CONSOLIDATED FUND (No. 2) BILL.

HC Deb 15 June 1910 vol 17 cc1322-95

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the third time."—[Mr. Hobhouse.]

Mr. PRETYMAN

I rise to call attention to the administration by the Commissioners of Inland Revenue of their duties in the collection of the Increment Value Duty. I suppose the House is aware that under the Finance Act recently passed no sale of land, or of any interest in land, or any lease over a period of fourteen years can be legally completed without the Increment Value Duty stamp having been affixed. It follows that every transaction in land, however small, has to be brought to the notice of the Commissioners, and has to comply with the regulations made by them. I think the House will perhaps realise what this means when they understand how infinitesimal may be the transactions which can be brought to the notice of the Commissioners, and which have to go through this expensive process. There are certain concrete cases which I propose to bring forward, and I am sure the House will agree that an actual concrete case is a matter of which it should take cognisance. I do not propose to put my opinions before the House; I propose to put before it what is the actual state of affairs, and what is the procedure which solicitors hove to follow with the Revenue Commissioners, and then the House will be able to form its own judgment. I have here a letter from a firm of Scottish solicitors—Messrs. Symons and Macdonald, of Dumfries. I quote this only to show the character of the transactions which are involved. The letter states:— I recently purchased a lair in the cemetery here in connection with the death of a client. The Secretary of the Cemetery Company informs me he is unable to deliver the conveyance until lie has satisfied the Revenue as to the liability of the Company for Increment Value Duty. I believe "lair" is the Scottish for a site of a grave. Here we have the case of a site for a grave, about seven feet by four presumably, for the interment of a deceased person. I do not know whether the interment has been allowed to take place pending the settlement of this matter with the Inland Revenue Commissioners. That is not my point, but that you have an infinitisimal transaction running into a matter probably of a few shillings, and on that transaction a mass of documents have to be furnished and particulars have to be supplied to the Inland Revenue, and expense incurred by the individuals concerned in the site, although it is perfectly obvious no Increment Value Duty can be charged in such a case as that. Curiously enough, in the very same letter, I have evidence to show that it is not only a question of urban land or even of cemetery sites, but of agricultural leases also. The same letter states:— Leases even of purely agricultural subjects if of fifteen years duration or upwards, are regarded by the Revenue as justifying an elaborate inquiry as to the liability of the proprietor for Increment Value Duty. We sent up a lease last week of a farm three miles distant from the nearest township to have the ordinary lease stamp impressed and got in return a voluminous set of questions from the Commissioners. If the trouble involved in answering such questions is to be avoided the only course for proprietors to follow is to make their leases of shorter duration than fifteen years.' The House will gather from these concrete cases that every one of the tens of thousands of daily transactions in land or interest in land, has to go to Somerset House, and not a single one has yet been adjudicated upon, and at least five or six months must elapse before Increment Value Duty can be settled in any one of those cases. The very smallest property is not exempt. I have a letter here in regard to another part of this matter—where a property has been bought for £50. The owner of that property has now resold it. and he has to go through this mill, and all this great trouble and expense. The Commissioners of Inland Revenue are demanding all these particulars, and I think the House will agree it is obvious that those particulars can only be demanded under the authority of the Act itself. Any authority which they possess can only arise under Section 4 of the Finance Act. That Section is perfectly clear on this point. Under Section 4, Sub-section (2), it is enacted, "It shall be the duty of the transferor or lessor on the occasion of any transfer on sale of land, or on the grant of any lease of any land for a term exceeding fourteen years, to present to the Commissioners, in accordance with regulations made by them, the instrument by means of which the transfer or the lease is effected, or agreed to be effected, or reasonable particulars thereof, for the purpose of the assessment of duty thereon.…" It is a perfectly clear enactment that either the instrument itself or, not "and," "reasonable particulars thereof" are to be presented, and that is all. Sub-section (5) enacts: "Regulations may be made by the Commissioners with respect to the mode in which any instrument is to be presented to them …" That is the extent of the statutory powers of the Commissioners. They may demand the instrument, or reasonable particulars of the instrument, and may make regulations as to the mode in which the instrument is to be presented. That, so far as I am aware, is the sole authority the Inland Revenue Commissioners have. What is the procedure which they are actually adopting? I have here a concrete case. A widow, Mrs. Applegate, and two sons jointly owned a small estate, consisting of a greengrocer's shop and nine small leasehold properties, in three equal shares. One of the sons sold his share to his mother and brother for £1,300, or a third of the total value of the property — namely, £3,900. He executed a deed assigning his interest, and what happens then? The deed of assignment is sent to Somerset House, thereby complying absolutely with the enactment of the Act. Attached to the assignment which was delivered to Somerset House is a schedule containing particulars of the nine leases. An abstract of those was sent to Somerset House with the deed itself. The authorities—that is, the Commissioners of Inland Revenue—have refused to assess the claim for Increment Value Duty, or to withdraw their claim, unless they are furnished with details on Form I.V.D. (B) of all the nine leases, together with copies of the plans thereon. Mr. Applegate, the vendor, has not got, and never had, any of those leases in his possession, and he cannot, even if he would, insist on their production to him. I may remark that Mr. Applegate in that matter is in the same position as the husband of a wife who will not tell her income for assessment of Super-tax. He cannot complete his sale, and—and this is a point that must not be lost sight of—this is not a case of a demand made by the Inland Revenue upon the subject for a tax which the subject may refuse to pay.

This is a case where the subject, in his own interest, has completed a legal transaction. That legal transaction is pounced upon by the Commissioners of Inland Revenue; he is prevented from completing it, to his disadvantage, and cannot realise his money because this illegal demand is made upon him. He has not got those leases, and it is out of his power to comply with this demand, except with the voluntary consent of those in whose possession they are. If he obtains production he will have to pay for it and for copies of the leases, or of extracts from them, and for copies of the plans. If he did obtain all these and produced them, there would be in them no evidence as to the value of the leaseholds, without particulars of all the present lettings also. Having nothing but the £l,300, which is his sole fortune, and which has now been paid to him, he can ill afford the expense involved in obtaining copies of the leases and plans, and he cannot afford the expense of fighting the question on the construction of Section 4, but would be glad to know what authority, if any, the Chancellor of the Exchequer thinks the Commissioners have for making regulations requiring the production of originals, or copies, or abstracts of any documents beyond the "Instrument of Transfer" itself. This is the Form I.V.D. (B) which Mr. Applegate and innumerable others in a similar position are asked to fill up. Here are four cases of most intricate particulars demanded with regard to each of those separate leases on Form I.V.D. (B) on which statements have to be made as to the description, situation of the land, names, addresses, and descriptions of the parties, consideration, and innumerable details under that heading. Then questions about parcels, plans, exceptions, and reservations, covenants by purchaser or lessee to build or improve property or to make roads, etc., and restrictions. There is a long list of possible restrictions. Then there are questions as to easements, rights of common, and as to any other covenants or conditions; then additional particulars as to habendum, rents, and lessee's or transferee's covenants. All these particulars are demanded in full as to these nine leases. There are present many Gentlemen learned in the law who can interpret statutory language better than I can, but, reading it merely as a plain man, I can discover no sort of authority for placing this expense upon the subject. This was the very objection raised from this side of the House when the Clause was under discussion, and it was in deference to our objections as to the expense that would be thrown upon the subject by the demand for all these particulars in cases where no Increment Value Duty was payable that the section was limited as it is. Yet now we have the Commissioners of Inland Revenue going past the decision of the Committee of this House and demanding these particulars absolutely without authority. I have here another case showing the actual expense. It is the case of the sale of a small property, worth £400 or £500, belonging to a Mr. Emmott. He and his solicitors have had a correspondence as to the charges involved to clients by these demands of the Commissioners of Inland Revenue, and this is what the solicitors say:— Upon inquiry of officials at Somerset House, we have ascertained that it will be at least five months before the original site value is fixed, and, of course, until that has been done, it is impossible to dispose of the question of increment value. The effect is that it must be, on the officials' own statement, at least six months before the question can be disposed of finally and we shall be very surprised if a considerably longer time is not required. As regard the legal charges in connection with Increment Value Duty, it has been held by the Council of the Law Society that such charges are not covered by or included in the ordinary conveyancing scale, and that solicitors are entitled to charge under the old Schedule 2 for the whole of the additional work involved. The amount of such charges must therefore depend in every case upon the actual work done, and at the moment it would be difficult to give you an estimate of what our charges will eventually amount to under Schedule 2. If we were to hazard an opinion, we should say that they could not possibly amount to less than three or four guineas, and they might of course be considerably more. There we have a measure of the expense thrown upon small proprietors by these demands. In addition to the direct expense, the Commissioners of Inland Revenue, absolutely without authority, so far as I am aware, are retaining purchase money, in case there may be Increment Value Duty payable. Here is a letter, received this morning, from Mr. Pantlin, of 54, Lower Thames Street:— I get my living by buying and selling land or house property, principally leases of small cottage property. I suppose it would be difficult to find anyone really as poor as I am now. [Laughter.] Hon. Gentlemen opposite will talk by the hour on the platform about helping the poor. There is a kind of altruism which is beautiful in theory, but which finds its practical result in the imposing of intolerable burdens upon the poorest of the people in the name of helping other people who get nothing whatever out of it. Then when a man writes and complains at the bitter injury which he is suffering, and says that he is a poor man, the mere statement brings laughter from those benches.

Mr. JAMES PARKER

What brought the laughter was the suggestion that this was possibly the poorest man we could find. Some of us know poorer persons.

Mr. PRETYMAN

I read the words of the letter stating that the writer was as poor as any man could be, and that statement caused the laughter. The letter goes on:— I suppose it would be difficult to find anyone really as poor as I am now considering that only a few years ago my father (dead) left me a large fortune, and I now welcome even one single pound. I purchased six old cottages (the lease) at Limehouse for £50, and resold for £135. According to the authorities I made £85 profit, and £17, being 20 per cent., was retained to pay Increment Value Duty. But I give you my small balance sheet, every figure of which can be supported by independent evidence on oath. Purchase price £50, costs including Government fees, stamps, land registry on purchase and sale £20, repairs—the amount expended upon the property bought for £50 — £53, incidentals, £2. Total cost, £125. By sale. £135. Nominal profit on the transaction, £10. Government have in hand, £17. Present dead loss, £7. If I prove to the complete satisfaction of the authorities my figures I may in six months time, not before, be able to deal with my £17. That is the position under these regulations of this taxpayer, who, I would remind the Chancellor of the Exchequer, is not a duke.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

Does the right hon. Gentleman really suggest that Increment Value Duty is charged without deducting the £53 for repairs?

Mr. PRETYMAN

I have never made any suggestion of the kind. It would be out of order for me in this Debate to criticise the Increment Value Duty or the principles of the right hon. Gentleman. All I am criticising is the administration of the Act by the authorities at Somerset House. I made it quite plain in the other case, and I repeat it now, that in all probability no Increment Value Duty is payable at all. Yet this man has his £17 impounded, although the Revenue authorities know, and the right hon. Gentleman himself tells us, that there is no Increment Value Duty payable. If that is so, what right has he with Mr. Pantlin's £17? Will he give it back to him? On his own statement he is bound to do so, but the taxpayer cannot get it for six months, according to the statement of Somerset House. This is only one of innumerable cases which reach us every day. The administration is becoming a public scandal.

4.0 p.m.

I will now deal with the more general case. There happens to be an election going on at the present moment at the Hartle-pools. I have investigated something of the conditions in that place, and I find that there are something like 1,500 small holders of land. The trade of that place is unfortunately bad. I am told that there are something like 1,500 empty houses there. Prospects are not bright in that place, and unfortunately many of these small owners have got to emigrate to Canada or elsewhere. Every one of them wishes to part with his property. It is quite obvious in a town of declining trade with 1,500 small owners and 1,500 empty houses that there can be no possible increment, certainly not exceeding the taxable amount of 10 per cent. Not one single man in that place can transfer or lease his property without giving particulars of every sort and description through a solicitor to Somerset House. If he wishes to realise his money, to take his purchase money to Canada, the transaction cannot be completed and cleared up till this mill of Increment Value Duty procedure has been gone through. What is the position there 1 I find the solicitors are obliged to? make a charge to these small owners for the extra work involved by this Increment Value Duty procedure. The small owners refuse to pay the extra charge, and it is a question now between the solicitors and their clients as to whether solicitor or client can best afford to pay this exaction, which is going to produce not one farthing of Revenue.

Here you have every transaction in the borough of Hartlepool, and not there alone, but in forty, nay, hundreds of smaller boroughs, carried through in this way, and I beg to suggest to the House that not one in a thousand of these cases ought to go to Somerset House and go through this expense and trouble. In not one case in a thousand will there be any revenue whatever derivable. Is it tolerable that the Commissioners of Inland Revenue, in order to be able to exact a small modicum of Increment Value Duty in one case, should be entitled, illegally as I maintain, to demand from 999 others expenditure, trouble, anxiety, and delay with regard to their money, with all the evils and absurdities which I have been detailing to the House?

I have no doubt that we shall receive an answer from the Chancellor of the Exchequer. I asked him a question yesterday which throws a little light upon the matter. I asked him—and I will tell him why I asked the question in the form I did—I asked him yesterday whether it is considered that the power given by the Section to the Commissioners to make regulations as to the mode in which an instrument is to he presented to them for stamping authorises them to require the instrument to he accompanied by further documents involving trouble and expense to the taxpayer. I asked him that question because a firm of solicitors had received a letter from the Commissioners of Inland Revenue in which they made that claim. They stated that they claimed that the words I have read just now in Sub-section (5), which allows the Commissioners to settle the mode in which this information is to be delivered to them, entitles them to demand all these extra particulars. That is their statement, and that is why I ask the question of the right hon. Gentleman in the form I did. He answered me by simply stating, "The answer is in the affirmative." Therefore his answer confirms the letter which was sent by the Commissioners of Inland Revenue; and the House now knows that the right hon. Gentleman and the Commissioners of Inland Revenue claim that these words, inserted here by this House, by which they may prescribe the mode in which the instrument is to be presented to them, also gives them authority to demand as many other instruments as they may inquire for. Until they get these other instruments they will refuse to allow transactions to be completed by affixing the increment value stamp, and thereby they are absolute masters of the situation. Perhaps the right hon. Gentleman, when he replies, will explain to the House how it is that these words, permitting the Commissioners to settle the mode of the presentation of one instrument, can be twisted into authority to demand as many particulars, instruments and plans as they are now demanding. Possibly the right hon. Gentleman will try to assure the House that this is a temporary difficulty. He will possibly tell us that it is only because this tax is new that this thing has occurred. Do not let the House be deluded for one moment by any consideration of that sort in these cases. So far from that being the case, this difficulty will increase. We have now a single unit to deal with. Properties are now in the same form, or practically universally must be in the same form, and in the same parcels, as they were on 30th April, 1909. But as time goes on, and we have a constant redistribution of property, you will find that the investigations will become constantly more complex, constantly more difficult, and that any particular parcel of land which becomes subject to this inquiry will be composed of parts of other parcels which have been separately valued, and that the value of the parcel originally taken is only an indefinite guide to the value of the particular bit of it included in the property under review, and you will arrive at an impasse.

I do appeal to the House—after all we have been considered to be a business nation—is it tolerable that all our business in dealing with realty in this country should be exposed to this mass of procedure, and that no transaction, however small, can be carried out without this delay and absolutely unnecessary expense? The right hon. Gentleman added, and I think this was the most ingenious thing I ever heard in an answer—the right hon. Gentleman told me that the answer to the second part of the question which I have just read out "was in the affirmative." He then proceeded:— I may add that the further documents required to be lodged with the instrument are necessary for the purpose of enabling the Commissioners to assess Increment Value Duty. I should have thought that that would have been a condemnation of the Increment Duty rather than an excuse for the Commissioners for acting illegally. Does the fact that the Commissioners want these to enable them to assess Increment Value Duty give them the right to act illegally without the authority of this House? What right have they to demand these particulars because they happen to want them to enable them to assess the Increment Value Duty? That fact ought to have been brought before the House when it was discussing the Budget of last year. If that authority had been required perhaps the House would have given it. It will be open to the Chancellor of the Exchequer, if he desires authority for all this procedure, to bring his demand forward at the present time when we get the Budget of this year, and he will then see whether the House will or will not give him the authority he asks for.

I have made my case in regard to that matter. I will only refer to one more matter. That is the question of the Super-tax, which was referred to at Question Time. May I on that say that the forms are not yet in the Vote Office, and are not yet available? It is therefore practically impossible for us to discuss that matter to any advantage until the forms are available. I will only say, in regard to agricultural property, that I can hardly suppose for one moment that the demands made upon the taxpayers can be intended to be complied with to the letter. Surely it is ridiculous to require an owner of complicated landed property, where it is in the shape of allotments, small holdings, cottages, and tenures of all sorts and descriptions producing very little income, as to every one of which he has been through the mill of the ordinary Income Tax as to any claim that the Commissioners may have made in regard to tax leviable upon him with the exemptions to which he is entitled, that he shall be obliged in respect to that property to furnish, to re-supply, a statement containing the particulars of every allotment separately, and the name of the person to whom it is let, and exactly the same in regard to every cottage, when a simple reference to the Commissioner in the district would enable the Inland Revenue Commissioners to obtain the whole of these particulars which have already been gone through by the owner at great expense in the estate office. I will not say more than that. There are many other instances which will arise upon the Super-tax, but this is one which I am able to speak to from personal knowledge, and I bring that matter to the notice of the right hon. Gentleman. I hope the right hon. Gentleman will be able to—I am sure the House will expect him to—make it perfectly clear that the Commissioners are acting within their powers in making these demands upon the taxpayer or to say if they are not entitled to make these demands then these exactions shall cease. I will make one more suggestion. If this matter is in doubt, sup- posing legal Gentlemen on the other side of the House or the advisers of the Crown cannot make up their minds as to what is the exact effect of these words in the Statute—if there is any doubt whatever— it is clearly the duty of the Crown to resolve that doubt without expense to the subject. I call the right hon. Gentleman's attention to the precedent set in the Beach case. I claim that until a case of that sort is decided that the action of the Commissioners in demanding these documents is illegal. If the right hon. Gentleman can convince the House that they are acting within their rights, then the matter falls to the ground. If he himself is convinced that they are not acting within their rights he will, of course, immediately stop this procedure. If, at any rate, the matter is in doubt, I then beg to suggest to him that it is his duty to immediately bring into the courts a test case at the expense of the Crown, and I suggest to him that a better case than that of Mr. Applegate, who cannot afford to fight it himself, could not possibly be brought forward. Let Mr. Applegate's case be decided at the expense of the Crown, and let it be decided in the courts whether these Commissioners are or are not acting ultra vires.

The CHANCELLOR of the EXCHEQUER (Mr. Lloyd George)

I shall deal first of all with the question of the Super-tax. I agee with the hon. Gentleman who has just sat down, that perhaps on the whole it would be better to defer the Debate on these regulations until, in the words of Mr. Speaker, they are effectively in possession of the House. I quite agree they are not effectively in possession of the House when we have only laid them nominally on the Table, and nobody is in possession of them except the officials. I fully realise that forty days ought to be given from the moment the House of Commons has full cognisance of the regulations. I am sorry that they are not already in possession of the House, but I understand that they will be in a very short time. I think that it is exceedingly desirable that the Debate, which I agree is quite inevitable with a new tax like this, should take place not merely after these particulars have been given to the House, but after the Members have had full time for thoroughly considering and digesting them.

Mr. AUSTEN CHAMBERLAIN

May I assume that it follows, from what the right hon. Gentleman says, that the regulations will not be acted upon as against the tax payer until the House has had this discussion?

Mr. LLOYD GEORGE

The right hon. Gentleman knows very well what the practice is with regard to regulations of this kind. You cannot altogether suspend the operation of the tax until the expiration of the date on which this House, or the House of Lords, shall challenge the regulations. And for that reason we must have a Special Commission. You could not vary the Finance Bill of this year. In every Finance Bill the regulations shall be acted upon as presented until the day of their annulment, and if the House of Commons, in its wisdom, thinks it necesary to alter them, the adjustment ought then to be made in favour of the taxpayer. But you cannot suspend the operation of the collection of the taxes until forty days has expired; that was fully debated when the Budget was before the House last year. I cannot go beyond that at the present moment, but I agree it ought to be taken into account. If it is ever a question of pressing the taxpayer, you ought to take into account the fact that the notice was shorter than it otherwise might have been.

Mr. AUSTEN CHAMBERLAIN

I think I have not made my request clear. It was not that action should be postponed for forty days, but, as I presume we will have these regulations shortly, it will be for the convenience of Members generally that we should have an opportunity of discussing them at an early date.

Mr. LLOYD GEORGE

I think that is quite reasonable, and I shall discuss the matter with the officials, and see if there is no insurmountable difficulty, and I will do my best to meet the right hon. Gentleman. I do not want to enter into a matter which is very controversial of these regulations. The whole machinery has been dislocated and put back owing to the peculiar circumstances under which the Budget had to be postponed. [HON. MEMBERS: "No, no."] I should have thought that there would riot be the slightest doubt about that, and I am sure that that was the feeling of the officials in the matter—they never knew, of course, what might happen. Therefore I will postpone anything I may have to say about the Super-tax until we come to the discussion about the regulations. The only observation I should like to make is in reference to what fell from the hon. Gentleman opposite and some others in regard to the Super-tax. He complains of the number of particulars of hereditaments which are demanded from the taxpayer. That is very largely due to the taxpayer himself, and it is due to the fact that we have increased the deductions and exemptions which he is entitled to make in order to have relief from the Super-tax. The Commissioners therefore wanted full particulars in order to enable them to arrive at a correct result.

Mr. PRETYMAN

That really is not so.

Mr. LLOYD GEORGE

I am only telling the hon. Gentleman what the officials state, as one reason among others, for wanting more particulars; and what I suggest is this, that for the moment they should apply a lump sum, and in good time they should supply full particulars, and that then there should be an adjustment as between the Inland Revenue and the taxpayer on either side. If the taxpayer should prove that he is entitled to larger reduction, it shall be made. On the other hand, if he has paid less than he ought to have paid, the adjustment should be made in favour of the Crown. That is the only suggestion I make, and I think it ought to meet the case. It would be very difficult for the Crown to make a proper deduction unless full particulars were supplied.

I now come to the much more controversial part of the hon. Gentleman's statement—that is the part dealing with the Land Taxes. The hon. Member opposite has not given me notice of any of these cases, and therefore I am not in a position to deal with all of them.

Mr. PRETYMAN

I gave the right hon. Gentleman notice yesterday.

Mr. LLOYD GEORGE

Of these particular cases?

Mr. PRETYMAN

That I was going to raise cases of this kind.

Mr. LLOYD GEORGE

I am not complaining of that, but the hon. Gentleman did not give me notice of these particular cases, and therefore I was not in a position to consult the Inland Revenue about them. He referred to a case in Scotland. I know nothing about the details. How could I? I only heard of it from the hon. Gentleman for the first time in the last few minutes. He mentioned the case of Mr. Pantlin. I have been able to make some inquiries in regard to that, and I find that the particulars given by the hon. Gentleman are incorrect.

Mr. PRETYMAN

No, no.

Mr. LLOYD GEORGE

Does the hon. Gentleman say that £17 was impounded by the Inland Revenue?

Mr. PRETYMAN

Mr. Pantlin says so.

Mr. LLOYD GEORGE

Mr. Pantlin does not say so. He has written to me, and he does not say so, and as a matter of fact the £17 has not been impounded. The hon. Gentleman opposite elicited very loud cheers from his friends behind him on the ground that the £17 was impounded as a stamp on an increment which he would not have realised, because he had £51 deducted in respect of repairs. That £17 has not been deducted by the Inland Revenue; it is not in the possession of the Inland Revenue.

Mr. PRETYMAN

He says it is.

Mr. LLOYD GEORGE

I do not care whether he says so or not. I have the authority of the officials here, who say that the £17 was not impounded.

Mr. PRETYMAN

His solicitor has it.

Mr. LLOYD GEORGE

The £17 has been impounded by his solicitor? That is a very different thing. I can understand a good many reasons why the solicitor impounded the £17, which has nothing whatever to do with the Inland Revenue. It may be for the cost of deeds or for other matters, but the Inland Revenue has not impounded the £17, and why the Inland Revenue, and not merely the Inland Revenue but the Budget, and the Government should be arraigned because the solicitor has impounded £17, is more than I can see.

Mr. AUSTEN CHAMBERLAIN

Will the right hon. Gentleman say whether the writer of the letter gives any reasons as to why the solicitor impounded the £17?

Mr. LLOYD GEORGE

I will read the letter. It starts exactly as the hon. Gentleman opposite told us, about £50 cost, and £20 and legal costs, and £53 cost of repairs, and £10 profit, and he talks about the solicitor having £17 in hand and having it for six weeks, and he talks about being a poor man, "and I want it and I cannot get it, and I cannot pay my way." What on earth has the Inland Revenue to do with all that? I ask any hon. Member whether the impression upon their minds left by the story told by the hon. Member was not that the £17 had been impounded by me, and he pointed at me and said, "You have got it." I have not got it; it is the solicitor who has got it, and that is a very different story. I think it would be fairer if the hon. Gentleman opposite stated the facts, and the whole of them, and did it correctly.

Mr. PRETYMAN

That is a most unwarrantable accusation. I read the letter, which states that the Government have in hand £17. He says "according to the authorities I made £85 profit, the £17, being 20 per cent., was retained as Increment Value Duty." He got the balance, which left the Government in hand £17. So I have made no mistake. He states that the Government have his money, and it is perfectly obvious that the solicitors are I obliged to hold the money to meet the claim of the Inland Revenue.

Mr. LLOYD GEORGE

That letter does not say the Government have got it.

Mr. PRETYMAN

"The Government in hand £17."

Mr. LLOYD GEORGE

He does not say that the Government have got the money and he does not, as a matter of fact, say it to me, and I tell the hon. Gentleman as a matter of fact the Government have not his money at all. That is what really matters. What does this thing matter if it is not that the accusation is made against the Government that we have got this £17? It is not accurate. We have not got a penny piece of it. Now the hon. Gentleman opposite repeats it. Does the hon. Gentleman say that we have got a penny piece of this £17?

Mr. PRETYMAN

No, I certainly withdraw the statement absolutely. I accept the Chancellor of the Exchequer's statement that he has not got the money. Mr. Pantlin in his letter to me says he has. It appears now that the difference is that the money instead of being in the hands of the Treasury is being held by Mr. Pant-lin's solicitor under the regulations.

Mr. LLOYD GEORGE

If the hon. Gentleman can point out a single regulation which justifies this solicitor in retaining that £l7 I should be very glad to see it. I know something of these regulations, and I know the solicitor has no business to retain it. Mr. Pantlin, in his letter to us, says there is no difficulty in proving £53 paid upon repairs, but that is no justification for the solicitor retaining the I money, and it is very unfair that the Government should be held responsible, not for the Act which they passed, but because a solicitor in Limehouse has retained £17 which ought to be in the pocket of Mr. Pantlin, who is a poor man. These are the hard cases of the new Land League. Are these cases which are being got up?

Mr. PRETYMAN

They will bring you down.

Mr LLOYD GEORGE

The hon. Gentleman failed to bring us down at the last election. These are the cases on which he runs his Land League. This is the pabulum supplied to him by his clients. This charge is absolutely groundless. Anybody who reads the case of Mr. Pantlin when the real facts are given and believes anything else will believe anything.

Take the case of Mr. Edward Evans. He is a very able opponent of the Budget. He worked harder than anybody in the country except the hon. Member opposite against it. He is a propagandist against the Land Clauses. I have only to say that his statements are apparently supported in this instance without examination. I think the hon. Gentleman opposite ought to give more particulars from Mr. Evans. He is a very strong opponent of the Land Taxes. He said he had consulted the Law Society. I know something more than the hon. Gentleman about the Law Society, and I have never seen a Bill for the reform of the law whether brought in by a Liberal Government or a Conservative Government that the Law Society did not oppose if it was to have the effect of reducing the charges in the profession to which I have the honour to belong. Take the case of the Bill introduced for the Registration of Titles. The Law Society fought it just as hard as they fought the Budget, and for the same reason, and the Law Society knows perfectly well the effect in the long run of registering every particular of this kind in a great national register will be to simplify the transfer of land. I know something about the transfer of land— something more than the hon. Baronet the Member for the City of London. On the question of stocks and shares, I would be quite prepared to take his opinion. I tell him that I would rather make out a bill of costs where there was no registry of this kind than where full particulars were registered. I am sure it will be much simpler afterwards. We have heard a lot of talk about the increase of the costs, but, as a matter of fact, I believe in a very short time they will be a good deal less than three guineas. Does the hon. Member really mean that the Law Society will get up a great agitation against a Bill that increases the charges of a lawyer by three guineas? The Law Society has always opposed every Bill of this kind. They have opposed the Public Trustee Act, Registration of Title, Middlesex Registry, and everything of that kind. They opposed the simplification of bankruptcy, proposed by the right hon. Member for West Birmingham, and they were always opposed to all such proposals. The hon. and gallant Member complained that too many particulars were being asked for. I notice that the particulars of which he complains his own party were responsible for. Mortgages, restricted covenants, there is hardly one of these which is not in the interests of the taxpayers, and they were proposed by the hon. and gallant Member's Friends. I remember a deputation being brought in, and I heard the Leader of the Opposition urging with great ingenuity and success the desirability of making exceptions where you have restricted covenants, and the right hon. Gentleman intended it to apply not only to restricted covenants of the future, but also of the past. I thought he made out a good case, and I assented to his proposition, and now that is one of the things complained of. I think the hon. Gentleman should settle that matter with his own Leader.

Let me give another case. The case of the mortgagee was urged by the hon. Member for Liverpool, and he urged it repeatedly. There is hardly a Clause in all the provisions of that Act to which the hon. Member did not move an Amendment in the interests of the mortgagee, and at last we assented to his proposition. In order to carry out an Amendment moved from the other side of the House-we had to put special questions demanding full particulars in the interests of the taxpayer, and because we are doing it the hon. Gentleman says, "Look at the sort of particulars they are demanding." These are the very particulars which the hon. Gentleman and his Friends wanted us to insist upon for the protection of the taxpayer. Why should we want to insist upon them? If the taxpayer does not want to supply particulars of mortgages it is all the better for us, and the same argument applies to restricted covenants. The questions we put are all in the interests of the taxpayers themselves. With regard to plans, we are entitled to demand all particulars necessary to enable an assessment of the Increment Duty. The hon. Member said this was ultra vires. I think there is a good deal to be said for the contention that the litigation should not be at the expense of the subject. I am sorry that none of the legal advisers of the Crown are present, but I will consult them as to whether a test case can be fought. I do not know enough about the legal difficulties there may be in the way, but I think it is reasonable that if there is a doubt about the matter this question should not be settled fit the expense of the man who has got a property of £l,300, and I will see if it is possible to get an opinion at the expense of the Crown. A man with a property of £l,300 should not bear the expense of fighting a matter which may have to go up to the House of Lords. I think that is a reasonable demand, and if I can be assured that there is any reasonable doubt by any legal gentleman on the hon. Member's own side, I do not think there will be any difficulty about seeking the opinion of the courts without putting the subject to the expense of litigation.

I think I have now dealt with all the points raised by the hon. Member. I should have liked to have gone into the Scotch and the agricultural cases to which he has alluded, but I do not know what those cases are, and perhaps he will be good enough to supply me with them. When the hon. Member talked about tens of thousands of transactions of this kind being dealt with by lawyers I think his statement is absurd, because there are certainly not tens of thousands of cases. It is not true to say that this difficulty is largely one of valuation. There is no doubt there will be a great deal of difficulty at first until the valuation is complete, but after that the process will be just as simple as it is in any other country. I do not like harking back to old controversies, but this matter is very simple in the great cities of Germany—so simple, in fact, that they propose to extend it. It is not difficult so far as the particulars are concerned. As far as the particulars themselves are concerned, they are just as complicated in Germany as they are here. In the course of time, once the valuation is complete, once you get your national register to refer back to, there will be no difficulty. There may be a little difficulty at the beginning, and there may be just a little expense, but in the long run it will not merely bring revenue to the Treasury, but it will add a good deal to the simplification of the transfer of land, and will benefit those engaged in buying and selling real property.

Mr. AUSTEN CHAMBERLAIN

The right hon. Gentleman has really made a very characteristic speech, illustrative not of his best, but of his worst Parliamentary style. He has subjected certain very reasonable concessions suggested by my hon. Friend to a good deal of very violent language, which was quite unnecessary, and which really does not strengthen the case of the Chancellor of the Exchequer. I recognise that he met the request which I made across the floor of the House in the matter of the Super-tax regulations very fairly, and I notice that copies have been circulated in the House since I put the question to him. I at once acknowledge that he met me very fairly on that point, and he said as much as he could at this stage by suggesting that a test case should be taken upon a matter to which both sides attach great importance. I quite understand that the Government in making a concession of that kind must be assured that this is no mere debating conviction given in the course of a Parliamentary discussion, but that it is the considered opinion of a lawyer of eminence and repute speaking as such, and who is ready to state that there is grave doubt as to the legality of the action taken by the Government. I hope in administering this legislation the Chancellor of the Exchequer and the Government will be, prepared, on good cause shown, to take similar test cases in other similar matters. It is quite obvious that very important questions of principle may arise in regard to cases where very little money is at stake, and it is quite impossible in such cases for the taxpayer to find the money. The Government ought to be prepared on good cause shown to fight these cases, as has occasionally been done before, at the cost of the Crown in order that the law may be declared in the common interests of the Treasury and the taxpayers.

I now pass from those points upon which I think the Chancellor of the Exchequer met my hon. and gallant Friend very fairly to the gravamen of the indictment which my hon. Friend has brought, and in regard to which I do not think the Chancellor of the Exchequer really appreciated, and may I say perhaps did not even intend to appreciate, what the gravamen of the charge was. He dealt with the case of Mr. Pantlin. Mr. Pantlin was out of pocket on a business transaction more than the amount of his profit. He was £17 out of pocket in a case where the whole profit was £10, and he could not get his money because the tax was not assessed. It was a case in which it was clear that no tax was due. Mr. Pantlin could not get a decision from the Commissioners of Inland Revenue, and therefore could not get his money, and could not deal with it. Not only could he not get the £10 profit he had made, but he could not get £7 of his own money in addition, which was held up because the Inland Revenue would not give a decision. Now, what is the Chancellor of the Exchequer's defence? My hon. and gallant Friend read Mr. Pantlin's own letter, and I know nothing of Mr. Pantlin beyond what is stated in his letter. Anyone reading that letter would have supposed that the money was actually in the hands of the Government. We have been told that it was not in the hands of the Government, but that it was held by a solicitor to satisfy a claim which the Government might make, and the amount of which the Government would not state. What is the Chancellor of the Exchequer's defence? He says: "It does not matter; what really matters is that the Government has not got the money." In my opinion what really matters is that the man who ought to have the money has not got it. The Government have not got the money, and have no claim to it. If any hon. Member looks into the case he will see that the Government have no claim to it, and they are keeping the man who ought to have the money from having it because they will not pass the transaction and declare it to be free of tax. That is the real gravamen of the case and of every other case which my hon. and gallant Friend presented. In Mr. Pantlin's case the Inland Revenue will not decide whether any tax is payable. He cannot get his documents stamped. The Inland Revenue want six months to find out whether there is any Increment Duty payable. I agree with the Chancellor of the Exchequer. He thinks it absurd; so do I. Then why does not the Chancellor of the Exchequer issue instructions that this kind of thing is to cease—this persecution of poor men and this interference in petty transactions where there is no duty to be had?

Mr. LLOYD GEORGE

If I really thought there was any hanging up of transactions of this sort for six months I would certainly issue instructions, but I am assured it is not the case with regard to Mr. Pantlin. If £20 of anyone's money were held up I agree it would be unreasonable.

Mr. AUSTEN CHAMBERLAIN

Will the right hon. Gentleman say if they have stamped his documents and shown what, if any, tax is payable? The trouble, I am afraid, will inevitably arise, because in every case, whether primâ facie any tax is due or not, all these forms have to be gone through and all these particulars asked for. I think the Chancellor of the Exchequer did not consider whether these forms which he says are being employed for the protection of the taxpayer are being so employed. Take the case of the seven houses and the grocer's business. Is it necessary for them to have the details of the leases of each of these separately in order that they may protect the man who has £l,300 in all as his third share? Is it necessary they should have the plans of the houses? These powers are not being used for the protection of the taxpayer. I do not suggest that they are being deliberately used to persecute him, but they are being used as forms of the Government and the law are apt to be used —without consideration and thought. If the Chancellor of the Exchequer means this Act to work without producing a sense of intolerable wrong, and if he hopes to obtain for it such a measure of popularity as he boasted of at the last election, he will have to alter the ways of the Inland Revenue, because every time they interfere like this in one of these transactions, and every time they cause this expense and delay they add a convert to our view as to the injustice and inexpediency of the Finance Act of last year.

He says all this will pass away, and that you have only to look at the working of the tax in Germany. There is no more comparison between this tax and a certain tax in Germany than between the moon and green cheese. The tax in Germany is not a tax on leasehold property, and it does not involve the valuation of every piece of agricultural land. Only such property is dealt with as is taxable property, and the procedure, as the right hon. Gentleman knows, and as he showed last year, is infinitely more simple than the procedure which has to be gone through in this case. When you work a great change of this kind and introduce new principles into taxation and new impositions into affairs which are the subject of daily transactions in all classes and all ranks of the community, affecting not great men with great estates, having the power to summon to their assistance the most expert advice obtainable, but little men struggling to make both ends meet, to whom every pound and shilling is of consequence, if you want to make your measure tolerable, you must alter the spirit in which the Inland Revenue is dealing with these matters, and you must instruct them that they are to make the Act work as smoothly, instead of as roughly, as it can be made to work. It is better at the beginning, at any rate, that the State should lose some revenue to which it is entitled than that poor individuals should be fined in costs and expenses in order to prove that no tax is due. I submit to the Government and to the House that, if the samples which my hon. Friend has given, and which are drawn from the large correspondence he has on this subject, are in any way fair samples of what is going on throughout the country, and I believe they are, the whole spirit of the administration must be changed, or the Government will be unable to maintain their legislation.

Mr. ELLIS DAVIES

The whole thing seems to me to be nothing more than a storm in a teacup. If I understand the case rightly, there is an increment value of £85, and possibly, therefore, a duty due to the Government of £17. That is an obligation thrown on the vendor by the Finance Act. Consequently, the solicitor to the vendor has to satisfy the solicitor to the purchaser that that duty has been paid or that there is enough money in hand to meet that obligation. One would think from the two speeches delivered from the other side that the rules and regulations with regard to Estate and Succession Duty did not at the present exist. Anyone conversant with conveyancing in this country knows perfectly well that on the completion of any purchase the vendor's solicitor is bound to produce evidence that the property is either not subject to Estate and Succession Duty or that the duty has been paid. What is the difference between the payment of Increment Value Duty and Estate and Succession Duty? There is practically no difference whatever. All the vendor in this case has been asked to do is to satisfy the purchaser of the property that the Increment Value Duty has been paid, and, as he is unable to do so, the solicitor to the purchaser has naturally retained in hand sufficient to meet the obligation cast upon the vendor.

Mr. AUSTEN CHAMBERLAIN

I beg the hon. Member's pardon. I said the solicitor in this case is exonerated from the charge brought against him. Will the hon. Member tell us why Mr. Pantlin is unable to prove that there is no tax due? Is it not because the Inland Revenue will not stamp his documents?

Mr. ELLIS DAVIES

I make no charge against the solicitor. I know it is a very common practice indeed to give an undertaking to the solicitor on the other side that these duties will be paid. As far as I understand, the only complaint made is that there has been some delay with regard to the sum of £17. Surely the right hon. Gentleman must know, if he will consult some of his Friends who are solicitors, that there is always considerable delay in getting the assessment of Estate or Succession Duty. There are innumerable inquiries to be made, and the difficulty is generally got over by the solicitor retaining in hand sufficient to meet any claims the Government may make. Is not that the exact case here? I understand the solicitor in this particular case has retained £17, which is 20 per cent. Increment Duty on £85 increase in the value of the property. What does the right hon. Gentleman complain of? The solicitor merely thought what every other solicitor thinks with regard to Estate and Succession Duty. There is no difference between the method of collection of the Increment Duty and the method in which the Estate or Succession Duty is collected at the present time. It is perfectly well known in practice, and there is really no difficulty in the collection of either of those two duties or in the completion of purchases.

Mr. GEORGE FABER

I am glad the hon. Gentleman has come to the rescue of his great profession. I do not think the Chancellor of the Exchequer displayed the same fairness as the hon. Member— in fact, at one point of his speech he almost got to his Limehouse style. He threw it out as a taunt against the solicitor who is engaged in the Pantlin transaction that he was a solicitor from Lime-house. The transaction arose in Lime-house, but, as a matter of fact, the solicitor came from an entirely different part of London. That is the characteristic style the Chancellor of the Exchequer employs when he knows he has got a bad case. He really has not a leg to stand on. To the knowledge of probably all those competent to judge in the matter, there is nothing due to the Government at all, but the whole transaction is held up, and this little man whose poverty is ridiculed by hon. Members below the Gangway on the other side is £17 out. Why? Because the Inland Revenue have failed to affix the stamp to the conveyance which is the condition precedent to the completion of the matter. My hon. Friend said the Government had the £17. The letter, he has received rather led to that conclusion. It turns out that the Inland Revenue have not got the £17, and that the solicitor has. The Chancellor of the Exchequer tried to ride off on that as if the solicitor in the matter had done something wrong. He told my hon. Friend (Mr. Pretyman), almost with a sneer, that Mr. Pantlin had better settle with the solicitor. The solicitor, as a matter of fact, did the only thing he could do. He was bound to hold the £17 until the transaction was completed and the stamp affixed. Until the Government stamped the document, it might turn out that something might have to be paid, and, if the solicitor had not the money, he would have to pay it out of his own pocket. Last year for days, weeks, and months we told the Government this was certain to happen. We said it was not only a, case of dukes and big men, but that it v as going to be a hardship upon little men. Little men's transactions would be held up, and they would have to produce all sorts of information before transactions could go through. Little men would be under intolerable hardship. We are only at the beginning of the hardships. This is the commencement.

5.0 P.M.

It is easy enough for the Chancellor of the Exchequer to say that as the time goes on the wheels will be oiled and the machinery will run much more smoothly. I think I may suggest that as weeks and months pass it will be found that such a morass of difficulty has arisen as to amount to a stoppage of all business with regard to transactions in land—a stoppage which will become insupportable—and something will then have to be done. The Government would not listen to our warnings last year. They stopped their ears with cotton-wool. They rushed their Budget through on the plea that the burden was being placed on the dukes and big men, and the little men were led to believe that all would be well with them. But now they find it is going to be very ill with them. There are cer- tain of these little men who will discover at a later stage the difficulties which they will have to face. The Member for the West Derby Division of Liverpool—a Gentleman of immense knowledge on these subjects—continually impressed on the Chancellor of the Exchequer that he did not know where he was going or what difficulties he was about to impose on the whole system of land sale and purchase in this country. In those days his warnings were treated as a matter of prejudice. Now, however, we are face to face with the solid facts of the case, and the further we go into the matter the worse the condition is proved to be. The land system of this country is so complicated and land title is so difficult to investigate that if you are going to rip up the title whenever a lease is made for more than a few years you are going to impose a very great hardship indeed. Very often the little man has not got a title; some bigger man holds it. All the little man possesses is the covenant of the bigger man to produce the title when required. The solicitor interested for the bigger man naturally will not produce a copy without being paid, and the little man will be under the obligation of paying him. In the end the holding of land by small men as a profession will become literally impossible. It will not only not be lucrative, but it will become prohibitive. We were told when the Budget was under debate that the Government were compelled by the exigencies of the situation to bring this in. Now, however, they have been able to clear their eyes and wipe their spectacles. They can see what they are doing. They can realise that they are imposing impossible land taxes, and I believe the common-sense of the House will eventually have to come to their rescue. As a tree falls so must it lie, and the community will find that the working of these taxes is in many cases extremely difficult, and in some cases impossible, while in all cases the hardship will prove intolerable.

Sir F. BANBURY

The hon. Gentleman who rose to defend the Chancellor of the Exchequer based his defence on the fact that the same trouble occurs in connection with the Estate and Succession Duties. But may I point out that those duties are only charged at death and there is no hurry for the property to pass. Therefore the delay which occurs is not detrimental to the value of the property which changes hands.

Mr. ELLIS DAVIES

What I pointed out was that there was no more delay in regard to the Increment Duty than there is already in regard to the Estate and Succession Duty.

Sir F. BANBURY

I quite follow that. The hon. Member said that the delay which occurred when the Estate or Succession Duty was payable was serious and that the delay in the present case would not be more serious. But I repeat that payment of the Estate and Succession Duty occurs only on death, whereas these transactions are taking place almost every day. Hitherto there has been no such delay on purchase and sale, and the delay therefore is a new feature to be considered. The fact that there have been delays in other directions is no justification for inflicting it in this present case. I want to direct the attention of the Financial Secretary to another point of which I had given notice to the Chancellor of the Exchequer. Although it is not on all fours with what we have been discussing it does show that the tendency to arbitrary power now prevalent on the Front Bench opposite is extending and is likely to extend. The persons in these cases I am taking up are perfect strangers to me, and I do not wish in any way to appear as champions of their character. I do not know who they are; they may be, or may have been, people whose character is beyond reproach or the reverse. One is dead. But my point is that the Treasury, although it may have acted in a legal manner, has taken arbitrary proceedings which certainly should not have been taken by a Government that calls itself democratic, and which is supposed to represent the interests of the people. The facts of the case are these: There was a Captain Field who, a short time ago, committed suicide. Before his death he had owed the Treasury £300, and the Treasury say that of that debt he had only liquidated £150. Thereupon they issued a writ of immediate extent founded on an Act of Parliament of Edward I., confirmed by Acts of Parliament of Henry VIII. and Queen Elizabeth, an Act of Parliament which, I am informed, has not been acted upon, at any rate in the district in which it was used this time, for at least fifty years. The effect of a writ of immediate extent is that no trial is necessary. It is not necessary for the Treasury to prove that the person whose goods they are going to seize owes them any money or is under any liability to pay them any money. They have to go to the jury, and the question they put to that jury is simply "Are the goods we are going to seize value enough for the money which we require?" The jury in this case were told by the prosecuting counsel that they were not to investigate whether or not the Crown had any right to seize this person's goods, but merely whether the Crown, in seizing the goods, had seized goods which were of a value sufficient to make up the amount of the supposed claim. The jury, of course, had nothing to do except to say that the goods were of that value, and immediately the bailiff was put into this person's house—she was a shopkeeper— and he actually took the money out of the till to recompense himself and to recompense the Treasury. I believe that, after a short time, it was realised that that proceeding was too tyrannical even for the occupants of the Front Bench opposite, and therefore instructions were given that the bailiff was only to take a sufficient sum to recompense him for his own expenses, which I understand amounted to about 5s. a day. I think a question was asked in this House by the hon. Member for the Holborn Division upon this case, and the reply he got was that the writ of the immediate extent was not always issued to collect taxes, but was sometimes issued, as in this case, for other purposes. Since that reply was given application has been made to the High Court, and two judges have granted an injunction preventing the Treasury seizing the property of this person. I believe her name is Mrs. Pridgeon. Proceedings are therefore sub judice, and it is not my desire naturally, under those circumstances, to discuss the action of the Treasury. It is sufficient at present to say that they have been stopped by an injunction issued by the High Court. But it does seem to me that the proceedings of the Government are—I hardly know what Parliamentary epithet I can use to describe them —but they are tyrannical to the last degree. That is not a strong enough expression, but I have no wish to be called to order, and I cannot invent at the moment a stronger phrase. It would have been all very well if the Treasury had put this old-fashioned writ, passed in the days of Emperors and Kings—in the days of hereditary legislators and that sort of people who are always doing wrong things —I say it would have been all very well if the Treasury had put it into execution against a duke or some rich man who was in a position to go to the courts and to obtain the best legal advice available. But this particular person was a poor person, and I would ask the House to consider what happens in the case of an ordinary poor person who is invaded by an official with a writ empowering him to seize her body—I think that is the legal phrase—and is told that this is put in force by a great Government, that the official is to come in and help himself to all of her goods, and that when she comes to the ordinary court she has no redress. It is enough that she has been able to employ a solicitor and counsel and to get from the High Court an injunction. But I do not know what justification the right hon. Gentleman the Financial Secretary to the Treasury will make for this procedure. I do not believe that either he or the Chancellor of the Exchequer really knew anything about the matter. What I do believe is that the bureaucracy which is increasing so much under the rule of right hon. Gentlemen opposite has now come to such a pitch that the officials do not care what, they do as long as they achieve their ends. They are accustomed to present forms and papers and all sorts of things, and to compel people to sign them. They are now apparently under the impression that they can do just what they please, that the courts of law ought not to be consulted, and that the liberty of the subject is in their hands. I am sorry that the House is so empty, for this is a very serious question. Surely the course the Treasury should have taken would have been that which anybody else would naturally have adopted. They should have gone to this woman and haw served upon her notice that they claimed that she owed them a certain amount of money. It must be remembered that this lady never had any dealings with the Treasury of any sort or kind. What the Treasury claim is that Captain Field owed them money, and they believe that Captain Field has given Mrs. Pridgeon a certain amount, which they claim to take from her. Look at what that might mean! I might owe and pay money to a trader. I might go to a shop in the ordinary course of business and spend a couple of hundred pounds on goods in that shop, and because that £200 that I paid might have belonged to the Treasury then it is said that that Department is entitled to go to that shop and put in a writ of immediate extente and seize the goods in that shop because I paid for the goods I bought with money which they said I obtained from the Treasure. And they might do that without, it is said, advancing the slightest proofs before a court of law, or before a magistrate that I owed that money. It seems to me that such an action is inconceivable, and I only hope that the right hon. Gentleman will not only apologise to this person for the steps he has taken, but that he will not in the future proceed in cases of this sort in the same way, but that he will proceed in a similar manner to that which anyone else would proceed—that is to say, he would justify before a court of law the claim which he makes.

How is anybody able to defend themselves unless they are to appear before a judge and jury or a magistrate, and say that they are not liable for the claim which has been made upon them. Unless they are given a chance of proving that their goods are taken under this particular writ and harm is done to their business, and although the right hon. Gentleman does not seem to consider it a very unpleasant thing, I am sure that if a writ of this sort were put into his house he would not like it. I have brought this question up in all seriousness. I have endeavoured to investigate the matter, and I believe that the facts which I have given are correct. I began by stating that I did not appear here as the champion of the character either of Captain Field, who has committed suicide, or of Mrs. Pridgeon. I know nothing about them, and if the defence of the right hon. Gentleman is going to be that the character of these people is not above suspicion, that has nothing whatever to do with the case. The character of a person may be bad, but he is entitled to be judged toy the laws of the land, and no advantage should be taken of anyone because their character is not above suspicion. There are not, perhaps, very many of us who can claim to be above suspicion, but however that may be a man or woman born in England, and an English subject, is entitled to the protection of the laws of the land, and he or she is not to be treated in the high-handed way in which this woman has been treated on this occasion.

Mr. G. A. LLOYD

I rise to ask the attention of the House to a matter of; foreign policy which is gravely agitating all Europe to-day. I refer to the question of Crete. Whilst I know that there are a large number of hon. Members on both sides of the House who have a full recollection of many previous discussions on the same subject, yet I think also there must be many who feel rather inclined to ask why it is that we who have already so many large responsibilities are taking an interest in the fate and the affairs of a small island in the Mediterranean, whose interests are in no way our interests apparently, with whom our trade is insignificant, which in size and population is not as large as one manufacturing town in this country, and which forms no part of our Empire. The answer is brief and simple. It is that for various reasons, well understood, I think, by most Members of this House, the question of Crete troubles the whole peace of Europe, and may, ii wrongly handled or ignored, have a very grave and serious effect upon the international relations of the Great Powers in Europe. Further, I would ask the House to consider for a moment what would be the effect to this country if by any chance England allowed any injustice to be done to the Moslem minority in the island of Crete. The situation in the island itself would be a serious one, but it would not be confined to the narrow limits of the island itself. The effects would extend into Asiatic Turkey and beyond. It would gravely prejudice, I have no doubt whatever, the peaceful economic expansion which Great Britain, in company with other Powers, is making in Turkey, to the mutual benefit of the workers of this country and the people for whom we are working in the Ottoman Empire. The breeze of dissatisfaction would spread, and have the effect of fanning the flames of discontent in Egypt, and arouse the attention of many millions of our fellow-countrymen in India and elsewhere. The fact is that the importance of the Cretan question is entirely disproportionate to the size of the island and the amount of the population, and the question has now passed from the stage of being merely an interesting one into a very grave and acute stage. I think the moment has come when on all sides of the House there will be a general feeling that some immediate and drastic remedy should be applied to this question.

No one who has any knowledge of this question, of the many increasing difficulties which have beset succeeding Governments who have taken a share in cooperating with the three other great Powers for the peace of the world in the protection of the Island of Crete, would be willing by any untimely or hasty criticism to render the task of His Majesty's Government more difficult, in finding some satisfactory solution of so difficult a problem. But I have once again within the last few days—not for the first time—had some special opportunity of seeing the local effects which the protracted and much-delayed settlement of the Cretan question is having upon the poltical atmosphere in the Levant, and as if to add fuel to the flames already raging out there, and in some parts of Europe, some portion of the less responsible European Press has seen fit to indulge in some loud and bitter condemnation of the action of the four protecting Powers, doubtless with a view to breaking down or impairing in the eyes of the parties concerned the prestige and influence of Great Britain, Italy, France, and Russia. The attack has been more especially made upon the British Government, who have been accused by the German and Austrian Press of serving their own interests in failing to carry out the obligations they undertook with regard to-Crete. This is, perhaps, all the more deplorable because the criticism comes from the Press of those two Powers who have themselves put their hands to the plough as regards Cretan protection and have seen fit to draw back from it, and have left the other Powers to look after the interests of Crete. Whether from the fear of the unpopularity which accrues to people who take other people's work in hand or not, they prefer to stand out and criticise the performance of the very difficult task which the four Governments have undertaken, and are dealing with on the whole very adequately and well. I think that the criticism is deplorable, and I think that the whole tone of it is entirely unjust. If this agitation was receiving only the attention it deserves and no more, and if the people for whose benefit the criticism is circulated were sufficiently well-informed to appreciate it at its true value, it might be well that the Powers concerned could ignore it; but as such is by no means the case, and as public feeling both in Constantinople and in Canea and Athens has been much inflamed to our detriment, I cannot but think that some immediate and full declaration and exposition on the part of His Majesty's Government as to the intentions of the-protecting Powers, not only as to their immediate action, but as to their ultimate goal, would not only be very timely at this moment, but would serve to calm the overexcited feelings of the Greek, Turkish, and Cretan peoples in Athens, in Crete,, and in Turkey.

It is unnecessary—it is an old truth— to point out that the part of the peacemaker is always a thankless one. It certainly is with regard to the Cretan question, whatever settlement may be ultimately arrived at, as almost certainly the four protecting Powers will earn the dislike of one of the parties concerned, and very possibly of both. But the delay only augments the uneasiness, and is generally construed as a sign of vacillation, and for these reasons I would ask His Majesty's Government if they would consider very carefully whether the time has not passed for hand-to-mouth arrangements with Crete, and whether, just because public feeling is rather more excited than usual in Crete at this moment, that in itself is a sufficient reason for avoiding a permanent settlement of the question. It is well known how Crete and the Cretan question was the direct cause of the Turko-Greek War of 1896. The deep provocation that was given to Turkey's feelings by the raid of General Vassos in the Island, his landing in Crete, his declaration of the annexation of the Island to Greece, was in a large measure unprovoked, and created almost immediately an impossible situation in the Island. General Vassos retired to the hills while the Turkish Garrisons remained in the coast-towns. The situation was impossible, and neither the Turks nor General Vassos, for various reasons, were able to put an end to it. The Powers intervened for that reason, and, indeed, for another even more grave reason, and that is the incident at Candia, when, unfortunately, some British sailors were shot. The Turkish troops were ordered to leave the Island. Not satisfied with this, the Greeks further aroused the Turks by sending bands into Macedonia at this moment.

It will be remembered that nothing at that time could prevent war, not even the intervention of the Powers, not even the announcement that the Power which was victorious would not be allowed the fruits of conquest—not even that was sufficient to stop the war which succeeded. The Turks won a complete victory, and I confess that I have always considered that at that particular moment the Powers lost a unique opportunity of coming to a settlement of the Cretan question. It may well be considered that the Powers would not willingly, and very probably they would not have been willing to allow any of the territory which had been so hardly won during the war of liberation from the Turkish Government—it may be well understood that they would not be willing that this should go back to Turkey to be again under the evil administration which then prevailed in the reign of Abdul Hamid. There was no question that Crete should again be put under the actual administration of Turkey. Autonomy was granted, and it does not appear obvious why the Powers should have chosen that particular moment when after a war which was made about Crete, and on the question of Crete—why they should have chosen that moment for the purpose of strengthening the influence of Greece in the island.

However that may be, the Powers saw fit to take the course they did, and if they erred in any manner it can only be said that they erred in leniency to the vanquished Cretans. It cannot be too clearly stated that when the Powers took over the protection of the island they accepted the condition which was asked for by the Turkish Government, which was that during the whole period of their protection the Turkish Suzerainty should be maintained absolutely unimpaired.

Now we have to consider what has been the attitude of the Powers towards Crete and Turkey. There can be no question that it has been uniformly fair and correct during the period of the protection of the island. It has not only shown a very lenient disposition to the aspirations of the Cretans—many people consider it has been far too lenient—but at any rate the Governments concerned have done all they legitimately could to conciliate Cretan feeling in the island. On the other hand, the Powers have rigorously maintained the suzerainty of Turkey. It is, I hope, superfluous to repeat that any Power which was privy to any union of the island with Greece would be guilty of a gross breach of faith with Turkey and of the obligations under which they took the island. That is an incontestable fact, and I do not think it will be disputed on any side of the House. This is the attitude—the maintenance of Turkish Suzerainty and of Cretan autonomy—which His Majesty's Government and the Powers concerned have consistently maintained as far as I know, and if we have come in, in England, for a very large share of Austrian and German criticism, after all, it is only this attitude which the Austrian and German Press can be complaining of. This is no time for recrimination with regard to the Press in those countries but we have not yet forgotten the value which is put in those countries upon International Treaties. We in England have the greatest respect for treaties, and we are most unwilling to undergo another period of volcanic unrest such as that which we underwent after the tearing up of the Berlin Treaty last year.

If the attitude of the Powers has been correct, and I think everyone will maintain that it has been substantially correct, the attitude of Turkey towards the Powers has for some time past given no cause for undue complaint. The Turks themselves, though they have often protested against action on the part of the Powers, which they, not without some excuse, have considered might easily be interpreted as giving undue encouragement to the Cretans in hopes which can never be fulfilled, yet they never attempted to interfere with the autonomy of the island. They have not imposed, or attempted to impose, taxation upon the Cretans. The liberty of the Cretans has been absolute, their autonomy complete and large, and they have been far freer from taxation than the subjects of that country to which they now aspire to belong. The behaviour of the Cretans unfortunately has been very different. It has compelled many of those who sympathise very much with their aspirations to consider that the attitude of the Powers has been even too lenient. Every legitimate measure which could have been taken to satisfy the Cretans has been taken by the protecting Powers. They were allowed to have a Greek Prince as High Commissioner, and they were subsequently allowed to have a well-known Greek politician to follow him. They were allowed Greek officers for the training of their Militia, and it is to me incredible that the Cretans cannot have realised the satisfactory position in which they found themselves. If their trouble was bad government they were relieved of it. If it was oppression they were made free. If it was the presence of the Turks, they were relieved also of that. If it was undue taxation, they were left absolutely at liberty to impose upon themselves whatever taxation seemed good to them. Yet ever since-—and this fact should be remembered in weighing the question—in spite of the many concessions and the leniency which the Powers showed, the Cretans have done all they could to cause trouble. They have recently, and for a considerable time, persistently intrigued with Greece and done all they could to stir up trouble and difficulties. At the very moment when Turkey was in the throes of a revolution and was purging her administration and laying, amidst unparalleled difficulties, the commencement of the foundation of constitutional government, that moment was chosen by the Cretans to cause trouble and to attempt to declare their union with Greece. Not satisfied with having gained freedom for themselves, they appear to have been unwilling to allow Turkey to have freedom.

Here it is necessary to point out a fact which seems to me of late to have been very much forgotten by the Government of Constantinople. It was at this critical moment in the fortunes of the Young Turkey party that His Majesty's Government took the lead in intervening to prevent trouble in Crete, and they informed both Greece and Crete that they could not be allowed to move at the present time. It would indeed be well if this fact were remembered in Constantinople. It would create an attitude of more confidence and calm if they recollected that if the protecting Powers had been generous and patient in their attitude towards the Cretans they have never failed to remember the obligations to which they were bound with regard to Turkish suzerainty in the island. Foiled in these attempts to create disturbance, the Cretans gave fresh provocation to Turkish feeling in issuing stamps bearing the likeness of the King of Greece and administering justice in the same name, and as soon as the foreign troops had left the island they saw fit to attempt to hoist the Greek flag at Canea. Quite recently they expelled the Moslem deputies out of the Cretan Assembly because they had shown their unwillingness to take t[...] of loyalty to a foreign king. Such are the events which have given rise to the present anxious situation in regard to the affairs of Crete. I have surely said enough to show that whilst the attitude of both Turkey and the Powers has been regular, it has been correct and patient towards the Cretans. It has been correct for both parties concerned. Yet the Cretans at the present moment must to a large extent be held responsible for the present situation.

I assume, and am perfectly confident, that as the Powers have acted with discretion and with good faith with regard to the Cretan question in the past, so the protecting Powers and His Majesty's Government will undoubtedly do, and are doing, properly at the present time. I have personally no doubts on that score, but I have one criticism to make in regard to the attitude of His Majesty's Government. Whilst they are doing I am confident what is right—the right hon. Gentleman's declaration yesterday reassured us on that point—they have neglected to make it clear to the other Powers that they are doing right. That is where, in my opinion, His Majesty's Government, to a certain extent, must thank themselves for the storm of misrepresentation which has fallen upon our heads from abroad. Candour no less than secrecy has its place in the armament of diplomacy, and personally, and I think I might speak for everyone on our side of the House, I am sure we are only too anxious to support His Majesty's Government in bringing this thorny question to a final settlement. But this cannot be done unless the Government and the Powers will clearly explain not only the course of their immediate action, but the drift and the purport of their future action over a more extended period. They must make it clear whether they intend that there is to be in the near future union or not. It is impossible to suggest that they do intend it, because such a suggestion would impute to them a bad faith which no one in any part of the House suggests, but as long as there is doubt on that score there will never be a settlement of the Cretan question. I am confident that if there had been a clear and early definition by His Majesty's Government with regard to their policy there would not have been all these misunderstandings and there would have Been less scope for the insiduous misrepresentations which have been made in the European Press, all of which must in a larger or smaller degree tend not only to prejudice us in the eyes of those for whom we are working, but to cause friction and to impair the good relations between ourselves and the other great Powers of Europe.

I would now ask the Government from what standpoint they propose to lock at this question. Surely it must be either from one of hard fact or from one of sentiment. In either case we get the same result. If you look at it from the point of hard fact you may surely ask what benefits the islanders of Crete are likely to get from union with Greece. What can they get that they have not now already got? Crete is anxious for freedom from taxation. The union with Greece will involve her in partnership with very burdensome taxation to which the Greeks are now subject. Crete has representative Government. She has autonomy and freedom. Were she united to Greece she would in many respects be very much worse off, and in no respect, as far as I can see, would she be better off. It is almost a comedy now that when, for the first time, it might be a question of pride, at any rate, and not one of shame for Crete to acknowledge Turkish suzerainty, they should choose this moment for attempting to fling themselves into the arms of another Government, which has not yet completely recovered from the condition of chaos and anarchy into which she has recently been plunged. If you look at it from the point of sentiment, you may equally ask what is the real sentiment which underlies the aspirations of the Cretans. Crete has never formed part of Greece. Before she was conquered by the Turks she belonged to Venice, and before she belonged to Venice she belonged to Rome. Is her claim to union one of language? Has every country that has a majority of one language or race ipso facto a right to be annexed to another country that speaks the same language? If so, curious results would be found in Europe and elsewhere. Such a claim would shatter our position in Cyprus, in Malta, and in South Africa. There are more Maltese who speak Italian than English; more Poles in Prussian Poland than Prussians; and more Danes in Schleswig-Holstein than Germans. If the question is one of sentiment, you must choose between Turkish and Greek sentiment. I would remind the House that the question of Crete is really a matter of deep sentiment not only to Greece but to Turkey. It is one that by continual prominence has become better known than many other questions even among the peasants of Anatolia. Turkey has spent blood and treasure enough in securing her title to the island of Crete. When she took the island from the Venetians, she spent no less than twenty years in beseiging the town of Candia, and surely at this moment of Turkish regeneration it could not be said that this sentiment, which was justified even in the reign of Abdul Hamid, should not be more justified now.

But even if this Cretan sentiment was justified by history, which it is not, could it be balanced against the fortunes of constitutional government in Turkey? Few of those who so loudly applauded the first step taken in consitutional government in the Ottoman Empire realised, I think, that it was only an easy step on the rough road to reform. The reconciliation of races, the reconstruction of finances, the extermination of rebellion, the institution of justice, the development of trade, had to be begun on an absolutely empty exchequer. Few Members, I think, probably in this House realise the very grave and precarious condition which still remains in Constantinople. Few people realise that at this very moment Turkey is engaged in no less than four campaigns of lesser or greater importance. It is quelling rebellions in places, separated by thousands of miles, in Albania, Yemen, Nedj, and Kurdistan. These are all occupying the attention of the Turkish Government in its attempts to restore order in the country. What would be the effect if fresh hopes an encouragement were given to Crete? I think it might well be that failure in this matter—failure to get an early and rapid settlement—might bring down into ruins the precarious structure which has been painfully built up in Constantinople.

In conclusion I have to point out that the peace of Europe cannot go on being jeopardised by a handful of turbulent people in Crete, or by the rising passions this question evokes among the Turkish people. The solution can be arrived at fairly easily, but it can only be arrived at if the Powers clear away all ambiguity at once and teach not only Crete but Turkey that the first disturbers of the peace after the final settlement has taken place will be held not only actually but financially responsible for the action they take. Let the continued maintenance of absolute autonomy and self-government be assured to the Cretan islanders, but at the same time let the absolute permanence of Turkish suzerainty be equally assured to the Ottoman Government. Let the Cretan officials, and the Cretan officials only, administer the affairs of the Cretan people in the island. The moment any disturbance takes place in the island let it be made clear that foreign troops will most certainly return, that they will return at the expense of the people who have made the trouble, and that they will remain there until the trouble has been quelled and the status quo restored. I believe that when the hopelessness and the futility of all further agitation is once thoroughly understood on both sides, then, and then only, will the Cretan question be finally settled. I hope His Majesty's Government will give us a clear statement not only of the trend of their immediate action, but some assurance as to the unchangeable course of the future policy of the protecting Powers in the Island of Crete.

Sir CHARLES W. DILKE

Those of us who hold views diametrically opposed to the views of the hon. Member (Mr. G. A. Lloyd) have not heard without concern the considered and grave reply given yesterday upon this question from the Treasury Bench. But we had practically decided not to interfere with the discretion of the Government in a matter so grave and so dangerous, not as regards war in Turkey—there is very little risk of that— but so grave and so dangerous as regards those relations between the Powers of Southern Europe which involve the interests of peace. If it is not likely to cause war, it may affect those great questions involving the interests of peace. It is not only an embarrassing question, but it is a very dangerous question. It is also a permanent question. The hon. Member must have come recently to his studies of the nationalities of Eastern Europe and to his studies of Roman, Greek, Venetian, and Turkish history. They must have been a little wide and superficial if he thinks it is possible by a Declaration of the Powers to put an end to the aspirations of a fighting people like the Cretans, who have fought throughout their history. It is a remarkable fact that in all the charges made in recent times against the Turks and the Cretans they have not been charged with concealment. They say what they mean, and they are very inconvenient to the Great Powers in their extraordinary plainness. They are a fighting people, and you can no more put an end to their rational aspirations than you could during the whole course of history put an end to the aspirations of Montenegro by the Conferences at Paris and Berlin. The best you can do in such a case is to temporise. Surely it is best to do what you have had to do throughout the ages. You cannot "settle it." The hon. Member thinks that a Declaration by the Powers would settle the question. Does he remember the number of treaties and solemn declarations by the Holy Alliance about Corfu? The Ionian Islanders were not a fighting people, and yet you could not, by any number of declarations as to the suzerainty of the Ionian Republic, terminate the problem which finally was terminated in exactly the opposite way to that which was at one time contemplated. I think if the only charge were that the four Powers could not now propose a final settlement of the Cretan question, that charge would pass by very easily. It is not possible, in view of the history of that island, that you can terminate that question.

Mr. LLOYD

I never made the charge at all.

Sir CHARLES DILKE

The hon. Member said very often in his speech that he made no charge against the Government, but he used the word vacillation, and seemed to give examples of what he meant. He made the weightiest charges against the whole of the four Powers, which ought to be disproved. The hon. Member began by saying that he hoped not to render the task of the Government more difficult. One of the difficulties of this Debate is that it is impossible for those who hold strong opinions opposed to those of the hon. Member to sit still, and not attempt to put something on the other side, and yet by saying that something against our wishes, I admit frankly that we render the task more difficult. I speak with a deep sense of responsibility on this occasion, and I shall try to put the case as plainly and with as much freedom from heat of language as it is possible to put it. I shall endeavour to put it in a way which will make the greatest agreement rather than the greatest controversy on such a grave question.

I differ absolutely from many on this side of the House, and I differ absolutely from many things which were said by the hon. Member opposite with regard to being able to decide the fate of nations by their material interests. National aspirations, however disagreeable they may be to the Powers, have to be taken account of as grave facts. You cannot put them down and you cannot prevent those feelings. You cannot affect them by any amount of suggestions that their material interests lie the other way. The only charge the hon. Member thought he made against the Government was that while he considered the four Powers have been acting rightly they had not made it clear to certain other Powers that they were acting rightly. What did he mean by that? He began his speech in language which was thinly veiled by attacking those Powers for interested attempts to break up the arrangements existing between Russia, France, and England. Well, the conclusion is clear that they could only allude to Germany and Austria, and yet he says that all he blames our Government for is that they have not made their policy clear to those very Powers which at the beginning of his speech he charged with having, from motives of self interest, disturbed the harmony of the protecting Powers. The assertion he made was that all those attacks in the Austrian Press were made for the purpose of producing mischief among the Powers.

6.0 P.M.

He wants the Government to state what is their ultimate goal. He complains of a policy of vacillation, in which he seems to think we took the lead. His object seems to be to give some assistance to constitutional government, a course which I ventured to support by my cheer; but I read that phrase the other way. I read those difficulties as making it more dangerous to encourage Turkey to set up claims in other directions. He attaches overwhelming importance to what he calls the absolute supremacy of Turkey. What does he mean by that? Is, or is not, Turkey absolutely supreme in the Soudan? What does he mean? Does he mean any vestige of Turkish influence, nomination functionaries or act of government of any kind? He does not.

Mr. LLOYD

I mean what is generally understood by the word "suzerainty."

Sir CHARLES DILKE

What is it?

Mr. LLOYD

It is, I believe, possession of the island; that there should be no question as to whom the island belongs, and that the Turkish flag should be allowed to fly, as it does still on the island.

Sir CHARLES DILKE

On a detached rock, that is one of the absurdities of the status quo. But does the hon. Gentleman think it worth asserting the powers of the Turkish Empire on a question of suzerainty which is one of pure name, when, as I understand him, there is no danger of that suzerainty being impugned? He raises this academic question of a suzerainty which is to be imposed, and when I ask him to translate his words he translates them by words which have no application to suzerainties in the case of other Powers which are occupying portions of the Turkish Empire. Here is a country which was, as he says, once Venetian, and which was in the past century twice Egyptian—once it was given by the Powers to the Egyptian Government— which was twice absolutely, self-governed, having driven everybody from its shore, and which afterwards was subjected to invasion after invasion. You cannot apply a term like suzerainty here. You cannot suggest to Turkey with any certainty or wisdom that that suzerainty can be made any more tangible than the suzerainty, of which no one complains, which exists in fact, and which no one is desiring to undo. The hon. Member has stated suzerainty as being everywhere understood to mean an absolute recognition of rule in some form.

Mr. LLOYD

No.

Sir CHARLES DILKE

What does it mean?

Mr. LLOYD

It means what I have already explained. I mean suzerainty and nothing else. Let the right hon. Gentleman decide what he considers suzerainty.

Sir CHARLES DILKE

In Egypt it is one thing; in the Soudan it is another. In both cases there is a suzerainty. In Eastern Roumelia there is still a Turkish suzeraint3T. The hon. Gentleman complained that our policy has been vacillating. As I understand the policy of the four Powers, they stepped in as they did and caused the Turks to yield and withdraw their troops from the island for the sake of Crete and to produce a situation which would enable the Cretans to show how they governed their island, and they accepted de facto a most irregular situation, but not uncommon in portions of the Turkish Empire, until the time came when the weakness, as the hon. Member says, of the Young Turk Government forced them to insist on maintaining everywhere their prestige. That prestige the House generally, I believe, desires to maintain; but it is not promoted by this House accepting statements made to the Turkish Parliament by Turkish Ministers which do not state the historic truth of the events described. The speech of the Grand Vizier of the Turkish Parliament was the subject of Notes by the Powers which have been published by other Governments, but not by ours. The speech of the Grand Vizier was the subject, I believe, as regards what he said of our own action, of representation—at least, it is very reasonable to think so—by our Government. That speech encouraged false hopes by the Turkish Parliament, and it weakened, I think not slightly, the position of the Turkish Parliament against those who do not believe in the new réyime. Is it wise, is it safe, to encourage a feeling which is easily interpreted to mean that we are going to give them back a real and effective rule in Crete? It is not within the power of the Powers to do that. Nobody is going to do it. It will not be done, and by raising the illusion we do not seem to be the friends of constitutional government in Turkey, but in the long run we only weaken it by showing how the weakening of its prestige has been possible. Because everyone knows— it is idle to conceal the fact—that the Turkish Parliament is one which does not altogether possess the confidence of the strong old fanatical Mahomedan element in Turkey. It is very natural that it should be so, but they will not gain by being forced into demands from the Powers, which, as a matter of fact, Europe will not allow to be granted. They will have to accept this fact. Does my hon. Friend think that either this Government or France or Italy, for example, is going to assist or is even going to allow the resumption of direct Turkish rule in Crete or in any other country in which it has now ceased?

Mr. REES

Does my right hon. Friend deny that the Government of Turkey is a military despotism, and nothing else, at this moment?

Sir CHARLES DILKE

I am afraid I have not made myself understood. I do not touch on that question.

Mr. REES

I do.

Sir CHARLES DILKE

I carefully avoid it. I do not think it is right and I do not think it would be wise to give individual opinions about what is the character of the Government in Turkey. I only say that, accepting what is said now in this House, that it is an experiment which we heartily desire to see succeed if possible, then it is not to strengthen but to weaken it in the long run if we seem to support, by admitting its possibility, such a policy as that described by the Grand Vizier the other day. There is not a Member of this House who thinks it is possible to impose any kind of effective Turkish rule within that island, or within any of those territories which before the present Turkish Parliament came into existence had already ceased to be governed by Turkey. With regard to vacillation, the hon. Member has brought in the various steps which were taken, which were naturally of a curious kind—unprecedented if you like. Administration in the name of the King of Greece, and a number of isolated facts of that kind constituted new departures in this case, and the lion. Member knows that long before the Powers withdrew their troops, and long before they declared the Cretan Government, all those events already had occurred, and the new event is the one event alone that has happened since. As regards that, I would like on the one hand to state that every friend of the Cretans believes they made a mistake in not freely admitting the Turkish Moslem members; but, on the other hand, they firmly believe they were carrying out the status quo, because the Turkish Members had not made the protest on these occasions which they made on the present occasion, and because that protest was undoubtedly, as I believe our Government has put on record, prepared in Constantinople, and sent out for the purpose of making trouble in the island. It is not my wish to defend that action. It was undoubtedly a mistaken action. But there is this to say for it, that I am sure my right hon. Friend will feel that no more statesmanlike administration can be expected in an island like Crete—as there is in existence no more statesmanlike administrator—than that of the gentleman who is the virtual Prime Minister of Crete. He saw the tactical error of what happened, but he showed that, after all, it was only what had existed before the troops had been withdrawn from Crete, so that I hesitate to say that I find sufficient ground for my right hon. Friend's statement yesterday that the Cretans had violated the status quo. On this question the French say it is the status quo of 1908, and, as we put it last year that there was the status quo of 1908, when we talk about the status quo in 1910, we may be supposed to mean the status quo of 1908; but, as a matter of fact, the French now admit they meant the status quo of 1906. That is the answer. There has been no recent change of action, and there has been only one event which we all regret. But that swearing of allegiance to the King of Greece by members of that Parliament was, if you like, anticipated by the Powers in their own Notes to the King of Greece about the future of the island of Crete, and by then asking the King of Greece to send his son to govern the place, and afterwards asking him to send his former Prime Minister to govern the island.

What is to be the blame that this House wishes to throw on the Government? What can this House usefully do in connection with that? In the first place, I think it is well to do what we can to dispel alarm as to anything like war issuing from these events. I do not think anyone seriously believes that there is the slightest risk that the Turks will be so ill-advised as to attempt to restore their authority in an island where even in the height of their military power they never succeeded in firmly establishing it. It is most unlikely for the additional reason that the Turks are already engaged in a desperate struggle, and they have other wars on their hands. But nothing is more dangerous than an attempt to settle this question now. It has been a dangerous question for many years, and it is especially dangerous now. Anything more dangerous than an attempt at present to settle it out of hand I cannot well conceive. They are the best friends who clearly show that there is no chance of a return to the status quo, and those who desire a practical solution in any sense are those who, I think, do not really wish well to the Turkish Government. The hon. Member has tried to establish a vacillation that does not exist. The vacillation which he seems to see has been only evidenced by a series of events very difficult to justify, but accepted by all the Powers because of the immense difficulty in the way of a solution of this problem. Those who view the matter in a sense exactly opposite to that of the hon. Member I think would prefer if this question had not been raised to-day at all, and would desire to see it left, as far as possible, in the hands of the Government, to be dealt with upon this temporising plan which avoids any attempt at a solution at this moment impossible to find, our policy being guided neither by selfishness nor by a complete disregard of the circumstances.

Mr. KETTLE

I do not think I need make any apology for referring to the question of the government and the future of Egypt. I do not know whether the Secertary of State for Foreign Affairs quite realises yet the effect or the importance of his own declaration of policy. I was not myself present at the Debate on Monday, but I have carefully read his declaration of policy, and he appears to have stated:— I cannot talk any more about self-governing institutions in Egypt so long as that agitation against British occupation continues. He then went on to indicate the circumstances in which, in order to repress the political movement, he would have recourse to an army of occupation. I want to know from him a little more definitely what it is that he precisely means. There is to be no further reform in Egypt if the agitation against British occupation goes on. Does he mean that any newspaper which publishes an article, an argumentative and reasoned article, tracing to its historical origin the occupation of Egypt and reminding this country of its repeated promises that there is to be a development of self-government so as to lead up to the evacuation, will constitute a breach of the condition of things that the Foreign Secretary demands? Since the recent Debate we have had through Reuter's agency the first fruits of the policy of repression. A telegram published this morning says:— The Council of Ministers to-day passed in its original shape the measure giving jurisdiction to the Assize Courts in all Press cases, and also the measure for the repression of illegal secret societies. The Ministers have thus overruled the action of the Legislative Council in rejecting the former law and proposing emasculating amendments. They also rejected amendments proposed by the Legislative Council in the School Discipline Bill. The firm attitude of the Government in resisting the Legislative Council's pretensions to weaken legislation necessary for preventing political crime creates an excellent impression locally, as showing that the authorities are determined to repress Nationalist violence and disorder in all forms. I want to know whether the Foreign Secretary's speech was intended as and is to be treated as an ultimatum. Has he definitely made up his mind to bolt and bar the door to everybody in Egypt who believes in the peaceful development of self-government in that country? I may remind the Foreign Secretary that in the policy upon which he has entered he has carried with him, indeed, the approval of those newspapers which are not the organs of Liberalism, but he has incurred the rebuke and condemnation of the few papers like the "Manchester Guardian" that in this country do stand for the real traditions of Liberal foreign policy. What was the political philosophy and what was the policy announced by the Foreign Secretary? A policy of repression founded upon a philosophy of violence. The Foreign Secretary rebukes the violence into which certain persons associated with the Nationalist movement have unhappily been brought. What is his own justification for the presence of the English nation in Egypt? He appealed to no moral sanction, and all that the Leader of the Opposition and the Foreign Secretary had to say was that the English Were the dominant race, and they were there for the good of the Egyptians. The English seem to see that more clearly than the Egyptians do. They say the English are the dominant race, and that there they are and there they will stay. It is, I think, a somewhat unhappy thing perhaps that this total change of policy in Egypt is a betrayal of the hopes held out by the Liberal party to the Egyptians immediately after the affair of the Suez Canal concession. There has been much capital made of the assassination of Boutros Pasha. Sir Eldon Gorst—against whom, by the way, a campaign of the greatest possible baseness was recently commenced in the Imperialistic Press of this country, which now finds material to praise him—has without a particle of proof insinuated that the leaders of the Nationalist party in Egypt were, as he said, morally responsible for the unhappy assassination. I think I remember an instance in Irish history—that of the Phoenix Park murders—in regard to which exactly the same Press, the same organisation of opinion, tried to destroy and ruin the Nationalist movement in Ireland by an attempt to fix responsibility for that crime on the leaders of the Nationalist movement. The true leaders of the genuine Nationalist spirit in Egypt are not in any degree responsible for events of that kind. No particle of truth has been adduced to associate them with the assassination in any way.

Speaking as one who feels honoured by the personal friendship of some of these gentlemen, I say that the sentence of Sir Eldon Gorst, re-echoed in this House, makes a grave charge against men who are not here and in a position to answer what is a piece of unparalleled cowardice. What is the real origin of this recent development? It is this. When it was proposed to extend the Suez Canal concession, Sir Eldon Gorst, for the very first time since the occupation, determined, in a straightforward way, to take Egyptian opinion on the question. After he had taken this step—a step which created greater hope in Egypt than any event that had happened during the occupation—the campaign of which I have spoken was let loose in the Imperialistic Press of this country. One read articles from week to week in the sixpenny Press, and from day to day in the halfpenny Press, demanding the instant recall of Sir Eldon Gorst. The General Assembly considered the Suez Canal concession. It reported upon lines hostile to what apparently was the design and purpose, at any rate, of the Imperialistic section of opinion in this country. You have now torn to pieces all the promises made, all the hopes held out, and you have embarked upon a policy which is one of repression. What is to be the future in Egypt? The "Manchester Guardian," in an article this morning, has delineated the psychology of the circumstances with which the Foreign Secretary has to deal. It said:— No Englishman wants to scuttle out of Egypt, livery Egyptian worth his salt, if it were put to him, would say that he was against the occupation. I want to know what is the prospect open to the Egyptian worth his salt—to the Egyptian who is as much concerned for the peaceful development of representative institutions as any man in Western countries? What is the course open? The Press Laws are to be made more drastic in defiance of the view of the Legislative Council. Then special legislation is to be passed for the repression of political societies; and this policy, as I say, is not supported by any moral sanction whatever or any attempt to appeal to moral sanction. Can anything be more unhappy than the auspices under which this policy is launched? The Foreign Secretary, departing entirely, I think, from the antecedents of his office, saw the draft of a speech to be made by a distinguished foreigner who happened to be passing through Egypt, and he employed that distinguished foreigner as his mouthpiece for the enunciation of a policy which he should have had the courage to announce himself. What did it come to? The Foreign Secretary told the House the other day that he had consulted with Mr. Roosevelt before the speech was delivered, and that he knew what Mr. Roosevelt was going to say, and was glad Mr. Roosevelt was going to say it. Is that a courteous fashion; is that a discreet fashion in which to launch this new policy? When Mr. Roosevelt was in Egypt he followed the track of a good many distinguished foreigners, we have had in Ireland. He saw the Dublin Castle of Egypt, and he learnt the occupation view of the occupation. As for Mr. Roosevelt, he does not seem to me to be a person of very great importance, an unrivalled master of platitudes and attitudes, a sort of mixture of Tartuffe and Tartarin of Tarascon, who will very soon be forgotten. If a policy of this kind was to be announced it ought to have been announced by the Foreign Secretary from his own lips, and upon his own responsibility. In the philosophy with which the Foreign Secretary and the Leader of the Opposition have recommended their policy, I notice that Front Bench leaders are always readiest to agree when they are both wrong.

The Leader of the Opposition made the astonishing statement that amongst Eastern nations there had been no instance of a movement towards the development of representative self-government. Did he never hear of Turkey, to which the Egyptians look as a model for their own national evolution? In the Debate which has just occupied the attention of the House we had the declaration from the Tory benches that you were to confirm Turkey, an Oriental nation that knows nothing about self-government, and that has not developed in that direction, in the suzerainty over Crete. A contradiction of that kind cannot survive more than a brief examination. I have always been deeply interested in and concerned as to the future of Egypt. We in Ireland have discerned in that country something that seemed in certain respects, at any rate, parallel to our own experience—in each case an ancient civilisation, in each case high aspirations, in each case deep views. We did not ask for any sudden and abrupt action. I entirely agree that progress in Egypt might very well have been, and under the circumstances ought to have been, gradual. We were no advocates of or apologists for violence, but when there is talk about violence, and about the unfortunate assassination of Boutros Pasha, I venture to remember the executions at Denshawi. We are concerned now because the misguided person who was guilty of that assassination is not yet hanged. At Denshawi there was no such delay. The scaffold was erected before the trial was con-eluded. At any rate, we looked forward for a possible development that would have produced a strong and prosperous-Egypt bound up in ties of friendship to this country. That was the hope upon which every person who had any feeling for Egypt builded. The Foreign Secretary has now destroyed that, and, if you will, for ever. He has issued, through the lips of Mr. Roosevelt, an ultimatum to the Egyptian Nationalists. I now have only to ask him what line of action does he expect that a self-respecting Egyptian believer in an Egyptian nationality is to pursue if he is at the same time to respect the conditions laid down by the Foreign Secretary and to do what he conceives to be his duty to his own country and to his own particular and special type of civilisation. The Foreign Secretary must give a somewhat more definite declaration. I think there are many questions of foreign policy during his tenure of office on which he has taken an anti-Liberal line of policy, and I think upon this question of the future government of Egypt he has been guilty of an entire and complete betrayal of all Liberal traditions.

Sir HENRY DALZIEL

Before the right hon. Gentleman replies in the Debate I should-like to make one or two observations upon the speech which he delivered on Monday evening, a speech which I venture to term a most remarkable speech. I hope he will believe me when I say that I rise in no spirit of captious criticism. I am a believer in the foreign policy of the right hon. Gentleman, and have always consistently supported him for the past twenty years in this House at any time he had any share in the administration of the Foreign Office. I believe, as a Liberal, the right hon. Gentleman is one of our greatest political assets, and I have said so in the country in different parts and on different occasions. As a democrat I am grateful to him for the fact that he has given us the priceless blessings of peace during his tenure of office, while at the same time maintaining the prestige and the dignity of our country in every quarter of the world. He has done all this without any self-advertisement and without any self-glorification, and for that we are grateful to him. Therefore I think I can truly say that it is in a spirit of regret I find myself directly opposed to him on one point of his present action and present policy. Let me go further, and say that I have complete confidence in him in regard to the present situation in Egypt. I believe that the right hon. Gentleman, if left to himself, without any internal or external influence, that it will be better for the future position of that country, but I express my regret, and my great regret, that he should have justified and delighted in the interference of a stranger in what was after all a matter of British domestic policy. The right hon. Gentleman the Leader of the Opposition described it as "a British problem." I was disposed in the first place to take a charitable view of the right hon. Gentleman's position. I imagined, in his defence of Mr. Roosevelt's extraordinary action, that he was actuated by considerations of national courtesy, and, having recognised that Mr. Roosevelt had made a mistake, that he was prepared to help him to get out of it as easily and as well as he could. But that charitable view can prevail no longer. We know now, to my great astonishment, that that speech was delivered with the full approval and after full consultation with the Foreign Secretary. I say that that is a most remarkable position.

Did the right hon. Gentleman make any suggestions of alterations to Mr. Roosevelt when Mr. Roosevelt submitted his manuscript, as I presume he did, because a general talk on matters of that delicate character would have been of no value whatever. Did he suggest any alteration when ex - President Roosevelt said that we had erred in vital particulars in regard to our policy? I would like to know whether he made any suggestion with regard to that. Did he ask what those vital points were? Because this is a matter that this House should know, and more especially with regard to the future administration of Egypt, where the faults in our policy have been, who has committed them, and who is responsible for them? Is it the man on the spot or the Minister in charge? We have not any information whatever from the right hon. Gentleman with regard to that most important statement of Mr. Roosevelt, when he tells us that he stated that if we could not really successfully maintain law and order we ought to get out. Did the right hon. Gentleman suggest any alteration in that statement. Did he think it was courteous for a man who had been President of a great friendly State, and who, after all, is a politician, talking to America as well as here? Did the right hon. Gentleman encourage him, was that the cause of his delight that he expressed when he told us if we could not do better we ought to get out? I would like to know whether in that particular respect the right hon. Gentleman suggested any alteration whatever?

I say, the right hon. Gentleman in encouraging the intervention of a foreign Statesman in our domestic concerns, in assisting him to be a contributor to our party Debates in this House, as was evident by the Debate the other night when nearly every speaker supported Mr. Roosevelt, I say he is instituting a new and most dangerous precedent. I go further and I say that in the position that he has taken up with regard to Mr. Roosevelt, he does not represent the Liberal party either in this House or in the country. That is a strong statement to make, but it is not the first time that the Front Bench has not represented the Liberal party in the House or in the country. On two vital occasions they were wrong, and on two vital occasions they had to be brought into line with Liberal opinion. That is true. I therefore submit to the right hon. Gentleman to contemplate the possibility that in this matter also he may not represent Liberal opinion either in this House or in the country. Of course, I always exclude when I say that the hon. Member for Montgomery Boroughs (Mr. Rees).

Mr. REES

May I ask who made the hon. Gentleman the accredited representative of the Liberal party, or of the country?

Sir HENRY DALZIEL

I said nothing of the kind. I did not claim to be the representative of anyone but myself.

Mr. REES

The party. The country.

Sir HENRY DALZIEL

I beg the hon. Gentleman's pardon. I did not claim to speak for the party or the country, or for him under any circumstances, a party by himself, leaders, followers and supporters, but I venture to claim, as a humble Member of the Liberal party, the right to express my opinion on what the opinion of the party and the country is. That is all I claim. I speak and represent no one in this House but my Constituents, and I have no right to speak for a moment but for myself. Therefore, I say, in this matter the right hon. Gentleman does not represent in my humble judgment Liberal opinion. How can we get a test of what Liberal opinion is? Can the right hon. Gentleman point to any Liberal representative of any standing whatever, who has endorsed either in this House or in the country, his attitude in encouraging Mr. Roosevelt to interfere in our domestic policy? I say he cannot. I take another test; can the right hon. Gentleman show me one representative Liberal newspaper in any part of the country which has supported him in his attitude? I say he cannot. I say that every representative paper in the party has criticised him and condemned him for introducing this new principle in our politics. Even the most loyal of the supporters, the "Westminster Gazette," which sometimes supports the Government even when they are wrong, with all its influence, has been used in criticism of the right hon. Gentleman. That is one test of Liberal opinion. In my opinion this new principle has not the support of the party. It is a dangerous innovation, and I would like to know how far the right hon. Gentleman thinks it is going to take him. If we are to have Mr. Roosevelt balancing his judgment in the scale in matters of this kind it cannot rest there. Any other distinguished foreigner will be fully entitled to express his opinion on any question of party politics in this country, and I say that the outlook will indeed be of a grievous character. A bad precedent has been set, and I am sorry it has been done by a Liberal Foreign Minister.

Then we have the attitude of the right lion. Gentleman the Leader of the Opposition. It is curious that when the Front Benches agree there always seems some trouble or some mistake being made. The Leader of the Opposition also hails with delight the interference of Mr. Roosevelt in our affairs. The right hon. Gentleman was, I believe, one of Mr. Roosevelt's most enthusiastic applauders at the Guildhall. How far does the right hon. Gentleman and his followers go in supporting this new precedent? I wonder what their attitude would have been if Mr. Roosevelt had dealt with another matter? He is an avowed and uncompromising Home Ruler in regard to Ireland. Suppose he had dealt with Ireland instead of with Egypt. We have been in Egypt some twenty-five years in Ireland over a hundred. Suppose Mr. Roosevelt had said here, as he has said in America, that we are responsible for misgovernment in Ireland, that our government there has reduced the population to an enormous extent, and that we have to face a discontented and disaffected people, the great majority of whom are against our rule. Suppose he had said, "Unless you can do better in Ireland why do you not get out?" Would the party opposite have given Mr. Roosevelt their enthusiastic approval then? Not at all. Mr. Roosevelt is applauded and welcomed only when he says something useful for party purposes or for the immediate question of the moment. I object to Mr. Roosevelt's interference quite as much when he praises our policy as when he condemns it. Suppose the Leader of the Opposition went to receive the freedom of New York and made a speech Ihere—

Mr. SPEAKER

I would remind the hon. Member that Mr. Roosevelt's salary is not included in the Estimates.

Sir HENRY DALZIEL

I wish it were; I would do my best to prevent any of it being obtained. What I am attempting to do is to bring home the responsibility to the Foreign Secretary, whose salary is included. He knew that Mr. Roosevelt was going to interfere; it was with the full approval of, and after consultation with the right hon. Gentleman, that Mr. Roosevelt interfered; it was after his views had been discussed; and I want to know how far the right hon. Gentleman suggested any alteration in what Mr. Roosevelt proposed to say. Will the right hon. Gentleman justify the interference of other American politicians in our domestic concerns? Once you allow one politician to do it I do not see where you are going to draw the line.

What has been the effect of that speech? Has it done any good? In my opinion it has done grievous harm. What Egypt requires at the present moment is a period of rest, and I consider that the right hon. Gentleman will deal with Egypt the more successfully according to the amount of freedom that he is given. This very Debate is a condemnation of the interference of Mr. Roosevelt. I doubt whether but for the Guildhall speech this question would have been before the country in the present prominent manner. The British electors did not want this great issue of Egypt to be brought before them at the present time. They wanted the right hon. Gentleman to go on with his cautious policy, doing justice firmly and fairly towards the population of Egypt, and they believe that he is capable of settling that problem without any external assistance from America or elsewhere. If Mr. Roosevelt's speech simply referred to the past, it was unwise, because no good purpose could be served. Criticisms of the past are useless for practical purposes. If it referred to the future, the speech has been absolutely useless, because the right hon. Gentleman told us on Monday that no new departure is necessary. In my opinion, the speech was bad taste, bad manners and bad policy. It was another example of the attempts which are made in America to twist the lion's tail. Mr. Roosevelt was talking to his party in America more than to the electors in this country. He not only twisted the lion's tail, but, as a friend of mine put it, he actually went into the lion's den. He twisted the lion's tail to the delight of the right hon. Gentleman, and every time the lion gave an extra squirm the right hon. Gentleman gave an extra indication of applause. This encouragement of Mr. Roosevelt is bad policy; it is dangerous for the future; and, so far as I am concerned, I enter my humble but respectful protest against it.

Mr. G. A. ARBUTHNOT

I desire to ask the Secretary of State if he will make a statement as to the policy of His Majesty's Government with regard to railway construction in China? I bring forward this matter for two reasons. The first is the mystification in which some of us have been thrown by answers to questions put to the right hon. Gentleman. The second, that there prevails at present an impression that our interests in China are not being adequately supported by His Majesty's Government. I do not say that that impression is correct. I am not proposing to build up an indictment against the right hon. Gentleman. I simply ask him for information which I hope will allay the apprehensions that are felt. The questions to which I refer have to deal with what is known as the Chinchow-Aigun Railway scheme. It has been proposed by Anglo-American enterprise to build a railway from Chinchow to Aigun on the Chinese-Siberian frontier. China desires that this railway shall be built. The preliminary contract was signed in October last by the Viceroy of Manchuria on behalf of China. It was submitted to the three Imperial Departments of Foreign Affairs, Finance, and Communications. It passed speedily through the necessary stages, and was confirmed by Imperial Rescript in January last. I will read two short extracts to show why China desires that this railway shall be built. The "Economist" of 12th February, 1910, says:— From this large and ambitions railway project China stands to benefit by the opening up of thousands of square miles of excellent grain-growing country, to develop which she proposes to import large numbers of colonists drawn from the more congested districts of her Empire. Within a few years the resulting development of agricultural land should provide produce for exportation running into many hundreds of thousands of pounds worth annually, besides supporting a growing and thriving population. The "Far Eastern Review" says:— The vast fertile regions of Manchuria and Mongolia mean to China what the north-west does to America—a national granary to supply what the worn-out lands in other sections of the country are incapable of doing, and provide homes and farms to the struggling millions who are otherwise doomed to eke out a miserable and precarious existence in the congested and unproductive districts of the Southern provinces. Those are the reasons why China wishes to have this railway built. A point which has an important bearing on my argument is that there has been absolutely no concessions. China is granting concessions to nobody. There is simply a contract to build the railway at a given price, and when the contract is completed the railway will be handed over to China. Since January last, when the preliminary contract was authorised by Imperial Eescript, protests have been lodged on different grounds by Japan and Russia. Japan does not object in toto to the construction of the railway. She is willing that the railway should be constructed provided she is given a reasonable share in financing the same. For some time there was difficulty in obtaining from Japan her definition of a "reasonable share." When at last she defined her conditions they were such that China could not accept, because they went further than the question of finance and involved control. Russia also objected to the construction of the railway, but on strategic grounds. Questions have been put to the right hon. Gentleman asking that in these circumstances some support might be given to the British interests involved.

7.0 P.M.

So far as we have been able to gather from his reply, the impression—I do not say it is a right one—is that the Government consider it advisable to support Russia and Japan regardless of British commercial interests. The two reasons given for this are: Firstly, that the question of this railway is one of comparatively small importance, and that it does not very largely affect the interests of this country; secondly, and more important, that His Majesty's Government are unable to take an active part in supporting British interests owing to the provisions of the Anglo-Russian Agreement of 1899. So far as the first reason advanced is concerned, I will refer the Foreign Secretary to the statement made at the annual meeting of the China Association by Sir Charles Dudgeon, the chairman of committee, who is a great authority. He stated, in very emphatic language:— That this persisting thwarting of railway enterprise in Manchuria is a matter of high concern to all trade interests. I think it must be obvious that the construction of a railway of this kind is a matter of the very highest importance to British trade interests. You are opening up a vast territory which will be available for British enterprise and British capital, and there are all the advantages which are obtained by the contracts for the material of the railways and employment which would be given to British labour. For once I make a statement upon which Tariff Reformers and Free Traders are agreed, when I say that it is in the great neutral markets of the world, outside our own Empire, that we have to look for the greatest development of our trade. Certainly it seems to me a very remarkable reason for the Government to have advanced that the construction of this railway is a matter of small importance to this country. Their second reason that they are precluded by reasons of the Anglo-Russian Agreement of 1899 is even more remarkable still. The hon. Gentleman, in reply to my right hon. Friend the Member for Hammersmith, stated that— His Majesty's Government are unable to take an active part in supporting Britisli interests, owing to the provisions of the Anglo-Russian Agreement of 1899. I have looked up that agreement, and I find it consists of an exchange of notes between Sir Charles Scott, His Majesty's Ambassador at St. Petersburg, and Count Mauravieff in the year 1898. By the terms of that agreement Great Britain undertook not to seek for railway concessions north of the Great Wall of China on condition that Russia on her part did not attempt to seek for railway concessions in the Yangtse Valley. I, will ask the right hon. Gentleman what in the world that has got to do with the Chinchow-Aigun Railway? China is granting concessions to nobody. There is not one penny piece of concession in it. It was a contract simply for the construction of a railway, and as soon as the railway is completed all ves-tage of foreign interests vanishes and disappears. The Foreign Secretary may have very good reasons—I have no doubt he has—for the attitude adopted by the Government in this matter, but I cannot think that the reasons he has advanced in this House, namely, that the Government are precluded by the Anglo Russian Agreement of 1899, are valid, for the reason stated is one that it is difficult to reconcile with the actual facts. I believe that the argument is still further invalidated by reason of the recent claim successfully put forward by Germany to participate in the loan to finance the Hankow-Szechuen Railway, which is to be constructed within the sphere of British influence. This is under the agreement made in 1898, which is precisely similar in its general terms to that of the Anglo-Russian agreement of 1899. There was this difference, that the agreement made with Germany consists of an arrangement between two financial groups, whereas the other consisted of an exchange of Notes between two Powers. I think that the right hon. Gentleman will admit that the agreement between the German financial house and the English financial house received the approval of His Majesty's Government. Lord Salisbury actually gave instructions in 1898 to the Minister at Pekin to obtain certain concessions on the strength of that agreement. Why, therefore, should the nonexistence of a concession hold good in one case and not in the other?

Finally I would ask the right hon. Gentleman whether it is not a fact that this Anglo-Russian Agreement of 1899 is out of date, or is, at all events, very considerably modified by subsequent treaties, by the Portsmouth Treaty of Peace, by the Anglo-Japanese Treaty of Alliance, and by the Chinese-Japanese Treaty of 1905? These are subsequent to this agreement, and they lay down the policy of "equal opportunity" and "the open door." It is desirable that a fuller explanation should be given of the views of His Majesty's Government as to how the position in the Far East is denned by these treaties. I would like to ask the right hon. Gentleman whether he will say whether the principles laid down by the international treaties are subservient to the Anglo-Russian Agreement of 1899, which consisted of nothing more than an exchange of Notes between two Powers? Then as to the question of spheres of influence. I think that the answer which the right hon. Gentleman gave to a Member on this side of the House, taken in conjunction with the facts I have already mentioned this evening, call for some further elucidation from the Government as to the relationship between the old doctrine of spheres of influence and the new doctrine which was laid down by these treaties. The Foreign Secretary, in reply to a question asked him by one of my hon. Friends, said:— The principle of spheres of influence regarding the railway concessions in China have never been formally repudiated. It is perfectly true that, so far as I know, this principle has never been formally repudiated. At the same time it has no doubt been very considerably modified by the treaties to which I have referred. What is the policy of His Majesty's Gov- ernment in relation to the whole question of concessions? Both Russia and Japan have shown certain signs of impatience at the restraining influence of the policy of equal opportunity. The fact appears to be that the control of the Manchurian Railway from the apex of the Liaotung Peninsula to the Siberian frontier is a pretext to interfere with the sovereignty of China. I should like to ask the right hon. Gentleman whether this interference meets with the approval of His Majesty's Government? I would ask him to give us some information as to what is the relationship between what I have always considered the old doctrine of spheres of influence and the new doctrine laid down by the treaties I have named. No doubt the right hon. Gentleman will have noticed that the attitude of this country has given rise to considerable hostile comment in America. During the last week or two there have been statements in some of the papers that a new agreement is to be entered into between Russia and Japan, and that this country is taking a part in it. The Japanese Press are answerable for that statement. Mention has been made of another region, I presume Mongolia. If it be true that the trend of events in the Far East at the present time is for Russia to surrender to Japan her interests in Manchuria on condition that Japan assists her to obtain a free hand in Mongolia, then I think the interests of this country are enormously affected. With an extension from Russia's Trans-Siberian railway across the Gobi Desert, over the great caravan route to Kalgan, Russian influence would extend all the way from St. Petersburg to Hankow, in the very heart of China. All these are questions which are occupying at the present time the minds of some who are interested in the Far East. They are all questions, I think, which are raised by the answers that have been given by the right hon. Gentleman in connection with the Chinchow-Aigun Railway. The area I have covered is a very large one, and I have covered it in a very short time. I cannot expect that the right hon. Gentleman, with the many interests that he has to watch, will be able to make a very full and detailed reply. I have brought up this matter not with any desire to build up an attack upon the right hon. Gentleman, but to ask for information in order to allay certain misapprehensions, and to clear away what I believe to be certain misunderstandings which exist.

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey)

I am aware that I can speak only once in this Debate, and that by rising now I exhaust my right to address the House. I would not on that ground wish to influence any other Members who may desire to speak on the question which has been raised. I would not have risen had it not been for the fact that the amount of material that has been introduced during the last two or three hours is as much, and perhaps more, than I can without difficulty deal with in a single speech. It covers a good deal of ground. In some of the questions raised very delicate ground has been covered. I must follow speakers into that ground, bearing in mind as I do so—especially with regard to the subject of Crete—that I shall be dealing with a question on which the susceptibilities of some other nationalities are at the present time far more sensitive than are our own. One never knows how far one is going back into history in Crete, especially in view of recent discoveries. I will not go back far into the history of this Cretan Question. I do not think I can usefully do so without a risk of adding to the susceptibilities that already exist. With regard to the existing situation, let me commence my recital of our view of the situation by recalling that under the old régime in Turkey the Powers were forced to intervene. Eventually four Powers found themselves left with the responsibility of establishing some order in Crete. That resulted in the autonomy of Crete under the guidance, and with the consent of the four Powers. But a pledge was given to the Turkish Government at the time that although the four powers undertook the occupation of Crete, there should be no annexation to Greece under the present circumstances. Since then circumstances have changed. The old régime in Turkey has passed away, and a new régime has come in. That is a change of circumstances, but it is not a change of circumstances which which makes it reasonable or possible for the Powers to abandon their promise of not permitting annexation to Greece. On the contrary, the fact that this change has been one from the old régime to the new régime is every reason why the four Powers in occupation of Crete should show increased regard for the susceptibilities and prestige of Turkey in any settlement that they make—not less regard, but more. Now that is what governs the present situation. There can be no new definite solution, for which the hon. Member for Staffordshire pleads, of the Cretan Question, without consultation with Turkey, and in the meantime the four Powers are bound to see that the status quo is maintained in Crete and not altered by the Cretans in a way which would be hurtful to the feelings or damaging to the prestige of Turkey, which is the suzerain Power. The right hon. Gentleman the Member for the Forest of Dean said with some truth that there has been some confusion as to what the status quo was. The oath of allegiance to the King of Greece was taken by members of the Cretan Assembly by Cretan people not for the first time, but the Powers never recognised that as something which was done with their consent nor as forming part of the status quo which they recognised and intended to maintain. As long as it remained an oath taken voluntarily by certain people who desired to take it it was an empty oath without any practical effect. But when it came to be a question of the Cretan Assembly refusing to admit members unless they took that oath, then undoubtedly the status quo was being impaired in Crete not in theory only but in practice, and the first thing we have demanded of the Cretan Executive is that Cretan members elected to the Assembly, in this instance Mussulman members, should be admitted to that Assembly with full rights without having any oath of this kind imposed upon them and that Cretan Mussulman functionaries and Cretan Mussulman officials should not have it made a condition of the performance of their functions or receipt of their salaries that they should take any oath of that kind. Crete has its autonomy; it has nothing to complain of as regards its liberties in its own affairs at the present moment. It owes that autonomy to the Powers, and the least we can expect from the Cretans is that they should show to the Powers to whom they owe that autonomy the very moderate consideration which we ask when we say that they should maintain that autonomy without altering the status quo to the disadvantage of Turkey.

I know sentiment is very strong in Crete in favour of annexation by Greece, but Turkey has her sentiment, too. My right hon. Friend the Member for the Forest of Dean said the Cretans were a fighting people. Yes, Sir, but the Turks are also a fighting people. Crete has got her liberty and her autonomy, and I say it would be unreasonable, and, in the interests of the Cretans themselves most unwise, if they were to push their sentiments to such lengths as to endanger the peace of that part of the world. They have provoked and given provocation to Turkey by repeated attempts to alter the status quo. We have had difficulty with regard to the Greek flag last year, and had to use force to restore the status quo on that point. The taking of the oath was also an alteration of the status quo—an alteration of the status quo not recognised by the Powers, and the mere fact that the Powers did not intervene because it was not a practical question does certainly add force to the Turkish protest against any alteration and the status quo that would have any practical effect.

The Cretans will have their chance of reconciling themselves to the status quo and keeping their autonomy without giving offence to Turkey. The four Powers made a communication to them quite recently—this month—with regard to the treatment of Mussulmans and the oath. We have demanded that this violation of the status quo should be rectified, and the four Powers will have to undertake the duty of, if not rectified, of seeing that the violation of the status quo does not continue by Cretan subjects. If the four Powers had failed in that task, or if they were not to undertake that task, if the Cretans insist upon violating the status quo at the expense of Turkish sentiment, then undoubtedly it might be forced upon the Powers to find a definite solution, which could only be undertaken in consultation with the Turkish Government, and which, so far as I can judge, would be less favourable to Cretan aspirations than the status quo they have at the present moment.

They cannot expect that for the sake of their sentiments they can push things to such lengths as to endanger the peace of the Near East; they cannot expect that Europe, called upon to take the matter in hand, should favour their aspiration. Europe would be bound, in taking the question in hand, to pay some regard to Turkish susceptibilities and to insist upon some definite solution of the Cretan question. And, so far as annexation to Greece and the particular aspirations of Cretans in that respect are concerned, it would probably be less favourable than the existing state of things. But before that is undertaken there will not only be four Powers but six Powers to be consulted. If there is to be a definite change in the status of Crete, then Germany and Austria would have to be consulted as well as the four Powers who are at present in charge of the status quo and have been in occupation of Crete. The hon. Member for Staffordshire complained of the misrepresentations which have appeared in the German and Austrian Press with regard to our attitude in the matter. I do not think I have seen all these misrepresentations, but I have seen reference to some of them. The hon. Member thought His Majesty's Government was to blame for these misrepresentations, and that they were directed against us because we had not been more explicit in explaining our views. We have been just as explicit as any of the other three Powers. If the other Powers have not been explicit enough, why are these misrepresentations only directed against us? Why have they brought in the person of our Sovereign, and why have they left the attitude of the other three Powers alone? What the hon. Member called misrepresentations are entirely untrue statements, without any foundation whatever, that our attitude has changed on this question, and, therefore, they are just the kind of untrue statements which, when circulated in the foreign Press, are bound to make general international good feeling more difficult. They are absolutely untrue, and, though I do not intend to speak at any length at the present moment on Crete, I am, at any rate, glad to have the opportunity of saying there is no truth whatever in the misrepresentations which have found credence in certain quarters abroad, and which are calculated, if believed, to give considerable offence to a large portion of the Mussulman world.

I will recapitulate the position in regard to Crete. There can, in my opinion, be no question of annexation to Greece as a definite solution at the present time. The Powers will make no definite settlement of a new kind without consultation with Turkey. The four Powers who have been in occupation of Crete are determined to prevent changes in the status quo which would be detrimental to the prestige and suzerainty of Turkey and the rights of the Mussulman minority in Crete. If the Cretans accept that position, their autonomy remains, their self-government is not interfered with, there is complete liberty, and I do not see that they have-Anything to complain of.

The attitude of Greece has been during these recent troubles perfectly correct. Greece has been quite passive in the matter, and has given no provocation to Turkey. If we take upon ourselves the responsibility, and, if need be, take the necessary steps, to prevent changes in the status quo in Crete to the detriment of Turkey, and if Greece, on her part, remains passive and gives no cause of offence or provocation, then I trust there is no legitimate cause for a breach of the peace outside Crete itself in the Near East.

All I have said to-day is an amplification of the answer. I gave yesterday. Our first object is to preserve the peace, and I trust the matter being as it is, that the four Powers will have their advice accepted by the Cretans without being forced to resort to those measures which must necessarily follow upon their part if they are to discharge the obligations which they undertook when they originally entered upon the occupation of the island.

With regard to other matters, that of Egypt has come up again. I thank the hon. Member for Kirkcaldy (Sir H. Dalziel) for the personal reference which he made to myself at the beginning of his speech. He complimented me upon my unobtru-siveness—a compliment which I very much appreciated. It is a little dangerous, however to be complimented on unobtrusive-ness, because, if one is frequently complimented upon it, it is possible that the quiet and repose which go with unobtrusiveness, and which are one of its advantages, may cease to be as useful and complete as mine have been. But I appreciate the personal reference. I cannot agree with his speech about Egypt. He said the question would not have come up in this House if it had not been for the speech of Mr. Roosevelt at the Guildhall. It certainly would have come, because I know there was some thought of bringing it up in this House before the Spring Recess, and I have been considering, in the light of the information I had from Egypt at that time, what I should have said had the question come up. I should have made then a speech very much the same as I made a few days ago, and it would have contained a sentence to the effect that we were in Egypt as trustees, that we were bound to maintain the good work we have done in Egypt, maintain order, and that if we abandoned that task, or failed, or reluctantly continued to accept responsibility for the state of things in Egypt, then undoubtedly we should have been at the parting of the ways and we had better decide to leave the country altogether. We must discharge the responsibilities that came upon us to a great extent unsought, and continue to discharge them, and if we do not the whole reason and justification of our remaining in Egypt would come to an end. That I should certainly have said, and it is obvious. The more things are unsettled in Egypt the more you are brought to the feeling that we are nearing the parting of the ways. We have either got to assert our authority and bring things to a satisfactory state or else make up our minds that our views with regard to the continuance of our occupation in Egypt must be changed. That is why I said it was the policy of the Government to maintain our occupation of Egypt, because we cannot abandon without disgrace the responsibilities which have grown up around us there. The greater part of the hon. Member for Kirkcaldy's speech was devoted to expressing an opinion upon Mr. Roosevelt's speech. The hon. Member for East Tyrone also expressed his opinion about that speech. Mr. Roosevelt would be the last man to object to people expressing an opinion about his speech. I expressed mine the other night, and I see no reason why other people should not express theirs, and I also see no reason why I should be continually called upon on every occasion to repeat the opinion which I have already expressed. I do not think that I need concern myself with that speech any more. I would observe, however, how difficult it is to express one's feelings accurately in public speeches. What I said two days ago as to what had passed between Mr. Roosevelt and myself is on record. I have heard tonight the impression which it produced on the hon. Member for East Tyrone and the hon. Member for Kirkcaldy. One said that I had received a proof in advance of Mr. Roosevelt's speech, another assumed that I had seen the manuscript, and one went so far as to assume that if I had not actually written the speech I had inspired it. The fact of the matter is that I did not see any manuscript, but I would suggest to hon. Members who think that a dangerous precedent has been set, as the hon. Member for Kirkcaldy seems to think, that they should read the whole of that speech.

Sir HENRY DALZIEL

I have read every line of it.

Sir E. GREY

Then the hon. Member has omitted to notice, when he said what a bad precedent it was and how Mr. Roosevelt might have said this or that about something else, there is in that speech a sentence something about not saying anything about internal affairs, and supposing any representative of another country came there discussing internal affairs there would be a protest against any action of that kind.

Sir HENRY DALZIEL

Does the right hon. Gentleman draw a distinction between Foreign affairs and internal affairs?

Sir E. GREY

I do not say I draw a distinction between them. What I object to is that the hon. Member for Kirkcaldy seems to me to be widening the precedent which had been set. I do not think a precedent is involved, but when the hon. Member for Kirkcaldy wishes to establish this as a far-reaching precedent, I would demur to any such construction being put upon it, or to the assumption that that speech affords so wide a construction as the hon. Gentleman puts upon it. Undoubtedly, as the Leader of the Opposition said the other day, for any representative of another country to discuss internal affairs even favourably is always treading upon delicate ground. As far as this particular incident is concerned I have nothing to add and nothing to take from the opinion which I have already expressed. As regards the position of things in Egypt the hon. Member for East Tyrone said that our policy ought to be one of slow development and improvement in Egypt. I would ask anyone who says that at all seriously to ask himself how is it possible that slow and favourable development can go on if every Egyptian Minister who works cordially with us, and who takes our advice, which has been of exceeding benefit to the country, is to be insulted and denounced in the native Press? That is what I complained of two days ago, and with that complaint everybody who advocates the policy of development in Egypt ought to sympathise.

I come to the question of the Chinchow-Aigun Railway. I am afraid that on this point I shall disappoint the expectation of hon. Members. I was not aware that this particular question was likely to arise in Debate. I was told through the usual channels that the question of China would arise. There are many questions associated with China, and I endeavoured to ascertain which of these questions was likely to be raised, but I did not understand that the Chinchow-Aigun Railway was one of the questions which would be raised. I have not, therefore, been able to refer back to all the details of this particular railway which the hon. Member referred to, and that is why I am afraid my remarks on this subject will be rather meagre, and will probably disappoint the expectations of those who expect to hear a very important statement. The Chinchow-Aigun Railway is promoted by American financiers and a British firm of contractors, who are applying for and have been promised a concession from the Chinese Government. It is not a concession of the particular kind to which the hon. Member referred, but it is something which is to be given to them by the Chinese Government in the nature of a concession for a loan for the making of a railway. That is perfectly legitimate on their part, and I have not the least right to complain, and I do not complain, of any action that has been taken. On the contrary, I look very favourably at the co-operation of British and American firms in this or any other matter, and I am very glad that they are co-operating. I do not in the least deprecate anything that has been done in this matter, but when I am asked to come forward and put diplomatic pressure upon the Chinese Government to put this agreement through, then I am brought up by the fact that in 1897 notes were exchanged between the British and the Russian Governments under which we agreed on our part not to press for railway concessions in this particular region. It is true we did not undertake any obligations to discourage them, or to prevent British firms applying for them, or promoting railways there. It was a purely negative undertaking on our part.

What I am reproached for is that I have not taken an active and positive part in promoting the construction of this railway. I think the hon. Member opposite put a technical and somewhat narrow construction upon the Anglo-Russian agreement of 1897. He asked if it had not been superseded by a subsequent arrangement. In so far as it may have been modified by subsequent arrangements superior to it, it would have been superseded, but I am not aware that arrangements which have subsequently been made have altered the natural meaning of the Anglo-Russian agreement or deprived it of its force. If any agreement of that kind still exists it ought not to be put an end to without a mutual understanding between the two Governments, and ought not to be modified unless they understand exactly what it means. The Chinchow-Aigun Railway is a railway which is to cross the line of Russia, and is to extend right up to the Russian frontier. I think we were bound to take the line that if the Chinese were going to have this railway made by foreigners we could not in the face of the Anglo-Russian agreement take an active part in supporting it until the Chinese had come to terms with Russia about it. Japan has not opposed it in principle but has asked for participation, and I think that was a perfectly reasonable demand on the part of Japan. If Japan had taken up the line of stating that she wished to have a railway monopoly in Manchuria, that would have been a distinct breach of the open door. If she made use of her position there to give preferential rates to her own people as against others, that again would be a breach of the open door. But when Japan, after all that has passed, says she has an interest in Manchuria which justifies her in wishing for participation in railways which may to some extent compete with the railway which is already in existence, it would be going too far for us to say that that is an unreasonable demand, and does not justify us in taking active diplomatic steps at Pekin to press for the granting of this railway.

Mr. ARBUTHNOT

Is it not a fact that this concession involves some control over and above participation?

Sir E. GREY

I am not quite sure on that point, but it is a matter to be arranged between the Chinese and the Japanese Government. All I am defending is my attitude of neutrality. In the face of the Anglo-Russian agreement it would have been impossible for us to take up the attitude of actively promoting a railway which is going to be constructed by foreigners with money lent by foreigners, which is going to cross the Russian line at one point and extend up to the Russian frontier, and is going to have a considerable influence on Russia's strategical position, and to press for that railway without Russia being given any chance of participation. I think the only course consistent with a reasonable interpretation of our obligations in this respect has been that we should say, while we have every wish to see British and Ameri- can finance co-operating in railway construction in China, with regard to this particular railway we cannot but think it reasonable that China should consult with both Japan and Russia if she intends to have a railway made by foreigners. In face of the Anglo-Russian Agreement of 1897, the only reasonable course for us to adopt is to maintain a neutral attitude until China has discussed the matter and the Russian and Japanese objections to the railway have been removed. I think that is the only reasonable course we could take, either on grounds of general policy or in accordance with a general sense of the construction of our treaty engagements.

Mr. G. STEWART

I am encouraged to rise by a remark of the right hon. Gentleman the Secretary of State for Foreign Affairs, which seemed almost to express a regret that some questions he expected with regard to China had not been mentioned in the course of the Debate. I do not propose to say a word about the railway which has been mentioned, because it seemed to exercise a very paralysing influence upon the Members of this House. The question of China is naturally one in which I take a considerable interest, because I lived for a considerable time in that country. The termination of the Russo-Japanese War may be said to have opened a new era and awakened fresh interest in China as a field for British capital and enterprise. Before the war there were apprehensions as to the possibility of Russian intervention, which might have a paralysing effect upon British enterprise. There was a good deal of talk about spheres of influence in different districts for different people. If we ever had a sphere of influence, it does not seem to exist at the present moment, but it was supposed to be in the Yangtse Valley. Now it seems to be open to anyone. I do not know that we, as stout upholders of the open door, need mind that very much, but it occurs to one that if we welcome others in our sphere of influence it would be fair to us if Englishmen were allowed to enjoy opportunities of enterprise in Shangtung and Manchuria, which are more or less closed against us. If Germany is allowed privileges in the Yangtse Valley, we can reasonably ask for facilities for making railways in the northern portion of Shangtung.

There is one railway in which we are specially interested, and that is the railway between Hankow and Canton. If any particular railway was ever earmarked for British enterprise it was that railway. The Colony of Hong Kong pledged its credit for a million to enable the Chinese to pay out the Belgians and to secure that their railway should be a British enterprise. We all know the evil practices of the Chinese with regard to railway construction, and, when the Hankow Bailway came up for consideration, it was the duty of our financiers to protect British investors as far as possible from any misappropriation of their funds. It was during those negotiations that the public who are interested in such matters received a most unpleasant shock. It was announced one day in the public Press that the negotiators, I will not say had been defeated, but had failed, and that Germany had acquired the contract for that railway. It is true we have been able to get the matter back into our own hands, but the advantage which our rivals got has been used as a lever to further their interests in fields where we might have had a larger share of business. It seems to me that the Foreign Office might have protected our interests in the matter if they had notified China that going behind our people would be looked upon as an unfriendly act. China, as far as I am able to judge, treated our negotiators and our prestige with a certain want of consideration when, for a very small advantage, they handed over to a German company the construction of the railway for which we had advanced such a large sum of money on a definite promise. If our negotiators had known that they had the full support of the Foreign Office, and that the Chinese could not treat our interests in a light manner, their hands would have been considerably strengthened. One can hardly imagine a German colony advancing one million for the making of a railway and a British company by some slight concession ousting German interests in the way we were ousted. I have a very fair estimate of the immense trouble and difficulty there are in all negotiations with the Chinese, but I should like to draw attention to the fact that the Chinese are apparently treated with a certain amount of indulgence, and are allowed to go back upon their promises with impunity.

Let us turn for a moment to the Mackay Treaty. It was signed, sealed, and delivered in 1902, and at the present moment it is more or less a dead letter. It never has been operative. Article 2 of that treaty, which stipulates for a uniform coinage with a proper currency throughout the whole of China, has been inoperative for eight years. In fact, so far from making the coinage a legal and proper one, it has, I believe, been debased, with the result that the Chinese peasant has had his money reduced 50 per cent, in its purchasing power. He is crippled to that extent in purchasing British goods, and, as has recently happened, when rice has advanced in price riots have taken place owing to the reduced purchasing power of this money. It is to that that a considerable amount of the present unrest in China is due. We have had promises, of course, in plenty, and I understand we have had some recent ones. I trust they are more worthy of credence than those we have had hitherto. The anti-foreign feeling in the Yangtze Valley makes me ask the Foreign Office to bear one small point in mind, and that is the difference between the foreigners and the surrounding Chinese with regard to the boundaries of Shanghai. It is conceivable that the differences might suddenly produce a demonstration of a very unpleasant character, and, as it is an open secret that the United States Government are most anxious to co-operate in settling the question, I hope the Foreign Office will give it their careful consideration and do their best in the matter. Shanghai is a growing place, and it would be to the benefit of all if the boundary question were settled. It is in no spirit of adverse criticism that I have approached these two points. There has always been, and I am sure there is now, the best feeling between the trading community in China and the officials of the Foreign Office at home. I hope that will always continue, and that the Foreign Office will do what they can to support our own people there. It is only by mutual support and by a mutual interchange of knowledge that any real effective progress can be made. Traders require all the support they can get from the Government, because they suffer more than anyone else from the tortuous, dilatory diplomacy of the Chinaman, and they have the most strenuous competition from their rivals, who are sometimes backed up by Government forces, which it is not always our policy to accord.

Mr. ARTHUR LYNCH

I would like to refer to one aspect of the speech which the right hon. Gentleman the Leader of the Opposition made in this House the other night. The idea which pervaded his whole speech was that of there being a dominant race of superior wisdom which has not only the right, but also the mission, to rule other races of an inferior kind. One would think these inferior races were something like the worm of Isaac Walton—delighted to be put on a hook. Almost precisely similar language was used with respect to the American Colonies as is used at the present time to defeat the object of the Egyptian Nationalists. We were told that the time had not arrived for entrusting them with self-government, and now we have the spectacle of one of those races coming here to instruct our Government in the manner in which it should govern its own affairs. The same questions arose even in Australia. At one time, in 1854, there were scenes of greater violence there than those which have happened in Egypt, and precisely the same argument was used for defeating and crushing down the very natural feelings of the Australian colonists for a little more control of their own affairs. I for one refuse to associate the question of Ireland with that of Egypt or that of any other nationality or race struggling for the management of its own affairs.

8.0 P.M.

Very far-reaching principles are involved where races of different countries and having the same qualities and the same capacities as the white race come in question. I may point out that this question of the mission of one race to govern another was dealt with by France more than a hundred years ago, and it is therefore a matter of ancient history. We here to-day are dealing with problems which France settled a century since. The Foreign Secretary has said that no concessions can be made while Egypt remains unsettled. But may I point out that if a country is entirely quiescent, then the argument is used that there is no need for any kind of reform. We are told that things are in a settled condition, that the people are happy, and that there is no necessity to try experiments. Therefore the only recourse open to the people is agitation, and when They begin to agitate and to demand fuller rights from the Government, then they are subjected to pressure, and it is only human nature to respond to violent pressure by the exercise of violence on the part of those 'subjected to it. I am not one of those who at any time advocate violence. I have a certain horror of it, and my horror is all the more sincere and profound when that violence is used from the governing side. I am inclined to think that in Egypt, even if progress must be slow, it would be possible gradually to associate the people with the government of their own country, and to give them increased responsibility. Let there be a natural move in that direction. But with regard to these Eastern races, and their capacity for self-government, one is not entirely without light even in modern history. Take the case of Turkey. In our own time we have had an extraordinary revolution there, a perfectly peaceful and bloodless revolution, showing how a people supposed to be indoctrinated with despotic theories of government have been able to rise and overthrow despotism, and to take the government of their own country into their own hands. We have a further illustration in the case of another country formerly dominated by this same Turkey, and the arguments which have been applied by the Leader of the Opposition to the case of Egypt and against the aspirations of the Egyptian Nationalists applied only a short time ago, and with equal force, against the aspirations of the Bulgarians, who protested against the domination of Turkey. The Bulgarians at a certain moment, taking advantage of the European situation, revolted and overthrew the domination of Turkey, and we had this remarkable result, that they not only justified themselves in taking the government into their own hands, but that they displayed unknown qualities, qualities unsuspected in their race and character, and developed their country with an enormous acceleration of progress, so that it is now one of the foremost in the Near East. I use this argument not because it is very apt to Egypt, but because these cases should serve as useful guides. There has been no direct experiment with regard to Egypt at all, and we can only proceed on lines of general analogy. We see how baseless are the arguments used by the Leader of the Opposition, by Mr. Roosevelt, and by the Foreign Secretary, in regard to the agitation in Egypt, and used in order to defeat the demand of the Egyptian Nationalists for self-government. I am inclined to think that, on the whole, none of their philosophies apply at all. It is possible to have just enough learning to misquote, and just enough of the principles of philosophy and history to mislead. In regard to this immediate matter of Egypt there is one question which, after all, rises dominant. On the one hand you have a policy of repression and retrogression which will surely lead to violence and counter-violence and send back the civilisation of Egypt perhaps for generations. On the other hand there is a policy of moving, perhaps slowly, but at any rate progressively, towards educating the Egyptian and giving him an opportunity of sharing in the government of his own country and encouraging him in the way of self-government. I am inclined to think, looking at the two pictures, that the Liberal Government should adopt a Liberal policy, tending towards progression and the elevation of the whole status of Egypt by means of very proper concessions to the national sentiment in that country.

Question, "That the Bill be now read the third time," put, and agreed to.

Bill read the third time, and passed.