Commons Sitting of 21 March 1910

Preamble
The House met at a Quarter before Three of the clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Private Bills (Standing Orders not previously inquired into complied with),— Mr. Speaker laid upon the Table Report from one of the Examiners of Petitions for Private Bills, that, in the case of the following Bill, referred on the First Reading thereof, the Standing Orders not previously inquired into, and which are applicable thereto, have been complied with, namely:—
South Hants Water Bill.
Ordered, That the Bill be read a second time.
Private Bills [Lords],—Mr. Speaker laid laid upon the Table Report from the Examiners of Petitions fox Private Bills, that, in respect of the Bills introduced pursuant to the provisions of the Private Legislation Procedure (Scotland) Act, 1899, and which the Chairman of Ways and Means had directed to originate in the House of Lords, they have certified that the Standing Orders which are applicable thereto have been complied with in the following case, namely:—
Aberdeen Corporation Water Bill.
Lancashire and Yorkshire Railway Bill, Read a second time, and committed.

IMPERIAL REVENUE (COLLECTION AND EXPENDITURE).
Return ordered relating to Imperial Revenue (Collection and Expenditure) (Great Britain and Ireland) for the year ending the 31st day of March, 1910 (in continuation of Parliamentary Paper, No. 223, of Session 1909).—[Mr. Joseph Pease.]
ORAL ANSWERS TO QUESTIONS.

  Colonial Church at Lagos.
  Mr. JOSEPH KING (for Mr. Silvester Home)asked the Under-Secretary of State for the Colonies if sanction has been
  742
  given to the erection of a colonial church at Lagos; if half the cost of the erection of the church was to be paid from the revenues of the Colony; if the church would be available for services other than those of the Anglican communion, and if Europeans and Natives will have an equal right to sittings in the church?
  Mr. HENRY J. WILSONasked whether a chaplain had been appointed, or was about to be appointed, at Lagos; if so, whether he was of the status of a Colonial chaplain, and, if not, what were the conditions of the appointment; whether official sanction had been given for the erection of a church at Lagos, and from what source the funds would be provided; whether natives would have the same rights as Europeans as to the use of the church; whether religious services other than Anglican would be permitted; and whether Sir Walter Egerton stated on 8th September, 1909, that a majority of the Europeans in Lagos were not adherents of the Church of England?
  Mr. JOSEPH KINGasked whether a Colonial chaplain has been appointed, or is to be appointed, for Lagos; if so, on what conditions; and whether the House would be allowed an opportunity to discuss the affairs of this Colony and the action of its Governor, in view of the fact that public criticism had been directed against them?
  The UNDER-SECRETARY of STATE for the COLONIES (Colonel Seely): I will reply to these questions together. The Governor represented that there was a strong feeling among the European community at Lagos, the majority of whom were members of the Church of England, for the appointment of a chaplain, as they had otherwise to depend on the ministrations of a missionary whose permanent presence in the town could not be anticipated. The Secretary of State, in view of this representation, and of the fact that the proposal was supported by the Legislative Council, did not feel that he was in a position to veto the appointment. The proposal to contribute from colonial funds to the cost of erecting a church was dealt with in the same manner, the Governor having urged that the circumstances of Southern Nigeria were exceptional, owing to the fact that the unhealthiness of the climate allowed very few of the residents to remain long in the country, so that they could not fairly be expected to contribute

  743
  largely, as might be expected in healthier colonies. It is proposed that the Government contribution should (with certain limitations) be equivalent to the amount raised by subscription, and £1,500 has been estimated as the sum payable in the current year from the funds of the colony. As regards the questions of detail, raised by my hon. Friends, the Secretary of State has not sufficient information at present to enable him to reply with certainty. He will, without delay, cause enquiry to be made of the Governor, and will communicate the results of the inquiry as soon as they are received; but I would take this opportunity of observing that the Secretary of State has no intention of departing from the policy of his predecessors in such matters, which has been to authorise no exceptional treatment to any particular Christian denomination. If, therefore, representations should be received from members of other denominations at Lagos of the same nature and with equal support, he will undertake to consider them in a spirit of complete impartiality.
  Mr. J. KING: Can the hon. Gentleman assure us that this matter will not be finally settled until he has replies to the inquiries which are now being made?
  Colonel SEELY: I can undertake that there will be no fresh steps making any exception to the principle I have laid down without the sanction of the House, but I may state for the information of the House that we propose in this matter to treat every denomination as in the past with impartiality.
  Mr. MURRAY MACDONALD: Will the proposed grant appear on the Votes?
  Colonel SEELY: It is not a grant from funds in this country, but a grant from the funds of this colony. Of course, it can be raised on the Colonial Estimates.
  Mr. HENRY J. WILSON: Are we to understand that the people of Lagos—the Mahomedans, heathens, and others—will be taxed in order to provide this building for Christian worship?
  Colonel SEELY: So long as the natives of that country pay taxes they will contribute their share to the place of worship, but they attend places of worship also. It has been the long established practice in various Colonies to give grants from the funds of the Colonies for places of Christian worship, and there is here no
  744
  departure from the usual custom. The only departure would be if we favoured one denomination at the expense of another.
  Mr. WEDGWOOD: Is the hon. Gentleman aware that this step has aroused considerable indignation in Lagos, and whether prosecutions are now taking place of natives for protesting against the waste of their money?
  Colonel SEELY: No, I am not aware of that, but if any such step has been taken, I shall be very glad if my hon. Friend will bring it to my notice.

  Crown Colonies (Growth of Cotton).
  Mr. ARTHUR FELLasked if the Under-Secretary could give any estimate or particulars of the extent of land in the Crown Colonies which is considered to be suitable for the growth of cotton, so far as the soil and climate were concerned?
  Colonel SEELY: The latest readily available document containing information as to districts in which it may be possible to grow cotton is Professor Dunstan's Report to the Board of Trade of 1904 (Cd. 2020). It would take a considerable time to make even an approximate estimate of the area of suitable land in Crown Colonies, etc., which may ultimately be made available, but the recent report on British Cotton Cultivation (Cd. 3997) of 1908, shows that cotton of good quality can be grown in a large number of British possessions.
  Mr. FELL: Will it be possible to lay the papers relating to this matter before the House together instead of separately?
  Colonel SEELY: I shall be very glad to lay papers on the subject if there is any general wish that it shall be done. I may say that the Colonial Office have taken the deepest interest in this matter for many years past, and we have conferences monthly about it.

  Transvaal Mines (Compounds).
  Mr. FELLasked if the compounds at the mines in the Transvaal which had been vacated by the Chinese were now occupied by Kaffirs or other black labourers; if these Kaffirs were confined in the compounds under conditions at least as stringent as those lately in force for the Chinese; and if their pay was as low and their food as good and plentiful as that which was given to the Chinese?
  Colonel SEELY: I have no doubt that the compounds are being utilised by natives, but the Transvaal is now under responsible Government, and arrangements for housing labourers are under the supervision of the local authorities and not of the Secretary of State. With regard to the second paragraph of the question the reply is in the negative, as the hon. Gentleman will see if he will refer to the reply I gave to my hon. Friend, the Member for West Ham, on Tuesday last.
  Mr. FELL: Are the Kaffirs confined in compounds and not allowed out without permits, and then only occasionally?
  Colonel SEELY: The hon. Gentleman has asked me questions again and again as to what is the distinction between Kaffirs and Chinese. I have endeavoured not to raise questions which have any connection with immediate politics, with the sole desire of avoiding political controversy. If the hon. Gentleman wishes to know what is the distinction, I may say that these Kaffirs live under the ordinary law, but the Chinese live under legislation of so restrictive a character that it was protested against by the Chinese Minister as likely to make Chinese labourers mere chattels or implements of industry, was described by the Lord Chancellor in another place as semi-slavery,and was protested against by the legislatures of self-governing Colonies. It is a system of restrictive legislation which I am glad to say will shortly be wiped out from the Statute Book.
  Mr. AUSTEN CHAMBERLAIN: May I ask whether the statements widely circulated on the subject of these Chinese Regulations by hon. Gentlemen opposite were described by the then Under-Secretary for the Colonies as terminological inexactitudes?
  Colonel SEELY: I know nothing of that, Sir; I only know that much the best answer to any questions of this kind, either here or in the country, is to read the Chinese Labour Ordinance. It is quite sufficient an illustration that legislation of the kind is a disgrace to the Statute Book.
  Sir GILBERT PARKER: Is it not the case that the Kaffirs in. the mines are under exactly the same restrictions as the Chinese, except as regards repatriation?
  Colonel SEELY: No. The whole circumstances were absolutely and com-
  746
  pletely different, so much so that their status was described in the Transvaal itself, by an impartial legal authority, as I said in the reply to which I referred, as being in the position practically of outlaws.
  Mr. FELLrose to put a further question—
  Mr. SPEAKER: The hon. Member can deal with this at a later stage—on the Consolidated Fund Bill.

  Crime in the Transvaal.
  Mr. FELLasked the Under-Secretary for the Colonies if he had official information showing that there had been a marked increase in crime in the Transvaal since the repatriation of the Chinese commenced; would he state what number of Kaffirs were now undergoing imprisonment, and what percentage this bore to the total number, and if this was an increase on the percentage in previous years; and, if so, could he give any explanation of the cause of the increase?
  Colonel SEELY: No, Sir. I have no official information later than 1908, and whatever the figures may be I have no reason to think that the presence of the Chinese was necessary to keep order and diminish crime.
  Mr. FELL: Has the right hon. Gentleman any particulars of an up-to-date kind of imprisonment in the Transvaal, and does it not show an immense increase?
  Colonel SEELY: Since I have drafted the reply I have seen a newspaper which states that there is an official return issued on 18th February, showing that the right hon. Gentleman is misinformed, and that there is a diminution in crime, which is not surprising seeing that the death rate of Chinese from murder, homicide, and suicide works out almost exactly as ten times greater than that of the Kaffirs.
  An HON. MEMBER: Is the right hon. Gentleman referring to a newspaper report?
  Colonel SEELY: Yes. Since I drafted the reply I have seen the "Cape Times,' which purported to give the official return of the number of persons imprisoned in the Transvaal. I will be glad to furnish a copy. I am not quoting it as being official information. We have not received if officially. The newspaper arrived by the last mail.

  Naturalisation Laws.
  Mr. MACMASTERasked what steps had been taken to give effect to the resolution which was unanimously adopted by the Colonial Conference of 1907 in regard to naturalisation laws within the Empire; what were the results of the inquiry called for; and whether any date had been fixed for the subsidiary conference contemplated in that resolution?
  Colonel SEELY: An Inter-departmental Committee was appointed to assist His Majesty's Government in considering what amendments might properly be made in the draft Naturalisation Bill laid before the Colonial Conference of 1907, with a view to meeting the criticisms made on the Bill. The Committee reported in July, 1908, and their report was forwarded to the Governments represented at the Conference, with a suggestion that it should be considered and representatives appointed to discuss the question in conference with the members of the Inter-departmental Committee on behalf of His Majesty's Government with a view to a final settlement. Replies have not yet been received from all the Governments concerned, and the matter is still forming the subject of correspondence. Till the correspondence is complete a date cannot be fixed for the subsidiary Conference.

  Referendum (Return).
  Mr. WEDGWOODasked the Secretary of State for Foreign Affairs whether he would grant a Return showing the countries in which the referendum was resorted to, and the methods adopted in each case to obtain and register the will of the people?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. McKinnon Wood): We will ask for reports on the subject.

  Declaration of London (Right of Capture).
  Mr. HUNTasked whether, under the Declaration of London, all food-stuffs, except nuts, coming by sea to Great Britain during war in neutral ships would be subject to capture by an enemy's vessels; and whether similar food-stuffs, conveyed in neutral vessels and destined for the use of an enemy, would be immune from capture by British warships, provided that the cargoes they conveyed were consigned in the first instance to neutral ports?
  Mr. McKINNON WOOD: The answer to the first question is in the negative. Foodstuffs are only conditional contraband, and conditional contraband is not liable to capture unless it is shown to be destined for the use of the armed forces, or of a Government Department, of the enemy State. With regard to the second question, conditional contraband is not liable to capture on board a vessel bound for a neutral port, but the immunity does not depend on the place to which the cargoes are consigned, but on the destination of the ship.
  Mr. GIBSON BOWLES: May I ask whether the answers just given are founded upon the assumption that the Declaration of London will come into force, and is he aware that such a Declaration can have no force against the subjects of the King unless and until ratified by Parliament?
  Mr. McKINNON WOOD: That is certainly so, but the question is whether in the Declaration certain things are provided.
  Mr. HUNT: Is it a fact that foodstuffs are conditional contraband without notice?
  Mr. McKINNON WOOD: I think I dealt with that in the answer which bears on the distinction.
  Earl WINTERTON: Are we to understand that this matter is to be laid before Parliament to be ratified?
  Mr. McKINNON WOOD: Yes, the promise has been given that before ratification opportunity will be given for discussion in this House.
  Mr. HUNT: Is it the fact that with the exception of nuts three-fourths of the foodstuffs to this country in time, of war would be liable to capture, while the foodstuffs to Continental ports would not be?
  Mr. McKINNON WOOD: I have answered that question in my main answer.

  Horse Meat (Price in Germany).
  Sir CHARLES HUNTERasked the Chancellor of the Exchequer if he had any official information showing that horse meat in Germany was dearer than good meat in this country?
  The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): According to Returns furnished to the Board of Trade the average retail price in this

  749
  country of foreign frozen meat of good quality such as is largely eaten by the poorer classes, ranges from 4d. to 6d. per lb. The retail price of horseflesh in Germany varies greatly in different localities and according to cut, but the Report of the investigation conducted by the Board of Trade in 1905, shows that prices ranging from 4½d. to 6½d. per lb. or even higher were frequently paid.
  Mr. GIBSON BOWLES: Is the right hon. Gentleman aware that it has established that horse meat in Germany is dearer at any rate than beef in King's Lynn?
  Mr. JAMES HOPE: Is the right hon. Gentleman aware that in Kemitz, which is the town where horseflesh is more consumed than in any other part of Germany, the Burgomeister and the public authorities entirely repudiate the right hon. Gentleman's figures?
  Mr. LLOYD-GEORGE: No; the hon. Gentleman is entirely wrong. He did not repudiate the figures with regard to slaughtered horseflesh in the municipal slaughter-house for consumption as food.
  Mr. JAMES HOPE: But he repudiated the prices.

  FINANCE BILL PROCEDURE.
  Sir JOHN RANDLESasked the Chancellor of the Exchequer could he now state the result of his inquiry for advice to the Law Officers as to whether persons who had paid Income Tax during the last few months in the mistaken belief that the Government would carry through the Budget, and so legalise the tax before 31st March, would have their payments refunded, should they so wish, on making application to the Inland Revenue officers; and, in the event of Income Tax not being refunded, would interest be paid thereon at the rate of 2½ per cent, for the period such tax had been deposited pending the decision of Parliament as to the imposition of a tax on income?
  Mr. LLOYD-GEORGE: I have not yet received the Law Officers' opinion upon the point.
  Sir J. RANDLES: In view of the fact that I have asked this question week after week for some weeks, can the right hon. Gentleman say if he is likely to receive this reply before the ecclesiastical Easter, or not?
  Mr. LLOYD-GEORGE: My learned Friend is not here, but I shall ask the question later on. I can assure the hon. Member that I am just as anxious as he is to get their opinion about this matter; it is very important for administrative purposes.
  Lord HUGH CECIL: Can the right hon. Gentleman say how long the matter has been under consideration?
  Mr. LLOYD-GEORGE: The hon. Gentleman opposite may remember when the question was put—about a week ago, I think.
  Mr. CROFTasked whether any means exist for recovering Income Tax from the estates of persons who have died or emigrated since 6th April, 1909, and who have not paid the tax?
  Mr. LLOYD-GEORGE: I am not aware that the circumstances of the present financial year will ultimately affect the question of recovering tax in cases of the character referred to.
  Mr. GEORGE YOUNGERasked whether demand notes for Income Tax under Schedule D on profits directly assessed by the Special Commissioners have yet been issued; and, if not, whether he can state the reason for the delay?
  Mr. LLOYD-GEORGE: Prior to 2nd December, 1909, the usual "Notice of Assessments" for Income Tax under Schedule D, on profits directly assessed by the Special Commissioners, were issued in the ordinary course. Those notices contain instructions as to the mode of payment. Since that date, in view of the rejection of the Finance Bill by the House of Lords, no such notices, nor any applications in the nature of "demand notes," have been issued.
  Mr. GEORGE YOUNGER: Is the right hon. Gentleman not aware that in certain cases no such intimation has been made to the taxpayer as his answer indicates, and that in these cases the taxpayer does not even know whether his return for assessment has been accepted or not?
  Mr. LLOYD-GEORGE: That is not the question put. The question put is: "Whether demand notes for Income Tax under Schedule D, on profits directly assessed by the Special Commissioners,

  751
  have yet been issued?" I told him they were issued prior to 2nd December, which was the date of the rejection of the Finance Bill. Since that date they have not been issued.
  Mr. AUSTEN CHAMBERLAIN: Is not the right hon. Gentleman aware that in Scotland demand notes were issued as late as 20th December?
  Mr. LLOYD-GEORGE: By the Special Commissioners?
  Mr. AUSTEN CHAMBERLAIN: I did not say by the Special Commissioners.
  Mr. LLOYD-GEORGE: That is the point. The right hon. Gentleman cannot have seen the question. The local Commissioners are not under the control of the Inland Revenue; they act on their own initiative. But the hon. Gentleman's question has reference to the Special Commissioners, who are under the control of the Inland Revenue, and I say that no demand notes have been issued by them since the rejection of the Finance Bill.
  Mr. AUSTEN CHAMBERLAIN: Does the right hon. Gentleman say that where the Treasury exercises control no demand for Income Tax has been made since the rejection of the Finance Bill?
  Mr. LLOYD-GEORGE: That is my information.
  Mr. AUSTEN CHAMBERLAIN: I shall have to refer to the matter in Debate.
  Lord HUGH CECIL: Is the right hon. Gentleman aware that the Income Tax is deducted from money paid to officers in the Army and in the Navy, and also in the case of Civil servants?
  Mr. LLOYD-GEORGE: I have already answered that question several times in House.
  Lord HUGH CECIL: Does the right hon. Gentleman think he need only answer such questions as are convenient? What distinction does he draw between the case of an officer or public servant, and a case in which a demand is made?
  Mr. LLOYD-GEORGE: As to answering only questions which are convenient to me, I answered the first question of the Noble Lord a week ago. As to the second part, that is entirely a matter for argument. I do not agree with the Noble Lord. I have already given my view to the House,
  752
  but I understand there is to be a discussion on the subject, and I can assure the Noble Lord the Government will not shirk giving an answer.
  Mr. HARRY SEYMOUR FOSTERasked the Chancellor of the Exchequer whether he was aware that in the City of London demand notes had been sent out in the usual course for the payment of Income Tax on the basis of the late Finance Bill; whether the collectors had paid to the Income Tax Commissioners for the City the sums so collected; what was the amount so collected up to 10th March last, or to any earlier date to which the figures were available; whether such sums in due course had been paid to the credit of the Treasury at the Bank of England; if not, would he state why such sums had not been paid over; and whether any communications had passed between the Treasury and the Income Tax Commissioners upon the subject?
  Mr. LLOYD-GEORGE: Yes, Sir, I understand that, in the exercise of their discretion, the commissioners of taxes for the City of London have authorised the issue of demand notes by their collectors. From 1st January to 25th February the amount of Income Tax so collected and paid over to the Exchequer was £1,790,461. Since the latter date no further payment on account of Income Tax has been made by the City Commissioners, who are acting upon their own responsibility in the matter. The answer to the last part of the question is in the negative.
  Mr. HARRY SEYMOUR FOSTERasked whether the joint stock banks in the City of London had sent to the Treasury their usual quarterly returns of the amounts they held for payment to the Government in respect of Income Tax; what was the amount of money so collected and held by the said banks; had any request been made by the Treasury officials for the payment of such sums to them; and had any, and what, communications taken place between the Treasury and the banks upon the subject?
  Mr. LLOYD-GEORGE: The usual quarterly returns have been sent to the Board of Inland Revenue. The sums still in the hands of these banks, according to returns made up to the 5th instant, amount to £833,000. No requests for payment have been made by the Inland Revenue since the 30th November last, nor has any correspondence passed between the banks and that Department.
  Mr. H. S. FOSTER: Has the right hon. Gentleman communicated to the banks his statement of 4th March that he would gladly welcome the receipt of every penny sent in?
  Mr. LLOYD-GEORGE: I do not know, without reference to the correspondence, whether there has been any communication on the point by writing, but, at any rate, the statement is public information.
  An HON. MEMBER: Is it a fact that the Treasury has given an indemnity at a date later than 30th November in regard to the deduction of Income Tax in the manner adopted in former years?
  Mr. LLOYD-GEORGE: I do not know what sort of indemnity the hon. Member means.
  Sir FORTESCUE FLANNERY: Is the right hon. Gentleman aware that in the City, within the last few days, the collectors of Income Tax have called on and informed several of the banks that they would receive the Income Tax if the banks volunteered to pay it.
  Mr. LLOYD-GEORGE: That confirms my previous answers. The collectors are acting on their own responsibility. They are not under the direction of the Inland Revenue. They are under the local commissioners.
  Lord HUGH CECIL: Have there been any communications between the Treasury and the banks in relation to the liability of the latter in connection with the collection of the Income Tax?
  Sir FORTESCUE FLANNERY: May I say, in reply to the Noble Lord—
  Mr. SPEAKER: The hon. Member must wait until he gets to the other side of the House before he answers questions.
  Mr. AUSTEN CHAMBERLAINasked whether the Inland Revenue authorities had made refunds to individuals on account of Income Tax deducted from the dividends of those individuals, although the tax itself had not been handed over to the Exchequer.
  Colonel LOCKWOODasked the Chancellor of the Exchequer whether he proposed to repay hospitals and other approved charities amounts which they has paid as Income Tax, or must those institutions suffer the loss under the present financial arrangements of the Government?
  Mr. MILDMAYasked the Chancellor of the Exchequer what course he proposed to adopt in the case of those individuals who, by reason of their incomes not exceeding a certain amount, were entitled to claim return of Income Tax in April, such having already been deducted from dividends on the full scale by banks, etc.?
  Mr. NORMAN CRAIGasked what would be the position in regard to rebate on Income Tax of persons having incomes of less than £400 derivable from dividends which fell due between the 6th April, 1909, and the 5th April, 1910, and from which Income Tax had been deducted by banks but not received by His Majesty's Exchequer; whether, in respect of the year 6th April, 1909, to 5th April, 1910, such persons would be entitled to claim rebate on the 5th April, 1910; whether claims to rebate in such circumstances would be paid; and whether the rebate would be paid as in the past within a few days of the receipt of the claim?
  Mr. AUSTEN CHAMBERLAIN: In putting my question, may I express my regret that the right hon. Gentleman should have had to come back from a holiday which I am sure he needed?
  Mr. LLOYD-GEORGE: I thank the right hon. Gentleman for his courtsey in postponing his question until to-day. The Board of Inland Revenue have, in a few cases, made refund on account of Income Tax deducted from the dividends of individuals entitled to claim such refund, although the tax itself has not been paid into the Exchequer. I may add that I have authorised the Board to follow the normal practice in regard to repayment of Income Tax in all cases where claims can be substantiated.
  Mr. BOYTONasked whether Income Tax is being deducted from all due payment of salaries to the members of the Civil Service and other services of the State?
  Mr. LLOYD-GEORGE: I must refer the hon. Member to the reply which I gave on the 10th inst. to the hon. Member for Worcester. I may add that I have received no complaints on the subject from Civil servants.
  Mr. GEORGE YOUNGERasked whether in many instances firms who proposed to withdraw spirits from bond since December last at the legal duty of 11s. per gallon were called upon to provide security in the form of bonds to the Commis-

  755
  sioners of Customs and Excise sufficient to cover the amount of the extra duty of 3s. 9d. per gallon estimated to be due at the end of three months, namely, at or about the time at which the Government had undertaken to reintroduce the Budget in the House of Commons?
  Mr. LLOYD-GEORGE: The security which is required by law to be given for all bonded warehouses has been increased in a few cases where spirits have been delivered upon payment of the duty of 11s. per gallon, and the additional duty of 3s. 9d. under the Budget Resolution has not been deposited. The increase has only been asked for where the quantity of spirits so delivered and the amount of the duty which will ultimately become payable in respect of them has been so considerable that the Commissioners of Customs and Excise have felt that the security already given was insufficient, but in no case has the increase been estimated by reference to the amount which may be due at the end of three months or at any particular date.
  Mr. GEORGE YOUNGER: Is the right hon. Gentleman entitled to call a payment of that kind, made under such circumstances, a voluntary contribution?
  Mr. LLOYD-GEORGE: They need not make it unless they like.
  Mr. AUSTEN CHAMBERLAIN: With reference to the statement that increased security has been required only where the previous security was insufficient, does the insufficiency refer to the legal duty or to the duty which the Government hope some day to induce this House to legalise?
  Mr. LLOYD-GEORGE: I think it has reference rather to the nature and the quantity of the transactions between the person who pays the duty and the Inland Revenue.
  Mr. AUSTEN CHAMBERLAIN: Must it not have reference to whether the duty is calculated at the rate of 11s. or at the rate of 14s. 9d.?
  Mr. LLOYD-GEORGE: As I understand from the Inland Eevenue—but I should like to confirm this—it refers rather to the 11s. rate than to the 14s. 9d. rate, because it is undoubtedly a purely voluntary contribution on their part of the traders. That has been the attitude of His Majesty's Government, and I must say that in the vast majority of cases it has been done without any difficulty at all.
  Mr. GEORGE YOUNGER: Is not the right hon. Gentleman perfectly aware that these bonding arrangements are more or less permanent in their character, and that the extra security, although not stated so in terms, is distinctly in consequence of the additional 3s. 9d. duty?
  Mr. LLOYD-GEORGE: I do not think so. Where the trade treat the 14s. 9d. as a duty which it is prepared to pay—and that is the position at the present moment —in the transactions between the Inland Revenue and the trade the amount is probably computed on the 14s. 9d. basis. But it is purely by voluntary arrangement—an arrangement which the traders have accepted.
  Mr. GODFREY LOCKER-LAMPSONasked the Chancellor of the Exchequer when the Finance Bill will be introduced for the purpose of giving legal effect to those Resolutions dealing with the financial year 1909–10 which the Government have stated will be moved after Easter; whether it will be introduced before the Spring Recess; and whether there will be two Financial Bills, one having reference to the financial year 1909–10 and the other to that of 1910–11.
  Mr. LLOYD-GEORGE: I must ask the hon. Member to wait for the answer which will be given to similar questions by my right hon. Friend the Prime Minister.
  Mr. STEEL-MAITLANDasked how much of the estimated loss of revenue of the present financial year, placed at £28,500,000, and stated to be due to the rejection of the Finance Bill, would have been saved if a temporary Bill had been passed before the dissolution, authorising the collection of Income Tax at the rates specified in the tax, and at the rates specified in the Finance Act of 1908, at the rates specified in the Finance Bill of 1909, including the Super-tax, and at the rate specified in the Finance Bill of 1909, without the Super-tax, respectively; and what, would have been the estimated saving of loss at each of the above-mentioned rates if a Resolution authorising the imposition and collection of Income Tax had been adopted immediately after the conclusion of the Debate on the Address?
  Mr. LLOYD-GEORGE: I must refer the hon. Member to the reply which I gave on 14th instant to similar questions by the hon. Members for the Woodstock Division and for Falmouth.
  Mr. LONSDALEasked the Chancellor of the Exchequer what was the total estimated yield from additional taxation in 1910–11 and in future years imposed upon Ireland by the Finance Bill, 1909, and what was the estimated yield from each tax?
  Mr. LLOYD-GEORGE: It would be contrary to precedent for me at this period of the year to anticipate my financial statement by giving estimates of revenue for 1910–11 and subsequent years, and I cannot, therefore, see my way to add to the information which I have already given in regard to the incidence on Ireland of the additional taxation imposed by the Budget of last year.
  Mr. LONSDALE: Does the right hon. Gentleman propose to make such changes in the Budget in reference to its application to Ireland as will have a favourable effect?
  Mr. LLOYD-GEORGE: In the first place, that does not at all arise out of the question. The hon. Gentleman again asks me to anticipate my statement—a course which no Chancellor of the Exchequer has ever been asked to do before.
  Mr. LONSDALEasked what are the taxes, and what is the yield from each tax, comprised in the Treasury estimate of £438,000 as the total Irish contribution in 1909–10 to the revenue as a result of the additional taxation imposed upon Ireland by the Finance Bill, 1909?
  Mr. LLOYD-GEORGE: The figure of £438,000 quoted in the question represents, as I explained in the reply I gave to the questions asked me on this subject on the 9th instant, not the Irish contribution to the revenue to be collected in 1909–10, but the Irish contribution to the revenue proper to the year of which, however, a portion (approximately £173,000), will not be received until after 31st March owing to the delay in passing the Finance Bill. The details of the calculation are the same as those given in the reply of my right hon. Friend the Secretary to the Treasury to a question addressed to him by the hon. Member for North Galway on 27th October last with the omission of the items for spirits (£80,000) and stamps (£17,000). The reasons for these variations are that it is now apparent that the yield of the increased rates of Spirit Duties will be less than the yield of the duties upon the former basis, while the higher rates of Stamp Duties only beome operative as
  758
  from the day on which the Finance Bill receives the Royal Assent.
  Mr. LONSDALE: How much does the right hon. Gentleman hope to realise by the Stamp Duties in relation to Ireland?
  Mr. LLOYD-GEORGE: I have told the hon. Gentleman that we will not realise a penny this year from the Stamp Duties because they are not in operation.
  Mr. LONSDALE: Will they ever be in operation?
  Mr. HAYES FISHERasked the Chancellor of the Exchequer if he could state the approximate amount which local authorities may expect to receive in the financial year 1910–11 as their moiety of the duties on land values under the proposals of the Finance Bill, 1909; if he could state whether His Majesty's Government had arrived at any decision as to the basis on which the allocation of this amount between the various local authorities should be made; and, if so, what amount was likely to be received by the London County Council during the year 1910–11?
  The HON. MEMBERfurther asked the Chancellor of the Exchequer if he could state approximately the amount by which the revenues of local authorities for the financial year 1909–10, arising from the Surtax of 6d. per gallon on spirits under the Customs and Inland Revenue Act, 1890, would be diminished as compared with the year 1908–9, and how much of such loss of revenue would fall upon the London County Council; and whether, seeing that the whole or greater part of such loss of revenue was the result of the increased rate of duty proposed for the purposes of the Imperial Exchequer by the Finance Bill of 1909, and would have to be made good out of the local rates. His Majesty's Government would consider as to applying to such revenue a similar provision to that contained in Clause 88 of the Finance Bill, 1909, by which local authorities were protected from loss of revenue from the duties on liquor licences caused by an increase in the rate of duty for imperial purposes?
  Mr. LLOYD-GEORGE: I do not think it is desirable to anticipate my financial statement by giving the information asked for in either of these questions. As regards the latter part of question 31, I do not in any way accept the hon. Member's contention that any loss of revenue under this head to local authorities would necessarily

  759
  be the result of the increased rate of duty on spirits, but I shall be glad to give the matter my sympathetic consideration when I come to deal with the financial arrangements of the coming year. At the same time, it would be premature for me to commit myself in advance to any particular solution of the difficulty such as that suggested by the hon. Member.
  Lord HUGH CECIL: Can the right hon. Gentleman say when, approximately, he will make his financial statement?
  Mr. LLOYD-GEORGE: The Noble Lord really ought to know that that is a question which should be addressed to the Prime Minister, the Leader of the House.
  Mr. STEEL-MAITLANDasked the Prime Minister whether it was the intention of the Government that the Finance Bill should be passed through all its stages in this House before the Spring Recess; and whether the intention of the Government to obtain the consent of this House to the Finance Bill was contingent on anything that may happen elsewhere?
  Mr. DOUGLAS HALLasked the Prime Minister if he will state when His Majesty's Government intend to introduce the Finance Bill for 1910–11; and whether, in view of the fact that it is not their intention to introduce the Finance Bill of 1909–10 until after the expiration of the financial year 1909–10, His Majesty's Government contemplate introducing one Finance Bill for the two years?
  Viscount CASTLEREAGHasked whether it is the intention of the Government to introduce more than one Finance Bill during the present Session?
  Lord HUGH CECILasked whether it is the intention of the Government to introduce a Finance Bill before the Spring Recess or at any time during the present Session; and, if so, whether that Bill will contain any, and, if so, which, of the provisions of the Finance Bill, 1909?
  The PRIME MINISTER (Mr. Asquith): As I have already stated more than once, it is the hope and intention of the Government to pass the Budget of 1909–10, which, of course, must be embodied in a Bill, through this House before the Spring Recess, and that intention is not contingent on what may happen elsewhere. The method of procedure which we shall propose for securing that purpose "will be
  760
  indicated in due time. There will not, according to our present intention, be a single Finance Bill for the two years. In reply to the last part of the question of the Noble Lord the Member for Oxford I cannot at this stage make any detailed statement such as is asked.
  Viscount CASTLEREAGH: May I ask if this is one of the tactical and strategical steps the right hon. Gentleman alluded to on Saturday?

  Development Grant, Growth of Sugar Beet.
  Mr. FELLasked if it was proposed to devote a reasonable portion of the Development Grant to the encouragement of the growth of sugar beet in the United Kingdom, and the manufacture of sugar, according to the most scientific methods in use on the Continent?
  Mr. LLOYD-GEORGE: The promotion of the growth of sugar beet in this country would certainly be a purpose for which grants might suitably be made out of the Development Fund, but the matter is one primarily for the consideration of the Development Commission when it is constituted.

  Vote on Account (Civil Services).
  Mr. LONSDALEasked the Chancellor of the Exchequer if he would ascertain from the Chief Commissioner of the Dublin metropolitan police whether the sum of £25,000, provided in the Vote on Account for that service for the first six weeks of the coming financial year would be sufficient to discharge all payments falling due and payable in that period from the Vote?
  The HON. MEMBERfurther asked the Chancellor of the Exchequer (1) if he will ascertain from the Inspector-General of the Royal Irish Constabulary whether the sum of £260,000, provided in the Vote on Account for that service for the first six weeks of the coming financial year, will suffice to discharge all payments falling due and payable in that period from the Vote; (2) whether he is aware of the fact that the sum provided in the Vote on Account for Public Education (Ireland) for the first six weeks of 1910–11, namely, £370,000, was short by the sum of £200,000 of the moneys which would fall due and be payable within that period; and what steps he proposed to take to make good this deficiency and to avoid default in payments which would have been

  761
  already earned and become legally due, in the period mentioned, to several thousands of national school teachers and others who were paid from the Vote for Public Education?
  Mr. LLOYD-GEORGE: In view of the fact that the charges on each of the Votes referred to are specially heavy during the early weeks of the financial year, considerably more than the normal proportion of the total Vote has been provided on account in each case. The provision under Dublin Metropolitan Police represents abðut thirteen and a half weeks' average expenditure, that under Royal Irish Constabulary about ten, and that under Public Education (Ireland) about twelve. I am in communication with the Irish Government with reference to the amount provided under Public Education. In regard to the other two services, I have no reason to suppose that the amounts provided will not suffice to meet all charges coming in course of payment between 1st April next and the date on which a further Vote on Account will become available in ordinary course.
  Mr. LONSDALE: Has the right hon. Gentleman seriously considered the position the school teachers will be in if they cannot get their salaries paid?
  Mr. LLOYD-GEORGE: I can assure the hon. Gentleman that the Irish school teachers need be under no apprehension on that subject. If there is any difficulty at all, they may depend upon it that the Government will see that their salaries are discharged.
  Mr. LONSDALE: Does the policy of the Government not involve some risk of delay?
  Mr. LLOYD-GEORGE: No, not in the slightest degree. I can assure the hon. Gentleman—and I think it is only right that the teachers should know—that there need be no anxiety upon the point.
  Mr. LONSDALEasked the Chancellor of the Exchequer whether the authorities of the new universities and colleges in Ireland were consulted before making provision for the sum of £25,000 in the Vote on Account for the first six weeks of the next financial year for that service; whether he is aware that expenditure has been incurred in the current year on buildings in connection with the Queen's University, Belfast; whether such expenditure was taken into account in estimating
  762
  this provision; and what is the explanation of the delay in payment to the Belfast University and the other constituent colleges of the new university in Dublin of the full moiety of the grants already voted for these institutions under Section 7 (2) of the Universities Act, 1908, in respect of the current half-year ending the 31st instant?
  Mr. LLOYD-GEORGE: The information furnished by the authorities of the universities and colleges in connection with the preparation of the Estimates for 1910–11 was sufficient to enable the amount required on account to be estimated without further reference to them. The answers to the second and third questions are in the affirmative. The balance of the grants referred to in the last part of the question was voted in the Supplementary Estimate agreed to by the House on Report on the 2nd instant. This Vote is, however, not available until the necessary Ways and Means have been provided by the passing of the Consolidated Fund Bill now before Parliament.

  Bank of England (Dividends on Government Securities).
  Lord BALCARRES (for Mr. Norman Craig)asked what is the total amount deducted by the directors of the Bank of England, but not paid over to the Exchequer, in respect of dividends which became due between 6th April, 1909, and the present time upon Government securities, including Colonial and Provincial Government securities?
  Mr. LLOYD-GEORGE: The total amount deducted by the Bank of England on Government securities, including Colonial and Municipal Securities, in the period mentioned amounts to about £358,000.
  Lord BALCARRES: Can the right hon. Gentleman say the amount deducted by other banks standing to the credit of joint stock companies?
  Mr. LLOYD-GEORGE: I am under the impression that I have answered that question to-day. My recollection is that the sum is £800,000.
  Lord BALCARRES: Is that in all the banks?
  Mr. LLOYD-GEORGE: Yes; I think I answered that to-day.
  Mr. AUSTEN CHAMBERLAIN: That is only the joint stock banks in London?
  Mr. LLOYD-GEORGE: In London.

  Gold Imports and Exports.
  Viscount CASTLEREAGHasked what were the imports of gold into this country between 1st January and 17th March in 1909 and 1910, respectively; and what were the exports during the same periods?
  Mr. LLOYD-GEORGE: The information required is only available for the periods from 1st January to 17th March, 1909, and from 1st January to 16th March, 1910. The particulars are as follows:—

  1909 Period.

  1910 Period.

  £

  £.

  Imports

  12,452,639

  8,711,838

  Exports

  9,616,050

  11,010,704

  Viscount CASTLEREAGH: Can the right hon. Gentleman give any reason for the great difference?
  Mr. LLOYD-GEORGE: I do not think if the Noble Lord asked half a dozen experts that they would agree upon the particular reason which was the predominant one in the effect.
  Mr. GIBSON BOWLES: May I ask whether it is not a fact that on a number of years, ten or twelve years, we always import and keep about £5,000,000 bullion per year more than we export?

  Bank Bate and Income Tax.
  Viscount CASTLEREAGHasked the Chancellor of the Excheqner whether, having regard to the very unusual increase in the bank rate during the month of March and the consequent burden upon trade, he would reconsider his refusal to expedite the collection of Income Tax?
  Mr. LLOYD-GEORGE: The Government see no reason to alter their decision on this matter.

  Old Age Pensions.
  Mr. O'KELLYasked the Secretary to the Treasury whether he would inquire into the case of Honor Cullen, Cartron townland, parish of Ardcarne and Boyle No. 1, whose pension had been stopped by the pension officer without any evidence as to her age, and whose name is not found in the Census of 1841 or 1851, but who was able to produce the testimony of respectable persons sufficient to satisfy the pension committee that her age was over seventy years; whether pension officers were to be allowed to cancel pensions granted after careful examination by the pension committee; and whether he would cause the return of Honor Cullen's
  764
  pension book, taken away in the month of May last, and the restoration of the pension money due to her since it was stopped in May?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse): The facts in this case are as follows: After the grant of a pension to Honoria Cullen by the pension committee a question based upon the Census Returns was raised by the officer on the ground that she had not attained the age of seventy years, so as to be entitled to a pension. Upon this question the pension committee decided that she was entitled to a pension, but upon appeal by the officer, the decision of the committee was reversed by the Local Government Board for Ireland, who decided that she was not entitled to receive a pension. The payment of the pension was accordingly stopped, and I have no power to restore it.
  Mr. CATHCART WASONasked the Financial Secretary to the Treasury whether, in view of the fact that the Local Government Board (Scotland) dismissed the appeal of the pension officer in respect of the claim of Margaret Harcus, and declared that the claimant was entitled to a pension of 5s. a week from 1st June, 1909, he can state for what reason the pension has been withheld, and if the arrears due will now be paid?
  Mr. HOBHOUSE: The pension order book in this case was delivered on the 18th ultimo, and all arrears due will be paid. The delay in delivering the book was due to the remoteness and inaccessibility of the island of Papa Westray, on which the pensioner resides. The hon. Member is so well acquainted with these islands and the difficulties of reaching them in rough weather that he will readily understand that delays at times are unavoidable.
  Mr. CATHCART WASONasked the Financial Secretary to the Treasury if his attention had been directed to the refusal to grant pensions to Mr. and Mrs. Miller, aged respectively eighty-four and eighty-two years of age, and who were proved to have lived on the island of Eday, Orkney, for over seventy years; and if, in view of the fact that, during the temporary absence abroad of the applicants, they always retained their home on the island, he would give the most favourable consideration possible to all the circumstances?
  The LORD ADVOCATE (Mr. Ure): I would refer my hon. Friend to the reply I gave to him on 31st March last, and I would add that the Local Government Board on consideration of the facts were unable to hold that the applicants retained a home in this country during their absence in Canada.

  Elementary School Teachers Superannuation Act (Deferred Annuity Fund).
  Mr. BOTTOMLEYasked the Financial Secretary to the Treasury if he would grant a Return of the contributions to the Deferred Annuity Fund under the Elementary School Teachers Superannuation Act, 1898, by persons who had not claimed the annuity up to the 31st March, 1909?
  Mr. HOBHOUSE: I do not think that the results of such a Return would be worth the labour and expense involved in making it. I am informed that up to 31st March, 1909, in seventeen cases no application for the award of an annuity under the Elementary School Teachers Superannuation Act, 1898, had been made by teachers who, if alive, had reached the age of sixty-five and had so become entitled to apply by that date. The contributions made by these teachers amounted to £34 5s. in all.

  Government Contracts (Fair Wages Resolution).
  Mr. HARRY SEYMOUR FOSTERasked whether any steps were taken to enforce the Fair Wages Resolution of this House in respect of Government contractors where such contractors are foreigners and where the work is executed abroad?
  Mr. HOBHOUSE: The question is not one which concerns the Treasury directly, and I think the hon. Member should inquire of the Departments making the contracts to which he refers.

  His Majesty's Customs (Statistical Office Abstractors).
  Mr. JOHN ROBERTSONasked whether it was proposed to assign the £10 increment to each of the six abstractors in the Statistical Office of his Majesty's Customs who completed five years on their present maximum in September last?
  Mr. HOBHOUSE: As I informed my hon. Friend on 20th May last these special increments are allowed in a limited number of cases only, as a reward of special merit, and are not given automatically to the senior or time qualified men. Only the cases, therefore, of such of these six
  766
  men are deserving will be considered in connection with the grant of these special increments.

  Small Holdings Acts Amendment.
  Mr. LANE-FOXasked the Prime Minister whether, in view of the general desire of Members of all sections in the House that the Small Holdings Acts should be so amended as to secure the payment of fair compensation to farmers whose land was taken for small holdings, the Government would include among their non-controversial legislation promised for this Session a Bill with this object, or would give facilities to any of the private Member's Bills of this character already presented to the House?
  The PRIME MINISTER: The Government are anxious to see this grievance removed, and if they could be satisfied that the matter would be treated as non-controversial they would be prepared to propose legislation.

  Granite for Public Departments.
  Dr. HILLIERasked the First Lord of the Treasury whether, in view of the various expedients to which the Government have felt it their duty to resort, at the public cost, in order to relieve the distress caused by unemployment, he will recommend that such granite as is required for use by public Departments shall in future be supplied from quarries in the United Kingdom?
  Mr. HOBHOUSE: This matter is not within the competence of the Treasury, and no general rule applicable to all Departments could be laid down.

  Veto Resolutions.
  Viscount CASTLEREAGHasked the Prime Minister on what date he proposed to place upon the Paper the Resolutions relating to the House of Lords?
  Mr. JAMES HOPEalso asked the Prime Minister when he proposes to place upon the Paper the text of the Resolutions to be submitted to the House with reference to the functions of another place, the duration of Parliament, and kindred matters?
  The PRIME MINISTER: I hope to be able to-morrow to place the Resolutions upon the Paper.
  Lord HUGH CECIL: When is the right hon. Gentleman going to make the statement he proposes as to the special procedure on the Finance Bill?
  The PRIME MINISTER: When the time comes. Sir.
  Lord HUGH CECIL: Will it be before the Ecclesiastical Easter, or after the Ecclesiastical Easter?
  The PRIME MINISTER: I think after.
  Mr. JAMES HOPE: Will the right hon. Gentleman state when the financial statement of 1910–11 will be made?
  The PRIME MINISTER: No, Sir; it would be quite premature.

  Private Members' Time.
  Mr. TOBINasked whether it is still the intention of the Government to make no encroachments upon the time of private Members after the Ecclesiastical Easter Recess?
  The PRIME MINISTER: I cannot make any definite promise, but we shall be anxious to respect the time of private Members, so far as the exigencies of public business allow.

  Committee of Imperial Defence.
  Mr. GIBSON BOWLESasked the Prime Minister if he can give the names of the present members of the Committee of Imperial Defence, and inform the House by whom the appointments are made to that Committee; whether all the appointments are made by the same authority and under the same conditions as to the retention of and retirement from membership of the Committee; can he state whether any, and, if so, what, allowances or salary is received by each member of the Committee for services thereon; and whether such allowances or salary is the same in the case of each member?
  The PRIME MINISTER: The Committee of Imperial Defence is composed of the Prime Minister and such Members as he may nominate from time to time to assist him. The names of those who, for the time being, are regularly summoned by the Prime Minister to meetings of the Committee of Imperial Defence are as follows:—
  The Secretary of State for Foreign Affairs.
  The Secretary of State for the Colonies.
  The Secretary of State for War.
  The Secretary of State for India.
  The Chancellor of the Exchequer.
  The First Lord of the Admiralty.
  The First Sea Lord.
  The Director of Naval Intelligence.
  The Chief of the Imperial General Staff.
  The Director of Military Operations.
  Lord Esher.
  General Sir John French.
  Admiral of the Fleet Lord Fisher of Kilverstone.
  Appointments to serve on the Committee are made by the sole authority of the Prime Minister. No allowance or salary is received by members for their services on the Committee.
  Mr. GIBSON BOWLES: Are the appointments made under the same conditions as to retention and retirement of membership?
  The PRIME MINISTER: They are all made at the discretion of the Prime Minister.

  United States and Canada (Tariff War).
  Mr. HUNTasked whether, in view of the fact that the United States of America have threatened to penalise Canadian imports, and that there is danger of a tariff war between the United States and Canada, he proposes to make any effort to assist Canada?
  Colonel SEELY: The Dominion Government are fully aware that the good offices of His Majesty's Government and of the British Ambassador at Washington are at their service in this matter.
  Mr. HUNT: Are we to understand that the Free Trade system prevents us doing anything definite to help Canada?
  Colonel SEELY: The hon. Member is to understand nothing of the kind.
  Mr. HUNT: May I take it that the right hon. Gentleman is not to help the Canadian Government in the matter?
  Colonel SEELY: I think the House will realise that in the matter of this difficulty and delicacy it will be impossible and improper for me to take any further steps.
  Mr. PAGE CROFT: In what manner could the right hon. Gentleman intervene?
  Colonel SEELY: I have said the British Ambassador at Washington is at the disposal of the Canadian Government, and negotiations are at this moment going on, and it will be obviously very undesirable to make a general statement when negotiations are going on of a very important character.
  Mr. PAGE CROFT: Can the right hon. Gentleman state in what manner this country could possibly intervene?

  Military Convention (Great Britain and Prance).
  Mr. BYLESasked the Prime Minister whether any treaty or naval or military convention of which this House is yet uninformed exists between this country and France, by which the French Navy is to maintain absolutely free and secured against all danger the English commerce which passes down the Mediterranean to use the Suez Canal, and by which there is assured to the French and English flags in case of conflict the absolute mastery of the Mediterranean; and, if so, can he now make any statement regarding it, and especially will he say if it accounts in any degree for the unprecedented increase in the Naval Estimates of the year?
  The PRIME MINISTER: No treaty or convention of the nature specified by my hon. Friend exists between this country and France.

  Letitia M'Ginnes (Glasgow Conviction Quashed).
  Mr. DUNCAN (for Mr. Barnes)asked the Lord Advocate whether his attention has been called to the case of Letitia M'Ginnes, who was convicted at the Glasgow police court in February last year without the opportunity of an adjournment so as to get assistance in defence, and the conviction of whom was subsequently quashed on a bill of suspension being presented; to the Court of Session; and whether he will take into consideration the case for substantial reparation, as was done in the case of Adolf Beck?
  Mr. URE: My attention has been called to this case. The conviction was quashed by the High Court of Justiciary on purely technical grounds; and I can see no justification in the circumstances for an award of compensation. Such a course would be entirely without precedent.

  Public Trustee (Scotland).
  Mr. WATTasked whether the success of the experiment of appointing a Public Trustee for England will cause him to introduce legislation instituting a similar office for Scotland?
  Mr. URE: No evidence whatever of a desire for the appointment of such an official in Scotland has reached the Secretary for Scotland or myself. In these circumstances legislation in the direction suggested in my hon. Friend's question is not contemplated.
  Mr. WATT: Is the right hon. Gentleman not aware that this position of public trustee is likely to prove a lucrative one, and is it not only right that the Scotch should have a look in?

  Scottish Provisional Order Procedure.
  Mr. GEORGE YOUNGERasked the Lord Advocate whether the attention of the Secretary for Scotland has been called to the fact that in the case of nine of the eighteen Provisional Orders deposited at the Scottish Office last December the parties promoting and opposing those Orders lodged representations and attended before the Lord Chairman of Committees of the House of Lords and the Chairman of Ways and Means of the House of Commons to request that, in the exercise of their powers under the Act, they would report that these nine Provisional Orders ought to proceed as Private Bills and not as Scottish Orders, and that five of these nine were so ordered to proceed; and whether, in view of the persistent efforts made by promoters and opponents of Scottish Provisional Orders to have them proceeded with as Private Bills, he will reconsider his decision as to the need for early legislation to remedy the alleged defects in the Act which lead to this course of action?
  Mr. URE: In the case of eight of the eighteen Provisional Orders referred to application was made by promoters or by opponents to the Lord Chairman and the Chairman of Ways and Means that the Order should proceed as a private Bill, but the Secretary for Scotland cannot agree with the inference the hon. Member seeks to draw from these facts. Applications that Orders should proceed, as Bills can only be based on the grounds set forth in Section 2 of the Private Legislation Procedure (Scotland) Act, 1899, and in no case was any application based on alleged defects in the Act, nor could the Chairman have considered an application based on such grounds. The answer to the last part of the question is, therefore, in the negative.
  Mr. GEORGE YOUNGER: May I ask whether the right hon. Gentleman is not aware that no less than eight promoters and twenty-five opponents attended on that particular occasion, showing that upon both sides there was a desire for a change and may I ask whether any stronger facts than these could be brought to waken up the Scotch Office from its sleep?
  Mr. URE: I am aware that both promoters and opponents appeared before the Lord Chairman, and that they both appeared for the purpose of supporting the ground set out in Section 2, which the Act carefully provides will be sufficient to justify a Procedure Order being taken as a Bill.
  Mr. WATT: Might I ask the right hon. Gentleman if he is aware that town clerks are advising their councils that it would be better to proceed by Private Bill than by Provisional Order?
  Mr. URE: I am not aware of it.
  Mr. WATT: Is it cheaper?

  Devonport Dockyard (Apprentices and Yard Boys).
  Sir C. KINLOCH-COOKEasked the First Lord of the Admiralty whether his attention has been called to the fact that men who have served as apprentices in Devonport Dockyard and become established are placed at a disadvantage in respect to their pensions compared with men who have entered as yard boys and become established; and whether, seeing that the apprentices have to pass a competitive examination and yard boys do not, he will take the necessary steps to remove this disadvantage, the disadvantage being that the former class of workman is only allowed to count his hired time for pension at the earliest from the age of twenty, while the latter class of workman has the privilege of counting his time for pension from the age of sixteen, thereby gaining two extra years?
  The FIRST LORD of the ADMIRALTY (Mr. McKenna): The question is governed by the Superannuation Act of 1887, and I would refer the hon. Member to my right hon. Friend the Chancellor of the Exchequer, who is responsible for the administration of that Act.

  H.M.S. "Lion."
  Sir C. KINLOCH-COOKEasked the right hon. Gentleman whether he would inform the House when it is expected that the "Lion" will be ready for launching; and what date, if any, has been fixed for laying down new ship No. 2 at Devonport Dockyard?
  Mr. McKENNA: The reply to the first part of the question is, August, 1910, and to the second part, January, 1911.
  Sir C. KINLOCH-COOKE: What will be done to the ship in the meantime?
  Mr. McKENNA: The same as has very often been done before—it will remain empty.
  Sir C. KINLOCH-COOKE: What will become of the men?
  Mr. McKENNA: When the hon. Member has represented Devonport a little bit longer he will know.
  Sir C. KINLOCH-COOKE: I confess I did not hear what the right hon. Gentleman said. Will the right hon. Gentleman repeat it?
  Mr. SPEAKER: It had better not be repeated.

  Ocean-going Destroyers.
  Mr. BURGOYNEasked the First Lord of the Admiralty whether he includes the "Albacore" and "Bonetta"' in the category of ocean-going destroyers?
  Mr. McKENNA: The reply is in the negative.
  Mr. BURGOYNE: In view of the right hon. Gentleman's reply, will he explain why they are so described on page 214 of the Navy Estimates?
  Mr. McKENNA: If they are so described it is an error. I will look into the matter.

  Armoured Units ("Neptune" and "Indefatigable").
  Mr. LLOYDasked whether it was expected to complete the large armoured units "Neptune" and "Indefatigable" in all particulars within the financial year 1910–11?
  Mr. McKENNA: The reply is in the affirmative.

  Gun Practice ("Invincible").
  Mr. EYRES-MONSELL: Will the right hon. Gentleman state whether the Admiralty have now received the report of the "Invincible's" gun practice on 22nd February; how many of the 12-inch guns were fired; how many rounds were fired by each gun: and were the electrical arrangements for actuating the guns satisfactory in all respects?
  Mr. McKENNA: No, Sir, practices of this nature are not specially reported to the Admiralty, but the following information has been obtained by telegraph: All the 12-inch guns were fired, two rounds each gun, and the electrical arrangements were satisfactory in all respects.

  Naval Officers (Engineers).
  Mr. WEDGWOODasked whether the right hon. Gentleman would appoint a committee to inquire into the status and powers of the engineer officers of His Majesty's Navy, especially with a view to harmonise the position of such officers and that of similar officers under the new scheme of training?
  Mr. McKENNA: No, Sir, the Admiralty do not intend to appoint a special committee; but the Board are keeping the circumstances, of which they are fully apprised, continually in their view.
  Mr. WEDGWOOD: Does that answer mark any advance up to now?
  Mr. McKENNA: I do not think it is any advance.
  Mr. WEDGWOOD: Has there been any change of opinion?
  Mr. McKENNA: I do not think any change is necessary.

  Royal Marine Artillery.
  Lord CHARLES BERESFORDasked whether it was intended to keep the Royal Marine Artillery as a corps, or whether it was intended to abolish the Royal Marine Artillery by degrees?
  Mr. McKENNA: It is not intended to abolish the Royal Marine Artillery.
  Sir C. KINLOCH-COOKE: Will the right hon. Gentleman state the policy of the Government in regard to the Royal Marines?
  Mr. McKENNA: No, not in answer to a question across the floor of the House.

  Ground Game Act, 1880.
  Mr. GREENWOODasked the Home Secretary whether his attention has been called to the recent case of May v. Waters in the High Court of Justice, in which it was held that Section 6 of The Ground Game Act, 1880, which provides that spring traps shall not be set for ground game except in rabbit holes, was intended to have a special and restricted application only, and is only applicable to occupiers, and not to owners of land; and whether, in view of the fact that Ministers in both Houses during the Debates upon that Act expressly declared that this Section was intended to have a general application in order to place the owner and the occupier upon the same footing with
  774
  reference to the use of firearms and traps. His Majesty's Government will introduce legislation in order to give effect to the intention of the Legislature?
  The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Churchill): I am aware of the facts set out in the question. The point seems to me one which may well be met by further legislation, but at present I can only say that it will not be overlooked when next a suitable opportunity occurs.

  Belvoir Poachers (Sentences).
  Mr. WEDGWOODasked the right hon. Gentleman whether he had yet any further information as to the sentences passed upon the poachers at Belvoir?
  Mr. CHURCHILL: I have made inquiry, and, having regard to all the circumstances of the case, including the violence which the prisoners used to the keepers and the long lists of previous convictions for various offences against both of them, I do not see my way to recommend any reduction of the sentences.

  Carnarvon Election Riots.
  Earl WINTERTON: Has the right hon. Gentleman received representations from leading residents of Carnarvon asking for a Home Office inquiry into the conduct of the police and the Carnarvonshire Joint Police Committee in connection with the recent election riots in that town; and if he is prepared to grant their request?
  Mr. CHURCHILL: I have not received any such representations.

  Sub-Post Office (Stonefields).
  Mr. LLOYDasked the Postmaster-General whether he is aware of the inconvenience cause to the inhabitants of the town of Stone by the closure of the sub-post office in the Stonefields districts of that town; whether he is aware that repeated representations have been made without effect; and whether he will give instructions for its restitution without further delay?
  The POSTMASTER - GENERAL (Mr. Herbert Samuel): I am aware of the facts set forth by the hon. Member, and, after making inquiries, I am satisfied that present conditions justify me in giving instructions for the re-establishment of the sub-post office in the Stonefields district of Stone.

  Siberian Mail Route.
  Mr. CHARLES CRAIGasked the right hon. Gentleman whether he was aware that the Siberian mail route to Japan and China is available only for letters and parcel post, and not for bonâ fide samples within the twelve-ounce limit, the same as are transmissible to other countries at the uniform rate of 1d. for four ounces; whether the charge for such a parcel of samples would be 6s. for any weight up to eleven pounds; whether the alternative route by New York and Vancouver is, on the average, fifteen days longer; and whether he will endeavour to have such sample packages included in the list of postage matters which may be sent at the lower rate by the Siberian route?
  Mr. HERBERT SAMUEL: I am aware of the facts stated by the hon. Member, and should be glad if I could provide for sending samples by the Siberian route. Unfortunately the charges made by the East of China Railway Company for the transmission of postal matter by that route are so high that I feel bound, in common with other European postal administrations, to make but a restricted use of it. I shall, however, lose no opportunity to press for such reductions as, I hope, will lead to samples and other matter being sent to China and Japan viâ Siberia,

  Trinity House (Elder Brethren).
  Mr. GIBSON BOWLESasked the President of the Board of Trade how it is intended to provide the proposed new fund for the retirement of Elder Brethren of the Trinity from active service, and especially whether it is proposed to provide this fund out of the property possessed by the corporation of Trinity House itself, or out of any other, and, if so, what property; in particular, is it proposed to provide any portion of it out of the light dues; and will His Majesty's Government consider, before recommending His Majesty to grant the supplemental charter to the Trinity House, the desirability of transferring the duties of lighting, buoying, and erecting beacons on the whole coasts of the United Kingdom to one body better adapted than the Trinity House to the performance of such duties?
  The PRESIDENT of the BOARD of TRADE (Mr. Sydney Buxton): It is proposed that the number of the Elder Brethren engaged in active duties shall be somewhat reduced, and that the fund in ques-
  776
  tion shall be constituted by contributions from Elder Brethren out of the annual sum of £7,000 to which they are entitled by statute as remuneration for the duties they discharge in connection with lighthouses. This sum is provided out of the General Lighthouse Fund, but the scheme will not involve any additional charge on that fund. The question of the administration of lighthouses, etc., was fully inquired into by a Royal Commission which reported in 1908. I am not prepared to propose legislation to transfer the duties to any other body.
  Mr. GIBSON BOWLES: Is it proposed to divert £7,000 of this fund to a different purpose from that to which it has hitherto been applied?
  Mr. BUXTON: It was thought best to utilise the money in this way.

  PRESENTATION OF BILL.
    FACTORY AND WORKSHOP ACT (1901) AMENDMENT BILL.
    "To regulate night employment, and to prohibit week-end employment in certain Factories and Workshops," presented by Mr. Jowett. (To be read a second time upon Monday, 4th April.)

BUSINESS OF THE HOUSE.
Mr. AUSTEN CHAMBERLAIN: May I ask the Prime Minister if he will state, for the convenience of hon. Members making their arrangements, whether he still anticipates that it will be possible for the House of Commons to adjourn for a considerable Recess at some time in the course of the month of April?
The PRIME MINISTER: Without more notice from the right hon. Gentleman I should not like to make any definite statement of that kind.
Mr. GIBSON BOWLES: Can the right hon. Gentleman state whether the arrangements already announced as to this week stand good?
The PRIME MINISTER: We propose that the House should meet at twelve o'clock on Wednesday and that questions shall be taken in the ordinary way. This course has been adopted with a view to meeting the convenience of hon. Members generally.
Mr. JOHN REDMOND: Does the arrangement to start the Debate on the Veto Resolutions on Tuesday week still hold good?
The PRIME MINISTER: Yes, Sir.

CONSOLIDATED FUND (No. 1) BILL.
Order for Second Reading read.
Motion made, and Question proposed: "That the Bill be now read a second time."

FINANCE BUSINESS (PROCEDURE).
Mr. STEEL-MAITLAND: I cannot allow the Second Reading of this Bill to pass without some protest against the maladministration that has taken place in the Revenue Department under the present Government during the past two months. At the time when the Consolidated Fund Bill was before this House last year the Financial Secretary to the Treasury prided himself upon the financial rectitude of the Government. They apparently were not as other administrators, or even as bad as the Unionists had been. [Cheers.] I can well understand those cheers from hon. Gentlemen opposite, and perhaps I may be permitted to adapt a well-known phrase:—
"The temple of finance has echoed and re-echoed for years with the Pharisee's prayer, and the accent of its unmistakably radical."
It is not as if there are only one or two taxes with regard to which mismanagement has taken place. It concerns not only the taxes of a temporary character, but others which do not depend primarily on the Budget at all for their continuance. In the first place, the Income Tax and the Tea Duty are of a temporary nature, and have been affected by the mismanagement, but apart from those taxes the whole question of the Death Duties, the additional Spirit Duties, the extra Tobacco Duties, and other taxes have been affected by the maladministration of His Majesty's Government. Beyond the taxes in. the Budget and the Finance Bill, there are other taxes, and here the breach of principle is worse, although the amount involved is not so great. The taxes affected include the Land Tax and the House Duty, which are not imposed by the annual Budget, but are a matter of permanent enactment.
If I may I will deal with some of these taxes in order, taking first of all the question of the Income Tax. I take it first, because, for one reason, the loss involved is
778
so infinitely great. Up to the date of the publication of the last figures of revenue in the "Gazette" of 12th March, the loss involved through the non-collection of Income Tax which might have been collected amounted to something like £19,500,000, and by the end of the financial year that sum will probably be increased to something like £22,000,000. Another reason for taking the Income Tax first is that the mess, the muddle, and the make-belief that there has been have reached their maximum in the case of that tax. As a matter of fact, the whole of this business of the collection of the Income Tax would really have been a ludicrous farce if it had not been for the magnitude of the sum involved and for the extraordinary ineptitude of the Government, as evidenced by the way in which the difficulty is being met. If hon. Members wish to know what the chaos is with regard to the Income Tax they can take for one moment the matter of demand notes. I am informed that demand notes have been issued by the Local Commissioners in Essex, but not, I believe, in Kent; that they have been issued in Somerset, but not, I believe, in parts of Lancashire; that they have been issued in Coventry, but not in its next-door neighbour, Birmingham; and that they have been issued in one part of the City of London, but not in another part of the same City. Again, as another instance if the chaos that exists, you may take the degree to which the Government have been receiving or abstaining from receiving the Income Tax when it has been readily offered to them. In some cases demand notes have been issued, and where deductions have been made by bankers and financial houses the Government have been ready to take the money; but in other cases of banks next door to the same bank where they have taken the money, the Government have not demanded the money where they might have done so; and, again, where private individuals have spontaneously offered the Income Tax the Government have, in some instances, refused to take it.
A great part of the Income Tax, as every Member probably knows, is levied by means of deductions, but up to this year I believe not even the banks and the financial houses themselves have realised the variation that exists in their treatment of the matter. Quite apart from the deductions made from dividends due to their own shareholders are the deductions they make on the coupons which they present

779
for their clients. They deduct the Income Tax before they credit their clients with the amount. It has in certain cases been the practice of banks when deducting Income Tax from coupons to pay the money straight over to the collector of Inland Revenue. In other cases, where they do not pay the money straight over, they have been accustomed to let the money remain at their own credit, and to inform the collectors that they can have it as soon as they want it. When the bank has adopted the first method the collector has received the Income Tax on the part of the Government, but when the bank has deducted the Income Tax and notified the collector that he has merely to call or to write in order to get it, then the collector has refused to receive it on behalf of the Government. Surely that is a perfectly absurd distinction. Really and truly, if they are going to require this sort of theological acumen on the part of their collectors, and if their collectors are to decide that to take money when it is paid over to them is consistent with the dignity of the Government, but that to ask for the money when they have been informed it is there for their asking is inconsistent with the dignity of the Government, then will they not have to pay them at a rather higher rate?
That is the case with regard to deductions. Take the case with regard to the demand notes. We have been informed by the Chancellor of the Exchequer that the chaos and difference with regard to the demand notes are due to the Local Commissioners. A few days ago, in answer to a question, the right hon. Gentleman said:—
"The issue of demand notes is primarily a matter for the decision of the Local Commissioners of Taxes, "with whose discretion the Chancellor of the Exchequer has no power to interfere."
4.0 P.M.
If I may say so with all deference, that answer is verbally perfectly accurate, but, in substance, it is entirely disingenuous. The answer in theory assumes that the Local Commissioners and the Government are distinct bodies, and that the Government have no power whatever to interfere with the Local Commissioners. The Local Commissioners are, no doubt, in theory independent gentlemen appointed from the Land Tax Commissioners. In theory, they appoint their own clerks, their own assessors, and their own local or parochial collectors. Then, on the other hand, there is, in theory, the distinct hierarchy of the Government—the Commissioners of Inland
780
Revenue, responsible to the Chancellor of the Exchequer, who appoint their own inspectors, their own surveyors, and their own collectors, the collectors of Customs and Inland Revenue. The Local Commissioners and the Government, to start with, therefore, are quite distinct from one another. What is the case in actual practice? In the case of incomes under Schedule E, incomes of public officials, officers of the Army, and others of like position, it is the Inland Revenue who collect the tax. But, in the case of incomes under Schedule D, the great schedule which contains the profits of businesses throughout the country, the Local Commissioners have it in their own power to collect them. In a large number of cases, however, they have agreed, as they are empowered to do, I believe under the Taxes Management Act, that the Inland Revenue should take over the whole of the collection of profits under Schedule D, and in that case I believe it is generally done by the collectors of Customs and Inland Revenue, who are officials of the Inland Revenue Department. In cases where the Local Commissioners have not actually handed it over to the Inland Revenue, but where the money is collected by local or parochial collectors, the Local Commissioners can arrange that those officials shall be appointed and be the servants of the Inland Revenue Department, and in a very large number of cases they have done so. Very often the same individual who holds office under the Inland Revenue Department also holds the office of assessor under the Local Commissioners. When that is the case, and when these officials are appointed, paid, dismissed, and found fault with by the Inland Revenue Department, can anyone really maintain that the Local Commissioners act entirely on their own discretion, without any interference, and that their sphere of action and that of the Government are quite, distinct? The same is the case when one inquires into the power of the Chancellor of the Exchequer to interfere with the discretion of the Local Commissioners. Theoretically, he has no power to interfere; but the Surveyor of Inland Revenue, who is the direct servant of the Chancellor of the Exchequer, sits by the side of the Local Commissioners at all their meetings; he supervises what they do, looks over their assessments, and he makes representations to them which they find it very hard not to follow. Not only is this the case, but when any

781
point of difficulty comes up down comes a circular to the Local Commissioners from the Board of Inland Revenue suggesting to them, as a matter of request, but in terms sufficiently imperative, the course they should follow. It comes to this: When, anyone has gone through the whole technicalities of the relations between the Local Commissioners and the Board of Inland Revenue the conclusion that they arrive at, in the end, is precisely the same conclusion that any business man would form to start with, and that is that it is the Chancellor of the Exchequer who has power over the collection of Income Tax, that it is the Chancellor of the Exchequer who could, if he had the wish, see that the Income Tax was collected by administrative methods in the ordinary way, and that it is the Chancellor of the Exchequer who of set purpose has said it shall not be collected in this financial year. If the Government had really wished to avoid financial confusion in the matter of the Income Tax, why could not they have gone ahead in precisely the same manner that they have gone ahead with regard to the Tea Duty, the additional Spirit Duty, the Tobacco Duty, or other Custom duties which have been collected, not by obligation, but of will? The Income Tax could have been collected in precisely the same way if the Government had shown any desire. There is no reason why the local collectors of Income Tax should not have sent out their demand notes with a notice that they were requests asking for the Income Tax to be gathered in in the usual way. As a matter of fact, why did they not send them out? From the information I have received the Local Commissioners and the collectors were perfectly willing to send out their demand notes with a notice of request that Income Tax should be got in in the ordinary way. Why were they not sent out? It was because a circular was sent down by the Board of Inland Revenue—a Government Department—to the Local Commissioners—the gentlemen with whose discretion the Chancellor of the Exchequer has no power to interfere !—a circular was sent down to them asking them to prepare assessments and duplicate of assessments, but not to send out the demand notes, which otherwise the Local Commissioners were willing to do. What reason, in the name of Heaven, could the Government have had for sending round that circular? Is it be-
782
cause the Government did not wish to strain the legal powers conferred on them with regard to Income Tax? If they had really not wished to strain their legal powers why did they do it in other cases of precisely the same nature? The Government have overstepped their legal powers to some degree with regard to the incomes of public officials and officers of the Army under Schedule E. There was no power and no obligation to deduct that tax any more than there was a power or obligation to collect taxes under Schedule D. There was power to ask for payment in both cases alike, but not to demand it. A case has come to my notice where a certain officer asked why his Income Tax was deducted. The information he received from the Bank was that the War Office, had said, "Deduct the tax as if the Budget had been passed." Surely if the conscience of the Government is not so scrupulous with regard to Schedule E it might have encouraged the local collectors, instead of discouraging them, to send the demand notes with a form of request.
It is not only the question of the Schedule E. What has happened with regard to the Bank of England? I am not speaking of the most recent development this morning, which is likely to prove most interesting. I believe it is a commonplace in law that the Bank of England are agents to the Government as regards matters connected with the National Debt; yet, at the same time, the Government, through their agents, the Bank of England, have been at any rate deducting Income Tax on dividends from the National Debt. In a notice sent out by the Bank of England, they say they are deducting Income Tax at the rate of 1s. 2d. in the £ on all dividends on the National Debt, and they go on to state in their notice that their action is in agreement with the suggestion of the Board of Inland Revenue, as authorised by the Lords Commissioners of His Majesty's Treasury. The same course, not so very nice in conscience, has been followed by the Government in other matters. Of course, Members on this side of the House are quite willing to accept the answers of the right hon. Gentleman with regard to the bond demanded for the additional Spirit Duty of 3s. 9d, We can only say, however, that that demand for the bond for the additional 3s. 9d. has reached some of us in a very different form to that in which it has been presented by the Chancellor of the Exchequer. According to our account of the

783
action of the Commissioners of Customs and Excise, they had been practically wrestling with the distillers as Jacob wrestled with the angel. They have refused to let the spirits go until they had been told that the bond for the additional 3s. 9d. should safely be handed over to them.
If the House will have forbearance with me I should like to deal with one other technical point. It is this. The Government might say that they would be willing to take the risk themselves of collecting the Income Tax where it is not strictly due, although they might feel they could not ask some independent body like the Local Commissioners to take the risk. At the start that might seem to have some reason, but I confess that the Government's action in the matter has been very self-contradictory. If the Local Commissioners wished to be secure they could have asked the Government to undertake to refund the money which had been paid. As a matter of fact, the Local Commissioners have asked the Government for such an undertaking. Why should not the Government have given it? There was another case in which they gave such an undertaking; they gave it to the bankers for collecting Income Tax upon deduction. This is the undertaking:—
"In reply to your letter I am directed by the Lords Commissioners of His Majesty's Treasury to inform yon that they are ready In undertake that any sum deducted on account of income Tax at 1s. 2d. in the £ will be refunded should Parliament hereafter decide that the tax for the year 1909–10 should he collected at some lower rate.
That is a perfectly businesslike proceeding. Why on earth could not the Government have given the same undertaking to refund to the Local Commissioners? They have given a like undertaking in other branches of the Revenue. They have given it with regard to the Tea Duty. Why should they not have given it to Local Commissioners in regard to Schedule D?
I hope the House will pardon these technical details. The fact of the matter is that when Members on this side of the House have asked the Government questions with regard to Income Tax we have had these technical details fobbed on to us as reasons for some course of action, which does not stand examination when anyone gets away from these technical grounds. There is no question but that anyone conversant with Income Tax administration realises there has been most extraordinary folly and muddle throughout the whole business. There has been a vast sum of money
784
outstanding, which, from every business point of view, was the property of the Government had they only chosen to take it. That would have been released had the Government chosen to ask for it, but it purposely refused doing so. If the Government were willing to outstep the law I am sure the business people of this country would have gladly welcomed their so doing if it would have enabled these sums to be collected. If the Government were not willing, why did they outstep the law to a far greater extent in the matter of the Land Tax and the House Duty? If their conscience had been so nice in the matter there would have been one quite straight path for them. If they had condescended to pass one Income Tax Resolution at an earlier date the whole difficulty and the whole muddle and the whole maladministration would have come to an end, and the Income Tax would have been got in. There would have been no financial difficulty and none of the borrowing which is going on to-day. When one hears the strictures of right hon. Gentlemen opposite of the methods by which the Unionists conduct finance, one is reminded of one of the old heroes who, we are told, rebuked Sin, and rebuked it with great gusto, like a very learned clerk.
I will not take up the time of the House with the Death Duties or the taxes on tea or spirits, but I wish to touch on two other taxes particularly, namely, the Land Tax and the House Duty. Are these two taxes being collected to their proper and full extent at this minute? The Land Tax and the House Duty are not dependent on the annual Budget. They are duties which are dependent for their validity on Statute. The duties are of a permanent character. The Land Tax is dependent on an old Act of 1798, with its modifications. The House Duty is dependent on the Act of 1851, with its modifications. They are not dependent for one instant on the Budget of the year. There is every legal obligation on the individual to pay the Land Tax and the House Duty whether the Finance Bill be passed or not. There is every legal obligation on the Government to levy the Land Tax and House Duty whether the Finance Bill be passed or not. We are entitled to ask the Government whether the Land Tax and the House Duty are being brought in or not. The estimate for the financial year of their yield was £2,650,000, and the proportionate amount which should have been properly collected at the date of the issue of the "Gazette" of 12th March wag

785
£2,400,000. The amount actually collected was little more than one-fourth of that sum. What, I ask, is the reason for the non-collection of a tax which depends on the Statute for its collection? Is it the fact that no attempt has been made to collect it, and that the people have not been paying it? I have an instance present to my mind which needs corroboration, but it is a case in which an individual who offered to pay the Inhabited House Duty, has had his money refused. May I ask if, because this tax has not been collected, the Local Commissioners are again to be the scapegoats for the non-collection? Fortunately, we possess some documents which show where the responsibility lies in the case of the Land Tax and the House Duty as between the Government and the Revenue Department, on the one side, and the Local Commissioners, on the other. If the Chancellor of the Exchequer will listen he will recognise some of the circulars, if he has read them, which have been sent out under his authority:—
"Inland Revenue,
"Somerset House.
"London. W.C.,
"4th December, 1909.
"Sir.
"INCOME TAX AND INHABITED HOUSE DUTY, 1909–10.
"I am directed by the Board of Inland Revenue to state fur the information of your Commissioner that, acting under the instructions of the Lords Commissioners of His Majesty's Treasury, they suggest that progress should be made with the Assessments and Appeals in the usual way, and that, the collector's Duplicates should be prepared for signature, but that they should not be signed or issued at present.
"In cases where the collector's Duplicates and Warrants have already been signed and issued, the Board desire to record their opinion that it is advisable that they should be recalled forthwith.
"I am, Sir.
"Your obedient servant.
"J. E. CHAPMAN,
"Secretary."
There is a similar circular with regard to Land Tax, where it is also the legal duty of the Chancellor of the Exchequer to collect the sum. It is as follows:—
"Inland Revenue,
"Somerset House,
"London,
"4th December, 1909.
"Sir,
"LAND TAX, 1909–10—COLLECTOR'S DUPLICATES AND WARRANTS.
" I am directed by the Board of Inland Revenue to draw your attention to the Circular of this date on the subject of the Income Tax and Inhabited House Duty Assessments, etc., and to point out that, in view of the fact that collectors of Income Tax are, with few exceptions, also collectors of Income Tax and Inhabited House Duty, and that the Land Tax is included with Income Tax and Inhabited House Duty in the same Demand Note, inconvenience might arise if the collection of Land Tax alone were proceeded with.
786
"In these circumstances, the Board direct me to surest that the collector's Duplicates and Warrants should not at present be signed or issued, and that in cases where they have already been issued, they should be recalled forthwith.
" I am, Sir.
"Your obedient servant,
"J. E. CHAPMAN,
" Secretary."
That, as I have said, is another tax which it is the legal duty of the Chancellor of the Exchequer to collect, and where Local Commissioners, with whose discretion he has no power to interfere, have felt constrained to follow his injunctions. What are the inferences from those two circulars which any business men will draw? The fact is that it is awkward and inconvenient to collect the Land Tax and the Inhabited House Duty if you do not collect the Income Tax as well—for administrative reasons it is awkward and inconvenient. In the first place, what an extraordinary side inference it affords upon the Income Tax. If the Local Commissioners will follow the Chancellor of the Exchequer's directions in this matter, with regard to the Land Tax and the House Duty, they would have followed his advice in regard to Schedule D for the collection of the Income Tax if he so wished it. But with regard to the Land Tax and the House Duty, we hear that it is awkward and difficult to collect them unless you collect the Income Tax as well. What is the inference, again, which a plain business man would have drawn? It would have been that if, on the one hand, the mess and muddle with regard to the Income Tax is bound up with the breaking of the law over the Land Tax and the Inhabited House Duty, then keep the law over the Inhabited House Duty and the Land Tax and do away with the mess and muddle over the Income Tax by amending it. The conclusion the Government have drawn is quite different. They are quite willing to jettison the law in regard to the Land Tax and the Inhabited House Duty, but the mess and muddle over the Income Tax must be continued in order to maintain the dignity of the Government.
Does not the financial rectitude of the Government, of the Financial Secretary to the Treasury, and the Chancellor of the Exchequer, seem like the rectitude of their henchman the hon. Member for Swansea (Mr. Mond)—something that is more a matter of precept than of practice and something which has been more honoured in the breach than in the observance? It resembles another case of another gentleman whose piety was in exact accord with the financial rectitude of those who are

787
responsible for the Government. There was a celebrated Dr. Campbell whose piety was called into question, and Dr. Johnson came to his rescue and said:—
"Campbell is a good man and a pious man. It is true that lie has not been inside a place of public worship for years, but he never passes one without pulling off his, hat, and that shows that he has good principles."
I will only trouble the House for a minute or two more while I inquire further whether there is any real excuse which can palliate the maladministration which has taken place. I can well imagine from any sane point of view that any sane man would be willing that the law should be strained to ensure uniformity of administration or to ensure that there should not be loss to the Exchequer or that loss should be avoided to the business community. The Government, by their action, have not been avoiding these difficulties, they have been creating them. If I may appeal for one minute to the hon. Members on the Labour Benches, I would say with regard to the matter of administration, that there are no reforms which Labour Members wish for more anxiously than those reforms involving the extension of the area of administration, and if the area of administration is extended, then it is of primary importance that the administration should be uniform and regular. Take the case of the inspection of factories. Hon. Members may wish for an increase in the number of factory inspectors, and so do I, but if they are increased, then it is absolutely necessary that there should be an equal standard of requirement in force throughout the country.
It is the same by analogy with regard to the Poor Law. If hon. Members wish for the reform of the Poor Law, as I do, even if the reform of the Poor Law, which I wish for and they wish for differ, yet the one thing essential in reform is that there should be equal administration throughout the country, and that there should not be a lack of uniformity which, as between Whitechapel and Poplar, adds much to the difficulty in London to-day. If that be the ease may we not ask them, at any rate, to avoid constituting a precedent which is so dangerous from their own point of view, and which will have the result of throwing administration into disorder for party purposes. Then, again, there is no excuse from the point of view of the loss of revenue. The Chancellor of the Exchequer has stated that the loss to the revenue will amount to some
788
£28,500,000, but he does not wish to anticipate his Budget statement by showing how that £28,500,000 will be made up. May I give the items of which it will be made up, roughly speaking:— Customs, a little over £400,000; Excise about £2,100,000; Death Duties, slightly over £1,000,000; Stamps, about £450,000; Land Tax and House Duty, about £1,950,000; Income Tax, without the Super-tax, about £22,000,000; the Super-tax, £500,000; and the Land Tax, for the sake of which all this muddle has been created, £50,000. That is, approximately, how that sum of £28,500,000 will be made up, but I calculated out the items separately without adding up the total, and the total adds up to a figure slightly over £28,500,000. Much of this will be recoverable, but not all. In addition to that loss there is the loss which is caused by temporary borrowing. Much has been said in general about the folly of paying interest on money when it is to all intents and purpose your own. The crucial question is what has occurred with regard to the Bank of England—the Government's own agents.
The Bank of England are holding a sum of over £200,000 on suspense account for Income Tax on interest on the National Debt, and at the same time the Government are borrowing from them not under Treasury Bills, but in the way of ordinary Deficiency Advances, under the Treasury Act. They have borrowed, up to a certain date in March, £1,500,000 at interest, although the Bank holds, without interest, £200,000 which is lying idle at this minute; consequently the country is asked to pay for borrowing a maximum sum of £50,000 or £60,000 a month, and this sum will probably be greater if the rates harden, as they have been doing lately. To judge from what happened on Saturday last, the loss will be £50,000 or £60,000, or more. Hon. Members opposite are most scrupulous with regard to the expenditure of money upon elections, and, perhaps, they will insert a clause in their Bill to the effect that this £50,000 or £60,000 is to be debited against the expenditure of candidates on the other side.
Lastly, there is injury to the business community. The Prime Minister spoke recently of the uncommonly handsome way in which the traders of the country had come to his assistance, but he is answering them in a very sorry way. If the traders of the country have been relying upon one thing when the Government have collected the Spirit Duty, and they have paid that duty voluntarily, it is that the position

789
should be regularised with the least possible delay, and yet, for what purpose it is not difficult to conjecture, the Government are refusing to regularise the position, and so they are beginning to create distrust with regard to other taxes than the Income Tax. But the situation in the City is over and above that grievance. Anyone in the City will say that the action of the Government in borrowing just recently, the likelihood of further borrowing, and the general uncertainty that has been caused by the action of the Government, is one of the reasons of a rise in the Bank Rate recently from 3 to 4 per cent., and it has occurred to me that perhaps that consideration may appeal peculiarly to Nationalist Members on the Irish Benches.
If there is one thing that I believe Nationalist Members desire in common with Unionist Members it is that land purchase should be pursued and shall not be hampered or clogged. If there is anything which will hamper and clog the progress of land purchase in Ireland it is that money should become dearer, so that it is more difficult for the Government to issue Shamrock Stock, and to finance Land Purchase without loss. If, therefore, hon. Members below the Gangway are going to support the Government in a policy which will raise the rate of interest, they will be still further responsible for hampering the process of land purchase in Ireland.
It is not only the rates of interest at the present moment that are important, it is also what is likely to happen in the near future. It is a matter of common knowledge that here in the spring the rates of interest are generally easier than at other times, but this year they have continued to go up. In the autumn, however, unless something peculiar happens to affect the Money Market or the Exchanges, the rates of interest regularly tend to go up, because of the demand for money, for the American grain crop and so on. But if the Government are going to come forward for the payment of additional taxes in the autumn, just at the precise time when the demand for money from other causes is most acute, then not only will the rate rise from 3 to 4 per cent., as it did last Thursday, but we may expect the bank rate to show a rise in the autumn from 4 to 5 or 6 per cent, to the probable disturbance of the whole of the trading community and of the industries and employment dependent upon them. What is the whole cause of the situation? It is simply that quite apart from the Budget the
790
Government could have got in the money by administrative action. If hon. Gentlemen laugh at that, and say that the responsibility for the Budget rests elsewhere, then the only thing that, if we wish to convert them, we can do is to direct them to the speeches of the Chancellor of the Exchequer in his more expansive moments in Wales. What does he say in Wales? That a trap has been set for another place. I quote from the "Mid-Glamorgan Herald."
The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): All I can say is that the "Mid-Glamorgan Herald" has misreported me. I am perfectly certain I never said anything of the kind. I was not referring at all to the House of Lords at the time, but to something else, and I have already stated so more than once.
Mr. STEEL-MAITLAND: I am sorry I have not seen the right hon. Gentleman's explanation. The Government, quite apart from the passing of the Budget, might easily have got in the money by ordinary administrative methods, as they got in the money of the rest of the Budget. The only reason why they did not do so is that they wanted to create the confusion for their own purposes which has resulted. The consequence is that the Income Tax has been in some measure lost—in any case lost in the present year—that the administration has been thrown into disorder, that the actual law with regard to Land Tax and House Duty has been neglected, that there has been confusion caused and possibly apprehension of further damage in the City. But, after all, there is the reward. The Government have preserved their dignity, and they are going off to enjoy their prolonged Recess—Otium cum dignitate.
The FIRST LORD of the ADMIRALTY (Mr. McKenna): The hon. Gentleman has spoken with great force, and, if his facts were only right, he would have received a great deal of support in all quarters of the House. It happens, however, very unfortunately—I do not know how he managed it—that he was wrong in every particular. He reminded us that the Inhabited House Duty and the Land Tax are permanent taxes, not in the least dependent on the Budget, and that we might have collected them, but for some unexplained reason we failed to collect them. The hon. Gentleman little knows the mischief he and his Friends did when they advised them to reject the Budget in another

791
place. If he had read that Bill, which received its Third Reading in this House, he would have seen in it a particular clause which had reference to the Inhabited House Duty. Does he know that clause? He omitted to mention it. Under the general law under which the Inhabited House Duty is raised a revaluation has to take place every year. The practice is only to take the valuation every five years. The valuation has not taken place in the last preceding year, and consequently it would not have been legal to raise the tax, but in last year's Budget—a fact which the hon. Gentleman, I understand, was thoroughly familiar with—there was a clause suspending the operation of the five years' provision, and providing that the last valuation should be taken as sufficient. Without that clause Inhabited House Duty cannot be raised, because the valuation has not been made.
Mr. STEEL-MAITLAND: The Land Tax?
Mr. GEORGE YOUNGER: Does the right hon. Gentleman suggest that that applies to Scotland, because it does not. [OPPOSITION cheers.]
Mr. McKENNA: I am perfectly willing that hon. Members should have all their cheers if they provide any food for cheering.
Mr. AUSTEN CHAMBERLAIN: Would the right hon. Gentleman say whether he means to assert that it does apply to Scotland?
Mr. McKENNA: I am making my statement. I am interrupted in the statement, and I say that if the hon. Gentleman can get any satisfaction from the interruption to justify his cheering, he is at liberty to cheer as much as he pleases. I am going on with my statement.
Mr. AUSTEN CHAMBERLAIN: The right hon. Gentleman made a perfectly general statement, which was, as to half of it, inaccurate. It was inaccurate as to Scotland.
Mr. McKENNA: The right hon. Gentlemen will see in a moment that neither the point of Scotland nor the point of the Land Tax is really material. The point is raised that this Inhabited House Duty and the Land Tax raised between them between two and three millions of money, and a very small amount of it has been collected so far. But the Land Tax is
792
only £600,000 out of it. It would not be worth while to go through the whole machinery of collecting the Land Tax, which is only postponed for a little while, and to set the whole of the same machinery up again in order to collect the Inhabited House Duty separately. As the large tax which covers the great bulk of the amount to be raised cannot be legally raised, the two are being held up, and will be raised together as soon as we are able to legalise our taxes. At the beginning of the Session the Government proposed to take the time of the House, with the assent of hon. Gentlemen opposite, for the purpose of getting the Supply which was absolutely necessary to be taken before the close of the financial year. Did the right hon. Gentleman (Mr. Austen Chamberlain) stipulate that the Budget should be included amongst the subjects which the Government were to take? Not at all.
Mr. AUSTEN CHAMBERLAIN: I did press that the Budget should be taken at the earliest possible moment before any other contentious business.
Mr. McKENNA: We have not yet reached 24th March, and the whole of the pressure that has been brought to bear upon us is that we should take the Budget before we got through our Supply. Did the right hon. Gentleman and his Friends, when they assented to give us the time of the House, including all private Members' time, for the purpose of taking Supply, ever suggest that the Budget should be included?
Mr. AUSTEN CHAMBERLAIN: I pressed from the very first that the Income Tax should be taken. When the Prime Minister challenged me across the floor as to whether I was willing to take the Budget, I said officially, on behalf of the Opposition, that that was a better offer than what I was asking for, and we would gladly take the Budget at once.
Mr. McKENNA: All I can say is that we have now the whole time of the House, including all private Members' time up to the Ecclesiastical Easter, and we have that with the assent of the Opposition for the sole purpose of getting Supply.
Mr. AUSTEN CHAMBERLAINmade an observation which did not reach the Gallery.
Mr. McKENNA: I do not think the right hon. Gentleman is justified in saying that.

793
That was an arrangement. We have the private Members' time up till Easter for the purpose of Supply, and the right hon. Gentleman and his friends did not divide against it.
Mr. AUSTEN CHAMBERLAIN: Certainly. My Friends stated that they would not divide against the Prime Minister's Motion to take the time of the House for necessary business. I offered on behalf of the party to include the Budget in that necessary business.
Mr. McKENNA: What date was that?
Mr. AUSTEN CHAMBERLAIN: I cannot give the date.
Mr. McKENNA: That is the whole point.
Mr. AUSTEN CHAMBERLAIN: I understand the right hon. Gentleman to be raising this defence, that it would have been a breach of an agreement with us.
Mr. McKENNA: No.
Mr. AUSTEN CHAMBERLAIN: Then I do not understand him.
Mr. SPEAKER: I think the Debate had better be conducted in the usual way.
Mr. McKENNA: I am not suggesting for a, moment any breach of agreement. I am suggesting, and I reaffirm, that all these complaints against not taking the Budget have been raised by hon. Gentlemen opposite since the date when they agreed to give the Government the whole time of the House for the special purpose of getting through Supply, and that no stipulation was made at the time, nor was any protest raised that the Government were not immediately taking the Budget. The reason why the Budget was not immediately taken was because the Government were bound to pass Supply before the close of the financial year. If they had failed to pass Supply there would have been a breakdown of the administrative services on 1st April, and the Government had no option except to devote the whole of their time before Easter to passing the necessary financial business. My right hon. Friend (Mr. Lloyd-George) points out that Scotland is included in the clause in the Finance Bill.
Mr. GEORGE YOUNGER: There is no five-year valuation in Scotland.
Mr. McKENNA: In the first part of his speech the hon. Member (Mr. Steel-Mait-
794
land) complained that the Government had not done all that they could in order to induce people to pay the Income Tax voluntarily. He said that if the Government applied to the Local Commissioners to press upon them the need for getting the Income Tax in the people would have paid the Income Tax voluntarily, just as they paid the Tea Tax and the Spirit Tax. The second half of the hon. Member's speech was made up of complaints against the Government because they have done what they are not entitled to do in deducting Income Tax from the salaries of soldiers and public servants. He does not explain under what possible motive the Government could have been acting in adopting these two contradictory policies, but he can only assume that the Government was probably wrong in both.
Mr. STEEL-MAITLAND: No. I think that in deducting Income Tax as they did under Schedule D they were doing a perfectly businesslike proceeding, and the only marvellous matter was that they did not take the same course with regard to the Local Commissioners.
Mr. McKENNA: As the hon. Member forgot the clause of the Finance Bill so he has forgotten a very important fact in relation to the Local Commissioners. The Local Commissioners cannot enforce their demand otherwise than by distraint. Does he suggest that they should send out demand notes for Income Tax upon the face of which there is the claim that distress will be levied—illegal distress which they could not enforce? The Local Commissioners, in spite of what the hon. Gentleman says, are in no sense the servants of the Treasury. In fact; the resistance to any such claim by the Treasury is as old as the Income Tax Acts themselves. It is quite true that, like what is done in all good business arrangements, the Board of Inland Revenue do their best to work in harmony with the general public, and if the Board were to assume any title to give these Commissioners orders, I venture to say that there would be an immediate resistance to them. The Board have no power to enforce the tax. So far as the Board of Inland Revenue are concerned, everything they have in their power in order to collect the money due under the Income Tax Acts has been done. The hon. Gentleman says, regarding deductions under Schedule E, that they have done all that is in their power. Now, he says, if they had pursued the same policy with

795
regard to Income Tax as they have pursued with regard to Customs, such as the Tea Tax and Tobacco Tax, they would have been able to get in a large part, or the bulk, of the £20,000,000 now outstanding. The hon. Gentleman, if he were not wishing to make a case against the Government, would be far too acute to be deceived by any such argument. The Tea Tax and the Income Tax are on an entirely different footing. With regard to the Tea Tax it is to the benefit of the tea trade to pay the tax in the first instance, and that they should go on paying the tax. What would be their position if they did not? If the tea trade were only to pay on the smaller tax and sell tea to their customers with only the smaller tax paid—
Mr. BONAR LAW: You mean the Tobacco Duty.
Mr. McKENNA: Yes, the Tobacco Duty. Substitute tobacco for tea. Supposing the great tobacco traders, when they take tobacco out of bond, were to pay duty only on, the smaller rates and then, sell the tobacco with only that amount of duty paid, they would themselves be liable hereafter, if the Budget passes, for the difference in the duty. The traders would have no means themselves of recovering, because the tobacco would have been disposed of. It would have passed into the hands of the consumers who bought the tobacco at so much per ounce, and it would be absolutely impossible to recover a ½d. or a ¼d. per ounce afterwards. It is therefore better for the wholesale traders themselves to pay the duty in the first instance. It would have this remarkable advantage, that should the duty hereafter not be imposed by Parliament they will have received the full price plus the higher duty from those who bought from them, and they would be entitled to come to the Government to recover the higher duty which they themselves have paid. Therefore that would be something for nothing. If the duty is imposed they do not lose anything, and if it is not imposed they get back the duty which they paid to the Customs authorities. It is the same with regard to tea. The Income Tax is quite different. That is the difference between a direct and an indirect tax. If a man declines to pay Income Tax and prefers to leave the money with his own banker he gets something for nothing. When the tax is imposed he withdraws the money from the bank and pays it into the Ex-
796
chequer. If the Income Tax is not imposed, then he is so much better off, and he keeps the money he has lodged at his bank, so that we have two entirely different sets of motives at work. The trader who pays the Tobacco Tax wants to pay it, and the other man who is charged with Income Tax does not want to pay it. Therefore the arguments with respect to the indirect tax do not in the least apply to the direct tax. The hon. Gentleman ought to have been aware from the consideration of his own case that the Board of Inland Revenue are likely to have done everything in their power to get in all the Income Tax they could. There could be no conceivable motive—[OPPOSITION laughter.]Hon. Gentlemen laugh, but there could be no conceivable motive, either in the mind of the Board of Inland Revenue or in the mind of the Government, for not taking as much taxation as possible in the course of the present financial year. The hon. Gentleman illustrated his argument by mentioning cases in which the Board of Inland Revenue had in fact deducted Income Tax. Why did they do that? Upon what conceivable motive except that of getting as much as they could? In every case in which the Board of Inland Revenue have authorised deduction of Income Tax they have done it where they themselves are masters of the situation. Take the case of the salaries of Ministers. Income Tax has been deducted in the case of these salaries at the source by the Treasury, and the only way in which we could recover would be by ourselves proceeding to an action of law, which would be a very doubtful course to take. The hon. Gentleman will find that in every case the Board of Inland Revenue have exercised their full powers, and have gone possibly beyond the limits of the law where they could, in order to get revenue, and they have only refrained from exercising these powers where in their judgment they would be likely to be losers rather than gainers if they attempted the task. The hon. Gentleman is not quite 60 much in the counsels of the Board of Inland Revenue as I am myself, or some of my hon. Friends, and I can assure him he is entirely mistaken when he supposes that they have any other motive than to get in as much revenue as they can without danger. When he presses for procedure under the Income Tax Acts, which would be a violation of the law, which could not be enforced, and which, in our judgment, if they were to follow it, would mean that

797
they would find themselves immediately brought to book by an action of law, I can assure him that the Inland Revenue are perfectly well advised in not taking any such step. But I beg the House to believe that the Government will take every step in their power in order to collect these taxes at the earliest possible moment. The notion that some barren Resolution of this House imposing Income Tax would of itself legalise the tax has not the slightest foundation in law or in fact. Resolutions to legalise taxes would only be Resolutions intended as the foundation of an Act of Parliament. It has been stated again and again in this House that the only Finance Bill which this Government will introduce to this House and attempt to carry through Parliament is the Finance Bill of last year. It is idle, whether the hon. Gentleman agrees or disagrees, to press the Government again and again to pass a mere Income Tax Resolution. The Government would not propose a Resolution except as the foundation of the Finance Bill for the whole year. And it is equally idle to imagine that we should be able to get through the necessary financial business before 31st March if we were to introduce one Resolution, or rather a number of Resolutions, as the foundation of the Finance Bill of last year. Therefore it is a mere attempt to throw dust in the eyes of the public to suggest that by some simple procedure we could legalise the tax without further delay. It cannot be done.[An Hoy. MEMBER: "Why?"] Because if we attempted to introduce the Finance Bill at the present moment we should find ourselves delayed at every point in the other necessary financial business we have to pass before 31st March. Why make any concealment about it? Why hide your heads in the sand? There is not a single hon. Gentleman on the Opposition side of the House who really himself believes that if we introduced the Budget at this moment we would be able to get through our Supply. If we cannot get the Budget through an Income Tax Resolution would have no validity. A Resolution is only passed on the faith that it will be the foundation of an Act of Parliament, but it has not the smallest validity by itself. I hope my hon. Friends will concur with the Government that it is necessary to pass in the first instance all the Supply business in order to secure that the business of the country can be carried on after 1st April. [An HON. MEMBER: "For how long?"] For six weeks-
798
full time enough to settle all outstanding business, including the business of the Budget. The hon. Gentleman asks, "For how long?"Is he willing to grant longer Supplies than for six weeks, or is he willing to grant a Vote of Credit lasting for the whole Session till the month of August? We have asked sufficient Supply to enable us to carry on the necessary business of the Government up to the holidays, and I ask the House to endorse that course.
Mr. BONAR LAW: The right hon. Gentleman commenced his reply to what I thought the exceedingly able speech of my hon. Friend (Mr. Steel-Maitland) by saying at once that every one of his statements were wrong. That is the kind of statement which could be made by everybody, but we do not expect it to be made by a Cabinet Minister without some little attempt to prove it. My hon. Friend made a great number of very important statements, and I will not accept as statements of fact what has been said by the right hon. Gentleman any more than he accepted my hon. Friend's statements. He has established the fact, if he has done anything at all, that my hon. Friend was wrong in saying that Inhabited House Duty could be collected as an old tax, and that it was the legal duty of the-Government to collect it, but even on that point he has to admit that the argument of my hon. Friend is true as regards the Land Tax. It is not a question as to whether the amount is small or large. My hon. Friend's whole argument is that the Government chose to break the law in one case, and refused to stretch the law when it was in the interest of the Treasury to do so. The right hon. Gentleman used another extraordinary argument in support of his assertion that my hon. Friend was wrong in another particular. My hon. Friend's whole argument was that by administrative action we could have got in a very large part of the Income Tax without any action by this House at all. My hon. Friend gave arguments which seemed to me to be absolutely conclusive in proof of that. What argument does the right hon. Gentleman give in reply? He says there is no comparison between the man who-pays income tax and the man who deals in tea or tobacco.
5.0 P.M.
It is the interest of the person dealing in tea or tobacco to pay the duty, because, after he has sold it, he can never get the money back if the duty is increased—or

799
some argument of that kind. I would point out to the right hon. Gentleman that if he were engaged in that trade there is no man in this world who would have discovered more quickly that there was another course open to the dealer in tea or tobacco, and that was to take out the tea or tobacco without paying the duty and charge the customer the full duty; and the whole argument, therefore, not only falls to the ground but is absurd. If you are looking to the selfish interest of the traders merely it is their interest not to pay the duty except on the broad ground, the ground on which they do pay it, that they rely on the Government of the day, whatever Government that is, to do its best to keep the finances of the country in proper order.
I must say I felt that my hon. Friend expended a great deal of ingenuity in trying to find out a principle—not a principle which they could have justified, because we do not expect that—but any intelligible principle on which the financial policy of the Government has been carried on during this Parliament. I think it is a vain effort. If a thing does not exist you cannot find it. The Government have no principle, and no amount of ingenuity therefore can enable them to find it. It would be very unreasonable—to take an analogy which has just occurred to me— to ask a fox to give a reasoned explanation of the twistings and turnings to which it has recourse when its strength is exhausted, and it feels that the hounds are close upon it. In such a case the fox acts upon a blind impulse, and so do His Majesty's Government. All the manœuvring, all the finessing, all the clever shifting, is simply part of an effort, and a futile effort, to dodge or perhaps postpone the inevitable catastrophe which is fast following upon them. I would like to deal not so much with the detailed points which the right hon. Gentleman has brought forward as with the wider issues of these financial questions which so often have been put before the present House of Commons for days on this side of the House. It is only four weeks to-day since this Parliament first met. On that occasion the Prime Minister made a speech, to which I at least listened with the greatest respect. I thought it was the speech of a statesman, but what has happened since has proved, though proof is scarcely necessary, how much easier it is to speak like a statesman than to act like one. A more extraordi-
800
nary four weeks in regard to the finances of the Government than we have been experiencing it is difficult to imagine. I am going to take two aspects of the financial question. Both have been referred to today. The first, and by far of less importance, is the giving of Supply for a much shorter time than usual. Gentlemen on that bench have several times tried to explain their motives in taking that course. The right hon. Gentleman tried it just now. But I am sure they have not made it clear to any human being, and I doubt very much if it is clear to themselves, what is the idea underlying it.
A sort of glimmering of sense in it occurred to me when I read the Prime Minister's speech at Oxford on Friday. He made a speech there in which he pointed out for the benefit of the hon. Member for Waterford (Mr. John Redmond), whom I am glad to see present, that the Budget is no weapon against anybody, and that the real weapon is withholding Supplies. Perhaps he had an idea that the hon. Member, who is an old Parliamentary hand, might be induced to give them the Budget, which they so much wish, and to trust to this curtailing of the Votes in Supply for the weapon which they are going to use later on in this fight in which they have engaged. The Budget, I admit, is no weapon; but what is the use of Supply as a weapon, especially in the struggle against the House of Lords? Supply never has been, and never can be, used, and cannot be contemplated as being used by any sane person as a weapon against anybody except the Government of the day, except against the Executive. Then it is obvious that if the present Government is to be in power when the time comes, the limiting of Supply is simply silly. There is no object in it. But perhaps that is not the idea. They think it possible—this is where the extreme cleverness comes in—that my right hon. Friend the Leader of the Opposition may be called upon to form a Government, and they then threaten him with short Supplies. Notice how cleverly they have done. They have given adequate supplies for Army and Navy, and it does seem difficult to imagine that they or anybody else could direct the Government of the day to say in the face of a coming election, "We refuse to grant you Supplies to pay old age pensions, and the expenses of the Civil Service." That is the skill with which this has been arranged.
I happened to be in Scotland when this great manœuvre was carried out, and I read the account next day in a Scotch

801
paper, and the writer of a London letter in that paper gave what seemed to me the best account I have yet seen of it. He said that when the Chancellor of the Exchequer first showed his hand, his Friends behind him were delighted. It was another splendid proof of the cleverness of the Chancellor of the Exchequer, but later on, when they understood a little, they began to ask each other—is it really clever or is it only stupid? Well, I think it is both. There is a kind of cleverness which is known in colloquial language as too clever by half, and which in actual practice is the highest form of stupidity. I can assure the right hon. Gentleman that that cleverness which is suitable to an artful dodger engaged in picking pockets is the kind of thing that does not pay in public. It can be met at once without any cleverness on either side, by honesty and straightforwardness. I now come to what is by far the most important part of this financial question, and that is the deficit which has been caused in relation to the income. The Prime Minister, in that speech to which I have already referred, stated, as anyone in his position might be expected to state, that it was his duty to carry on the King's Government, and as a part and a very necessary part of carrying on the King's Government we must take into account the very necessary financial business. We now know what that means from their point of view. Necessary financial business means the arrangements necessary to be made for the spending of money, but it does not include an arrangement for the prevention of the absolute throwing away of public money, of which they have the administration. Everyone in this House is familiar with the facts. Here is a Government which has been passing through this House Bills to borrow money, money which is already their own, which they do not need to borrow, and which they could get without borrowing at a moment's notice if they chose to ask for it.
Mr. McKENNA: That is not true.
Mr. BONAR LAW: I will make my statement good in a moment in a better way than the right hon. Gentleman made his. I say they could get the money without borrowing at all. I ask the House to consider what is the effect of what the Government are doing upon the interests of this country. They have injured in this way our national finance in at least three distinct ways. In the first place, as pointed out by my hon. Friend, and this is
802
by far the least important, they are paying large sums of money every week in interest on money which they could get without paying interest. The next is more important. For every week's delay in collecting the Income Tax they are permanently losing a part of that Income Tax. That was admitted by the Prime Minister, so that it cannot be denied. But by far the most important injury which they are doing to the country is in regard to our national credit. At this moment our national security stands at almost the lowest point at which it has stood in our time, and it happens that that same period was the time of the doing away with the Sinking Fund, and we had therefore no longer the power of using that Sinking Fund to steady this security by buying at any time if there was need. Under those circumstances I am perfectly sure that there is no business man in this country, no man who has given any thought to the finances of this country who would not say that the most important thing for us is to avoid as far as we can any new borrowing. But instead of that the Government are going out of their way to borrow when they could get the money without borrowing it at all. On what grounds do they justify the course which they have adopted? They pretend, and it is only a pretence, that they could not collect this Income Tax except by breaking the precedent which was established, I think, in 1894 of having all the financial business of the year in one Bill.
Mr. LLOYD-GEORGE: 1861.
Mr. BONAR LAW: The right hon. Gentleman if he looks it up will find that he is wrong. That sometimes happens. They say they are going to break this very good precedent. If that were true I should say I could understand from their point of view, though I think it would be difficult to justify it on any ground, the waste of public money. Suppose that were the only alternative, that they should introduce a special Bill for the Income Tax, would they not be bound to do it? I think they would. Why do they not? It as, they tell us, because of this great constitutional struggle in which they are engaged with another place. Just think what that means. They are engaged in promoting a revolution. Everyone in this House and out of it knows that that revolution can only be carried out, not by a scratch majority, but by a real majority of the people of this country. Are they

803
so timid, have they so little faith in their own cause as to believe that creating a precedent, even a bad precedent, which is justified by the condition of affairs at the present moment, is going to have a feather's weight in deciding the question? Even in that case they would be bound to do it. But the right hon. Gentleman has repeated what was said before that a Resolution as ordinarily introduced has no legal binding effect. I suppose he is a lawyer; at least, he is a kind of a lawyer. I do not mean that offensively. He is something greater than a lawyer in his office. But the Gentleman who represented the legal opinion of the Government, Sir Samuel Evans, distinctly stated, in contradiction to what the right hon. Gentleman has just said, that that is not the law that, as he understood it, the question had not been decided; that he did not know whether it was or was not the law; but that, at all events, all experience shows that until now the passing of a Resolution by itself has been sufficient to collect the tax.
Mr. McKENNA: That the Resolution in itself is not sufficient unless it is intended as the foundation of an Act of Parliament.
Mr. BONAR LAW: The right hon. Gentleman assumes that Members of the House of Commons are extraordinarily ignorant. Of course it is implied, when the Resolution is introduced, that it is the intention of the Government to found a Finance Bill upon it. Does the right hon. Gentleman say that he does not mean to introduce the Finance Bill? All that is required either by law or precedent is that, when the time comes, the Finance Bill should embody the Resolution and nothing more. Everybody knows that at any time during the last four weeks the Government could have passed a Resolution the effect of which in practice would have been to at once bring into the Treasury all the money which is held by banks and by other institutions ready to be paid. More than that, we think that if the Government had sent out demands the result would have been that before the end of this month a very large part of the arrears would have been paid. I am bound to say I cannot conceive, even from their own point of view, what their object is in not pursuing that course. I would like to read an extract from an article by Mr. E. C. Cooke, which appeared in the "Contemporary Review." Mr. Cooke is a supporter of the Government, and a frequent writer in the periodical
804
press. Writing on this very point, Mr. Cooke says:—
"The Income Tax is greatly in arrear. Some eager politicians here and there say 'What matters the confusion; it is the fault of the House of Lords.' So it is—"
Says this gentleman, but he is a partisan, like many Members opposite:—
"But the common-sense of the country might transfer the fault to the House of Commons if, having the power to end the confusion, it abstained from doing it."
I think the country will have that amount of common-sense. I am perfectly at a loss to understand the course of the Government even from their own point of view. They are very good electioneerers, but not so good as they think. If that be good electioneering then I am a very bad judge of what is good. But there is an explanation which, I think, is possible of the action of the Government. The hon. and learned Gentleman the Member for Waterford (Mr. John Redmond) has said the same thing in this House, and he said it in a rather brutal way—I do not use that word in an offensive sense—as he said the other day at Newcastle. He said—I am quoting, I think, almost the exact words:—
"It will he the maddest course to do anything to mitigate the acuteness of the present financial crisis. The country has got to be worse before it is better. We must use revolutionary tactics."
That is really the principle which actuates his Majesty's Government. I think there are some Members of the Government, at least, who would not readily adopt that method, even in the present crisis, but needs must when somebody drives. I do not think they will readily adopt that method, but I must say that though they will not avow it, that though they are ashamed to avow it, that is the principle on which they are acting. They are ashamed to avow it, but they are by no means ashamed to act upon it. Another remark I should like to make in connection with the attitude of the hon. Member for Waterford. In one of his speeches in this House he said that he was quite willing to support the Budget, but he must be paid for it. Of course we all understand the sense in which he used those words. I am bound to say if he chose to support the Budget now he would be paid in full, in the extent of the humiliation he has inflicted upon the Benches opposite—a humiliation which must be all the more galling because of the ostentatious way in which it has been imposed.
Mr. GIBSON BOWLES: I certainly feel with the right hon. Gentleman who has

805
just spoken that it is an important and imperative and instant duty to wipe up the mess in which the financial arrangements of the last year have been left through the action of the House of Lords, but I think the argument used on the Treasury Bench is a perfectly fair one and a perfectly sound one, that it is absolutely necessary in the few remaining days between this and 31st March that the Government should have money to meet their engagements on 1st April. That cannot be denied, that is the task on which we are now engaged, and which we shall scarcely be able to finish by the time 31st March arrives. The right hon. Gentleman remarked that it is easier to speak like a statesman than to act like one. When he said that I believed him at the beginning of his speech, but at the end of it I began to doubt it, because I do not think his speech was the speech of a statesman. If it was so easy to speak like a statesman, I think he would have done it. In the course of a speech I always look for its true inwardness in the metaphors with which it is adorned. He said that the Government is like a beaten fox, ready to die, and doing the best it can. That is the figure before the mind of the right hon. Gentleman—the beaten fox on this side, the hounds on that side. But if the fox is beaten, why do you not run into him and chop him up? Is there any reason at all for whipping off these hounds? Is there any reason at all for delaying the final catastrophe? I am really surprised at seeing the right hon. Gentleman and his colleagues taking up an attitude of financial purity. Why, they were the most abandoned financial rakes that ever sat upon the Treasury Bench. Let me recall what they did, because apparently they have forgotten. When the late Government was formed, the right hon. Gentleman the Member for the City of London (Mr. Balfour)—whose absence we regret, though I am glad to hear ho is in excellent health—said never had so able a set of Ministers taken office. Here are their financial exploits during the ten years they held office. Having found the expenditure at £110,000,000, they left it at £166,000,000, an increase of the annual expenditure by £56,000,000, or 52 per cent. Having found a funded and unfunded Debt of £659,000,000, they left it at £789,000,000, an increase of the Debt by £130,000,000, or 20 per cent. It is scarcely becoming on the part of hon. and right hon. Gentlemen opposite to affect such great financial purity. Let them
806
affect purity, if they will, in other directions. I have myself always been deeply interested in national finance, and I can scarcely picture to myself the three right hon. Gentlemen opposite sitting there like three plaster busts of the cardinal virtues. Of course, there are seven cardinal virtues, but four of them are absent—Faith, Hope and Charity, I suppose, amongst them.
Let me remind the House that this Consolidated Fund Bill is not in itself a granting Bill; it is only a Bill which enables the Government to spend the money already granted. When it was a question of granting Supply, hon. Members opposite were tumbling over each other to increase the grants. The Army, the Navy especially, they said, were ill-provided for, and the Noble Lord the Member for Portsmouth (Lord Charles Beresford) read a list as long as a yard-arm of people who wanted their pay or salaries raised, and which he said ought to be raised. I believe it included almost every man in the Navy except admirals, who, I suppose, were already properly remunerated. Hon. and right hon. Gentlemen opposite oppose this Bill, though they have granted the money, and the only question now is whether the Government are to be allowed to spend the money that has been granted. The whole Votes on Account for the Navy, for the Army, and for the Civil Service represent about £24,000,000 or £25,000,000, and can it now be suggested that, after having urged that these grants should be increased, the Government ought not be allowed to issue the money? That is all this Bill does. This is not a granting Bill—it is a Bill to enable the Government to issue and to apply the money granted. Therefore the criticism, if any, is rather belated. You should have thought of these things when you were granting the money. I have for many years endeavoured to get the House to think of that. When the money is granted it is useless for these same purists, like the right hon. Gentleman, say that it is monstrous that the Government should spend all this money. The right hon. Gentleman, however, complains that the Government are not collecting the money that they might collect, and he says that it is a perfectly legal thing to collect the taxes by mere virtue of the Resolution passed by this House. Let me tell him that he is entirely at variance with an authority on Parliamentary procedure who is at least his equal—Sir Erskine May.
Mr. BONAR LAW: I stated exactly what the position was, that the Law Officer of the Crown, himself admitted that it was at least doubtful if it was a sufficiently legal method of collecting.
Mr. GIBSON BOWLES: I submit that Sir Erskine May is a greater authority on Parliamentary procedure than even a Law Officer of the Crown. There is no higher authority than Sir Erskine May on the legal validity of proceedings in this House. In the 1879 edition of his book, before it was revised by scholiasts, he says that to levy taxes by sole virtue of a Resolution of this House is obviously not legal, and that there is no legal authority for acts done by sole virtue thereof.
Of coarse it is illegal, but when you have passed the Resolution, and it is certain that the Finance Bill will be founded upon it within a month or two, the taxpayer cannot refuse to pay, because, if he did, before his case was settled, the tax would be based on the authority of an Act. It is a very different thing when, in consequence of the action of another House, your Finance Bill, founded on your Resolution, instead of passing, lags, and is finally rejected. It never can be pretended or supposed that a Resolution of this House would retain its vitality, not for one month or two, but for eleven or twelve, and it never could be supposed that it would retain its validity after the Bill founded on it had been rejected. It is a fact that is clear that the levy of taxes by the mere virtue of a Resolution of this House is illegal; and that the full and only authority which can authorise the levy of taxes upon the subject in this country is an Act of Parliament.
I think it must be admitted that there has been some irresolution on the part of the authorities of Inland Revenue in the collection of the Income Tax. They first of all thought, with the right hon. Gentleman, that the levy of Income Tax by mere virtue of a Resolution was lawful; then they took better advice, and came to the conclusion it was not lawful, but that it might be lawful to receive the tax. I think they have now recovered from that position. It must be remembered that the situation that has been created with regard to the Finance Bill of last year is entirely and wholly unprecedented. It is one which could not fail to lead up to irresolution, and finally some inaction on the part of the authorities of Inland Revenue and other authorities too. I confess that it seems to me that the Govern-
808
ment have been put to making a choice between various difficulties. Whether they have chosen the smallest of the difficulties, and taken the easiest means of getting out of their trouble, I will not pretend to say, but the difficutly is there. Do right hon. Gentlemen opposite mean to prevent the Government from carrying on as far as they can the financial business of this country? That, and that alone, would result from successful opposition to this particular Bill. That, and that alone, must be the effect of their speeches, when it is complained that the money that the Government have asked for is not sufficient. Why so much charity for the Government. Hon. and right hon. Gentlemen opposite begin to bewail the fate of the Government. They say they will not have enough money to spend; the poor Government say they will be starved, and will perish of inanition, and so they proceed to feed them with supplies by a stomach-pump as if they were Suffragettes.
I do think the financial situation in this country is very grave and very serious. I have not seen any candid offer on the part of hon. and right hon. Gentlemen opposite to co-operate in bringing that situation to an end. I wish I had. I have heard many taunts, many reproaches, addressed to the Government, but I have not seen, what I should have expected to see, a candid and open offer of co-operation in carrying through measures that are required, first of all to supply the funds which will be required from 1st April next, and secondly to aid in recovering and levying the taxes which are partly levied and partly un-levied. If I had seen any such desire on the part of hon. and right hon. Gentlemen I should join with them in appealing to the Government not merely to provide themselves, as they have done, with this Bill and Votes of Supply, but also to do something and to take certain measures, if heroic measures, to invest them with lawful authority for the collection of taxes which have already been paid, and to complete it for those which have not already been paid. I am sorry instead of that spirit on the opposite side to see a spirit of cavilling of objections, and a great many of them not well founded as to the law, and, I think, on an entire misunderstanding of what the law is.
Sir FORTESCUE FLANNERY: The excess of zeal which always characterises the action of the hon. Member who has just spoken has given away the whole case

809
of the party which now is so fortunate as to possess his support. He stated at the commencement of his speech that the financial mess and muddle is the fault of the House of Lords. That statement being cheered by hon. Gentlemen opposite, is evidently the case they desire to make in this House, as they have already attempted to make it in the country, that it is part of the strategic whole to create inextricable confusion in the finances of the country in order that they may afterwards blame the House of Lords, and say that the whole fault rests with that body. In the course of the Debate on 4th March on the Temporary Borrowing Bill the Chancellor of the Exchequer made this statement:—
"There is nothing to prevent our receiving cheques for Income Tax from Income Taxpayers in any part of the country."
What are the facts? The House of Lords referred the Budget to the judgment of the country on 3rd December, and on 4th December certain action was taken by the authorities of Somerset House. My principal object in rising is to justify the allegations of my hon. Friend the Member for Birmingham. He indicated that the Income Tax might not only be collected, as the Chancellor said, with the consent of the Income Tax payers, but he indicated that there has been round the country very great diffidence in the manner in which voluntary taxpayers have been received by the Government. I wanted to justify what I have sought to obtain by question of the Chancellor of the Exchequer, and which I failed to obtain, and that is a statement of the facts as to what happened in the county which I have the honour to represent. In the town of Maldon, in the county of Essex, a case in point has arisen. On 4th December, the day following the reference to the country of the Budget by the House of Lords, the authorities at Somerset House sent instructions to the Clerk of the Income Tax Commissioners at Maldon to prepare the necessary documents for the collection of Income Tax, but not to issue them, and they said if any had been issued they were to be withdrawn. About 8th December the surveyor of taxes for the district, an official who is directly under the authority of the Treasury through Somerset House, wrote to all the collectors to surrender and deposit all the publications, all the forms of receipt, and all the books that were in their custody. The Chancellor of the Exchequer has sought to ride off from responsibility in regard to this burking of payment of
810
Income Tax. He said that his Department had no control over the Local Commissioners, but it is not denied that he has absolute control over the surveyors of taxes.
The surveyors of taxes are like ambassadors of a foreign state; they are the direct representatives of the Treasury in regard to these Local Commissioners of Income Tax, and it was from the surveyors that instructions were issued to the collectors to surrender their books, and so to paralyse them as possible receivers of Income Tax. Those books were surrendered the next day or within a week of the rejection of the Budget, the reference of the Budget by the House of Lords, to the direct agents of the Chancellor of the Exchequer, and remained until a week ago in the custody of those to whom they were surrendered. That is to say, that for three and a half months those books which were, necessary for the receivers of Income Tax, not merely to give receipts, but even to ascertain the amounts which were due from voluntary payers of the tax, were kept out of the custody of the collectors, so that they could not even tell the amount receivable from any voluntary payer of Income Tax. That has been changed. The books have been returned within the week, but when the Chancellor of the Exchequer seeks to make the excuse that he, has no control over the means that have been adopted of burking the collection of Income Tax, then I say this is a case in point whereby, under the direct instructions of officials who are his own officials, the payment of the Income Tax has been rendered impossible.Ex uno disce omnes.I believe what has happened in one county has happened in more than one. It is all part and parcel of the strategic position of making the finances of the country in a greater muddle than they could possibly be otherwise, and of so piling up a case of artificial accusation against the House of Lords. That is the policy of the Government. That is the policy which they have adopted, and which I feel and I believe the country will never accept as other than an organised system and an attempt to throw dust in the eyes of the country, and an attempt to create an electioneering device which cannot possibly succeed.
Mr. LANE-FOX: I think the attitude which the Government are taking up on this question is one which gives the impression that they must think a very large number of the people of this country are extremely stupid. I think the large bulk

811
of the technical arguments such as those as to the collection of the Income Tax will not convince the great majority of those who will consider this question when it comes to be decided, as it shortly will. The hon. Member for King's Lynn made great point of the technical illegality of the collection of Income Tax under Resolution. Is there any man in the country who really believes but that though there might be some technical illegality, still that might have been avoided, because the people of the country know perfectly well that a Resolution of that kind passed in this House would constitute a guarantee of good faith of the Government of the country, and that it would be recognised and allowed as a perfectly legal method of collecting the tax, which would be legalised and sanctioned in the proper way. The First Lord of the Admiralty made the point that you could not pass a Resolution of that sort, because it would have to depend upon the Finance Bill. Everybody knows that; but look at what the right hon. Gentleman's argument leads us into. He says it is impossible to pass this Resolution by itself. He based that on the argument we have heard of before, that the dignity of the Government would not allow that. We know that the position of the Government is that they do not want particular sections of the Finance Bill to pass. The whole difficulty of the Government is that the Finance Bill cannot be passed in this House, and that is the reason why the Government feel they cannot get their Supplies. They know that to pass a Resolution of the sort would involve bringing in the Finance Bill, which they cannot pass in this House. That is the real reason for the delay and why the Finance Bill has not been brought in.
Another argument which seemed to me extraordinarily thin was that there had been an agreement with the Opposition that only necessary Supplies should be granted, and that that precluded the Finance Bill being brought in again. Everybody knows that much stronger influences than that prevented the Government from bringing their Bill. It is not the technical question of an agreement with the Opposition, but the position taken up by hon. Members from Ireland. If the Government had wished to press the Finance Bill through the House by means of all-night sittings or other methods of Parliamentary procedure they could have done what they required. But they have
812
deliberately refused to take that course, and it is impossible for them to throw dust in the eyes of the country by giving such thin reasons for the financial chaos which they have brought about. Everybody knows that the main reason why the Government have not brought in their Finance Bill is that it would not command the support of a majority in this House. In a short time we shall be going before the country again, and the argument is already being used by unscrupulous supporters of the party opposite that those who are liable to Income Tax and who are supposed to represent the richer classes are making difficulties in regard to payment, while the working man—good, honest fellow—does not mind paying the tax on his tobacco and spirits. That is not a very fair argument, and I hope it will not be used by many supporters of the Government. In all fairness, it should be recognised that the great bulk of Income Tax payers are perfectly willing to pay the tax, but that obstacles are put in their way which make such payment absolutely impossible, and which even prevent, a legal receipt being given if the tax is tendered. The Government could have removed these difficulties if they had chosen to do so. The electors of the country, when they consider the position which has been created, will lay the blame upon the Government, and the attempt of Ministers to hide their misdeeds under a constitutional crisis will fail.
Mr. H. S. FOSTER: I desire to add my respectful protest to those, of my hon. Friend at the neglect of the Government of the real interests of the taxpayers. His Majesty's Ministers seem incapable of rising above considerations of party expediency. The Prime Minister at Oxford on Friday spoke of the present condition as "unexampled financial confusion." He apparently has lent himself and his Government to the deliberate organisation of confusion, with the one object of laying it at the door of the House of Lords. He referred to the necessity of organising in advance of an election, and apparently an election being now in view, a part of the method of organising is to be to disorganise the finances of the country. On such a vital matter as the revision of our ancient Constitution the Prime Minister can find no higher conception of duty than that which is tactical and strategical. Any steps to be taken, the Prime Minister said, were not to be disclosed in advance either to his political opponents or to the

813
country, and Income Tax was not to be collected in order to suit the convenience and wishes of friends of the House of Lords in this House. The Government do not seem to think very much of the wishes or the convenience of the taxpayers. If anything which is proposed gives satisfaction to this side of the House, however advantageous to the country it may be, on party grounds it is to be resisted. In regard to solemn pledges we have now a new reading. In future, if it is found inconvenient to the tactics or the strategy of the party to observe solemn undertakings, they are to be described as merely statements of intention. Nothing could have been more solemn or more formal than the statement of the Prime Minister on the eve of the Prorogation of the last Parliament:—
"His Majesty has been graciously pleased to accept that advice [that is of dissolution], and the result I trust will be that a new House of Commons will assemble at such a time as to make it possible for it to provide both retrospectively and prospectively for the needs of the current financial year."
The Prime Minister also said—and I cannot conceive a more definite pledge to the taxpayers who were asked to pay their taxes in anticipation of legalisation:—
"If we are fortunate enough to enjoy its confidence our first act would be to reimpose from this week all the taxes and duties which were embodied in the Finance Bill, and to validate all past collections and deductions."
It is because of that distinct pledge that taxpayers have been willing to go on paying their taxes and to submit to the demands of the Excise officers. We know that that was the policy of the Government down to a quite recent date, and that this makeshift policy of six weeks' Supply, which it has been attempted to justify on the ground that it will increase the financial control of this House, was another of those many changes which have been made in the tactical and strategical arrangements of the Government during the last three weeks. In the ordinary way the Vote on Account would have been something like £60,000,000, instead of £25,000,000. We have had a public statement of that fact on the authority of the Government itself, for in the "Observer" of a few days ago, there appeared a signed article in which Sir Henry Lucy stated:—
"Three weeks ago, at a time when public attention was concentrated on the Budget, and there was general agreement that it should and must be the first business of the Session, it was pointed out in this column that there are Votes on Account for the coming year which present themselves with imperative urgency. It is roughly calculated that such Supply for the Army and Navy and the Civil Service will approach the sum of £60,000,000. It may be stated that that information is based upon Ministerial authority, and that it represented the view and intentions of the Cabinet at the time."
814
There is no doubt that that was the intention, and it is shown by the way in which the Army Estimates were prepared. But a sudden change was made to a six weeks' Vote on Account. Why? Obviously for the purpose of creating in a certain event in the month of May greater financial confusion in order that the Government should lay still further blame at the door of the House of Lords. In November they prophesied, almost promised, that there should be financial confusion if the House of Lords did not pass the Budget. The financial confusion did not follow, and matters went on well. Then came a further opportunity. When large receipts were expected from Income Tax, the Government decree was: "Financial confusion has been promised by us; it has not happened; therefore financial confusion must be created in order that we may have a bludgeon with which to strike at the House of Lords." Something besides party duty devolves upon the Government. I submit that the Government are in the position of trustees for the taxpayers of the country, and that their action in imposing upon the taxpayers a burden which ought never to have been imposed is something very akin to a breach of trust. I am consoled with the knowledge that through the action which they have taken, through the manifest trick by which they are endeavouring to create this confusion and to put it to the blame of the House of Lords, they have already lost the respect of the country, and they must be approaching that period, if they have not already reached it, when they will have lost respect for one another, and even for themselves. I earnestly hope that before many weeks are over that state of things will arise for which the Government themselves are preparing, that they will quit that bench, being unable to carry the "People's Budget" through the people's House, and that other and better advisers will be called in.
Mr. AUSTEN CHAMBERLAIN: Everyone who has listened to this Debate will feel that my hon. Friend (Mr. Steel-Maitland) was fully justified in bringing before the House the question of the non-regularisation of our taxation and of the refusal of the Government to take the necessary and possible steps to prevent further loss to the Treasury and further expense to the taxpayers. My hon. Friend presented his case in a speech of singular power and lucidity, to which the First Lord of the Admiralty undertook

815
to reply, but which he did not answer. So far the case made by my hon. Friend remains, in all its main features, unanswered and uncontradicted by anything that His Majesty's Ministers have said. The First Lord of the Admiralty introduced a matter which, I think, was scarcely relevant, and to which I wish to make some allusion. My hon. Friend asked: What is the attitude of the Government in this matter? On what principles are they acting? What policy are they pursuing? The right hon. Gentleman found his easiest method of reply to be to taunt the Opposition with finding a newborn zeal for the discussion of the financial arrangements which they did not evince when the time of the House was, on the Motion of the Prime Minister, given to the Government without a Division for the purposes of necessary Supply and Finance. The First Lord was under an entire misapprehension as to what took place on that occasion. In the course of the Debate on the Prime Minister's Motion, in defining, on behalf of my Friends, the attitude of the Opposition, I said:—
"We are governed by the principles laid clown for us by my right hon. Friend (the Leader of the Opposition) when he said that in all that was necessary for carrying on the King's Government we shall be ready to give His Majesty's Ministers any support we see necessary, as long as they concentrate their efforts on those measures that are so necessary, and still refrain from interposing between the House and the consideration of the Budget, which is long overdue, and is only one degree less necessary than the financial business of which I have already spoken, any other contentious business."
If that was not clear enough, I went on to say:—
"The Prime Minister and his colleagues, both in this House, the last Parliament, and in the country, dwelt on the confusion introduced into finance, the injury caused to trade, and the great interests adversely affected by the postponement of the Budget until the opinion of the country was expressed upon it. The opinion of the country has been expressed upon it. You can have that issue before the House at any moment. Why do yon not do it?"
6.0 P.M.
There was no shadow of foundation for the insinuation which underlay the whole of that part of the speech of the First Lord of the Admiralty that it was the action of the Opposition which stood in the way of His Majesty's Government dealing with the financial mess which they had created, or prevented them from regularising the Income Tax, or proceeding to discuss the Budget. At that very moment the Prime Minister and moved to take the time of the House. I referred in an interruption —I am afraid my interruptions were a little frequent—and I owe a little apology to the First Lord of the Admiralty for
816
having interrupted him so much—to a later occasion. On 3rd March I said that the House had adjourned three nights running at eight o'clock, and that it was proposed to adjourn again at eight o'clock, thus showing clearly that time was available for the Government to proceed with the Income Tax Resolution. I said that for the third day running half the Parliamentary day had been wasted; and that this was at a time when the Government themselves had admitted that money was being lost and expense being caused by the non-collection of the taxes. Why, I asked, did they not use the time which the House gave them for the purpose? At that point, before I had finished my sentence, the Prime Minister interrupted me with a question: "For the Budget?"
The Debate goes on:—
"Mr. AUSTEN CHAMBERLAIN: Yes. Use it for the Budget if you like. I am very glad to accept the offer of the right hon. Gentleman. "Will they put down the Budget? That is better than I expected. And if the Prime Minister was going to do that, of coarse no one would be more gratified than we."
It is therefore not true to say, as the First Lord of the Admiralty alleged, that we did not, from the first, press the Government to take the course that we now condemn them for not taking, and that we had not first offered to proceed, in the first intervals of Parliamentary time that were available, to the discussion of the Income Tax Resolutions—either for their ordinary tax at 1s. 2d., which they could have had as unopposed business, or, if they preferred it, with the Budget as a whole. Of course, we should have been bound to come to an issue with them upon that, and take the decision of the House on that very question which was referred to the country and on which the Government will not allow the country's opinion to be expressed. So much for the attitude of the Opposition.
I come now to the attitude of His Majesty's Government. I confess that even after the explanation of the First Lord of the Admiralty I am still at a loss to understand on what principles the Government have acted. I believe the reason why I and others are at a loss is, in fact, because the Government have not acted on any principles whatever. What are the facts as we know them? The Bank of England, as stated to my hon. Friend, has deducted Income Tax from Consols. To use the words of the Bank of England, it:—
"In agreement with the Board of Inland Revenue, is authorised by the Lords Commissioners of the Treasury."

817
The Government have therefore encouraged the Bank of England to deduct that tax from the dividends due to individuals. That is every bit as illegal as to take their money into the Treasury. Why the Government are prepared to take it from those who for the moment are its only legal owners, and are not prepared to take it and to use it for the only purposes for which there is any possible justification for deducting it, namely, for the taxes due to His Majesty the King, I do not know. They advise, they encourage the Bank to refuse to pay to the owner. They refuse to take money, or to collect money, from the Bank. They borrow it from the Bank instead.
In the next place we have the War Office, which tells the Bank that they are to deduct the tax as if the Budget had passed. There is a direct instruction from the War Office. What on earth the War Office has to do with it I do not quite know, but on a direct instruction from the War Office the tax is to be deducted. Then we have the Government themselves, who direct the deduction of the tax from all salaries paid by them. On what ground do they do that? If it is illegal to ask for money from a private citizen, a citizen not in Government employ; if it is still more illegal to take money which has been collected from a private citizen and is held by the banker; by what right do you deduct it from the Civil servants who are under your control? What is the explanation the First Lord of the Admiralty gave us? He said: "We will not take it from the ordinary taxpayer, because that might involve us in a troublesome and extensive loss." They take it from their own employés, because, I suppose, they feel they have such a hold upon them that they could not bring the Government to book! Can you have a greater injustice as between man and man than the Government have produced by the course of action which they are taking? I have already shown, I think pretty clearly, that the action of the Government is wholly inconsistent with their following out any settled plan. They are living from hand to mouth. They make a new law for each individual case, and the result is what you would expect—an arbitrary tyranny which deducts money without lawful authority, and does not collect it for the purpose for which it was deducted; which takes money from one man and allows another man to go without paying what is as much or as little due from him. The Chancellor of the Exchequer, in answer to a good many ques-
818
tions at Question Time to-day, gave us some further information. He stated definitely, and I understood the First Lord of the Admiralty to say the same thing, that since the rejection of the Finance Bill no official coming under the authority of the Government has made any demand for the Income-Tax. He distinguishes between some officials whom he professes to have no control over, but who would not act in defiance of his advice, and others whom he has direct control over. He says where he has direct control no tax has been demanded since the rejection of the Budget. I venture to refer him to a Board of Inland Revenue circular letter (Number 52), dated 4th December last year—therefore, after the Budget had been rejected. The circular is headed:—
" A circular to bankers…entrusted with the payment of foreign and colonial dividends, and pensions paid out of Indian funds."
it concludes:—
"The Board are authorised—"
they did not do it without that authorisation—
" by the Lords Commissioners of His Majesty's Treasury to suggest that Income Tax should continue to be deducted at the rate of 14d. in the £, pending the introduction of another Finance Bill for the current year."
The deduction of the tax during the annually recurring interval between the expiration of one and the passing of the other Resolution, which is referred to in the earlier paragraph of the circular, which. I hold in my hand:—
"The deduction of the tax—"
the circular goes on—
"has hitherto given rise to no difficulty, if, on the present occasion, any objection is taken, you may, if necessary, refer the matter to the Department."
Why did not the Government pass the Resolution, or collect their tax for general application, instead of taking it out of particular people? No, they did not collect the tax, but they do all the injury to the-individual taxpayer which is involved in the deduction of the tax from his dividend without securing the corresponding benefit to the Treasury which is involved in the payment of that money into the Exchequer. Then they go to the Money Market and borrow at 3 per cent.—from money which is waiting to be paid in! They decline to assume to themselves the risks which they have hitherto invited bankers and others to take upon their own shoulders. That is what the Government has done.
Let us go a little further. Their inconsistency, their injustices, do not stop with

819
the collection of taxes. I asked the Chancellor of the Exchequer to-day whether it was a fact that the Board of Inland Revenue were refunding to individual persons sums deducted from their dividends for Income Tax, but held up by bankers, and which, therefore, had never jet reached the Treasury. What did the Chancellor of the Exchequer reply?
" The Board of Inland Revenue have in a few cases made refund on account of Income Tax deducted on dividends by those entitled to claim such refund, although the tax inself has not been paid into the Exchequer."
So that, first of all, the Government would not collect the tax; then they borrow money that is waiting to pay the tax with; then out of the borrowed money they refund money which they have not received I Was there ever a Government conducted on such principles which did not come to speedy and deserved grief? Why have the Board of Inland Revenue done it in a few cases only? Let them do it in all cases or none. Then I understand in future from the concluding paragraph that the right hon. Gentleman believes in the criticism of mine that if the Board of Inland Revenue are to do this at all they had better deal out—shall I call it even-handed justice or even-handed injustice?— to all taxpayers alike. His answer to me concluded:—
"I may add that I have authorised the Board to follow the normal practice in regard to the repayment of Income Tax in the cases where the claim can be substantiated."
I do not know what he means by that. I shall be much obliged if he will explain what it means. Does it mean that every man who has had Income Tax deducted at the instigation of the Government, though not by its direct action, can get his Income Tax back from the Government, whether the Government had ever received it or not? Or does it only mean that if the shareholder can prove that the Income Tax has been collected, or, may be, has been paid over by the bankers or companies, and collected by the Treasury, that he will get relief? If it means the former, the injustice to the individual taxpayer would be remedied at the expense of grave loss to the Treasury—an injustice which I think is almost necessary, because the hardship to little people of small income in having 1s. 2d. in the £ deducted from their income when no tax is due or a much less amount is due because their incomes are below £160 or below the final limit of abatement £700,
820
would be tremendous. And the disturbance to domestic economy of poor families would be very serious indeed. If it means giving it back to all of them without expense, then you entail great and quite unnecessary loss to the Exchequer, which is involved by neglect of collecting the money which the Government refunds before they receive it. Refund here means that you are giving back what you received. Dr. Murray will now have to give a new meaning to the word, so that it will mean in future giving back something which you have not got—authority, "the Chancellor of the Exchequer." If it does not mean that it means that each individual taxpayer has to prove that not only has the money been deducted, but that these sums have been paid over to the Exchequer. See what an intolerable task you are putting upon these people. These little incomes may be scattered over numberless investments, and these people will have to write to ascertain whether the company has or has not handed over the money to the Treasury, and, if they have, to get a certificate from which company that this money has been handed over before they can get their refund of the tax taken from them. This is an inconvenience to the taxpayer, an inconvenience to the official and an inconvenience to the banks and to the companies which do this business as agents for the Government. It is wholly unnecessary, and it is maintained purely to suit the party exigencies of His Majesty's Government.
I do not know how the Inland Revenue selected the few hundreds of pounds in which they have hitherto refunded Income Tax. I know the case of an individual who is certainly not entitled to a rebate on account of the smallness of his income: He is entitled to rebate under that provision of the Act which allows exemption from Income Tax for insurance premiums on a man's life, provided the amount of the premium does not exceed one-sixth of his income. I know the case of an individual whose Income Tax, I think, has been deducted, and not a penny of it has gone into the coffers of the Government, because the Government would not collect it. He applied for a rebate under this provision, and he got in the ordinary way a rebate for a sum which was nearer £1,000 than £500, and many poor people cannot get their rebate. Is that democratic finance? To pass away from details on this matter to the general results, let us consider what this democratic finance is. This triumph of demo-

821
cratic finance has proved what? That you can carry on Government for eighteen months without a Finance Bill, that you can collect taxes without legal authority, and that half of that financial control upon which this House has been wont to pride itself is the flimsiest mockery when you have a Government in power that wishes to break through it. Meanwhile you are receiving all the Customs duties or practically all the Customs duty and the Excise duty upon the higher scale. What is the result? The result is that that part of the late Budget—the suspended Budget— which was intended to produce the contribution from the working classes of this country is in full operation. Everything you intended to get from the indirect taxpayer as distinguished from the direct taxpayer is being taken from him, and I believe almost all that is being received by the Government. The extra Whisky Duty is being paid by the consumer, the extra Tobacco Duty has been paid by the consumer. From the poorer classes of the people you are collecting what you intended to be their taxation.
What a triumph of democratic finance! You take the taxes of the poor without legal authority. The only thing you will not do is to collect the taxes of the rich. What is the sole defence of the Government? Not that there was no time to proceed with the Budget Resolutions—those Budget Resolutions under which, as the circular pointed out, the Income Tax has always been collected—it was not that they had not time, it was that it did not suit the Government's policy to proceed to carry out the pledge—I will not call it a pledge—but to carry out the statement of their intention which the Prime Minister solemnly made in this House upon the last day of last Session, upon which he went to the country, and for which he professes to have received a mandate. It does not suit their intention to do that. They prefer to create confusion which did not arise until they engineered it. From the very moment of the rejection of the Budget the Government began to talk of the confusion that would arise. The Prime Minister has admitted that, thanks to the Government, and, perhaps, in part to the interest of the traders and also, I think, though he did not mention it, thanks to the co-operation of the Opposition with the Government, in order to prevent confusion and injury to trade, the great mass of these duties were being collected and paid without any trouble and without any
822
friction. It was only in respect of one of them that serious trouble has arisen, and that one was the Income Tax. No trouble had arisen in regard to that when this House met. Its collection was in arrear— not its collections from individuals to any large extent, not mainly its collections from individuals. It was in arrear in regard to certain cases, but a vast amount of it had been collected from individuals, and was at the disposal of the Government the moment they choose to take authority to ask for it. It was held in the expectation that they would take that authority at the earliest possible moment. They were pressed to do so from this side of the House, and they might have done it in the time at their disposal. They refused to do so. What is now the result? They have the confusion which they had predicted, but which had not then arisen; that is the collection of the tax, which was easy if they took action at once, has become, increasingly difficult day by day. We see the injustice of it in the papers to-day, when the Bank of England, having waited four weeks for His Majesty's Government to take a single step in the direction of legalising the deductions they made at the suggestions of His Majesty's Government, are now announcing that they will repay the money to the individuals from whom it was taken because His Majesty's Government have done nothing of the kind.
I hope the Chancellor of the Exchequer will tell us whether His Majesty's Government propose even now, in view of that contingency, to take any step whatever to prevent the loss to the revenue and cost to the Exchequer and difficulty both to the banks and their clients which have arisen from the Government's previous neglect. I am afraid it is not very likely. The Government are not dealing with finance with a view to the financial interests of the country—they are openly making it a tool which they use for the purpose of a party game, played, as my hon. Friend the Member for Dulwich (Mr. Bonar Law) said, so cleverly that I think it is too clever by half. I fail to find in the speech of the First Lord to the Admiralty any justification or any explanation of the conduct of the Government. For that you have to go to the speech of the Prime Minister delivered at Oxford a couple of nights ago. He did give an explanation. He said:—
"I ask you—it is not I think too strong a claim to make—"
I agree with him.
"I ask you to believe that we shrill subordinate everything to the attainment of our ends."

823
And the first thing the Government have chosen to subordinate to the attainment of their ends is the collection of the taxes, the credit of His Majesty's Government, and the interests of the people whom they represent.
The CHANCELLOR of the EXCHEQUER (Mr. Lloyd-George): The right hon. Gentleman's speech has one phase in common with all the other speeches delivered on the other side. He has given to the House of Commons a lurid picture of the financial confusion which has arisen in consequence of the inability of the Government to collect the taxes. I have only one criticism to make upon his speech, and it is a criticism that will apply to all the other speeches. They are speeches that ought to be delivered in support of the Resolutions of His Majesty Government to put an end for ever to the interference of the House of Lords with finance. They were quite irrelevant to the Consolidated Fund Bill. They would have been excellent speeches if delivered upon platforms belonging to the House of Lords. Let the right hon. Gentleman reflect upon what he has told us about the present position of affairs. He said, "Here you have millions of money neglected, lying idly in the banks. You have people whose Income Tax is not collected, who would only be delighted to pay it. You are interfering with business." All that is absolutely true; but who is responsible?
On 3rd December the Finance Bill of the year was rejected. No one would complain that we gave too little time for discussion. As a matter of fact, we gave time sufficient to satisfy everybody. We could not have done anything before 3rd December. As soon as the Finance Bill had been rejected, the first thing we did afterwards was to make arrangements for an appeal to the country upon the whole position. I do not believe anyone who went through the labours and the Parliamentary experience of the last Session of Parliament will complain that the Government did not summon Parliament earlier than the date upon which we met this year. Up to that date the whole of the financial responsibility must rest at the doors of those who rejected the Finance Bill. [HON. MEMBEES: "NO."] At any rate, His Majesty's Government are not to blame. They submitted their financial proposals, and took every step to lgalise them; they sent them up to the House of Lords, and
824
there they were flung out, and consequently the confusion up to that time must lie at the doors of those who rejected the provision made by the Government, and rejected it for the first time in the history of this country. We took a week over the Address. It is not suggested that we could legalise the Income Tax or any other tax before the Address is voted. That brings us up to March, so that the responsibility for the confusion in December, in January, and in February rests entirely upon those who rejected the Budget. There has been three months of confusion, and how far have we been responsible? This is 21st of March, and, therefore, three months of that responsibility belongs to the Lords and only three weeks to the Government. The right hon. Gentleman cannot possibly lay the responsibility at our doors. And yet we are told that we have upset the whole finance of the country, that we have destroyed business—
Earl WINTERTON: Hear, hear.
Mr. LLOYD-GEORGE: We know the Noble Lord is such an authority on business.
Earl WINTERTON: Quite as great as the right hon. Gentleman.
Mr. LLOYD-GEORGE: The Noble Lord's commercial sense is outraged by it. But what about the three months confusion which the Lords are responsible for as compared with the three weeks for which we are responsible? That is what has made the Noble Lord feel a sense of indignation which he cannot possibly restrain. But I repudiate the idea that we are responsible even for three weeks of the confusion. What happened? I will refer the House to a speech made by the Leader of the Opposition. We had business to transact which the right hon. Gentleman in his speech said he regarded as primary. He himself admitted in that speech that our first duty was Supply; otherwise there would have been no money to pay anybody. It is agreed that our first urgent duty was Supply. What course did we take? For Supply we have taken every hour. If we had really wanted to dawdle away the time of the House we could have said, "We are not going to interfere with private Members," and we could have quoted many speeches delivered by those sitting opposite protesting against taking the time of private Members. If we had really wanted, I will not say to

825
waste time, but at any rate to find a legitimate excuse for not bringing forward our financial proposals, we could have proceeded in the usual way without bringing forward a Motion for taking up the time of the House usually devoted to private Members.
But what did the Prime Minister say? He just looked at the time at our disposal, and he took up the whole of the time that was available for Supply. He looked at the Supply we could get through, which was unusually heavy. The Navy Estimates were unusually heavy, but this question had formed part of the controversy around which the General Election raged. There were exceptionally heavy Estimates as Supplementary Estimates, and as the ordinary Estimates of the year, and in addition to that there were Supplementary Estimates for Ireland and for Labour Exchanges, which came for the first time on the Estimates, and which everybody expected would raise a very prolonged discussion. I ask any hon. or right hon. Gentleman who has had experience in this House whether, looking at that programme of business, he would not have said at once the time is undoubtedly insufficient to get through all that work, and that is how it struck those sitting on this bench. This programme of business was submitted to the House, and it was assented to on the understanding that the Budget and the Veto Resolutions were not included in it. There was one speech made from the Front Opposition Bench on this Question, and it was made by the Leader of the Opposition. When the Prime Minister made his statement justifying his proposal to take nip the whole time of the House because of the condition of Supply the Leader of the Opposition quite accepted that view. H? did not say, "Why do you not give a day to the Budget? Why do you not give a day to the Income Tax?" He realised perfectly that the whole of the time the Opposition had followed the course which every Opposition has followed in criticising, I will not say at undue length, but at legitimate length. Estimates which they themselves criticised on every platform throughout the country during the election.
Mr. AUSTEN CHAMBERLAIN: Let me interrupt the right hon. Gentleman. He is making a contrast between the speeches made by the Leader of the Opposition and myself. My speech from 'which I quoted was made after consulta-
826
tion with my right hon. Friend, and had his full approval and assent.
Mr. LLOYD-GEORGE: Is that not very remarkable? Let the House consider what it means. Here is great financial confusion, which is the one dominant factor, ruining business, and the Leader of the Opposition, in the course of his speech, did not even think it worth giving even a sentence to it. He delivers a speech occupying half an hour or three-quarters of an hour, and as a sort of afterthought he says, "I quite forgot the financial confusion. It never occurred to me while speaking. Do you mind mentioning that fact?" And the right hon. Gentleman does it. But how does he do it? This heartrending situation he dismisses in a few rather obscure sentences. The right hon. Gentleman is not usually obscure. I have sat opposite the right hon. Gentleman, and I have never had reason to complain of his want of lucidity, but here he tells me that is what he meant, and I am willing to accept it, although, if the right hon. Gentleman had not assured me that that was his meaning, I should not have gathered it from his speech. Just think of the financial situation. A few perfunctory sentences at the end of a Debate after the Leader of the Opposition and every Member on the Opposition side had forgotten all about it—just at the end of a few obscure sentences referring to the matter. Does the right hon. Gentleman mean to say that that would have been his view if the Opposition had taken the view which they have now taken, that it is the imperative duty of the Government in the interests of the finances of this country to deal with the business of this country?
Let us assume that they had decided upon the course which they have now determined upon. Does he really mean to say that that is the way they would have proceeded? What they really mean is that the whole thing is an afterthought, an absolute afterthought on their part. He knows perfectly well why this has arisen. There was a great agitation in the papers; but it did not occur even to the intellect of the Noble Lord who is seated in the corner there on that particular day that the country was being ruined. Even he discovered it from the columns of the "Morning Post," of which I have no doubt he is a regular reader. What is more, he discovers it from an anonymous correspondent in the "Morning Post." It

827
is not even the Leader of the Opposition; it is not the Noble Lord himself, but it is a purely anonymous letter-writer in a Tory newspaper in London—that is the man who starts the whole of this "financial confusion and ruin of the country." Up to that date no one denies that the Government could not have done anything to regularise the situation. They could have done nothing except pass an alternative Budget. That would have been accepting dictation at the hands of the Lords, and I cannot imagine even a Conservative Government doing that. What! Accept from the House of Lords dictation as to what the Finance Bill for the year is going to be! That claim has never been put as far as that up to the present time. The House of Lords never claimed it; all the House of Lords has claimed is the right of referring the Budget to the people, and they have never claimed the right to dictate the terms of the Finance Bill. [Cheers.] I note from those cheers that there are a few hon. Gentlemen who agree with me. Their claim now is not that the House of Lords has a right to dictate to the House of Commons, but that they have a right to dictate an alternative Budget. That is an intolerable demand.
Mr. T. L. CORBETT: Only the hon. and learned Member for Waterford has a right to dictate.
Mr. LLOYD-GEORGE: I can assure the hon. Member that our view is that every hon. Member of the House of Commons, whatever constituency he represents— whether he comes from Ulster or Con-naught, or whether he comes from England, Scotland or Wales, has an equal right to express an opinion in this House. With regard to the condemnation of the Budget hon. Gentlemen opposite think the Irish vote is everything. May I point out that there is a British majority for the Budget Hon. Members opposite think the people have condemned it, and why? Because they assume that the Irish people have condemned it. But when it comes to a question of the House of Lords, they say, "What right has any Irishman, unless he comes from Ulster, to express an opinion upon anything? It is sheer impertinence on the part of an Irishman, unless he comes from somewhere North of the Boyne, to express an opinion upon any subject except when it agrees with our opinions." Our view is that the House of Commons, as a
828
whole, has a right to dictate the finances-of the country, and that the other House has no right to meddle.
Mr. T. L. CORBETT: What about your Budget?
Mr. LLOYD-GEORGE: I shall come to that, but the hon. Member must really wait. I now come to the second part of the right hon. Gentleman's speech. I really do not know even now what his complaint is. He does not say whether we should carry the Budget. Surely he does not imagine that any Government can carry the Budget in the interval between 1st March and our adjournment for Easter. If he does he raises a very important question. Does he think that the Budget can be got through in twenty-four hours? That is the first time I have heard such an expression of opinion. It seems to me that in their opinion we ought to pass so much of the Budget as suits the right hon. Gentleman and his Friends, and we should postpone the rest. That, again, is accepting dictation at the hands of the House of Lords, which this House could not possibly tolerate, and it is a departure from a time-honoured precedent, and a precedent upon which the privileges of this House are firmly founded, the precedent of 1861. The hon. Member for Dulwich, who is always positive and always incorrect—[HON. MEMBERS: "Withdraw."] He is the last man who has a right to complain of hard things. He said some hard things in the course of his speech. He even went so far as to insinuate dishonesty on our part. I have not gone so far as that, but I think I am entitled to say his statements are inaccurate. He said that it was in 1894 that the taxes were for the first time put together in one Bill. That is wrong; it was in 1861. All that happened in 1894 was that a sort of general financial provision of the year which used to form a separate Bill—
Mr. BONAR LAW: I would point out that what I said was that all the financial arrangements of the year were included in one Bill, and that is precisely the precedent of 1894.
Mr. LLOYD-GEORGE: I will just remind the hon. Gentleman what he did say, because his memory is rather bad. [HON. MEMBERS: "Oh, oh !"] Really, hon. Members are very sensitive. I think the hon. Gentleman is the last man who requires protection from young Members. The

829
hon. Member's argument was that the Income Tax could very well be dealt with separately. It was not a question of general financial clauses; it was a question of taxes.
Mr. BONAR LAW: I beg the right hon. Gentleman's pardon.
Mr. LLOYD-GEORGE: Surely the hon. Member was dealing with the question of the Income Tax. I appeal to the House with confidence. He said the Income Tax could very well be dealt with separately, and then he said:—
"The reason why it is not dealt with separately, I am told, is because it interferes with the precedent of 1861."
The hon. Gentleman then said it was not in 1861, but in 1894, that the financial arrangements for the year were for the first time brought together. I say that it was the precedent of 1861 which brought all the taxes of the year into one Bill, and it has never been departed from since.
Mr. BONAR LAW: It is simply a recollection of what I said, and the best test will be the OFFICIAL REPOBT, when we see it to-morrow. I did not mention 1861; the right hon. Gentleman mentioned it in correcting me, and in answer to that I stated that the precedent for having all the financial arrangements in one Bill was that of 1894, and not of 1861.
Mr. LLOYD-GEORGE: That is exactly what I said, and the hon. Member is wrong. The first precedent for having all the financial taxation of the year in one Bill is that of 1861 and not that of 1894, and to depart from that would be to depart from the precedent which undoubtedly assured and established more firmly the position of the House of Commons in the matter of finance than it ever had before; and that is the reason why we cannot possibly depart from it. The right hon. Gentleman opposite (Mr. Austen Chamberlain) asks why we are deducting the Income Tax in some cases, and not collecting it from individuals? Really I should like to know what is the complaint of the right hon. Gentleman. We have done everything in our power to minimise the financial confusion without contravening the law. We have done our very best to persuade banks to deduct. We have done the same thing with the Bank of England. We have clearly indicated our opinion, and we have given every encouragement to companies to deduct from their dividends. We could not collect from individuals, and
830
the right hon. Gentleman knows perfectly well the reason why. The very duplicates upon which you collect are an authority to the Commissioners to issue warrants of distress. Does the right hon. Gentleman say there is no difference between intimating to the banks that it would be a great convenience to the Government, not merely to the present Government, but to the Government of the country, and to individuals, that they should deduct Income Tax from dividends, and sending, out documents which would authorise the issue of warrants of distress to sell people up for Income Tax when there is no legal authority for doing it?
Mr. AUSTEN CHAMBERLAIN: I have never suggested that the Government should issue threatening notices, or asserted that they have a right to collect taxes they have not a right to collect. I asked why they have encouraged banks to deduct money which they will not themselves collect, and why they treat different classes of taxpayers differently.
Mr. LLOYD-GEORGE: The right hon. Gentleman is quite wrong. We could say to the Banks: "It is a convenience for the Government, whichever Government comes in after the General Election, that you should deduct from the dividends, and it is convenient for you, because the money will be collected from you, and not from individuals," but we could not go to individuals, and say, "Unless you pay within three days we shall take proceedings." We could not take proceedings. Were we then to send collectors round from door to-door, and say, "Will you pay your Income Tax? We have no authority to collect it, but we shall be very much obliged if you will pay."
An HON. MEMBER: You did.
Mr. LLOYD-GEORGE: The City of London Commissioners have done it purely on their own authority. It was done voluntarily by the City, and I think it was a very creditable transaction, but it was not done on the initiative of the Government, because we knew perfectly well we could not legally enforce the demand notes. Every step any Chancellor of the Exchequer could take within the powers he possesses I have taken to minimise the confusion; I have encouraged banks to deduct and, the right hon. Gentleman condemns me for it. I have taken steps to deduct from public servants. I think that can be done, because public servants pay their Income-

831
Tax by deduction. Their case is not like that of the ordinary man in receipt of a salary who does not pay by deduction, but pays his own Income Tax direct. The right hon. Gentleman complains that we have taken steps to refund. He started by condemning us for not refunding, and then he condemns us because we are doing it. I appeal to business men on both sides of the House as to whether we are not taking the right course. The banks, I think, in every case have actually deducted the Income Tax, where it could have been collected if a Resolution had been passed through this House, and if it were legalised. They are retaining it in their own hands, and I think, on the whole, they are right; but that is a matter entirely for themselves. Most of them are holding it over in order to see what will be done.
Then comes the individual taxpayer, who says, "You have deducted from my money at the rate of 1s. 2d., but I am not liable for 1s. 2d. I am a man with only £200, £300, or £500, as the case may be, therefore I am not liable for the full 1s. 2d." What are we to do? Are we to say that we must wait until the whole of the machinery has been legalised, and that then we will consider your claim? We have discovered that the banks have deducted the money, and we know perfectly well that the money will be handed over to the present Government or to its successors when the time comes. We have treated that as if it were a payment to the Government, and, so far from injuring these poor people for whom the right hon. Gentleman so pathetically pleaded, we have gone on as though the money had come to our hands and have handed it back. Is not that the right course to adopt? Who is injured? We are protecting the poor people whose money has been held up. The Government is not suffering, except to the extent of those remissions. The right hon. Gentleman asks why there are so few of these people. Really I am surprised at him asking. I could well understand some hon. Member who has had no experience of the Treasury asking, but he knows perfectly well that these remissions begin in April. The examination for claims for refunding always begins in April, and they take an enormous length of time. He complains there are people who have not had their money refunded, but he knows that the process goes on almost to the end of the year, not only this year, but it went on last year, and when the right hon. Gentle-
832
man was the Chancellor of the Exchequer. Why should he complain when we are pursuing exactly the same course as has always been pursued? He must have forgotten what the process was.
I have only one or two more questions to answer. What is the real reason why right hon. and hon. Gentlemen opposite have suddenly become so anxious for the Budget? I should like him to answer me candidly. I have heard a good deal about "being too clever by half" and about the "ingenuity exercised." Would they mind giving me a frank answer? Is it really the financial confusion that is impelling them to this action? Is it not this: that they are under the impression that the moment the Budget is introduced and pressed forward, for political reasons some Members of this House who think it a great weapon against the House of Lords may decline to vote for it? That is their real motive. Their anxiety for the Budget reminds me of what Sir Ernest Shackleton said to me the other day when he was talking about the stupidity of the penguins. He said that if, when they carried their young, one of the little ones fell in the march, all the rest fell on him, and in their anxiety to set him up again dragged the poor little creature to pieces. That is what is happening now. This poor old Budget has fallen in its march, thrown down by a cruel House of Lords, and all the penguins are pecking at it. There is one there (Mr. Austen Chamberlain), and I can see another lying in wait there (Lord Hugh Cecil). Is all this in order to set it up again? Not a bit of it. It is in order to tear it limb from limb. What will become of the financial confusion then? I am proceeding now on their assumption that there are Members who say, "This is such a great weapon that we cannot possibly allow it to go through until the Veto Resolution has been discussed." Oh, yes, this is the assumption which is operating in the right hon. Gentleman's mind. The operative assumption of hon. and right hon. Gentlemen opposite is that if we press the Budget now it may come to grief.
Mr. AUSTEN CHAMBERLAIN: Hear, hear.
7.0 P.M.
Mr. LLOYD-GEORGE: That is it, and all this has been done in the name of saving the finances of the country from confusion. The right hon. Gentleman has admitted that his real motive is to defeat the Budget. If the Budget is defeated, does he really think that in this House of Commons we would allow

833
any alternative Budget such as he and his hon. Friends imagine to be set up? They might appeal to the country. But what would happen to the financial confusion? How long would that last? When would that come to an end? The Dissolution itself would take five weeks. You cannot summon your Parliament for five weeks, even if you summon it for the first possible day. They you get a week for swearing in, and you cannot get at your Budget until the month of May or June. The financial confusion will be going on all that time. I have heard something about engineering confusion, but the hon. and right hon. Gentlemen opposite are the engineers. The right hon. Gentleman the Member for East Worcestershire is the engineer-in-chief. He is not trying to put an end to the financial confusion. He is only jealous. He only wants his own confusion. He does not like the one provided by the House of Lords. He will try his own, and he will thereby make worse confusion than ever. We can get the Budget through long before it will be possible by his method.
A word about the method by which the confusion has arisen. We have to take a very important step in considering that. The right hon. Gentleman need not be afraid; we will not give it consideration. We are willing to risk the life of the Government and the life of this Parliament in putting forward our proposals with regard to the financial year. The right hon. Gentleman talks about our collecting from the poor and not from the rich. Is it not the fact that another House is objecting to the taxes upon the rich? It was not upon tobacco that they threw out the Budget. It was not even upon whisky that the hon. Members from Ulster voted for the House of Lords. It was not the 1s. 2d. Income Tax upon the middle classes which caused the trouble. It was purely the tax upon rich people, and that is why we have had all this difficulty. Will the right hon. Gentleman say where, at the present moment, the taxes on the poor are collected and those on the rich are not? He is one of those primarily responsible for the advice given to the House of Lords. He and his friends are responsible, and they alone are responsible for it, and one part of our duty, a duty which we shall not shirk, will be to make it impossible for that to happen again.
Lord HUGH CECIL: The right hon. Gentleman concluded his speech with ob-
834
servations of a not unfamiliar character, suggesting that the Lords were resisting the Budget because it taxed the rich—
Mr. LLOYD-GEORGE: I simply quoted the right hon. Gentleman opposite.
Mr. AUSTEN CHAMBERLAIN: I cannot allow that to pass. The right hon. Gentleman is imputing to me a great many things, and I think I ought to be allowed an opportunity of contradicting him.
Mr. LLOYD-GEORGE: If the right hon. Gentleman says he did not say that, I accept it at once, but what I gathered he did say was that what we were now doing was to collect the taxes imposed upon the poor, and not to collect the taxes imposed on the rich; that is all that I suggested.
Lord HUGH CECIL: I think the right hon. Gentleman misunderstood me. What I was saying was that he was throwing the blame on the House of Lords by saying that they resisted the Budget because it taxed the rich. As a matter of fact, the taxes that were most severely criticised in another place were precisely those against which the hon. Members from Ireland mainly protested, and those hon. Members certainly represented the poorest part of the United Kingdom.[Mr. DILLON dissented.]Does the hon. Member for East Mayo dispute that an Irish Member opposed the Land Taxes?
Mr. DILLON: We certainly support the Land Taxes.
Lord HUGH CECIL: But the hon. Member for Waterford declared against them. The opposition to them in Ireland was very formidable.
Mr. JOHN REDMOND: The Noble Lord must allow me to say that we obtained certain concessions on the Land Taxes last year, and after that we heartily supported them both in Debate and in the Lobby.
Lord HUGH CECIL: But you did not vote for the Third Beading of the Bill, and there are other hon. Members from Ireland who will bear out the view which I have put forward. Indeed, I may be permitted to express some doubt whether the next General Election in Ireland will not show that the hon. Member for Cork more truly represents Irish opinion.
Mr. JOHN REDMOND: Not at all.
Lord HUGH CECIL: At any rate, there is no sign that the Budget is peculiarly acceptable to the very poor people in Ireland. But the point which we are really discussing is the financial confusion which has arisen, and who is to blame for it? Our ease is this, that the Government have not encountered their confusion in the spirit of statesmen. They have done so rather in the spirit of sulky and mischievous children, who are aggrieved because they are not allowed to have their own way. I do not know whether hon. Members will remember the story of the little boy who sat in a puddle on purpose to spoil his trousers. Evidently the Government are anxious to sit in a puddle and make as much dirt as possible in order to be able to charge the House of Lords with having dirtied their fine clothes. Let it be observed that the right hon. Gentleman does not quite understand the able speech my hon. Friend the Member for East Birmingham made in opening this Debate. The point he made was that for a large part of the taxation the Government have already exercised their discretionary power. They have refunded in certain cases, and in others they have incited the banks to deduct the taxation. But they have not the courage to consult the interests of the public service and bring the money into the Treasury, and, consequently, there is injustice as between taxpayer and taxpayer, there is loss to the Exchequer, and there is general financial confusion, and the Government would not have been justified in that, according to their own or anyone else's professions, except that it is a moral certainty that these taxes will, sooner or later, be sanctioned by Parliament. There is, however, a formal obstacle in the way, and by a measure of extraordinary perversity in financial administrations, they have refused to remove this formal obstacle. We know in reality that the tax will be levied in the end. It may be there will be a considerable loss, but, eventually, the taxation will be gathered from the taxpayer. The formal obstacle prevents it being done regularly, and the Government will not take the trouble to remove it. They say that the House of Lords is to blame. Could there be a more grotesque contention? The right hon. Gentleman asks: What could we have done, seeing the House of Lords rejected our Bill? My answer is that they could have made temporary arrangements to carry on the financial business of the country. No one asks them to accept from the House of Lords any tax which
836
this House has not already passed. No one asks them to make any permanent arrangement whatever for the taxation of the year. No one suggests that they should depart from the precedent of 1861. which established the principle that the provision for the taxation of the year should be made in that one year. We suggest a temporary Bill, merely doing what all the world recognises is convenient, and what both parties desire to see carried out—we suggest that a temporary Bill might have been passed at the end of last Parliament, and then the whole difficulty would have been avoided. How would such action have jeopardised their case against the House of Lords? How would it have altered the constitutional issue by one iota? It is an empty pretence. They wanted a cry against the House of Lords. They worked themselves into a passion, and, having done that, they did all the perverse and unreasonable things they could in order to make the country either sympathise or suffer. Then they complain that the Opposition did not draw their attention to this matter. Surely it is the strangest possible conception that it is the duty of an Opposition to foresee administrative difficulties. But, as a matter of fact, the Chancellor of the Exchequer has done an injustice to my right hon. Friend the Member for East Worcestershire, because on 21st February my right hon. Friend drew attention to this very matter of the Income Tax, and asked was he going to pass a Resolution as early as he could, and thereupon begin the collection of the Income Tax, or would he withhold that collection until perhaps after the close of the financial year? Therefore the Opposition did, in fact, call the attention of the Government to the matter at the opening of the Session. May I say it would have been quite easy to give a whole week to the business of Ways and Means? The Government may tell us they have taken the whole time of the House. How have they spent that time? They spent a good deal of it on the Temporary Borrowing Powers Bill, which would not have been necessary had they made better financial arrangements.
Mr. LLOYD-GEORGE: The Noble Lord is quite wrong. Even if we had passed our Income Tax Resolutions on the very first day of the Session a Temporary Borrowing Powers Bill would still have been necessary.
Lord HUGH CECIL: But it would not have taken up any time. The right hon. Gentleman knows we took the opportunity of that Bill to criticise the financial policy of the Government. Then in addition to that there are three days in March which the Government will be using for the Veto Resolutions, and one day—Thursday— which they are not going to use at all. Then there were several half days which were wasted on Supplementary Estimates. These make more than a week, which could have been devoted to Ways and Means, and the Government could have carried through any temporary arrangement, indeed they might have got their Budget practically through in that time. But the Government would not bring forward the Budget because it might have been unacceptable to a majority of the House. Surely they cannot have it both ways. Our plan would have been to carry a temporary Bill adjusting the finances, and that would have been perfectly in accordance with the best traditions of national finance. But they would not have that? They pretended it would weaken their case against the House of Lords. They can give no authority for that. You cannot refuse to pass part of your financial proposals. Something you must do. The right hon. Gentleman has the assurance to look forward to future confusion. I quite agree that if the majority of this House are always going to behave as the majority is behaving, there never will be an end to the financial confusion, because it is obvious that difficulties arise just as much when the House of Commons rejects a Budget as when the House of Lords rejects one. You cannot conduct the Government of this country on the basis that the majority of this House is going to act in a spirit of partisan self will. If the principle is going to be that a large party in the House of Commons are going to use their influence only to pursue their party objects at whatever cost to the national finances, then certainly we shall have a series of confusions until the country entrusts their confidence in a better direction. The right hon. Gentleman contends that you must regard Irish opinion in these matters, while it is obvious that Irish opinion on the question of the House of Lords is confessedly directed to the question of Home Rule. The hon. Member for Waterford (Mr. John Redmond) has repeatedly said that he regards j the policy of the veto as tantamount to
838
Home Rule, but he can hardly expect that to carry weight with those who are convinced that the vast majority of the electors are against Home Rule.
Mr. SPEAKER: I think the Noble Lord is travelling rather wide of the question before the House.
Lord HUGH CECIL: I was misled by the Chancellor of Exchequer. I thought he was out of order, and I wondered you did not call him to order, but I will not pursue the matter further. In the case of the Budget, or in the case of national finance, I quite agree with the proposition of the right hon. Gentleman that all Members of the House of Commons are entitled to have their voice heard, but what is so strange is that the Government will not give an opportunity to the House of Commons of making its voice heard. There is evident reluctance at all events to hasten the day when this final judgment shall be given, and this confusion which has arisen over Ways and Means, we are now threatened shall be repeated over Supply. The Government are not satisfied with one set of financial confusions in this House, and they are already planning to produce another in the month of May over Supply. I am sorry the Prime Minister is not in his place, but it is really so very remarkable that he should now solemnly assert as he did down at Oxford, that the proper weapon of the House, of Commons is to control Supply and to go on withholding it, and that, measures have been taken to keep that weapon ready. That he should make that statement for the first time when it is perfectly plain that the Government never thought of using it until a comparatively recent period is, I think, strange. I remember the second night of the Session, when the Home Secretary got up, and the Prime Minister sat by on that bench looking like the proud father who was seeing the good child's performance, and feeling on the whole how much less anxiety the right hon. Gentleman the Home Secretary gave him than that other child the Chancellor of the Exchequer. The Home Secretary said it was foolish and revolutionary to withhold Supply, and that it was an obsolete weapon; but now the Government, having never meditated upon it, suddenly turn round and discover that they can control the Executive in the month of May by withholding Supply. Nobody supposes that the Government really will withhold

839
Supply in the month of May; but it is too much the practice of this Government to threaten to do something revolutionary in the future and then not carry out their threats. We have had it all before at the Albert Hall. They are always going to do something violent the day after to-morrow. I suppose hon. Members opposite like to be soothed by these assurances, but I protest very energetically against their adopting so grave a step as altering the customs of this House in regard to Supply in order that they may satisfy the criticism of their own side or that from the Irish Benches. It is not fitting that there should be this menace of such a thing if the Government are not prepared to act up to their word. Merely to make the voting of Supplies part of the mechanism of their practice, part of the way in which they satisfy this critic or another is not a seemly proceeding. I do not know whether hon. Gentlemen opposite will think it is a proper course, that if once more they are disappointed in their hopes of receiving assurances they want, they will have these votes to assert their independence upon. So far as their independence is concerned it has rather looked like the independence of a little dog which runs about, but always comes to heel. That is the position of the Labour party. But I am satisfied that the country at large. whatever may be the feeling of that party, are getting tired of a policy of mingled braggadocio and vacillation. They are sick of hearing threats which are not carried out. It is time that the Government addressed themselves to the business of the country. It is time that they preferred national objects to party objects. It is time that we who are accustomed in this country to see the King's Government carried on by the King's Ministers in the interests of the King's people should declare that the methods of thwarted wirepullers are not fitting for the Ministers of the Crown.

STATE OF CONGO.
Sir CHARLES DILKE: I believe the Secretary of State for Foreign Affairs has been here to-day, knowing that many Members in all quarters of the House have undergone a certain disappointment, reflected in the letter in the day's paper of the Archbishop of Canterbury, with regard to the speech with which he wound up the other night the short Debate upon the Congo question. The Noble Lord, who has just addressed the House, said
840
that the Government was always in the position of intending to do something violent the day after to-morrow, but in the matter we wish once more to bring before this House in order to try and clear up the points which were left obscure the other night by the Secretary of State— in that case we are sometimes accused of desiring the Government to do something violent in support of their own statements in this House in the past and in support of the honour of this country, which is deeply engaged. The Secretary of State will allow me to direct his special attention on this occasion to three or four matters, which I can state very briefly, which are thought by those who have dealt with this question in the past to leave the matter in a less favourable position than he himself, as well as the country, would desire that it should be left. The Secretary of State attached importance as great as on former occasions to his negative action in declining to recognise the annexation of the Congo State to the Kingdom of Belgium, but when the House agreed to support that annexation, when they followed the Government in supporting that annexation, they received from the Secretary of State assurances from which he has never departed, and which led them to think that when the time came to give recognition it would imply a change from non-recognition to recognition more important than that which he now seems to assume.
He says that we have not weakened our position, that we have given nothing away that we have not recognised, but it is not a mere paper recognition or a paper non-recognition to which we attach high importance, and which we formerly thought we understood from his speeches. We have noticed that negotiations have been proceeding at Brussels between the Government and the Government of Belgium, representing the Congo State, on the frontier questions, and that there is a tendency, in Belgium at all events, to explain to the Belgian people that our non-recognition is a mere formal business which they assume might satisfy our rigid conventions, but which nobody thinks means much, and that a complete change has been produced, not only in the record but in the non-popularity of the Congo Government in this country by the accession of the new King to power. The hon. Member for Ipswich, in a most powerful speech the other night, in which he followed up the cogent argument

841
of my hon. Friend the Member for Norfolk, made a strong case upon the public defiance of the action of this country which has been uttered quite recently by M. Renken, the Colonial Minister for Belgium in the Belgian Senate. My right hon. Friend the Secretary of State, in his reply —time pressed him, I know, to develop his full argument—made no answer whatsoever to that which was the principal part of a most eloquent and powerful speech, followed with assent by the whole House. He made no reply to what had fallen from my hon. Friend upon the defiance of this country by M. Renken. We have before us a bill for the largest naval expenditure that any country has ever incurred in time of peace. We add, for the first time, to that expenditure, Colonial expenditure, which swells out beyond that of our own Estimates. The House has supported those Estimates and the Empire is spending on land forces even a larger amount than it is spending on her Fleet. None of us believe that war is probable, but we do think, and many in this House believe, that the armaments of this country, if they are to have weight in time of peace, ought to have weight behind our diplomacy, and if they are to be justified by many of the arguments put before this House there is no reason why at this moment we should be afraid of our own shadow. We have been afraid of our own shadow on the Congo Question. I think there can be no doubt we have received from M. Renken, the Colonial Minister, such treatment as we have never had to put up with from any great Power, at all events in recent years. We are responsible in a degree which cannot be stated more strongly than it has been stated by the Prime Minister in the creation of the Congo State as a model state on behalf of the natives. We are the Power most responsible, because the United States and ourselves are the two Powers which made treaties before the Berlin Act, and we, though not the United States, are signatories of the Berlin Act. We are not only entitled to interfere, but we are morally bound to interfere, and we all know it. The Government has asserted that position over and over again. The Prime Minister, when he said at the Guildhall last autumn that we were responsible in this high degree, suggested one of the steps that we might take to act upon that responsibility if the separate action contemplated at one time should become necessary.
842
Speaking of a population towards which we have undertaken, as he said, solemn obligations, the Prime Minister pointed out that one means open to us was to refuse any longer to admit any jurisdiction but our own over British subjects travelling or trading in the Congo. That argument is closely connected with the position of non-recognition or of recognition of the Congo State. But we find that the apologists of the Congo State in Belgium, although they have changed their line towards individuals, although their great official organ now admits that, though formerly attacked with violence, Mr. Morel and others are honest men, acting upon public grounds, now admitted even in the "Indépendance Belge" in these very words, yet they at the same time repudiate our right to interfere, in the Chamber and in the Senate, and they also state that since the accession of a new King our Government is weakening and no longer shares those views which they admit to be honest on the part of Mr. Morel and his friends. On 24th February, in the Belgian Senate, the Minister for the Colonies, M. Renken, in the strongest possible terms, said, "Hands off ! "to this country. He formally repelled, from the height of his dignity, as it were, any foreign intervention in their affairs. M. Renken is one of those who, in the words of the Secretary of State, are wedded to the old and worst traditions of the Congo State. He cannot now be said to have the confidence of his own country, and barely of his own Government, which he represents as Minister for the Congo, and I will show the House how that can be well proved.
The question of the Noble Lord (Lord Ronaldshay) at the end of last Session brought out the fact that M. Renken is one who is deeply committed, as an administrator of the Congo State, on the worst side of the old system. He was also the lawyer of King Leopold, and he became first Minister of Justice and then Minister for the Congo. He was one of the signatories on the part of the Congo State of the original Treaty of Transfer in 1899 and last year he visited the Congo, and he made at Boma a speech with regard to the future of the Congo, which was almost word for word the same as the speech made about the same time by King Leopold, when he said it would be no longer necessary for the Belgian working man to pay heavy taxes, because there was the Congo, from which great national objects in Belgium could be served out of money which

843
would come from the Congo and would relieve taxation in Belgium. That speech was apologised for and withdrawn in the Belgian Chamber in a Debate in which the Government found no friends; but still, on 24th February that Colonial Minister, M. Renken, defied this country in the language which I have quoted. He was attacked, and the whole position of the Belgian Government was attacked primarily on the question of the distribution of the money drawn from the Congo by King Leopold, but also on the question of the treatment of the natives still in the Congo by combination of the friends of M. Vandervelde and the Liberal party in the Belgian Chamber in the present month. In these last Debates M. Renken was put in a position which I think justifies me in my statement that he no longer has the confidence even of the Government of which he is a member, and yet he has defied this country and denied the right of foreign interference, and of our interference in circumstances where our Prime Minister and our Government say not only that we may, but that we are bound, to interfere, and that we can do nothing but interfere in the present state of things. M. Vandervelde is the leader of the Socialist party in Belgium. He is, quite apart from that, a man of brilliant distinction, and he is a man who carries such weight in the Belgian Chamber that on the one hand he voted alone of the Socialist party for the annexation of the Congo by Belgium, the whole of his party voting the other way, but giving him leave to carry out his own honest and long held view, and now he has the support not only of the entire Liberal Opposition in the Belgian Chamber and the Senate upon this question but of a large section of the Catholic majority. In the name of that combination M. Vandervelde brought this question again before the Belgian Chamber in the Debates of the 4th and 5th of this month. The Secretary of State told us the other night that he doubted whether we should have the assent of those who hold the same views with ourselves in Belgium now in raising this question here.
Sir EDWARD GREY: No.
Sir CHARLES DILKE: I have the words. The Secretary of State was replying to the hon. Member (Mr. Silvester Horne) and the hon. Member for Norfolk. He asked:—
" Is it their view that, we ought to depart from hope who have expressed extreme indignation at the delay?"
Sir E. GREY: The point I was making at the time was that to give up hope was to admit that improvement was perfectly hopeless, and that we were, therefore, going definitely to refuse to recognise the annexation and to take our own course.
Sir CHARLES DILKE: I will put it in this way. There were two parts of the sentence, one was milder than the other, and I will quote the milder one. The phrase was "benevolent expectancy ":—
"They would prefer us rather than taking our own line, to take an attitude of benevolent expectancy."
Sir E. GREY: Rather than give up hope.
Sir CHARLES DILKE: I do not give up hope. I should not be raising this question now if I had given up hope. After the violence of the language, honestly used from the hearts, far more violent than the language the other night of the hon. Member (Mr. Silvester Horne), by M. Vandervelde and the Liberal speakers when, with a nominally considerable Clerical and Catholic majority, they ran M. Renken within six votes, and there was no approbation by the Chamber, it was a mere order of the day—against one of the most violent motions ever put before the Chamber—when I say they were within six votes of beating M. Renken, I should think that at least half the Belgian people, while they still have hope, would desire that we should support their hands by continuing to maintain the principle which we have maintained in the past, and by exercising more pressure on the Belgian Government to avoid continuance of these delay's, and by resenting the language of "Hands off" applied to us by their Colonial Minister. I am sure none of them would desire that we should sit down under declarations of that kind. I am sorry that my right hon. Friend made no allusion to the "Hands off" statement of M. Renken the other day. He, after all, is one of the men of the old system, and in this very Debate one of the Liberal leaders said of him, "Who was the man who advised King Leopold to break the laws of this country? Who was that great lawyer who so advised him? You "—pointing to the Colonial Minister—a man of the old system, a man wedded to the old system, King Leopold's lawyer, who represents the continuance of these old traditions. When he declares, in even stronger language than King Leopold did, that he repulses all interference, foreign or by this country, I believe the House of Com

845
mons should resent the use of language of that sort, and try once more to show that they have the whole country behind them in the belief not only that we have the right, but that we are bound to interfere.
The points I have raised are the "Hands off" declaration—the fear that we have that the refusal to recognise annexation may become a mere paper refusal if we go on negotiating and allowing things to pass in this easy fashion, and the certainty that we are able to express that those who form half the Belgian people, who now have been brought to understand this question and who are exercising on that Government the same pressure that we are exercising upon it, will not desire that we should hold our hands or refrain from expressing our opinion. Of the delay I need say very little, because my object to-day is rather to secure a statement from the Secretary of State on these three points which may probably produce something to clear up our difficulties. But of the delay I will only say that it was eighteen months—eighteen months—and eight months more in another case, making from three to four years' delay, and that my right hon. Friend in two successive years said, "We will wait, but we cannot wait indefinitely," and twice pointed to the end of the year, in 1908 and then in 1909, as being the last time to which we reasonably could wait for the full grant of our demands. I will not go into these promises, because we do not differ greatly as to the value of the promises. The-Secretary of State has some fears that they are at present only paper promises. The promises as to the Kasai and some other districts stand outside them. The Belgian Government is now at Kasai. It receives 50 per cent, of the profits of the Kasai Trust. It is living on forced labour, and the Belgian Government therefore is living on forced labour to that extent. I warn the Government and all who speak on this Question that we are met by answers in regard to the labour conditions that the law is clear and that the concessionaire companies cannot do this or that, but I would point out that what is done by the Kasai Trust makes the Belgian Government still responsible for the running of the country by forced labour.
I would say one word in regard to the fears which some Members have when they are asked what they would do in certain events. I have never shared these fears, and I would point out that in this House, when the Government takes strong action with certain powers, not
846
even a single question is asked. Not one was asked in the far more dangerous case of the ultimatum which we now know was sent to the Turkish Government by our Government when they came into office in the beginning of 1906 in regard to the occupation of the village of Tabah. That ultimatum might have raised serious questions in Europe. I think a little more courage would be desirable in a case like that of the Congo. It is not a question of £10 or £100 of somebody's property, as in the case of some successful acts by France and Italy against Turkey. We are shocked in the case of the Congo, because that which would never happen is put as a conceivable danger at the end of a long train of hypothetical events. It is said that there might be an act of violence. There would not be an act of violence, and I beg the House not to be led away by the fear of trifling complications following upon our insisting, not upon anything new, but upon that which we have been insisting upon for years past in a matter in which our moral obligation is very weighty. It would almost amount to moral complicity in the evils if we did not endeavour to put an end to them.
The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Edward Grey): I will endeavour to clear up the points which the right hon. Baronet has raised, and I do not at all complain of his having raised them, because on the particular point of M. Renken's speech—although I was not well acquainted with the speech except from what the right hon. Baronet has told me—I quite agree that it is a point to be taken notice of, and I will deal with it. First of all, let me say that although I do not consider we are at all in a less favourable position—on the contrary we are in a more favourable position—than on previous occasions with regard to this question, I have never said that the question, was completely satisfactory. Opinion runs very high on the question of the Congo, and when feeling runs high it is always the case that words are apt to be misinterpreted and one is thought to have said more than one intended, and when one says on the question of the Congo that one has not yet given up hope it is too apt to be interpreted as if one intended to sit down under the present position as if it were completely satisfactory and to show no desire for either movement or improvement. That is not so at all. All I would say with regard to the present situation in the Congo is this. As to the actual

847
facts in the Congo, the situation leaves an immense deal to be desired. As to promises with regard to the future, they also leave something to be desired. But the question has moved considerably, and the attitude of the Belgian Government, which now undertakes the responsibility for the government of the Congo, is very different, alike in language, in promise, and in spirit from anything we had to deal with under the old régime. As to our own position on the question of the difference between recognition and non-recognition, I would say that it is in my opinion of vital importance. I am told that people have asked in Belgium—What does it matter whether Great Britain does recognise annexation or not? Well, it matters a great deal, because we cannot go on indefinitely when we have not formally acknowledged annexation to agree to jurisdiction being exercised over British subjects. The position must be regularised sooner or later. And as long as it remains in the present state of suspense it is always open for any British Government at any moment to say that we cannot prolong this informal situation, and until the situation is regularised we must insist that we ourselves and nobody else shall exercise jurisdiction over our own subjects in the Congo State. That is the situation.
My right hon. Friend is afraid that our position will be weakened by the negotiations on the frontier question. These negotiations are going on with the distinct understanding that they are informal, and do not involve recognition. I do not see how, if substantially the negotiations result in an agreement on particular frontier questions which are being discussed, that they will take definite shape until formal recognition has taken place. But if negotiations had not been undertaken there would have been danger of conflict between the Congolese officials and the British officials on the disputed frontier, and I should have been sorry if conflict had occurred on that sort of point, because it would have appeared to be a dispute about territory, or territory that we were claiming for ourselves, and it would have at once exposed us to misconstruction— for it would have been misconstruction— that we were making use of the position of suspense with regard to annexation in order to acquire territory for ourselves which was being claimed on behalf of the Congo. If a rupture does come on this
848
question I do not wish it to come on a question of ownership of territory. Precisely because we do desire that questions of territory where there are claims overlapping should be settled by peaceable means, and in the same friendly spirit in which we should wish to deal with a country on the best terms, we have agreed to negotiations proceeding informally upon these matters, but they cannot be definitely settled until the question of annexation is cleared up. Meanwhile they proceed in order to prevent conflict arising upon what, I am sure, the House will feel is the most undesirable ground on which it could arise, and it proceeds without prejudice to our position as to the recognition of annexation.
With regard to M. Renken's speech, I take the right hon. Baronet's account of the language he has used, and which he construes as a denial of our treaty rights on the Congo. That is entirely contrary to any language the Belgian Government have used to us. They have not only not denied our treaty rights, but they have admitted that they take over the treaty obligations of the old Congo State, and they have kept us informed of what their intentions are in regard to the administration of the Congo. So far from denying our treaty rights, they have, on the contrary, given full assurances that they are going to make changes in the administration of the Congo which will bring the state of things there into accord with our treaty rights. If any language of the kind which the right hon. Baronet attributes to M. Renken had been used to us as a Government—of course I cannot commit the Cabinet on a question of that kind—I should certainly have recommended the Cabinet to at once take up the position of saying that our treaty rights and our own rights to stand up for treaty rights should be observed, and to continue diplomatic pressure until we secure them. If that was denied, we should at once deny the right of any Government which denied that in the Congo to exercise any jurisdiction whatever over British subjects, and we should have taken that into our own hands. I never thought that any language of M. Renken's was intended to convey that they were not prepared to discuss British treaty rights with the British Government, and if language of that kind was put forward I should at once have replied, denying the right of the Congo Government to exercise jurisdiction over any British subject in the Congo State.

849
With regard to the attitude of M. Vandervelde and the Belgian reformers, I am glad the right hon. Baronet mentioned that, for I. never thought they would have objected to the question being raised. I said the other day I did not believe it to be their view that we should depart from hopeful expectancy, or think that the situation is now hopeless in the Congo, so far as the Belgian Government is concerned, and that we should therefore come to an open rupture and take things into our own hands. I said that so far as I knew, the position of the Belgian reformers ought to be rather that of benevolent expectancy than departure from hope in that sense. I was thinking of the point that I was making to the House whether the time had come when we should say that the situation was hopeless, and that we should resort to measures other than those of mere diplomacy. I assumed that the Belgian reformers did not wish us to say the time had come that we should say that the situation was hopeless, and that the British Government could do nothing more. I never supposed for a moment that they desired that we should take no interest in the question here, and that we should sit down while they themselves were pressing for projects of reform in the Belgian Parliament. What the right hon. Baronet quoted tonight as to the pressure used in the Belgian Parliament and the large measure of support it has received is itself a justification for saying that the situation is not hopeless, that the time has not come to say that it is hopeless, or to break off all diplomatic negotiations on the subject of the Congo. With regard to departure from diplomatic method, the right hon. Baronet said we seemed to be afraid of our own shadows. I do not think that is quite a just reflection of the view of the Government or of any section of the House.
8.0 P.M.
I have always understood that if any Government came forward and said, "The situation is now hopeless; diplomacy can do no more. We must resort to other methods," the feeling of the House was such that the Government would have the support of the House. But the more that was the case, the more it was the duty of the Government not to make that remark until they did think that the situation was hopeless, and until they were perfectly clear as to what they were going to do and to what
850
lengths they were going to proceed. I think that some of the misapprehensions arose from something which I said in the Debate last year, not in the House, but outside, because probably the Debate was not reported at great length outside, An hon. Gentleman who is no longer a Member of this House impressed upon me in the Debate last year that we should depart from diplomatic methods, and take the course of blockading the Congo, and stopping merchant vessels carrying rubber. I replied on that point that it must be borne in mind that the navigation of the Congo was free by international treaty, and not by treaty with us, and therefore that we are under obligations to all the other Powers with respect to freedom of navigation on the Congo as well as to the Congo State. And to apply this principle of blockade is useless unless it is applied to everything going up and down the river, and if we had adopted that course it would have involved, and rightly involved, that we should be prepared to stop all ships under the flag of perhaps two of the greatest European Powers. It would raise the question of interfering with the flag of other European Powers in waters where they had a perfect right to go. That, in my opinion, would be about the most undesirable method to take of raising this particular question.
Sir CHARLES DILKE: A clumsy way of doing it.
Sir EDWARD GREY: If you were intending to raise the question of the Congo you would, as a matter of fact, have raised the question of the right of interference with the flags of other European Powers. That was the most undesirable way of raising the question. But because I deprecated that particular method, it was interpreted outside as if I suggested that any departure from the diplomatic course in the taking of matters into our hands would have involved war, especially war with Germany, which, even before the last election began, seems to have been in people's minds whenever there was talk of any action whatever. That was not in my mind at all. I wanted to deprecate that particular course for the reasons I have stated. I never intended to imply that the drawbacks to that particular course necessarily applied to other courses of departure from diplomatic action. I have been giving for some years careful attention to what we should be able to do supposing diplomacy failed in this matter. I have always been reminded of our treaty rights.

851
But when you come to look at the remedies which those treaties provide if those rights are infringed you will find that the treaties are not very satisfactory. I always thought under the old régime of the Congo that the proper course to take was to refuse to recognise any longer the authority of a Power which has for years violated our treaty rights, and to resume jurisdiction over our own subjects, on the ground that we cannot allow any Power we do not recognise to exercise jurisdiction over British subjects. If we had done that, or if we were to do that now, it would, of course, throw the Government of the Congo into confusion, and we should have to be prepared to have our decision disputed, and to take whatever steps we thought justifiable and necessary to ensure that British subjects were not interfered with. That would mean occupying whatever position in the Congo we considered to be necessary, not for the purpose of assuming responsibilities ourselves in the Congo, for neutrals or for natives, but for the purpose of protecting our own British subjects from interference by any foreign Power.
If we decided to resume our authority over British subjects and to deny the authority of anybody else we should have to be prepared to take those steps, and I think we ought to be prepared to undertake them, and we ought to undertake them, and we should not for a moment admit the right of any other Power to interfere with us when we were taking action for the protection of our own subjects. I do not think any European Power would wish to interfere with us if we were taking action of that kind, and if they did pretend to interfere with us then I should rely upon the forces at our disposal, which the right hon. Baronet referred to as being very considerable. But I do not for a moment suppose that other Powers would interfere in matters between ourselves and our own subjects, and I have nothing to say in deprecation of that course. To my mind that has always been the course which, if diplomacy failed, should be adopted. All I contend for is this, that not even the Belgian reformers themselves would wish us to say at the present moment that the situation is so hopeless that we should abandon diplomacy and resort to force. If the situation does become hopeless it will be the duty of some British Government to propose a course of the kind to the House, for I am convinced that there is better hope now than there has been in any of the past years that things are
852
moving in the Congo. I promise the House that we will not imperil resort to measures such as I have described, in the assertion of our rights over our own subjects, by definitely recognising the annexation of the Congo until we have assurances, and not merely assurances, but reports from our own representatives in the Congo, that things were vastly improved, and brought into accordance with our treaty rights. And we shall retain our diplomatic methods for the purpose. All I say to the House is that I do not think that the moment has come to abandon diplomatic methods; but we shall not permit any definite recognition of the annexation until we are able to lay before the House evidence to show that the actual state of things in the Congo with regard to the condition of the natives and with regard to trade is such as to have brought us within, at any rate, reasonable measure of fulfilling our treaty rights.
Mr. RAMSAY MACDONALD: I certainly would not describe myself as one who on this question has ceased to hope, but I am bound to confess to the House that I am very nearly one of those to whom hope has been deferred so long that the heart begins to get sick. One of the painful features of the whole of this controversy has been the facilities that have always been afforded to Foreign Ministers for assuring the House that things are getting a little bit better. We were told that from 1903 onwards, when the negotiations were opened for the purpose of transferring the Congo from King Leopold's personal government. When that was finished we were told we ought to postpone pressure because the Belgian nation was considering its plans. And now because there has been a debate in the Belgian House of Representatives, which resulted in the remarkable survival of the Government by the narrow majority of six votes upon a very wild and, speaking for myself, altogether too strong resolution, we are told once more that that is a good reason why this country should not fulfil its obligations. There is one thing I wish to be perfectly clear about. Whatever Belgium is doing we have obligations, and I think as a matter of simple fact that Belgian reformers are very anxious that side by side with anything that is going on in Brussels pressure should be kept up by us for the carrying out of our portion of the obligations. I really wish I could say to the House that the language and the spirit of the Belgian representatives

853
were better than they are. I am bound to say it takes one a very long time to discover that. Take the language of the Colonial Minister, to which my right hon. Friend alluded. That language translated into English, and quite accurately translated, used not at some private meeting or social function, but used deliberately in the Senate on the 24th of last month is as follows: "It does not pertain to the dignity of a free country to admit foreign intervention in their internal affairs." That is a perfectly plain claim laid down by the responsible Ministers that Congo affairs are purely internal to Belgium.
Nothing can be clearer than that. The language could not possibly be used under circumstances more sober, more serious, and more responsible than when the Minister is addressing the Senate. He says that there must be no outside intervention, and that the International Acts relating to the Convention of the basin of the Congo exclude the possibility of this absolutely. I do not care who speaks. I do not care who acts; but this responsible Minister and this language give the key, so far as I am concerned, to the language of the Government of Belgium and to the spirit in which it is approaching its responsibilities. What other guarantees have you got? The right hon. Gentleman the other day referred to the Budget. The Budget removes nothing, not one iota of it, to which we have been objecting. It does not remove what we have been objecting to regarding the land tenure. Fifty per cent, of this Reform budget is still being provided for by the forced labour of natives. The percentage of the income of the Congo Government provided for by forced labour in the new Budget is not any appreciable percentage less than the percentage in previous years. Moreover, I would like to remind the right hon. Gentleman that the figures he gave were merely estimates, and that we know on these occasions, and in such cases as that, that the estimate is very likely to err upon the liberal side rather than upon the other. But that is not all. It is stated that half of the Congo, after July, is going to be thrown open to Free Trade. What was the condition of affairs in that part of the Congo? That part of the Congo was doubly barred. There was the Kassai Company, in which the Belgian Government holds 50 per cent, of the shares. They have economic conditions under which it is practically impossible for free-
854
dom of trade to be established. That half of the Congo was also barred by the political edicts of the Congo Government, so that this matter upon which the right hon. Gentleman has placed so much emphasis is this, that the political bar is being re moved, but that the economic bar remains. That is no guarantee—
And, it being a Quarter past Eight of the clock, and there being Private Business set down by direction of the Chairman of Ways and Means, under Standing Order No. 8, further proceeding was postponed without Question put.

PRIVATE BUSINESS.

  MIDLAND RAILWAY BILL.—(By Order).
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read a second time."
  Mr. JAMES PARKERmoved, as an Amendment, to leave out the word "now," and at the end of the Question to add the words, "upon this day six months."
  I may state at the outset that I am not speaking against the whole of the proposals contained in this Bill, but rather against those which particularly affect the Constituency I represent. But the points which I have got to lay before the House are not, strictly speaking, matters of detail. They are of much graver importance so far as they affect the town of Halifax, and I consider them sufficiently important to bring them before the House on the Second Reading. Halifax objects to this Bill chiefly because the Midland Railway Company are seeking in it powers to drop certain proposed lines, and we consider that in so doing they are placing that town at a disadvantage after they have made repeated promises to bring their line into and through it. It will be remembered by those Members who were in the last Parliament, and who listen to the discussion of the Amalgamation Bill of the Great Northern, Great Central, and Great Eastern Railway Companies that the then President of the Board of Trade referred to secret agreements between railway companies, and gave as a reason on that occasion that the House should agree to give that Bill a Second Reading, or otherwise they probably might find that the railway companies would be making agreements behind the back of Parliament, with the result that

  855
  those agreements would possibly be calculated to do more harm than they were inclined to think. I admit that at that time I did not see very much in the statement of the right hon. Gentleman. But in view of what has now taken place in regard to this Bill, and from what we; know in regard to it, that statement of the then President of the Board of Trade assumes great importance. This company has made promises to Halifax for the last twenty years, and has been in negotiation with the authorities of that town time after time, promising to bring forward a scheme which would give Halifax a through connection north and south. Time after time they have failed to fulfil their obligations, and as a result the trade of Halifax and the growth of Halifax have been hindered, because of the inadequate railway facilities which are provided. If I may, I will briefly give a history of the case. Halifax is situated on the main line of the Lancashire and Yorkshire Railway, and to a small extent it is served by the Great Northern Company. Efforts have been made from time to time by the Corporation of Halifax and by the traders generally in the town to increase the railway facilities. Both the Corporation and Chamber of Commerce as well as the traders have shown themselves willing to support any company or body of persons who would undertake to improve the railway communications of the borough by the construction of new lines. From time to time during the last thirty years the Midland Railway Company have been approached from this point of view, and they continually and repeatedly promised to give Halifax direct communication with I their main line. As a result of that, when other companies suggested that they were prepared to give better communication, Halifax set aside those companies, and did not support them. As far back as 1873, to show how the Company has played with Halifax, they produced a scheme in Parliament to connect Halifax by direct route with Keighley, thus giving us direct access to a main line to the north.
  At that time both the Corporation and the Chamber of Commerce and the whole of the Halifax trading community, supported the Midland Company in their scheme. In the year 1898 the company obtained power to construct certain railways known as the West Riding lines, the object of which was to give Bradford a better connection with the Midlands and
  856
  the South, without having to go round by way of Leeds. Though there had been negotiations previous to this scheme of 1898, Halifax was put on one side entirely, and the company proposed to go forward with these lines, ignoring altogether whatever obligations they might have with respect to Halifax. In 1899, however, the company brought forward another Bill, in which they proposed to construct certain junctions which would give Halifax connection with the proposed new West Riding lines, and direct access to the Midland Company's system both North and South. Since that time practically no progress has been made with either of these lines. There have been various causes for the delay. I am not concerned with what the causes are. All I know is that practically nothing has been done with regard to them. At one time there appeared to have been some little dispute or differences of opinion between Bradford and the Midland Company as to the West Riding lines —whether there should be a low level or a high level scheme, and if the high level scheme is to be adopted the result will be, the Midland Company say, that these junctions which were to be the connecting I lines, and to couple up Halifax with the main line, would be altogether useless, and therefore they propose to drop the powers. That is the case, so far as I understand it, for the company to drop their powers, as they do in Clause 20 of the Bill, without regard to Halifax. We see in the dropping of this clause the entire collapse of the scheme so far as Halifax is concerned, and there is no chance of our getting a direct connection between North and South. The company propose to extend their powers so far as the extension of the West Riding line to Bradford is concerned, but while they propose to extend those powers they practically admit that these particular powers do not apply to the route which had previously been suggested in regard to Halifax. If the company ask for powers to extend the time in the case of Bradford, on behalf of Halifax it is asked that they should at the same time extend the time for carrying out the necessary connecting lines in the case of Halifax. I submit to you that the Midland Railway are not serious at all with regard to this Bill. It is a Bill of an omnibus character, and in the report which the directors have given to their shareholders they state:—
  "The Bill promoted by the company authorises works of minor importance, and the abandonment of the Low Moor Junctions and the Halifax Connecting lines authorised by the Company's Act of 1899."

  857
  If that is not clear that the company regard the chief object of this Bill as the getting rid of obligations which they have at the present time, "The Times" report makes it quite clear that the company regard that as the most important part of their Bill. The Chairman of the Board of Directors, addressing the shareholders, said:—
  " The company's Bill this Session proposed to authorise the abandonment of their Parliamentary powers to construct a railway to Halifax. The directors obtained these powers as far back as the year 1899. when money could be raised by railway companies on favourable terms: lint, as they very well knew, railway companies had not since been in that, position, and capital expenditure had to be rigorously curtailed. Owing to their friendly relations with the Lancashire and Yorkshire Company the directors had recently been able to put through services into operation, which, to a considerable extent, gave to the people of Halifax the advantage they would have had if the new railway had been constructed, and it had become obvious that the construction of the railway could be altogether a voided. This was a good illustration of the advantages they derived from their agreement with the London and North-Western and Lancashire and Yorkshire Companies. The directors would still be left with powers to construct a railway to Bradford which they obtained in 1898: they did not want to say much about the Bradford line at this meeting, as negotiations with the Lord Mayor and Corporation of Bradford were now proceeding with regard to it. It had been frankly recognised on all hands that the very costly line originally proposed could not now be proceeded with, but it was hoped that an agreement might be arrived at for the modification of the scheme with the assistance of the corporation."
  If a railway company can go behind the back of Parliament and enter into an agreement, ignoring all their previous promises and obligations, and if it is within the power of these boards of directors to make or determine according to their own will to give facilities to towns, and if they use their powers to stave off opposition on the part of those towns by making the most definite promises, then I say that is giving railway companies power which this House ought never allow to them. After all, railway companies do exist for something besides the provision of dividends to shareholders.
  Mr. REES: They do not do much in that way.
  Mr. PARKER: They do it to the extent of forty millions, or thereabouts, which is a detail of some importance to everybody possibly except the hon. Member for Montgomery Boroughs (Mr. Rees). Railway companies can by adopting these methods considerably hinder the progress of towns. I think this House ought not to allow these companies to get out of their obligations in this particular way. I sent to the town clerk of Halifax a request that he would inform me of what loss Halifax had incurred as the result of
  858
  the purchase of land and property which the town had made with the avowed object of the Midland Company going to Halifax. I know I am speaking the truth when I say that many thousands of pounds have been spent in good faith on such property with the avowed object of its being required for the purpose of railway traction. I will not say they will not get some of that money back, but that the town will lose a great deal there is no doubt whatever. On those grounds, which to my mind are ample and sufficient, we have a right to ask this House to consider seriously before it puts it into the power of a railway company to abandon proposals and undertakings which it has honestly entered into. I think that those who have read the Petition which has been sent round to practically the whole of the Members of the House must confess that the case has been made out by the Corporation and Chamber of Commerce of Halifax against this Parliamentary Bill. I beg to move.
  Mr. J. S. HIGHAM: I beg to second the Amendment. My Constituents are directly interested in this matter, just as are those of my hon. Friend the Member for Halifax (Mr. Parker). They are not interested to the same financial extent, but many thousands of them use this line from Halifax to get into Yorkshire for the North and South. The abandonment of this short section will be a serious matter for them. We owe a duty to the local authorities who have negotiated in bygone years with these railway companies. There has been too much inducing of local bodies either to support a Bill or withdraw opposition. Promises have been given, and then, when the object has been achieved, the railway company have, over and over again, deliberately thrown over the local authority, having got all the help they could from them. My hon. Friend pointed out that for nearly forty years negotiations have been proceeding between the Midland Railway Company and the Halifax district. In one case thirty-seven years ago another company was promoting a line. The Midland Company induced the Halifax Corporation and the councils around to oppose that line under a definite and distinct promise from the Midland Company, and a promise which has never been carried out to this day. That line was dropped to the loss of that district, and largely because of the failure of the help and sympathy of the authorities of the district. We owe a duty to those

  859
  authorities. We are here representing the people generally in our own locality; but what has taken place in Halifax and around that part of the West Riding of Yorkshire takes place at other times in other parts of the country.
  When a railway company come here with a Bill we take it for granted that that Bill is the well-considered judgment of the company. It is very often a balanced Bill, containing concessions to various parts, to various authorities, and those various authorities work together for the company, withdraw their opposition and lend their help because of these balanced parts of the Bill. For twelve years nearly this Bill has been in existence. My hon. Friend referred to the fact that Halifax has bought land; but that is not the most serious part of it. When it is known in a district that a railway company intends to bring its line into that district, make sidings, station, and so forth, the town in its building and planning arrangements adapts itself to the future of that new line. In the construction of its tramways it is borne in mind where the termini will be, how the people are to get to the station, and how the lines will run from the station for junctions. That has been the case in Halifax, so that it is not alone the question of the land that Halifax has bought, but also the question of the arrangements that have been made in the last ten or twelve years in view of the promises held out so solemnly for twenty-five years and put in the Bill of 1899. We have come to a time when there is never a shareholders' meeting of a railway company without an announcement being made of an agreement with some other company. Many of these agreements are for the benefit of the public, but, at the same time, it is not fair to districts like that with which we are dealing to-night, which may be made or damned by a clause of this kind, that bargains which have been made, and works the carrying out of which has been expected for twelve years, should be thrown over merely to enable the railway company to avoid a slight expense. The whole length of line concerned in this case is only a mile and a half, but for want of it the industry of the district has been hampered in past years. The corporation of Halifax is opposing the Bill, and the district councils in my own Constituency are taking a similar course. My Constituents are watching the interests of the manufacturers and the whole community.
  860
  The Midland Railway Company have been held up as the pioneers of railway companies in the past, and that it should throw I over a Bill which has been in existence for twelve years and abandoned a mile and a half of railway which would be of enormous importance to the locality, simply for the sake of a small saving and an agreement with another company, we do not think quite worthy of its reputation. I hope the House will exercise such pressure as will induce the railway company not to reverse its position just now, but to put this abandonment clause into the same position as they have put another clause, by which they are asking for a three years' extension. If they would agree not to abandon this section but to get a three years' extension, matters might be so arranged in the interval as to enable the company to carry out the work.
  Mr. J. H. THOMAS: In supporting this Motion I am representing a much larger Constituency than either of the Members who have spoken. I desire to bring to the notice of the House a matter which, in my judgment, is of vital importance to the future relations between railway companies and their employés. However desirable peace may be in industrial concerns in general, it is especially necessary having regard to the importance of the railways to the country. Therefore, when in 1907 the President of the Board of Trade succeeded in bringing the railway companies and their employés together, and, as a, result of that conference, set up a scheme of conciliation and arbitration, Members on both sides of the House and the country generally appreciated his achievement, because they recognised that it was the best and most common-sense method of settling disputes between capital and labour. Therefore, I make no apology for taking advantage of this De bate to point out that it is the duty of Members of this House to see, not only that that should be given effect to from both sides, but that there should be fair dealing on the part of the railway companies. Unfortunately—and I deeply regret having to say so—instead of that scheme being accepted in the spirit in which it ought to have been—
  Mr. REES: May I ask how these remarks are relevant to the Bill before the House?
  Mr. DEPUTY-SPEAKER (Mr. Emmott): The hon. Member is in order.
  Mr. J. H. THOMAS: Whilst I was speaking in a general sense with a view to showing that all railway companies were under an obligation in this particular matter, the Midland Railway Company, whose Bill is now before the House, is, to say the least, a very big sinner, inasmuch as it has unfortunately taken advantage of the scheme to lay down conditions in regard to its employés which, I think, to put it very mildly, are cruel. During the past month there has been considerable discussion with regard to unemployment, and Members on both sides have welcomed any suggestion that would tend in any way to alleviate that great social problem. Whatever differences may exist, it will be generally agreed, I think, that no man should either be reduced or out of work in any branch of industry, and especially in a railway concern, if in that same town or district similar men are working an enormous amount of overtime, with the result that other men are suffering. Therefore I desire to draw the attention of the House to this fact, that the Midland Railway Company, taking advantage of the conciliation scheme, taking advantage of the agreement between themselves and their employés, reduced hundreds of their goods-guards from 30s. per week to 22s. a week. Eight shillings per week may not be a large amount to Members of this House, but I think hon. Members will appreciate that it is an important matter to working men. If the Midland Railway Company can prove, either to the men or to the satisfaction of this House, that they had no work for these men, and that they were justified in reducing them because they could not find them work, then, much as I would regret it, it would not be my duty to complain in the least. But unfortunately I find at one station alone, Normanton, from 3rd to 21st February of this year, taking the four weeks alone, that forty-nine goods-guards stationed there worked during that month 1,634 hours overtime over and above the sixty hours week. At the same time there were nine goods-guards reduced 8s. per week under the pretext of the Company that there was no work for them to do. Take another station, Haslam. Taking the same dates—I hope hon. Members will recognise that I am not going very far apart, but am keeping to dates within this I year—I find that on 3rd February thirteen goods-guards were called out seven times during six days. The next week there were twenty men called out seven times, and one called out eight times. In the
  862
  week ending 17th February there were fifteen men called out seven times, and one called out eight times. For the week ending 24th February thirteen men were I called out seven times. All this overtime from seventy to eighty hours per week was worked, and still goods-guards were reduced on the excuse that there was no work for them to do !
  In one other district, Sheffield—and I will conclude on that point—not one but a number of goods-guards were working from seventy-five to eighty hours per week, and some of their fellow workers were losing 8s. per week in wages under the pretext there was no work for them. I submit that that, although for the moment that may not be relevant to this particular Bill, is a matter that vitally affects the Midland Railway Company, and it is something which ought to be given expression to.
  But I have a more serious complaint even than that against the Midland Railway Company. There are a class of workers on our railways that are especially deserving of sympathy and support—the humble platelayers. On the Midland Railway I find that there are 4,400 platelayers earning wages of 17s. 6d. to £1 per week. I am not complaining for one moment of the wages—that is not my point. I indicated it only as showing the struggle for existence by these unfortunate working men. Under this scheme of conciliation, when these 4,000 odd men made an application for the improvement in their conditions of service, they asked that Good Friday and Christmas Day should be treated as a Sunday. When this application was made, the Midland Company paid these men a day for coming on duty on Good Friday and Christmas Day. Whilst they were negotiating this improved programme the company said to them: "We would suggest to you that you should withdraw this application, because you will really be better off under your present system." The humble platelayers took the company at their word and replied: "Yes, we agree to that; we will withdraw it. And there was a mutual understanding that it should be withdrawn. Immediately it was withdrawn, and the scheme of conciliation came into operation and the agreement had to take effect, the Midland Company took advantage of the position and reduced 4,400 platelayers 1s. 6d. for the Good Friday or the Christmas Day, as the case may be. In other words, instead of paying them for the day, as per the agree-

  863
  ment of the scheme, they took advantage of the position, and paid them for half a day instead of a day.
  Another and perhaps a more glaring illustration of what has happened is that one part of the conciliation scheme, as affecting the goods-guards, was settled by this Conciliation Bill on the understanding that Sunday was made distinct from the week; that was, that there was an enhanced rate of pay to goods-guards if they were called upon on the Sunday to do the work of any other employé. The goods-guards accepted this position. Everything, as they thought, was working smoothly. A number of men were called upon to work last Christmas Day. Because the Midland Company were compelled to pay these men the guaranteed week—that is, whether they worked or not—in accordance with their conditions of service, they actually compelled these men to take the place of other men, who were paid off because the company were not compelled to guarantee them their work. One man, who felt that this was a grievance, made an application to the company to pay him his solitary day's pay in accordance with the scheme. The company paid him, and everything was satisfactory, but imagine — next Friday is Good Friday—because this one man made an application, and got his one day's pay—which is an admission on the part of the company that he was right, and in order to avoid paying the men next Friday what they are legitimately entitled to—last Thursday the Midland Company issued notices to practically every guard in the London district, Wellingboro', Kettering, and Wigston, and in London as well, intimating to them that, "on and after Thursday next, owing to slackness of work, their wages would be reduced by 8s. per week in some cases and 6s. in others." The company are simply taking advantage of Good Friday to relieve themselves of their obligation under this conciliation scheme. I ask hon. Members to pardon me if I have spoken with any heat, but I have spoken because I know how these men feel. I have spoken because we recognise that the relationship between employer and employed should always be amicable, because I feel that only in exceptional circumstances should this House be called upon to interfere, because I am jealous of the scheme of conciliation, and because I want this method to apply to all industries. It is because I want to give a chance to railways that I want this House to give very
  864
  strong expression of its opinion upon the present occasion, and to say, whether in the case of railway companies, or railway-men, how far they shall go in dealing in a common-sense way and in a spirit of conciliation in matters of this kind.
  Viscount MORPETH: So far as I am aware, there is no Member of this House who is entitled to speak on behalf of the Midland Railway Company with authority, and yet we are, unfortunately, discussing upon Second Reading complicated questions of detail. I have some slight interest in this railway company, and although I cannot claim the detailed knowledge of the hon. Member for Halifax, whose constituency is interested, or of the hon. Member for Derby, who presented the case in regard to the men, still I venture to address one or two observations as to the undesirability of entering into this detailed consideration upon the Second Reading in the House, where they cannot properly be discussed. The Corporation of Halifax has issued a Memorandum of thirteen clauses. It is very complicated, containing many geographical details with which no doubt the hon. Member for Halifax is able to grapple. The rest of us, with the very best intentions in the world, not having got the detailed knowledge of the hon. Member for Halifax, cannot know the exact position of Morrow Junction, or the exact run of the places to which he has made allusion. I would suggest that the only way these details could be properly discussed is before a Committee upstairs, where there will be competent people to offer elucidation in evidence, and where there will be a large map upon which the Committee can look. It may be quite clear that Halifax has, primâ facíe, a case for inquiry, but that inquiry should be conducted by the proper tribunal. The Midland Railway Company also has a primâ facíe, case, and they have a good argument to support it.
  These powers were asked for in 1899. Money was more available then than at the present time. It is quite conceivable —I have not quite sufficient knowledge myself to say so—but it is quite conceivable that the policy undertaken in 1899, when money was easy to get, is a policy that the railway company may find it hard to follow in 1910. I venture to say that the Midland Company are not seeking to go behind the backs of Parliament. On the contrary, they are coming to Parliament and asking Parliament to absolve them from the obligation they are under. If Parliament sees

  865
  fit to refuse it, as it will be in their power to do, there is no better place for coming to such a decision than before the Committee upstairs. The hon. Member for Derby excused himself toward the end of his speech for having spoken with some heat, and, in apologising, said he felt strongly on the matter.
  9.0 P.M.
  I do not think anyone will say that the hon. Member spoke with any undue heat. I think he put his case temperately to the House. But here again questions and details arose such as hours of employment, and it is very difficult to deal with them on the floor of the House in a Second Reading Debate. They can only be dealt with in a Committee containing many persons of technical and expert knowledge, who can explain the special difficulties. I have certain information in connection with these matters which I believe to be correct. The Midland Railway Company, the history of which everybody knows, is a large coal-carrying line. They have a fluctuating trade, and at certain periods of the year they find it absolutely essential to reduce the staff which is occupied in carrying the coal at the fuller times of the year. They have endeavoured to meet this with the least hardship possible to the men. No one would believe that the company desires to treat the men harshly. It is the interest of the company to keep on good terms with its men, because it gives the best results both for themselves and the public. The Midland Railway Company act through the Conciliation Board when aiming at an understanding with the men. In the case of a guard where his work is no longer required, he is not dismissed, but simply reduced, and in that case, although acting in an inferior capacity and on less skilled work, he continues to draw the minimum pay attaching to the great service in which he acted before. The hon. Member for Derby brought forward certain cases in regard to special incidents. I have no information in regard to the special case of Normanton or the case of Haslam. I have no doubt they can be accounted for by special circumstances.
  Mr. J. H. THOMAS: I only particularised a few, but they apply generally.
  Viscount MORPETH: My information is that there has been a great diminution in the amount of overtime worked by the guards, and that it is steadily diminishing; and speaking of the service as a
  866
  whole it may be said that a practice of excessive hours in the work of guards is diminishing. There may be certain individual cases of very great overtime, but taking the records as a whole, it cannot be said that the evil is becoming worse, but is steadily diminishing. I believe that will be found to be the result if the matter is looked at as a whole. With regard to the platelayers, that is a matter of detail, into which I cannot go. But I would point to this matter, namely, that the terms and conditions were made by award, and if the men have cause of complaint they have a remedy open to them which is the proper remedy and not the opposing of a Bill on Second Reading. Their remedy is to complain to the Secretary of the Conciliation Board or to come straight to the Board of Trade. I am sure every Member of this House desires to see a proper channel open for the redress of grievances, where there are grievances to be redressed, but this is not the occasion, I venture to say, on which to bring forward these matters, although it was ruled that it was in order to raise these grievances upon this occasion. I urge this is not the desirable way of dealing with these labour difficulties and with this question of hours of labour, and that everybody who desires to see justice done between employer and employed must see it done through the proper channels and not by attempting to stop the legitimate work by raising a side issue upon an occasion like this.
  Mr. A. C. MORTON: I desire to oppose this Bill for a totally different reason to that which has been given by other speakers. I want this company to provide sleeping carriages for third-class passengers when they supply them for first-class passengers. There should be no preference in this matter, and all should be treated alike. The Noble Lord (Viscount Morpeth) tells us that we ought not to discuss these matters on the Second Reading. May I point out that I cannot raise this question upstairs, because I cannot get an Instruction carried. There is another reason why this question should be considered here, and it is that it may cost £l,000 to have it considered upstairs. The Noble Lord is utterly wrong in saying this is not the right place to bring such matters, forward. I remember that the right hon. Gentleman the Member for West Birmingham told us in the year 1882 that it was not only the right of everybody but their duty to bring their grievances before this House or before the

  867
  House of Lords when railway companies come forward asking for concessions.
  I notice in the paper sent round by the company they say in regard to third-class sleeping carriages:—
  "This question has no reference to the subject matter of this Bill."
  There the company is entirely wrong. My contention is that this House should not grant any more favours or concessions to railway companies until my grievance has been dealt with. I do not want to say anything against this particular company. I have always been most anxious to help all railway companies in all bonâ fide undertakings, because whatever benefit the public get, in the long run the company benefit as well. The company say that this question has been raised on previous occasions. I am quite aware of that, and if this or any other company wish that this question should not be raised again let them give way, and then they will get over the difficulty, and this will avoid them the trouble of writing these letters.
  Another argument advanced by these companies is that they lose by the provision of first-class sleeping carriages. We all know that they lose by their first-class traffic altogether, and you have only to look at the empty first-class compartments, and the full third-class compartments in a train in order to satisfy you as to the truth of that. We all know that railway companies make most of their profit from third-class passengers, and not from the first-class. The third-class is the part of the traffic out of which the companies get their profits, and I ask is it fair to make the third-class passengers pay for the first-class sleepers and not have the same convenience for themselves? If the companies will only look at the matter in that fair way I think they will soon conclude that it will be for their benefit, both financially and otherwise, to treat all classes of passengers fairly.
  I do not know what the Board of Trade are going to do, but I am afraid they are rather against us now. A year or two back, when Sir Hudson Kearley was at the Board of Trade, they did try to help us, but they have got rid of him now and sent him to clear out the mud in the Port of London without any salary. I notice from the newspapers recently that Sir Hudson Kearley has been busy pro-
  868
  moting the worst class of Tariff Reform that I know of, and I am not certain that we have any friends at the Board of Trade now. Generally speaking, the Board of Trade do not help us, and the only thing they seem to have done lately is to allow the railway companies to increase the price of week-end tickets by about 20 per cent., and not a word has been said against that by the Board of Trade. I do not want to kill this particular Bill, but what this and other companies will have to remember is that if they do not make some concession in this direction we shall probably throw out a Bill and very seriously inconvenience them. It is simply stupidity on the part of the companies to act in this way, and I know no more stupid set of persons than railway directors have been for a good many years in these matters. They have treated the public badly. I do not say that they are not more enlightened now, but if they would only give us these third-class sleepers I shall be pleased to admit that they are more enlightened still. I hope no other hon. Member will advance such reasons as the Noble Lord the Member for Birmingham has advanced in regard to such matters as these going upstairs for consideration. I protest against anybody telling us that, whether he is a railway director or not, or whether he comes from Birmingham, or any other place of worship. I hope that, as the House seems to be in a good humour now, it will support me and throw out this Bill, unless someone gets up on behalf of the company and promises us at least some consideration of this proposal.
  Mr. REES: The hon. Member for Halifax (Mr. Parker) has given notice to oppose the Second Reading of this Bill, and he says his opposition is directed to the proposed abandonment of the Low Moor junctions and the Halifax connecting lines authorised by the Company's Act of 1899. I submit that it is the action of the hon. Member and of others who act with him that leads to the dropping of railway schemes. It is quite impossible for railway companies to carry out fresh schemes if they are treated as a sort of public enemy instead of being treated, as in fact they are, as a mere branch of the public. The hon. Gentleman who has just addressed the House (Mr. Morton) professes to speak for the public, but the railway proprietors are a portion, and a very large portion, but not a rich portion, of the public. It is all very well to talk

  869
  about the boards as if they were a collection of bloated plutocrats, but they represent shareholders, 60 per cent, of whom have only £500 worth of stock per head, the interest on which is about half the amount which disqualifies an applicant for an old age pension. I submit that the spirit in which this question is treated in this House is likely to kill any railway extension and to thereby deprive labour of the advantages it would receive by the proper development of the railways of the United Kingdom.
  The hon. Member for Halifax said that the railways get so much out of the local authorities, but I submit with some confidence that the local authorities get more out of the railways. Wherever the railway goes it is the milch cow of the local authority, and, instead of being taxed like any other business concern upon its profits at headquarters, it is taxed wherever it goes, and, with great respect, I submit that the hon. Member's remarks on that subject are not worthy of acceptance by this House. Then the hon. Member objected very much to agreements between railway companies. The hon. Member and other hon. Members spoke as if railway companies are branches of the State; but the railways have not yet been nationalised in this country. They are private companies, and how are they to exist unless their shareholders receive some return, and how can they work if unlimited competition is enforced upon them by Acts of Parliament? Not that I believe the Board of Trade has the slightest authority to force a railway company to work at a loss, or to avoid competition on its behalf. The Board of Trade, so far as I know, has, in fact, no such authority. Throughout this Debate nobody has referred to the railway companies as if they were what they are—a mere collection of persons who have invested their capital in British concerns at a very low rate of interest. It it were permissible to use the word preference on this side of the House, I would say they were people who had almost established a claim to preference. How it can be considered to benefit labour to oppose railway companies in this way passes my comprehension.
  The hon. Member for Derby (Mr. Thomas) said he represented a larger constituency that those who had spoken before him in the Debate. I do not profess, in this respect, to speak for any constituency, but I submit I might claim to speak for a far larger constituency than
  870
  any hon. Member who has spoken in this sense, and that is the large bulk of the people of the United Kingdom who have invested their money in railway enterprises. If that is not a large constituency, and if it is not one for which any hon. Member in this House may venture to speak, I am very much astonished. I listened to my hon. Friend with equal pleasure and profit, and I think he made an admirable speech, but during his remarks upon the Labour question, I ventured to ask whether they were relevant to this issue, not with any desire to interrupt, but because it seemed to me that Member after Member spoke from one point of view only, and that so few Members speak for the enormous number of people, not wealthy people, but people of moderate means, who own all these railways, and because I was anxious, however unworthy I might be, to say a word from that point of view. This is not a point of view which is popular, but I submit it is worthy of all consideration.
  My hon. Friend then referred to the fact that a few guards had been reduced in pay. Guards are most popular persons. The moment you see a guard, your hand begins to go automatically to your pocket, and, even if he gets nothing, he is equally polite and capable. There is no one in this House who has more sympathy than I have for the guard, but if it becomes necessary to reduce the number of guards, if it is the absolute duty of unfortunate directors, who are continually pilloried in this House, in justice to their shareholders to put down a man because there is no work for him, what is the use of shutting our eyes to that very simple fact, and of proceeding as if a railway board is some kind of Monte Cristo who can pay wages irrespective of whether there is work for the men to do or not. Another of my hon. Friends said that any ground given by a railway company for reducing a man was a pretext. It is rather hard to say that anything done by the employer is a pretext, and I put it to him whether he does not consider it fair to allow something to be said on both sides on a matter like this, as in so many others which come before the House. He said that the relations between the railways and their employés should always be amiable and pleasant. So they should, but, when the hon. Member was speaking he reminded me of a character in the play who was the most amiable and tractable man in the world provided he was led in the direction in which he wanted to go.

  871
  I do say that to take any action which has the effect of killing railway Bills makes it difficult for any railway company to come to the House with any Bills. We all know that in the last Parliament railway companies almost ceased to bring Bills before the House. [HON. MEMBERS: "Oh."] Well, they ceased to do so in any great numbers, and it was notorious that members of the Bar who deal with such cases sat in sackcloth and ashes during the life of the last Parliament. I therefore submit that to take any action, however admirable the intentions of hon. Members may be, and I am sure they are admirable, which will put difficulties in the way of railway companies getting Bills through Parliament is to kill the goose that lays the golden egg.
  Hon. Members have not scrupled openly to apply that epithet to those gentlemen of whose competence to perform their duties I am fully persuaded. I am not a director of any railway company in the United Kingdom; I speak absolutely from the point of view of the railway share holder—the man with £500 invested which brings him in but 3¼ per cent. I press hon. Members who have raised this question to consider earnestly whether in opposing these railway Bills they are really serving the interests they have at heart. Although no doubt it is very popular to describe boards of directors as bloated plutocrats—
  Mr. MORTON: Nobody made that charge against directors.
  Mr. REES: I have often heard it said. I was not quoting my hon. Friend. But I should like to point out he said the railway companies should be liable to provide third-class sleeping accommodation where-ever they did first class—he suggested if they lost by first-class traffic they should also lose by third-class. That struck me as one of the most extraordinary arguments ever addressed to the House of Commons.
  Mr. MORTON: I never used that argument.
  Mr. REES: I was endeavouring to summarise the argument of my hon. Friend with such intelligence as I possess. If I misunderstood him I apologise. He certainly spoke of rich railway companies. I do not know any country where the railway companies are poorer. Ours are by
  872
  no means rich. I am speaking for the moment as a poor proprietor. But it is notorious that trains going long distances cannot possibly carry sleepers for third-class passengers without doubling the accommodation, and that, of course, would double the expense, and the interest would fall from 3 per cent, to 2 or to 1 per cent.
  Mr. MORTON: Take off the first-class sleepers, then.
  Mr. REES: Then the hon. Members argument is that because the third-class passengers are uncomfortable, so the first-class should be. That is not treating seriously a grave commercial problem. Until the railways are nationalised the interests of the owners of the undertakings are entitled to some consideration, and hon. Members in opposing the passing of Bills like these are not serving their true interests of labour.
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Tennant): I should like to draw the attention of the House to a letter which was written, and which has been circularised by the Midland Railway Company—a letter signed by the general manager on the subject of sleeping accommodation on trains. The general manager admits that third class sleeping accommodation on long distance trains would be greatly appreciated by third class travellers, but the companies, having considered the matter at the request of the Board of Trade, have come to the conclusion that the charge the public would be prepared to pay for the convenience would in no way reimburse the companies for the outlay.
  Mr. WATT: There is nothing to prevent them trying it as an experiment.
  Mr. TENNANT: I am afraid that such an experiment would be very costly, and there is the danger that when once it is embarked upon it would be very difficult to withdraw from it, and the companies might find themselves led into an enormous cost for which they might never be able to recoup themselves.
  Mr. MORTON: But the Board of Trade adviser suggested a plan by which it might be carried out.
  Mr. TENNANT: The Board of Trade have not altered their view. They tried to persuade the companies, but in view of the answer received to their representations that it was not practicable to run third.

  873
  class sleepers without serious loss they cannot see their way to press it. With regard to the question of week-end tickets I will make inquiry as to facts and the possible remedy. I was entirely unaware of the facts mentioned by the hon. Member.
  Mr. MORTON: I mentioned the subject a year ago in this House.
  Mr. TENNANT: Next I come to the speech of the hon. Member for Halifax. The reasons put forward by the railway Company for the abandonment of the Low Moor Junction of railway lines was that they had been able to come to an agreement with the Lancashire and Yorkshire Railway providing additional facilities, and I do not think my hon. Friend will deny that the agreement come to was one which very largely performed the services to the public, which had been provided by the construction of the new lines.
  Mr. PARKER: It does give us better communication with the south, but that with the north and Scotland is not improved at all.
  Mr. TENNANT: I understood that the arrangement was that in future there would be extra facilities to the north. The improvement as regards the south is concerned has been acknowledged by the hon. Member for Halifax and by the local authorities. This point was really made by my Noble Friend the Member for Birmingham (Viscount Morpeth), and these are matters which can only be properly investigated by a Committee which will hear evidence and have all the facts before it. I would, therefore, very respectfully ask the House in regard to the Halifax question to give the Bill a Second Beading, and let it go to a Committee upstairs, which is the proper tribunal to investigate facts of this kind. If I may be allowed to, I should like to ask my hon. Friend incidentally why the town of Halifax should have taken the power to buy land, or why they should have entered into negotiations to do so. The hon. Member for Derby (Mr. J. H. Thomas) made an interesting and earnest speech, upon which, I hope, I may be allowed, to congratulate him, and I should like to be allowed to associate him with the Board of Trade, which is most anxious that agreements arrived at in the course of an arbitration system should be carried out, not only in the letter, but in the spirit, and it is my belief and the belief of the Board of Trade that this agreement is going to be carried out by the railway com-
  874
  pany in its integrity. I believe there is no intention upon the part of the railway company to depart one hair's breadth from that agreement. But I should like to be allowed to join the hon. Member for Derby in supporting and pursuing the system of conciliation and arbitration, which, I think, will prove not only beneficial to the present, but to the future of the working classes and the whole trade of this country. Under the award of Lord Cromer, which was arrived at under the instrument of conciliation and arbitration, the question of wages was decided for the company, and as to that I do not think there need be, or will be any dispute between my hon. Friend the Member for Stockport (Mr. Wardle) and myself.
  Mr. WARDLE: May I point out to the hon. Gentleman that this matter did not come under Lord Cromer's award? It has been referred to to-night; it is a question of the goods-guards, and it did not come under Lord Cromer's award.
  Mr. TENNANT: I have got the agreement here, and there is an enormous amount of detail which came before the tribunal, and there were a large number of concessions made on both sides. The question of the goods-guards came before that tribunal to this extent, the company wished to get away from the particular system of guaranteeing weeks.
  Mr. J. H. THOMAS: Allow me to point out that this did not come under the conciliation scheme, inasmuch as it was an agreement between both parties. It never came before Lord Cromer, but it did come before the Conciliation Board, and both sides agreed.
  Mr. TENNANT: I am obliged to the hon. Member. It is my mistake in mentioning the name of Lord Cromer. The point is that conciliation and arbitration was the instrument by which the agreement was arrived at. There were, as I say, a large number of proposals withdrawn, and there were a certain number of agreements arrived at, one of which, to which the men attach great importance, was agreed to, namely, that there should be a guaranteed week, so that if a man works one day as a goods-guard and is idle for the rest of the week he gets pay for the whole of the week as a goods-guard. If he only works half a day as a goods-guard he will be paid for a full week, and although there are cases in which men are reduced in status, much as we regret reduction, I maintain that reduction of status is better than dismissal.

  875
  After all, the railway companies, as has been pointed out, have not been very prosperous lately, and some economies, I am sure it will be agreed, are necessary. It must also be remembered that the men who are to be reduced will have a week's notice before the reduction takes place, and if they are employed as goods guards another week's wages has to come to them before they can be employed again at the reduced scale. The hon. Member who complained that there was a reduction of status went on to complain of overtime. For myself, I should like to see overtime abolished, but it is necessary in order to run a great railway company that there must be some freedom, and I am assured by the company that it has every desire to do away with overtime to the greatest possible extent that they can, because it means to them increased pay, the keeping of engines in steam which ought not to be in steam, and other expenses, and they wish to get away from it. The railway company desire to get rid of this system, but it is not always possible to work the line without overtime, which comes about through pressure of work, or a fall of snow, or other causes. Then it comes about that some guards have to work overtime and others have to be reduced because the company desire to effect economies in other parts of their system. It is not quite fair to blame the company, however, for reducing their goods guards and for the large increase of overtime on the part of other guards, because it is not possible for them to organise their labour so that there shall be no overtime and no reduction.
  Mr. THOMAS: I ask the hon. Gentleman to appreciate the point that I recognise that if there was no financial advantage to the company they would obviously work it to suit themselves, but in this case the reduction is brought about because it saves them paying the enhanced rate I have mentioned.
  Mr. TENNANT: I will make inquiries into that, but I very much doubt whether it is done on purpose. I believe the fact that you have some guards working on a reduced scale and others being paid overtime is the result of accident which cannot be foreseen or avoided. I will certainly make representations to the company in the sense of the hon. Gentleman's remarks, and if I can get the overtime abolished
  876
  further no one will be so happy as I shall. May I give one or two figures upon the amount of reduction of overtime which has already been effected upon the Midland? This subject came before Parliament in 1907, when it was admitted that owing to the boom in trade there was a very considerable amount of overtime being worked, and an inquiry was held, conducted by Major Pringle, on behalf of the Board of Trade, into the amount of overtime which had actually been worked. My purpose now is to show that it is owing to the action of this House and of the Board of Trade that very large reductions in overtime have been made, and also that there is anxiety to get rid of overtime. The facts are that the percentage of turns of duty, after deduction of the time occupied in travelling home after relief, was in April, 1907, at the time the complaints were made, for goods guards 3.45 per cent. For October of last year the percentage calculated on the same basis was not 3, nor 1, nor 1, but 05 per cent. For goods engines there was even a greater reduction from 10½ per cent, in April, 1907, to 04 per cent, in October, 1909. I am very pleased to be able to give these figures, because I think they show that the company has really been desirous to meet the wishes of the House and the Board of Trade in reducing overtime as much as they possibly can. The hon. Member (Mr. Thomas) stated that at Normanton in four weeks forty-nine goods guards worked 1,634 hours overtime. I did the sum while I was sitting on the Bench, and I find it works out at eight hours a week each. Eight hours a week is too much, but it is not a rate of two hours a day. It is two hours for four days a week. I assure the House that this is a Bill which in my judgment ought to go to the Committee to be investigated. Not only has it the points which we have already dealt with, but it proposes to confer considerable advantages both in Leicestershire, where a bridge is to be built over a level crossing which has been a source of danger and congestion for twenty-five years, but also to complete a set of lines in the West Riding of Yorkshire, where great benefits will accrue. I ask the House not to deny the Bill a Second Reading.
  Mr. W. E. HARVEY: I am delighted to hear the report as to the reduction of hours of railway servants as a result of the action we took on this side of the House in 1907. The hours then given startled the whole country, and if there has been improvement, which we readily admit, there is

  877
  room for still greater improvement. We are not here to object to this omnibus improvement in regard to railways, and we are not anxious to prevent a million and a half of money being spent, because we know that it means a good deal to the men we represent. We are anxious that the Midland Railway Company or any other company should realise that they have a duty to the men who work for them. I come from the county of Derby, and I know something about the Midland Railway Company's work, and I have an important depot in my division, and the real point of the whole of our objection has not been met satisfactorily. The hon. Member (Mr. Thomas) distinctly laid down real abiding grievances, grievances which are brought to us almost every day. He mentioned a place named Hasland, where I was born. If anyone knows Hasland I do, and if anyone knows the railway employés of Hasland I know them. I have been associated with them. What we complain about is that a reduction of goods-guards is brought about under false pretences. Here you have a reduction of goods-guards earning 30s. a week to the next grade, which earns a maximum of 22s. a week, but the men who remain in the goods-guards department are working overtime seven and eight hours a week. It is not because there is a necessity to reduce them. It is because they have a desire to reduce wages. That is what we object to. While the Midland Railway Company or any other company come to the House to seek powers and facilities for carrying on further trade with the hope of bringing in large revenue to themselves they must expect in these days, when there are representatives of labour here, to meet claims for the men who do the work. The hon. Member (Mr. Rees) made reference to some other people in a sarcastic way, and talked about the necessity of reducing wages in times of depression. Will he tell me when directors have been reduced?
  Mr. REES: I could easily.
  Mr. HARVEY: These men earn 30s. a week, and they have plenty to do to make ends meet. Will the hon. Member tell me whether directors who earn their thousands suffer any reduction at all because trade is bad?
  Mr. REES: I deplore the reduction. I only said it is sometimes inevitable, and that it is better than that their work should cease altogether. I spoke of it with the greatest regret.
  Mr. W. E. HARVEY: So do we. We think that if there is general depression in trade the directors ought to suffer as well as the employés. We never hear of reductions taking place in their wages. I suppose it is essential that it should be kept quiet. [An HON. MEMBER: "Not at all."] I should be glad if my hon. Friend would give the information and state whether it applies to the Midland Railway Company, whose application for this Bill we are discussing to-night. My point is that men in one grade have been reduced to another grade, and that the difference means several shillings a week. With regard to overtime, I hold that the system on this railway is not in harmony with all that can be called the true interests of the men concerned in working the railway. I have a complaint to make also in regard to the way in which goods-guards at Staveley have suffered on account of this reduction. There is seething discontent regarding the management of the Midland Railway right through the whole county where the headquarters are situated. The situation is one that needs the attention of the Board of Trade, and I hope that the grievances that have been brought before the House to-night will at an early date be inquired into by the Department.
  Question, "That the word 'now' stand part of the question," put, and agreed to.
  Main Question put, and agreed to.
  Bill read a second time and committed for to-morrow (Tuesday).

  CONSOLIDATED FUND (No. 1) BILL.

    STATE OF CONGO.
    Postponed Proceeding on Question, "That the Bill be now read a second time."
    Question again proposed. Debate resumed.
    10.0 P.M.
    Mr. RAMSAY MACDONALD: When I was interrupted by Private Business I was trying to make clear to the House that the concession supposed to have been given by the Belgian Government in respect to the opening of half of the Congo for trade is nominal and not real. The point I wish to make is that the half of the Congo now opened up has been under a double embargo—first of all, the political edict of the Government of the Congo itself; and,

    879
    secondly, that part of the Congo has been operated by the Kassai Company, and they have got certain economic advantages which secure to them a practical monopoly of Congo trade. Therefore the mere removal of the political embargo is not sufficient to open the door of that part of the Congo to ordinary competition. I am bound to say, however, that when the Foreign Secretary disclaimed the statement made by the Belgian Colonial Secretary which my right hon. Friend (Sir Charles Dilke) and I quoted, I am bound to say that I am not sure how he stands in that matter. In the despatch which he sent to Sir Arthur Hardinge on 5th March, 1908, he informed our Ambassador at Brussels that, in consequence of the statement which he made in this House, the Belgian Minister had called upon him. The statement the Foreign Secretary made was that he would insist upon guarantees precedent to the annexation of the Congo. The Belgian Minister, when he called, made certain representations to him, namely, that in negotiating with the then existing Congo Government the Belgian Government would not recognise any interference on the part of this country; and not only that, but it would not recognise that this country had any right to interfere in the matter of the transfer of the Government. Then the Belgian Minister went on to say that the Belgian Government considered that the organic law of the Congo, and the reforms it was going to make in the political and economic system it was to establish were internal affairs, and would decline to allow our Government to interfere in any way whatever. What is that but what the Belgian Colonial Minister said the other day? That has been the unhappy circumstance of the whole of this case. We are not quite sure that the Foreign Secretary has made up his mind. So far as his action is concerned, it seems to cast doubt in our mind as to what the rights of this country are in respect to the Congo. On 26th February, 1908, the right hon. Gentleman said:—
    "I go further and say that it must be a condition precedent to any transfer of the Congo to another authority that that authority should take it over on terms which will place it in a position to give assurances, and to guarantee that these assurances shall be carried out, and the treaty obligations of the Congo fulfilled."
    On 27th March in a despatch to our Minister at Brussels he said:—
    " As already stated His Majesty's Government submit these views for the friendly consideration of the Belgian Government."
    880
    I do not like to use the expression "climbed down," but it does strike me as if, after the interview with the Belgian Minister, the right hon. Gentleman climbed down, and that the statement made in his despatch to our Ambassador is very much milder not only in form—for that does not matter—but in substance and fact than the statement he made in this House during the Debate. But while we are waiting why cannot the Government publish some Papers?
    There are two sets of papers I would like very much to see. These are, first of all, our Consular Reports. I would like to know whether the assurance given us this afternoon by the right hon. Gentleman that the Belgian Government is really making change, is supported by the Consular Reports. I am bound to say that if the right hon. Gentleman could produce and make public reports from our Consuls in the Congo, stating that improvements are taking place, I would for one be very much gratified, and would be much more satisfied than I am at the present moment. But there is another kind of paper that we might have. Why cannot we now see the correspondence that has taken place between His Majesty's Government and the Belgian Government. I am very certain that some correspondence must have taken place, and as the last despatch we have got was dated June, 1900, was a despatch which certainly invited further communication, surely the time has come for some supplementary papers upon this question. I would like to ask categorically if other communications have taken place of an important character between our Foreign Office and His Majesty's Government. If they have, I think we might have them. If not, I think we ought to be told quite candidly that the correspondence, the pressure, and the operations of diplomacy have practically come to an end for the time being. There is another point on which the right hon. Gentleman places great emphasis. He told us again this afternoon that His Majesty's Government has not recognised and does not propose to recognise the annexation. I am not at all sure that that is so very important. I know this that it is of no importance as far as the man in the street is concerned.
    The man in the street does not care whether we recognise the annexation of the Congo or not, and he does not regard the refusal of the right hon. Gentleman on behalf of His Majesty's Government to recognise the annexation as being a very

    881
    substantial benefit. The statement made by the right hon. Gentleman in June, 1909, was this, that if he refused to recognise the annexation serious embarrassments would be caused to the Belgian Government. The implication of that was that those embarrassments would be immediate, not that they would appear ten or twenty years hence, but that the mere fact that now and immediately His Majesty's Government did not recognise the annexation would cause the Belgian Government to find itself in difficulties. In other words, the declining of His Majesty's Government to recognise annexation would be of the nature of pressure upon the Belgian Government. But that is not the case. I would like to quote the "Indepéndence Beige," which, I think, is very well known to be practically an official paper, which interferes in foreign politics generally, if not always, upon the instructions of the Belgian Foreign Office, and which on foreign politics expresses the opinions of the Belgian Foreign Office. This paper, commenting upon the speech made by the right hon. Gentleman here, when this question was before the House last, I think on 10th March, says in its issue of 12th March: "We are very sorry to hear that there should be any doubt about this annexation"—(I am paraphrasing this.) "We are told that until the English Consuls tell the English Foreign Office that they are satisfied with the arrangements for the protection of the natives, the English Foreign Office will not recognise an annexation." They go on: "If for reasons which we cannot comprehend it should be thought necessary in London to let matters drag on, we should regret, without, however, troubling ourselves greatly, as the non-recognition does not imply for us any real inconvenience from a practical point of view." That is the opinion of the Belgian Colonial Office.
    Sir EDWARD GREY: That will not be so after what I have said this evening.
    Mr. RAMSAY MACDONALD: That is a very important interjection. All I can say is that up till now, at any rate up to this evening, the effect of the refusal to recognise annexation has been expressed in that contemptuous way by this official organ of the Belgian Government. I would also like, before I sit down, to object to the way the right hon. Gentleman referred to the suggestion made by Mr. Bennett, who is no longer a Member of this House. Several
    882
    times the right hon. Gentleman has referred to that suggestion as having been tantamount to a blockade of the Congo. That really was never the suggestion of our late colleague the Member for South Oxford. I may remind the right hon. Gentleman what that suggestion was. Mr. Bennett said on more than one instance he hoped there would be reform, and that he need only mention the despatch of the Italian battleship and the occupation of the Custom House at Mitylene as an action which brought the Ottoman Government to a different frame of mind, and he said that a single British cruiser sent to the mouth of the Congo and the occupation of the Boma Custom House would possibly end the present system. The Noble Lord (Earl Winterton) cheers. I hope he is prepared to support his cheers by some sort of substantial action.
    Earl WINTERTON: I support my action by my vote.
    Mr. RAMSAY MACDONALD: The Noble Lord votes for "Dreadnoughts" without perhaps any sort of policy behind it such I suggest. The right hon. Gentleman said in this House in 1908 that he was prepared to act alone. If he was prepared to act alone in 1908 surely he must have had in mind some sort of idea how he was going to act alone and yet maintain the peace of Europe. If in 1908 he could act alone in an effective way that would make Belgium recognise her obligations to the Signatories to the Treaty and the Convention, surely he must be able to do it in 1910; or if the right hon. Gentleman could not do it in 1908, surely the Member for Montgomery Boroughs (Mr. Rees) would be the first to admit that he had no business to say he could in this House. My point is that he said he could do it in 1908, and I think we ought to know now why if he could do it in 1908, he could not do it in 1910, or why if he was prepared to say in 1908 he could do it, he is not prepared to explain in 1910 why he has not done it, why he could not do it, and why he is not prepared to do it. All we want is to have some sort of assurance that the affairs of the Congo are going to be regulated in such a way as is consistent with our desires in the matter. We want an attitude to be taken by our Foreign Office which will convince the Belgian Government that we surrender none of the rights we have claimed from time to time in this House, and in these Debates, rights which

    883
    are tantamount to this, that the Belgian Government, being the heirs of the Congo Free State Government and its obligations, are bound to consult us. We are bound to be consulted. We hope to be satisfied before the affairs of the Congo are to be regarded as having been settled at all in a proper way. That is the situation, and we did feel very sorry to think that the right hon. Gentleman has not pushed with that energy and that force and that power which he ought to have shown. But we just now, at any rate, on a most important point have got a statement which I suppose the Belgian Government will duly note. We beg him to stand by the position which he has indicated in that interjection, because he may be perfectly certain that all sides in this House, and all sections outside of this House, are agreed in supporting him in more drastic action than he has hitherto taken.

    COTTON GROWING WITHIN THE EMPIRE.
    Mr. ARBUTHNOT: I desire to call attention to a matter of vital importance to that part of the country which I have the honour to represent—and to the country as a whole—that is, the question of cotton growing within the British Empire. In order to consider what is the position today we must make a comparison with the position of the cotton growing industry some thirty or forty years ago. As it stands now, we do not occupy the same position in the world that we did. We only consume something like one-fifth of the total amount of cotton instead of three-fifths as was the case in the Forties. In those days we were pre-eminent in the cotton trade of the world, but since then other industries have grown up. Germany. America, and other countries, behind their tariff walls, are now making great calls upon the cotton supply of the world, and there is no longer the same amount available for the Lancashire spindles and looms. First, take the case of America. Forty years ago we in this country had double the supply of cotton that America used. In the last decade America has passed us. She has first developed her cotton industry to meet the demands of her own markets, and now she is building up an export trade, a trade which eventually will cut into our own, and for which she demands an increasing supply of raw material in order to meet the demands of her own spindles and looms.
    884
    There can be no question that the ultimate goal of America is to wrest from this country our pre-eminence in the supply and manufacture of cotton goods. Moreover, cotton is used in America for other purposes than that of weaving cloth. It is used for woollen blankets; it is used for motor-car tyres, and I believe it is used in the manufacture of leather to cover the hoods and cushions of cars. Altogether something like 6,000,000 bales of cotton are required for America alone, and she is continually wanting more. There can be no doubt the time will come—it may not be very far distant— when America will require the bulk of her own cotton for her own mills. If we turn to the Continent and make a comparison in the number of spindles, we find that in France the number of spindles in the last thirty years has increased by 75 per cent, and in Germany by 100 per cent. The consumption of raw material on the Continent in the same period has increased from 857 million lbs. to nearly three thousand million lbs., and another 5,000,000 bales are required for mills on the Continent. Turn to this country. Lancashire, Cheshire, and Derbyshire require something like 5,000,000 bales. You have, therefore, a total of some 15,000,000 or 16,000,000 bales required for the world's-consumption of raw cotton. In connections with the supply, and this is the point I am going to make, you must remember that this country is dependent for its cotton supply, and the world is dependent for its cotton supply, upon one country alone. I think that seven-eighths of the raw cotton consumed in this country comes from America. It must be remembered that America is our most powerful rival in the cotton trade, and that she is ever absorbing a greater quantity of the cotton which she herself produces. Therefore this fact that we are dependent upon one country is a fact which ever becomes more acute, and which will continue to affect our position more and more. Last year the total crop of America was 11,000,000 bales. The result is that there is not enough cotton to go round. We have looms stopped in Lancashire; we have spindles running half-time; we have privation and distress among the operatives, and we have great loss of capital among the employers. The black cloud that hangs over Lancashire to-day is simply this—that the manufacturers cannot obtain raw material at such prices as to enable them to manufacture their cloth

    885
    at a profit. Nor does the cloud show any signs of lifting. Experts tell us that probably the cotton crop in America in the coming year will be no better than in the past year. I should like to read to the House, if I may, words that were spoken the other day by Mr. Patten, the great cotton king, and who is supposed to be very largely responsible at the present moment for having cornered the cotton market. He said:—
    " Lancashire spinners do not seem to realise when the demand of America is fourteen million bales, and when there are only ten million bales in sight cotton is going to go up to panic prices. There is drought and drought, and drought in the great cotton growing areas, and cotton is going to rise sky high."
    No wonder in Lancashire that the cotton trade looks with fear to the future when at the present day cotton stands at 8d. per lb., and if it goes to 10d. it means the stoppage of all the looms and spindles in Lancashire. There is another aspect of the question without going so far as the stoppage in the trade. This is a point which is very well known to Lancashire Members, though perhaps not so well to others. That is the controversy known as steaming in weaving sheds. I am very sorry the hon. Member for Clitheroe (Mr. Shackleton) is not here to-night, because this is a matter upon which he is a great expert. What it amounts to is that a certain amount of humidity has to be used in spinning in the mills and in the weaving sheds in order to work the cotton. When that humidity is used in excess it is detrimental to the health of the operatives. This means that they have to go into a warm damp atmosphere, that they get their clothes wringing wet, and when they go out into the cold and chill of a Lancashire winter they run very grave risks of rheumatism, of catching chill, and of laying the seeds of permanent disease. Cotton manufacturers are only human, and when cotton stands at £15 per bale, in order to keep their looms going, and in order to manufacture their cloth at any price approximating to that which shows a profit they are compelled to mix their higher grade cotton with a grade of a less good quality. The result is that when you get this high-priced cotton you have a less good quality cotton mixed with it, and more steam has to be used; consequently there is more moisture in the atmosphere and more risk to the health of the operatives. The question whether steam is good or bad, whether it is necessary or unnecessary, is not one that need be discussed at this moment; it
    886
    is, in any case, in the hands of a committee of inquiry. But one thing is certain. Whatever may be the findings of that committee, if you have cotton at high prices, so that manufacturers are compelled to mix with it cotton of less high quality in order to make a raw material which will enable them to manufacture their cloth at prices at which they can sell it at a profit, you must have more steam used, and therefore, from the point of view of the health of the operatives, the high price of cotton is a matter of serious importance.
    From whatever point of view you look at this cotton Question, it is a problem of the gravest nature to manufacturers, to operatives, and to all concerned. The problem which Lancashire has to meet at the present time is how to escape from the clutches of America, how to make herself independent of this one country upon which she is dependent at the present time for her supply of raw material. That it may be done has been shown by the work carried on by the British Cotton Growing Association. It has been shown most conclusively that long staple cotton suitable for Lancashire mills can be grown in Egypt, the West Indies, India, the Soudan, East Africa, Nyassaland, and Uganda; while in West Africa there are almost unlimited fields. I believe that Nigeria, properly developed, would supply almost a sufficient amount of cotton for the whole of the looms of Lancashire, Derbyshire, and Cheshire. I am not raising this question in any political spirit. I desire, first of all, to call attention to a matter which all Lancashire believes to be of the greatest importance; and, in the second place, to give the Government an opportunity of stating their views in a better way than can be done at question time.
    I should like to recognise, in the name of all political parties in Lancashire, the action of the Government in making a grant to the British Cotton Growing Association, and in meeting the demands made upon them in a generous and, if I might say so, a statesmanlike manner. Not only has it been demonstrated that cotton can be grown, but areas are being developed. The British Cotton Growing Association during the last few years has marketed some two million pounds' worth of cotton. But the process is very slow; there are many difficulties, and the problem is very urgent. The operatives in Lancashire are asking themselves two questions. The first is whether, in view of the enormous interests involved in the

    887
    fact that you have a trade of £150,000,000 a year, upon which 10,000,000 people are dependent for their bread and butter; whether, in view of the difficulties which exist in the development of cotton areas solely by private enterprise, the time has not arrived when the Government, recognising their responsibilities, should step in and hasten the development of these areas, which we think would mitigate the evils at present existing in connection with the shortage of the cotton supply? The second question is, if these areas are to be developed, if the Government are going to step in and give such assistance as they can, if they are going to give grants for experimental or other purposes, should not the cotton which is obtained as the result of this expenditure be used for the home market?
    The right hon. Gentleman the Undersecretary for the Colonies said to-day, at Question-time, in answer to a question which I put to him, that there was no proviso whatever in the grant which ensured or necessitated that the cotton which is grown as the result of this grant should be supplied to the British Empire. He said there was no necessity for it, because, as a matter of fact, cotton grown in the British Empire always came to the British markets. I think the right hon. Gentleman forgets the case of Egyptian cotton. I find from the figures—which I had not at the time—out of every 120 tons of Egyptian cotton England gets fifty-seven tons and the American Continent sixty-three tons. What the Lancashire cotton trade wants to know is: In these areas, to be developed in the British Empire, can we really be sure that the cotton which is going to be grown will be used for the relief of the pressure upon the Lancashire industry? Will there be any guarantee that those who are engaged in it will be relieved at some future date from the nightmare which hangs over employers and operatives at the present time, namely, the shortage of cotton which exists, partly because of the increased demand that arises in different parts of the world, and partly from failures of the American cotton crop? I shall be grateful—and I venture to think that Lancashire will be grateful—if the right hon. Gentleman would communicate briefly what are the views of the Government upon these two aspects of the problem. Firstly, will he tell us what the Government have done and what they are doing; what they think they
    888
    can do and what they are prepared to do? Secondly, will he say whether they will make it a condition of anything they do in the future that cotton which is grown in the British Empire as the result of the aid that is given to it by the British Government shall be used to supply the Lancashire spindles and the Lancashire looms?
    Mr. J. D. REES: May I beg the right hon. Gentleman in his reply not to forget Nyassaland. May I remind him that the Governor has just reported that in the uplands the American variety there is one of the finest specimens of cotton in the world. The hon. Gentleman preceding me will bear me out in that, when I say that it fetches 1s. 2d. per pound. Egyptian varieties grown on the lowlands of the same Protectorate fetched as. much as 1s., so that this small country is entitled to most sympathetic consideration of the Colonial Office. I hope they will not forget to extend that consideration to the private individuals and merchants who are engaged in an endeavour to develop the Protectorate.
    The UNDER-SECRETARY for the COLONIES (Colonel Seely): I will not forget what my hon. Friend has just said, and I will refer to it before I sit down. I congratulate the hon. Gentleman opposite (Mr. Arbuthnot) on the very excellent speech he has made, and what I understand is his first. If so, I am sure it is the first of a series, all of which will be equally helpful and to the point. I will divide my reply into two parts: the controversial and the non-controversial. In regard to the controversial parts, the hon. Gentleman tried to make the House believe in one sentence at the commencement of his speech that here was an argument for Tariff Reform in regard to the cotton industry. That seems to me to be an argument which must immediately be met whenever anyone who is interested in the industries of his country speaks from this side of the House—or, indeed, from any side of the House—because whatever views we may entertain as to the merits or demerits of Tariff Reform, it is as well to look at facts in the face. It is a fact that however much Tariff Reform may benefit any other industry—and those on this side of the House do not admit the thesis—to cotton it would be fatal. [HON. MEMBERS: "No, no."] I put it as bluntly as I can. Before I come to the non-controversial points I was anxious to clear away the controversial

    889
    points. The reason I say it would be fatal if you try and mix up British cotton growing within the Empire with any scheme of Tariff Reform you will ruin the industry is this. Speaking from recollection, approximately the product of cotton from Lancashire is about £102,000,000. Of that the enormous proportion, the amazing proportion of £80,000,000 worth is exported to other countries. On the other hand the imports of cotton were almost negligible, amounting to only a few hundred thousand pounds a year. I do ask hon. Members opposite, setting aside the abstract merits of Tariff Reform altogether, to realise that it would be fatal to the cotton growing industry to attempt to mix up this scheme of growing cotton with a scheme of Tariff Reform, because by so doing all those who know the figures I have just given will say: "If this is going to be a scheme which implies Tariff Reform for cotton then we will not subscribe any more money to the Cotton Growing Association," and then the whole springs of private enterprise upon which the cotton growing depends, even though the Government assists, will be dried up. How can any scheme of protection in this respect be otherwise than fatal to an industry which has practically no imports and which exports the enormous proportion of nearly four-fifths of its total to foreign countries. I need not say a word more. I think it is sufficiently well known in all parts of the House that, whatever you may say of other industries, cotton is the creation of our Free Trade system and is maintained by it and would fall by interference with it.
    Mr. ARBUTHNOT: I think I tried to steer clear of the question of Tariff Reform, and I tried to raise this question in a purely non-political manner.
    Colonel SEELY: I quite appreciate that, but the hon. Member will remember that in his opening sentences—and I listened to the whole of his speech with very great care—he did say that under tariff walls the tariff countries were overtaking us. The House will remember that he developed that argument at some length, and although in his concluding observations he dwelt upon the non-controversial matters, yet, in the first part he did dwell upon the fact that America was overtaking us on account of her tariff walls, and I think it my duty, as the Minister responsible, to state the views His Majesty's Government hold in this matter.
    890
    The only other matter of controversy is the question whether we should restrict trade, and see that the cotton grown within the British Empire shall be consumed in Lancashire. The hon. Member referred to the answer I gave to a supplementary question of his at Question Time. I then referred to the cotton grown in the Colonies with which I am personally concerned, and have intimate knowledge of. Of course my right hon. Friend the Foreign Secretary speaks for Egypt, but I was aware of the figures he gave. So much to justify the statement I made, and which I think the hon. Member will find was accurate. But with regard to the question as to whether we can divert this cotton once it is grown within the Empire to Lancashire, I say no. That is not the policy of His Majesty's Government. What we set out to do is to try by every means in our power to increase the total production of cotton in the world, and since we find that within the British Empire there are many places where cotton can be grown to the advantage of the Colonies and to the advantage of the industry as a whole, we will support it by every means in our power. It would be a great mistake—and I am sure many persons conversant with the cotton industry on both sides of the House will agree with me—to earmark the cotton grown within the British Empire for any particular country, although it happens that practically the whole of our cotton grown in our Colonies goes to Lancashire. I now come to the more non-contrversial part of the Debate. The hon. Member for Burnley knows very well that there are a great many different kinds of cotton. He referred to long staple cotton. It may be that in future that while the proportion of cotton grown in certain Colonies will go to other countries, other qualities will come here. That has been the tendency up to the present time. If we were to lay down that the cotton grown within the British Empire shall go to Great Britain, and that grown in America and adjacent countries go to other places, we might divert the great cotton industry in Lancashire—which is probably one of the most extraordinary industries we have known—from its normal development to an abnormal development, and that probably would be unwise, because no one can see the end of the artificial development of any industry.
    I turn now to the question put to me by the hon. Member for Montgomery Boroughs (Mr. Rees). In a paper which lies before me I see it is provided that £10,000 a year

    891
    shall be paid to the British Cotton Growing Association. I see that there is a condition laid down that seed is to be provided by the association free of charge for Nyassaland. I trust that will show the hon. Member that we have a watchful eye upon that country in which he is so interested, and which he never fails to bring before the House when Colonial matters are under discussion. The Government have endeavoured to assist the British Cotton Growing Association in the growth of cotton in every way. This work began in 1902, and has progressed since then by stages which, although they have not been rapid, have, nevertheless, been sure.
    It would not be proper to make this very short review without referring to the great services rendered to this country in this matter by the late Sir Alfred Jones. Many other men who are now with us have helped very greatly in this matter. Lancashire has determined to subscribe a very large sum of money to forward the work of cotton growing within the Empire, but I think it is fair to say that if Sir Alfred Jones had not taken up this matter it would not have been so far forward as it is to-day; and, irrespective of politics, we are all grateful to his memory for what he did in this respect. I think the future is bright with regard to the production of cotton within the Empire. The hon. Gentleman opposite is wrong in supposing that within a measurable space of time the amount of cotton grown within the Empire will form the full supply for Lancashire or for a large portion of Lancashire. For many years to come the amount of cotton produced within the Empire will form but a small percentage of the total requirements of Lancashire. It is a step in the right direction, and, with regard to some sorts of cotton especially, it has been of immense value, but it has helped the Colonies as much as it has helped Lancashire. In the West Indian Islands many of them have been saved from great financial embarrassment by the planting of sea island cotton. It is by far and away the most valuable cotton, and it has brought back to these islands the cotton which was originally indigenous to them. It is found you can produce this cotton there with a finer staple than in any other country, and I believe higher prices have recently been obtained for West Indian cotton than have ever been obtained for that type of cotton in the history of the industry. So that both in
    892
    the West Indies and in West Africa the prospects are favourable, and it is possible in Nyassaland and in East Africa cotton growing may also advance. We have had disappointments, and we shall continue to have disappointments, but in our efforts, which are solely devoted to increasing the world's supply of cotton for the good of the world as well as for the British Empire, I can promise the hon. Gentleman that we will not faint nor fail. We see that it is good to devote scientific thought and enterprise to give further help to those who will grow this raw material of almost the greatest industry in this or any other country, and, whilst I cannot subscribe to all the propositions the hon. Gentleman put forward in the first part of his speech, I am sure we are all glad he raised this important matter, and I can assure him the Government will not lose sight of it, and will do all they can to help cotton growing throughout the Empire.
    Earl RONALDSHAY: Could the right hon. Gentleman tell us the amount of the actual subsidy which the Government give to the Cotton Growing Association? Is there any agreement?
    Colonel SEELY: I wish I had not understood that it was essential for the convenience of both sides of the House that we should conclude our business so very soon; otherwise I have here, as the Noble Lord will see, a very large quantity of material of general interest to all those interested in the cotton industry. The amount the Treasury now agree to subscribe is £10,000 a year to the British Cotton Growing Association for three years. That will be expended in various ways, but principally in scientific directions.
    Mr. JOSEPH MARTIN: I desire very briefly to call attention to a matter under the control of the Colonial Office. I allude to the recent action of His Excellency the Governor-General of Canada in taking an active and decided part in politics. I asked a question with regard to this matter early in the Session, and I was informed on behalf of the Colonial Office that the speech to which I referred had been misreported on account of no shorthand writers being present at the time of its delivery, but, from wherever the Colonial Office may have received the information, I am quite satisfied that it is entirely incorrect. There were three speeches delivered—one at Edmonton, one

    893
    at Calgary, and one at Regina. The speech at Regina was delivered on the occasion of His Excellency the Governor-General laying the corner-stone of the new Government buildings for the Province of Saskatchewan. On 6th October last there appeared in "The Times" newspaper what purported to be a verbatim account of that speech. While many Members of this House perhaps do not agree very well with "The Times," I think it is fair to say that its reports, especially with regard to foreign and Colonial matters, are to be almost absolutely relied upon for accuracy. I am not going to read the speech at length, but just a line or two giving the portion which has been so seriously objected to in Canada. This was in answer to an address presented to His Excellency on that occasion:—
    " You will, I know, be anxious to support the Federal Government in its endeavour to create a Canadian Navy, which will be able to guard your coasts and protect your oversea trade."
    The question of the assistance to be given by Canada to the Empire is surely a purely Canadian question—not only a purely Canadian question, but it is one with regard to which the people of Canada are divided into three camps. The Government, which is Liberal, has announced as its policy the creation of a Canadian Navy; the Conservative Opposition has taken very strong ground indeed in favour of a policy of direct contribution to the Admiralty for the purposes of Naval defence; and the third party in Canada opposes altogether any assistance to the Empire for naval defence. Therefore it is clear that His Excellency the Governor dealt with a matter of purely Canadian politics. There was last year a Colonial Conference in London in which Canada participated, and at that His Majesty's Government was extremely careful not to offer any suggestions of any kind or to give any advice to any Colony as to what stand they should take in regard to Imperial defence. That attitude of the Government was entirely correct, and was calculated to make matters smooth and easy for the Colonies in dealing with this great question. The Canadian Constitution is practically a replica of the Constitution of the United Kingdom; we have practically the same representative institutions and the same idea of responsible Government as obtain here. The Governor-General takes the place of the King, and I think it will be admitted that under no possible circumstance would His Majesty express any
    894
    opinion whatsoever in regard to any question discussed in this House on which there was a difference of opinion. In Canada this question was a very heated one, and the matter has just been disposed of, the Government scheme having been adopted after a long Debate. Since Canada has had responsible Government we have had a long line of Governors-General appointed from the two great parties in this country, and this is the first instance in which a Governor-General has undertaken to express any opinion in public in regard to any debated question.
    Mr. SPEAKER: There is no money taken on this Bill for the Governor-General of Canada.
    Mr. MARTIN: What I am trying to do is to point out that the Colonial Secretary has not done his duty in allowing conduct of this kind to occur in Canada by an officer and gentleman who is under his jurisdiction, and I am attacking not the Governor-General, but the Colonial Secretary for his failure to properly carry out the duties for which he is paid by the salary which is provided for by this Bill. This speech has created a great deal of discussion in Canada in nearly all the leading newspapers, both Liberal and Conservative. The people of Canada have no remedy; they cannot do anything; they have no control whatever over the Governor-General.
    Mr. SPEAKER: The hon. Member has a great deal to an y about the Governor-General, but nothing about the Colonial Secretary. He is only using the Colonial Secretary as a shield from behind which to attack the Governor-General. I do not think he is entitled to do that by the forms of the House. If he wishes to attack the Colonial Secretary, let him do it.
    Mr. MARTIN: I do attack the Colonial Secretary. I say that the only remedy of the people of Canada for a matter of this kind is to look to the Government here. They are part of the Empire; Canada is one of the Colonies of the Empire, it is part of the jurisdiction of the Colonial Office to provide a Governor-General for Canada, and I submit that when the Governor-General of a Colony does not properly carry out his duties there are plenty of precedents—one a very prominent one in the history of Canada—where the Governor-General has been recalled. Again, I submit that from the attitude of the United Kingdom it is a very improper

    895
    thing for a Colonial Secretary to allow a Governor-General to express any opinion at all, as that opinion would be assumed to be that of His Majesty's Government, and I submit to the right hon. Gentlemen on the Treasury Bench that if they were going to express an opinion by the mouth of the Governor-General it would not be one inducing the Canadian people to provide a Canadian navy as a part of the defences of the Empire.
    Colonel SEELY: I have only got one moment to say that in this matter I am confident that although my hon. Friend represents St. Pancras, he does not represent Canada, because, although he told us that the speech he referred to by Lord Grey was not fully reported, we do know that he is deservedly popular with all classes of the community in Canada, and I am confident that nothing said by Lord Grey has forfeited that confidence of all classes in any degree whatever.
    Question put, and agreed to.
    Bill read a second time, and committed for to-morrow.

    ARMY (ANNUAL) BILL.
    Order for Second Reading read.
    Motion made and Question proposed, "That the Bill be now read a second time."
    11.0 P.M.
    Mr. J. WARD: It is rather unfortunate that on an occasion of this description, and in a Session which is supposed to be devoted entirely to two great measures, one dealing with the finances of the country and the other the relations of the two branches of the Legislature, when we were promised that no matter except purely Departmental subjects should be brought forward, we should have again an Army (Annual) Bill, which, until at least some explanation is given, is a very contentious measure indeed. We have in this country under our voluntary military system probably one of the most brutal military codes of any country in the world. On the last occasion when we discussed this measure, and the subject of billeting, and the innovations which have never been attempted by any Minister for War before, there was an evidence that since the right hon. Gentleman has been Chief of this Department there
    896
    has been a tendency to tighten up and make the conditions of service more stringent, and to make the military code more severe, both to the citizen and to the soldier, and on this occasion it would be unwise, at least without some explanation from the Secretary of State, to pass such a clause as we have in this Bill. Clause IV. is very ambiguous. It alleges that with a view to reducing the number of cases which have been sent to court martial, it proposes to do such and such a thing, and the way in which the right hon. Gentleman proposes to reduce the cases of soldiers sent to courts-martial is by increasing the power of the commanding officer to inflict punishment on the soldier to very nearly double the extent without any court martial at all. Why should we have more courts martial held considering the size of the Army, and more soldiers sent to penal servitude by court-martial than any other country in the world? I have not been able to get comparative figures, but the figures which have been secured haphazard for our Army at home, independent of our Indian garrison, up to 1907 is a very serious indication of the truth of the observation I am now making.
    I asked a question on 18th June, 1908, as to the number of courts-martial which took place in the English Army and the comparative amount of sentence imposed. The answer was that at general courts-martial eight were tried, one was acquitted, and seven were convicted. At district courts-martial 5,385 in one year were tried, of whom 131 were acquitted, and 5,131 sent to prison. We have a small Army. Some people imagine that it does not constitute an Army at all. That we should have laws so stringent that 6,000 men are put in prison every year by courts-martial—some of them for long terms of imprisonment, some of them even for penal servitude— without any sign of what I consider fairness in the trial, is one of the blots in our Army system. If we had conscription in our country, and if it was understood that we had to drag our men to serve, I could understand that you would be obliged to keep them in a state of subjection which would not be tolerated under better circumstances; but we have a voluntary Army, and it may be taken that a large number of the men who volunteer wish to be soldiers. I see that some of the sentences by courts-martial amount to four or five years' penal servitude. In cases where sentences of

    897
    imprisonment with hard labour are pronounced, the average term is fourteen months. These cases are tried practically with closed doors, the public having no knowledge of the thing whatever. I think that is a question which requires very serious consideration on the part of this House. I object to the policy contained in this Clause. I daresay it is a suggestion of the right hon. Gentleman and his Army Council. They see that hundreds and thousands of soldiers are sent to prison by courts-martial, and they want to do something to reduce the number of cases. Instead of giving the men a better chance of being defended they propose to allow commanding officers to inflict in future just double the sentence they can give to-day. There will then be no necessity to send a soldier before a court-martial at all. I think that is jumping out of the frying pan into the fire. I would sooner that a court-martial should sit and that I should have a show of answering a charge than that I should be brought before a commanding officer. The mere fact that a soldier denied a charge would be sufficient to give him a month's imprisonment. I myself would much prefer the courts-martial to the policy indicated in this Clause. While I do not wish to oppose the Bill, I think we should have some reasonable explanation why this attempt should be made to inflict punishment to a greater extent than hitherto by commanding officers without any trial whatever. I consider that our military penal code is strong enough already. I consider that the discipline is stronger in our Army than in any other European Army. [HON. MEMBERS: "NO."] I daresay those "noes" are from Gentlemen who think they know. I am as well entitled to know as they are. I have been through the mill. I ought to know, and I say I believe that the discipline in our Army is as strict as in any army in Europe, and I believe that the tyranny of the officers over the men is more severe than in any other country. For that reason I raise my voice to-night, because I do not wish that the commanding officers, without, at least, the semblance of a trial, should have the right to send men to detention or other form of punishment, and for longer terms than is possible under the law as it stands to-day.
    Sir CHARLES DILKE: There are some questions that I would like to ask my right hon. Friend. I have often called his atten-
    898
    tion to the extraordinarily high number of courts-martial in the Home Cavalry. The reform by which detention has been substituted for imprisonment has not in many cases prevented a very considerable amount of imprisonment in the Cavalry at home as compared with detention. A comparison of the figures for the Cavalry at home with those for the Infantry shows that the number of courts-martial, imprisonments, and punishments is very high for the Cavalry, and I do not understand why that should continue to be the case. General Haynes, in his Report last year on the Cavalry, has called attention to the very high character of the men. He says: "It is gratifying to see the improvement as regards class and intelligence apparent in the non-commissioned officers and men. The ranks of the Cavalry are filled by men who would bear comparison with the pick of the Continental armies." That being so, it is very strange, and certainly deserving of notice, that the courts-martial and the imprisonments as compared with detentions and as compared with imprisonments, detentions, and courts-martial in the Infantry at home, are extraordinarily high in the Cavalry regiments. The new tables show a certain improvement, but very slight improvement. In the Report issued two days ago it will be found that the number of punishments is very high as compared with the Infantry, and so is the total number of punishments. I think that the House must contrive to press for some explanation of those very strange figures, which really point to their being something the matter with the Cavalry at home which does not apply to the Cavalry in India or other places abroad. On the general question raised by my hon. Friend, all the House knows that the military law is in a state of the most extraordinary complication. No one who has sat up all night in Committee at Debates on the Army (Annual) Bill year after year but knows that our military law is complicated beyond all description, and we have pressed successive Secretaries of State for War—we pressed my right hon. Friend when he came in—to make some serious effort to codify and simplify the military law in this country. He knows as well as anyone how complicated it is to understand. The Army Act, which is complicated in itself, cannot be understood without reference to the whole of the King's Regulations, and confusion has been made worse confounded by the necessary application of the Act to the

    899
    Territorial Army in certain clauses which did not formerly apply to Volunteers. An extraordinary example of that fact was given last year on one clause which amended the law in respect of the Territorial Army, when we had to refer to somewhere between 2,000 and 3,000 paragraphs of the King's Regulations. There were over 2,000 pages of Regulations which had to be put right in connection with this Act, and no one can understand what the Act exactly means without reference to almost all the King's Regulations and the Army Orders, which are issued at the rate of four per week, and which no one, I think, in the country has really studied. The Secretary of State, on page 5, attached his Memorandum to the Army Estimates, relies on powers which have always existed, and which were extended two years ago to seizing horses, vehicles, and snips in time of war. County Members in this House were under the impression that the Secretary for War was going to do something about horse breeding in this country; and now we are informed that he has power to get all the horses he wants without going through any complicated forms. The power of seizing horses, vehicles, including motors, ships and boats, in this country is much stronger than that which exists in foreign countries. The power of billeting is much less than exists in foreign countries. The right hon. Gentleman the Member for Dover and other Members of the Front Opposition Bench, in the Debates on the Estimates this year, suggested that the power of billeting should be increased in this country and brought up to the foreign level. The compulsory seizure of horses and vehicles exists under two sets of peace provisions—that is to say, route marching and also on emergency as declared by the Secretary of State. There are two quite separate powers for route marching and for emergencies in time of peace. Billeting, of course, depends on habit. In France, Germany, and Continental countries billeting is accepted as a matter of course. As regards the taking of horses and vehicles, I do not think anyone in this country realises how extraordinarily strong the powers are. What I want once more to press on the right hon. Gentleman is the necessity of trying to simplify and codify our military law. A very distinguished professor was called in, I believe, to the War Office, and did his best for two or three years to try
    900
    and simplify that law, but nothing came of that endeavour. The law is now more complicated than it ever has been before in spite of the efforts of the right hon. Gentleman, and in which he has my sympathy. He knows how complicated it is and how wise it would be to simplify it if possible. I leave the matter there. I am pressing this question with regard to cavalry courts-martial because it seems to me there is something wrong in the state of the Cavalry at home, and I am sure he will do his best to clear it up.
    The SECRETARY of STATE for WAR (Mr. Haldane): My attention has not been called to the figures which have been mentioned, but I hope I shall be able to deal with them. Whether the inference he draws is correct we shall see when we have seen the whole figures.
    Sir CHARLES DILKE: The figures are there.
    Mr. HALDANE: As regards the second part, the codification, there is nothing I should like so much as to simplify the code of military law. We are always trying to do so. Last year when the Committee was investigating the circumstances under which the military might render assistance in cases of civil disturbance, I did my best personally before that Committee. I took great interest and trouble in disentangling the law, which was in an extraordinarily obscure condition. I got, I think, to the bottom of it. I put my evidence in the form of simple propositions, and I came to the conclusion it was best to publish them and leave other people to take particular cases to test them. If you tried to put those into the code you inevitably do not cover certain cases. There are some parts of the code so simplified such as that on Bills of Exchange. The judges of the land tried more than once, and on one memorable occasion to codify the criminal law, and they failed. Where they failed it is not very easy for a humble military man to hope to succeed. We do publish very useful volumes annually on military law.
    Sir CHARLES DILKE: Nearly 3,000 pages of small print.
    Mr. HALDANE: Not as much as that. It is a reasonable-sized volume of five or six hundred pages, and there the whole of military law is set out in very clear fashion. It is the nearest thing anybody can get to the code unless he wishes to be misled

    901
    by all sorts of obscurities. The right hon. Gentleman (Sir Charles Dilke) referred also to the power of seizing horses and vehicles. He says those are much greater than the corresponding Powers on the Continent. I do not know whether he has read lately the French code. I am sure he has.
    Sir CHARLES DILKE: They have to pass a special law each year.
    Mr. HALDANE: What are powers there? The maire is commanded to do three things, under a penalty of 1,000 francs to issue orders to all civilians around who possess horses and vehicles, not only to let them be inspected with due access to them, but to parade them and have the horses brought to a certain point.
    Sir CHARLES DILKE: That is the horse and vehicle census. They have no powers in peace without a special Act, and they are passing one this year.
    Mr. HALDANE: They are brought out in times of peace for inspection. You may call it a census if you like, but when the list is made and the unfortunate citizen has complied with the law, or has paid his fine of £40 they pass every year an Act which not only brings out these things if war breaks out, but brings them out in time of peace for manœuvres.
    Sir CHARLES DILKE: It is a special law.
    Mr. HALDANE: You may call it a special law, I will not quarrel about terms, but it comes out every year. The hon. Member for Stoke-on-Trent (Mr. John Ward) complained that this Bill should be brought forward at a time which, as he said, would only justify the merest Departmental Bills. I need hardly remind the House that on 30th April unless this Bill is passed the whole of the Army becomes illegal.
    Mr. JOHN WARD: I meant Clause 4.
    Mr. HALDANE: Last year I had to ask my hon. Friend to read the Bill carefully before he discussed it, because we then lost two hours on a point he raised. If my hon. Friend had read the Clause this year he would have found he was mistaken. This Clause, so far from inflicting punishment or penalties on soldiers in excess of what they are now, diminishes them. Its effect is this: A commanding officer is at present compelled to send every case to
    902
    court-martial, unless he is satisfied that a sentence of fourteen days' detention is sufficient. We propose to enable him to award a sentence of twenty-eight days instead or fourteen in lieu of sending the case to court-martial, but we fence that in by giving the soldier the power of going to a court-marital if he prefers it, so that it is at the option of the soldier. The result is that we shall probably diminish courts-martial by about 25 per cent. If this Clause were struck out the position of the soldier would be worsened.
    Bill read a second time, and committed to a Committee of the Whole House.

    EAST INDIA LOANS (RAILWAYS AND IRRIGATION) BILL.
    Considered in Committee; Reported without amendment; to be read the third time to-morrow (Tuesday, 22nd March).

    SUPREME COURT OF JUDICATURE BILL [LORDS].
    Order for Second Reading read.
    Sir HENRY DALZIEL: This is a very important Bill to take after eleven o'clock, with the evidence of the Lord Chancellor strongly against it. I do not think the Attorney-General can be surprised if we ask for a little time in which to discuss it.
    The ATTORNEY-GENERAL (Sir William Robson): I hope my hon. Friend will withdraw his objection. The evidence of the Lord Chancellor is not against the Bill; it is against certain proposals, but by no means against the proposals embodied in this Bill. The Bill reserves in the hands of this House full power for the future appointment of judges.
    Sir HENRY DALZIEL: No doubt there is something in what the right hon. Gentleman says, but there should be a little discussion, and I hope the Bill will get it.
    Second reading deferred until tomorrow.
    And, it being half-past Eleven of the clock, Mr. SPEAKER adjourned the House without Question put, in pursuance of the Standing Order.
    House adjourned at Twenty-nine minutes to Twelve o'clock.