HC Deb 22 June 1915 vol 72 cc1094-113

Order for Second Reading read.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Pretyman)

I beg to move, "That the Bill be read a second time."

This Bill, which I commend to the House, deals with a very difficult and complicated side of our difficulties, namely, the question of trade passing through neutral countries which may eventually reach an enemy destination, and it is quite obvious from questions which have been put by hon. Members on both sides of the House that they are very well aware that, notwithstanding all that has been hitherto done and the measures which have been taken, there still are a certain number of consignments exported from this country to neutral countries, and particularly those neutral countries which are in contact with enemy countries, which do in one form or another find their way through the neutral country and so reach the enemy. The object we have is to prevent that in every possible way that we can. The whole subject of legislation in regard to trade in war divides itself under two contradictory principles. The first is that we desire, as far as possible, to prevent any goods from reaching the enemy, and the second is that we desire to maintain our own trade as far as possible, but I think the House will agree that during the War the first consideration must over-ride the second, and it is our first business to prevent any goods from reaching the enemy. But I think the House will also agree, subject to that, that we desire to interfere as little as possible, and to extend as much as possible our own trade to all neutral countries. In order to give effect to these principles, the War Trade Department, under Lord Emmott's presidency, has been created, and the method in which that Department works is that under the Acts passed by this House prior to and since the commencement of the War a very large number of articles have been prohibited from being exported, in some cases to any country, and in some cases to particular countries, and particularly the countries which border on Germany or on Austria.

Those articles under the prohibited list can only be exported to those countries under a licence granted by the War Trade Department. I have here a list of twenty-four pages long, showing what a very large number of articles have already been included in the prohibited list, and that involves the issue of licences in respect of all these articles, and the consequence of that is that there is some considerable delay in the exportation of goods, and further than that, the delay involves congestion at the ports, which is a great difficulty at the present time. Therefore it is desirable as far as possible to simplify this trade and at the same time it is necessary to extend this prohibition because we find that even now, with all this list, there are still articles going through neutral countries which eventually find their way into Germany and which it is desirable to prevent. But if we indefinitely add to the prohibited list, it will increase the congestion at the ports, and also overload the Committee which is charged with the issue of licences. The real difficulty comes when these articles have reached the neutral country. It is impossible for us here to control the final destination of these articles when they have once reached the neutral country, and all that the War Trade Department can do is, in regard to each consignment in respect of which they issue a licence, to investigate as far as they possibly can the character and standing of the consignee in the neutral country. That, of course, is a very difficult thing when you come to investigate each individual application for a licence. If we practically add everything to the prohibited list and throw upon the Committee the burden of having to make this investigation in every case, that must cause delay. There has been the development recently that not only have British traders been inconvenienced by this procedure, but the traders in neutral countries are also inconvenienced, and in Holland this inconvenience was particularly felt, and certain merchants and traders in Holland formed themselves into an association which is called the Netherlands Oversea Trust, and that association undertook that they would be responsible to see that neither goods delivered to them under licence by the War Trade Committee, nor any product manufactured from them should reach an enemy destination. That system has been in operation for some considerable time, and has been found so far to work satisfactorily. The whole operations of the Netherlands Oversea Trust are subject to the examination and supervision of the British Consul in Holland. Of course, as the House will understand, it is absolutely impossible for me to stand here and say that even such an arrangement as that is absolutely watertight. I should not make such a claim, that it is necessarily watertight, but from what we know of the character of the Netherlands Oversea Trust, and from the investigations which have been made by the British Consul and the reports which we have had from him, we believe that they have hitherto kept their obligations. What we now desire to do, is to extend this system beyond the prohibited licensed goods, and to extend it to all goods which go to Holland. With that object in view, the Netherlands Oversea Trust were approached and asked whether they would undertake to be responsible for all goods sent to Holland, if they were consigned to them, and they have given the undertaking that they are prepared to accept consignments to them of all goods exported from this country to Holland, and be responsible for seeing that they do not reach an enemy destination.

Therefore, what we do under this Bill is to extend the powers which have already been given by the House, and which, first of all, will enable us to prohibit the export of any goods; and which, secondly, entitle us to confine that prohibition to one or other particular country. We desire to extend that to a third point, namely, that we may not only prohibit any goods going to any particular country, but that we may prohibit them going to any particular country except to a particular consignee. That is really the whole point of the Bill. What we propose to do if the House will assent to pass this Bill is, in regard to Holland, to immediately issue a Proclamation prohibiting the export from this country of any goods to Holland, except such as are consigned to the Netherlands Oversea Trust. When that is done it will mean that no export trade can be carried on from this country to Holland, except under consignment to the Netherlands Oversea Trust, who, under the system which I have already described, will be responsible that that consignment does not, either in the form in which they import it or in any other subsequent form, reach the enemy. The Bill does not deal with the one particular country of Holland, because it must be obvious to the House that the same considerations which apply in the case of Holland apply to other neutral countries. It may be that the importers in other neutral countries will see the advantage of this system and will desire to form similar associations. If that be so, without coming to the House for further authority, we shall be able to make the same kind of arrangement with those associations in other neutral countries that we now have been able to make with the Netherlands Oversea Trust in Holland. It is very desirable, if possible, to issue the Proclamation at the earliest possible date. The Proclamation is ready. I do not know whether it will be the wish of the House to pass the Bill through all its stages to-day, but if they realise the necessity for immediate legislation, perhaps they might give us the Bill in all its stages to-day, and we should be able to get the Royal Assent with a batch of Bills on Thursday, and the Proclamation could be immediately issued. We should then be in a position to stop trade which is now passing through Holland into Germany, and the sooner that is put an end to the better.

The Bill deals only with export trade from this country, and has nothing to do with contraband. The question of contraband, as the House knows, is the question of goods exported from one neutral country to another, which may reach an enemy country. This Bill does not deal with that special case at all. It deals only with the question of exports from this country to a neutral country, which may reach an enemy country. The House will notice that in the Bill there is a heavy penalty imposed. In a former Bill, passed at the end of last Session, dealing with a similar question, the penalty on anybody who infringed the Act and exported goods to an enemy country was as low as £100. I am sure hon. Members will agree as regards a penalty of £100—or, indeed, any purely money penalty—in dealing with such matters where the price in Germany of certain articles, such as rubber, for instance, may be ten or twelve times, or five or six times what they are here, that the amount of money that could be made on a cargo would make such a fine quite ridiculous. Therefore it is proposed in this Bill that the penalty should be a money penalty of £500, with an alternative at the discretion of the Court, of imprisonment up to two years. I hope that that will be sanctioned. There is a further point, and that is: that there is a penalty imposed by this Bill, not only upon the exporter, the consignor, or shipper of the goods, but upon the shipowner, who knowingly carries any such consignment. That is necessary for reasons which I do not need to go into, and which are rather complicated.

That brings me to the last point, namely, that the machiney of this Bill will be worked through the Customs and Excise. The Customs Department has been very fully consulted about the Bill, and as every consignment of goods that leaves this country has to pass through the Customs, it is best that the machinery of the Bill should be carried out by that Department. It would not be wise to discuss the question of that machinery, but it has been fully considered, and as soon as the Proclamation is issued that machinery, under the Customs Department, will be immediately set in operation, and every consignment which goes to Holland and passes through the Customs will, without any delay, be dealt with by the Customs officials. As under existing Acts penalties against shipowners who infringe the Customs regulations, by shipping prohibited goods, are levied under the authority of the Customs, and the prosecution is inaugurated by the Customs authorities, that procedure will be followed under this Bill. That is why the two Clauses are separate. Proceedings against a shipowner will be carried out by the Customs officials, and proceedings against a shipper or consignor will be carried on in the ordinary Court. I believe that if this system is put into operation it will have a very considerable effect in the prevention of trade which is how, I suppose, in nearly all the cases, without the knowledge of the shipper or the desire of the shipper in this country, going through neutral countries into Germany. If the House is good enough to accept the Second Reading of the Bill now, and, I hope, to give the remaining stages to-day, we shall be able to issue the Proclamation on Thursday, when the Royal Assent has been received, and put the machinery into motion at once.

Sir H. DALZIEL

I congratulate the right hon. Gentleman upon the fact that the first speech he has made from that Bench is in introducing a Bill dealing with a matter of such urgent importance as that which he has brought to our notice. He has told us that the Government are now satisfied that we are supplying the enemy, and that it is necessary to provide measures to stop the enemy being supplied; and so urgent is it, that all the stages of this Bill are asked for to-day. As far as I am concerned, I heartily support the Bill, and I am glad that the Government have brought it in. I need hardly say that it would have been more welcome if it had been brought in a long time ago. I am a little doubtful whether the purpose which the right hon. Gentleman has in view will be fully accomplished by the Bill as it stands. In effect, the Bill really does one thing, and one thing only: it simply says that the goods that are to be exported in future are to be exported to an approved consignee. That is, instead of each individual merchant being allowed to make his own separate transaction in regard to exports from this country, the Government will have an approved list, and only the consignees on that approved list will be allowed to receive the goods that are so exported. That, in my opinion, does not completely deal with the difficulty. We practically have that in existence at the present time. In regard to the exports that have been sent to neutral countries—finally going into Germany, as it is now admitted by the Government, although we were told in March last that the whole question had been successfully grappled with—the consignors have, up to the present day, taken upon themselves the responsible obligation which the right hon. Gentleman provides for in this Bill; because they have undertaken that if they are allowed certain cargoes, so far as they are concerned, they will not dispose of them outside the neutral country to which they are sent. How has that been got over? Simply by the person who is getting the goods selling them to another merchant in that particular country, who is in no way under the obligation which the original merchant was under. That is why the whole machinery has been absolutely futile. The thing has been going on openly, and the Germans, to a large extent, have been laughing at us for the statements that have been made over here that practically nothing is going into Germany.

There are many matters which will be covered by this Bill. There is the question of coal, there is the question of sugar, and there is the question of tea. Sugar, I suppose, will not be so much affected, but tea and cocoa will be affected, because, as I have time after time demonstrated in the House, tea and cocoa was going into Germany. I hope something will be done as a result of this Bill to make that impossible. One very important question to which I wish to draw attention is how far this Bill will affect cotton cargoes going to the enemy. I put before the House the other day exports of cotton to neutral countries, which undoubtedly, and it is practically admitted, finds its way into Germany. Not less than threefold in every case has been the increase in the exports. This Bill may do something to deal with that matter. I think there is only one way of dealing with it, and that is to prohibit the export of cotton altogether. I do not think the Government have seriously up to the present time realised the very urgent importance of this matter. Cotton, as the House knows, is the raw material for ammunition, and Germany is supposed at the present time to be using not less than 1,000 tons a day. At the beginning of the War her stock of cotton was estimated at 250,000 tons. Two hundred and fifty thousand tons would practically have been exhausted by this time, but enormous imports of cotton have been allowed to go into Germany, and that has enabled her to make all the ammunition she requires. I am bound to say that the Government have been very slow to deal with this matter. I know there were difficulties; I know the replies we have had from time to time. We have been told Germany had enough cotton, and that therefore we need not interfere. I think that that was a most extraordinary statement, because it presupposed the length of the War, and practically said she could have as much as she required. Then we were told that she would be able to get a substitute for cotton. That has not been proved up to the present time in the making of ammunition. The importance of cotton is its regularity and you cannot get a substitute for it, so far as I know, up to the present time. Why have not the Government stopped the export of cotton, as I hope they will do as a result of this Bill, once for all? It is a matter affecting the position of the enemy, and may have involved thousands of our brave men's lives. I know that probably there are diplomatic considerations in the eyes of the Noble Lord who represents the Foreign Office here, and no doubt he ran tell us that in matters of this kind we are to consider other countries besides the particular countries who are importing the cotton.

What were the imports of cotton into Austria and Germany before the War? Probably about £30,000,000 a year—certainly not more than £40,000,000. What is that in a great war of this kind? Suppose that we have to consider the American cotton grower. All he was concerned with was to get the best price in any possible market. Would the country have refused to pay £30,000,000 to buy up the whole stock which Germany and Austria would take? Nothing of the kind. It would practically represent one week's expense of the War and have prevented any cotton at all from going into Austria or Germany. I believe that if the Government had taken up a very strong course months ago the whole position of the War at this moment would have been entirely changed. That is the opinion not only of myself, but of experts of the highest standing. At the present time, practically, I am told that there are not enough of warehouses in Copenhagen to provide for the bales of cotton there, and that whole streets are filled with bales of cotton on their way to Germany. That is a very serious state of affairs. I would ask the Government to consider with regard to this Bill whether the whole question should not be dealt with by complete prohibition. I believe that American views on the matter could now be reconciled very easily. I think that they could have been reconciled at the beginning of the War simply by the purchase of the whole output, and I would appeal to the Noble Lord who represents the Foreign Office as to whether he cannot give us some assurance to-day that the Government may be willing to go much further even than this Bill in order that they may practically stop the supply of all ammunition to the enemy.

Mr. RONALD McNEILL

I would like to say that I am in entire agreement with what has fallen from the right hon. Gentleman opposite, as I generally have found myself during the discussions on various matters arising out of the War. I do feel, and I believe that the country feels, extremely strongly about this matter of cotton. I do not believe that I am going the least bit too far in saying that the neglect of the British Government on this matter of cotton has been directly responsible for a prolongation of the War which cannot be measured, and for a loss of life on the part of the Allies which never can be measured, and it is continuing the neglect, as the right hon. Gentleman pointed out, and I hope very much, now that we have a new Government and also perhaps that experience has taught us all that some definite strong action in this respect will be taken, that some Member of the Government will take the opportunity in the Debate on this comparatively small Bill to give us an assurance on the subject which will quiet the apprehensions that are felt both in this House and in the country. When my hon. Friend opened the Debate on the Second Reading he left one matter in considerable doubt in my mind, and perhaps in the minds of others who heard his speech. I understood him to say at the outset of his remarks that the machinery for carrying out this Bill would be in the hands of the War Trade Department. Towards the end of his speech he told us that the machinery would be in the hands of the Customs authority. I hope that whoever speaks at a later stage for the Government will explain to the House exactly the functions of the Customs Department and of the War Trade Department, and how they dovetail into each other, because it seems to me that there is some danger of the various authorities which are being set up, and the various wheels of the great machine which is working these various provisions, lacking in efficiency owing to overlapping or to deficiency in marking out the functions which each has to perform.

My hon. Friend began by saying that the War Trade Department was to be used for the purposes of this Bill. The War Trade Department appears to be a rather mysterious body. I had some curiosity with regard to this Department and its personnel, and some days ago I put down a question on the subject, addressed to the President of the Board of Trade. I received an intimation that my question should have been addressed not to the Board of Trade but to the Secretary to the Treasury. Thereupon I addressed my question to the Secretary to the Treasury and put it down for yesterday. The question was to relieve my curiosity on this point: who were the persons in charge of the duties of this Department? What were their ages, and what were their business qualifications? The reply I got from the Secretary to the Treasury was: I am sending the hon. Member a copy of the notice issued to the Press on the formation of the Department. Of course, when I got that reply, knowing nothing as to what the notice to the Press was, I had no opportunity of seeing how far it was an answer to my question, but I have now got the notice to which the right hon. Gentleman refers, and it is no reply whatever to the main part of the question which I addressed to him. I hope in the course of this Debate that as this Department is involved we shall be told who are the persons who are carrying out these very onerous and very important duties in connection with this subject, and what are their qualifications.

The notice which the Secretary to the Treasury sent to me as an answer to my question begins by saying that the Treasury announce—not the Board of Trade—that in view of the complexity and volume of work involved in dealing with export and import licences, and so on, showing that they quite recognise, as we all recognise, that it is a work of great complexity and volume dealing with a subject which, as the speech which we heard on the introduction of the Second Reading to-day shows, I the Government recognise as one of very great importance and which the country, I think, recognise as being even more important than the Government consider. In answer to my question as to the personnel, I am told that Lord Emmott has consented to act as director of this Department, and that Sir Nathaniel Highmore, K.C.B., will be the secretary. Nothing is said about their qualifications or their ages. Later on we are told that the work relating to the movement of funds and other questions with which the Treasury is mainly concerned will be transferred to the Treasury and will be performed by Sir Arthur Thring, K.C.B., Parliamentary counsel, and his staff. So far as this information goes and I cannot think it is a full answer to my question as to the personnel of this Department, but if it is, and the Secretary to the Treasury tells me that these duties fall upon Lord Emmott, Sir Nathaniel Highmore, and Sir Arthur Thring, I would like to know whether or not Sir James Harrison is concerned with this Department, and, if not, is there anyone else?

I have nothing in the world—none of us have—to say against Lord Emmott. I have no doubt that he is a most amiable and worthy peer, but I would like very much to know what are his qualifications for being, in time of war, head of a great Department, dealing with the most intricate and critical matters of the commerce of this Empire. I am quite open to instruction on that point. Then as to the secretary, Sir Nathaniel Highmore, I have nothing in the world to say against him, but I should have thought that the secretary to this Department should have been a man who would have been described by the Minister of Munitions as a man of push and go. I should have thought that it would be well to find youth and vigour in this Department, yet I am informed—I do not know whether my information is correct or not—that the secretary has the misfortune to be a man of over seventy years of age. Then we have Sir Arthur Thring, a most excellent and able man; but here we have this Trade and Commercial Department, dealing with these intricate and critical matters of the export and the import into this country during the War, consisting of a peer, a politician, and two lawyers, and possibly an ex Civil servant. Not one single man in that Department has any knowledge, training, or experience in commerce or trade.

Surely that is a very extraordinary state of affairs for a Department of this sort. I do not know whether the Government can possibly give any explanation of that. I think that it is a very serious matter. If the Government is seriously intending to carry out the business which this Bill gives power them the power to do through the machinery of a War Trade Department, it is perfectly ludicrous and futile to have such a personnel as that which I have described upon the information given to me yesterday by the Secretary to the Treasury, and I think that the House and the country will expect that the Government, if they are going to show seriousness in this matter, will entirely reconstruct this Department. If my hon. Friend likes to have a Gentleman from the other end of the Corridor, wearing a coronet on his head, to preside over the Department, I do not know that anybody will object, but, in the name of common sense and of all that is serious, let us have a Department or a Board which shows youth, vigour, experience, and training in the duties which that Department has to perform, and do not let us have the futile absurdities of putting together two or three old men whose only qualifications are a half obsolete knowledge of law and a recollection of some services rendered in a Civil Service Department.

Mr. J. M. HENDERSON

(indistinctly heard): I have had some intimate connection with the War Trade Department, and I am bound to say that in the little which I have had to do with regard to the licences I seldom came on anything quite so chaotic. That is the very great danger which the Government have got to meet. I admit that it is a difficult subject. There are certain things which, in my humble opinion, the export of which ought to be stopped. Among these are lead, nickel, antimony, high-speed steel, and castor oil. Castor oil is very largely used in aeroplane work. Tons go forward to Sweden under licence, while Sweden hardly uses any of it. It is the same in regard to high-speed steel. I admit that in regard to ore there is a very great difficulty in regard to Sweden, because we import a great deal of Swedish, steel, and they cannot produce that Swedish steel without a certain mixture of ferro-manganese. But there is no doubt that a tremendous quantity of ore has reached Germany through Sweden and Holland and some from this country. Thousands of tons of ore have gone through Holland. There is not a blast furnace in all Holland, so that that ore must have gone through to Germany. There is no pretence for saying that it goes to Holland, for there are no blast furnaces in Holland in which they could use it to make steel. I would recommend my right hon. Friend that this Department should get some smart men in the City who know Scandinavian business, who know the merchants in Scandinavia, and the sort of things they deal in. I believe that such men would prove very valuable, and it is all the more necessary that such appointments should be made when it is recollected that in Scandinavia there are only four British Consuls who are British subjects. Those four Consuls are at four different places, including Stockholm, Malmo, Christiania, and Gothenburg. These are the only four Englishmen who hold those posts, and therefore when licences are applied for by dealers there is reference to the Netherlands Overseas Trust and the Government.

It would be all very well if the Govern-were responsible, and would hold themselves responsible, to see that goods were not exported again. What happens? The enormous profits which can be made are a great temptation, and food-stuffs, metals and ores have been passing through to Germany. That will never be put a stop to until you get attached to the War Trade Department men in the City, who, familiar with the Scandinavian, Danish, and Dutch Trade, have some home knowledge of the various dealers and merchants, the extent of their trade, and their usual manner of carrying on their trade. To appoint a very old Civil servant as secretary, though he is a very charming man—I know him very well—is unsuitable. What knowledge has he of Scandinavian business? What does he know about it? It is the old story. People apply for a licence for some goods to be supplied and the application is kept hanging about for weeks until someone takes the bull by the horns. A few days, or a week or a fortnight at the outside, ought to be sufficient. Every assistance should be given where goods are being sent bonâ fide, and which cannot by any possibility reach the enemy, and the licence should be granted promptly.

In the case of the War Risk Department, which has been a very great success, the Government placed the offices in the City, where it was in touch with the merchants. Instead of being at a distance from the City, this War Trade Department should be nearer the Custom House, through which all the licences go in the first instance. We have had some prosecutions for trading with the enemy. I am not sure that something might not be done in that direction. I know of a firm resident in Boulogne, who have their transmitting agents in London, and an agent in Sweden. Observe what is done. Ore is shipped to Holland, and to facilitate operations this firm has an agent in Sweden, who draws upon a London house, and the London house makes the money arrangements for this shipment of ore to Holland. As I have pointed out already, Holland uses none of that ore, and it goes up the Rhine to Essen, or elsewhere. If a London firm, no matter who they are, have financed or assisted in financing a shipment to the enemy, they come under the Defence of the Realm Act, and ought to be prosecuted. With regard to food supplies, we have shipped something like £4,000,000 worth in one month to Holland and Scandinavia, and with regard to high-speed steel very large quantities of it have gone forward. I am glad to think that a shipment of ferro-manganese was stopped. It comes back to this, that you will never get this War Trade Department to work this Bill with any satisfaction to the country until you get associated with it some men who really know Scandinavia, who know the trade, and who know the various traders, or can immediately decide what to do. Until this is done you will have no satisfaction. The whole country is seething with discontent at the ridiculous way in which licences have been held up. Men who have no notion of this business cannot protect you; they must have men who know the inside ropes of the various countries, and have the means of finding out who the people are and what is the character of their transactions.

Mr. FELL

This is an effort to meet the difficulty which we have encountered of supplies getting through to the enemy. In regard to the Netherlands Overseas Trust it apparently consists of a number of firms in Holland, and gives a guarantee. I do not know whether the firms who compose that trust are individually responsible, or whether the trust as a whole is responsible in regard to the guarantee. The Netherlands Overseas Trust may perfectly well agree to promise that the goods that are sent out shall not be sent to the enemy; but how are we possibly to assure ourselves that the goods sent out will not after all get into the enemy's country. There is a considerable amount of goods at present in Holland, and if these goods are retained in Holland they can be sent forward into Germany for the benefit of that country when a similar amount of goods is shipped into Holland, and, therefore, Germany would benefit exactly as much as if we had sent the goods, not to Holland, but direct into Germany. If there is not some provision that these people will not forward similar goods into Germany, then they might as well be sent direct to Germany. I hope, if such a thing can take place, steps will be taken to prevent it. I merely point out this danger, and I hope it may be avoided.

6.0 P.M.

Mr. WATT

I desire to say a few words in support of the contention put forward by the right hon. Gentleman (Sir H. Dalziel). In regard to cotton, I urge the Government to prohibit its export entirely; they have the power to do that under the Act. Everyone knows the importance of cotton to a country engaged in war. It is a notorious fact that Germany had not an enormous stock of cotton when the War broke out; she had only a stock to last 250 days, having made her arrangements on the basis that the War would be short. If the export of cotton had been prohibited, and Germany had been precluded from obtaining supplies of cotton, her stock would have run out. Though ten months have elapsed since the beginning of the War, I think it would still be well to prohibit the export of cotton entirely than not at all. The right hon. Gentleman constantly urged the Government to take action in regard to cotton, and again and again they have deferred it. If they remedy the matter now they will have acted in a wiser manner than if they continue the policy which has hitherto been adopted. It is the duty of the Government to stop hereafter cotton going into Germany.

Mr. LOUGH

I had not the opportunity of hearing the whole of this Debate, but I would like to make a protest respectfully against one remark which fell from my hon. Friend (Mr. J. M. Henderson). Although I think in some respects the War Trade Department is open to criticism, yet it is dealing with most difficult questions, and the heavy duties it has to discharge are necessarily of an embarrassing character. My hon. Friend appeared to visit the defects which lie in the nature of the work on the head of the very able official in charge of the Department, Sir Nathaniel Highmore. I think it is rather unfortunate that an attack of that kind should be made.

Mr. HENDERSON

I made no attack on Sir Nathaniel Highmore, who has only been appointed quite recently.

Mr. LOUGH

I think my hon. Friend did say something about an old Civil servant in charge of this Department.

Mr. HENDERSON

I said he was a very able Civil servant and I know he is a very able Civil servant. But what does the nicest or the best or the noblest Civil servant know about Scandinavian trade?

Mr. LOUGH

My hon. Friend has confirmed the point I made. I would be the last to say that it would not be an advantage to have a business man in connection with these matters. To that extent I agree with the general observation, but if we are to have Civil servants, I think there could be no more capable or able man than he who is at the head of this Department.

Mr. HENDERSON

Hear, hear!

Mr. LOUGH

I am glad my hon. Friend agrees with me. I had correspondence with him and I found him display the greatest courtesy and an endeavour to get to the bottom of matters difficult to unravel. The head of a Department must depend a good deal on the evidence that is laid before him with regard to the granting of licences. I think every effort should be made to discharge the duty which the whole country wishes the Department to carry out, namely, to prevent any goods reaching the enemy and at the same time without interfering with the legitimate trade of the country. I do not think sufficient importance has been attached in this Debate to the question of the legitimate trade which the country should carry on. The House ought to realise the great opening which exists for trade in neutral countries. I believe a great opportunity is presented through the shutting up of Germany, which is no longer a rival of this country. We can carry on trade where we like, and our great trade opponent was Germany. If trade can be carried on on safe lines so as to give no help by any goods reaching the enemy, then a golden opportunity is presented of seizing the trade of Germany, which I believe would be as important as defeating her arms or seizing her Colonies. There are two sides to this question, namely, allowing the country to carry on trade where it can safely do so and the preventing of trade with the enemy. We heard in recent Debates about the difficulty of paying for our imports. Of course the reason we do not pay for them is because of the cheek to our exports. If exports can be allowed in legitimate channels it would be the greatest relief to the country and would greatly facilitate those financial operations which we are engaged in at present. I hope that the Board of Trade will not interfere with legitimate trades more than it possibly can, while at the same time making every effort to prevent goods reaching enemy countries. Then there is the question of penalties, and I rather think that the object of this Bill seems to be to increase the penalty on the shipper for an act over which he might not have control. Goods might be delivered to the wrong place in spite of the shipper taking every effort to prevent that occurring. The fine is very heavily increased and there is an alternative of imprisonment. Perhaps the hon. Gentleman the Parliamentary Secretary can give us an assurance that every precaution will be taken to secure that innocent persons will not suffer in the carrying out of this very complicated law.

Mr. PRETYMAN

I explained the question of the penalties previously, but if the right hon. Gentleman will look again at the Bill, he will see that the penalty of £500 or imprisonment does not apply to the shipowner at all. Sub-section (2), Section 1, applies to the shipowner, and the penalty which is imposed upon him is, the same which is always imposed upon shipowners under the Customs Act for shipping prohibited goods. The penalty of £500, or the alternative of imprisonment, is against a person who consigns goods contrary to the Regulations to be issued after this Bill is passed. I am quite sure the right hon. Gentleman will agree to that as a maximum penalty, in view of the enormous profits which might be made by shipping a cargo of goods to an enemy country under present conditions. I think my right hon. Friend will agree that the penalty of £100 which previously existed was ridiculous, and I think even a penalty of £500 would be equally ridiculous if there were not the alternative of substituting imprisonment if the Court thought proper. It is, however, only a maximum penalty, and I do not think any less maximum penalty would meet the case of those who knowingly trade with the enemy to the detriment of the country at a time like this. In answer to questions by the hon. Member of West Aberdeenshire (Mr. J. M. Henderson) and the hon. Member for the St. Augustine's Division of Kent (Mr. R. McNeill) about the War Trade Committee, there seems to be a misapprehension about the work of that Committee. It is not the business of that Department to settle what are prohibited goods; the responsibility for settling that lies with the Government. The Board of Trade and the Admiralty and the War Office have considered what it is desirable to prohibit, and they have settled what is prohibited. The function of the War Trade Department is to grant licences for the export of prohibited goods where they are satisfied that those prohibited goods are going to persons who may be trusted not to pass them on to an enemy country. So far from that Department consisting only of its Chairman (Lord Emmott) and a Civil servant, the Department works mainly through Committees. As the House knows, there is no greater authority on matters of coal than the hon. Member for South Shields (Mr. Russell Rea), who is Chairman of the Coal Committee of the War Trade Department, and which Committee has full knowledge of the coal trade. Then, again, Lord Balfour of Burleigh is Chairman of the Committee which deals with tin and rubber.

The War Trade Committee is only really the nucleus of the War Trade Department which collates all the work of the committees and deals with those questions. There is then the general Committee which deals with the goods on the Schedules which I have already referred to and which is presided over by Lord Emmott. The Board of Trade has a representative on it, and there are other expert Members who are fully competent to deal with these questions. There is the article which has been referred to by the right hon. Member for Kirkcaldy Burghs (Sir H. Dalziel) namely, cotton. I am not competent to deal with the question, but I may tell him that I think before many days are past he will be informed that another Committee with full expert knowledge of cotton will be dealing with licences for cotton, and all cotton products will be on the prohibited list. I would add to that, that so far from this Bill increasing the responsibility of the War Trade Department the exact contrary is the case. The War Trade Department are not to carry out the machiney of this Bill at all. This Bill deals with articles which are not prohibited, and which therefore do not require licences and do not come before the War Trade Department whose business it is to grant licences. This Bill enables the ordinary Customs authority in every port to prohibit the export of any article whatever, whether it is a prohibited article or not, unless it is consigned in this case to the Netherlands Oversea Trust, or to an approved consignee. There was the question raised by the right hon. Gentleman (Mr. Lough) and by the hon. Member for West Aberdeenshire, namely, the great desirability of facilitating trade as much as possible. We quite recognise that subject to the major consideration of stopping trade with the enemy, we want to facilitate legitimate trade in every possible way, but we must first of all do everything we can to seal up all those sources from which the enemy is supplied.

The object of this Bill is a double one. It will, in the first instance, stop all trade, whether prohibited or not, which may reach an enemy country, and it will restrict the routine of licences in respect of those articles, and enable the ordinary Customs authorities to deal with those consignees without them having to go through the form of obtaining licences at all from the War Trade Committee. Therefore I think that on both counts this Bill will work for good. The War Trade Department will themselves admit that there was originally considerable delay. The reason is that given by the right hon. Gentleman opposite, namely, that the work is of enormous complexity, of great magnitude, and entirely new. Obviously, when you have a huge schedule of articles in respect of which licences have to be obtained, and you have to secure information as to the ultimate destination of those articles, a certain amount of delay would necessarily occur before the Committee could get its machinery into thorough working order. There is now very little delay, and I believe the Committee claim that no decision as to a licence is ever delayed for more than seven days. I will certainly convey to my right hon. Friend the suggestion that the Committees of this Department should be strengthened by the addition of experts having particular knowledge of the trade and of the personnel of the traders in the countries with which the Committees are dealing. The question raised by the hon. Member for Yarmouth (Mr. Fell), that while the consignment of goods from this country might be safeguarded, they yet might release other goods which could be sent to Germany, has been very fully considered in the drafting of this Bill. The only way in which that point can be met is by having as full a knowledge as possible of the imports, both before and since the outbreak of war, of the particular articles in question into a particular country, and having also a knowledge of the home consumption in that country. It is proposed not only to regulate the particular consignment, but to keep a careful watch on the total quantity of any article which goes under this or any other of these Acts into particular countries, and to stop the export of any article where it appears that more is going into the country than that country would naturally and normally consume. I am afraid that there is nothing further that we can do in that particular.

Question put, and agreed to.

Resolved, "That this House will immediately resolve itself into Committee on the Bill."—[Captain Pretyman.]

Bill accordingly considered in Committee.

[Mr. WHITLEY in the Chair.]

    cc1113-23
  1. CLAUSE 1.—(Power to Prohibit Exportation to Persons other thin Authorised Consignee.) 4,113 words