration of the Empire. He did not make the slightest suggestion, in relation to the possible outcome of the Ottawa Conference, how that disastrous consequence could take place. We who for generations have advocated the co-ordination of our Imperial resources are looking to Ottawa with the greatest confidence and hope. Looking back on the speeches today one can only say that the sad and sorrowful repetition of old platitudes which came from the Front Opposition Bench will, we hope, be buried once for all after the Ottawa Conference has concluded. I understand that my hon. Friend the Member for Limehouse (Mr. Attlee) is to close this Debate. He, marvellous to relate, is still attached to the old shibboleths of Free Trade. He indeed will find himself in peculiar plight when the Ottawa Conference has laid the foundation of a new Imperial structure.

In the Debate considerable emphasis has been laid on the importance of wheat and meat in the Ottawa discussions. I want to say with the greatest deliberation that unless at Ottawa we can give to the farmer of this country consideration in relation to the production of meat in his own home land, as against the foreigner, the Ottawa Conference had better not have been held at all. For years and years agriculture in this country has received but scant consideration from British statesmen. I am proud to think that the late Conservative Government and the present National Administration are giving more sympathy and practical consideration to agricultural questions than has ever been given before, but unless we can give to the livestock industry of this country some reasonable measure of protection against foreign meat coming into this country, then indeed the plight of agriculture in future will be hopeless indeed. During several months past we have had up and down the country declarations from all kinds of agricultural organisations as to the hopeless position in which agriculture finds itself to-day. I am certain that at the Ottawa Conference, in dealing with the arrangement of complementary industries in the Empire, opportunities will be found to give reasonable concessions to the primary products of the Empire in our markets. But I believe that the first consideration of the British Delegation at Ottawa must be to safeguard British agriculture, as far as possible consistent with the development of closer Imperial relations.

Agriculture is the biggest industry in this country, and we still maintain on the land a large number of people, farmers and labourers. The industry has the biggest purchasing power in this nation for industrial purposes. If something is not done to safeguard the future possibilities of agriculture, particularly in relation to every branch of the livestock section, I do not know what the future of agriculture in this country can be. To-day in every county in England agriculture is facing difficulties almost unexampled in the whole course of history. Agriculturists are looking to Ottawa with confidence, because they feel that something will be done to give them a reasonable measure of preferential treatment in their own home market. When at Ottawa the great question of complementary production of secondary industries throughout the Empire comes to be considered, there is a very hopeful outlook in the attitude of Canada herself. I see in the Press that the Conservative party in Canada, Mr. Bennett's party, has recently shown the greatest sympathy with a further advance on this question and that Mr. Mackenzie King's party criticises Mr. Bennett for not going far enough. In these circumstances, since Canada is the most difficult element in the future alignment of inter-Imperial relations, there is great hope of a satisfactory solution of our difficulties.

I would like to support the complaint made this afternoon by the Noble Lord the Member for Horsham (Earl Winterton) that forestry throughout the Empire had not received that measure of consideration in the past to which it was entitled. At the Ottawa Conference the question of making the most economic use of Empire-produced timber must be a subject of very vital consideration. My Noble Friend has suggested that there should be some sort of advisory committee of the same kind as that which advised the Minister of Agriculture on purely agricultural questions. Even now, at this late hour, it might be possible to appoint one or two gentlemen who are familiar with the intimate details of forestry organisation in this country to accompany my right hon. Friend to the Conference and, from time to time during the deliberations, advise him on the policy which he ought to pursue.

On the whole we in this country, who have been fighting for Imperial Preference for over a generation, look for ward to Ottawa with the greatest anxiety. We feel that at Ottawa our delegation ought to give leadership to all the other delegations present. We are confident that, with the Lord President of the Council at the head of our delegation at Ottawa, we shall have no fear. He will represent fully and fearlessly the interests of this nation. We must not forget that Great Britain itself is not the least important of the nations to be represented at Ottawa. The interest of this homeland of ours will have the careful and continued attention of the whole delegation. I hope that, with the representatives of our own Government who are going to Ottawa and who, please God, will not be dominated by their Free Trade colleagues in the Government, we shall have a really successful outcome of their deliberations. As the Noble Lord the Member for Horsham said, in spite of the free hand and the mandate, there is grave danger of the delegation being influenced by certain protagonists of the old Free Trade obsession. I hope very much that that will not be the case. I see these Free Traders on the Liberal benches, sitting there from day to day in their blind detachment from the new world in which they live. I extend to them my pity as far as I can, and I pray for their conversion. Ottawa will be of benefit to the world if it will relieve us of these old and wicked obsessions which have so long clouded the minds of many otherwise respectable people in this country.

I hope very much that at Ottawa our delegation will give a lead and will show themselves determined to resist the insidious propaganda by foreign countries. We ought to approach our responsibilities at Ottawa from the point of view of the British Empire alone. We ought not to be carried away by any feelings of sentimental obligations to foreign countries. If we arrive at practical, helpful and constructive conclusions, we can deal with foreign relations afterwards. We should not be slow to denounce commercial agreements with foreign countries if they stand in the way of Imperial unity. Above all, we ought to make the representatives of our Dominions and of the Colonial Empire feel that this Conference is the turning point of our Imperial destiny and that all that is best in the constructive thought and statesmanship of the British Empire will be brought to bear in order to bring a new world, a new hope and a new outlook to all our people.

9.30 p.m.

Mr. ATTLEE

The hon. Member for Moseley (Mr. Hannon) delighted the House, as he always does, with his spirit of confidence and hope. The Ottawa Conference now approaching seems to have quite rejuvenated him. For many years we have looked upon him as a representative of industry but to-day he has reverted to that early period of his career when he organised agriculture in Ireland, and he has come out as a protagonist of rural industry. It is very nice to see him getting as young as this. He charged me with being a bigoted Free Trader. I am not a Free Trader; I am a Socialist. I have nothing to do either with the Protectionist school of the right hon. Member for Sparkbrook (Mr. Amery) or with such Free Traders as those who remain on the benches below the Gangway.

The Debate has been very interesting for two reasons. First, we have had some very well thought-out and original speeches. I was particularly struck by the speech of the Noble Lord the Member for Harborough (Earl Castle Stewart), who struck a new note. I hope that on another occasion he will pursue the line he took to a more logical conclusion, because, in effect, his argument, which was very well put, was a condemnation of the capitalist system. It came very suitably at this time when, according to the Prime Minister, the whole system is cracking beneath our feet and we are in fact in the twilight of the capitalist system. The other feature of the Debate was that there was so little allusion to the speech of the right hon. Gentleman the Secretary of State for the Dominions. That was not really peculiar, because there was so little in it. The greater part of it was a warning of the difficulties and obstacles which beset the path of the statesman who is going to Ottawa. That is rather surprising. There was nothing of the cheery confidence of the hon. Member for Moseley about the speech. He emphasised that he was entering on a very difficult and dangerous task and he showed very little hope of success. The rest of his speech was taken up by platitudes and irrelevancies with a little Imperial sentiment thrown in.

We have not to go by what the right hon. Gentleman said. We have to try to deduce from that speech what is the state of affairs in the Government—not by what he said but by what he did not say. We may be quite certain that no definite conclusion of any sort has yet been arrived at. Obviously he had no cat in his bag or he would have let it out. He was anxious to have something to tell the House and was reduced at one time to reciting the number of people whom he had seen with suggestions during the last few weeks. When he was reduced to that it is clear that he was not very sure of his ground. With all these elaborate inquiries, all these committees, there is considerable room for discussion on this Vote as to what the Ministers really propose and as to the differences in that section of Ministers going to Ottawa.

We have one section of Ministers going to Ottawa and another section going to Lausanne. It recalls the old idea of the double-headed donkey. One part of the animal is facing towards Lausanne and seeking for international co-operation, and the other half is trying to go to Ottawa for economic nationalism. I do not know where is the place of the right hon. Gentleman the Lord President of the Council on the animal. Perhaps it is about the middle. To continue these allusions—perhaps it is this week which makes me think of various racing animals—the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) rode his own hobby horse and took it for a pretty good gallop down the course. But he did not go on the Ottawa course, because that course is full of jumps and ditches and other obstacles. There are all kinds of difficulties there, and it was obvious that the right hon. Gentleman preferred to ride on the flat. But he showed that confidence which seems to ignore all difficulties, and in that respect he was very different from the Secretary of State for Dominion Affairs, who knows some of the difficulties because he has had experience of them.

I sat through the last Imperial Economic Conference and heard some of these difficulties discussed. I am aware of their size, and I wish to remind hon. Members of one or two of them. Some curious assumptions have been made in the speeches to-day. One assumption in a number of speeches was that all our great trade rivals are in foreign countries. But our trade rivals for the most part are the industrialists of our own Dominions. There is no good ignoring that fact. The Dominion Ministers are perfectly frank about it, but hon. Members like the right hon. Gentleman the Member for Sparkbrook always seem to suggest that the Dominions are holding out their hand to us with wonderful favours, that we have only to go in and take those favours, but that we will not do so because we are perverse. Everybody knows, however, that a Dominion Minister has to look first to his own interest in his own country. We hear speeches here from hon. Gentleman like the right hon. Gentleman the Member for South Molton (Mr. Lambert), who was once a pillar of Free Trade, and is now a pillar of Protection, about British agriculture being forgotten. But there is a difficulty when you come to talk with Dominion Ministers, because every Prime Minister or Minister of Commerce, or whatever he may be in a Dominion, has this task—he has a particular commodity for which he wants to find a market, and the trouble is that he always finds a lion in the path when he wants to enter a market. New Zealand, for instance, wants a market for its butter and dairy products and so forth, but there is a lion in the path, and a very substantial lion too—the hon. Member for Moseley (Mr. Hannon).

Mr. HANNON

I am not a lion in the path. With great respect to the hon. Gentleman, I have advocated the sale of New Zealand products in this country, and, if I could do so, I would put such a tax on foreign products as would give New Zealand a substantial preference in this country.

Mr. ATTLEE

Yes, but only after our own home butter and other products. That is the lion in the path. You find the same thing when you talk with Ministers from any of the Dominions. They mostly belong to the school of politics represented by hon. Gentlemen on the back benches opposite. They are economic nationalists, and they intend that they should come first. As a matter of fact, with regard to particular commodities which we should like to sell over there, we are told frankly that, although there is a preference to this country, the tariffs that are put up are intended to be large enough to keep out those commodities. It is exactly the same with our own agriculturists. They know that it is just as unpleasant for them to be cut out by New Zealand butter as by Russian butter or any other kind of butter. That is a very serious difficulty, because it narrows the scope within which you can get these preferences.

Then there is the assumption that the British Empire is composed of units which are mutually complementary. That is not precisely true to-day. It was much truer in the early days of the Empire before the economic nationalism of Australia and Canada had developed. We are also apt to forget that this country is not a sufficiently big market to take the whole of the main crops or products of the Dominions, and therefore they have to look to foreign markets. I know it is very hard for many hon. Members to realise it, but if you buy goods from foreign countries, you have to pay for them somehow or other, and, if you have not gold, you have to pay in goods. The fact that we cannot take the whole of the wheat or the whole of the wool, for instance, produced in the Empire means that it has to be sold elsewhere, and, therefore, the Dominions must have foreign goods coming in to pay for those products. That, again, curtails the field with which you have to deal.

Let me take three points which are very important in this connection. First, industrial, or, I should say, business organi- sation, overlaps national boundaries. We have the British Empire with the King Emperor at the head of it, but there are other monarchs in the world. There are soap kings and nitrate kings and chemical monarchs and so forth, and unfortunately they parcel out the world without the slightest regard to the sentimental wishes of the inhabitants of the British Empire. That is a practical difficulty. I had a conversation at the last Conference with a Dominions Minister who told me that he wanted to do business here, that he had raised money on the market here and thought he could buy the goods which he wanted in this country. But he found that he could not buy them here because arrangements had been made with American people in the trade concerned and that Dominion market had been handed over to them. There are a great many such agreements and that is one difficulty which has to be surmounted.

The second point is that capitalism is international, and we have to consider the control which is exercised by foreign capital in the development of the Empire. For instance, you have 4,601,000,000 dollars of United States capital invested in Canada which makes Canada, to a certain extent, in the capitalist world, a dependency of the United States. That again is a thing that will cut across your sentiment. The Secretary of State for the Dominions has told us that he was going to get over all these difficulties eventually, that love would find the way, but it will be very difficult to do it against the business interests and connections. Quite apart from that, we have to consider as to how far we really are complementary in the exact kind of goods that we produce. Take the matter of Canada and the United States. You have an enormous industrial unit like the United States producing goods for a people whose habits of life are very much the same as those of the Canadians. Probably Canada is infested with the American film, and the film is a very powerful weapon for directing the kind of purchases that people should make. It forms their habits

It is very difficult for us to get into a market unless we produce exactly the right thing. There again is a complaint which I have often heard from overseas people, and that is that we do not pro- duce the right thing and that we do not market in the right way. I have been told over and over again that we do not take up the Preferences that we are already given. I would like to ask the right hon. Gentleman to tell us whether at the Conference there is going to be any consideration of marketing and salesmanship. I dare say hon. Members have read the talk at the advertising conference about selling British goods. Sir Francis Goodenough, who is one of the biggest authorities on the subject, warned us once again of the fact that we do not sell the kind of goods that people want. You can make every kind of tariff arrangement you please, and give every kind of Preference, but if you do not sell the goods that the people want, they will not buy. That has been our trouble over and over again, and I should like to hear how far the actual political conversations will be supplemented at Ottawa.

I think those hon. Members who have put forward the point that you have to consider our home producers are absolutely right. If you are going to have such an organisation as is proposed, you ought to consider on an orderly plan how much production you want in this country. But I am very doubtful whether the Government have a plan, whether they have considered taking this country as an economic unit and how much they want to devote of the capital and labour of this country to the production, let us say, of meat, or poultry, or eggs, or cheese, or butter. Have they really gone into it at all to find out what they mean by an economic plan for the Empire? As far as I am aware, we have yet to have a speech on an economic topic from this Government which has been anything more than a series of departmental statements. We have never had an exposition of economic policy from any Front Bench Minister that dealt with anything more than merely ephemeral matters or matters of detail.

We do not know the view of the Government in regard to the future of this country, and I say that if you are going to go into this Conference, you are quite right to say that your planning of this country must come first, and that it has got to work in with the Empire. Equally well, if you plan your British Commonwealth of Nations or Empire, you have to see that it works in with a world plan. I wonder whether there has been any serious discussion in the Government as to how the proposals that they are going to put forward at Lausanne or at the conference on economic matters that will follow Lausanne will fit in with what they are going to propose at Ottawa, because these things are vitally connected. They are most closely connected again with this question of debts, not only war debts, but commercial debts as well, to which the noble Lord the Member for Harborough (Earl Castle Stewart) referred.

That is one of the things that you have to face. The immense burden that is on all the countries that are producers of raw materials in the main is the burden of debt that they have to pay to their creditor nations. I do not know whether it is proposed to scale them down, but we shall be in a very difficult position if, when we have asked for some of our own debts to be forgiven, we are met by the statement that a country is nearly bankrupt through the sums they owe us. It would be very difficult to refuse them. In my view, taking the situation of the world to-day, we should aim at a scaling down of debts and long-term commitments of every sort, if the world is not to stagger down even further than it is at present. That should be considered at Lausanne and Ottawa and perhaps with regard to the question that is to be discussed to-morrow.

I am sorry that in this Debate we have mixed up purely political and economic questions. I do not want to raise the Irish question now, but if I understood him aright, the right hon. Member for Sparkbrook rather suggested that the economic weapon should be used for making the various units of the Empire behave, that we should make a sort of division between the sheep and the goats, that Preferences were not going to be general Preferences,, but separate bargains with those who—

Mr. AMERY

As the Conference is going to proceed by the method of negotiation and agreement, I suggested that the normal rule should be that concessions given to one member of the Empire should be normally extended to the other members, but that that should not be an absolute rule, and that there should not be that extension to those who evidently were not prepared to take part in the policy of mutual agreement.

Mr. ATTLEE

That is precisely what I said. He intends to use the economic weapon with his negotiations at Ottawa to produce political results.

Mr. AMERY

No.

Mr. ATTLEE

Yes, undoubtedly. He wants to keep a strict hand and to say, "If So-and-so does not play what I consider is the game, I shall make him pay." I think that is a most dangerous thing. Already you have had serious difficulties and almost tariff wars between members of the British Commonwealth of Nations over the question of these agreements, and the more you keep whatever you do on the broadest possible lines, the less you are likely to disrupt the Empire. I have always found that the people who break up Empires are the people who talk about Empires.

There was a remarkable omission from the speeches both of the Secretary of State and of the right hon. Member for Sparkbrook, and indeed of almost everyone who has spoken from the benches opposite, and that was an entire disregard of the consumer in this country and of where the working man comes in. We have gradually had piled up a stately fabric of tariff on tariff. At the time when the Government were embarking on this policy, I said we were going to get a four-storey building, with the ordinary tariff, then the various Preferences to the Dominions, then the Preferences for home people on top of that, and then you had to go higher and to give Preferences to your friendly people who would come into a sort of group, and then the whole thing was to be topped by something for the people who were active against you.

This stately fabric, it would appear from the discussion to-night, is to be founded particularly on meat and wheat. In fact, the fabric is going to be built up on the working man's stomach, and I want to know where he comes in. I notice that the same gentlemen who talk about raising prices and who want to have high tariffs and to raise the cost of living, are the same gentlemen who intend to cut down the social services and to cut off everything they can in the shape of communal provision for the workers of this country.

Mr. HANNON

Has the cost of living been raised by recent tariff applications? The hon. Gentleman knows that in the recent tariffs applied under the emergency legislation the cost of living has not been raised by a penny.

Mr. ATTLEE

I only ask the right hon. Gentleman to suggest to his right hon. Friend that when he goes to Ottawa he should tell Mr. Bennett or any of the other Dominion Premiers that he will give them a preference, but that they will not get any better prices as a result—and then see how much they thank him for it. Tell them, "You are going to have a tariff system, but you will have to pay for it," and see how far you get with your bargaining. It is obvious that the real danger in this whole tariff policy is that you are trying to set up an elaborate system which is in fact going to reduce the standard of living of the workers. [HON. MEMBERS: "No!"] If that is not so, I shall be very glad if hon. Members can show from the OFFICIAL REPORT that in any tariff Debate any hon. Member opposite agitated for better wages or mentioned the wages of the workers. There was not one.

Mr. PEARSON

I did when we discussed the wheat quota.

Mr. ATTLEE

As a matter of fact, it has been totally disregarded. It has not been urged on the other side that if this policy were carried out there must be a corresponding rise in wages. There has been talk of what was euphemistically called a rise in world prices, but it all depends whether you are a seller or a buyer, whether you are a seller of your goods or a seller of your labour. I do not know if hon. Members who want a rise in world prices of commodities believe that labour is a commodity and want to raise the price of that too. The second great danger I can see in this policy is the division which is made clear between those who realise that the difficulties that we are facing are a world question that can only be settled by a world conference and agreement, and those who think that we can do anything really effective at Ottawa to cure the world situation. As a matter of fact, Ottawa is not large enough in its scope to deal with the world situation, and it can only be effective if it follows on some reasonable settlement at Lausanne.

10.0 p.m.

We on this side have never opposed the closest possible co-operation between all parts of the British Commonwealth of Nations. We believe that the fact that one quarter of the earth's area, one quarter of the peoples of the world, are brought in to a political community, is a great advantage to the world if it is viewed as a stable unit, as a working alliance with other stable units; if, in fact, it is the basis for unity of the whole world. If, on the other hand, you take the line that the world is to be organised into economic nationalist groups, one the British Empire, one perhaps the United States, another perhaps a bloc composed of Russia and China, and another of European States, and if they are going to fight among themselves and not co-operate, they may lead on from economic warfare to real warfare. We shall judge what is done at Ottawa by whether or not it will raise the standard of life of the people of the world, and whether it will mcrease the ability of the world to consume the results of the productive forces of the world. If Ottawa enables us to do that, and enables us to get a higher material civilisation for all the peoples in the world, good luck to it; but if, on the other hand, it is a mere device to try and save the people who have invested their money in the Dominions oversea, and who fear that they will never get their capital back or any interest, and if this is done at the cost of reducing the standard of life of the British workers, we will have none of it. The right hon. Gentleman the Member for Sparkbrook spoke of a 10-years' plan. I take it that whatever is done at Ottawa will have to be confirmed by this House, and this House has no power to bind its successors. We shall hold ourselves free to scan most closely what is done at Ottawa. We cannot consider ourselves bound by party decisions on party policy which may totally disregard the interests of the workers of this country.

Mr. BALDWIN

I am sure that everyone in the House will be glad that an opportunity has arisen in the course of our business to devote a day to the discussion of some of the problems that face us at Ottawa. I should like to preface my observations by taking note of one or two questions which have been asked in the various speeches which have been delivered before I come more directly to the principal subject of discussion. One question which was asked by the hon. Member for Limehouse (Mr. Attlee) is fortunately easier to answer than, I expect, he thought. He asked what view the Government had of the future of this country. It all depends on the Government in power. I should like to assure him for his own happiness that when he expresses some doubt as to the pleasure which we shall have in one another's company on board ship on the way to Canada, we shall be quite as happy a family as that to which he belongs. What struck me about the hon. Member's speech was this. There were here and there fragments with which I found myself in agreement, but there was nothing in it that had not been present to my mind from the first word to the last. He concentrated entirely on the difficulties, and that concentration on difficulties being a peculiarity of the party opposite, no wonder they were unable to face the difficulties that arose last autumn. We know that there are difficulties—any amount of them. The best way to overcome difficulties is to know they are there and to know what they are, and we are going to do the best we can to overcome them.

One or two observations were made by the hon. and learned Member for East Bristol (Sir S. Cripps). He and the hon. and gallant Member for Pembroke (Major Lloyd George) performed their parts admirably as an Opposition in asking questions. I could not help reminding myself when the hon. and gallant Member for Pembroke said very naively and delightfully that we should give this and that information to the House and that he thought the House was entitled to have it, that some years ago there was made in Europe—not at Ottawa—perhaps one of the most important treaties in the history of the world, which affected the lives and interests of half the. world. We were represented by a great Prime Minister, and I remember that he never told the House of Commons a single word of what he was going to do at Versailles. [Interruption.] Whether a mess was made of it or not, that was the course adopted at Versailles.

I would like to refer to one observation which fell from the Secretary of State for Dominion Affairs which interested me and with which I agree. He spoke of the agreements he had made during his industrial life as a trade union leader, and said he never entered into a final conference with employers until he had prepared the ground. That is true, and I think it is worth remembering, and I am sure I shall not hurt the feelings of anybody opposite when I say that no trade union leader has ever done better for his constituents than the right hon. Member for Derby (Mr. Thomas). But it is to be noted that, when he said that, he did not say he carried out his preparations in public; of course, negotiations are private.

The moment the fierce light of publicity plays on any conference the work of that conference is made more difficult a million-fold, and naturally, it is a necessity to have the preliminary discussions as private as possible, or there will be no chance of coming to an agreement when the time comes. It may be of interest to note that Mr. Bennett, the Prime Minister of Canada, said in the Canadian House of Commons the other day that he had no intention of giving any indication of what his Government would do when the time came, or how it would conduct its business. We have not practised that reticence. We have tried to say what we can. I admit that many hon. Members would have liked more and I wish It had been possible to say more, but it is not, and for the reasons I have stated.

The hon. and learned Member for East Bristol interested me. I very much enjoy watching coming leaders of the Opposition learning their task. He spent a lot of his time in digging quotations from my right hon. Friend's speeches made as long as two years ago, that is, six months before he himself became a Member of this House. People who live in glass-houses should not throw stones. I admit that the hon. and learned Member has not yet got a glass-house about him; he has not been here long enough. Give him two or three more years, and he will have a regular Crystal Palace about him. Having come to the House since the last Imperial Conference I think he made a slight error. He spoke with some contempt of the bringing together of business interests in this country and the Dominions, but I am afraid he forgot—no, he never forgets anything, I am afraid his attention had not been called to the fact that it was a resolution adopted by the Conference of 1930 that they should facilitate conferences among those engaged in particular industries in various parts of the Commonwealth; and the Labour Government, as I have been informed by those who knew what went on at that time, certainly had in their minds, among other things, these agreements between industrialists for promoting Imperial rationalisation. I tell him that to cheer him up and encourage him.

My Noble Friend the Member for Horsham (Earl Winterton) has been asking questions, as have many other hon. Members, and I apologise to him for having had to leave the House before his speech, because I am rather occupied at the present time. He raised the question of timber, and asked whether an ad hoc committee might consider the timber interests and advise the delegation before they left for Ottawa. There have been many questions on those lines, and the main point of the answers has been this, that it is impossible for any single Minister to devote himself to any particular interest among the innumerable interests concerned at Ottawa; but if those interested in this question would see the gentlemen who have been delegated by the Government to undertake this work, that is, the trade advisers, they could get advice from them which we think would be useful. I would like to inform my Noble Friend that a meeting has been arranged between the representatives of the timber interests and the British industrial advisers. It has been fixed for to-morrow, and in the course of that discussion doubtless they will get good advice, having stated their case, as to whether it would be wise for them to have a little delegation of their own to go to Ottawa to be in contact with us, in which case of course, as with the other delegations which are going out, they would have to pay their own expenses.

Mr. LAWSON

May I ask if that applies to the coal trade too?

Mr. BALDWIN

It would be difficult for me without notice, as they say, to answer exactly what is being done about that, but as a matter of fact the whole situation as between the Dominions and this country is being studied by experts at this moment. We leave it largely to the interests themselves. If they feel the industry would be advantaged by having special representatives of their own they are at liberty to go out, and we shall only be too pleased to take any advice from anyone competent to offer it to us. There is only one other point. A question was raised by my hon. and gallant Friend the Member for South Padding-ton (Rear-Admiral Taylor) which perhaps I ought to make clear, and that is as to the position of the Colonial Empire at the Conference. I have seen my right hon. Friend the Secretary of State for the Colonies and he tells me, as has been stated to the House, that he is representing the Colonies at the Conference. He tells me that preparations have followed exactly the same lines as those followed with regard to the framing of proposals put forward on behalf of this country, that is consultation with Colonial Governments and with organisations representing producers of Colonial products. As a result of such consultations and study of Dominion tariffs, trade returns and of shipping facilities, proposals have been submitted to Dominions on articles on which new or increased preference would be of value to particular colonies, and Dominions have been invited to consider these proposals and to make their suggestions as to whether and in what directions an increased preference or a new preference would be of advantage to any Dominion. I may add that in nearly all cases colonial preferences are already extended to the whole Empire. New Zealand grants a preference to all colonies, and Canada to nearly all. The Canadian-West Indian agreement is an admirable example of mutual trade between a Dominion and a group of colonies. My hon. and gallant Friend may rest assured that there will be nothing left undone to represent and to further the interests of the Colonial Empire and bring them into close touch with the Dominions.

Now I wish to come more directly to the Conference itself. The great importance of the Ottawa Conference is that it comes at a time when we are definitely at the parting of the ways. It will be impossible for things to be allowed to drift any longer. You have either to advance in the direction of closer fiscal relationship within the Empire or you have to drift apart. There is no question about it. The evolution of the economic world is, I hope, gradually to increase the larger units, and I hope from that that we may see in Europe a great change in the future, or it will be all up with European trade. If the Dominions do not get into this closer economic union with us, I need not in this country and with this audience point out to those who value the Empire and the traditions of our race, the directions in which the economic dangers would lie between each different component part of the Empire. That is the first reason why at this moment the Ottawa Conference is a conference of supreme importance again for this country. I warn the House that in what I am going to say I shall not fail to put the British point of view, which I think is sometimes slurred over but which should be clear at home and should go out to the Dominions. After all, the component parts of our Empire are never going to get closer together by avoiding or slurring over points of difficulty or by not presenting our case fairly.

I come to the second point. Taking a long view, it is essential for our future economic health and prosperity that we get into closer fiscal relationship with the Dominions, and that the Empire keeps together. I need not elaborate that; we all know that it is a question of almost the only expanding markets in the world in which we can get preferential treatment, the only countries in the world in which, as has been said in the Debate to-day, we may hope to see a population of British stock increasing and in which, when things get better, we may hope to see many of our own people finding new homes. Then there is another point: for a long term policy, I believe it to be essential for us economically. It is perfectly true that in many ways it is more difficult. I am going to use that word two or three times, and I qualify it by what I said at the beginning, that difficulties are made to be overcome, if you can. We are going out with a will to overcome them. The difficulty is that we are meeting at a time when, just as in this country we are introducing a change in our fiscal system, the whole world's conditions have added enormously to the difficulties of making progress. On the one hand, we must not let world conditions overshadow what we have to do at Ottawa, but, on the other hand, we must have them in mind, because they do not affect only us—they affect the Dominions.

The initiative in the calling of this Conference has been taken by Canada, and Canada has provided the agenda. That agenda, as hon. Members know, is being scrutinised now by ourselves and by the various Dominions. I wish it had been possible to lay it to-day, but I can tell the Committee quite frankly that it is a tremendous agenda; there is hardly a subject which anyone could think of that is not somewhere or other on that agenda. That leads me to the point that, that being the case, we must, in the first days of the Conference, be selective. I think, and I believe that the Committee will agree with me, that we ought to concentrate first on whatever subject will, in our opinion, have the most direct effect on trade revival. Trade revival is what we all want. We always come back, at home, to the employment of our people, and, after all, whatever policy we may carry out, whatever policy we may advocate—I have felt this in the last 10 years—the real ultimate test of that policy is what it is going to do as regards the condition of our own people, and on that test we shall be judged. If our work be good—and we hope and believe that our work at Ottawa, and our fiscal work in this country, will tell, and tell happily and favourably, on the condition of our people before the time is due for this Government to lay aside its power and appeal to the country—if that be the case, then the system we are building up will stand; and, whatever the hon. Member may say about upsetting what we may do, no one in this country will touch it if it is justified by events.

Time at the Ottawa Conference must be limited—I mean by that that we are not going to sit until Christmas; and, having regard to what I have just said, if real progress is to be made on the vital matters we must avoid overloading. The necessary limitation that is involved brings me directly to a point on which my right hon. Friend made some observations, and I think that my right hon. Friend the Member for Sparkbrook (Mr. Amery) also spoke on it. That is that it emphasises the need for continuous consultation. I lay great stress on that. There is a number of subjects so technical and so detailed that they will call for other methods than discussion in the Conference, or, let me say, complete discussion in the Conference; and so it is essential, I think, before we leave Ottawa, that we should have strengthened and improved whatever methods now exist for continuous exploration. We cannot afford to have any time when we lie fallow in these matters. We have to press on with all the subjects, it may be for the next year, two years, or three years, until we have accomplished the great task that lies before us, and proposals for the kind of machinery to effect this object must be discussed at an early period.

Then I spoke of the conditions of world trade as affecting the Empire as well as this country. Discussion of promoting means of trade within the Empire—an all-important question—must not blind us to the other side of it. I have reason to suppose that some of the Dominion Governments share my view on that matter, because it is not the United Kingdom alone that is affected by world conditions—we all are—nor by the need of world markets. We all are. Wheat and wool have "been quoted by several speakers. The exportable surplus is larger than we can handle, and it has to go out into world markets. You cannot ignore these considerations. If the United Kingdom, importing these commodities had to pay higher prices, it could not fail, pro tanto, to have an effect upon the economic structure. You have to balance in many of these things because, supposing foreign wheat and wool were excluded from our markets, or made more difficult of entry, of course they would go out into the markets which the exportable surplus from the Dominions was trying to get into, and a certain amount of dislocation would be bound to occur. It is a very delicate question to see where the balance of advantage would lie for the producers in the Dominions. There will be, and there must be, many cases where this kind of truth holds, that is to say, where there might well be considerations that have to be weighed regarding the Imperial internal trade and the Imperial external trade. I mention that, obvious as it is, just to show those who, perhaps, have not come face to face with these problems, what considerations force themselves upon you when you get close to doing business.

I would make one observation here which shows the difficulty of debating these subjects in any detail before you get to Ottawa. The hon. and learned Gentleman the Member for East Bristol quoted perfectly fairly, a passage from an Australian paper as to what some member of the Australian Parliament had said about an Imperial wheat quota. It is very difficult to know, in quoting from a newspaper, how perfectly accurately the passage may represent what was said, and it is also not always easy for us to know whether the Member of Parliament who made the statement was in a position to know whether it was accurate because, with profound respect to all my hon. Friends, I have heard statements made in this House which I should be sorry to see quoted at Washington as representing the accurate view of the British Government. We will leave it at that. The fact is that we shall explore the possibilities of an Imperial wheat quota. That is a very different thing from saying that we are going to impose it or that we have settled it. This matter could not be settled without discussion with the particular Dominions concerned. It is by no means an easy problem, but it is one which is well worth exploring.

10.30 p.m.

Whether we like it or not, the real and the only salvation for the primary producers is an improvement in world prices. As long as prices are sagging away as they are to-day, there is hardly any thing conceivable by the wit of man which can convert the almost desperate position of many countries in the world into a position where they can hold their own, and become profitable consumers of the manufacturers' goods. But the surest way, although not the spectacular way, of effecting this is by an increased confidence in world trade, and so we have to ask ourselves, What can Ottawa do to revive trade? If we can help to revive trade in the Empire—and this answers the question of the hon. Member for Lime-house—we shall then be making a tremendous contribution towards reviving trade in the world. Until you get revived trade throughout the world, I have never maintained that such a thing as isolated prosperity exists. In so far as international action may be required for the purpose of world trade revival that, of course, is outside our scope. We must hope that something may come of the Conference, the composition and terms of which, I believe, were under discussion before so many of my colleagues went to Lausanne. In any ease, that cannot take place until later in the year, but there is much that we can do.

International trade has been very much strangled in recent years since the War by the enormous increase in tariffs and the sub-division of countries in Europe making for smaller economic units. There is all the difference in the world between a careful and discriminating Protection such as we are introducing in this country and the kind of wild Protection that acts almost as prohibition, and prohibition indiscriminately utilised against the countries of the world. On all sides these barriers have been rising, and the imposition and heightening of tariffs in one country leads to a similar practice in another country, and we have to remember, as I said two minutes ago, that there is no such thing as isolating yourself from world depression. Countries have tried it, notably the United States of America. There you have a country which tried to keep out the goods of other people, which has the largest Free Trade area of the world with a population of something like 140,000,000. They kept themselves away from world influences for a time, but even they could not succeed. They are depressed to-day and disasters have overtaken them, and there is no country in the world at this moment which is suffering more. It may be beneficial from the standpoint of a single country to take measures, as it were, to isolate itself. It cannot be done by all of them, and we must do what we can to break it down.

In my view our Empire is singularly free from the most damaging forms of trade restriction, but there has been a marked tendency of recent years for the heightening of the barriers in our Dominions both against each other and against ourselves. Let me say at once that no one questions their right to do that, and no one questions the right of the newer countries to develop themselves industrially. That is right and proper. I do not for a moment criticise a policy which in different degree we are following in this country to-day. I was very glad that my right hon. Friend the Member for Sparkbrook, in his most interesting speech, put his finger on a point that I have felt too, for some time as I have considered these great Imperial questions. He may not be perhaps always as ready as I am to think that our country is sometimes right. However, I was very glad to hear him say what he did.

I do think, without specifying names, that at times and in places in the Dominions this policy of exclusion, of trying to develop industrially, has been pushed farther than is helpful to the Empire or to the Dominion that does it. The results of such action are not confined to the country that practises it, because it lessens the purchasing power of their own people, and that lessens their power of taking goods, quite apart from their tariffs. Therefore, I think it would be a perfectly proper subject of discussion among the statesmen from the various countries, as to the limits within which such a policy of development is useful and proper. After all, it is but a question of degree. I think most people in this country, and I am sure that a great many in the Dominions would agree with this, that where a great output is required for economical production, where the demand for an article is small and where the consumer wants in a certain class of article constant variety and change, in those cases it is not economically profitable for any country, Dominion or otherwise, to try to make them themselves, if they can import cheaply and, by importing cheaply, improve the volume of their own trade. That is a matter that I think might well be discussed among the statesmen who will be present.

We shall ask them to consider whether or not in their own interests as well as in ours they may not in some directions have gone a little too far and a little too fast in industrial development. We cannot hope to buy what we would like, and if we find that we cannot export sufficient goods to pay for it all, the increases of duties in cases like that interrupt the free now of trade. Having made these observations, I think that at this point I can state, in a word, what in my view our policy is. I have written it down for the purpose of greater accuracy. The general objective is freer trade or, if you like the phrase better, reciprocal Free Trade within the Empire, or the nearest practicable approach to it. It would be of great advantage to every part of the Empire and a step towards a world-wide lowering of trade barriers and restrictions, which is an essential condition to world recovery. So that it really is within the power of the Empire to do what would be of great advantage to ourselves and give a lead to the whole world, in making trade freer for at least one vast area of the world's surface.

I may remind the House that the principle of Free Trade within the Empire is now embodied, and embodied on purpose, in the Import Duties Act. I want to say a few words about that Act, especially to guard against what we have done being minimised. I hope to show that it is a very important action on the part of the Government. That Act itself was designed to lead up to Ottawa. The whole scheme of the duties is related to greater freedom of trade throughout the whole Empire, and that is the spirit in which we approach the Conference. Had we considered our own interests alone we should not have acted as we did. We have put duties on articles which, if we had been consulting our own interest alone, we should have admitted free. There are duties on lead and zinc, and sisal hemp, which may react to some extent against the interests of our own consumers. We are consumers in large quantities of these articles but we have taken the broad view for the greater freedom of trade and our Dominions to-day enjoy a free entry an absolutely free entry for these articles, which are taxed if they come from a foreign country.

I would say a word at this point about the preferences which have been granted to us. Let no Dominion think for a moment that we are not grateful for what they have done for years without any reciprocity from us, but let them for their part not fail to realise what a tremendous thing free entry is. It is a very different thing from having to get over a tariff wall even though that tariff be comparatively low as compared with the high tariffs against a foreign country. I should like to see our system followed. I believe it is the best for Imperial trade, and I am sure it is the best for the world; and if in the process of negotiation this action of ours should appeal to the Dominions and they see their way to go not all the way but a long way, in that direction I believe that that action will do more not only to help themselves and us, but to help that sick body the trade of the whole world, at a time when it needs help more than ever before. This very favourable position, as the Committee knows, terminates automatically on 15th November, unless some agreement is come to which will enable us to continue goods on the Free List. I will say no more to-night except that I am sanguine that the spirit in which we are entering this Conference will be reciprocated by all those who come to it from overseas, and deeply disappointed indeed shall I be if arrangements cannot be concluded that will enable us to continue, and continue indefinitely, these preferences which we have given in our first Import Duties Act. Our sincere belief is that the Dominions are actuated and will be actuated by the spirit which we have in this country. At all events the chance of a lifetime is before them. If this chance is. thrown away it may never return.

In reply to observations made from the benches opposite, I can assure the Committee that this is a point constantly in my mind—about our own consumers—I prefer to call them our own people, of whom there are now far, far too many unemployed, and the prospects at the moment are none too bright—I can assure the Committee that I have always supported this policy, and that in my mind I believe it is the only way in which we can help permanently our own people. We have to remember that if a revival of the export trade is necessary to us, as it is necessary, the recovery of the Dominions, who are suffering too, depends very largely on the consuming power of our own people here. The whole thing is interlinked closely. If we solve the problem at one end we solve it all through.

I would have liked very much to have added one or two points more, but time is limited. Before eleven o'clock I do want to make a few observations on a question which very much interests my right hon. Friend the Member for Spark-brook and many other Members of the House, and that is the question of currency. Let us remember that anything which we do at Ottawa has to be ratified by this House, and that we shall have plenty of opportunities for discussion in the Autumn. The Ottawa Conference is meeting, not only at a time of worldwide depression, but at a time of grave disorder of the monetary system, and it has been a generally expressed desire that the Dominions and ourselves should confer together, and that we should make clear to them what are our views on these problems. Of course, the most valuable preliminary would be a successful outcome from Lausanne. It is too early yet to say whether that will be accomplished. I am sure we all hope that from the bottom of our hearts. That is a necessary preliminary to better conditions in the world, and a necessary preliminary to better conditions in the Dominions.

We shall have to consider at Ottawa the inter-relation ships of the various currencies and monetary standards of the Empire with a view to promoting conditions most favourable to mutual trade and intercourse. These matters, more than any others it is impossible to discuss with freedom before you get into Conference, but I tell the Committee that we welcome such discussions, and that our desire is to make them, as fruitful as possible. We have, of course, to remember that these matters are within the control of the different Empire Governments, and we should no more attempt to interfere with their free choice of action than we should welcome from them interference with our own free choice. Subject to that, I believe we can have a most useful and profitable discussion that may well; lead to something further. Of course, my right hon. Friend, who has often spoken on these matters, knows, and none better, that the problems of the Dominions themselves are not all similar. South Africa, for instance, would probably hold a very different view from Australia. But the main thing is for us all to get together and to understand each other's viewpoints before we can proceed further.

It might, perhaps, clear the air as it were, if I were to mention four or five points on which we are agreed, and with which there will be a great deal of sympathy in the Committee. There is nothing new about them, for most of them have been alluded to by the Chancellor of the Exchequer, although I do not think they have been put together as I propose to do now. We do not want the exchange value of the pound to rise, and we do definitely want a rise in wholesale prices. At the same time, I should dread any running away of retail prices. We have been exceptionally fortunate—and I put it no higher—in the way retail prices have kept down in this country. A definite rise in wholesale prices and a substantial lag in the rise in retail prices would be the best thing for the people of this country, for a rise in wholesale prices is an essential preliminary to the better circulation of goods. But, in seeking to give effect to this policy, we are constantly in difficulties both from foreign liquid capital seeking refuge in this country and from a fall of gold prices abroad.

We have no intention of returning to gold as long as gold behaves itself as it is behaving. We cannot give definite undertakings as to the future course of sterling prices, and experience elsewhere —in the United States, for instance—has shown the difficulty of one country endeavouring to raise prices. The policy adopted by the monetary authorities in this country has recently been one of cheap money and an abundant supply of money, which will produce an effect on prices in the long run. I am not at all sure that some, at any rate, of the Dominions would not find a plank here on which they might take their stand, but that time will show.

I would like to conclude by saying this. I have been very much struck by the words of good will which have come from various parts of the Committee towards the delegates who have this tremendous task on their shoulders. Even the hon. Member for Limehouse said that in certain conditions even his spirits would rise. I admit quite freely that I have no doubt that in this House there are many Members who honestly believe—and I dare stay it is the case—that if they were to go to Ottawa they could carry out their heart's desire in a fortnight. I give no such undertaking, but I tell the Committee that at any rate we are going out all of one mind and that we have an absolutely free hand. Whatever we may effect must come back to the House of Commons—there will be no secret about it—for its ratification or for its rejection. We shall all do our best. We are quite conscious of the difficulties but we intend, so far as is humanly possible, to overcome them.

I hope, indeed, that we may be able to bring back something as an earnest of far greater things to follow, for I know quite well that this particular Conference can only be the start. It is going to get us, I hope and believe, in the right direction. We shall make progress, I hope and believe; we shall accomplish something, I hope and believe, and I hope that, following on this Conference, steadily, earnestly and continuously we may push forward on the intricate questions that are bound to be left. I hope that next year, or the year after, but before we go out of office, we may have laid for generations the foundations of a system which will bind our people more closely together and which will enable our own people who, after all, are nearest our hearts, to have a better chance of enjoying the good things of life than they have had in these sad years since the War.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.— [Captain Margesson.]

Committee report Progress; to sit again To-morrow.