Commons Sitting of 19 May 1909

Preamble
Mr. SPEAKER took the chair at a Quarter before Three of the clock.

PRIVATE BUSINESS.
South Lincolnshire Water Bill [Lords],
Considered; to be read the third time.

EAST INDIA (INCOME AND EXPENDITURE).
Address for Return "of the net Income and Expenditure of British India under certain specified heads for the 11 years from 1897-8 to 1907-8 (in continuation of Parliamentary Paper, No. 174, of Session 1908)."—[Mr. Hobhouse.]
ARMY COMMISSIONS (PROMOTIONS FROM THE RANKS).
Address for Return "as to the number of Commissions granted during each of the years 1885 to 1908, inclusive (in continuation of Parliamentary Paper, No. 111, of Session 1907)."—[Mr. John Ward.]
ORAL ANSWERS TO QUESTIONS.

  Captain Bacon's Letters.
  Mr. BELLAIRSasked the First Lord of the Admiralty whether any other copies of letters from Captain Bacon, R.N., to the First Sea Lord were printed at the taxpayers' expense, in addition to the one officially admitted; and, if so, how many copies were printed in each case?
  Mr. ASHLEYalso asked whether any other letters written to the First Sea Lord and containing observations on the views of their superior officers, besides that written by Captain Bacon, parts of which have already been published, have been printed for the convenience of Lord Tweed mouth or any other First Lord, or of any one connected with the Admiralty; and
  Mr. LONSDALEasked whether more than one letter written by Captain Bacon has been printed by authority; and whether he will lay copies of all these letters upon the Table of the House.
  The FIRST LORD of the ADMIRALTY (Mr. McKenna): It would be inexpedient and contrary to usual practice to give information with regard to confidential documents.
  Mr. ASHLEY: Are we to understand that documents are confidential which have been printed and circulated outside the Admiralty?
  Mr. McKENNA: Yes, Sir; these particular documents are confidential, and many confidential documents are printed. As to the circulation outside the Admiralty, I am unable to give any explanation as to how it came about that any of these documents found their way outside the Admiralty.
  Mr. ASHLEY: Does the right hon. Gentleman deny that they were sent outside the Admiralty?
  Mr. McKENNA: I have stated already that in regard to the numbers in one case 25 were printed and in the other case 50 were printed. The circulation of these documents outside the Admiralty is a matter quite unknown to me.
  Mr. JOYNSON-HICKS: Does the right hon. Gentleman associate himself with the comments regarding an hon. Member of this House contained in the letters?
  Mr. McKENNA: No, Sir. Probably it would be better if supplementary questions on this matter were put to me after the further question on this subject which is down on the Paper has been put.
  Mr. CHARLES DUNCAN (Barrow-in-Furness): Are we to understand that some-body has stolen these copies?
  Mr. McKENNA: The whole of this happened years ago, and I am unable to offer any explanation.
  Mr. SPEAKER: Would it not be better to accept the suggestion made by the First Lord of the Admiralty before putting further supplementary questions?
  Mr. BELLAIRS: I desire to ask the First Lord of the Admiralty whether, in any communications to the First Sea Lord which have been printed at the taxpayers' expense, Captain Bacon cast any personal or professional reflections on any brother officer on the active or retired lists; whether he could state for what purpose the letter or letters were printed; and whether the Board of Admiralty, as a whole, with due regard to the traditional

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  methods of British naval administration, approve of the printing of such letter or letters and propose to continue the practice?
  Mr. McKENNA: My hon. Friend is, I understand, in possession of a copy of a private letter addressed by Captain Bacon to the First Sea Lord which was printed for use in the Admiralty, and in which there is an incidental reference to the hon. Member himself. It would certainly have been better if the personal reference had been omitted in the printed copy, as it was solely for the sake of the remainder of its contents that the letter was preserved. The practice of printing informal documents of various kinds is convenient, and the Admiralty do not propose to give up this convenience in all circumstances. As regards the reference now complained of, I desire to express my regret that the hon. Member's feelings should have been hurt by this letter when a copy of it came into his possession.
  Captain FABER: I would like to ask the right hon. Gentleman whether he has read the career of the hon. Member for Lynn Regis, and whether he does not consider it brilliant?
  Mr. CHARLES CRAIG (Antrim, S.): Seeing that the right hon. Gentleman has described Captain Bacon's letters as private, what explanation can he give of the fact that no less than 50 copies of the letter were printed?
  Mr. McKENNA: I would like to explain the whole of the circumstances because, most unfairly, Captain Bacon's name has been used in a way which implies a charge against him. The only crime, if it be a crime, that he has committed is that he is a very able man who writes remarkably good letters. [Cries of "Oh, oh"] He wrote two perfectly private letters to Sir John Fisher, and he had not the faintest idea that they were going to be printed or made use of in any public way. I have read the two letters, and they are admirable letters, and very long ones, and in the course of these two private letters Captain Bacon makes the personal observation which my hon. Friend very properly complains of. But in a private letter I do not suppose any one of us would deny that on occasions we have mentioned individuals by name—[Cries of "No, no"]—and not always in the most complimentary form. Captain Bacon's letters, without his knowledge, were printed, and the reason for their being printed was that
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  they were remarkably good letters containing, outside the personal reference complained of, a very useful account worthy of being preserved of what has taken place during an eventful period in the history of naval administration. Sir John Fisher had a very great deal of work to do at that time, and when he read these letters he thought they ought to be preserved. He regrets, and nobody regrets it more than himself, that without editing those letters first they were printed for private use. The only complaint is that before those letters were printed the reference to my hon. Friend was not struck out. That is a matter for which he is extremely sorry, and for which I am also extremely sorry. As regards everything else in the letters it was entirely proper that they should be printed, because they were worth preserving. The mere fact of having 50 copies printed was merely giving an order to the printer.
  Mr. G. D. FABER (York): May I ask the right hon. Gentleman whether the 50 copies were not printed because they reflected upon the personal character of the hon. Member opposite?
  Mr. McKENNA: No, Sir. If the hon. Member saw the letter, which is a long one, he would agree with me that it was admirably written. The personal reference to the hon. Member for Lynn Regis was merely one short passage, in a long letter upon many different matters.
  Mr. JOYNSON-HICKS: Is it not a fact that at the time the hon. Member for Lynn Regis was engaged in this House attacking Sir John Fisher?
  Mr. McKENNA: I could not say without reference to the speeches made by my hon. Friend at the time. The whole incident occurred three years ago.
  Mr. ASHLEY: May we take it that the right hon. Gentleman disapproves of this incident?
  Mr. McKENNA: I have stated again and again that I disapprove, and Sir John Fisher himself disapproves, of including in any printed document a personal reference to any individual Member of this House. I disapprove of it most strongly, but this letter was never published in any ordinary sense of the word.
  Captain FABER: Was Captain Bacon's letter a private letter—was it marked private or not?
  Mr. McKENNA: I do not know that it was marked private, but it was written as a private letter. It was a private letter.
  Mr. MacNEILL: I move, Mr. Speaker, that the Question be now put.
  Mr. LONSDALE: As 50 copies of this letter have been printed, will the right hon. Gentleman undertake to lay one on the Table of the House?
  Mr. McKENNA: No, sir. It would be most undesirable.
  Several hon. Members rising—
  Mr. SPEAKERsaid: Any further questions must be put on the Paper.

  Naval Base (North-East Coast).
  Mr. CURRANasked the First Lord of the Admiralty whether his Board was contemplating the construction of a naval base on the North-East Coast; and whether any investigations had been made as to the facilities afforded by the River Tyne for this purpose?
  Mr. McKENNA: The Admiralty do not propose at present to construct another naval base on the North-East coast in addition to that at Rosyth. The suitability of the Tyne was considered before the selection of the site at Rosyth was determined upon.

  Dirigible Balloons (Fleet in North Sea).
  Mr. FELLasked the First Lord of the Admiralty if any steps had been taken towards the construction of garages or shelters for dirigible balloons to be used in connection with the Fleet in the North Sea?
  Mr. McKENNA: A dirigible and a shed are being constructed. It is premature to say whether dirigibles will or will not be used in connection with the fleet in the North Sea.

  Reserve of Steam Trawlers.
  Mr. LONSDALEasked the First Lord of the Admiralty what progress had been made with the organisation of a reserve of steam trawlers for the purpose of sweeping up floating and submarine mines in time of war?
  Mr. McKENNA: An officer has been appointed to organise and develop a force for the purpose referred to, and four steam trawlers have been purchased to work under him. It is considered undesirable at present to furnish further information
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  than that the progress of the work is satisfactory.

  H.M. Ships "Hercules" and "Colossus."
  Mr. MIDDLEMOREasked the First Lord of the Admiralty what were the names of the. two "Dreadnoughts" which had just been ordered?
  Mr. McKENNA: "Hercules" and "Colossus."

  Fleets in Home Waters.
  Mr. MIDDLEMOREasked the First Lord of the Admiralty whether, under the new scheme of fleet distribution which came into operation in March last, the number of fully commissioned battleships in Home waters was reduced from 26 to 22 and armoured cruisers from 16 to 14; and whether there was any corresponding reduction in the readiness for war of Foreign fleets to justify this reduction on our part '
  Mr McKENNA: Assuming that the Atlantic Fleet in March last is to be included in the fleets in Home waters, the reply to the first part of the question is in the affirmative, and to the second part in the negative. I may add, however, that the actual fighting strength of the Home waters force is greater than before.

  Government Broker (Demerara Rum).
  Mr. H. C. LEAasked the First Lord of the Admiralty, referring to the recent purchases of Demerara rum, including the mark F.B., is the Admiralty aware that the said parcels had already passed through the Government broker's hands on account of other interests; and whether he will take action to prevent the Government broker also acting as a dealer?
  Mr. McKENNA: The Admiralty is fully aware of the circumstances of the purchases referred to and is fully satisfied as to the regularity of the broker's action. As I have stated in reply to previous questions, the Admiralty broker does not act as a dealer.
  Mr. H. C. LEAasked the First Lord of the Admiralty whether he was aware that, in consequence of the manipulation of the market by the Government broker, with the tacit consent of the Admiralty, Demerara rum is now and has been for some time past standing at a fictitious price, with a result that the British public is paying from 3d. to 6d. a gallon more for rum than it ought to; and what action he proposes to take to alter this state of affairs?
  Mr. McKENNA: There has been no manipulation on the part of the Admiralty-brokers. A comparison of the London prices, where the Admiralty purchases are usually made, with those of Liverpool, where prices have ruled higher than in London for the past eight or nine months, seems of itself to show that the London price is in no way fictitious. The Admiralty has no advantage in or influence upon this market, except such as a large buyer for actual consumption naturally possesses, and by buying at favourable moments owing to the Department being well advised as to probable course of supplies and the market. No action is therefore proposed.
  Mr. H. C. LEAasked the First Lord of the Admiralty, with reference to his answer of the 2nd December last regarding purchases of rum by the Admiralty for the years 1906, 1907, and 1908, that the whole of the purchases were made through one firm of brokers who obtained offers in the open market without restriction of free competition; whether he is aware that in December last SO puncheons, marked G.G. in a diamond, excess. "St. Croix," were bought by the Government broker himself to arrive some considerable time before the sale to the Department by the Government broker; and in view of the fact that the present broker is a dealer as well, can he give an assurance that Ad miralty purchases of rum will in future not be made through one firm alone?
  Mr. McKENNA: The rum in question was purchased at the lowest price of that or any other mark; the Admiralty practice is to buy "on the spot," and not "to arrive." The Admiralty is fully aware of the circumstances of this purchase. There is no irregularity whatever in the purchase of a parcel for the Admiralty which had already been sold "to arrive" by the same broker on behalf of another client. Whether such a parcel would be selected by the Admiralty does not depend upon the broker, but upon the independent selection of the Admiralty inspector from the total of all brands offering at the moment. As I have stated in replies to previous questions, the Admiralty brokers do not act as dealers, and no change in Admiralty procedure is proposed.

  Attack on Watchman (Humberstone).
  Captain FABERasked the First Lord of vthe Admiralty whether he can give any
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  information as to the alleged attack on a watchman at the signalling station at Humberstone, near Grimsby; and whether there is now an armed patrol there at night?
  Mr. McKENNA: The Cleethorpes wireless telegraph station, which is situated at Waltham, near Grimsby, was broken into by two men on the night of Sunday, March 28th. The two men are thought to have been employes of the contractor who had built the station. The station was not in working order at the time, and has only just been completed. The arrangements since made for guarding the station are considered satisfactory.

  H.M.S. "Gladiator."
  Viscount CASTLEREAGHasked the First Lord of the Admiralty if he will state the original cost of building H.M.S. "Gladiator," the cost of raising H.M.S. "Gladiator" after her collision with the liner "St. Paul," and the sum received as proceeds of the sale of H.M.S. "Gladiator"?
  Mr. McKENNA: The original cost of the "Gladiator" was £287,604. The cost of salving her was approximately £50,500. She was sold for £15,125.
  Viscount CASTLEREAGH: Seeing that the original cost was £287,604, the cost of salving her £50,500, while she was sold for only £15,125, was it worth while to raise her?
  Mr. McKENNA: The wreck had to be cleared. If she had been exploded the explosion might have caused damage on shore. The best course, therefore, seemed to be to remove the wreck.
  Mr. H. A. WATT: I should like to ask the right hon. Gentleman whether the breaking-up condition was attached to the sale, and if so, how much has the nation lost by the sale?
  Mr. McKENNA: My impression is that the usual break-up condition was not attached to this sale.

  Rosyth Dockyard (Men Employed).
  Major ANSTRUTHER-GRAYasked the First Lord of the Admiralty whether he can inform the House how many men are now being employed at Rosyth?
  Mr. McKENNA: The total number of men employed to-day by the contractors

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  at Rosyth, including their staff and workmen, is 252. No doubt many men are at work elsewhere in connection with the contract.

  Torpedo-Boat Destroyers.
  Mr. MIDDLEMOREasked the First Lord of the Admiralty if he will state his reason for refusing the Return in regard to British torpedo-boat destroyers asked for on the 13th of this month?
  Mr. McKENNA: It is not considered to be in the public interest to publish all the confidential details for which the hon. Member asked in the Motion for the Return.
  Mr. MIDDLEMORE: Why does the right hon. Gentleman withhold information which is in the possession of every Admiral in Europe?
  Mr. McKENNA: I have every reason for believing that the information for which the hon. Gentleman asks is not in the possession of every Admiral in Europe.

  "Dreadnoughts" (Employment of Men).
  Mr. GRETTONasked the First Lord of the Admiralty, if the official estimate of the number of men employed in building a "Dreadnought,"i.e.,
  Mr. McKENNA: The number given in reply to the hon. Member for Shrewsbury was calculated for dockyard construction work only. We have no statistics available to allow an estimate to be given in reply to the hon. Member's question.
  Mr. GRETTON: Is the right hon. Gentleman's estimate of the amount expended on labour only for labour employed in the dockyards?
  Mr. McKENNA: Yes, for dockyard work only.
  Mr. GRETTON: Is he also aware that on the basis that it takes two years to build a "Dreadnought," the average wage for each man, on his estimate, would be upwards of £450 per annum?
  Mr. McKENNA: I should like to have notice of that question.

  German Mercantile Marine (Armaments).
  Mr. ASHLEYasked the First Lord of the Admiralty whether he is aware that many German merchant ships carry small guns, and that the captains have their commissions, pennants, and uniforms ready for an emergency; and, if so, what steps have been taken to protect the British mercantile marine, especially on those stations from which many of our small craft have been removed?
  Mr. McKENNA: The Admiralty does not consider that it is in the public interest to make any statement as to the information we possess on the subject matter of the question or as to the course it is proposed to adopt for the protection of commerce. I must not be understood to assent to the correctness of the hon. Gentleman's information.
  Mr. ASHLEY: Arising out of the answer, can the right hon. Gentleman state, without injury to the public interest, what steps the Admiralty are taking to guard against this danger?
  Mr. McKENNA: That is exactly what I think undesirable to make public.
  Mr. CHARLES CRAIG: Did I understand the right hon. Gentleman to say he must be taken as assenting or dissenting to the correctness of the information?
  Mr. McKENNA: I am not assenting.
  Mr. ASHLEY: Does the right hon. Gentleman deny that the facts are as stated in the question?
  Mr. McKENNA: We are very reluctant to give information on the point. I can only repeat I must not be taken as assenting to the accuracy of the statements in the question.

  Dilke (Navy) Return.
  Mr. ASHLEYasked the First Lord of the Admiralty whether any ships included in the Dilke Return, published on Friday last, have since the date of that Return been placed upon the sale list or in any other way discarded as ineffective; and, if so, will he state what ships have been so dealt with?
  Mr. McKENNA: I should be glad if the hon. Member would defer his question, as I have been unable to obtain the information required to enable me to answer it to-day.

  Cruisers for Trade Protection.
  Sir BERKELEY SHEFFIELDasked the First Lord of the Admiralty whether the cruisers which are told off for trade protection are also told off for duty as watching cruisers; and, if so, how can they execute the two duties at the same time?
  Mr. McKENNA: The question of what duties are assigned to particular vessels in war cannot be stated, but the hon. Member may rest assured that no vessel is assigned to carry out two incompatible duties.

  Captain Bacon's Letter.
  Sir BERKELEY SHEFFIELDasked the First Lord of the Admiralty whether the letter of Captain Bacon to Admiral of the Fleet Sir John Fisher, making serious reflections on an hon. Member of this House, was printed by Messrs. Eyre and Spottis-woode at the orders of the Board of Admiralty; whether he can state how the letter came to be circulated; and whether it was in any way marked as confidential?
  Mr. McKENNA: The answer to the first part of the question is in the affirmative. The letter was not circulated in the ordinary sense of the word, and I have no knowledge as to how any copy obtained publicity except by what has been published in the Press. Although the letter was not marked "Confidential," it was obviously a private letter.
  Captain W. V. FABER: May I ask the right hon. Gentleman who is the person actually responsible for the directions given to the King's printers to print this libellous document?
  Mr. McKENNA: I have said again and again that the letter was printed by order of the First Sea Lord.
  Colonel Sir IVOR HERBERT: May I ask whether it has not been the custom from time immemorial to print letters of a private character in order that the subject matter of those letters may be brought within the official ambit of knowledge within the Department, and has not the regulation recently issued had the effect of limiting the very considerable number of unregistered letters so brought into official cognisance?
  Mr. McKENNA: Yes, Sir, that is the case. It is the common practice of every Department to print letters by order of
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  the head of the Department for the purpose of future reference. Nothing more was done in this case than that.
  Mr JOYNSON-HICKS: May I ask if the right hon. Gentleman officially associates or dissociates himself—
  Mr. SPEAKER: Order, order. That does not arise out of the question on the paper.
  Mr. CROOKS: Who stole the letter?
  Mr. C. CRAIG: In view of the fact which has been admitted by the right hon. Gentleman these letters were not printed by the private printers of the Department, but were printed by Messrs. Eyre and Spottiswoode—
  Mr. SPEAKER: Will the hon. Member ask his question without repeating a previous answer?
  Mr. CRAIG: Well, in view of the fact that—
  Mr. SPEAKER: The hon. Member is disregarding my ruling.
  Major ANSTRUTHER-GRAY: Will the right hon. Gentleman see that in future private and confidential letters are marked "private and confidential"?
  Mr. McKENNA: I have already said that this was obviously a private letter.
  Captain FABER—
  Mr. McKENNA: On a point of order, Sir. I do not know whether your attention has been called to an observation by the Noble Lord opposite (the Earl of Winterton). The Noble Lord asked whether we proposed to observe the ordinary standards of honour.
  Earl WINTERTON: As my observation was obviously disorderly, of course I withdraw what I said.
  Captain FABER: Could not these letters have been printed at the Admiralty instead of by public printers?
  Mr. McKENNA'Sreply was inaudible.
  Mr. BELLAIRS: When there are 50 copies printed is it the practice of the Admiralty to keep a record of the number issued to each individual member?
  Mr. McKENNA: I will inquire. I think it probably would be.
  Mr. BELLAIRS: Will the right hon. Gentleman ascertain the exact distribution of the 50 copies of this letter which have been circulated?
  Mr. McKENNA: I have asked for the exact distribution, but nobody knows how the letter left the Admiralty.
  Mr. BELLAIRS: I meant the distribution at the Admiralty.
  Mr. G. D. FABER (York): How many copies are still left?
  Mr. McKENNA: I should think 45 out of 50. At least, they were there.

  Several other HON. MEMBERS rose.
  Mr. SPEAKER: If hon. Members are going to ask questions in this number and of this length it will be impossible to get through the questions on the Paper.

  German Battleship Building.
  Mr. ASHLEYasked the First Lord of the Admiralty how many battleships and armoured cruisers were under construction by or for the German Government on 1st May in the years 1900, 1904, and 1909 respectively?
  Mr. McKENNA: The numbers are as follows:—
  The 1909 figures include one battleship and one cruiser of the 1909 programme, for which, according to our official information, orders have been given.
  Mr. ASHLEY: Will the right hon. Gentleman say, in view of the figures he has just given, what justification there is for—
  Mr. SPEAKER: Order, order. That is not a proper question.

  Canton-Hankau Railway Contract.
  Mr. LONSDALEasked the Secretary of State for Foreign Affairs whether the arrangement reported to have been concluded with regard to the construction of the Canton-Hankau Railway will insure that British firms will have first option of executing orders for materials purchased out of China, in accordance with the agreement signed on 9th September, 1905, with the Chinese Government?
  The UNDER-SECRETARY for FOREIGN AFFAIRS (Mr. McKinnon Wood): I understand that the arrangement just concluded contemplates the distribution, in equal proportion so far as is possible, of orders for material among the firms of the three countries who are parties to the arrangement. This applies to the Canton-Hankow line, as well as to the Hupeh section of the Szechuen line, and to any other lines which may be constructed in the future. I must point out that the agreement of 1905, to which the hon. Member refers, did not exclude competition from foreign firms as to the terms to be offered to the Chinese Government, though the question as to the limits beyond which such competition would not be in accord with the spirit of the agreement is one which His Majesty's Government found it necessary to raise in the course of the negotiations.
  Mr. LONSDALE: Is the hon. Gentleman aware that this railway is to be constructed by British capital, and that the understanding arrived at at the time was that preference should be given to British firms with regard to the supply of materials?
  Mr. McKINNON WOOD: No, Sir, the statement of the hon. Member is not correct.

  British Whaler's Crew in Venezuela (Alleged Imprisonment).
  Mr. LONSDALEasked the Secretary of State for Foreign Affairs whether he had received information that for five years the crew of a British whaling ship, reported to have been lost in a storm in the West Indies, had been incarcerated in a Venezuelan prison; and, if so, whether he had taken any action in the matter?
  Mr. McKINNON WOOD: No such official information has been received, but His Majesty's Minister at Caracas will be instructed to ascertain the truth of the report.

  Spirit Licence Duties (Tralee).
  Mr. THOMAS O'DONNELLasked Mr. Chancellor of the Exchequer what was the amount received from spirit licences in the town of Tralee, county Kerry, for the year ended March, 1909; and what were the gross minimum and gross maximum amounts which would be received under the proposals of his Budget?
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): There are no statistics available which would enable me to give the information desired by the hon. Member.

  Direct and Indirect Taxation (Ireland),
  Mr. VINCENT KENNEDYasked the Chancellor of the Exchequer if he would state what was the proportion of direct to indirect taxation in Ireland and in Great Britain in 1907-8; and would he say what the proportions of these respective taxes would be for 1908-9, under his present Budget proposals, in the two countries?
  Mr. LLOYD-GEORGE: The proportion of direct to indirect taxation in 1907-8 was:—
  The proportion for 1908-9 on the basis of Exchequer receipts (which is not, however, as the question suggests, affected by the present Budget proposals) was:—
  and the estimated proportion for 1909-10 under the Budget proposals is:—

  Budget Statement.
  Mr. JAMES HOPEasked Mr. Chancellor of the Exchequer, whether he would circulate as a White Paper the prepared but unspoken portions of his Budget statement?
  Mr. LLOYD-GEORGE: No, Sir.
  Mr. JAMES HOPE: If the right hon. Gentleman cannot circulate those portions, will he communicate them to his journalistic friends'?

  Development Bill.
  Mr. JAMES HOPEasked the Chancellor of the Exchequer, whether the introduction of the Development Bill was dependent on any of the Resolutions in Committee of Ways and Means, of which notice appears on the Paper?
  Mr. LLOYD-GEORGE: No, Sir.
  Mr. JAMES HOPE: Will this Bill be brought in in Committee of Ways and Means, separately set up for that purpose?
  Mr. LLOYD-GEORGE: Yes; I think there must be a Resolution before that Bill is introduced; I think so. I will make inquiry.

  Consumption of Whisky.
  Mr. JOYNSON-HICKSasked the Chancellor of the Exchequer, what was the consumption of whisky in the United Kingdom last year; what he estimated the consumption to be this year; and how much he estimated a tax of 3s. 9d. a gallon on that amount to produce?
  Mr. LLOYD-GEORGE: I am afraid I cannot give the hon. Member the information for which he asks. Whisky is not shown in the Revenue accounts separately from other British spirits—i.e., spirits manufactured in the United Kingdom.
  Mr. FLYNN: Can the right hon. Gentleman give any estimate as to what will be the probable decrease in the consumption owing to the increased duty?
  Mr. LLOYD-GEORGE: I am not quite sure. I will see by the time that the spirit tax comes on, whether I shall be able to meet the wishes of the hon. Gentleman.
  Mr. FLYNN: On what basis is the £1,600,000 in the table issued in this morning's White Paper based. What is the decreased consumption? There must be some basis.
  Mr. LLOYD-GEORGE: I quite agree, and if questions are put to me when the discussion comes on I will do my best to answer them. I cannot do it by question and answer.
  Mr. JOYNSON-HICKS: Will the right hon. Gentleman give the figures?
  Mr. LLOYD-GEORGE: I will see if I can.
  Mr. HUGH LEA: In view of the repeated requests made by the whisky distillers year after year, can the right hon. Gentleman see his way in future to give statistics with regard to whisky in bond in every year, distinguishing between that made by pot still and patent?
  Mr. SPEAKER: That does not arise out of this question.

  Motor Tax.
  Mr. VINCENT KENNEDYasked the Chancellor of the Exchequer if he has received a memorial from the Irish Automobile Club, praying that the proposed

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  taxation on motor cars and duty on petrol be not imposed in Ireland; when was a tax last levied upon cars in Ireland, and what percentage of the estimated revenue by the taxes stated is Ireland calculated to produce; will this whole matter be considered so that Ireland may not be unfairly taxed as it is at present proposed, owing to the different conditions prevailing in the two countries, such as the poverty of the people, cost of getting motors into the country, dearness of petrol, and the expense of upkeep owing to bad roads?
  Mr. LLOYD-GEORGE: I have received the memorial to which the hon. Member refers. As I explained in my Budget speech, there has not hitherto been a tax in Ireland on motor-cars, though prior to 1823 duties were leviable upon carriages. I cannot, on my present information, give a precise estimate of the proportion of the revenue from the new motor car licences which will be derived from Ireland. But, after careful consideration of the whole matter, I fear I cannot agree with the hon. Member that there are sufficient grounds for exempting the owners of motor cars in Ireland from the proposed new tax.
  Mr. JEREMIAH MacVEAGH: Is the right hon. Gentleman aware that there is an Act of Parliament passed in 1823 which lays down that no carriage tax shall henceforth be leviable on Ireland, and that that Act has never been repealed?
  Mr. LLOYD-GEORGE: I am quite prepared to take that fact from my hon. Friend, but these taxes which I have levied are not for the purpose of general taxation, but purely for the expenditure on the roads. Ireland will, of course, get a share of it for the purpose of improving the roads, and if Ireland wishes to be exempted from the tax. I should like to know my hon. Friend's view as to whether he would like Ireland to be exempted or not from the benefit?
  Mr. JOHN REDMOND: Are we to understand that the entire tax levied in Ireland will be given back to Ireland for use on the roads, and will it be expended by an Irish authority or a central authority in England?
  Mr. LLOYD-GEORGE: As to the second part of the question I should like to have notice. In regard to the first, I should be very much surprised, from what I know of the condition of the roads in Ireland, if a
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  larger proportion is not demanded for Ireland than for any other part of the country.
  Mr. WILLIAM MOORE: If the right hon. Gentleman cannot go the whole way, will he consider between this and the bringing in of the Bill whether he can give a rebate to medical men using motors in medical work as in the case of the commercial men in Ireland?
  Mr. LLOYD-GEORGE: There are several questions in regard to that. As the hon. Gentleman knows very well, medical men are getting a rebate under my proposals.
  Mr. WILLIAM MOORE: Only on the tax, not on the petrol.
  Mr. VINCENT KENNEDYasked Mr. Chancellor of the Exchequer if he will favourably consider in the direction of remitting entirely the petrol and motor taxes in the case of Irish dispensary doctors who use their private motors for the more speedy and efficient discharge of their professional duties in relieving the suffering poor under their care?
  Mr. LLOYD-GEORGE: As at present advised I do not think there are sufficient grounds for granting doctors further concessions in addition to the rebate, which I have already proposed, of half the licence duty on their motor-cars.
  Mr. HUGH BARRIEasked the Chancellor of the Exchequer whether he has received representations from veterinary surgeons urging that their profession should receive the same rebate on petrol as he proposes to allow to the medical profession; and whether he proposes to grant their request?
  Mr. LLOYD-GEORGE: I have not proposed to allow the medical profession a rebate upon the petrol used by them. As I have already explained to the House, I do not see my way to extend to veterinary surgeons the rebate of half the licence duties allowed to doctors on their motorcars.
  Major ANSTRUTHER-GRAY: Is the right hon. Gentleman aware that the petrol used on the average by medical men will amount to something like £12 a year?
  Mr. WATT: Will the right hon. Gentleman extend this rebate to lawyers and clergymen?

  Children and Income Tax (Birth Certificates).
  Mr. HUGH BARRIEasked the Chancellor of the Exchequer whether he is aware that in Ireland it costs 3s. 7d. to obtain a certificate of birth; whether it will be necessary to produce these in order to secure the £10 rebate per child on income tax; and whether, if birth certificates are held to be necessary, he will arrange that the charge for them shall be reduced to a nominal sum?
  Mr. LLOYD-GEORGE: I am considering the point raised by the hon. Member.

  Budget Proposals.
  Captain FABERasked the Chancellor of the Exchequer if he will state whether, where a profit rental is paid for a licensed business, as in the case of all railway refreshment rooms let to tenants and of the Clarence Pier, Southsea, viz., £1,260, assessment £1,140, the licence duty will be based upon the assessment when the actual value of the rooms is not more than £100 a year?
  The following questions were also on the Paper:—
  Sir GILBERT PARKER: To ask Mr. Chancellor of the Exchequer whether chalk and clay are to be regarded as ungotten minerals, and to be taxed as such under the terms of the Budget; whether the grounds of private lunatic asylums, such as Chiswick House, Chiswick, hospitals, convalescent homes, and inebriate homes will be affected by the proposed tax on unearned increment; and whether land redeemed under the Land Tax Kedemption Act would be subject to the tax on capital values or mineral values?
  Mr. JAMES HOPE: To ask Mr. Chancellor of the Exchequer whether he contemplates that the undeveloped land tax shall apply to land such as the Bramall-lane Cricket Ground, Sheffield, on which many of the Yorkshire county matches are played?
  Mr. LLOYD-GEORGE: These are questions which I think can be more satisfactorily dealt with when the Finance Bill is in the hands of hon. Members.
  Mr. JAMES HOPE: Does the right hon. Gentleman apply that answer to my question?
  Mr. LLOYD-GEORGE: Yes.

  Taxable Capacity (Ireland).
  Mr. KETTLEasked the Chancellor of the Exchequer what is the present taxable capacity of Ireland relatively to that of Great Britain?
  Mr. LLOYD-GEORGE: So far as the yield of the various duties, which are levied in Great Britain and Ireland at uniform rates, gives any indication of the comparative taxable capacity of the two sections of the United Kingdom—and I have no materials for making a calculation upon any other basis—the proportion on the figures for 1908-9 is approximately as 14 is to 1.

  Estate Duty (Agricultural Land Tenancies).
  Mr. MAURICE HEALYasked the Chancellor of the Exchequer if he can state whether estate duty is claimed in England on tenancies in agricultural land held under ordinary agricultural leases or tenancies at full rents?
  Mr. LLOYD-GEORGE: Tenancies in agricultural land in England are governed—for the purpose of estate duty—by the same rule of valuation as other property. If they have no market value, no estate duty is claimed.

  Poor Law Commission.
  Mr. LONSDALEasked the Prime Minister whether it is the intention of the Government to carry out the recommendations of the Poor Law Commission by means of regulations and orders, as recommended by the President of the Local Government Board, or whether it is intended to propose legislation on this subject in the usual way?
  The PRIME MINISTER (Mr. Asquith): The Reports of the Royal Commission on the Poor Law are being considered by the Government, and I am not in a position to make any statement as to the steps to be taken for carrying out the recommendations of the Commission.

  Welsh Church Commission.
  Mr. JOYNSON-HICKSasked the Prime Minister whether he or the Government have, since the Royal Commission on the Welsh Church was appointed, made any representations or requests to them; and, if so, what were they and what was the result?
  The PRIME MINISTER: I have on one or two occasions been in communication

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  with the chairman of the Royal Commission in connection with questions of which notice has been given by hon. Members. I am not aware that any requests have been addressed to the Commission by or on behalf of the Government.
  Mr. JOYNSON-HICKS: Will the Government be prepared to consider the question of making a request to the Royal Commission to abstain from publishing two volumes of the evidence without publishing a third?
  The PRIME MINISTER: I think that would be an illegitimate interference with the discretion of the Commission.

  New Spirit Duty (Proportion of Burden).
  Mr. WATTasked the Chancellor of the Exchequer what proportion of the £1,600,000 which he expects to get from the new spirit duty this year will be payable by England, Scotland and Ireland respectively, calculated on the quantity of spirits consumed in the three countries?
  Mr. LLOYD-GEORGE: The amounts, calculated in proportion to the quantities of spirit consumed in the three Kingdoms respectively, will be:—
  Mr. MOONEY: Is it the fact that the right hon. Gentleman stated in his Budget speech that the percentage of reduction anticipated would be 11 per cent., and whether, in view of the official figures given last year of the amount of spirits consumed in Ireland, he will state how he arrived at the figures which he has just given? It will not be 11 per cent., but nearly treble that amount.
  Mr. LLOYD-GEORGE: The hon. Member is entering on a question of estimate. That, of course, I shall be prepared to defend when the discussion comes on, but it is purely a question of what the abatement will be, owing to the reduction of consumption and other causes.
  Mr. MOONEY: That is not my point. It is whether his estimate of 11 per cent. reduction on the official figures of last year would give the sum he named, or whether he took some figures not before this House, and of which the House has no knowledge?
  Mr. LLOYD-GEORGE: I am not quite sure I follow the hon. Member's point now. I have simply distributed the £1,600,000 between the three countries on the proportion of the present consumption.
  Mr. MOONEY: May I ask whether the official figures show that the consumption in Ireland last year was, roughly speaking, £3,000,000 or £2,700,000, and whether 1½ per cent. reduction on that would not give treble the amount he has stated in estimating the amount for next year?
  Mr. LLOYD-GEORGE: The hon. Member is asking me what the consumption was in Ireland. That I must have notice of. I cannot carry the figure of that sum in my mind.
  Mr. KETTLE: I would ask why it was found impossible in preparing the White Paper issued this morning to give a separate calculation of the yield of this new tax in Ireland. I would remind the right hon. Gentleman that we got at least a half promise from him the other day that he would have a separate calculation made as to the yield of these new taxes in Ireland. Why was not that done?
  Mr. LLOYD-GEORGE: It is impossible to make a calculation. A good deal must depend upon the estimate. There are no figures which enable anyone to arrive at the actual figure of distribution.
  Mr. KETTLE: This is a somewhat serious question. Is the right hon. Gentleman aware that a great many of the calculations made by the Treasury including that given to-day, an estimate of the taxable capacity of Ireland, are regarded by people who know this subject as not merely inaccurate but ludicrous.
  Mr. SPEAKER: That is not a question, but a statement.

  Petrol Tax (Rebate).
  Mr. HUNTasked whether, in view of the fact that petrol is used by some persons for commercial vehicles and also for other purposes, how such persons are to obtain the 50 per cent. rebate on the petrol used for commercial vehicles?
  Mr. LLOYD-GEORGE: I must refer the hon. Member to the answer which I gave on the 10th inst. to the hon. Member for Hammersmith.

  Metropolitan Police (Complaints).
  Mr. GEORGE GREENWOODasked whether any steps have yet been taken to

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  carry into effect the recommendation of the Royal Commission upon the duties of the Metropolitan Police that an officer duly qualified by knowledge of the law and experience in legal proceedings, acting under the direct superintendence of the Chief Commissioner, should be appointed for the purpose of dealing with complaints against the police by private persons and conducting inquiries into them?
  The UNDER-SECRETARY for the HOME DEPARTMENT (Mr. Herbert Samuel): This recommendation presents some administrative difficulties, but it is the Secretary of State's intention to carry it into effect, and he hopes to be able to make arrangements for that purpose very shortly.

  Welsh Church Commission (Publication of Evidence).
  Mr. BRIDGEMANasked if the two volumes of evidence taken before the Welsh Church Commission, which are to be published with the Interim Report, contain the evidence of the four Welsh bishops?
  Mr. HERBERT SAMUEL: No Interim Report has yet been received by the Secretary of State. I believe, however, that the evidence of the four Welsh bishops is contained in the third volume of the evidence.
  Mr. BRIDGEMAN: May I ask whether the publication of the Interim Report has been decided upon in consequence of representations made to the Commission by His Majesty's Government, and whether it is possible that the third volume may be published, containing the evidence of the Welsh bishops at the same time, if not before, the Interim Report?
  Mr. SAMUEL: I have no knowledge of any Interim Report having been signed by the Commission.
  Mr. JOYNSON-HICKSasked whether any request has been received from the Royal Commission on the Welsh Church for consent to the publication of the first two volumes of evidence without the third; whether such consent is essential to such publication; and whether such consent has been given?
  Mr. HERBERT SAMUEL: The answer to the first part of the question is that no such request has been received. The answer to the second and third parts is that the publication of such documents is
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  not by authority of the Secretary of State, but follows on their presentation to Parliament, if they are presented, by Royal Command. The Secretary of State's position in the matter is that of adviser to His Majesty.

  Detention of Inebriates.
  Mr. JOYNSON-HICKSasked when it is proposed to introduce the legislation dealing with the detention of inebriates which was promised in the King's Speech and on two subsequent occasions during the Session?
  Mr. HERBERT SAMUEL: The Secretary of State regrets that he can add nothing at the moment to the answer which he gave on 29th April to the hon. Member for the Oswestry Division of Shropshire.

  Dairies (Scotland).
  Mr. GULLANDasked when the Bill dealing with dairies in Scotland will be introduced?
  The LORD ADVOCATE (Mr. Ure): The Secretary for Scotland intends to introduce this Bill in another place before the Whitsuntide recess.

  Infectious Diseases Hospital (Stornoway).
  Mr. WEIRasked whether the Secretary for Scotland is aware that in the Report of the medical officer of health for Ross and Cromarty just issued attention is again called to the fact that the infectious diseases hospital at Stornoway is in urgent need of a water supply; and, in view of the danger to which patients are thus exposed, will the Local Government Board take such steps as may be necessary to ensure an adequate water supply being provided without further delay?
  Mr. URE: I am aware of the statement referred to, but I can only refer my hon. Friend to my answer of the 9th March, 1909, to the effect that in the present financial condition of the Lews District Committee there is no immediate prospect of making this improvement.
  Mr. WEIR: Am I to understand that the Secretary for Scotland and the Local Government Board for Scotland are so utterly indifferent that they intend to discard the Public Health Act?
  Mr. URE: The Secretary for Scotland is not discarding the Public Health Act. The Local Government Board have no power.
  Mr. WEIR: Am I to understand that the Local Government Board has no power whatever to enforce the Public Health Act?

  Dalziel School Board (Scotland).
  Mr. BOLANDasked the Lord Advocate whether his attention has been called to the action of the newly elected Dalziel School Board at their first meeting in excluding by special resolution two members of the board from the convenerships of any of the public schools in the parish; and whether, in view of the duties imposed upon this authority by the Education (Scotland) Act of 1908 and previous Acts, he proposes to take any action in the matter?
  Mr. URE: The Department is in communication with the School Board of Dalziel as to the facts of the case, and I hope to be in a position to reply to the question of the hon. Member at an early date.

  Old Age Pension (Edward Hudson).
  Mr. JAMES O'KELLYasked the Secretary to the Treasury whether his attention has been called to the case of Edward Hudson, Lisgarr, Ballyroddy, Elphin, county Roscommon, who had an old age pension granted to him by the Boyle sub-committee, and had the pension disallowed, on appeal by the pension officer, on the grounds that the record of the claimant's birth was not forthcoming; and whether, seeing that this record with a number of other documents relating to the parish were burned after the death of Father Egan, P.P., and that it is claimed that Hudson was born on 31st October, 1838, and was married on 3rd February, 1873, the pension will be granted in this case?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse): I have not been able to obtain the information. Will the hon. Member put the question down for Monday?

  Fish Supply (Dingle, County Kerry).
  Mr. THOMAS O'DONNELLasked the Vice-President of the Department of Agriculture (Ireland) whether he is aware that fish merchants in Dingle, county Kerry, after repeated requests for assistance to public boards in Ireland, have established a scheme of supplying fish, fresh and cured, of various kinds, neatly packed in cases from five pounds upwards, to various parts of Ireland and Great Britain; and whether inquiries will be made and assistance given to make this scheme a success?
  The VICE-PRESIDENT of the DEPARTMENT of AGRICULTURE (Ireland) (Mr. T. W. Russell): The Department are aware that one fish merchant in Dingle is, with financial assistance from the Congested Districts Board, making experiments with a view to the sale of cured mackerel in the home markets. The merchant referred to has not yet reported on the experiments. The Department are unable to give a guarantee of assistance to this scheme at the present stage, but the matter will be considered when the results of the experiments are known.
  Mr. O'DONNELL: Seeing that foreign markets are almost closed to the Irish fisheries owing to the extraordinarily high tariffs, will the Department of Agriculture give special attention to this new experiment?
  Mr. T. W. RUSSELL: We will consider it whenever the results are known.

  Margarine (Fraudulent Sale).
  Mr. SHEEHANasked the Vice-President of the Department of Agriculture (Ireland) whether he has received from the trustees of the Cork Butter Market a Resolution approving strongly of the Bill now before Parliament to prevent the fraudulent sale of margarine for butter, and urging the supreme necessity of passing it into law, so as to prevent the injury now being inflicted upon the staple industry of Ireland; and will he state whether the Government propose to give facilities for the passage of this Bill through Parliament?
  Mr. KILBRIDE: Before the right hon. Gentleman answers, can he say if the hon. Member in charge of the Bill is in communication with him, and whether he is aware that the hon. Member for Mid-Cork has not his name on the back of the Bill?
  Mr. T. W. RUSSELL: The Resolution referred to has been received. As regards the second part of the question, the Bill relates to the United Kingdom and not to Ireland only. The question as to facilities must therefore be addressed to the Prime Minister. I am in constant communication with the hon. Member for Kildare in regard to this Bill.

  Metropolitan Water Supply (Enborne Valley Reservoir).
  Captain FABERasked the President of the Local Government Board whether he can give any information concerning the

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  contemplated reservoir for London to be made near Kingsclere; and if he can give the names of the villages about to be done away with for the purposes of the reservoir?
  The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Burns): I understand that the chief engineer of the Metropolitan Water Board has been engaged upon various schemes for providing an additional supply of water for London from the Thames, and that, amongst other schemes, he is considering one for the construction of a reservoir in the Enborne Valley. No decision has, however, at present been arrived at on the subject, and hence no determination has been come to with regard to the site to which the hon. Member refers. I may add that the chief engineer will be happy to give him any reasonable particulars with regard to this scheme if he puts himself into communication with him.

  Imported Meat (Seizure at Grimsby).
  Mr. STARKEYasked the President of the Local Government Board if he will state the result of his inquiry into the seizure of foreign imported meat at Grimsby; whether any of the crates guaranteed by a foreign Government to contain meat sound and fit for human consumption were found to contain meat either tuberculous or in a state of fermentation; and, if so, what steps he proposes to take in the matter?
  Mr. BURNS: I find that the meat recently seized at Grimsby included two diseased carcases of calves which, though they did not themselves bear the official label guaranteeing that they had been inspected by officers of the Netherlands Government, were packed amongst several healthy carcases which were so labelled, in a crate which itself bore an official label. I am in communication with the Consul-General of the Netherlands with respect to the matter.

  Butter Substitutes (Fraud).
  Mr. FLYNNasked the hon. Member for South Somerset, as representing the President of the Board of Agriculture, whether he is aware that, notwithstanding recent legislation, fraud and adulteration in connection with the sale of butter substitutes still prevails in some parts of England and Wales; what steps, if any, the Board have taken to carry out the provisions of the Butter and Margarine Act, 1907; has the
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  Board taken any action under sections 2 and 3 of the Act; and has he any information as to how many local authorities have used their powers of entry and inspection under section 2, sub-section (3)?
  The TREASURER of the HOUSEHOLD (Sir E. Strachey): Probably there is still some fraud. The Board have taken all the steps necessary to carry out the Act, but they are too many to enumerate, but full information will be found in the Intelligence Beport shortly to be issued. The Board have acted under sections 2 and 3. Forty-seven local authorities have appointed officers under sub-section 3 of section 2.

  Foreign Hay, Straw and Forage (Prohibition Order).
  Mr. STANIERasked if the Board of Agriculture's order prohibiting the importation of hay, straw, and forage from abroad is still in force, and, if so, which countries are so scheduled?
  Sir E. STRACHEY: The Foreign Hay and Straw Order of 1908 is still in force, and as the hon. Member will see from the copy which I am sending to him, 21 countries are scheduled. The Order also applies to the States of Pennsylvania, New Jersey, New York, Maryland, and Delaware.

  Milk Bill.
  Mr. STANIERasked when the Board of Agriculture intends to issue the orders mentioned by the President of the Local Government Board as causing the delay in introducing the Milk Bill, and what are the subjects which are in need of these orders?
  Sir E. STRACHEY: The order to which my right hon. Friend referred deals with tuberculosis in bovine animals. We hope to issue and circulate it at the same time as the Milk Bill.

  Fertilisers and Feeding Stuffs Act.
  Mr. STANIERasked whether the Board of Agriculture propose to take steps to prosecute a combination of persons trading together in cases where now individuals would be prosecuted under the Fertilisers and Feeding Stuffs Act?
  Sir E. STRACHEY: The Board do not themselves institute proceedings under the Fertilisers and Feeding Stuffs Act, 1906. I see no reason why a combination of persons trading together should not be

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  prosecuted for offences under that Act, but if the hon. Member is aware of any difficulty which has arisen perhaps he will communicate with me on the subject?

  East Limerick (New Writ).
  Mr. MOOREasked the hon. Member for East Cork, as Senior Whip of the Nationalist Party, if he will state the cause of delay in moving for a Writ in respect of the vacancy in East Limerick, now two months overdue; and when Ke intends to do so?
  Captain DONELAN: In reply to the question of the hon. and learned Gentleman, I beg to say that the delay which has occurred in moving for this Writ has been caused by a desire to meet the convenience of the Constituency. I propose to move for the Writ next week.

  Steamship "Gregory Apear" (Death of Asiatic Fireman).
  Mr. WEIRasked the President of the Board of Trade whether his attention has been called to the death from consumption on 30th December, 1908, of an Asiatic fireman named Mowla Bux Madir Bux, a member of the crew of the steamer "Gregory Apear," of Calcutta; whether the seaman was medically examined before joining; how long he had served on the vessel; whether he had any previous sea service; whether steps were taken to isolate him from the rest of the crew; and whether any previous cases of death from this disease have occurred on this vessel?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. H. J. Tennant): The fireman referred to died of phthisis at Hong Kong. He is said to have suffered from the disease for a long time, but it only became acute a fortnight before his death. I am not aware whether he had been medically examined before joining; he had been over six weeks in the vessel, and had had about two years' sea service; it is not at present known whether he was isolated on board the vessel, but he was removed to the Civil Hospital Hong Kong before his death. No other death from consumption in this vessel has been reported during the last three years. The "Gregory Apear" is owned and registered at Calcutta, and is employed in trading in Eastern waters.
  Mr. WEIR: Has the hon. and learned Gentleman no power to see that isolation
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  is provided for these men, and will he ascertain whether the man referred to in the question was medically examined before going on board?
  Mr. H. J. TENNANT: I believe that instructions are given for isolation where possible, but it is not always possible to provide it. In this case we have not had time to ascertain whether he was medically examined before going on board the vessel.

  Letter Postage Charges and Public Boards (Ireland).
  Mr. THOMAS O'DONNELLasked the Postmaster-General whether public boards in Ireland incur a considerable expense in postage every year which has to come out of local rates; and whether he will consider the possibility of treating the letters sent by those bodies as the letters of public departments are treated?
  The POSTMASTER-GENERAL (Mr. Sydney Buxton): The official correspondence system is restricted to Metropolitan Government Departments, and even in their case the postage on unpaid official letters is charged to the account of the Departments concerned. There are many objections to the extension of the system to the local boards to which my hon. Friend refers.

  Military Men in Telegraph Service (Ireland).
  Mr. AUGUSTINE ROCHEasked the Postmaster-General how many civilians have been replaced by military men in the telegraph service in Ireland during the past 12 months; whether, considering the dearth of employment in Ireland, the admitted superiority of civilians for the work, and the feeling of resentment entertained by the people, he will discontinue the practice in Ireland?
  Mr. BUXTON: I have already fully explained to the House the reasons why certain Royal Engineers are taking up telegraph work in Ireland. Up to the present six civilian engineers and linemen have been replaced by Royal Engineers officers and men in the telegraph service of Ireland.
  Mr. FLYNN: May I ask whether a number of civilians, married men with families, in Cork have not been replaced by these military men?
  Mr. BUXTON: Of course it is inevitable when a change of this kind is taking place

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  that some people should be replaced. But we have endeavoured to meet the convenience of all concerned.
  Mr. O'DONNELL: Has the work done by the military men been done badly?
  Mr. BUXTON: That is incorrect. That point was raised in the Debate the other day, and I pointed out that the work done by the Royal Engineers in the South of England was of the highest possible class, and certainly as good as was done by other men previously.
  Mr. FLYNN: Has a similar course been adopted in England?
  Mr. BUXTON: Exactly the same thing occurred wherever a change of this kind was made. We have paid the greatest possible consideration to those concerned.
  Mr. KILBRIDE: May I ask if the civilians in Cork have been replaced by military men on account of the fear of hon. Gentleman above the Gangway of a German invasion of Ireland?

  Post Office Night Messengers (Wages).
  Mr. O'GRADYasked the Postmaster-General if he is aware that the present scale of wages paid to adult night messengers was fixed by the Select Committee on the basis that the sole work of these officers was the delivery of telegrams, express letters, and parcels; and, as these messengers are now compelled to clean cycles and do other work, will he award them good conduct stripes, or pay them a reasonable allowance for the extra wear and tear of their clothing, other than uniforms, caused by the work of cycle cleaning?
  Mr. BUXTON: As regards the duties of these officers I must refer the hon. Member to the answer which appears in yesterday's Orders to the question asked by the hon. Member for the Jarrow division of Durham. It does not appear to be a case for good conduct stripes. I am proposing to issue some kind of protective clothing for use of the men when engaged in cleaning bicycles.

  Opium (Exports from India).
  Dr. RUTHERFORDasked what were the opium exports from India in 1905, 1906, 1907, 1908 and 1909 respectively; and what steps the Government are taking to carry out their declared policy with the Government of China?
  Mr. HOBHOUSE: The figures are: 1905, 63,053 chests; 1906, 65,617 chests; 1907, 63,415 chests; 1908, 62,408 chests. In 1909 the export will be limited to 56,800 chests. In accordance with the arrangement made with China, the export of opium from India is being reduced by 5,100 chests per annum. This is with effect from 1908, the average export for the five years ending 1905 being taken, as suggested by the Chinese Government, as the basis of the calculation.
  Mr. REES: May I ask what steps the Government of China are taking to carry out their declared policy with His Majesty's Government?
  Mr. SPEAKER: The hon. Member should give notice of that question.

  Land Purchase Agreements (Liabilities of Tenants).
  Mr. GINNELLasked the Chief Secretary to the Lord Lieutenant of Ireland what steps do the Estates Commissioners take to make known to tenants before they sign purchase agreements that after purchase they will be liable for all Board of Works and similar charges attaching to the land?
  The CHIEF SECRETARY for IRELAND (Mr. Birrell): I would refer the hon. Member to page 33 of the Estates Commissioners' Rules, which have been presented to Parliament. It is there provided that if a holding is subject to maintenance and drainage charges which will affect it after purchase a statement to that effect is to be inserted in the purchase agreement.

  Misuse of Untenanted Land (Ireland),
  Mr. GINNELLasked the Chief Secretary to the Lord Lieutenant of Ireland, in view of the insufficiency of untenanted and non-residential land for the relief of congestion in Ireland, whether he will endeavour, by legislation or administration, to stop the present misuse of such land in giving large tracts of it to occupants of adequate holdings, of which there are numerous complaints?
  Mr. BIRRELL: I am not aware that there is any foundation for the suggestion contained in the question.

Compensation for Malicious Injuries (Ireland).
Mr. GINNELL Mr. GINNELL asked the Chief Secretary to the Lord Lieutenant of Ireland if he will state the number and average salary of the county court officials in Ireland whose duty it would be to distinguish

415
between riotous and non-riotous in cases of compensation awarded against ratepayers for malicious injuries; the average number of days they work in each year; the number of cases in which such damages were awarded in the last completed year; and whether the refusal to report the facts of the non-riotous cases was that of the officials themselves or of someone else on their behalf?
Mr. BIRRELL: The county court officers charged with keeping a record of the compensation granted are the clerks of the Crown and Peace. Particulars as to their emoluments are given in the Estimates annually presented to Parliament, and in the case of Clare and Kilkenny (where the offices have not yet been united) in the Local Taxation Returns. They are bound by law to keep open office daily from 11 to 4 o'clock in the assize towns. The number of cases in which compensation was awarded for malicious injuries in 1908 was 481. Riotous and non-riotous cases could only be distinguished, if at all, by examination of the depositions in each case. The Clerks of the Crown and Peace are always ready to supply any information in their power, but I cannot ask them to undertake this task.
NEW MEMBER SWORN.—NEW MEMBER SWORN.—James Avon Clyde, esquire, K.C, for the West Division of Edinburgh.

QUESTION OF PRIVILEGE.
Captain W. V. FABER: On a Question of privilege, Sir, I wish to ask whether a paid servant of the Crown, such as the First Sea Lord, was in order in printing, or causing to be printed, 50 copies of a letter of a libellous nature affecting a Member of this House—namely, the hon. Member for Lynn Regis—and whether there is any precedent for this?
Mr. SPEAKER: I understand that the hon. and gallant Member puts it to me as a question of privilege—whether it is a breach of the privileges of this House for a public servant to print such a letter as he has described. I have only seen an extract from the letter, and, as far as I have seen it, the character of the hon. and gallant Member for King's Lynn is not impugned as a Member of this House. Nothing, I think, is said against him in that letter as a Member of this House, and, therefore, no question of privilege arises.
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Of course, whether the letter is libellous or not is not one for me to express an opinion upon. That is a question for the courts.
Captain FABER: I bow to your ruling. I beg to give notice that I shall ask Mr. Attorney-General what steps he intends to take to protect Members of this House against the publication and circulation of libellous statements by a servant of the Government at the public expense.

PRESENTATION OF BILLS.
The following Bills were presented and read the first time:—
Mr. MUNRO FERGUSON—Rights of Way (Scotland) (No. 2).—Bill to amend the Local Government (Scotland) Act, 1894, with regard to Rights of Way. (To be read a second time upon Tuesday next.)
Mr. HOBHOUSE—Superannuation.—Bill to amend the Superannuation Acts, 1834 to 1892. (To be read a second time upon Monday next, 24th May.)

VAGRANCY BILL.
Mr. SWIFT MacNEILL: I beg the liberty, under the Ten Minutes Rule, to bring in a Bill to repeal the Vagrancy Act of 1824. I think the general opinion is that that Act ought to be repealed. The public conscience has been profoundly shocked—people would scarcely believe it is possible—by the fact that an old man of 65 was sentenced for begging to 12 months' imprisonment with hard labour with the accompaniment of 12 lashes. The method of punishment has not been prescribed. The lashes might be administered with a cat-o'-nine-tails, or a birch, or by a cane. That such a thing should occur at this time of day in a civilised country is scarcely credible. What I propose is simply to repeal the Vagrancy Act. It was an Act passed by the rich against the poor and the labouring classes in this country. The first Vagrancy Act was passed in 1821, but the very bad Parliament which passed it only allowed it to be a temporary measure, and passed it only for three years. It then became permanent under the Act of 1824, which I now ask to have repealed. If you look at the date at which it was passed you will realise the surrounding circumstances. It was passed at a time of profound agricultural depression, when vast numbers of people were out of work and were in distress, and the landlords were trying to maintain the profits which they had made during the Napoleonic wars and

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wanted to do it at the expense of the people; and, accordingly, they passed this Act, which was a coercion Act for the oppression of the people. They were not only to suffer, but they were to be punished for complaining of their sufferings. Every real offence which is comprised in the Act is an offence under the Common Law, which may be proceeded against in the ordinary course. The specific offences which are subject to punishment under this Act are, first of all, begging. If a man begs he can be brought before a Petty Sessions Court and the Petty Sessions Court can then convict him of begging and can then send him on, keeping him in prison meantime, to the next Court of Quarter Sessions; and the Court of Quarter Sessions can inflict, without any evidence at all, without trial by jury, or any-other trial, without hearing the man, and merely taking the depositions of the Court below, the punishment of 12 months' imprisonment with hard labour and any amount of lashes, either public or private, and not only one flogging, but as many floggings as the magistrate wishes.
Another offence punishable under this Act, which shows the savage and vindictive nature of the measure, is that if anyone is found loitering, sleeping near a house in the air of Heaven, at night time, he can be brought up under the same Act and punished in the same way, his offence being the Scriptural offence of not having whereon to lay his head. These things are done in the light of the twentieth century. Then there are other offences, grave offences, against women and children—the atrocious offence of deserting wife and children; but that does not justify this punishment of the lads. It has been so held by very eminent authorities. Twenty years ago it was repealed so far as its flogging provisions were concerned by a second reading Bill in this House, which Bill, introduced by Mr. Milvain, proposed not to suppress, but to extend, flogging in certain cases, and repealed certain sections of the Vagrancy Act, because Mr. Milvain said that flogging should not be applied to such offences as that, though applicable to other offences under the common law. Similarly Mr. Wharton, who was a chairman of quarter sessions, moved a Bill to repeal this very Act, although he was in favour of flogging in other cases. He said that he could sentence to flogging for certain offences, such as indecent exposure, when he could not sentence to flogging for greater offences, such as outrages on women and
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children. I have also got three or four Home Secretaries in my favour. The hon. Member for one of the divisions of Kent actually wrote down to the magistrates of Dorset, asking them not to inflict this sentence. Sir Ralph Littler said it was obsolete. The Prime Minister said that the punishment of flogging was greater than any other, and that it took all the sparks of humanity out of a man. I hope that I shall have the consent of the House to introduce this Bill, and express our condemnation of such penalties and our opinion that they should not be even passed on any man.
Motion made and Question, "That leave be given to introduce the Bill," put and agreed to.
Bill presented accordingly, and read the first time; to be read a second time on 26th May.

INDIAN COUNCILS BILL— [Lords].
Lords' Amendments to Commons' Amendments considered.
Dr. RUTHERFORD Dr. RUTHERFORD moved: "That this House do disagree with the Lords' Amendments to the Commons' Amendments."
In moving to disagree with the Lords' Amendments I do so to give the House an opportunity of protesting against the criminal infatuation of the House of Lords in this matter. For the convenience of the House it would be well that I should recapitulate briefly the chief circumstances with regard to the Bill. The Government and the Secretary of State for India considered that clause 3 was a vital portion of the Indian Councils Bill. The Bill they realised was a modest measure to meet the legitimate and proper aspirations of the people of India. The Lords considered this clause, and summarily re jected it. Then the Bill came to this House, and on the motion of the Government the clause was reinstated in its entirety. The Bill went back to the House of Lords, and instead of accepting our Amendment restoring the clause in its fulness, their Lordships whittled it down, and only allowed it to apply to Bengal; and their Amendments made it necessary that if they wanted these councils in clause 3 extended the Government of India must-lay the proclamation on the Table not only of the House of Commons but also of the House of Lords, and an address from either House would render these schemes nugatory and void.
This is a serious step for India, and, to ray mind, it is a very sinister and significant fact. It means now that the veto of the House of Lords is suspended over progressive legislation in India like the sword of Damocles. It means that it is going to handicap progressive legislation in that country. It means that good government, according to the meaning of good government by the people in this country, is now going to be, in India, at the mercy of the House of Lords. Might I ask the question: What is the character of an assembly already drunk with power that arrogates to itself more power? I should like to read—
Mr. SPEAKER: The hon. Member must confine himself strictly to the Amendments that have come down from another place.
Dr. RUTHERFORD: We are considering whether this Amendment is justifiable, and I wish to read the opinion of Lord Morley, which he expressed in 1885.
Mr. SPEAKER: Order, order. What Lord Morley said in 1885 has nothing whatever to do with the Indian Councils Bill of this year. The hon. Member must try to confine himself to the matter now before the House.
Dr. RUTHERFORD: Lord Morley, in the House of Lords, said that most of these Amendments we are dealing with to-day were a reasonable compromise. Lord Morley was not of that opinion when the Lords had first decided their policy on this matter by rejecting the clause entirely. He then thought it was so serious to the good government of India that within two or three days he moved in the House of Lords that this clause be reinserted. What I have to say with regard to this suggestion of Lord Morley that this is a reasonable compromise is this: that it only gives to Bengal power to have an Executive Council at once. That can hardly be called a reasonable compromise, for the simple fact that Lord Morley can snap his fingers at the House of Lords, and straightway create, by the Acts of 1833 and 1858, an Executive Council and Governor in Council for Bengal and the United Provinces. It is quite unnecessary for the Government to accept these Amendments in any shane or form as a comnromise. They would be infinitely better without the clause, as it at present stands, and they could do far more for India without this clause, and by means of these Acts which I have referred to in
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regard to both Bengal and the United Provinces. It would be better for the Government to let this clause drop altogether as amended by the House of Lords, and to throw the responsibility upon their Lordships' shoulders. What does this action of the House of Lords mean to the Government of India? It means, as far as I can see, a direct vote of censure. It means that the House of Lords has no confidence in the judgment, wisdom, and discretion of the Viceroy and his Council, and I believe it is a deliberate blow to their self-respect and to their prestige. The Government of India will now be in the position of Lazarus, and will have to crawl to the Table of the House of Lords or to the Table of this House to ask for any political crumbs that either House may offer to them. This is entirely unsatisfactory, humiliating, and detrimental to the Government of India. How will this action of the Lords affect the Liberal Party? I feel that it is another challenge, another skirmish, another defeat of this House and of our party, and another victory for the House of Lords. At the same time I should like to remind their Lordships that it is a Pyrrhic victory by which they will lose more than they will gain, and it will be another proof to the people of this country and to those whom it may concern in India, that it is essential that the veto of the House of Lords should be restricted or removed entirely. The Lords are going to do for India what they have already done in this country—deprive India of legislation which is for the regeneration and for the building up of the people under one great nationality. I would like to ask, further, what will be the effect upon India itself of this action of the House of Lords? I should like to quote in this respect the view of Mr. Goklale on this subject, which appeared in the March number of the "Contemporary Review." He said:—
"It will he absolutely disastrous if any attempt is made to go back on the scheme in any important particular. The people of this country have accepted it in the spirit in which it has been conceived by the Viceroy and the Secretary of State, and if the people of India are subjected to any disappointment in connection with it there will be a violent reaction, which will be in every way deplorable."
So far as the shunted provinces are concerned, it affects Eastern Bengal, which is in a state of unrest; the Punjaub, which is the training ground to a large extent of the Indian Army; the United Provinces, which are to a great extent the home of the Mahomedan movement; and the Central Provinces as well as Burma

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It means that all these provinces will now have to come cap in hand to the House of Lords whenever they want an Executive Council. It means that they are condemned to one-man rule and to political servitude for a considerable time to come. That must embitter public feeling in all those provinces, and must make the government of the country more difficult than it is to-day. I think the House of Lords should remember that, after all, we lost America by denying to the Americans the right to govern their own country. We declined to acknowledge the rights of citizenship there, and if we decline to acknowledge the rights of Indians to govern their country, if we deny them all the privileges and duties and responsibilities of citizenship, it must lead to great trouble, to great difficulty, and it might lead even to what occurred in America—the loss of India as part of the British Empire. This, after all, is a very serious matter. I look upon it as indeed very serious for the reasons I have put before the House. I believe it will fill India with indignation and despair, and that the reform scheme will lose—for, after all, the reform scheme lulled the storm in India—its effect, and that the danger in India will be increased. I feel that their Lordships have eyes which do not see and ears which do not hear. They fail to see that this national movement is like a great, mighty, and beneficent river flowing from the everlasting heights of freedom. They fail to recognise that this national movement is irresistible. It must grow, and it must increase. If we do not recognise it, then the danger will be enormously increased. I feel that the House of Lords have tried to dam this river, but it will only overflow, and probably lead to that anarchy and destruction of life and property which everybody must deplore. In conclusion I feel it is our duty as a nation and a country to foster this spirit of nationalism, and it is for that purpose that I ask the House to disagree with the Lords' Amendment.
Mr. SPEAKER: Am I to understand that the hon. and learned Member does not object to the Lords' Amendments being now considered? That is the question which I put.
Dr. RUTHERFORD: I move to disagree with the Lords' Amendment, and I understand that is the proper form.
Mr. SPEAKER: The question I put and on which the hon. Member rose to speak was that the Lords' Amendments should now be considered.
Dr. RUTHERFORD: I have no objection to their being considered.
Question, "That the Lords' Amendments be now considered," put and agreed to.
The Lords' Amendments, which were read a second time, were as follows:—
The Lords agree to clause A inserted by the Commons (Power to constitute provincial executive councils):—
A.—(i) It shall be lawful for the Governor-General in Council, with the approval of the Secretary of State in Council, by proclamation, to create a council in any province under a Lieutenant-Governor for the purpose of assisting the Lieutenant-Governor in the executive government of the province, and by such proclamation—
(a) To make provision for determining what shall be the number (not exceeding four) and qualifications of the members of the council; and
(b) To make provision for the appointment of temporary or acting members of the council during the absence of any member from illness or otherwise, and for the procedure to be adopted in case of a difference of opinion between a Lieutenant-Governor and his council, and in the case of equality of votes, and in the case of a Lieutenant-Governor being obliged to absent himself from his council from indisposition or any other cause.
(2) Where any such proclamation has been made with respect to any province, the Lieutenant-Governor may, with the consent of the Governor-General in Council, from time to time, make rules and orders for the more convenient transaction of business in his council, and any order made or act done in accordance with the rules and orders so made shall be deemed to be an act or order of the Lieutenant-Governor in Council.
(3) Every member of any such council shall be appointed by the Governor-General with the approval of His Majesty, and shall, as such, be a member of the Legislative Council of the Lieutenant-Governor in addition to the members nominated by the Lieutenant-Governor and elected under the provisions of this Act.
But propose to amend the same by leaving out the words ("any province under a Lieutenant-Governor") in lines
3 and 4, and inserting (" the Bengal division of the presidency of Fort 'William '"), and by inserting as a new sub-section at the end of sub-section (1):—
(2) It shall be lawful for the Governor-General in Council, with the like approval, by a like proclamation to create a council in any other province under a lieutenant-governor for the purpose of assisting the lieutenant-governor in the executive government of the province. Provided that before any such proclamation is made a draft thereof shall be laid before each House of Parliament for not less than sixty days during the session of Parliament, and, if before the expiration of that time an address is presented to His Majesty by either House of Parliament against the draft or any part thereof, no further proceedings shall be taken thereon, without prejudice to the making of any new draft.
Dr. RUTHERFORD: May I now technically move: "That this House do disagree with the Lords in the said Amendments"?
Mr. SPEAKER: I shall put the Question: "That this House do agree with the Lords in the said Amendments," and then the hon. Member can vote against it.
The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse): One word, and one word only, upon the subject which has been raised by the hon. Member for Brentford. The House will remember that this Amendment, which has come down to us from the Lords, is the result of an understanding—a verbal understanding, but none the less a binding understanding—which was come to between the two Front Benches when this matter was last considered by the House.
Mr. O'GRADY: Binding on which House?
Mr. HOBHOUSE: This House. It is the result of a suggestion thrown out by myself, speaking on behalf of my Noble Friend the Secretary of State and accepted by the right hon. Gentleman the Leader of the Opposition. I must confess that I thought at that time, and I think still, that it was a pity that the discretion of the Government of India was limited in the way in which this clause does limit it; but, at the same time, I perfectly understand and I frankly admit that there were very good precedents for the course which has been adopted, and I think it is just as well to point out to the hon. Gentleman that this is the usual form in which those draft
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Orders—for, after all, this is a draft Order, and not a final Order—would be put before each House of Parliament. For such a draft Order it is a usual and common thing that exception can be taken by either House. Therefore the form in which this Amendment reaches us to-day is the usual form taken in proceedings of this sort. I am also bound to say that I do not think either House of Parliament, in the event of the need arising and when it does arise, for the Government of India to recommend that an Executive Council should be set up as occasion occurs from time to time in any of the provinces of India—I cannot believe that either House of Parliament would take upon itself the responsibility of rejecting the recommendation arrived at after mature deliberation by the Government of India. Believing as I do that in practice no such inconvenience will arise, I recommend the acceptance of this Amendment to the House.
Mr. JAMES O'GRADY: I must confess that the statement now made by the hon. Gentleman somewhat changes the aspect of the case. I was not aware of the fact that the compromise had been effected between the two Front Benches of this House. That being so, it must be clear these are not the Amendments of the Lords in actuality. I want to protest most emphatically against the arrangement as it stands, because, after all, we are dealing with a very great reform that has been met by several sections of the Empire with very great approval. I want to emphasise what the hon. Member who attempted to move the Amendment suggested, that the original Bill received the full assent of the Viceroy of India and his Council, and all the important authorities in India, and then because the other place began to discuss this matter and began to use pressure—I say this with all due respect—began to use pressure on the Government that they should accede to what I consider to be a vicious compromise in regard to the original Bill. I think most of the Members of this House who have taken a keen interest in Indian matters will admit that the result of this compromise in India must be simply disastrous.
The purpose of the Bill was to guide the growing feeling that has undoubtedly developed in India during the last ten years, to guide the national aspiration of the Indian people in the right direction. I believe it could be so guided, and I believe we could have attached India with firmer bonds under the original Bill of Lord Morley than has been possible during the

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last 20 years. But it must be considerably weakened by the fact that the Government, in conjunction with the Front Opposition Bench, have acceded to this weak and—may I say it again with deference—this parochial compromise in that narrow spirit that grapples with great reforms, and always does something to undermine, it seems to me, the real good that reforms must effect, particularly in countries like India. I suppose the harm is done; but I just want to say a word with reference to the Orders. Most public men during the last ten years have declared that what we ought to do with regard to India is to trust the people, and particularly the moderate section who are engaged in the work of reform. Statements have been made in the Mansion House here in London to that effect. I submit that the Orders that are to be placed on the Table with regard to extending the councils to the provinces is nothing more or less than mistrust. I can quite see the point that any contentious Member of this House or the other House who are absolutely opposed to reform, and they are on the Liberal side as well as upon other sides of the House—I mean men who pose as an authority on this question—they can protest against those Orders, and so the extension of those councils to other provinces would be indefinitely delayed. I submit that is a very dangerous proposition, and I just rise for the purpose of entering my strongest protest against what I consider to be a weak, vacillating policy, which has resulted in this miserable compromise that is going to damage a very great reform.
Mr. J. D. REES: I would not have said a word if I was not well aware of the important effect of speeches made in this House. My remarks will be of a non-controversial character. My hon. Friend the Member for Leeds entirely overlooks the fact that it was only Bengal that asked for a council; that no other council is asked for. Surely that makes all the difference.
Dr. RUTHERFORD: I do not wish to interrupt my hon. Friend, but may I state that public meetings have been held in the Punjab and United Provinces and Eastern Bengal asking for councils.
Mr. REES: Perhaps I should have said it is only Bengal made anything like an official request. I am too much acquainted with the genesis of public meetings to attach too much importance to them. The hon. Member for Leeds (Mr.
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J. O'Grady) said that he was far more in favour of the original Bill, but is he aware of the fact that the Noble Viscount was perfectly satisfied with the arrangement made in the House of Lords? I understood his position to be, and that of his Friends, that they were satisfied with the Bill. Therefore I submit they ought to be satisfied with this small compromise, which has been effected with the entire concurrence of Viscount Morley. In the other House it was admitted by the Noble Viscount that no effort had been made to make party capital of India in that House, and I really do not see how my hon. Friend could fairly take objection if he perused the proceedings of another place.
Mr. O'GRADY: I thought I made my position perfectly clear. I said I was distinctly in favour of the original Bill, and protested against any compromise of any kind.
Mr. REES: The Noble Viscount not only consented to the compromise, but congratulated the opposition upon the manner in which they had met him. He expressly did so, and the hon. Member may see the words. The hon. Member for Brentford (Dr. Rutherford) appeared in a very startling character as the champion of the Government of India. He said the Government of India was hurt by these proceedings. I should not have accepted the hon. Gentleman as champion of the Government of India until I have some reason to know that the Government of India accept his championship. He said the character of the Liberal party was affected by this matter. The Noble Viscount in another place made a great point of keeping India outside the purview of party considerations. He con-gratualted the Noble Lords on the manner in which they had met him in that all-important object, and on the satisfactory way in which party considerations were kept out of the discussion of the Bill in the other House. I wish myself that a similar spirit had inspired the speech of the hon. Gentleman just below me (Dr. Rutherford), and which we have heard to-day. He spoke with great confidence of the opinion of Mr. Goklale, who said that the compromise would be disastrous. No one man can speak for the people of India. There are many peoples in India, and there is no one person authorised to speak for them. I do not at all undervalue the authority of a gentleman who, like myself, was a member of the Viceroy's Council, and who, I am

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sure, has opinions that are entitled to be heard with respect, but he is not entitled to speak in that wholesale manner of the people of India, nor when the hon. Gentleman the Member for Brentford said that when the other provinces wished to have councils they would have to come cap in hand to Parliament, did he speak according to the book? That is not the case. When the Government of India issue a Proclamation, according to the Orders, that Proclamation shall lie upon the Table, and if either House presents an address, which is a somewhat solemn and serious proceeding, and which cannot be done on the action of one Member only, in that case would the Proclamation be stopped. So that really to speak of provinces in India having to come cap in hand to the House of Lords in order to obtain what the Government of India decided they should have is really quite an exaggeration of the situation.
I feel bound to refer to these things, because I know the way in which these speeches are reported and scattered broadcast in vernacular leaflets. The hon. Member said that the effect upon India as a whole would be to produce indignation and despair. I trust the hon. Member will not think me wanting in any respect towards him if I do not admit his right to speak for India as a whole. If any man came here and ventured to speak for the opinion of Europe as a whole his remarks would be received with derision, but when one Gentleman speaks of the far more difficult case of India, with more peoples than Europe, his remarks are received probably with acquiescence, or at any rate without any apparent sign of disagreement, such as I think anyone who is acquainted with the problem in any way must know to be their desert. I do say this very discussion is sufficient to show how weighty and how true were the words of the Noble Viscount in the House of Lords when he spoke of the great inconvenience both to the Government of India and Parliament if, whenever a proposal is made to attach Executive Councils to Lieutenant Governors, there should arise full dress debates on second reading, Committee, Report, and the various stages. He went on to say (the Noble Viscount) he now began to understand the full significance of the fact that the Government of India was very sensitive to the intervention of Parliament, and that whenever that can be avoided it ought to be done. I most heartily associate myself with those remarks, because I know how
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great the danger is in these speeches, and how they are reported. If no reply is made they are said to be unanswerable, and it is only for that reason I have reluctantly risen.
I submit and hope that hon. Members who wanted the Bill as it originally stood without these Amendments will remember what Lord Morley himself said, and how he complimented Lord Lansdowne on his spirit of give and take, and how Lord Lansdowne complimented him. Lord Lansdowne said that he had been able to meet them in a reasonable spirit. Hon. Gentlemen who are able to receive with levity the mention of the names of Lord Morley and Lord Lansdowne are not likely to be in a proper frame of mind to consider a Question affecting India. I sincerely hope in my remarks I said nothing controversial or provocative. I have striven very hard not to, and I might certainly have said a great deal more, but in case I should be betrayed into doing so I shall say nothing more at all. I sincerely hope that no objection will be raised to this moderate and reasonable compromise, which gives the substance and which practically allows the further extension of those councils, only subject to this formality, and it is a necessary formality, because the power of Parliament cannot be abrogated over the Government of India.
Mr. JOHN DILLON: I do not pretend to go into the merits of this clause, but the hon. Member who has just spoken (Mr. Rees), in answer to the objections which have been made, said that this Amendment was put in by the House of Lords because the power of Parliament cannot be abrogated over the Government of India. But why not keep the clause as it originally stood, and as it was accepted, if not unanimously, by an overwhelming majority in this House? The only reason I have intervened in the Debate is that the Secretary to the Treasury, who spoke for the Government, appears to be under a complete misapprehension as to the history of this particular transaction. This clause was struck out in the House of Lords at the instance of Lord Lansdowne and Lord Macdonnell. All of us remember the Debate which took place, and also the expressions of opinion that came from all friends of reform in India in this House and in the country as a consequence of the action of the House of Lords in the matter. The speech of the Secretary to the Treasury was calculated to give the impression that the Government were really content

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with the present compromise. That certainly is not the impression conveyed by the Debate in the House of Lords. The Government are contented with it, I suppose, on the principle that half or quarter of a loaf is better than no bread. They have had to be content with many mutilated reforms, the mutilation of which has been forced upon them by the House of Lords, and I assume—I think I am justified in assuming—that the reason we are asked by the Government to accept this Amendment from the House of Lords is that they are placed in the position of either taking the Bill so mutilated, or paying no reform for India at all. That puts the matter in a very different aspect. I do not profess to have sufficient knowledge of the affairs of India to say whether or not the Government are justified in accepting this reform in its mutilated shape in preference to allowing the Bill to be lost. But that I believe to be a true statement of the case, but it certainly was not the impression conveyed by the speech of the Secretary to the Treasury. What was the strong argument put forward in support of this compromise by the hon. Member (Mr. Rees), who always stands up to champion what I might fairly describe as reactionary India 3 He said that it was very objectionable that whenever a proposition came forward to constitute a new Executive Council in India it should be made the subject of Debate in Parliament.
Mr. REES: The Noble Viscount said that.
Mr. DILLON: The hon. Member agreed with the Noble Viscount, and strongly supported that view. But that is exactly what this Amendment proposes to do. Under the clause as it originally stood, new councils could be set up in any part of India without any Debate in Parliament; but under this Amendment, no new council can be set up outside the province of Bengal without the risk of Debate in Parliament and of collision between the two Houses. I cannot conceive any machinery more foolish or more fraught with mischief. What is likely to happen is this. If a proposition is made, perhaps in response to some agitation in India, to set up a new Executive Council in the Punjab or some other province, a Proclamation may be issued. I am sick of hearing all this talk about removing India, or the fleet, or the Army, or anything else from party politics. It is all humbug and hypocrisy. Supposing that in the future a proposition is made by some reforming
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Viceroy like Lord Ripon to set up a new Executive Council, and the House of Lords in their wisdom say "No." Is the House of Commons, if it contains a large majority of Liberals, going to remain silent? You are setting up machinery by this stupid and most perverse Amendment by which you may invite India to the spectacle of their being denied that which the House of Commons by a large majority say they ought to have. I cannot conceive a worse or more ill-judged proposition.
Then, says the hon. Member for Montgomery Boroughs (Mr. Rees), "Oh, but the House of Lords will never dream of presenting an address overruling the judgment of the Government of India." But what are they doing by this Amendment? Have we not been told that the Government of India accepted the Bill in its original form? Lord Landsdowne complimented Viscount Morley when the latter was compelled to yield to him, but he was not very complimentary when Viscount Morley did not yield; but as soon as he had asserted the authority of the House of Lords and won his point he complimented the Noble Viscount. If I had been Lord Morley I would not have returned the compliment. This sort of compliment ought not to be very agreeable to Liberal Ministers. Lord Morley was complimented on accepting a compromise which overrules the opinion of the Government of India. What authority or ground has the hon. Member for Montgomery Boroughs for his confidence that in the future the House of Lords will be any more tender for the opinion of the Government of India than they have shown themselves to be on the present occasion? The House of Lords have had another victory in this matter. The whole course of reform, whether in Ireland, India, South Africa, or any other part of the British Dominons, is marked by these enterprises of the House of Lords, who have over and over again wrecked schemes of reform. As I say, I do not profess to have any expert knowledge of India which would enable me to give an opinion as to whether they will succeed in doing the same thing on this occasion. On previous occasions, when they have been compelled to yield and accept to some extent reforms, they have robbed them of their grace by mutilating them, and they have taken away any effect they might have had in reconciling opinions and healing bitterness in the countries to which they applied. They have done the same on this occasion, and

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they have only acted consistently with their whole record. In my opinion Lord Morley could have been much better employed than in complimenting Lord Lansdowne on this fresh humiliation inflicted upon the House of Commons.
Earl PERCY: As this clause in its amended form has been introduced by the Government mainly to meet representations from this side of the House, and in order to carry out an understanding arrived at, not in the House of Lords, as some Members seem to suggest, but in this House—an understanding on the strength of which I withdrew my Amendment—I may perhaps be allowed to thank the Government for having gone so far to meet the views which we then put forward, and also to express my surprise at the somewhat belated protest made by the hon. Members for Leeds (Mr. O'Grady) and East Mayo (Mr. Dillon). I really cannot understand how anyone who was present on the Report stage—I believe the hon. Member for East Mayo was not present—could have conceived that the declaration then made by the Government of their intention could possibly be given effect to by any other means than that embodied in this clause. What was the compromise which I myself suggested on that occasion? The clause had been thrown out altogether in the House of Lords on the ground that they did not think a case had been made out for the creation of Executive Councils in any of the Provinces of India. They said at the same time that when the Bill came back from this House the Government might be able to produce reasons to induce them to reconsider that view. When the Bill was brought forward in this House in Committee the Government did not produce any very convincing or novel reasons even in favour of creating an Executive Council in Bengal; but they did at all events show that not only the Government of India but the Lieutenant-Governor of Bengal were in favour of the immediate creation of an Executive Council in that particular province. We voted against the reinsertion of the clause in Committee, but it was reinserted; and when the Report stage came on I said that I would not move to reject the clause again, but that we would be willing so far to waive our objections to the creation of an Executive Council in Bengal, where the Government of India and the Lieutenant-Governor were in
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favour of that being done. I suggested that in other provinces where neither the Government of India nor the Lieutenant-Governor was at present in favour of the creation of those councils, the Government should allow matters to remain where they were. I said that if the Government objected to that proposal, not on the ground that it limited the discretion of the Government of India or their own discretion, but that the necessity of having recourse to fresh legislation would involve great and unnecessary expenditure of time, we on our side would be perfectly prepared to acquiesce in some arrangement by which, by some less dilatory procedure, such as we are familiar with in connection with provisional orders, the same object might be obtained and the control of Parliament effectively retained. Of course, the control of Parliament in the case of a proclamation like this or of a provisional order must mean the same as it means in the case of legislation, namely, effective control on the part of each House. Therefore, I do not understand why, if hon. Members objected to the compromise which was suggested in this House and provisionally accepted by the Front Bench opposite, they did not seize that opportunity to make their protest.
The real truth is that, in spite of the admirable example set him by his leaders, who, however much we may disagree with them, have throughout argued this Bill on the highest grounds of practical common-sense and not of party prejudice, the hon. Member for Brentford (Dr. Rutherford) cannot resist the temptation to introduce party considerations into the discussion of a purely Indian question and to have a dig at the House of Lords. A more inappropriate occasion to discuss the relations between the two Houses than an Indian question could hardly be imagined. I can quite understand that on ordinary questions, in which party considerations come into play, the hon. Member may dislike the prerogative of an Assembly in which his views are represented by a very small minority; but the question of creating Executive Councils in India does not involve party considerations at all, nor does it involve questions of reaction. The Opposition to the creation of Executive Councils in other provinces was expressed in the House of Lords quite as strongly by Liberals like Lord Macdonnell, and by independent peers like Lord Cromer, as it was by Lord Lansdowne, and the proposal was strongly opposed in this House by

433
several hon. Gentlemen who usually support the Government. If it is really to be suggested that on a purely administrative question like this the House of Lords is necessarily likely to take a different view from the House of Commons, the only possible reason I can suggest for that difference of attitude is that the House of Lords happens to possess almost a monopoly of those who have held high administrative office in India, and who, therefore, are capable of speaking on the basis of their Indian experience.
May I say a word, in conclusion, as to the object of this compromise, which I think has been somewhat misunderstood? The hon. Member for Leeds (Mr. O' Grady) seemed to imagine that our idea is to interfere with the discretion of the Government of India. That is the very reverse of our position. We think that to have retained the clause in its original form would really have been to fetter the discretion of the Government of India by enabling the Secretary of States at home to put pressure upon them or to force them to put pressure on the Lieutenant-Governor.
Mr. O'GRADY: Does the Noble Lord overlook the fact that the Viceroy himself and his council were strongly in favour of the original Bill?
Earl PERCY: I do not know whether it is really worth while going back on that point, but as regards the province of Bengal itself the Government of India were not in favour of the creation of an Executive Council there three months before the Bill was introduced, and, owing largely to pressure from home, they were induced to change that opinion within that short space of time. We want to safeguard them as regards other provinces, where neither the Government of India nor the Lieutenant-Governor is in favour of the creation of Executive Councils, from the same kind of pressure. May I point out that we want to safeguard the Government of India from the impression that the creation of these councils was due very largely to the feeling in England that the creation of these councils will afford a fresh opening for the employment of the natives. If they will turn to the Debate which recently took place on the Indian Budget they will see that Sir H. Adamson, who admits that sooner or later Executive Councils on administrative grounds will have to be created, also states that the main reason why many people think that Executive Councils should be created is that it will afford an opportunity for the employ-
434
ment of natives. He adds expressly that that is a wholly irrelevant consideration. That is our whole object. We want the Government to have a free hand to discuss. this question on its merits, from the point of view of administrative efficiency, and that alone. I entirely agree with the view expressed by the hon. Gentleman who moved the clause in its amended form, that whenever the time arrives that the Government of India comes to this House, and to the other House, and says: "We do think that the time has arrived when Executive Councils on the ground of administrative efficiency ought to be set up in these other provinces," then I do not think we shall find that there will be the slightest divergence of opinion between the two Houses or any reluctance to concede what the Government of India desires.
Mr. T. HART-DAVIES: I regret this compromise was entertained. I would have much rather have seen the Bill in its original form. At the same time I think that the effect of it has been rather exaggerated. I do not think it is a matter of such very great importance as some think. On the whole I think that the opinion of the Government of India will in all probability be followed. I think on the whole that Indian affairs are treated here in a way to show that whatever the Government of India recommend goes through, and the occasions are very rare that either House will refuse to follow that course. I understood at the time of the compromise that what was meant was that there should be an Address from both Houses. I see now it is an Address from either House. That seems to me to be rather a doubtful state of things. For instance, if the House of Lords moved an Address against the Government of India who had proposed the council, I suppose that the House of Commons would be in the position to move an Address in favour of it. Then we should have a conflict between the two Houses, and one which would be very much to be depreciated, because Indian questions are the very last thing that ought to come into our constitutional struggles here. I understood at the time that it was an Address by both Houses, and I was surprised when I read the Debate in the House of Lords that it was either House. I suppose it is too late now to alter that unless the Government were to take the matter up. It will be extremely desirable that they should take the matter up if only to give

435
a simple expression of our opinion. I hope the hon. Member who is in charge of this Amendment, if he can do so, will move that the Address from "either" House should be altered into an Address from "both" Houses.
Sir J. JARDINE: I would like to give my views on this matter, for it seems to me one in which we ought carefully to remember the great advantages of compromise, and the advantage also of looking at things in due proportion. There was a difference of opinion about this clause on this side of the House I know. I have been impressed by the speeches made from the other side, and by some of the arguments used in another place showing that there was a strong difference of opinion. However, what I venture to state is my own opinion. I think one of the reasons why we should be willing to accede to the compromise is the difference of opinion. Secondly, as regards the due sense of proportion, as most of those who have spent their lives in India know, it is extremely important, as we are on the eve of passing this Bill. I think that we can well afford to treat the Lords' Amendment as rather a matter of procedure than an issue raising a great constitutional question and possible conflict between the Houses, either now or in a time of future that none of us have eyes to see far into. As to voting for the Amendment moved by the hon. Member for Brentford (Dr. Rutherford), I would do so if I anticipated all the evil consequences which he was afraid of. I must state plainly I do not. I believe the people of India will very largely be satisfied with the whole measure. The people of Bengal will have their council, a thing which they have been demanding for so long. The Civil servants will be satisfied with the Lieutenant-Governor of Bengal presiding over the council. Then, besides, one must never forget that there are a great many people in India who do not trouble their heads in the least about the changes of Government unless it effects them personally, chiefly by means of taxes. There is a large number of people who are willing to see reforms go on in a quiet way. I do not deny that some enlightened minds are anxious for even more than this Bill provides; but still, there is a large number of people there, as everywhere else, who tell you that they are more or less indifferent. At any rate, I think that we may well wait in hope, and leave them to wait
436
in hope too. I am not concerned much as to procedure, nor to consideration as to what might happen if such an Address as is contemplated by the Amendment were assented to; but I agree with those who have preceded me in believing that both Houses would, as becomes their dignity and high profession, not consent to an Address conflicting with the Viceroy of India in Council in a matter of this kind, unless there were found grave and serious reasons for so doing. I think, then, that we may well leave this matter to time, and trust, in full confidence, that by passing this Amendment we shall present the people of India with a statute agreed on, not by one party alone but generally by the great historic parties, and in that way a free gift from Great Britain more than it would be if we made it a further means of conflict.
Mr. JOHN ELLIS: I noticed that my hon. Friend the Secretary of the Treasury—who is in the place of my right hon. Friend, whose absence we all lament—I say I noticed with pleasure that he did not express a very great sense of gratification in accepting this Amendment. He put his lament that it was necessary in the very careful sentence at the commencement of his speech. The Noble Lord who spoke on this matter for the official Opposition gave an account as to how this thing arose. It was accurate, of cours?, as far as it went, but it was rather insufficient. What we have seen of this matter this afternoon reminds us of what has happened. By an overwhelming majority of the House of Commons a clause was inserted, with the full assent of the Government of India, on the responsibility of the Secretary of State here, and with the full assent of the Cabinet. It was, I may say, contumeliously rejected by the other House. The Government restored the clause by an overwhelming majority. It went up again to another place. Certainly the suggestion was thrown out by the Noble Lord that if certain things were done, the Opposition would be willing to accept the change. I am one of those who is free to confess that I look upon this compromise as a very lamentable one. It is very true that one should observe the proportion of things. Even so, I regard the compromise as a very lamentable one. We must not blink the fact that if compromise is agreed to by the Government under force majeure it is in order to get a great Bill of which we all approve through the Houses of Parlia-

437
ment. Therefore, it is an old illustration of what I suppose we must submit to for a time longer—I hope not a very long time. I hope my right hon. Friend the Prime Minister will make a note that this is another illustration. Speaking for myself, I doubt very much whether the hon. Member for the Montgomery Boroughs (Mr. Kees), who seemed to have lost his way in the House, should speak as he did of the Secretary of State. I do not think my noble Friend ever committed himself to such strong language as to be "perfectly satisfied with this arrangement." Knowing him as I do, I do not think he would use such language as that. Therefore, I personally look upon this as a lamentable instance of what is constantly taking place, and that we in this House are being constantly overruled. If my hon. Friend goes to a Division I shall support him.
Mr. A. LUPTON: The hon. Member for Montgomery Boroughs said that it would be quite as absurd for a man to stand up and profess to talk for Europe as it would be to profess to speak in this House in the name of India. But supposing Europe was governed by Japan, and that Japan had established authority over the whole of the Continent of Europe, might not a man then speak in the name of Europe through Japan? I think it would be quite a possibility. We know that the bonds of love are strong; we also know from those who have read history that the bonds of hatred are also strong, and we often find people united in hatred of a particular rule, and we find it often to be one of the most common bonds that unite a nation. It would be a great pity if the people of India should be united in a hatred of this country. There have been signs in the last few years that such a possibility might arise. This Bill was a great calming influence when it was brought in, and we hope, and the correspondents many of us had in India had written to say that they had hopes of good things resulting from this Bill. I am sorry to hear the Noble Lord the Member for South Kensington (Earl Percy), whose observations I always listen to with great interest and respect, say that in his view the establishment of these councils was entirely a question of administrative effici-
ency. Of course that is good enough for a Gentleman accustomed to governing. For him practically the whole question of government is administrative efficiency. Some of us take a different view as to government. We think it is better to govern ourselves badly than to be well governed by foreigners. I can well imagine from what I read of some clever Japanese coming over here and governing this country far better than we could govern it.
Mr. SPEAKER: Order, order. I do not see the relevancy to the Amendment before the House of the hon. Gentleman's observations.
Mr. LUPTON: I beg pardon, Mr. Speaker. I was only replying to the Noble Lord opposite, who supported the Amendment on the ground that he was in favour of administrative efficiency, and declared that he was against those people who claim for Executive Councils solely on the ground that it would give employment to Indians and to natives in governing themselves instead of the employment of Europeans; it was that argument that led me to make that examination as to what would happen it we were governed by foreigners. Of course, I bow to your ruling. If you say it is not germane, of course it is not germane. We sometimes forget here that we have 250 millions of people in India to govern, and I think the only view we can take is how long it will be before these 250 millions are no longer subject to our government. I cannot understand the Liberal party—
Mr. SPEAKER: Order, order. The hon. Member is talking at large. He must confine himself to the particular Amendment.
Mr. LUPTON: I think in one respect the Amendment made by the House of Lords may produce a good effect in this country, for it may lead to many Debates upon India in this House which, if the. Amendment were rejected, we should be deprived of.
Question put: "That the House do agree with the Lords' Amendments"
The House divided: Ayes, 245; Noes, 104.

Barry, Redmond J. (Tyrone, N.)

Haworth, Arthur A.

Pullar, Sir Robert

Beauchamp, E.

Hazel, Dr. A. E. W.

Rainy, A. Rolland

Bonn, W. (Tower Hamlets, St. Geo.)

Heaton, John Henniker

Randies, Sir John Scurrah

Bennett, E. N.

Hedges, A. Paget

Raphael, Herbert H.

Berridge, T. H. D.

Helme, Norval Watson

Rea, Russell (Gloucester)

Bethell, Sir J. H. (Essex, Romford)

Henry, Charles S.

Rees, J. D.

Bignold, Sir Arthur

Herbert, Col. Sir Ivor (Mon. S.)

Rendall, Athelstan

Birrell, Rt. Hon. Augustine

Herbert, T. Arnold (Wycombe)

Renwick, George

Brooke, Stopford

Hobart, Sir Robert

Ridsdale, E. A.

Brunner, Rt. Hon. Sir J. T. (Cheshire)

Hobhouse, Charles E. H.

Roberts, Charles H. (Lincoln)

Burdett-Coutts, W.

Holland, Sir William Henry

Roberts, S. (Sheffield, Ecclesall)

Burns, Rt. Hon. John

Hope, James Fitzalan (Sheffield)

Robertson, Sir G. Scott (Bradford)

Butcher, Samuel Henry

Horniman, Emslie John

Robinson, S.

Buxton, Rt. Hon. Sydney Charles

Hunt, Rowland

Robson, Sir William Snowdon

Cameron, Robert

lllingworth, Percy H.

Roch, Walter F. (Pembroke)

Carlile, E. Hildred

Jardine, Sir J.

Rogers, F. E. Newman

Causton, Rt. Hon. Richard Knight

Jones, Sir D. Brynmor (Swansea)

Ronaldshay, Earl of

Cave, George

Jones, Leif (Appleby)

Runciman, Rt. Hon. Walter

Cawley, Sir Frederick

Jones, William (Carnarvonshire)

Russell, Rt. Hon. T. W.

Cecil, Evelyn (Aston Manor)

Kearley, Sir Hudson E.

Scarisbrick, T. T. L.

Chance, Frederick William

Kennaway, Rt. Hon. Sir John H.

Schwann, Sir C. E. (Manchester)

Chaplin, Rt. Hon. Henry

Kerry, Earl of

Scott, Sir S. (Marylebone, W.)

Cheetham, John Frederick

King, Alfred John (Knutsford)

Sears, J, E.

Cherry, Rt. Hon. R. R,

King, Sir Henry Seymour (Hull)

Seaverns, J. H.

Churchill, Rt. Hon. Winston S.

Laldlaw, Robert

Sheffield, Sir Berkeley George D.

Cleland, J. W.

Lambton, Hon. Frederick Win.

Sherwell, Arthur James

Clive, Percy Archer

Lamont, Norman

Silcock, Thomas Ball

Clyde, J. Avon

Lane-Fox, G. R.

Sloan, Thomas Henry

Corbett, C. H. (Sussex, E. Grinstead)

Lewis, John Herbert

Smeaton, Donald Mackenzie

Cornwall, Sir Edwin A.

Lloyd-George, Rt. Hon David

Smith, Abel H. (Hertford, East)

Cox, Harold

Long, Col. Charles W. (Evesham)

Smith, F. E. (Liverpool, Walton)

Craig, Charles Curtis (Antrim, S.)

Lonsdale, John Brownlee

Soames, Arthur Wellesley

Craig, Captain James (Down E.)

Lowe, Sir Francis William

Soares, Ernest J.

Craik, Sir Henry

Luttrell, Hugh Fownes

Spicer, Sir Albert

Crosfield, A. H.

Lyell, Charles Henry

Stanger, H. Y.

Crossley, William J.

Macdonald, J. M. (Falkirk Burghs)

Stanier, Beville

Dalrymple, Viscount

Maclean, Donald

Stone, Sir Benjamin

Davies, David (Montgomery Co.)

M'Callum, John M.

Strachey, Sir Edward

Davies, Ellis William (Eifion)

M'Calmont, Colonel James

Straus, S. S. (Mile End)

Davies, M. Vaughan. (Cardigan)

McKenna, Rt. Hon. Reginald

Strauss, E. A. (Abingdon)

Davies, Timothy (Fulham)

Mallet, Charles E.

Talbot, Lord E. (Chichester)

Davies, Sir W. Howell (Bristol, S.)

Markham, Arthur Basil

Tennant, Sir Edward (Salisbury)

Dewar, Sir J. A. (Inverness-sh.)

Mason, A. E. W. (Coventry)

Tennant, H. J. (Berwickshire)

Dickinson, W. H. (St. Pancras, N.)

Mason, James F. (Windsor)

Thomas, Sir A. (Glamorgan, E.)

Douglas, Rt. Hon. A. Akers-

Massie, J.

Thorne, G. R. (Wolverhampton)

Duckworth, Sir James

Masterman, C. F. G.

Tillett, Louis John

Duncan, J. Hastings (York, Otley)

Menzies, Walter

Tomkinson, James

Dunne, Major E. Martin (Walsall)

Meysey-Thompson, E. C.

Trevelyan, Charles Philips

Edwards, Enoch (Hanley)

Middlebrook, William

Tuke, Sir John Batty

Edwards, Sir Francis (Radnor)

Molteno, Percy Alport

Ure, Rt. Hon. Alexander

Erskine, David C.

Montagu, Hon. E. S.

Valentia, Viscount

Evans, Sir Samuel T.

Moore, William

Walker, Col. W. H. (Lancashire)

Everett, R. Lacey

Morgan, G. Hay (Cornwall)

Walrond, Hon. Lionel

Faber, George Denison (York)

Morpeth, Viscount

Walters, John Tudor

Faber, Captain W. V. (Hants, W.)

Morrison-Bell, Captain

Walton, Joseph

Fell, Arthur

Morse, L. L.

Ward, John (Stoke-upon-Trent)

Ferens, T. R.

Morton, Alpheus Cleophas

Warde, Col C. E. (Kent, Mid)

Ferguson, R. C. Munro

Murray, Capt. Hon. A. C. (Kincard.)

Warner, Thomas Courtenay T.

Fetherstonhaugh, Godfrey

Murray, James (Aberdeen, E.)

Wason, Rt. Hon. E. (Clackmannan)

Findlay, Alexander

Myer, Horatio

Wason, John Cathcart (Orkney)

Foster, Rt. Hon. Sir Walter

Nicholson, Charles N. (Doncaster)

Waterlow, D. S.

Foster, P. S.

Norman, Sir Henry

White, J. Dundas (Dumbartonshire)

Freeman-Thomas, Freeman

Norton Capt. Cecil William

White, Sir Luke (York, E.R.)

Gardner, Ernest

Nussey, Thomas Willans

Whitley, John Henry (Halifax)

Gladstone, Rt. Hon. Herbert John

Oddy, John James

Whittaker, Rt. Hon. Sir Thomas P.

Glen-Coats, Sir T. (Renfrew, W.)

Partington, Oswald

Wiles, Thomas

Glendinning, R. G.

Pearce, William (Limehouse)

Williams, Col. R. (Dorset, W.)

Goddard, Sir Daniel Ford

Pease, Herbert Pike (Darlington)

Wilson, Hon. G. G. (Hull, W.)

Gordon, J.

Percy, Earl

Wilson, J. W. (Worcestershire, N.)

Gretton, John

Phllipps, Col. Ivor (Southampton)

Wilson, P. W. (St. Pancras, S.)

Grey, Rt. Hon. Sir Edward

Philipps, Owen C. (Pembroke)

Young, Samuel

Haldane, Rt. Hon. Richard B.

Pickersgill, Edward Hare

Harcourt, Rt. Hon. L. (Rossendale)

Powell, Sir Francis Sharp

TELLERS FOR THE AYES.—Mr.

Harcourt, Robert V. (Montrose)

Pretyman, E. G-

Joseh Pease and the Master of

Harris, Frederick Leverton

Price, C. E. (Edinburgh, Central)

Ellbank.

Harrison-Broadley, H. B.

Price, Sir Robert J. (Norfolk, E.)

Division No. 119.]

AYES.

[5.7 P.m.

Acland-Hood, Rt. Hon. Sir Alex. F.

Ashley, W. W.

Balfour, Rt. Hon. A. J. (City Lond.)

Agnew, George William

Asqulth, Rt. Hon. Herbert Henry

Banbury, Sir Frederick George

Airsworth, John Stirling

Astbury, John Meir

Baring, Godfrey (Isle of Wight)

Allen, Charles P. (Stroud)

Atherley-Jones, L.

Barker, Sir John

Anson, Sir William Reynell

Baker, Sir John (Portsmouth)

Barlow, Percy (Bedford)

Anstruther-Gray, Major

Balcarres, Lord

Barnard, E. B.

Arkwright, John Stanhope

Baldwin, Stanley

Barrle, H. T. (Londonderry, N.)

NOES.

Abraham, W. (Cork, N.E.)

Bryce, J. Annan

Clynes, J. R.

Barnes, G. N.

Burke, E. Haviland

Cobbold, Felix Thornley

Black, Arthur W.

Burt, Rt. Hon. Thomas

Cooper, G. J.

Boland, John

Channing, Sir Francis Allston

Craig, Herbert J. (Tynemouth)

Brace, William

Clough, William

Crean, Eugene

Crooks, William

Kennedy, Vincent Paul

Power, Patrick Joseph

Curran, Peter Francis

Kettle, Thomas Michael

Radford, G. H

Delany, William

Lardner, James Carrige Rushe

Redmond, John E. (Waterford)

Devlin, Joseph

Law, Hugh A. (Donegal, W.)

Redmond, William (Clare)

Dillon, John

Lea, Hugh Cecil (St. Pancras, E.)

Richards, Thomas (W. Monmouth)

Donelan, Captain A.

Lehmann, R. C.

Roberts, G. H. (Norwich)

Duffy, William J

Lupton, Arnold

Roche, Augustine (Cork)

Ellis, Rt. Hon. John Edward

Macdonald, J. R. (Leicester)

Roche, John (Galway, East)

Fenwick, Charles

MacNeill, John Gordon Swift

Scott, A. H. (Ashton-under-Lyne)

Flavin, Michael Joseph

MacVeagh, Jeremiah (Down, S.)

Sheehan, Daniel Daniel

Fullerton, Hugh

MaeVeigh, Charles (Donegal, E)

Sheehy, David

Gill, A. H.

M'Arthur, Charles

Smyth, Thomas F. (Leitrim) s.)

Ginnell, L.

Meagher, Michael

Stewart, Halley (Greenock)

Glover, Thomas

Mooney, J. J,

Summerbell, T.

Grant, Corrie

Muldoon, John

Sutherland, J. E.

Greenwood, G. (Peterborough)

Murphy, John (Kerry, East)

Taylor, John W. (Durham)

Gulland, John W.

Murphy, N. J. (Kilkenny, S.)

Toulmin, George

Halpin, J.

Nicholls, George

Walsh, Stephen

Hart-Davies, T.

Nolan, Joseph

Wardle, George J.

Harvey, W. E. (Derbyshire, N.E.)

O'Brien, Patrick (Kilkenny)

Watt, Henry A.

Hayden, John Patrick

O'Connor, James (Wicklow, W.)

White, Patrick (Meath, North)

Healy, Maurice (Cork)

O'Connor, John (Kildare, N.)

Williams, J. (Glamorgan)

Henderson, Arthur (Durham)

O'Connor, T. P. (Liverpool)

Williams, W. Llewelyn (Carmarthen)

Higham, John Sharp

O'Doherty, Philip

Wilson, John (Durham, Mid)

Hogan, Michael

O'Donnell, T. (Kerry, W.)

Wilson, W. T. (Westhoughton)

Holt, Richard Durning

O'Dowd, John

Winfrey, R.

Hope, John Deans (Fife, West)

O'Kelly, Conor (Mayo, N.)

Hudson, Walter

O'Shaughnessy, P. J.

Johnson, John (Gateshead)

Parker, James (Halifax)

TELLERS FOR THE NOES.—Dr.

Jowett, F. W.

Pointer, J.

Rutherford and Mr. O'Grady.

Joyce, Michael

Ponsonby, Arthur A. W. H.

CONSIDERED IN COMMITTEE.
[Mr. EMMOTT in the chair.]
(IN THE COMMITTEE.)

DEATH DUTIES.
Motion made and Question proposed: "That in the case of persons dying on or after the 30th day of April. 1909, there shall be substituted for the rates of estate duty set out in the First Schedule to the Finance Act, 1907, the following rates:—

Where the principal value of the estate

Estate duty shall be payable at the rate per cent. of

£

£

Exceeds 100

and does not exceed 500

1

Exceeds 500

and does not exceed 1,000

2

Exceeds 1,000

and does not exceed 5,000

8

Exceeds 5,000

and does not exceed 10,000

4

Exceeds 10,000

and does not exceed 20,000

5

Exceeds 20,000

and does not exceed 40,000

6

Exceeds 40,000

and does not exceed 70,000

7

Exceeds 70.000

and does not exceed 100,000

8

Exceeds 100,000

and does not exceed 150,000

9

Exceeds 150.000

and does not exceed 2) 0,000

10

Exceeds 200.000

and does not exceed 400,000

11

Exceeds 400,000

and does not exceed 000,000

12

Exceeds 600,000

and does not exceed 800,000

13

Exceeds 800,000

and does not exceed 1,000,000

14

Exceeds 1,000,000

15.and does not exceed

—[Mr. Lloyd-Geurge.]
Mr. STANLEY BALDWIN: I do not propose to keep the Committee long, but. I wish to make a few observations on the steepening of the gradient with regard to the death duties as proposed in this year's Budget. We have this advantage in discussing the subject of the death duties, that we have in black and white the proposals of the Government. We are not fighting in the twilight, trying to elicit various details as we have been trying with singular want of success during the past week. We know the best and we know the worst of the case, and we shall be able to discuss the whole of the proposals of the Government. This is hardly the occasion to criticise the death duties as such, because the principle has been conceded for many years. The only question at issue between us and the Government is whether by the steepening of the gradients, especially on the more moderate-sized estates, you are not doing more damage to the financial stability of the country than you are doing good to the Exchequer. The objections to any form of death duty, of course, are obvious, and there are no new ones but what objections there were have been steepened in their gradient just in the same way as the duties have been affected. They group themselves principally into three forms. They inflict hardship on the individual, they penalise thrift, and when they are raised to such a scale as they have been raised this year you are running a very grave risk of paying for current expenditure out of your capital. With regard to

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the increased difficulty which this steepening of the gradients throws on the individuals who have to meet the death duties, the Prime Minister has been assuring us that the scale of income tax in this country is a very moderate one, a somewhat changed point of view from that which he took three short years ago; but that is neither here nor there in this discussion. I would merely remind the Committee, and I hope I shall be able to do it in two or three minutes without being tedious, that the charge which a thrifty man has to meet on account of these increased duties by insurance practically doubles the rate of income tax he is paying on that total. [An HON-. MEMBER: "More."] If you take a man with an estate which will come in for death duties at about £80,000 and allow him an income of 4 per cent. derived from that money—and where the estate is agricultural land it would not be so great—you will find that the death duties liable on that estate come to no less than two years' income, and if he has to provide £2,400 for insurance, if he is healthy and sufficiently young that he can get the insurance effected at a 3 per cent. premium, the payment of that premium means an additional income tax of no less than 14 pence.
Take a man with a very much smaller estate, who in many ways would be liable to feel this tax more. Take an estate of £15,000. The amount of insurance that man would have to cover under the new scale would be equivalent to an extra tax of 9d. in the £. If the man is too old to insure himself at a reasonable rate, if his health does not allow it, if he is not a prudent man, if he has the enjoyment of his income, this largely increased block of capital in many cases will be raised with very considerable difficulty. I want at this point to draw attention to what I think is the most peculiar hardship of all these cases of death duties. I approach the subject with some reluctance and with some trepidation, because even the courage of the hon. Member for Preston the other day could hardly induce him to trespass on the subject. I allude to the question of the widow. I know that the widow is unpopular in this House. I know that the Chancellor of the Exchequer entertains very different feelings for her from those he would entertain if she had the vote, and I must may if anything can convert me to be a suffragette it would be the treatment meted out under our financial system to
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widows. Take the case of the wife of a man who is earning an income under conditions where he can get an exemption owing to his income being earned. Supposing he is a profesional man, as many of these men are. Of course the moment that man dies the income of the family falls considerably owing to the death of the breadwinner. Not only has there to be provided an increased block of capital out of the estate, but the widow herself has to pay 5d. more income tax on her reduced income. There is one other point connected with the death duties which I think ought to be brought out, although I do not think it is a new point, but, like all other points, it becomes further accentuated by the steepening of the gradients. I want hon. Members to consider for one moment the value of a sovereign to a man from what is almost an ethical point of view. If a man has a sovereign, and he chooses to spend it on himself, whether he spends it on clothes, beer, or mineral waters, or as his fancy may lead him to spend it, he has the full enjoyment of it and the encouragement of the State to spend it, and he derives pleasure from its consumption. But the moment he decides to save it and put it by for his wife and children, the value of that sovereign drops from 20s. to 18s. 6d. or 19s., according to the size of his estate. If that is not penalising thrift I do not know what is. Any system of taxation that makes a man hesitate as to whether it is worth his while to go on saving money must be a bad system of taxation for the morale of the citizen. Wherever you find by legislation of this kind a tendency to lessen the disposition to save among well-to-do people you may be quite sure that the example of thriftlessness set up amongst them will be very quickly followed by those in less fortunate circumstances. Considering that thrift has never been a virtue of the English people in every class of life, I think our legislation should be directed to making it worth a man's while to save, and we ought to encourage him to do this in every possible way.
But there is one point which to my mind is the most serious of all, and it is that the time will come under these steepened gradients when we shall be taking, if we have not been doing it before, capital and employing it in the annual expenditure of the country. I know quite well it has often been said, and it has been held with some show of plausibility, that death duties are only a form of deferred income tax. If that be the case under the Harcourt duties

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of 1892 it is very questionable whether it is the case to-day, and although this is a matter that is not open to proof, I believe there is a closer cause of connection between the consumption of capital in annual expenditure and the want of employment in the country than appears on the surface. It stands to reason that you cannot go on employing large blocks of capital on the one side, and on the other maintaining wages and providing work for the millions of men in this country who want it. The cause of unemployment is a subtle one, and there are many links in the chain. Many of the causes that exist are hidden out of sight, but I am none the less convinced of what I have just stated, and I believe my conviction is shared by most men who have had much business experience, more especially connected with banking. There is another point in connection with the incidence of the death duties, and, as far as I know, no Government has attempted to deal with it, and that is the question whether an estate, of whatever size, is hit rapidly in a succession of years by a succession of deaths. Where you get deaths occurring at more frequent intervals than a generation you begin to make an attack upon the corpus of the property that nothing can resist; and I do not believe you can get away from this fact: that you are using up your capital, and therefore you are lessening the amount that is available for the production of fresh work, and indirectly for distribution amongst the wage-earning classes of the community. I should like, if I may be allowed to do so, to offer a suggestion to the Chancellor of the Exchequer. It is this. I believe that it is impossible to go on raising these rates of death duties indefinitely, as it is impossible to go on raising the income tax indefinitely, without doing an immense amount of harm indirectly to the productive industries of this country I remember, Mr. Emmott, at one time when I was a small boy, staying in a mountainous country, that I received strict injunctions not to amuse myself by rolling stones down a mountain. I got hold, one day, of a large rock, and sent it down the mountain side. It bounded down by leaps and bounds, and finally finished its career in a plantation of sugar cane, where it did an infinitude of damage. I cannot help thinking that the position of the Chancellor of the Exchequer is something like mine on that occasion. The Chancellor of the Exchequer finds himself in an exalted position on the top of a
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mountain. He sees some Duke of Westminster here and a Rothschild there on the mountain side. He also sees a rock and a crowbar at his feet. He thinks that if he can dislodge the rock he can hit these men. He starts the rock rolling. It goes down the hill, and it only stirs a hair on the head of those men whom he wishes to hit, but the rock goes down into the valley and scatters destruction amongst thousands of men who put him in the position in which he is to-day.
Lord KERRY: I believe that these Resolutions are absolutely inseparable the one from the other, when you consider the effect which they will have, but I should Committee in dealing with this Resolution which is to follow. I wish to ask the Committee, in dealing with this Resolution, to consider the burden which it will place upon property in connection with the burdens imposed by the subsequent Resolutions. The Resolutions must be looked at collectively, and with regard to their cumulative effect on property. I think that it is really unnecessary to go into the details of this subject, because everyone is agreed as to the broad results which these new rates of death duties will have. The Chancellor of the Exchequer spoke of merely "adjusting the rates," but I believe that the effect will be to double the burden which is to be put on property. It will be a heavy burden in all cases. It will very heavily increase that burden, if not, as I said, actually double it. I want to address my remarks on this question more particularly to the effect which this scale of death duties will have on agricultural property. I do not deny that there is a hardship on the owners of personal property, but it must be admitted that in the case of agricultural property the hardship is much greater than on other property. It will affect in the first place the owners of agricultural property; in the second place the community, which depends on that property; and in the third place the State. I am not going to quarrel, any more than my hon. Friend who has just spoken, with the principle of the death duties. I do not think that anyone will contend that a large property passing at death should not pay a fair contribution-to the expenses of the State. The Chancellor of the Exchequer has talked a great deal about the various parties in the community paying their fair share. The issue is whether the taxes he proposes on owners of large property are a fair share. I want to bring before the notice of the House

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the question of agricultural land, and whether it is able in the long run to pay the taxes. In order to get at the results from these death duties one must look upon them in the form of an annual charge on the property, and that is not a very easy thing to arrive at.
As the House knows, various methods have been suggested for estimating the average annual charge on properties of different sizes. Of course, insurance has been suggested, but I must remind the Committee that that is a very hard task—a very hard task to suggest to those who wish to make provision for the death duties. Why? Under certain circumstances it would pay everyone with regard to the death duties to insure, namely, if no death duties were to be paid until 20 or 25 years hence, but that is not the case. Therefore the average term of life must be very largely reduced, and the insurance will be proportionately heavier. Even if you do insure for the death rates you will have to insure for a larger sum than what is actually due. Another method is for the successor to regard the sum which he is called upon to pay as an annual charge for the rest of his life. Various methods have been proposed in dealing with such cases. It has been proposed that he should take out an annuity. Whatever these methods of compensation may be, it is quite evident that under the scheme now proposed the annual charge will be extremely heavy, and especially heavy in the case of large estates. Take agricultural property, for instance. Anybody who knows anything about agricultural property will bear me out when I say that the true income is generally 30 or 40 per cent. of the nominal value, and my suggestion is that if we increase the death duties it will destroy the larger part of that income and leave nothing at all for the owner of the property to live on and to keep up his house. If that is true, or partly true, it must be admitted that there will be a very large injustice to owners of agricultural property. I should like to say a word as to the effect on the community which lives on that property. Every owner of agricultural property has a sentimental feeling towards his property on which he and his ancestors have lived for many years. Everyone knows well that the last thing such an owner would wish to do would be to sell that property. He would make every effort to keep it going. What will he do,
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when he is hard pressed by these proposals? He will reduce as much as possible the amounts spent out of his income in repairs and new works. That is a very varying sum as all owners of property know. It is anything from 60 per cent. down to 25 per cent. or lower, but surely the effect of this legislation will be to compel him to spend less on repairs and upkeep, and to reduce the expenditure to a minimum. The best estates will be brought down to the level of the worst managed estate. That will be the first effect of the hardship which owners of property will have to undergo. They will refuse to spend money on unremunerative work. They will not build labourers' cottages, and they will dismiss men where they can dismiss them. A landowner will be forced to collect his rents more stringently than before, and he will be unable to give the abatements which he has been in the habit of giving in the past. Of course, the last thing which will happen will be that he will find himself so beset by difficulties that he will have to let his house and become an absentee. Hon. Members know full well the evils that have arisen from absentee landlordism in Ire land, and surely they do not want to bring about a similar state of things in this country by these financial measures.
Lastly, how will this stiffening of the. death duties affect the State itself as a revenue-collecting authority? The Chancellor of the Exchequer has told us that these death duties provide a revenue-producing machine of the highest efficiency. Will the effect of his legislation be to make that efficiency continue? Surely it will have the contrary effect. I do not deny the right hon. Gentleman may get the extra money for a year or two, but I feel confident that the ultimate effect will be very adverse to the monetary requirements of the Government. First, the landlords will be forced to sell, on succession, blocks of their property, in order to realise the necessary death duties. As a result, there will be many forced sales all over the country, and it is extremely doubtful whether people will be ready to buy the land so offered. In that event there will be general depreciation in the value of land and a consequent diminution of the future death duties and of the present income tax which the Chancellor of (he Exchequer is in receipt of. Besides that, it must be obvious that as the estates are pared off bit by bit they will gradually descend into the lower category of the death duties, and the sum received by the State

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will correspondingly diminish. Therefore, I should have thought that in the interests of the State, if not in the interests of the individual or of the community living on the land, it would be well to reconsider these tremendous imposts, which are especially heaped on the agricultural industry by the Budget of the right hon. Gentleman. What I really would like to know is what attitude the Government take up towards this question? Do they expect that owners of agricultural property should produce the necessary death duties out of the superfluity of their savings or of their accumulations? Do they expect the owner of a landed property will be able to save the money out of his luxuries? If they do I think we shall be able to show that such a thing is absolutely impossible. First the land will be starved, and eventually it will be sold. That is what will inevitably happen in the endeavour to meet these imposts. If the Government do not take up the attitude that the money is to be paid out of savings, do they frankly admit it is to come from the corpus of the estate? I know that that view is taken honestly and straightforwardly by hon. Members below the Gangway, who wish to see all property, and especially landed estates, become small by degrees and beautifully less. In that, no doubt, they voice the opinion of a certain section of the community. But is that opinion really shared by the Chancellor of the Exchequer? It seems to me from the answer given to one of my right hon. Friends, and from arguments which were adduced at the beginning of this Debate, that that is so. The idea, he said, taking the instance quoted by my right hon. Friend of an estate of £100,000, which would have to pay death duties amounting to £10,000, so that the successor would be left with £90,000, the idea was, he said, that that successor should at once set to to make his £90,000 into £900,000. I am sure any agricultural landlord will be very grateful to be shown how that can be done. It may be possible in the case of personal property held in investments or in the case of fortunate speculations, but no one can possibly contend that there is any chance of an owner of agricultural property increasing his capital except by the very hard process of putting by any savings he may be left in possession of by the Chancellor of the Exchequer. If it really is the attitude taken up by the Government, that the money must be found out of the corpus of the estate, and that estates are gradu-
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ally to be reduced, it seems to me they throw over altogether the rules laid down by economists whom they are so fond of quoting. We heard a great deal about Mill when it was a case of taxing unearned increments. I believe one of the principles which Mill held most dearly was that in no case should the present value of property be confiscated. Surely if the Government say that intentionally they are taking blocks of property at each succession, which property has no prospect of being replaced, that is only another way of confiscating the present value of a man's property. And if that is their attitude I do not think they can complain when we say that the death duty and other proposals contained in this Budget are proposals of a confiscatory and predatory nature.
Mr. MUNRO FERGUSON: I am not going into the general question of the death duties, but there are one or two points in connection with them where I think they press hardly and operate with excessive severity. I think, therefore, the attention of the right hon. Gentleman may fairly be called to them. I should like to make this point as regards the question of the basis of valuation on which the death duties will be raised. Unless that basis is a fair one, I agree with all that has been said by the Noble Lord opposite (Lord Kerry) to the effect that the incidence of the increased death duties will fall very heavily upon agriculture and upon agriculture as an industry. I do not propose to deal with the position of the owner in particular. I will take agriculture as an industry, and compare it with other things. I ask, in the first place, that it should be treated on an equal footing with other things. I should like to remind the Chancellor of the Exchequer, with a most sympathetic spirit towards his general proposals, what the burdens upon agriculture are, because it is very hard for any one unconnected with agriculture to appreciate what the position really is. The crux of the position is to be able to secure from agriculture sufficient to provide for the proper equipment of the land, because without that proper equipment there will ensue agricultural deterioration. The yearly income tax, apart from the deferred income tax as it has been called, presses heavily upon agriculture, both upon owners and occupiers, because it is not levied as in the case of other industries upon profits. I do think that agricultural incomes ought to be taxed under

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schedule D. Then, as regards the owner, the incidence is heavy, because on a well-equipped estate the deductions, one-eighth and one sixth, do not nearly cover the cost. I would not care to see encouragement given to a badly managed estate by granting it an undue abatement. Maintenance, renewals, and management absorb so considerable a proportion that probably the net income is about one-half of the gross income. I cannot give the figure more accurately, because the rates vary so much in different parts. But, at any rate, it is a very large proportion. Now, again, the incidence of local taxation upon the agricultural industry is increasingly severe, because Parliament is constantly imposing some new and onerous burdens upon realty which, no doubt, are necessary, and have to be met out of increased rates. Rates are levied on realty for every kind of purpose, although agriculture often derives little or no benefit, direct or indirect, from the expenditure it has to contribute, while personalty is not called upon to make any corresponding sacrifice. Therefore I venture to suggest it is high time that the minority Reports of Sir George Murray and of Lord Balfour of Burleigh were taken off the shelf and the recommendations put into force. As to the deferred income tax, as the death duty has been called, I am not concerned now, to deal with the question of its increase under the Budget, though that may arise at another stage.
All I am anxious to urge is the need for a fair basis of valuation for the agricultural death duties, and for this reason, that those death duties fall with exceptional severity on the equipment fund to which I have already referred. Ordinary agriculture is a co-partnership in which the owner embarks about four-fifths of the capital and the occupier one-fifth. That, at any rate, is about the proportion in my country. Taking Scotland as a concrete example, it will be found that owners have 100 millions invested in permanent equipment, and expend yearly about 2½ millions for renewals, maintenance, and management. There is only the prairie value left in agricultural land and an exceedingly low rate of interest upon the equipment fund, but in spite of all we manage to keep the plough going, and the standard of agriculture is high. In a great many cases the cost of agricultural equipment and of maintenance have
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hitherto been met by revenue from outside sources. They have been derived from coal or feus, or possibly from some marriage of a financially attractive character. The fact is outlays to a considerable extent do not come, as in other industries, from the profits of agriculture, but from extraneous sources and through the purchase of estates by men who have made their fortunes in the industrial world. Some of these other sources of the landowner's income, are, I think, properly met and dealt with in the Budget, and, on the whole, it appears that in the future agriculture must be regarded as being more in the nature of a self-supporting industry. As regards the death duties, there is no certainty as to when death will occur, nor as to the valuation which will follow. It is not every owner, as has been pointed out, who is in a position to insure, owing to health, or age, or other circumstances, to meet these death duties; sale or mortgage will often be the only expedient, while the taxation proposed will render insurance or mortgage more onerous. The sale of agricultural land, in any considerable quantity, will be apt to be in the nature of a forced sale, and if it is to be avoided owners will be compelled to limit their outgoings, which would be to the deterioration of agriculture. It must henceforth be the object of the owner, if the burdens are excessive, or if they are raised on an unjust valuation, to restrict his capital expenditure, in order to have the money in hand when the call comes. The relief which agriculture obtained, by the transfer of land from hard-up to well-to-do people, will be lessened, because it will sweep away the small margin of profit left through growing burdens, and in consequence of the competition in equipment, in order to obtain a tenant. The incentive to a buyer will no longer be sufficient to insure the transfer of an estate, or a portion of an estate, in regard to which its owner can no longer discharge his liabilities to others who would have been willing to have undertaken them.
That must withdraw much of that extraneous help from agriculture which it has had in the past. The argument as applied to sylviculture is still stronger, because of the century which must intervene between the improvement and the equipment. I am no advocate of large estates, nor of the existing land system, because I think there is wide scope for national communal and occupying ownership. I only say we cannot break down the existing system without

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making provision for setting up another, without destroying agriculture. One advantage of breaking up large estates is that agriculture would escape the death duties, and the Treasury would no longer receive them from agriculture. The Treasury would then, in fact, have to be prepared to find some hundreds of millions for that equipment of land which the landowners hitherto provided. Boot out owners of mining royalties or building values, and the interests of the community would be speedily secured by some other form of control. Boot out the agricultural owner and the State must step into his shoes and assume the character of an improving landlord in Britain, as it is already doing at the present day, or will have to do in some parts of Ireland—the State will have to undertake many obligations, which is the surest way I know of of doubling the National Debt. Whatever the merits or demerits of the present national land system, it tends to economy in national expenditure, and it also tends, as I think we shall find, to produce revenue for the Treasury. I suggest that the total duties should be levied upon an equitable basis of valuation. For example, few duties can be readily sold, when the Lord Advocate is not making too many speeches, at about 28 years' purchase. The valuation of agricultural land on the same basis should not exceed 14 years.
Major ANSTRUTHER-GRAY: May I interrupt the hon. Gentleman for a moment? Can he tell me where he would sell feu duties for 28 years' purchase?
Mr. MUNRO FERGUSON: I put it roughly at 28 years' purchase. They were 30 at one time; I do not think they are below 28 at this time. I think that is a fair rate.
Major ANSTRUTHER-GRAY: Twenty-five.
Mr. MUNRO FERGUSON: I think that is a fair rate, because the nett and the gross income in the one case is one, and the nett income is about half the gross income in the other case. A distinction is recognised already between agricultural and other incomes, in respect of one-sixth or one-eighth deduction, and if that deduction is just in the case of the annual tax, it is equally just in the case of the deferred tax, and I think the deduction should also be made in the case of the deferred tax as in the case of the annual tax. Woodlands on the richer estates have hitherto
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practically escaped death duties, because the 25 years' maximum which the right hon. Gentleman the Leader of the Opposition put into the Finance Bill of the late Sir William Harcourt. The 25 years' maximum under which the death duties on agricultural land are raised is, in the case of the richer estates, covered by the estate without there being any need to call upon the woodlands. But upon the poorer estates they are liable, and the incidence of the death duties on sylviculture will be detrimental, because they will tend to force immature timber into the market, and for that reason I would commend that and other points to the consideration of the Chancellor of the Exchequer. I do so with great confidence, because I know of no one who is more ready and more able to accept a practical hint from a practical man. As it happens, I had some chickens at some of the roosts that have been raided by the right hon. Gentleman, not in such good condition as he could have wished, but still safe for the bag, because they are all pinioned. There are stronger birds upon the wing, and I hope his sporting tastes may enable him to discriminate so as to have a varied bag at the end of the day. But there are forms of realty which cannot evade the Treasury net, and which yeild an income which conies in very easily, as compared with agricultural income, to which I have alluded—minerals and ground values, and so forth. On the score of ability to contribute, I have always thought that these got off too easily, although I hold by the reservation which I made earlier in the Session, that if it has been the local community that creates the building values, there does not seem to me to be any strong reason why the State should collar them. I agree that they can best be collected by the State, but at the same time—
The CHAIRMAN: I do not quite see how the hon. Gentleman can connect this with the death duties.
Mr. MUNRO FERGUSON: I was only going to point out, Mr. Emmott, that if the State is going to keep these values that I thought it made an additional ground for the revision of the incidence of local taxation upon realty. That was in connecting with and in view of my plea that in case of' any increase of the death duties it would be fair to take the other burdens upon agriculture into consideration, and I have, only got to say further that while personally I feel deeply impressed with the necessity for finding more money for the Fleet

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and for the Territorial army, as well as for social legislation, I am no less attached to the financial and commercial system which this. Budget so far preserves, and I would say this, that my plea for agriculture does not affect any principle, nor does it involve any irremediable loss of revenue, in securing equality of treatment for that industry as compared with every other industry in the country.
Mr. PRETYMAN: I entirely agree with the main sense of the speech of the hon. Member for Leith Burghs who has just spoken. I do believe that of all the hardships suffered under these death duties, and I do not want to speak of individual hardships, I want to treat it on a general and national basis, as all taxation has to be treated—of all the hardships, those affecting agriculture and agricultural estates will certainly be found to be the most serious. I also agree with him from the point of view of machinery. As I have already indicated, when addressing the House recently in regard to the new land tax, the machinery through which this hardship can best be approached is the machinery of valuation and assessment. It is perfectly clear that where a tax or a duty is a multiple of an annual duty levied by assessment you can regulate a tax by regulating the assessment; and it is also obvious that if you treat agricultural property equally with other property, when and only when you reduce the annual tax on which the tax is based to exactly the same basis, namely, that of money actually raisable or chargeable upon other forms of property, if that can be done, it is obvious that the special grievance of agriculture would thereby disappear, if the Chancellor of the Exchequer could show that the assessment of the actual receipts from the agricultural property is on the same basis as it is on all other kinds of property. We should then be unable to contend that we were suffering from any special hardship, and it is perfectly clear that we should then be confined as to the justice or injustice, the wisdom or unwisdom, of the, death duties as a whole. I should like to say one word upon the general question of the effect of the death duties under the scheme of taxation, and I cannot help saying something to endorse what was said by my hon. Friend the Member for Worcester, who started this Debate in regard to the effect upon national capital. We had a statement showing the amount which the Chancellor of the Ex-
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chequer expected to realise finally by these new taxes, and if you add that to the sum which he has estimated the old taxes would produce if left on their present basis, you will find that the total sum to be raised by the death duties in future amounts to 26 millions of national capital, and that sum exceeds by one million pounds the total sum which they now propose to allocate to the National Debt service. So that you are to provide £25,000,000 annually to reduce the National Debt, but you are at one and the same time to expend annually £26,000,000 of national capital. It is national capital and nothing else. That position is strengthened by the observation which the Chancellor of the Exchequer himself made that he did not expect owners of property to pay the tax out of their annual income, but that they were to break off portions of their property, and pay it in that way. To my mind the only possible defence of the death duties as a national system is that the thrift of the nation in any one year will replace the amount of capital which is being, abstracted for the annual requirements of the State. I do not see how you can get away from that. The whole basis of Sir William Harcourt's proposal of the death duties was that it was difficult to graduate the income tax, that graduation was desirable, and that large sums are accumulating in the hands of a few people, and that the. way to get at these sums in the most convenient manner was to take that deferred graduated income tax in the form of death duties when those properties passed from one hand to another. That is the basis of the proposal, and it is the principal basis, provided it is perfectly clear that the sum taken will be replaced by national effort annually. There we get at once to the question, "What does that depend upon?" It depends, of course, upon two things—first of all upon national prosperity as a whole, and secondly on the rate at which these duties are imposed, or rather the proportion which the whole payments due under these duties bear to the national progress and the advancement of national wealth. It is impossible, of course, to arrive at an actual estimate; you can only judge by results, but at the present moment there is clearly a decline in national prosperity. Trade and prosperity are not advancing but declining, and therefore on that national ground it is a most unfortunate moment to choose to increase by no less than 7½ millions the amount which you are abstracting from national capital. The Chancellor of the Exchequer is very fond

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of appealing to Continental opinion and example. I read with some interest a German criticism of his Budget, which was that the right hon. Gentleman was taking his money, not from the realised fruits of industry, but from the capital upon which industry was based, and which was being used as its life-blood, and that therefore he was taking it in an injurious form.
These are my two criticisms upon the general policy of the death duties, and I agree most strongly with the opinion which has been expressed that the weight of these criticisms mainly depends upon the scale and amount on which these duties are based. From what knowledge I possess I unhesitatingly express the opinion that to raise these duties to the extent which is now proposed on capital which is being used in the industries of the country at large is to spend the national capital to a larger extent than it ought to be spent, and to unduly interfere with and hamper and injure the general trade and prosperity and industry of the country. I admit that up to a certain point the State will derive a greater advantage by obtaining the revenue in that form than it will suffer harm; but the moment you pass that point and take more money than industry can afford you are then damaging the State, you are reducing your sources of revenue, and as the hon. Member for West Derbyshire, Lord Kerry, remarked, "Where are you going if you are spending the capital?" You are told he cannot afford to pay these duties out of income, and I can show that he cannot. You have to sell the capital and hand it over to the Chancellor of the Exchequer, and that process is applauded by those who wish to see large capital businesses and large estates broken up. When you have broken them up, and when these high scales of duty no longer produce revenue, because there are no more large businesses or large estates to pay, where are you going to get the duty? I suppose you will attack some other industry. Of course, the consequences will be very disastrous, not only to those who have to pay the money in the first instance, but to those who hope to benefit from the taxes when they are levied.
In regard to realty, and especially in regard to agricultural property, I should like to point out one or two definite reasons why that property stands on a different footing from other property in regard to payments of these duties. The first point
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is; that the income which arises from realty in any form, but mainly from an agricultural estate, bears such a totally different relation to its capital value from what it does in any other form of property. There is a very large proportion of the capital value of an estate which produces absolutely nothing, and it of course must be remembered in regard to all death duties that when a man dies the capital value of his whole estate is aggregated, and in that whole estate, especially in regard to large estates, a very large amount of property is included which clearly yields no income whatever—pictures, timber, amenities of various kinds, the house, the furniture, and many articles and objects which are not supposed to yield any income whatever—and the result of that is, that the remaining property which does yield income has not only to bear the rate due to its own magnitude, but also the rate due to the magnitude of the entire estate, including that part which produces no income whatever, to help the estate out. It follows from that, that in regard to large estates the real incidence of the scale of graduation in reference to the actual income available from which to pay it is very much higher than appears upon paper. That is true of all estates.
In regard to realty, the next point I wish to make is the serious disability that it suffers from being treated in regard to valuation as an undivided unit. In regard to payment of the duty, it is treated as divisible. A man has a homogeneous estate of say 5,000 acres. As an undivided unit it has a considerable value, and is honestly worth £100,000. It is valued at that, and the owner has no reason to quarrel with the valuation. He has a house upon it, and the estate has good grounds. The Chancellor of the Exchequer says, "I value that estate at £100,000. and I levy duties upon it," and I have figures here which prove that in many cases these duties will amount to at least a quarter of the whole capital value of the estate. You have, first of all, to pay on a settled estate 9 per cent. estate duty. You have to pay under this new proposal 2 per cent. settlement estate duty, and you may then have to pay, even when the estate goes from father to son, 10 per cent. succession duty. If you convert that into income tax, and add the income tax rate which is now payable, something like a quarter of the estate has to be paid away to the Exchequer. The Chancellor of the Exchequer says to the

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[owner, "You are not expected to pay this out of income, but out of corpus." The owner has to realise—I do not think under present conditions he will find it very easy to mortgage it, when all these duties are placed upon property. These matters are all cumulative in their amount and in their relative effect in regard to security and confidence in dealing in land, and we have these new land taxes which we are told are started on a small scale, but which may be increased in the future, and anyone who is going to lend money on land will have to look to that consideration, and the question of being able to raise money on land in the future is one of very great difficulty. If the owner of the estate has to sell land to realise £25,000 what is going to be the effect? How much of that estate has he to sell to raise £25,000, and how much will the residue of the estate be worth when he has sold it for £25,000? I unhesitatingly say, from practical experience, that in many cases, when he has sold enough land to raise £25,000, he would be very lucky if he had £50.000 worth left. It is much the same as if the Chancellor of the Exchequer said, "I insist on charging a duty upon any china plate which is owned by any person who dies, and he has to pay me the quarter of the plate and to keep three-quarters for himself." You cannot treat land, where the value depends upon the unity being maintained, on the same basis as property which is personalty. Where you have a large block of shares, and where you take on that block a certain percentage in order to pay a tax on the value of the remainder, it remains wholly unaffected. With land it is entirely different. The third disability under which land rests is that is is nearly always in settlement. Under these new proposals that will be a great disadvantage. Sir William Harcourt, when he introduced death duties, made very careful calculations, and made a very careful statement in regard to that calculation of his on the 1 per cent. I should like to read his words. He said:—
"After much reflection I have come to the conclusion that we ought to follow the principle now in force under the probate duty and allow one payment to cover the settlement. Some people think tills is a very great sacrifice because of the number of lives in the settlement. You may have a number of lives but you can only have one generation. It may well be that a young life in free testacy may cover a longer period than all the lives in the settlement."
He proceeded from that to argue that after most careful calculations and con-
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sideration the 1 per cent. settlement duty which he proposed was on the whole a fair equivalent on the part of the taxpayer, seeing that the duty was only to be paid once on the death of a person competent to dispose within the currency of the settlement. The Chancellor of the Exchequer is not only levelling up the duty, but he is also doubling the settlement estate duty, and he is also doubling in many cases the succession duty, which is a very heavy burden.
The CHAIRMAN: The hon. Member is now discussing the succession duty Resolution. That does not arise on this Resolution except in so far as it affects the total burden on estates.
Mr. A. J. BALFOUR: On that point of order you are no doubt aware that by arrangement all these Resolutions are to be disposed of by Wednesday, and these particular Resolutions by to-morrow night. Might there not be some convenience in slightly, in the general interest, relaxing the ordinary rule of order, as it cannot lead to any unnecessary waste of Government time. It is a point of difficulty and delicacy, but I thought I might ask your advice upon it.
Mr. LLOYD-GEORGE: I think it would be better if we could by arrangement discuss the whole of these estate duties together in the same way as we discussed the stamp duties. It is difficult to discuss one of these Resolutions except in reference to the whole, and I felt that although the hon. and gallant Member opposite was going outside the strict rules of order, his speech was perfectly germane to the taxes as a whole. I would only suggest to you, Sir, again that, with the assent of the House, it would be very desirable to discuss these taxes as a whole, for the other Resolutions bear, to some extent, on the taxes we are discussing now.
The CHAIRMAN: If it is the general wish of the Committee that some latitude should be allowed in the matter, as in the case of the discussion of the stamp duties, I will not say that it should not be allowed. I said that the latitude then allowed was not to be made a precedent, and I do not see that by my allowing latitude in this case any harm will be done. But for my own sake, and more particularly for the sake of other Chairmen in future, I must again say that I cannot admit this to be a precedent. I will allow it in this case.
Mr. A. J. BALFOUR: Unless there was an arrangement on both sides of the House to finish the discussion on ail the Budget Resolutions by a certain date it would be intolerable.
Mr. PRETYMAN: I appreciate your ruling in this particular case. It is impossible to consider the incidence of the estates duties except in relation to the succession duties also, and the point I wish to make is this. In the course of a settlement, whoever takes the property pays the succession duty. The increased rate of succession duty which the Chancellor of the Exchequer is now imposing is not to be paid merely once during the settlement, but it is to be paid three or four times. A man leaves property to his cousin or his nephew, with the remainder to his son, and with a succession to an unborn grandson. All these lives in succession will pay the extra 5 or 10 per cent. succession duty in addition to the estate duty. That seems to me a most intolerable burden to be placed upon them. How can such a burden be borne? I feel sure the right hon. Gentleman will deal with that question. I took him to assent to an observation that these duties cannot be raised indefinitely. He said there must be a breaking point. I should like to ask what his breaking point is. It has been shown in figures that you cannot deal with this matter without taking these duties as income from the point of view of the State. That is the only sound way to look at these duties. You may have the case of an estate of £100,000, and you may have a burden amounting to 6s. 5d. in the £. In that case I believe the figure is rather under-stated, and I should like to ask the right hon. Gentleman whether he considers that 6s. 5d. in the £ is a fair burden. That is what the duty is now where succession duty, estate duty, and settlement duty fall together.
Mr. LLOYD GEORGEindicated dissent.
Mr. PRETYMAN: The right hon. Gentleman shakes his head, and I hope it may not be so, but that is the way it presents itself to me. What is the effect of this tightening up of all these different duties? First of all, there is the increased estate duty, the increased settlement duty, and the increased succession duty—all enormous increases, which taken together increase the present death duties by something like 50 or 60 per cent., and in large estates very nearly doubles them. Then
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the right hon. Gentleman has withdrawn the exemption from husband and wife. That is a very hard case. Surely there must be some sense of justice between the State and the individual. It arouses a feeling of injustice and unfairness on the part of the subject when the Crown says to husband and wife, "For the purposes of income tax we treat your two properties as divisible in order that we may get more income out of them, but when you die we treat them as indivisible in order that we may get more death duties out of them." I do not think that the injustice is worth the money you will get out of it.
Then we have the very serious proposal to alter the date within which gifts, inter vivos, are to hold good. Is that a defensible proposition? [Cheers.] I am very glad that hon. Gentlemen opposite have some sympathy with the question. It is entirely outside the scheme of the death duties altogether. It is trying to get at one and the same time death duty and succession duty out of a property. Sir William Harcourt made the distinction perfectly plain when he said that estate duty is a duty taken from the property of the dead and that succession duty is a duty paid by the living. You cannot mix the two principles up. It was agreed, with Sir William Harcourt's assent, that one year was a reasonable compromise. I have a vivid recollection of that matter being discussed. We had very prolonged Debates on that question, and it was agreed, with Sir William Harcourt's assent, that one year should be taken as a reasonable period in which to that there should not be these gifts made merely to escape, duly in articulo, mortis. With that I entirely agree, and when you go beyond that, and take a period of five years, what burdens are you going to throw on the living? What is the position of a man in good health and sound mind, who, in the ordinary course, makes over a marriage settlement to his daughter into a trust and appoints trustees? He meets with an accident three or four years afterwards—How is that duty going to be paid? Who is to pay it? What is to be the position of the trustees under the settlement? Take another case: A man makes over property in his lifetime to a son or daughter, who predeceases the father two or three years later, and leaves the property to be dealt with by an executor, and the father dies a year or so later, the whole thing happening within a period of five years. How many transactions are you going to hunt up in that

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case? The thing is really wholly impracticable. [Cheers.] And I am glad that appears to be the general sense of the House. I hope the right hon. Gentleman will deal with it when he speaks.
I will not go into the details of the complicated and difficult Resolution in regard to the tenant for life. I would only say that I think the right hon. Gentleman in that proposal is going to do an injustice. He is going to impose two duties within the currency of one settlement if I understand that proposal rightly. I am quite aware of a case which was tried in the courts, and I am aware of its effect. The effect of the judgment in that case—I am addressing myself now to the Attorney-General—was that on the payment of duty that only covers part of the property where the tenant's life interest has been deducted duty is escaped on the remainder of settlement. That is regarded as a hardship by the State, and it is proposed now to adjust it by creating a greater hardship by putting duty on both. Will the hon. and learned Gentleman bear me out in saying that the difficulty would never have arisen if the simple scheme of Sir Wm. Harcourt had been adhered to? His scheme was that the duty should only be paid once in the settlement, but in order to get money more rapidly there was an exception to that, and where the first death after the passing of the Act on any estate was not the death of the settler but of the tenant for life, the duty was to be paid. It was the greediness of the State that created the difficulty. They wanted to get more money. In this case they think they have not grabbed all, and they want to grab a little bit more. It is grossly unfair, and the only possible ground for the right hon. Gentleman if he tries to deal with it fairly, is that if the duty is to be paid on the death of the tenant for life, it ought not also to be paid on the death of the person who is competent to dispose and whose death occurs before he comes into possession of the property. Under the proposal which is now made the man who gets the property will pay, and the man who never had it will have to pay as well.
We come now to the last point of these increased duties. It is the removal of the limitation of 25 years' value on agricultural property. I do not quite understand the object of that. I think I am right in saying that it is an extremely rare thing when an agricultural estate does amount on valuation to 25 years purchase. We
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have had a statement from the Treasury that the average is something like 17 or 18 years. Of course, my objection would be very largely removed if the right hon. Gentleman when dealing with that point would deal also with the question of assessment. If you put agricultural property on a basis of assessment exactly equal to other property the number of years' purchase should be the same. If that unfairness is removed other objections will be removed with it. What is the process which agricultural property now goes through? The duty is levied. Some provision will have to be made for it. I think, with the scale of duties as it is now, it is a real hardship, and it is felt as an injustice, that a man who is thrifty and who puts by money to enable his successor to pay the duty should, as the result of that very act, have an increased amount of duty to pay under the scale on which it is charged. That is taken as a reason by the State for adding to the burden to fall upon him. I really think that when the magnitude of the duty imposed on the general scale is considered there ought to be some allowance for insurance. In income tax if a man insures his life he is allowed within a limit one-sixth of his income. If a man insures his life he is allowed to deduct insurance. On the same principle if a man insures against death duties he ought to be allowed within a limit to deduct that from his income, and that he and his successors must protect themselves against such demands from the Chancellor of the Exchequer.
As things stand, it simply amounts to this, that where the State says to a man, "I mean to take one-fourth of your property," it is simply a case of the Chancellor of the Exchequer and that man pitting their brains one against, the other, and obviously the instinct of self-preservation will drive a man to any shift to enable him-to secure somehow out of the Chancellor of the Exchequer such a fund from which his son or successor may succeed in meeting his wholly outrageous imposts, and in such a form that it will not add to the burden which will fall upon his son at his death. Surely in his own interest if the Chancellor of the Exchequer wishes to keep the money in the country he. ought to see that the money that is put by for this purpose to maintain the capital of the country is the capital of the private individual which the Chancellor of the Exchequer is to squander. That is another objection to that duty. It is so easy to come down on capital. There are many

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hon. Gentlemen opposite who run great businesses. What would they think if they were to deal with the capital of the business as the State is dealing with its capital, because the State has no capital—unless you take the Suez Canal shares—except the capital owned by individuals who pay taxes? The State has to be run as a business on exactly the same principles as a private business. We have hon. and right hon. Gentlemen opposite earnestly desiring to bring population back to the land. We have a proposal before us of a Development Grant. I venture to say however much good the Chancellor of of the Exchequer's Development Grant may do, the harm, if these duties be imposed on agricultural properties without a very large measure of relief by altering the basis of assessment, will enormously exceed any advantage which agriculture will gain by the expenditure of the development grant.
What actually happens on an agricultural estate? When a man succeeds to an agricultural estate—I think hon. Gentlemen from Ireland will bear me out in this: that the love a man has for the land on which he was born and brought up, and on which his ancestors lived is very great—the very last thing a man will do is to part with his land. Before parting with his land the whole estate is stopped for a scries of years; perhaps for one or two generations that estate is stopped. The State takes no cognisance of that. The State levies duty on this enormous scale just the same as if it were being worked. There is no question of his desire to keep the estate in order, and spending the amount of money which is required on it. It is a question of his capacity to do it. He cannot pay the same money at the same time to the Chancellor of the Exchequer and at the same time spend it. I have got here the actual figures of an estate for which I can vouch. I do not put this forward as a case of hardship. I am not dealing with this case from the point of view of hardship to the individuals at all, but from the national point of view whether it is desirable to withdraw from the land money which is now being spent on it for the benefit of all those who are living in rural districts. Now at this moment death duties are the bane of the countryside already on the present scale.
Here is an estate on which for 18 years the average rental was about £15,000 a year, and the total money received in 18 years was £261,175. That is the gross
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total actually received from rents and royalties. Out of that £43,000 was paid in tithe, £6,298 in land tax, £10,494 on the maintenance of river walls and sea defences. All these are statutory deductions in the case of taxes. In addition, £15,000 was paid in management (which is rather less than £1,000 a year all told), £81,000 for repairs on buildings, £4,140 was insurance, £29,000 for fencing, draining, and developing it, new buildings £72,000, then on woods £2,160; other items £7,881, property tax £12,308, succession duty £14,635—making a total expenditure during the 18 years on the estate of £298,792, exceeding the total receipts by £36,984. There has been no doubt exceptional expenditure. I am not quoting that as a case of hardship. I do not put it any higher than it is. My point is not a question of hardship. My point is under the present death duties that estate will have had to pay in that time, according to the best calculation I can make, something approaching £100,000 death duties, about £80,000; and my point is not the hardship at all, but if the £80,000 had got to be paid in taxes to the Chancellor of the Exchequer it would have had to be withdrawn from the expenditure on the estate, and people who have now been properly housed would not have been properly housed and farms which have been properly equipped would not have been properly equipped, and the defences of river walls would not have been kept up, and the rateable value, the capital value, of that section of England from which the State desires to draw a continual revenue would have had its value depreciated and its income reduced; and not only as a source of income to the owner but as a source of revenue to the State there would have been a large depreciation as a result of the imposition of this taxation. That expenditure has only been possible, and the conditions of that section of the country can only be what they are now, because the owner of that estate succeeded before the death duties were imposed and not after.
I do not wish to use any harsh language. A good deal might be said as to hardship and as to injustice, but I want to put it higher than that. I do honestly believe that the right hon. Gentleman, if he imposes these duties upon this scale upon agricultural property, will inflict a hardship upon agricultural ownership from which it can never recover. I believe it to be absolutely impossible for owners of

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land who are in any sense whatever dependent on the income from their property to bear these burdens. Of course, there are men who have enormous resources in other directions and to whom their estates are merely playthings, but is it desirable that ownership of land should be confined to men of that character? I think this country owes much to those who have been brought up on medium-sized agricultural estates in the country, and this I look upon as a most important point. I think if there is one thing in our social economy from which we suffer more than any other at this moment it is the want of personal touch between employer and employed. The very great businesses are run by directors and owned by shareholders, and you have on the one side arrayed the interests of capital and on the other side you have arra3'ed the forces of labour, and often they would agree if they could be brought together; if they knew each other ' and had been brought up together as people still are, thank God, on country estates, then I think we should get on better as a nation than we do now. You have now still almost exclusively in rural districts a close touch between the owners of land and those who farm and work the land. They know each other's wants, each other's requirements, each other's difficulties, and I warn the right hon. Gentleman, if he persists in this policy of regarding land merely as an object for taxation, and if he persists in regarding owners of land—I do not think from what he says that he docs do so—as enemies of their country—
Mr. LLOYD-GEORGE: No, I do not.
Mr. PRETYMAN: His kindly feelings will not help this country if the taxes are put on. There is a common saying that a horse hurts just as much if it kicks you in play as if it kicks you in earnest, and I am sure I speak truly when I say that all who are interested in land truly appreciate the recognition which the right hon. Gentleman has shown of our efforts; but if he does recognise that, let him help us, and not put a burden on us which we cannot bear. I hope and trust that this matter will be. considered in that national way, and that nothing will be done by this House which would deprive the country of the benefit of the work of the owner of the land, those who farm the land, and those who work upon the land, working
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together and enabling people to come to this House who have a personal knowledge—farmer, owner, labourer, whichever class they belong to. I believe that we who have that knowledge and have been brought up from our boyhood in all classes on the land can bring to bear a knowledge and opinion on this point which honestly deserves the respect of the House and the attention of the right hon. Gentleman.
The ATTORNEY-GENERAL (Sir William Robson): The right hon. Gentleman who has just spoken and those who preceded him have exercised considerable ingenuity in condemnation of these taxes or, at all events, in explanations of the adverse effects which the taxes will have on the general capital of the community and the comfort of the taxpayer. We on this side of the House, at all events, do not deny that every tax affects adversely the general capital of the country, and is certainly unfavourable in some measure to the people who are taxed. If that is accurrate it seems to us somewhat irrevelant to point out in regard to any particular tax that it diminishes the funds available in the country at large for the general purposes of the people who pay the tax. Of course it does. Every tax does that. With every consideration for those hon. Gentlemen on our side of the House who are of opinion that certain taxes are desirable for their own sakes, that is not our view. Every penny we take out of the pockets of these people is pro taitto a mischief to their industry or comfort or subsistence. We believe that if possible that money ought to be left to private profits. The only plea for any tax is absolute State necessity.
The hon. and gallant Gentleman has pleaded in very eloquent and effective terms for the land interest, but he seemed to convey an impression to the House, as well as to his own mind, that agricultural land is being made a subject of some adverse differentiation as compared with other kinds of property. ["Hear, hear."] Hon. Members appear to accept that. I should like to explain, however, that it is not the fact. We are dealing here with taxes, and is it suggested that a heavier burden is laid on the land than is laid on other kinds of property? Nothing of the sort. Throughout the whole of his speech the hon. and gallant Gentleman seemed to be pleading for some interest which he regards as exceptionally oppressed. It may be that the burden falls with some degree of severity on land, but it falls on other sections of interest with exactly the

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same purpose. There is no differentiation against agricultural land or the agricultural interest.—none whatever. It falls on agricultural property precisely as it falls on other land, and the eloquent appeal of the hon. and gallant Gentleman in respect of agricultural land might with equal force be applied to railway shares and stocks. There are sections of the community who look for their incomes almost entirely to dividends on railway shares and stocks, and I do not think the House would listen to an appeal for special treatment of those forms of property, though the same argument might be applied to them as that which is applied by the hon. and gallant Gentleman to agricultural land. He apparently rather claims differential treatment in favour of agricultural property. Take one argument which he advanced, and which seemed very plausible, that which dealt with cases of hardship. He said that in the case of agricultural properties there were large portions of dutiable land which is left by the landlord unproductive, consisting of park, timber, and various other surroundings of a rich man's estate. The hon. and gallant Gentleman seemed to think it was very hard indeed that the owner of land in such a case as that should have to pay death duty out of what remains of the estate which happens to be productive. Does he really suggest that this class of property in the ease of a great land-owner, this unproductive class of property, should be exempt from death duties? That appears to be the only purpose with which the hon. and gallant Gentleman could possibly have advanced such an argument. What does it mean? It means that because a rich man has happened to put a great deal of his property into an unproductive form, a form which the poor man cannot afford, therefore the rich man is to be exempt while the poor man is to pay.
I think the hon. and gallant Gentleman will see whither his argument leads him when it comes to be logically and fully developed. He was pleading, not for equal treatment, but for preferential treatment on behalf of this particular class of property. He instanced other cases of hardship which would arise from the estate duty. They are rather rare cases, and not at all normal cases. We must take the Budget as a whole. There are burdens which will be laid on the land that are not laid on other kinds of property. The hardest case he suggested was one where he said that the State might appro-
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priate on the death of the owner duty up to 25 per cent. I am not denying that in certain rare cases there is a possibility of a large proportion being taken. He said you might get 10 per cent. payable on the property passing from father to son. But under what circumstances? Not by virtue of succession to his father under ordinary circumstances. It is where there has been a settlement made first upon the father and then afterwards upon the son. In such a case the son pays succession, not on his relationship to his father but on his relationship to the settlor. I agree in that case a very heavy burden will be laid upon the land; but do not let the House suppose that such a case is a common one; do not let it be supposed, as might be imagined from the strong argument of the hon. and gallant Gentleman, that this is a normal case. It is nothing of the kind. The hon. and gallant Gentleman made reference to a case which, I confess with some fear and trembling, I shall have difficulty in making quite clear to the Committee. The hon. and gallant Gentleman first of all pointed out that Sir William Hare our principle in his great Budget was to substantially get one payment in each generation, so that when there was a series of life interests followed by reversion to a particular person, he only charged in respect of the one person separate duty, and the one person paid only the once, no matter how many life interests might have been provided for by the settlement. The principal argument of the hon. Gentleman referred to the one payment of estate duty in each generation. That is really the principle aimed at. Let me take the case of a settlement by will.
A testator leaves by will to A certain land, with remainder to B. In that case the settlor, the person who makes the will, or his successor, will have to pay the estate duty upon death, because it is a free estate, and therefore comes within the terms of the Act. In such a case as that A, the life tenant, does not pay the estate duty, because he has to pay at the death of the settlor, and it does not become payable again until another generation comes—viz., when B, to whom the property comes in remainder dies, then comes a fresh payment of the estate duty. Therefore you see that Sir William Hareourt's principle is applied, and there is one payment of the estate duty for each generation. Let us take the case of a settlement made for life. There the settlor makes the estate over to A for life, and afterwards to B. When the settlor dies, no duty is paid

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on his estate, because on the terms of the Estate Duty Act the duty only becomes payable when the property passes at death. It did not pass at death, but during his lifetime, and therefore no estate duty was paid. According to Sir William Harcourt's principle, we have not, in the case of the death of the settlor, to take the duty; therefore, on the death of A, the life tenant, those who follow him will pay the estate duty. Then comes B, on whom the estate is settled. When he dies the estate duty becomes payable. That is what happens when each of these persons dies in his proper turn. But supposing B perversely goes and dies before A, then there happens something for which adequate provision has not been made.
B dies, but B has never had any property, said the hon. and gallant Gentleman, and why should duty be paid on land by the man who never had if? But B has the reversion, and that is something worth having, and that is all he pays on death. He pays simply on what he gets, and the State collect the value of his life interest. B is got out of the way, and A still goes on living, and then dies. My right hon. Friend the Chancellor of the Exchequer says we will take the estate duty on the death of A, because we are entitled to it on the principle that estate duty should be paid in each generation. Under two or three decided cases A said, "Under what section do you seek to charge the duty? "There is no section that prevents A's successor from paying the tax. Another section says that under the circumstances where the payment has once been made in respect of a certain property, then that payment is, so to speak, to frank the existing life tenant. That was held to be good law on the words of the section—words not intended to cover any particular case. I do not trouble the House with the exact words of the section. What we are seeking to do by this Resolution is this: We take in the case I have put the duty on these reversions. We have got no duty in respect of the enjoyment of the property during the A generation, or the generation of the man who has left the property, and therefore we are going to say under these circumstances that A shall pay as well as B. We are simply applying Sir William Harcourt's principle of one collection of the estate duty in respect of each generation.
Mr. PRETYMAN: May I ask would A pay on the life interest or on the corpus of the property?
Sir W. ROBSON: On the whole corpus of the property.
Mr. PRETYMAN: With only a life interest?
Sir W. ROBSON: Yes. If we collected only where there was an absolute right of the disposal of property I should think we would have to do without it in a good many cases. The agricultural interest would certainly gain by that, as property is nearly always in settlements. If we were to tax only upon the life interest we should very soon have to remodel our death duties in order to collect a proper amount. Let me assure the House that I feel the difficulty of explaining that which is difficult enough for the most expert tribunal. The House will take it from me that all that is being done by this not very clearly expressed Resolution is to apply the principle of Sir William Harcourt which the hon. and gallant Member quoted with approval—that is to try and get estate duty out of each successive generation under one or another set of circumstances.
Mr. PRETYMAN: You get two.
Sir W. ROBSON: We do not. In the Resolution, so I understand—I am not an expert on Parliamentary procedure—we do not provide for exceptions. The exceptions are afterwards dealt with in the Bill. In the Resolution you take authority of the widest possible kind, and in the Bill you deal with the exceptions. The hon. and gallant Member brought out the income tax as 6s. 5d. in the £. I despair of convincing the hon. and gallant-Member that nobody pays 6s. 5d. income tax, or is likely to. The House would understand that that 6s. 5d. is a very hypothetical figure. It is on the assumption that a man takes the trouble not merely to pay his own income tax, but to pay the taxes which are likely to fall on his successors. That is very noble of him, and I am sure any of us who are likely to succeed are very grateful for such an instinct on the part of our predecessors. But it is not to be taken that the predecessor is taxed to the extent of the burden which he pays voluntarily. Do not put the fault of that down to the Chancellor of the Exchequer, because it is not a matter for which he can be called responsible.
Those are the main points, but with regard to his general complaint of the extent to which this tax and all taxes deplete the capital of the community, when is the time to remember that and when is the proper

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occasion for all this eloquence? Not when you are voting for the tax, but when you are voting the expenditure; that is the time for it. I daresay the limits of all Parliamentary order might interfere with any hon. Member who got up and complained, say, of old age pensions or the naval votes, and that they were more than the country could bear. But whatever the Parliamentary order that is the logical and reasonable time to make the complaints we have heard to-night. I have sat on these benches during the discussion of the old age pensions, and I doubt whether we would observe the same generous spirit when we came to the Budget. I am sorry to say we do not observe the same generous spirit. I have heard, and not only do I not complain, but I approve, I have heard a careful exposition of the evil effects of taking away people's money for State expenditure. We cannot have too much of that, but do not let it be confined to Budget Debates, because that is not by any means the best time for it.
Mr. G. CAVE: From time to time during his speech the hon. and learned Gentleman used the expression, "We on this side of the House." I am in the recollection of several Members of the Committee on both sides who heard the speech of my hon. and gallant Friend the Member for Chelmsford (Mr. Pretyman) when I say that his appeal was made not to one side of the House rather than the other side. It was a serious and earnest appeal to all those who have an interest in the industry of agriculture and in the land of this country, and I hope we will continue to deal with the matter in that spirit so far as we can. The hon. and learned Gentleman (Sir William Bobson) began his speech by suggesting that these death duties are not a special tax on land. No doubt he is correct, but I think no one suggested that the amount of the death duty on land was greater than the death duties on personal estates. That is not the point that was made by my hon. and gallant Friend. What he said was that those duties fell more severely on land than on other kinds of property. I think it is obvious to us all that that is so; and let us take one or two points. If you levy a charge on the capital of railway stocks or shares you can raise the amount of that charge at once. You can sell 15 or 20 per cent. of your railway stocks or shares in 48 hours and without any kind of injury to the remainder. With regard to land the case is entirely different; you cannot pay the tax by contributing an un-
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divided part of the land. You cannot sell part of your land at short notice; you. cannot raise this tax as you can raise it on personal estate; you must resort to other means. Is it not true that if you have to sell, say, sufficient land to raise 25 per cent. of its value, you must in many cases sell not 25 per cent. of the land, not a quarter of the land, but a very much larger proportion than 25 per cent? Take an estate of £100,000, and assume that you have to raise £25,000. To do that you. must sell very often more than a quarter in value of your land. You must sell it at a sacrifice, and in doing so you lose more than your 25 per cent. Besides, you may very often injure the remainder of your land.
Mr. LLOYD-GEORGE: Why say 25 per cent.?
Mr. CAVE: I put 25 per cent. as an illustration. In regard to some estates the total death duties imposed by these Resolutions will amount to, and perhaps even exceed, 25 per cent.
Mr. LLOYD-GEORGE: On £100,000?
Mr. CAVE: I did not say on £100,000. I put 25 per cent. on £100,000 as an easy illustration.
Mr. LLOYD-GEORGE: The hon. and learned Gentleman is so very fair always I am sure he does not wish to convey an impression which would be an erroneous one. I think the impression would be rather taken from his observation that I am imposing a charge of 25 per cent. on an estate of £100,000. Under no conditions would the estate duty on that sum amount to 25 per cent.
Mr. CAVE: As a matter of fact, the amount of death duty on an estate of £100,000 might be over 20 per cent., but I should not intend for a moment to convey that an estate of that size pays 25 per cent. But there are estates, there are many estates, in respect of which the tax to be levied under this Resolution would exceed 25 per cent.
Sir W. ROBSON: Under what circumstances?
Mr. CAVE: Under these circumstances—the death of the owner and the devolution or bequest to some one other than his own children or near relatives. But I was dealing with the matter on another point altogether. I was attempting to show, and I think I have done so, that this tax falls more severely on land

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than on personal property. There is another point which the hon. and learned Gentleman mentioned, and I only rose co deal with his speech. The hon. and learned Gentleman dealt with the point, I agree the somewhat complicated point, of the change in the law relating to settlement of estate duty. Really the point is not very difficult if one takes a concrete case. Take the case of property settled by gift on A for life with remainder to B. B dies, and as the law stands now you pay estate duty on B's death on the value, I agree, of the reversion. You do not pay again on the death of A. The effect of the change proposed is that you pay on the death of B, and you pay again the duty on the whole capital value of the estate on the death of A. In other words, there being but one actual devolution, the effect will be that you must pay the duty twice over. I agree that on the death of B you do not pay the duty on the full amount, on the full value of the estate, but you pay on the value of the reversion. But in the second case you pay on the full value of the estate. The value of the reversion depends on the age of the life tenant, and you may very well pay in that manner very nearly twice the ordinary duty payable on death. I think that the provisions of the Finance Act of 1894 and the decisions given under that Act, to the effect that you should not pay twice over in those cases, are fair and just, and that the change proposed to be made is not one which ordinary people will recognise as just.
The Attorney-General dealt with one other point. He was replying to the observations made by my hon. and gallant Friend (Mr. Pretyman) upon the proposed change in the law under which, if a man dies within one year of a gift, the duty is paid upon it. The proposal is to extend that period to five years. My hon. and gallant Friend asked what would be the effect in a case where a man in his lifetime settled property upon his daughter on her marriage. It has been held by the Court that in such a case if the man died within a year the estate duty accrued upon that settlement. In other words, if a man felt himself able to give his daughter £10,000 on her marriage, and he was unfortunate enough to die within a year, the State would take a substantial portion of the amount settled on the daughter. The effect of the proposed change would be to extend the present uncertainty which exists in these cases from one year to five.
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I do not think the present rule is a just one, and if you extend the term you will make it far worse. Surely the real object of the original provision is to prevent evasion of payment of the duty. I put it to the Committee that you should not make the term longer than is necessary to prevent intentional evasion. I am glad to see that the Chancellor of the Exchequer accepts that view. A man who is anticipating his end may make an attempt to evade, but is it reasonable to suppose that a man in a perfect state of health, who may expect to live for a long time, will look forward as far as five years in anticipation of his death? I think that the term of five years is far too long. To prevent a person who intends to evade the Act one year is, I think, sufficient; two years, I believe, would be ample; but if you make it five years you will produce the effect that a gift made perfectly bond fide, with no prospect of death, and no desire to evade the duty, may become reduced in value by the unexpected death of the donor within five years. May I ask one question. Is the proposed charge intended to be retrospective?
Mr. LLOYD-GEORGE: No.
Mr. CAVE: On the general question, I believe that these and other provisions in the Budget affecting land will have very serious effects upon the future of agriculture in this country. Many hon. Members opposite know a great deal about land. Is it not the fact that if, by reducing his capital, by impoverishing the owner of the land, who very often has only just enough, after fulfilling his legal and moral obligations, to make a fair living for himself, you may produce a result injurious not to him only, but to all whose living depends upon him. ' If a man suffers by a large exaction of estate duties he must reduce his expenditure; in some cases he must go further, and cease to live on his estate. He must go somewhere else and economise as best he can. He naturally desires to hold on to his property as long as he can, but for years sometimes he must deny himself and reduce his expenditure in many ways. The whole estate goes down. There is less labour employed, less money spent in wages, and less spent in the place where he lives, and everybody connected with the industry of agriculture in that place suffers. In hitting that particular owner you will perhaps unintentionally hit a. number of other people. I do not want to rest my case on hardship,

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although hardship will be caused, but I believe that in hitting land and making it, as the President of the Board of Trade said, the subject of special taxation, you will, perhaps without meaning it, aim a serious blow at all who depend upon that industry.
Mr. J. M. HENDERSON: I do not desire to go into any general discussion of the death duties, but I should like to make a suggestion with regard to the graduation of the rate. I think the rate proposed will act with considerable hardship. If, instead of using the words, "Exceeds £1,000 and does not exceed £5,000, 3 per cent.,"' and so forth, the right hon. Gentleman would alter it so that it should read "'Beyond £1,000 up to £5,000, and beyond £5,000 up to £10,000," and so on, the, effect would be that up to £5,000 the duty would be 3 per cent., and on from £5,000 to £10,000 it would be 4 per cent., the original £5,000 being left at 3 per cent. A £100,000 estate would pay £8,000; a £105,000 estate would pay, according to the right hon. Gentleman's scale, £9,450, and, according to my proposal, £8,450; that is to say, 8 per cent. on £100,000, and 9 per cent. on whatever was the amount above £100,000. Up to a certain point the rate is fixed, and only the estate above that amount would pay the extra percentage. That would make a very great deal of difference. A small estate of £5,000 pays £150; if it is £5,200 the duty amounts to £208. I do not think that is fair or just. A man with an estate of £5,000 ought not to be subject to the feeling that if he makes another £100 it will subject the whole of his £5,000 to an additional 1 per cent.
As regards the general charges, I think small fortunes are very heavily hit. For the large fortunes it may be another matter, but I think the rates are very stiff for fortunes of £10,000, £20,000, or £30,000. The succession duties also are very heavy. I do not quite see why a legacy at present paying 5 per cent. should jump up to 10 per cent., nor why "husband and wife" should be construed "grandfather and grandmother." With regard to the term of five years, I think it is too long, and, although Members on this side of the House may follow the right hon. Gentleman into the Lobby, I feel sure that many of them are of my opinion, that these duties are somewhat stiff, and ought to be reduced. The period of five years is certainly far too long. Take the case of a man who gives his son £5,000 to start in business. The man may have not the
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slightest intention or desire to die within the five years, but the consequence is that his son may lose a large portion of that money, and it is very hard that he should be subjected to that risk.
Mr. LEVERTON HARRIS: I do not propose to enter into the legal intricacies which have characterised a considerable portion of this Debate, because, unfortunately, I am not one of those who are learned in the law. Referring for a moment to what, I think, in the Chancellor of the Exchequer's speech is called an anomaly—and a very complicated anomaly it is—it seems to be exceptionally hard upon the person who has been known throughout this Debate as "B," that he should be liable for estate duties when as a matter of fact he has never enjoyed the benefit of the estate at all, having had only a reversion and having never inherited the corpus of the estate. I know that we on this side of the House cannot expect much sympathy from the Chancellor of the Exchequer when we are pleading the cause of those who would have to pay these estate duties. In a Socialist Budget, such as this, anybody who inherits either money or estates must make up his mind that he is to be an object of plunder, andj one cannot read such speeches as that of the Chancellor of the Exchequer at Swansea without being almost persuaded that it is a crime to be rich. I shall, therefore, base my appeal to the Chancellor of the Exchequer not upon individual cases or upon individual hardships, but rather upon the disastrous effect which, I believe, these estate duties will have upon our national credit and national security. But, in order that I may not make a blunder, let me ask a question. Both the Chancellor of the Exchequer and the Prime Minister, in the course of speeches upon the Budget, have given information to the House which I am not quite sure is entirely accurate. Both have said that the maximum and minimum limits of the new scale of death duties were to be identical with those of the scale already in force. The limit of the scale already in force is 15 per cent.
May I respectfully ask the Chancellor of the Exchequer what the value of estate at the present time is that pays death duties to the extent of 15 per cent.? I think that if the Chancellor of the Exchequer will refer to his Treasury Minutes and Reports he will find that there is no estate that pays 15 per cent. That is not the maximum. An estate of £3,000,000 pays

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15 per cent., but only 15 per cent. on the excess of £1,000,000. Estate duties run at present up to 10 per cent. on £1,000,000, and it is the excess on £1,000,000 that pays 11, 12, 13, or 15 per cent., as the case may be. So that if you take the largest estate that you can conceive, the estate duty will never amount to a maximum of 15 per cent., which is the maximum in the proposed estate duties. Therefore, we have this: that the Chancellor of the Exchequer—I am sure perfectly innocent—has led the country to believe that the maximum limit is to be the maximum limit at present, where, as a matter of fact, that is not the case. May I ask the Chancellor of the Exchequer if I am right?
Mr. LLOYD-GEORGE: The only point I made was this: There are two limits. First of all there is a minimum of 3 per cent. Then there is the 15 per cent. maximum. The hon. Gentleman made a very good debating point. But I do not go beyond the 15 per cent. in maximum, or come below 3 per cent. in the minimum duty.
Mr. L. HARRIS: I think really that the Chancellor of the Exchequer has perhaps helped to remove the apprehension that he created that the maximum limit which he is imposing is not higher than the maximum limit at the present time. As a matter of fact, it is higher in the manner in which I have described. I said just now that I do not intend to ask sympathy from the Chancellor of the Exchequer for the victims of these estate duties. I ask for none. I do not even ask for justice, because I know we shall not get justice for them. But I do ask the House to pause for one moment and consider what the effect of these estate duties is going to be to the State. I wonder sometimes whether the Chancellor of the Exchequer really does understand what the effect of these estate duties is going to be. Sometimes he seems to me to be—I do not want to use an objectionable word—either profoundly cunning or supremely innocent. That is especially the case in a statement which he made in reply to my hon. Friend the Member for Essex in the Debate the other day. Why, he said, should you spread the death duties over the income during the man's life? You never do that at the present time? I think the answer is really a very simple one. I will make the Chancellor of the Exchequer a present of it. It is this. That if you do not spread
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your death duties over lives we are living upon our capital. The State cannot afford to do it. The Chancellor of the Exchequer continued with an illustration in which he said, suppose a man got £100,000 under a will, suppose he had to pay £10,000 legacy, succession, and death duties. He takes that out of the corpus, and retains £90,000. Then he made some rather flippant remark about investing the £90,000, and bringing it up to £900,000.
Mr. LLOYD-GEORGEdissented.
Mr. HARRIS: Yes, the £90,000 was to be invested and brought up to £900,000. It is all very easy for the Chancellor of the Exchequer to say that, but I should like to ask him where is that £10,000 to come from? It cannot come out of the clouds. That only shows the way in which he thinks fortunes are made. It must come out of what has been at sometime somebody's income. Somebody must have made it. Somebody must have saved it. It may be it was made 10 or 20 years ago. All the same, it comes out of income just as the estate duties of possibly 20 years hence may be coming out of the incomes of to-day. Let me go a little closer into the Chancellor of the Exchequer's figures, and see what the effect of the tax is. A man inherits £100,000. He pays £10,000 in estate, legacy, and succession duties. Is that not really a loss of income to the estate? The £10,000 which has to be paid for these estate duties admittedly has to come from somewhere. It may come out of insurance. If it does the premiums must have been paid of that insurance, and they have to be paid out of income. It may have to be borrowed. If so the loan has to be paid off, together with the interest, very likely in yearly instalments. That is a charge upon income. But even putting that on one side, take an estate of £100,000 which enjoys an income of £4,000 a year. You deprive that estate of £10,000. At once you are depriving the income of £400. That at all events is a charge upon income. It is a loss to the estate of the tenth part of its income. The amount is equivalent to an income tax of 2s. in the £. Let me presume that the man who inherits his estate of £90,000 is a prudent and provident person, and he wishes to see that the corpus of that estate is restored to its-original sum which it had when he inherited it. What does he do? He can make an estate sinking fund if he chooses during his life, or he can insure his life

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for £10,000, so that it may be paid at his death, and so restore the estate to its original £100,000. In either case this is a tax upon income, a tax upon income which is actuarily ascertainable. I think it was the hon. Member for Wirral (Mr. Lever) the other night, in the course of his speech in which he was commending the Budget, told us that one might safely take the premiums as about 4 per cent. of the cost of insurance for men of ordinary average age. Therefore, if the inheritor of this estate desires to restore to the estate the corpus which it contains when he inherited it he has to pay a premium of 4 per cent. on £10,000, which is £400; or putting together this, with his loss of interest on the £10,000, it amounts to no less than £800 a year. This sum, if the Chancellor of the Exchequer will work it out in the terms of income tax, he will find it comes, I think, to about 4s. in the £—rather over. If you add to that the income tax which the inheritor has to pay on the income which he derives from the £90,000, you have a total payment—first of all loss of income on the £10,000, which the estate is deprived of, then the yearly premium on insurance of £10,000 to restore the estate to its former size, and the income tax which the inheritor pays on the estate, a total charge of over £1,000 a year, or a charge equivalent to one-third of the nett income that the estate provides.
I will not go into the case of the millionaire, although I think he is just as much entitled to justice as anybody else. But if you take the money out of the estate of the millionaire who has to pay on his estate of £1,000,000 an amount of 15 per cent., you will find, apart altogether from such taxes as land, undeveloped minerals, stamps, etc., that that estate will have to pay—treated in the same way—including interest on the part that the estate is deprived of, in order to pay the the estate duties and the cost of insurance of a sum sufficient to bring the estate up to its original condition at the inheritor's death, plus the income tax—you will find that the estate of £1,000,000, bringing in an income, if there was no tax, of £40,000 a year, will have to bear charges extending to £15,000, leaving only £25,000 of nett income. The Chancellor of the Exchequer will no doubt say that there is no reason why we should insure. If he will work out what happens in such a case he will find that this estate when it passes at the next succession—that is the second succession—
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is paying a sum or is charged a sum on the estate of one million of £25,000 a year, and it produces a net revenue of £15,000, because the second estate duties have been deducted.
There is just only one other point which I would like to refer to. It was referred to by my hon. Friend the Member for Chelmsford (Mr. Pretyman). The death duties in the past, during the last few years, have yielded something over £18,000,000 a year—that is, estate legacy and succession duty. The Chancellor of the Exchequer is about to increase those by other £7,000,000. That will bring the total up to £25,000,000 per year. In order to pay these estate duties securities will have to be realised on the Stock Exchange or property will have to be sold. What will be the effect on prices of stocks and shares being put upon the Stock Exchange to the extent of something over £2,000,000 a month and the forcing of their sale? In the past the estate duties have been slightly over £18,000,000, but the Government has come forward with £16,000,000 from the Sinking Fund, leaving a balance of securities of £2,000,000 for the public to absorb. The position then to-day is this, that whilst you increase the amount which the Stock Exchange has to absorb by £7,000,000, you are reducing your Sinking Fund to £7,000,0000, and the result is that the public will have to absorb no less a sum than £19,000,000 a year of securities, which will have to be realised in order to pay these duties. The Chancellor of the Exchequer knows very well the effect—upon the price of Irish Land Stock—-of the fact of a possibility of new issues coming out. With the public knowledge that these sales will have to be absorbed I venture to believe that the effect on the market, continually being aware that £19,000,000 a year—or over £1,500,000 a month—of securities is to be absorbed by the public of the country, by fresh investors, is bound to have a very disastrous and depreciating effect upon the general body of securities. In his concluding remarks on the Budget speech the Chancellor of the Exchequer tried to justify these taxes so far as they are affecting the wealthy people of this country. With his Celtic pathos and oratory—which we all appreciate so much in this House—he told us of the sufferings and hardships of the poor people of this country. We admit it. I think everybody in this House admits that the poor in this country have very great hardships and very great sorrows.

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Nobody will attempt to deny it. But we believe that not only is this increase in the estate duties going to have a very prejudicial and serious effect upon national credit and security, but we believe the effect of these great burdens are bound to filter down upon the very poorest class, which the Chancellor of the Exchequer is so anxious to protect. The Chancellor asked: Would a rich man wish to spare has own pocket at the expense of the poorest? He would be a very shabby rich man indeed if he. did. In the course of his speech he justified his estate duties and increased income tax as against the mere possibility of putting taxation upon the necessaries of life—tea, sugar, and such like. I should like to remind the Chancellor of the Exchequer of what appears to be a strange change in his opinion. It is not so very long ago since he pointed out these heavy charges would fall upon the Government for old age pensions, and how they might be provided for. He did not then suggest estate duties. What he said was this, by way of illustration just to show how it could be done: "A mere penny on sugar would cover the whole £10,000,000. The people would pay it willingly, because it would be an insurance"; and then he went on to say the whole tradition of Chancellors was to reduce taxation; but the line of the new Chancellor—he was referring to my right hon. Friend the Member for East Worcestershire—"is to say my predecessor put on £5,000,000, but I put on £15,000,000. My little finger shall be bigger than his loins."
Mr. HAROLD COX: I will only keep the Committee a few minutes, and the point I wish to bring before its notice is a very definite one, and not a very exhaustive one. It is this: that the jumps of the graduation are so rapid that the result may be that actually a person may be paying more in taxation than he is receiving from his estate. Take for example a man who inherits £500. He will have to pay upon the proposed scale £5. If, however, he inherits £505, he will pay £10 2s. in taxation, so really the extra amount he receives will not amount to the extra taxation he has to pay. This results from the fact that the graduation is not gradual enough. There-fore I suggest to the Chancellor of the Exchequer that he should consider the possibility of making graduation, especially on those small estates, more gradual and. with all humility, I suggest he might
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adopt a decimal graduation, proceeding point by point. I know one of his predecessors at the Exchequer, when he first came across decimal points, consulted one of his advisers as to the meaning of those infernal dots.
Mr. LLOYD-GEORGE: Infernal was not the word used.
Mr. H. COX: I believe infernal was not the word. Well, I would suggest to the Chancellor that he should proceed by decimal points, and in those small estates after, say, £550, he might proceed by tenths, which would make the graduation much more evenly felt by everybody, and would remove the distinct sense of injustice which now exists. I quite admit there would be a small loss to the revenue, but I am firmly convinced it would remove a grievance from a great number of people who believe they are suffering injustice at the present time.
Mr. J. F. MASON: I beg to move "That the Chairman do report Progress, and ask leave to sit again."
Question put and agreed to.
Progress reported; Committee to sit again to-morrow (20th May).
Sitting suspended at Five minutes after Eight of the clock.

POOR LAWS COMMISSION (UNEMPLOYMENT).
At a quarter after Eight of the clock,
Mr. E. H. PICKERSGILLrose to call attention to the recommendations contained in the Minority Report of the Royal Commission on the Poor Laws so far as they affect unemployment; and to move, "That, in the opinion of this House, it is urgently necessary to take steps for the decasualisation of casual labour and for the absorption of the surplus labour thereby thrown out of employment; also to regularise the demand for labour, to develop trade union insurance against the risks of unemployment, and to establish training colonies and detention colonies."
I need not apologise to the House for calling attention to the subject of unemployment, because this is a question which excites the most profound and, I may add, a very painful interest outside this House. In the first place, let me say that I welcome cordially the proposal to establish a system of labour exchanges, which will

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at least be a great gain, because it 'will save the workmen from the soul-destroying necessity of travelling the streets in search of work. I hope these exchanges will follow the model of the bureau at Berlin. If we can establish a network of labour exchanges over the whole country in communication with each other we shall at least secure that labour, and all the work which is available shall be brought together without any economic waste or friction. I believe that this proposal will be welcomed by trade unionists. We have already had experience on a small scale in regard to this question in London. The labour exchanges which have been established by the central body were at first regarded with suspicion, but now that feeling has changed, and some of the largest and most influential trade unions keep their vacancy books at the labour exchanges. I may mention as an instance the case of the Amalgamated Society of Engineers and the Carpenters and Joiners, and it is interesting and significant to note that the feeling of trade unionists towards labour exchanges runs exactly the same course in Germany. If salvation lies in the direction of labour exchanges, what a pity it is that the Government have allowed 3½ years to pass without taking action. It is all the more amazing when we remember that the Unemployed Workmen Act of 1905 made a statutory duty upon every county council and every county borough council to establish labour exchanges. The Local Government Board, however, has so far not been enforcing that statutory duty upon the local authorities that a couple of months ago the President of the Local Government Board was not able to tell me how many of such institutions were at work.
I pass on now to refer to a result which is expected from these labour exchanges different from that to which I have referred, namely, the mere bringing of labour and work together. Both the Majority and the Minority Reports of the Royal Commission emphasise the fact that what this country is suffering from is not so much unemployment as under-employ-ment. Both reports tell us with almost painful iteration that casual labour is a great evil. Now it is anticipated that by means of exchanges casual labour will be, I will not say abolished, but reduced to a minimum. It does not enter into the object of my speech to go closely into details, because this subject has been most admirably treated in a book which has
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been written on this Question by Mr. Beveridge, who states that by means of labour exchanges it is hoped and expected, and I share that hope and expectation, that different employers will draw on the same reserve of labour, with the result that the members of this reserve will enjoy continuous employment from a succession of employers.
Let us assume that the expectations of the Government—because this view is shared by the right hon. Gentleman who has just entered the House (Mr. Burns)—are realised, and that labour is decasualised—that is, that the casual labour is decasualised. The effect would be to throw some casual labourers out of employment altogether. Take the illustration given in the Minority Report. The work of the Liverpool docks is spread at the present time over 15,000 workmen, who are chronically under-employed. If the whole of that work was done, as the Commission submit it could be done, by 10,000 men, the social gain to Liverpool would be great, but 5,000 workers would be squeezed out altogether. I do not think we ought to shirk that result. I think it is better for the community that 10,000 men should be regularly and continuously employed than that 15,000 men should be casually or intermittently employed. But what is to become of the surplus? They cannot be left to starve. It is clear, therefore, that the decasuali-Kittion of labour ought not to be undertaken unless simultaneously we provide for those who will be squeezed out. They must not be squeezed out because that would be a cruel policy. The needs of the community may require that this surplus should be squeezed out, but the community is not justified in making this surplus a sacrifice to the rest. The Minority Report sees this very clearly, and makes proposals which will have the effect of providing for the surplus which would be squeezed out. I will run over those proposals very rapidly. In the first place the Minority Report suggest restrictions upon boy labour. There can be no doubt that the employment of boys is to some extent, at all events, responsible for throwing men out of work. The practice of employing successive relays of boys in factories and workshops is a growing evil. No one has spoken on this subject more strongly than the right hon. Gentleman the President of the Board of Trade. This is what he said:—
"The whole of the labour market is deranged by the competition of hoys who do men's work for boy's wages, and are turned off as soon as they demand men's wages."

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He proceeded to show what was the ultimate effect by pointing to the fact that 28 per cent. of the applicants under the Unemployed Workmen Act were between the ages of 28 and 30. I want to get the approval of the House to the principal of the proposal of the Minority Report, and I appeal to hon. Gentlemen below the Gangway opposite to do what they can to induce the fathers of these lads to look with a favourable eye on this Report. For my own part I am sure working men stand to gain by it. They would gain by these proposals by the raising of the standard of life, although they would lose by the little pittance their children may bring home in the shape of wages. The second proposal of the Minority's Report is to reduce the hours of railway men and tramway men and drivers. The Board of Trade Returns do not reveal the exact number of railway men; but in 1907 there were thousands who were kept on duty over 12 hours a day, and drivers and tramway conductors were kept on duty 70, 80, or even 90 hours per week. These men are absolutely cut off from all real home life. Do not let us forget from a national and social point of view that these excessive hours of labour are second only to unemployment. I may add that the proposal of the Minority's Report contains no new principles. The foundation was laid by the Regulation of Labour Act of 1903. It is not suggested that the particular work hitherto done by boys or by labour men should be given to men displaced by decasualisation. Of course it is not suggested that the most demoralised men among the casual labourers should become railway signalmen or tramway conductors. That is not the way in which the social and industrial case will be worked out. Let me give an analogous case. When a slum area is cleared it is not the old slum population which occupies the new dwellings which arise on the site.
Many years ago in the innocence of our hearts and in the enthusiasm of youth we warmly supported the idea that the old slum population would occupy the new dwellings. That is not the result We know that it is a class above the old slum population which moves into the new dwellings. Hitherto, Mr. Speaker, I have dealt with some suggestions made in the Minority Report to provide employment for the surplus population. The Minority's Report takes a wider sweep and suggests the method by which the general demands for labour may be regularised. The
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methods are described with admirable lucidity. It is to set up an ebb and flow of national and local expenditure for the purpose of counteracting the flow and ebb of private industry, or in homelier and humbler words, to provide that when the demand for labour by the private employer arises then the municipality should step in. Take the Government first. In every Department of the State it is clear that there is a certain proportion of ordinary public work which must be constructed, but which is not necessarily constructed in any particular year of a series of years. It is proposed then that upon such works as well as upon works which are not ordinary, £40,000,000 should be expended in a 10 years' programme. Resides ordinary works, as I said, there may be other works. It is quire clear that this programme, besides the ordinary work of a public department, could be carried out; n intermittant spells. What is all important is that these would not be relief works. The demand for labour which these works would create would be supplied through the ordinary trade channels, and the work would be executed in the ordinary way. With regard to ten years' programmes, this House is not unfamiliar with programmes extending over a period of years. We have had many such programmes. We have had public works constructed out of loans extending over a considerable period of years. There have been programmes for the construction of military works. I am aware that the practice of getting authority in an Act of Parliament to extend these works over a number of years has been very strongly opposed on this side of the House. These objections possibly do not equally apply to work of a totally different character. Whatever may be the force of the objections they are. to my mind at least, far more than counterbalanced by the advantage of this scheme, and, therefore, this is a case in which good reasons must perforce give way to better. I want to go further, and to encourage local activity and expenditure as well as national expenditure. I think the local authority should be stimulated by grants in aid. It is suggested that this might well be a ten years' programme of capital grants in aid of local expenditure on educational buildings. But you must not entertain the hope that when you have done this there will not still be periods of unemployment. It seems desirable, therefore, that the State should encourage and develop insurance against risks of unemployment. I do not desire to develop that idea

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now, but there are one or two observations which I should like to make upon the principle, and they are these. In the first place it seems to me the State would do well to avail itself in this matter of the organisation and the past experience of trades unions. One of the principal difficulties of working schemes of insurance against unemployment is obviously that of framing suitable regulations with regard to the acceptance or refusal of work when it is offered. Here there would be an enormous advantage in working through the trades unions, and there would be ample provision against what one might call a fraud on the fund. That would be met, and amply so, by providing that the State subsidy should bear a certain proportion to the money actually paid in out-of-work benefits by the trade union concerned.
There is a second observation I would like to make, and it is this. I would like, if possible, to make the employer bear a share of the burden of insurance. It is said with a great deal of force that it is both impolitic and inequitable that, as soon as it pays an employer to drop a man, he should be taken care of by the State until it suits the employer to re-engage him. There is much force in this argument, and if the employer were made to share the burden, it is obvious he would be under a strong inducement, so far as possible, to retain at work his men during periods of industrial depression.
Lastly, it is proposed to establish training colonies, where the men may be trained to become self-supporting. The experience in regard to Hollesley Bay is that it has been, upon the whole, encouraging, and I say, with confidence, that where it has failed it has been in the inability to finance those sections of the work which would give a man greater opportunity for earning an independent livelihood after his period of help had expired. The original idea of the Hollesley Bay Colony was not merely to give relief for a time and then to let the man slip back into the abyss of unemployment. The original idea was to pass him on into permanent work, but the Local Government Board now insist on regarding Hollesley Bay only as a means of offering temporary relief and not as a means of training. The right hon. Gentleman the President of the Local Government Board told the Central Body under the Act of 1905 that it was only intended for the provision of temporary relief, but that is not what the Act says. The right hon. Gentleman
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is not, at least yet, emancipated from the control of Parliament. The Act says that the central body may assist an unemployed person by providing temporary work, not as relief but in such manner as is thought best calculated to put him into a position to obtain regular work or other means of supporting himself. Unfortunately, at least I think so, the right hon. Gentleman put his foot down, and thereupon the stimulus of hope, was taken away from Hollesley Bay, and, so far as it has failed, that is the root and the cause of the failure. You want, of course, in these training colonies an outlet for regenerated men, men who have been set up in body, in whom you have put mind and heart, and skill—you want an outlet for such men. You also want detention colonies for that class of wastrels with which, unhappily, we are afflicted. I submit these proposals to the House in the aggregate. They must be taken as a whole. If you take one, it would be insufficient. Theymustre regarded as a whole, and so regarded they seem to furnish a plan for dealing with unemployment which is reasonable, comprehensive, and efficient. I need not remind the House how the majority of Members feel on this question of unemployment. They know, as well as I know, the profound disappointment felt outside this House at the pledges of the Government in this matter not having yet been redeemed. There, is just one other word which I would say. I daresay many of us must have been witnesses of those scenes which daily and nightly have been enacted on the Embankment. The tolerance of such scenes as these is a confession that the State is conscious that it has failed to discharge its duties. I say that the feeding of men and of women in that manner is a disgrace. It ought not to be tolerated for an hour, but so long as you refuse to do your duty to those men you dare not prohibit it. I beg to move.
Mr. PERCY ALDEN: I beg to second the Resolution which the hon. Gentleman has placed upon the Paper, and I desire to thank him for giving us the opportunity o? discussing this important matter. It is true that the House is thin, but the subject is of such grave and serious importance that I think our time is very well spent, and I think also that the very practical nature of the speech which we. have just heard is likely to render our discussion of more value than would other wise be the case. I should like to say a word first about this question of casual

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labour, because unfortunately for many years of my life I have had experience of it. As the hon. Member who represents not only the Local Government Board, but also West Ham (Mr. Masterman), knows perfectly well, we are face to face with it in many districts of East London. I recollect paying a visit to a part of London which the President of the Local Government Board knows very well—the docks—and I was amazed one morning at seeing 1,000 men waiting for work for 100, and was still further amazed by the acts of brutal violence which were put forth by men in trying to obtain that work I admit that those scenes of violence have passed away, but there is still the same profound disappointment felt by the thousands of men at their inability to obtain one day's labour in the docks. This question of casual labour, as has been pointed out by the hon. Member, and as has been pointed out in both of the Reports of the Poor Law Commission, and which has been emphasised in Mr. Beveridge's book, and which is well known to every man who has studied the problem of unemployment, this question of casual labour does lay at the root of the problem, and any attempt on the part of the Government to decasualise labour seems to me to be worthy of praise. The question we have to ask ourselves is whether the present method of dealing with casual labour is of any value. I confess, as far as the labour register is concerned, I have very little faith in it, and I have been able to see very little result from it. I think the superintendents and the clerks in charge of the labour registers have done their very best with the very poor machinery at their disposal, but there is very little that they can do, and sometimes T am inclined to think that under the present conditions the labour registry is a place where a man who is unemployed registers his name in order to demonstrate the inability of the local authority to find him work. We understand that it is the intention of the Government and of the right hon. Gentleman the President of the Beard of Trade to try to remedy this state of affairs, and we are hopeful that the labour exchanges, which will be set on foot before very long, will make it possible to decasualise labour, and, therefore, make it possible to deal with the residuum of labour, which will be found after labour has been decasualised. The hon. Member, who introduced this Resolution, has re-
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ferred to the fact that the Minority Report states that some 5,000 men will be left without work, after all the dock labour of Liverpool has been regularised, and after all the casual labour there is decasualised, and I think I may add, and I am quite sure the President of the Local Government Board will agree with me, that if you regularise and decasualise the dock labour of London, the probability is that you will have something like 10,000 men to deal with, and to find employment for. I may possibly refer to the suggestions of the Minority Report for dealing with these men, but for the present I should like to say that they must be dealt with, and I imagine that it is the intention of the Government, after they have introduced and carried through the Labour Exchanges Bill, to take in hand the helpless individuals, who would otherwise be thrown utterly upon their own resources. Just one word of warning, if I may be allowed to give it to the Government, with regard to this question of Labour Exchanges. I do not think, however wisely they are managed, however carefully they are controlled, that the Labour Exchanges will appreciably lessen unemployment. I do think they will ease the situation greatly. I think they will make it possible for the working man who is out of work, and for whom a situation is to be found, to find that situation quickly, and will save him the hardship of walking about week after week in search of work. But I cannot come to the conclusion that unemployment will be appreciably lessened, even when the labour exchanges are in full operation. Going to Germany for our example, I imagine that there is no place in the world where labour bureaux are better managed, or more scientifically managed than in Germany. Take the large cities of Munich, Leipsic, Strasburg, and Berlin, and examine their work most carefully and most thoughtfully planned, one still comes to the conclusion that all the labour exchanges can do is to find work where there is work to find, and to fill rapidly and easily the situations which are vacant. But more than that, they cannot possibly do, and therefore it is that we look to the Government to take the next step—to take some other step, at all events, in finding work for those who are left out after all the vacant situations have been filled up by the labour exchanges. At the same time, I do think, and I believe the House will agree with me, that the establishment of labour exchanges is absolutely

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a necessary first step, and until these exchanges have been established it is impossible to proceed forward with any programme which the Government may have in hand. May I be allowed to say just one word about trades unionism and the question of insurance. I do not know what the plan of the Government may be with regard to insurance. I only hope that it is not a plan which deals with labour apart altogether from existing organisations. I am quite convinced that the line of least resistance, for the present at all events, is to give subventions to those organisations—trades unions and other organisations—which are already in existence, and which are already doing a very desirable piece of work. I would suggest that, whatever may be done in the future in connection with labour exchanges to help those who are outside trades unions—and I trust some such action may be taken—I do think the Government would be well advised, in the first place, in subsidising all the existing organisations which give out-of-work pay and benefit, and thereby encourage the unions which do not give out-of-work pay and assist them to start out-of-work benefit funds. I am convinced from my own experience and conversation with various trades union leaders that it only requires the encouragement suggested in the Minority Report, and which has often been suggested before, to make trades unions immediately start such funds, and although that is not a remedy for unemployment it is a very important matter.
It is, of course, an excellent suggestion that we should try to regularise the demand for labour, and that we should ask Government Departments to spread their work over the lean years as well as the years which are full of employment, and if the. Government can, in part at all events, carry out such an idea they would appreciably lessen the evil of unemployment in times of trade depression. But I think the Minority Report expects too much perhaps from this suggestion. I fear there will still be, even supposing the demand for labour can be regularised in the way that has been suggested, a large stagnant pool of surplus labour which cannot thus be utilised, and undoubtedly this would be an opportunity for labour or training colonies to be established in various parts of the country. I do not think the labour or training colonies have been quite fairly tried. I admit that the experiment is an extremely difficult one, and that it is hemmed round by all sorts of obstacles. I admit that many men who have been
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sent to training colonies and labour colonies in the past are men who ought never to have been there, and who never can benefit by the kind of work that is given there, but at the same time I feel that if these training colonies on the lines suggested in the Minority Report could be established in all parts of the country, and if the men under training, who are at present useless on the labour market and unable to find work, and possibly unwilling to work even if they could find it, could be sent to these colonies and trained and you found them useful work in the future, it would lift a very great weight from the national conscience.
I desire once more to thank the hon. Member who introduced the Motion for giving us a chance of discussing the subject in this practical fashion, and I trust the Government after its Labour Exchanges Bill has become law, and after they have made an attempt to deal with the rather vexed and difficult question of insurance, will go on to take up these larger schemes which have been hinted at in the past, and which were even hinted at by the Chancellor of the Exchequer in his Budget Speech, those schemes of afforestation, and possibly land reclamation, which would give an opportunity to a large number of men who at present constitute the surplus labour of the country to find useful and lucrative employment. I beg to second.
Mr. RAMSAY MACDONALD: I have the greatest pleasure in rising to support the Resolution. I am sure the House will feel regret that this Report has not been before us before now. The Government year after year, ever since it came into office, has been dangling this Report before us, and telling us that as soon as it was presented we were to have legislation. We were told last year that we were to have legislation this year. This Session is already mortgaged. It is absolutely impossible for any new substantial measures to go through the House, and I am afraid what has to be done will be put off till next year; but there is one source of satisfaction to be found in this Report to those of us who sit on these benches. In practically every respect the Minority Report supports the proposals that we have been making here from time to time. In no sense and in no important point is the Report new to us. It describes unemployment in language which is very familiar to us. It makes proposals for dealing with unemployment which are

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practically the same as the proposals that we have been making. For instance, it lays down quite clearly and quite indisputably that unemployment is a continuous feature of modern society. It is not casual. It is not now and then, but always. It is made greater than it normally is by periods of exceptional distress, but even when trade is busiest, and when the volume of exchange is greatest, and is being carried on most continually, there is a residuum of unemployed that requires the attention of the State.
The Report also points out that where no work has been or can be found maintenance ought to be found. It also points out that in certain respects it would be better not to find work, but simply to maintain by a system of insurance. That is a point that we have been making time after time. I am not quite sure that the best method of dealing with this question has yet been discovered. The Resolution which is before us asks the House to declare for the development of trades union insurance. Hon. Members must be aware that in the various unskilled trades unions the unemployed risk is very great, consequently the unemployed insurance premium must be very high. But if you impose a high unemployed insurance premium upon unskilled workmen, then you are not developing trades union insurance, but you are damaging trades unionism. I am not saying that the difficulty cannot be overcome. It has been suggested, for instance, that in any particular trade where the risk is high the subvention should be equally high, or at any rate should be high in proportion, but I am not quite sure that we are prepared to face public opinion, and say we are going to give high subventions to employers of labour who may use the casual nature of their employment to their own profit and not to public use. That is a point which must be considered. I am not putting it forward at all as being an insuperable point, but it must be considered, and whatever mechanism is ultimately adopted must be of such a nature as to meet that particular point.
There is this further point which must be considered. There are other agencies besides the. trades unions which insure, or might be created very properly to insure, against unemployment. Is this House prepared to single out from a series of such agencies any one for preferential treatments? Again, I only put the point because
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I understand the Government is considering the matter, and I think the Government ought to consider it with the fulness of knowledge, and not with a paucity of knowledge.
There is another point. What about women? We know perfectly well that unfortunately, in spite of the enormous sums of money that have been spent for the purpose of trying to get women inside paid unionism, and in spite of the enormous amount of human effort that has been spent to the same end, with the exception of one or two trades the results have been heartbreaking in their smailness. But still, unemployed women must be considered. An unemployed woman has just as much claim upon this House and the State as an unemployed man, more particularly if she is winning her bread and dependent on her own industrial efforts. I venture to say that if this House or the Government were to go to women and say to them, "We will give you subventions to a fund to which you subscribe to protect yourselves against unemployment," it must be regarded by everybody who understands the condition of women as simply offering them a stone. In nine cases out of ten a woman is not in a position to take advantage of any such oiler. Therefore, in devising a means of insurance the Government must consider the very difficult and the very hard case of the industrial woman who is dependent on her own earnings in order to enable her to keep up her head and make her living. Where, of course, a woman is a widow with children I think you might adopt the Australian experiment of boarding the children out with their own mother.
The hon. Member who moved this Resolution dealt with the problem of casual labour. I am in favour of organising the casual labour of this country. I know that the first effect of that will be to narrow the field of employment. You will pus a small number of men into continuous employment, and throw off from that particular kind of employment the margin so long as it is within the field that casualises the whole field. In other words the Government is now going to establish upon some national basis, upon some national machinery, the very condition of labour that the dock strike of 1889 attempted to do, and as the hon. Member says, we shall then only be placing ourselves in a position to assume responsibility for the employment of casual workmen. The argument that has been offered to the various proposals made

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in this House that the State, as the State, cannot find any employment for the unemployed except what private employers can supply. Of course, that is a profound mistake. The State can find employment which private employers cannot find, and the Report of the Commission gives us valuable backing in that respect. I am glad that the House is coming to see more and more the truth of the argument we have been using. Take a case in point, namely, afforestation. The virtue of afforestation is not merely that it puts a few men to work and gives an opportunity to local authorities and to the State to find employment for casual labour. That is not the chief value of afforestation. The chief value is that it creates a new labour market, and creating a new labour market it creates a new market of consumers. It creates a new economic demand. It increases the economic demand that the consumers of the country make upon the producers of the country, and consequently it tends to widen the basis of your employment and to give very much better security for the mass of your wage earners who are living from decade to decade. That is the economic justification for afforestation. It has been proved that afforestation cannot and will not be established adequately by private enterprise. It requires communal and State enterprise to put it on a sound foundation.
A further point mentioned in this Resolution is that training colonies should be established, and along with them detention colonies. Training colonies have been a very familiar subject of discussion from these Benches, and I am not to-night going over ground which has already been well trodden. The Minority Report is so full in its details, so accurate in its knowledge, and so complete in the way it is drafted that it fully bears out everything we have said about Hollesley Bay. The idea that Hollesley Bay embodies is that if you get waste land and waste labour they can be put to use, and it is a most obvious conclusion that if you can get waste labour in touch with waste land, then you solve. at any rate for the time being, a considerable part of the unemployment problem. Another point which was mentioned by my hon. Friend who proposed the Motion is the question of boy labour. I do not know what the Government propose to do in regard to boy labour, but there again the importance of the problem is only equalled by its delicacy and difficulty. For instance, are you going
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to prohibit boy labour up to the age of 16 or 17, or are you going to establish a new form of half-time after the age of 14 or 15? Those who are in favour of the drastic treatment of boy labour are divided in their opinions on this subject. I think it is quite clear that it would be a profound mistake to dissociate young people up to the age of 18 from the ordinary processes which are required to make a living. It appears to me that the system of apprenticeship, combined with sound education, is the better way of proceeding. You get that system admirably illustrated in some of the French schools to-day. I have been in these schools, and I have personal knowledge of them. If you go to these schools in the morning you find boys and girls are being taught drawing, the rudiments of science and mechanics, and so on; and if you go to the same school in the afternoon you would think you were in the annexe of a busy workshop. They are taught the art and science of a trade in the morning, and in the afternoon they are taught to specialise in a particular trade or group of trades. I am not at all sure of the next stage we will take. I do not know whether it will be a final stage or not. I am not interested in final stages. I am not sure whether it will be a stage which will combine the dead apprenticeship system with the benefits of a still unborn system of technical and scientific education. I only offer these observations when the Government is considering this question—we have been told over and over again that it is considering I he question—so that it may have not only one point, but several points to consider. I think the most valuable frame of mind that this House can remain in at the present moment is the open frame of mind. The Minority Report, backed up by the agitation that the Labour party has conducted in the country, has made it absolutely impossible for this or any other Government to neglect the case of the unemployed any more and has also placed before the country a sufficient body of well-informed opinion, an accurate description of the problem and a sufficient number of practical proposals for the solution of the problem. The country is now bound, and the Government is now bound, to consider this question in the light of the Minority Report and the Labour party agitation. That being secured, the impact being there, the absolute necessity of treating the question being in existence, what this House ought to do is to approach this delicate problem, consider the lot of suggestions which are before us

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and, by the amalgamation of the good and the elimination of the bad, to present to us a series of Bills and propositions dealing with the various aspects of this problem. That, taken as a whole, will really be of substantial advantage towards the elimination of the heartrending and exceedingly difficult problem, the unemployed man or woman wanting work, but unable to find it under modern social conditions.
The PRESIDENT of the BOARD of TRADE (Mr. Churchill): I am indebted to ray hon. Friend (Mr. Pickersgill) whose Motion occupies the Paper this evening for the opportunity which his Motion affords of making some statement upon the subject of unemployment and the measures to be taken to cope with that problem on behalf of the Government. There are three Departments in the State which are in the main concerned with the Motion which the hon. Member has brought forward. They are the Home Office, the Local Government Board and the Board of Trade, and each Department is concerned with a different part of that problem. The Home Office is concerned with the regulatory and disciplinary aspect, with the Factory Acts, and so on. The Board of Trade is concerned with the organisation of industry, so far as the Government may properly concern itself with the organisation of industry, and the Local Government Board is the Department which deals with relief, with curative and relieving processes apart from the functions of the other two Departments that I have mentioned. And it is with the organisation section of the problem that it will be my duty to deal as President of the Board of Trade and any suggestions or proposals which I may submit in the course of this Debate are concerned with organisation, and with organisation alone. They do not extend to other aspects of the problem, in some of which my right hon. Friend is deeply and actively concerned at the present time, but only with this one aspect of organisation; and the proposals which I shall venture to submit to the House must not, I ask, be judged as if they were an attempt to cover the whole field of these larger questions, but must only be judged in so far as they deal with that particular sphere which falls to the province of the Board of Trade. The first proposal which I think emerges from the argument of the hon. Gentleman is the proposal to establish a system of labour exchanges, and I
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hope to ask the House to-morrow for permission to introduce a Bill for the establishment of a national system of labour exchanges.
There is high authority for such a measure. The Majority and Minority Reports of the Poor Law Commission, differing in so much, agreeing in so little, are agreed unanimously in advocating a. system of labour exchanges as the first step which should be taken in coping with the problem of poverty and unemployment. Conferences were held in London the other day by delegates who represented 1,400,000 trade unionists who passed a resolution in favour of this policy. The Central (Unemployed) Body, who are equally concerned in these matters, have approved of that policy. The delegates of the Labour party who went to Germany a few months ago returned greatly impressed with the Exchanges which they saw at work in Germany. Economists as diverse in their opinions as Professor Ashley, of Birming ham, and Professor Chapman, of Manchester—leading exponents of Tariff Reform and of Free Trade—have all publicly testified in favour of such proposals; and several prominent Members of the Front Opposition Bench have in public, either in evidence before the Commission or in speeches in the country, expressed themselves as supporters of such a policy. The argument from authority is reinforced by the argument from example, because as early as 1904 Germany, Austria, Switzerland, France and Belgium all exhibited the system of public labour exchanges and public labour bureaux in full working order; and since. 1004 Norway has also adopted some application of that system. Mr. Bliss, who was sent over by the Government of the L'nited States to investigate the conditions and methods of dealing with unemployment in European countries last year, has, in the May bulletin for last year of the Washington Bureau of Labour, surveyed the whole field of unemployment organisations in European countries, and has come to the conclusion that a principal element in the methods by which that difficulty may be successfully treated lies in the establishment of public labour exchanges; and he draws great attention to the rapid and successful development in the last 15 years of the system in Germany. So we not only have the practical consensus of opinion of all authorities, irrespective of party, irrespective of the point of view in this country in favour of such a system,

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but we have the evidence of the successful practice of the greatest industrial community on the Continent and its continuous extension in different forms and under different circumstances to many other countries of the Continent of Europe.
With such argument from authority and example it is hardly necessary to submit the case upon its merits, but there are two general defects in the industrial position of this country which are singled out by the Royal Commission, the lack of mobility of labour and the lack of information about all these questions of unemployment. For both of these defects the policy of labour exchanges is calculated to afford a remedy. Modern industry is national. The facilities of transport and communication knit the country together as no country has ever been knitted before. Labour alone has not profited by this improved organisation. The method by which labour obtains its market to-day is the old method, the demoralising method of personal application, hawking labour about from place to place, and treating a job as if it were a favour—looking at it as if it were a favour, as a thing which places a man under an obligation when he has got it. Labour exchanges will increase the mobility of labour, but to increase the mobility of labour is not to increase the movement of labour. To increase the mobility of labour is only to render the movement of labour when it has become necessarily less painful. The movement of labour when it is necessary should be effected with the least friction, the least suffering, the least loss of time and of status to the individual who is called upon by the force of economic conditions to move. It would be a great injustice to the policy of labour exchanges if it were supposed that it would be the cause of sending workmen gadding about from pillar to post throughout the country, whereas the only result of the policy will be, not to make it necessary for any man to move who does not need to move to-day, but to make it easy for him to move the moment the ordinary economic events arise which make movement necessary. There is another thing in connection with labour exchanges. They will not to any large extent create new employment. In so far as facilities for getting labour on particular occasions sometimes leads to extra men being taken on, they will increase employment. That, however, is only a very small result. They will not directly add to the volume of employment. I never contemplated that they should. It would be to invest the policy
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with an air of humbug if we were to pretend that labour exchanges are going to make more work. They are not. What they are going to do is to organise the existing labour, to reduce the friction which has attended the working of the existing economic and industrial system, by reducing the friction of that system we cannot help raising the general standard of economic life.
As to lack of information, labour exchanges must afford information of the highest value in the sphere of social subjects on which we are lamentably ill-informed. In proportion as this system comes to be used it will afford us accurate contemporary information about the demand for labour, both as to the quantity and quality of that demand, as between one trade and another, as between one district and another, and as between one season and one cycle and another. It will enable us to tell workmen in search of work where to go, and it will also enable us, which is not the least important, to tell them where not to go. Over and over again at the present time men are led by the rumours of work. They crowd into a district, to find that there is no gratification of their hope, and, if there is gratification, it is wholly insufficient for the numbers who have been led to make that desultory pilgrimage. In association with the school employment bureaux which so many educational authorities are now starting in Scotland, and to a lesser extent in England, we hope that the system of labour exchanges will have, the effect of enabling us to guide to some extent a new generation into the trades which are not overstocked, and which are not declining, and to prevent the exploitation of boy labour, to which the hon. Member for Leicester (Mr. Ramsay Macdonald) has referred. So far as local and accidental unemployment is concerned, by which I mean unemployment in one place when there is a demand for labour in another, the labour exchanges will undoubtedly diminish that evil. They are, further, the only method of grappling with the evils of casual employment, which are singled out by the Royal Commission as being the original fountain of so many of the greatest evils in our social life. We hope that they will help to the process of dovetailing one seasonal trade into another, so that people who are always slack at a particular season in one trade may acquire in some cases a secondary trade which is only brisk at that season, and which will enable them to obtain a

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uniform average in the economy of their domestic life. Labour exchanges, by dispensing with the need of wandering in search of work, will render it for the first time possible to deal stringently with vagrants.
I am quite sure that those who know the sort of humiliation to which the genuine working man is subject, by being very often indistinguishable from one of the class of mere loafers and vagrants, will recognise as of great importance any steps which can sharply and irretrievably divide the two classes in our society. Lastly, labour exchanges are indispensable to any system of unemployment insurance, or, indeed, I think to any other honourable method of relieving unemployment, since it is not possible to make the distinction between the vagrant and the loafer on the one hand and the bond fide workman on the other, except in conjunction with some elaborate and effective system of testing willingness to work such as is afforded by the system of labour exchanges. I shall to-morrow have an opportunity of asking the permission of the House to introduce this Bill, and we present it to the House as a piece of social machinery, nothing more and nothing less, the need of which has long been apparent, and the want of which has been widely and cruelly felt by large numbers of our fellow countrymen. I said a little earlier that we might profit by the example of Germany, but we may do more, we may improve on the example of Germany. The German system of labour exchanges, although co-ordinated and encouraged by the State and by the Imperial Gove2-nment, is, nevertheless, mainly municipal in its character. Starting here with a clear field, and with the advantage of experience and of experiments in other lands, we may, I think begin at a higher level and on a larger scale than has been done in any other country up to the present time. The utility of a system of labour exchanges, like the utility of any other market, increases with its range and scope, and we propose, as the first principle of our system of labour exchanges, to adopt a plan which shall be uniform and national in its character, and in that we are supported both by the Minority and Majority Reports of the Royal Commission on the Poor Law. During the last few months a Departmental Committee has been sitting at the Board of Trade elaborating the details of this scheme, and I am glad to tell the
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House and the hon. Members who moved and seconded this Motion that those details are now very far advanced. We should propose, if the House assent to the Bill, to divide the whole country into about ten divisions, each with a Divisional Clearing House, and presided over by a divisional chief, and all co-ordinated with a National Clearing House in London. Distributed amongst those ten divisions will be between 30 and 40 first-class Labour Exchanges in towns of 100,000 or upwards, and about 45 second-class Labour Exchanges in towns of between 50 and 100 thousand, and 150 minor offices and sub-offices, third-class Labour Exchanges with waiting rooms will be established in the. smaller centres. The control of this system will be exercised by the Board of Trade. In order to secure absolute impartiality as between capital and labour, we propose that a joint Advisory Committee should be established in every principal centre, and on which representatives of the workers and representatives of the employers will meet in equal numbers under an impartial chairman. That is the same principle which prevails in Germany, and which has been worked successfully there.
Mr. JOYNSON-HICKS: A Government official?
Mr. CHURCHILL: An impartial officer. That is the principle that we have adopted in the Courts of Arbitration which have been established and which we adopt in the constitution of the Trade Board, which will be called into being should the Trade Board Bill obtain Parliamentary assent. I think that this balance of the contending forces under the presidency of an official whose whole interest will be to preserve the confidence of both parties, and who will at the same time be quite outside local jealousies and local difficulties, that that affords the best guarantee as to the successful and effective management of Labour Exchanges. If Parliament should assent to the Bill this Session without undue delay I should hope to bring this system of Labour Exchanges into simultaneous operation all over the country so far as practicable in the early months of next year. Temporary premises will be engaged in the first instance everywhere, but at the same time I think it very important that we should have permanent premises. A building programme is being prepared by which we will erect so many labour ex-

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changes every year until in about 10 years, so far as first class exchanges are concerned, we shall be permanently housed. This has been all worked out in very careful detail.
The expense of this system will no doubt be considerable. The ordinary working of the system will not be less than about £170,000 per year, and during the period when the building is going on the expenditure will rise to about £200,000 per year, not ever above £200,000 during the next 10 years. We hope that the labour exchanges will become industrial centres in each town. We hope they will become a labour market, we hope they will become an office where the Trade Board will hold its meetings as a natural course, and that they will be open to trade unions, with whom we desire to co-operate in every way in the closest and frankest terms, while preserving our impartiality between capital and labour. We hope that the trade unions will keep their vacant book in some cases at the exchanges. We hope that the structure of those exchanges will be such as to enable us to have rooms which can be let to trade unions at a rent for benefit and other meetings so as to avoid the necessity under which all but the strongest unions lie at the present time—of conducting their meetings in licensed premises. The exchanges may in some cases afford facilities for washing, clothes mending, and for nonalcoholic refreshments to persons who are attending them. Separate provision will be made for men and for women, and for skilled and for unskilled labour. Boy labour will be dealt with in conjunction with the local education authority, because we have no intention of allowing the commercial side to override the educational side in regard to young people. Travelling expenses can be advanced on loan, it is contemplated, to workmen by whom situations have been procured if the Management Committee think fit.
I do not want to go into all the details. They have been studied very carefully, and I shall be prepared when we are at closer quarters on the Bill to give the fullest information and to discuss without restraint of any kind all those special aspects and points to which I have referred. So much for the policy of Labour Exchanges. That is a policy complete in itself. It would be considerable if it stood alone, but it does not stand alone. AH my right hon. Friend the Chancellor of the Exchequer has announced in his
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Budget speech, the Government propose to associate with the policy of Labour Exchanges unemployment insurance. The hon. Member who moved this Motion has referred particularly to the Minority Report. He knows that the Minority Report advocates a system of compulsory Labour Exchanges, that no person shall engage any man for less than a month except through a Labour Exchange That is not the proposal we are making. We are making a proposal of voluntary Labour Exchanges. I am quite ready to admit that no system of voluntary Labour Exchanges by itself deals adequately by itself with the evils and difficulties of casual labour, but there is one reason against compulsory labour exchanges at the present time My hon. Friend foresaw it. To establish a system of compulsory labour-exchanges, to eliminate casual labour, to divide among a certain proportion of workers all available employment would absolutely and totally cast out a surplus of unemployed, before you have made preparation for dealing with that surplus, would be to cause an administrative breakdown, and could not fail to be attended with the gravest possible disaster. Therefore until poor law reform, which falls to the Department of my right hon. Friend Mr. Burns, and with which he and those who are working with him are engaged, his made further progress, to establish a compulsory system of Labour Exchanges, would naturally increase and not diminish the miseries with which we are seeking to cope. We have, therefore, decided that our system of labour exchanges shall be voluntary in its character. For that very reason there is a great danger, to which I have never shut my eyes, that the highest ranks of labour, skilled workers, members of strong trade unions, would not think it necessary to use the exchanges, but would use the very excellent apparatus which they have established themselves, that this expensive system of exchanges which we are calling into being would come to be used only by the poorest of the workers in the labour markets, and, consequently, would gradually relapse and fall back into the purely distress machinery, not economic machinery, from which we are labouring to extricate and separate it. It is for that reason, quite apart from the merits of the scheme of unemployment insurance, that the Government are very anxious to associate with their scheme of labour exchanges a system of unemployed insurance. If labour exchanges depend for

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their effective initiation or inauguration upon unemployment insurance being associated with them, it is equally true to say that no scheme of unemployment insurance can be worked except in conjunction with some apparatus for finding work and testing willingness to work, like labour exchanges. The two systems are complementary; they are man and wife; they mutually support and sustain each other. So I come to unemployment insurance. It is not practicable at the present time to establish a universal system of unemployment insurance. It would be risking the policy to cast one's net so wide. We therefore, have to choose at the very outset of this subject between insuring some workmen in all trades and insuring all workmen in some trades. That is the first parting of the ways upon unemployment insurance. In the first case we can have a voluntary and in the second case a compulsory system. If you adopt a voluntary system of unemployment insurance, you are always exposed to this difficulty. The risk of unemployment varies so much between man and man, according to their qualities; character, circumstances, temperament, demeanour towards their superiors—these are all factors; and the risk varies so much between man and man that a voluntary system of unemployment insurance which the State subsidises always attracts those workers who are most likely to be unemployed. That is why all voluntary systems have broken down when they have been tried, because they accumulate a preponderance of bad risks against the insurance office, which is fatal to its financial stability. On the other hand, a compulsory system of insurance, which did not add to the contribution of the worker a substantial contribution from outside, has also broken down, because of the refusal of the higher class of worker to assume unsupported a share of the burden of the weaker members of the community. We have decided to avoid these difficulties. Our insurance scheme will present four main features. It will involve contributions from the workpeople and from the employers; those contributions will be aided by a substantial subvention from the State; it will be insurance by trades, following the suggestion of the Royal Commission; and it will be compulsory within those trades upon all, unionist and non-unionist, skilled and unskilled, workmen and employers alike. The hon. Member for Leicester (Mr. Ramsay Macdonald) with
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great force showed that to confine a scheme of unemployment insurance merely to trade unionists would be trifling with the subject. It would only be aiding those who have been most able to aid themselves, without at the same time assisting those who hitherto under existing conditions have not been able to make any effective provision.
To what trades ought we, as a beginning, to apply our system of compulsory contributory unemployment insurance? There is a group of trades well marked out for this class of treatment. They are trades in which unemployment is not only high, but chronic, for even in the best of times it persists; where it is not only high and chronic, out marked by seasonal and cyclical fluctuations, and wherever and howsoever it occurs it takes the form of short time or of any of those devices for spreading wages and equalising or averaging risks, but of a total, absolute, periodical discharge of a certain proportion of the workers. These are the trades to which, in the first instance, we think the system of unemployment insurance ought to be applied. The group of trades which we contemplate to be the subject of our scheme are these: house-building and works of construction. engineering, machine and tool making, ship and boat building, vehicles, sawyers, and general labourers working at these trades.
Mr. RAMSAY MACDONALD: Is the engineering, civil engineering or mechanical?
Mr. CHURCHILL: The whole group of mechanical engineering trades. That is a very considerable group of industries. They comprise, according to the last Census Returns, 2j millions of adult workers. Two and a quarter millions of adult workers are, roughly speaking, one-third of the adult population of these three kingdoms engaged in purely industrial work; that is to say, excluding commercial, professional, agricultural, and domestic occupations. Of the remaining two-thirds of the adult industrial population, nearly one-half are employed in the textile trades, in mining, on the railways, in the merchant marine, and in other trades, which either do not present the same features of unemployment which we see in the precarious trades, or which, by the adoption of short time or other arrangements, avoid the total discharge of a proportion of workmen from time to time. So that this group of trades to which we propose to apply the system of

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unemployment insurance, roughly speaking, covers very nearly half of the whole field of unemployment. That half, on the whole, is perhaps the worst half. The financial and actuarial basis of the scheme has been very carefully studied by the light of all available information. The report of the actuarial authorities whom I have consulted leaves me no doubt that, even after all allowance has been made for the fact that unemployment may be more rife in the less organised and less highly skilled trades than in the trade unions who pay unemployment benefits—that is a fact which is not proved, and which I am not at all convinced of—there is no doubt whatever that a financially sound scheme can be evolved which, in return for moderate contributions, will yield adequate benefits. I am not going to offer figures of contributions or benefits to the House at this stage, though I should not be unable to do so. I confine myself to stating that we propose to aim at a scale of benefits which is somewhat lower both in anio'in tand in duration than those which the strongest trade unions pay at the present time. Nevertheless, they will be benefits which will afford substantial weekly payments for a period which will cover by far the greater part of the period of unemployment of all unemployed persons in this great group of insured trades. In order to enable such a scale of benefits to be paid it is necessary that we should raise something between 5d. and 6d.—rather nearer 6d. than 5d.—per man per week. That sum, we propose, should be made up by contributions, not necessarily equal, between the workman, the employer and the State. For such a sacrifice—and it is not, I think, an exorbitant one, which, fairly adjusted, will not hamper industry nor burden labour, nor cause an undue strain upon the public finances—we believe it possible to relieve a vast portion of the industrial population of these islands from that haunting dread and constant terror which gnaws out the very heart of their prosperity and content.
The relation of the insurance scheme towards the unions must be most carefully considered. We hope that there will be no difficulty, as the discussion on this subject proceeds, in showing that we safeguard all the institutions which have made voluntary efforts in this direction from anything like the unfair competition of a national insurance fund. More than that, we believe that the proposals which we shall make, when they are brought forward in detail, will act as a powerful en-
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couragement to all voluntary agencies to adopt and extend the system of unemployment insurance. Yes, but the House may say what is the connection of all this with Labour Exchanges. I must apologise for detaining the House so long—
Mr. JOHN WARD: This is the most interesting part of your speech.
Mr. CHURCHILL: But the machinery of the insurance office has been gone into with great detail, and we propose as at present advised to follow the German example i i insurance cards or books, to which stamps will be affixed every week. For as soon as a man in an insured trade is without employment, if he has kept to the rules of the system, all he will have to do is to take his card to the nearest Labour Exchange, which will be responsible, in conjunction with the insurance office, either for finding him a job or for paying him his benefits. I' am very glad, indeed, to have availed myself of the opportunity which my right hon. Friend has given me to submit this not inconsiderable proposal in general outline, so that the Bill for Labour Exchanges which I will introduce to-morrow may not be misjudged as if it stood by itself, and was not part of a considered, co-ordinated, and connected scheme to grasp with this hideous crushing evil which has oppressed for so long the mind of every one who cares about social reform. We cannot deal with the insurance policy this session for five reasons. We have not the time now. We have not got the money yet. The finances of this insurance scheme have got to be adjusted and interwoven with the finances of the other schemes which my right hon. Friend the Chancellor of the Exchequer is engaged upon now for dealing with various forms of invalidity and other insurance.
In the next place, Labour Exchanges are the necessary preliminary. We have got to get the apparatus of the Labour Exchanges into working order before this system of insurance can effectually be established or worked. Lastly, no such novel departure as a compulsory, contributory unemployment insurance in a particular trade could possibly be adopted without a very much fuller degree of consultation and negotiation with the parties concerned, that is the trade unions and employers, and the different trades and classes affected, than has been possible to us under the conditions of secrecy under which we have necessarily been working.

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In the autumn the Board of Trade will confer with all the parties affected by the proposals which I have outlined to-night, and we shall endeavour, while not making the production of our proposals contingent upon their agreement, to secure as wide and as large a measure of agreement as possible of all these parties, in order that all our proposals may be received with as much, consent as possible when next Session they are presented in their final form. One word more. The prospect and pressure of these considerable duties has involved some rearrangement of the Labour Department of the Board of Trade. I propose that that Department should be divided in the future into three distinct sections. The first section will deal with wages questions, arbitration, conciliation, and with the Trade Boards, which will be set up under the Trades Boards Bill if it should pass into law. The second section will deal with statistics, special inquiries, and with the "Labour Gazette." The third section will be occupied with Labour Exchanges and unemployment insurance work in conjunction. One of the functions of the last section will be to act as a kind of intelligence bureau, watching the continual changes of the labour market here and abroad, and suggesting any measure which may be practicable, such as co-ordination and distribution of Government contracts and municipal work, so as to act as a counterpoise to the unemployment of the labour market, and it will also, we trust, be able to conduct examinations of schemes of public utility, so that such schemes, if decided upon by the Government and the Treasury, can be set on foot at any time with knowledge and consideration beforehand, instead of the haphazard, hand-to-mouth manner with which we try to deal with these emergencies at the present time. That is a part of the policy I have unfolded to-night, which has not reached the same stage of maturity as the other subjects with which I have attempted to deal. I have only attempted to foreshadow them in the vaguest terms. Such are the proposals which we submit in regard to the organisation section of this problem. I have carefully confined myself to that section. I have not trespassed at all upon the other no less important or scarcely less important branches of this problem, and I am quite certain this Parliament will
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gladly exert what strength remains to it in attempting to cope with these hideous problems of social disorganisation and chaos which are marring the happiness of our country, and which, unless grappled with, may fatally affect its-strength and its honour.
Mr. F. E. SMITH: Nobody listening to the speech of the right hon. Gentleman will make any complaint of the length at which he dealt with this extremely important subject. He dealt with it in a manner which I think all sections of the House will admit was worthy of the importance of the subject. Perhaps, representing as I do a Liverpool Constituency, in which there is a great deal of casual labour, I may make one or two observations on the subject of the Resolution before the House before I venture to address one or two remarks to the compulsory insurance proposals which the right hon. Gentleman has. outlined. So far as casual employment is concerned, the Resolution which the House has now under consideration, I think probably all Members of the House, wherever they sit, will agree that even a mere-superficial analysis would suggest the drawing of a distinction between cyclical fluctuations of unemployment which are produced by general depression, and in the second place local and sectional fluctuations produced by causes only merely local and, therefore, more susceptible of local treatment. If one gives one's attention for a moment to the case of cyclical fluctuation in trade he will at once find that he is face to face with the great question as to what is the particular system in any particular country which is best qualified to deal with the general difficulty of the depression in trade. I do not propose to embarrass this Debate at this stage with the discussion of that question. I do not seek to introduce the subject of Tariff Reform, or the subject of afforestation, or the subject of labour colonies. Everyone of these is extremely controversial, and the value of any of them, if urged as a practical contribution to the Debate, would be hotly canvassed in some particular section of the House. Perhaps, therefore, it will be better to pass by for the purposes of a limited Debate the whole general question of cyclical fluctuation of unemployment, the reason of which it is extremely difficult to discover, and, therefore, it is better to deal with the question of local and sectional fluctuation, and see from this how far the proposals indicated by the right hon. Gentleman in the Bill he is about to

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introduce are likely to present anything in the nature of a cure or at all events a palliation for this local and sectional fluctuation.
I come from a Constituency where casual labour is present. I have given some careful attention to the subject and to the work of the local labour exchanges in foreign countries, and I have no hesitation in accepting the view which the right hon. Gentleman has placed before the House that without undue sanguineness you may look forward to labour exchanges to furnish some considerable palliative. It is extremely important that the House should clearly understand what is the nature of the gain which they may reasonably count upon these labour exchanges to furnish. I venture to suggest, as an illustration in passing, taking first of all skilled trades which, from one point of view, are not as valuable an illustration as unskilled, taking skilled trades it is a matter of common knowledge amongst those who study statistics if you take skilled trades in good times—and this is an illustrative test—one frequently finds the employers in such trades have a difficulty in finding workmen, and taking the not very enterprising activity of such an exchange as the Metropolitan Employment Exchange, which tries to do on a small scale the work that would be attempted on a national scale by the labour exchanges, one finds they have been able to enable many men to find employment which they would not otherwise themselves find. The real pressing importance of this problem is by the admission of everyone not in skilled but in unskilled trades. What is the problem in connection with the Liverpool Docks, and I know also the London Docks for many years has been claiming solution. The problem, of course, is this: Employment can always be got. It may be said there is no economic wastage in the labourer waiting there.
Let us take a simple illustration, and then reduce it to a concrete case. Let me ask how this suggested process of decasualising labour is going to help the problem. I ask the House to consider a very simple illustration. Take the case of one employer who employs ten men on Monday and another who employs ten men in the same class of employment on Tuesday. If there is no such organisation as that contemplated by the labour exchanges the result will be you will have 20 men partially employed on those two days. The express object of the organisation and
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the labour exchanges is that instead of having 20 men partially employed you will have 10 men fully employed. It is quite true that the labour is decasualised, and I am one of those who contemplate the economic consequences as a whole that society gets by the decasualisation of the whole of that labour. But it is very important that all engaged in attempting to suggest remedies for unemployment should realise what would be involved in the decasualisation of that labour in order to measure the admitted gains with the disadvantages, which cannot certainly be disputed. It follows that decasualisation of the kind contemplated in this Resolution replaces] 0 half-employed men by five fully-employed men. If you are going to decasualise labour in that way, if you are going to see that the men who are doing that constant amount of labour shall have it more widely distributed, it follows that you are going to replace 10 half-employed men by five fully-employed men. The right hon. Gentleman stated very modestly that conclusion when he said that he did not claim that labour exchanges would add to employment. I think he might have stated it more strongly, because not only will the establishment of labour exchanges not add to employment, but if they are to serve the only purpose which they can economically serve the necessary consequence of their establishment must be actually to diminish employment. I recognise that, and although I do so, I still do not hesitate to say that the Bill which the right hon. Gentleman is going to produce is one well worth introducing and worthy of the support of the House. The reason which I venture to offer to the House for that view is that, in my opinion, it is far better in the interests of society as a whole that you should have ten men fully paid and fully nourished than twenty men partially paid and partially nourished. It is clear that under this system you will not be able to supply even partial labour for as large a number of workers as you find partial work for to-day, and you are bound to increase the number of men who will have to appeal for corrective treatment or outdoor relief. I think it is important that those who are pressing forward this proposal to start labour exchanges should realise that the inevitable economic consequence of establishing those exchanges will be that you will diminish the number of men who can find work of any kind, although you are going to give them a larger living wage. As the necessary

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result of the rejection of a number of men who cannot obtain work you are going, as I have already stated, to increase the number of men who will have to apply for corrective treatment. I think those are large considerations which are well worthy of the attention of hon. Members of this House, whatever view they may have formed as to the best method of dealing with the problem as a whole. But in spite of all these difficulties I have no hesitation myself in supporting the proposals which the right hon. Gentleman has adumbrated for the establishment of labour exchanges, because I believe that, in the interests of society as a whole, it is better to have ten well-paid and well-nourished men than to have twenty badly paid and ill-nourished.
The right hon. Gentleman has touched upon a much more difficult question in regard to compulsory insurance. Now, Sir, I do not desire for a single moment to underrate the difficulties of compulsory insurance, but I do not think that the right hon. Gentleman will find himself confronted with very serious opposition from these benches, because during the discussions on old age pensions my hon. Friends here on this side of the House pressed upon the Government that compulsory contributions would be a reasonable basis for the system. We were told that there was something un-English in such a proposal—that is, the proposal of compulsory contribution. Speaking for myself, I was never convinced by that argument, and I am un-able to see why if the working classes would never consent to a system of compulsory contributions for old age pensions the Government are entitled to suppose that they will consent to compulsory contributions to provide against unemployment. Speaking for myself, I am convinced that the true and only method lies on the lines which the right hon. Gentleman has indicated. I do not think that compulsory contribution to anything can be easily made. But I do venture to think that the proposal which the right, hon. Gentleman has suggested to the House is such that all sections of the House may unite in supporting it. It is a proposal, whether popular or unpopular, which will conduce to the interests of the working classes.
Mr G. P. GOOCH (Bath): The speech of the President of the Board of Trade has rendered to-night's Debate not only one of the most important this Session, but
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one of the most important in the present Parliament, for the right hon. Gentleman has announced two Bills, each of enormous importance. I do not think there is anybody in the House who seriously maintains that the setting up of labour exchanges is useless. Where we differ is as to the degree of importance to be attached to them. My hon. Friend the Member for Poplar appears to attach rather less importance than the President of the Board of Trade to them, but if I may speak from my own experience, I am more inclined to agree with the view of the President of the Board of Trade. It is hardly necessary at this time to enumerate in detail the arguments in favour of the system. The convenience to both employer and employed is obvious. But surely, apart from the merits of the proposal in connection with the economic machinery, there is the question of human suffering in the background—the enormous amount of human suffering and misery involved in line fruitless search for work, which the setting up of a national system of labour exchanges would obviate. I was pleased to hear from the outline of the President of the Board of Trade's plan that he has a scheme likely to satisfy the three main conditions of success. First of all the system must cover a very wide area. It has failed in London because the area is small, and it also happened to be the congested district for the whole country.
The right hon. Gentleman made a reference to the German system which was hardly fair. He spoke of it as mainly municipal. But the fact is that the greater part of Germany is broken up into large units, which include country districts as well as large cities and capitals. Bavaria, with a population of seven millions, is a unit in itself; Wurtemburg is also a unit. The villages in each of these districts are in telephonic communication with its capital, and therefore I do not think it is quite fair to say that we are going to improve on the German system in so far as it is mainly municipal. They have these units which include seven or eight million people. The second condition which this scheme satisfies is that the labour bureaux not only tell where work is to be found, but enable the men to get to the place. In Germany, owing to the fact that there they have a system of State railways, they have a fourth class, which costs only Jd. per mile, and the problem of transport is consequently

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enormously simplified. I am glad to hear that the right hon. Gentleman has in contemplation the advancement of railway fares to men who have a prospect of employment. I only wish that, instead of transporting them at an expense of 1d. per mile, he could do it for ¼ d. per mile, as in Germany, or, as an many cases, at even one-half of that price. The third main condition of success for any scheme of Labour Bureaux was also in the President's plan. It must clearly enjoy the confidence of the employers and employed. One of the chief reasons why our Labour Bureaux have been, on the whole, the failure that they have is that the masters and the aristocracy of the workmen also have not had any great confidence in them, and they have been, on the whole, the place of refuge for the less equipped and less skilled worker. In Germany one of the main reasons of their success has been the fact that from the beginning the employers and the employed have been equally represented on them, and so entire has been their success that in many cases the German Trade Unions have ceased to carry on their Labour Bureaux, because they have found it quite unnecessary to do so. Those three conditions, so far as I understand, are satisfied by the scheme.
On the question of insurance, I have never myself been so very strongly enamoured of the Ghent system—the system of subsidies to Trade Unions. With many hon. Members the Minority Beport adopted the Ghent system, which is spread all over Belgium, and which is very much better than the old haphazard system which was begun in Switzerland and Germany many years ago. But I think the scheme of the President of the Board of Trade is even better than the Ghent system in some respects, and one is that it makes the employer take some part of the burden to be borne, while the Ghent system leaves the employer entirely out of the reckoning. The hon. Member opposite, the Member for the Walton Division (Mr. F. E. Smith), rather twitted us on our conversion to the principle of compulsory insurance, and said we were not in favour of a contributory pension system, but we were now proposing to introduce the principle in connection with unemployment insurance. My comment upon that is that the working classes would be quite right and justified in protesting against compulsion to pay into a fund from which they would only get any benefit if they lived to the age of 70—an apparently un-
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likely contingency; but I do not see why they should object to pay into a fund from which they are almost certain before they reach middle age to reap some benefit. In other words, the chance of getting relief during a period of unemployment is greater than that of obtaining relief on reaching the age of 70. Therefore I congratulate the President of the Board of Trade in striking out for himself and going one better than Ghent.
The speech of the President of the Board of Trade has concentrated the attentions of the House on the question with which it has to deal in the way of bureaux and insurance; but if I may revert for a single moment to one or two other issues which the Member for Bethnal Green raised in his straightforward and businesslike speech, I wish to say how entirely I associate myself with him in the tribute which he paid to the value of the constructive part of the Minority Report. As he said, all these proposals form an organic whole and each helps the other, and I believe in the long list of proposals which are made in the Minority Report, no two proposals are likely to obtain more general support than those which he mentions in his Resolution, training colleges and the detention colonies. As to training colleges, I entirely agree with him that Hollesley Bay gives us a lesson from which we have already learned much, and the lesson is not yet fully complete, and as to the detention colonies, having seen most of those on the Continent, I have thoroughly satisfied myself that we are bound to come to them in this country, and I only wonder that we have not copied the example of the foreigner in this particular long before. The Vagrancy Committee which was appointed some years ago and reported in the first year of the present Parliament, recommended strongly and unanimously the setting up of these penal colonies, and now their recommendation has been confirmed in both the Minority and Majority Reports. I hope very much the Debate we have had may help to concentrate opinion on the large body of valuable constructive proposals which are made in the two Reports.
Mr. ARTHUR HENDERSON: In rising to support the Resolution, I hope I shall be pardoned if I follow the example that the President of the Board of Trade set in keeping my remarks very widely apart from most of the points in the Resolution. I have risen for the purpose of giving a very general but a very hearty welcome

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to the statement which the President has made. I regret exceedingly that the House was not much fuller to listen to what, in my opinion, has been so far as the great majority of the people in all our constituencies are concerned, one of the most important, and what I believe will prove to be one of the most far-reaching statements which have been delivered during the time I have been associated with Parliament. I also rejoice at the statement made by the hon. and learned Member for the Walton Division (Mr. F. E. Smith). He concluded by urging that this question should be kept as far as possible on purely non-party lines. I think this is an excellent beginning, for there is no social question that touches so vitally the condition in which so many of our people are compelled to live as this great problem of unemployment, and I think of all questions this is the one that every section in this House should strive to keep entirely apart from party bias. It is the problem upon which we should centre the whole of our attention, in order to find the best and most practical remedy.
We on these Benches may be pardoned if we feel slightly gratified at the statement that the President has addressed to the House. I think that statement contains the germs of some proposals for which we have been striving in the Labour party for a good many years past. I think we may feel almost ready to congratulate ourselves that at last the Government has made a beginning in taking out—I will put it in a very rough form—the Right to Work Bill in penny numbers. I know the President would not admit that. It would scarcely do for him to make such an admission having regard to the attitude which the Government has always taken up when this Bill of ours has been before the House, but I think our Bill contained Labour Exchanges. It contained a form of maintenance in the absence of work. I think our Bill made some reference to insurance, and we are gratified to find that at last a beginning is to be made, if not in the adoption of the complete scheme, one which goes a long way in the direction that we have suggested for some time past. When I come to look at the two main principles which have been outlined to us to-night, I am personally very pleased to find that the Government is going to set up what I hope will be a complete system of co-ordinating Labour
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Exchanges. I am well aware of the objection which can be lodged against Labour Exchanges. They do not provide, in a strict sense, work for the unemployed. The only thing they do is, if there is a position going, it does not necessitate the demoralising tramping system, which, in my judgment, has done more to reduce the status of the workmen of this country than anything else I know of. I venture to say that some men have been compelled, in consequence of the difficulty of obtaining information as to the condition of the labour market in other districts than those in which they reside, to begin the tramping system, and in beginning that system they have begun the demoralisation of their own lives, and have gone so far down that they have never again been able to get back to the former standard of their manhood. The German system, which, I believe, the President of the Board of Trade is very closely following, is, in my judgment, excellent, and it is almost impossible to describe to the House the difference of the condition of the unemployed workmen in Germany and the condition that you find them in in this country. I believe that it is very largely due to the fact that they have been able to remain at home, and to ascertain the actual condition of the labour market, and that if they have to move they have been assisted to move with their families, and have thus been kept free from much of the demoralisation associated with unemployment in our own country.
As to the second proposal outlined, I must say that, whilst I give to it a very cordial welcome, I regret that the Government have not seen their way clear to make the scheme much more comprehensive. What I fear is that the scheme of insurance that has been outlined will be largely prejudiced because some of the worst trades in our present recurring periods of unemployment are not to be included. Probably I may be answered by the Government that in their scheme they have only included such trades as enable them to get proper information upon which to base the actuarial cost that would be incurred. But the Government at present especially should not lost sight of the fact that some of the trades not so highly organised, some of the trades which in days gone by were not so hard hit by unemployment as they are to-day, will feel very strongly because they are left entirely out of any provision in connection with this State insurance scheme. I should like to learn at the earliest

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possible moment—for I did not notice anything in the speech of the President of the Board of Trade on this point—whether this scheme that is going to be set up is going to be regarded as purely temporary, and whether there is going to be taken in the Bill provision for its easy extension, provided that there is a desire expressed on the part of other trades hardly hit by unemployment that they should be included without the necessity of going through the very long delay that often takes place in the process of passing another Bill through both Houses of Parliament.
Mr. CHURCHILL: I may state that the Government contemplate taking power for the extension of the system in the event of its succeeding—after all, that is the important point—to other trades and industries suitable for it, provided that Parlia-men approves of that extension and that money is available.
Mr. A. HENDERSON: I am delighted to hear the statement made by the right hon. Gentleman. I think this will assist in modifying very considerably the feeling of opposition that might have arisen in connection with some of the trades that are not for the moment included in the scheme. I have no doubt we will be told during subsequent discussion that this is going to be a costly scheme. Having regard to the fact that workmen are going to be included and will have to contribute, that the employers will have to contribute, and that the State itself is going to be associated with what I venture to hope will be a very generous contribution, I have no hesitation in saying that while the scheme may be to a certain extent costly, the cost is not excessive. There are other proposals that have been brought before the House for the purpose of assisting to remedy this great unemployed problem, as to which I do not say a single word of a controversial character; but I have heard it suggested in this House and in the country that we ought to go in for a larger naval programme in order to assist in solving the unemployed problem. When I consider this scheme of insurance I have no hesitation in saying that, though it may be costly, it will be much more permanent in character for good than any large scheme or programme of armaments for the purpose of assisting the solution of this great social problem. We welcome this scheme, not because we consider it is a complete remedy for this problem. We
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welcome it because we believe it is a beginning, and that it asserts in another form than that outlined in our Bill the recognition by the State of its obligations to make some provision for the relief and for the maintenance of those who have been suffering so seriously from unemployment in recent years, and on these grounds we shall give it a general and most hearty support. And our only regret is that the President has not seen his way to announce to the House that not only the labour exchange portion of the scheme but the insurance portion will be forced through Parliament during the present Session.
Mr. W. R. W. PEEL: When I stayed casually in the House to hear the beginning of this Debate I certainly did not expect the President of the Board of Trade to make such a very interesting statement and introduce not only the Bill he proposed to introduce to-morrow, but also the very important Bill which he proposes to introduce next year if the country affords him an opportunity of doing so. He dealt very broadly with the situation and apportioned out the duties of the three great Departments of State. He sketched his own programme and the programme of the Chancellor of the Exchequer. I was rather interested to know if he was going to sketch the programme of the President of the Local Government Board, because I rather understood that the President of the Local Government Board was not going to be so generous in his statement to Parliament of what he was going to do, but was going to ask Parliament to have the whole thing remitted to him, so that he could deal with things without any unnecessary interference of Parliament, and that if he informed Parliament of what he was doing every three months it would be quite enough to satisfy that unfortunate body of what he was going to do.
I am entirely in sympathy with labour exchanges, but I am bound to say I thought the expenditure rather large as outlined by the right hon. Gentleman; but, of course, the success of these labour exchanges must be enormously determined by the staff, and it must be largely determined by the attitude that employers take towards them. I think that if the employers find that they are receiving a very good class of men from these exchanges no doubt they will be a success; if not, if they get a bad name, if they supply only men who cannot get employment otherwise, then I am

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afraid that the scheme will be likely to be a failure. I have seen too much in London of unemployment; I have seen too much of the melancholy tramping of processions, not to be gratified by feeling that this kind of thing may be stopped. I was very much struck by the observation of the President of the Board of Trade that labour exchanges, apart from assisting man to find work, will be a means to prevent them from going to where there is no work. My hon. Friend the Member for the City of London may be rather old-fashioned in politics. ["Withdraw."] I do not think there is any necessity to withdraw, because I should think my hon. Friend takes it rather as a compliment. But the law of supply and demand—namely, that labour will go where it is wanted, and will not go where it is not wanted, is a proposition, like many other economic propositions, suited to a simpler state of society than now exists. When there was a simpler condition of society the simpler methods which were adopted were suited to it. But the state of society is wholly different now. I have myself too often seen that when there is a lack of employment in different parts of the country, as soon as it is known that there is a certain amount of employment to get in one place or another, such a mass of men go there and flood the whole town and the whole district that unfortunately they get no employment, and they frequently have no money to return with. As to the Bill of next year, I am referring to a rather remote measure. I am extremely glad to know that it was received so well by hon. Gentlemen on that side, because, first of all, it embodied the principle of contribution, and, secondly, the principle of compulsory contribution. I think hon. Members, speaking on that side, said that the contribution was never popular and never satisfactory, and my hon. Friend said that it was not a good way of gaining votes. But, after all, contribution is very pleasant when somebody else—one or two other people—are going to contribute at least as much or more, and when you yourselves are going to gain the benefit of their contributions. I am quite sure that after the shock of the first feeling of compulsion, the cold douche of compulsion, the method of compulsory contribution will not be so unpopular as it might otherwise be. From the statement of the right hon. Gentleman the President of the Board of Trade as to whether we should deal with a certain
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number of men in many trades, or with all those working in some trades, it is obvious that we could only adopt the latter alternative, and deal with all the men in sonic trades. I sincerely trust that the experience of compulsory contribution will be successful, and that it may be further developed.
Mr. D. J. SHACKLETON: I should like to say a few words as representing the purely trades union side of the question. As president of a Trades Union Congress, of course I should like to thank my right hon. Friend for having given us the speech he has delivered to-night. I can assure him that so far us I and my colleagues are concerned on the committee of the Congress, we shall give his proposals and his speech friendly consideration. In connection with the opportunity that he may seek during the autumn for consultation with us, I can assure him in advance that we will offer all the evidence and information we possibly can to assist him in bringing his proposals before the House. On the question of contributions, I think my hon. Friend (Mr. Peel) has hit the nail on the head. If the right hon. Gentleman would get contributions towards this fund big enough, as a sort of bait to the workmen to accept the system of compulsory contributions, I think that will meet all the difficulty. I do think there is another element in this matter which will encourage the British worker to accede to this request. The splendid understanding there is now, the international understanding between the trades unions of Great Britain and the trades unions of Germany, will help very considerably in getting past this little knotty point. The fact that our German brethren have acceded to this for over 20 years, and to-day admire it more than ever, and have not the slightest intention of going back on it, will be a considerable help to induce the British workman to look at it in a favourable light.
I would like also to express my thanks to the Mover of this Besolution to-night for a speech full of good advice. It may be that for myself, as representing a cotton district, it may be difficult for me to carry some of the things forward. Personally I am with him. I am in a small minority, but in a minority which in my opinion is increasing. I have the satisfaction of knowing that the whole of my executive are with me, and that the overwhelming proportion of the delegates represented at the council are with me, and

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that the rank and file are going in the right direction. I do ask the House and the workmen in the country and the employers in the country to seriously consider how much they can do to help in this unemployed question if they would tackle the question of child labour, systematic overtime, if they will seriously consider the question of shorter hours, and put all those things into the balance, and see what they can do to help the right hon. Gentleman in the troubles he is now endeavouring to deal with. If they do they will do something which they will be proud of hereafter. I know I am saying something for which some of my Constituents will blame me, but it is no use in dealing with the unemployed problem if you are going to have children of 12 or 13 years of age for years to come. I know we shall have to deal with it gradually, but I hope that before long we shall have the opportunity of adding a year more to the age of children going to school. There are other matters I might refer to but time does not now permit. We have had a good Labour night. I am proud to have been present, and we have heard for the first time schemes given forth to us which hold out some hope to us as Labour men—that we are going to do something in this Parliament for the relief of the oppressed worker who is unfortunately thrown on his own beam ends, without the slightest chance. We, some of UB, have gone through this experience, and we know how to feel for them, and we want to do something that will help them on the way.
Mr. PICKERSGILL: After the speech of the right hon. Gentleman the President of the Board of Trade it would be ungracious on my part to persist in my Motion, and I ask leave to withdraw.
Motion, by leave, withdrawn.

CHEAP TEAINS BILL.
Order for Second Reading read.
Objection taken to further proceeding.
Mr. BOWERMAN: May I appeal to the hon. Member to withdraw his opposition? The Bill is simply intended to prevent working men and women from being kept an hour in the streets in the morning.
Sir FREDERICK BANBURY: The railway shareholders will have to pay for it. If the hon. Gentleman wishes to secure his object he had better get the trades unions to pay for it. I object.
Second reading accordingly deferred.

BASTARDY ORDERS.
Ordered—That a Select Committee be appointed to inquire and report as to the Law relating to the making and enforcement of Orders under the Acts relating to Bastardy, and to report whether any, and, if so, what Amendments are required in the same:
That Mr. Charles Corbett, Mr. Arnold Herbert, Mr. King, Mr. Kennedy, and Mr. Whitbread be Members of the Committee:
That three be the quorum:
That the Committee have power to send for persons, papers, and records.—[Mr. Joseph Pease.]

BASTARDY BILL.
Ordered—That the Order for committing the Bastardy Bill to a. Standing Committee be discharged, and that the Bill be referred to the Select Committee on Bastardy Orders.—[Mr. Joseph Pease.]
Adjourned at Four minutes after Eleven o'clock.