Commons Sitting of 29 June 1915

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

PRIVATE BUSINESS.
Private Bills [Lords] (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, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, and which are applicable thereto, have been complied with, namely:—
Port of London Authority Bill [Lords].
Bill to be read a second time.
Provisional Order Bills [Lords] (No Standing Orders applicable),—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, brought from the Lords, and referred on the First Reading thereof, no Standing Orders are applicable, namely:—
Kilmarnock Gas Order Confirmation Bill [Lords].
Bill to be read a second time To-morrow.
Altrincham Gas Bill [Lords],
Read the third time, and passed, with Amendments.
Eastern Valleys (Monmouthshire) Joint Sewerage Board Bill [Lords],
As amended, considered; to be read the third time.
Electric Lighting Provisional Orders (No. 4) Bill, Gas and Water Provisional Orders (No. 2) Bill, Land Drainage (Raveningham) Provisional Order Bill, Local Government Provisional Orders (No. 8) Bill, Pier and Harbour Provisional Orders (No. 1) Bill,
Read the third time, and passed.
London Electric Railway Companies' Facilities Bill,
Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.
Railway Bills (Group 3),
Sir LUKE WHITE reported from the Committee on Group 3 of Railway Bilk; That, for the convenience of parties, the Committee had adjourned till Thursday, at Eleven of the clock.
Report to lie upon the Table.

AGRICULTURAL STATISTICS (IRELAND).
Copy presented of prices of Crops, Live Stock, and other Agricultural Products for the year 1914 [by Command]; to lie upon the Table.
WEIGHTS AND MEASURES ACT, 1878.
Copy presented of Order in Council, dated 25th June, 1915, approving a new Standard Measure of Length of 1¼ Metres [by Act]; to lie upon the Table.
ISLE OF MAN.
Account presented of Revenue and Expenditure for the year ended 31st March, 1915, with the Report of the Comptroller and Auditor-General thereon [by Act]; to lie upon the Table, and to be printed. [No. 284.]
LICENSING STATISTICS, 1914.
Copy presented of Statistics as to the operation and administration of the Laws relating to the Sale of Intoxicating Liquor in England and Wales for the year 1914 [by Command]; to lie upon the Table.
IMPERIAL REVENUE.
Return ordered "relating to Imperial Revenue (Collection and Expenditure) (Great Britain and Ireland) for the year ending the 31st day of March, 1915 (in continuation of Parliamentary Paper, No. 386, of Session 1914.")—[Mr. Joseph Pease.]
PROSECUTION OF OFFENCES ACTS, 1879 TO 1908.
Address for "Return showing the working of the Regulations made in 1886 for carrying out the Prosecution of Offences Acts. 1879, 1884, and 1908, with Statistics, setting for the number, nature, result, and cost of the proceedings instituted by the director in accordance with those Regulations from the 1st day of January, 1914, to the 31st day of December, 1914 (in continuation of Parliamentary Paper, No. 294, of Session 1914)."—[Mr. Brace.]
NEW WRIT.
For the County of Carnarvon (Northern or Arfon Division), in the room of William Jones, esquire, deceased.—[Mr. Beck.]
ORAL ANSWERS TO QUESTIONS.
  WAR.

    SOUTH AFRICAN GARRISON INSTITUTE FUNDS.
    Sir CHARLES NICHOLSONasked the Under-Secretary of State for War whether there is a large sum of money at the disposal of the War Office, being the balance of the South African Garrison Institute funds; if so, will he say what is the amount of the fund, how much of it is in England, and how much in Africa; whether he will consider the advisability of using this fund, which was compiled out of the soldier's pocket, for his benefit in France and the Dardanelles at the present time; and whether he will take steps to hand this sum over to the Board of Control of Regimental Institutes to be spent in improving the canteen hutting arrangements overseas?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. H. W. Forster): A sum of £50,000, part of the accumulated balance of the South African Garrison Institute, was remitted to this country last year. I am unable to state what balance now remains in South Africa. Part of the £50,000 has already been used for the purpose suggested and further measures of the same character are in contemplation. Any proposals that the Board of Control may
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    make for assistance from this fund to approved objects will receive full consideration.

    ARMY (PERCENTAGE OF MARRIED MEN).
    Mr. JAMES MASONasked the Under-Secretary of State for War whether he will state what is the percentage of married men in all branches of the Army at the present time?
    The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): As I have already stated, this information is not available.
    Mr. MASON: Will the right hon. Gentleman consider the advisability of taking some steps in future to reduce the enormous proportion of married men?
    Mr. SPEAKER: That is a very large subject to arise out of a very small question.

    WAR OFFICE CONTRACTS.
    Mr. FELLasked the Under-Secretary of State for War if access is given at the Contract Department of the War Office to men who claim to be contractors and manufacturers, but who are merely runners and go-betweens seeking to earn commissions on contracts they may secure; if he will consider the possibility of dealing directly with the manufacturers if in this country, or with their duly appointed representatives if they are abroad; and if these runners and agents will be kept out of the Government offices?
    Mr. FORSTER: It is already the established practice of the Contract Department of the War Office to deal, wherever possible, with actual manufacturers or their duly accredited representatives.
    Mr. FELL: Is the hon. Gentleman aware that grave dissatisfaction exists on this question, and that it is frequently stated that there have been cases where a manufacturer himself has not been able to get access to the authorities?
    Mr. FORSTER: It is almost unavoidable that there should be some dissatisfaction with any department which has to conduct operations of the nature of those connected with the War Office. It is the established practice at the War Office always to deal with manufacturers direct wherever it is possible.
    Mr. WATT: Is it not the case that manufacturers must first of all struggle to get on the list, and that after they have got on the list they have to struggle to get orders?
    Mr. FORSTER: Where a manufacturer is able to show that there is a reasonable prospect of his being able to execute orders on terms satisfactory to us there is no difficulty.
    Sir A. MARKHAM: Is the hon. Gentleman aware that firms on the list have not received inquiries from the War Office, but have received inquiries from armament firms who are contractors and who make a profit out of them?
    Mr. FORSTER: I am not aware of that. If the hon. Gentleman will bring any cases to my notice I will look into them.

    SIR JOHN FRENCH'S GENERAL STAFF.
    Mr. ELLIS GRIFFITHasked how many officers are attached to the General Staff of the Commander-in-Chief of the Expeditionary Force in France?
    Mr. TENNANT: The General Staff Branch of the General Headquarters consists of sixteen General Staff officers.

  RECRUITING.

    WAR OFFICE ADVERTISEMENTS.
    Mr. ELLIS GRIFFITHasked how much has been spent on advertisements inviting recruits to join the Forces of the Crown; who is responsible for this Department; and what salary he receives?
    Mr. TENNANT: As I stated on the 2nd March, in reply to the hon. Member for the Melton Division, it would not be possible without great labour and diversion of energy from other pressing work to take out a statement of the cost of all the advertisements issued. The responsibility for these advertisements rests with the Recruiting Department of the War Office.
    Colonel YATE: Would it not be advisable now to put a stop to that expenditure?
    Mr. TENNANT: It is a very difficult question to answer, because one does not
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    know how much result is obtained from a definite amount of expenditure. But I would say to the hon. and gallant Gentleman that this is not a time to stop any agency by which we may be able to get recruits.

    EQUIPMENT.
    Sir A. MARKHAMasked the Under-Secretary of State for War whether, seeing that many thousands of men have enlisted whom the Government are unable to equip and arm, he will say why large numbers of men working on munitions of war and equipment are still being recruited; and whether the enlistment of such men means further delay in the arming and equipment of those already enlisted?
    Sir HOWELL DAVIESasked the Under-Secretary of State for War whether he will now institute a system of registration of willing recruits for the Army and allow them meanwhile to continue their civil occupations until such time arrives as the equipment of those already enrolled in the Army has reached a more complete stage and until the Minister of Munitions, has enrolled a sufficient number of men to secure a satisfactory supply of shells and other munitions for successfully conducting the War?
    Mr. TENNANT: It is not proposed to cease enlisting recruits for the Army at the present juncture, or to register men merely as proposed in question No. 7. Men of skilled trades in which there is a shortage of labour required for the production of munitions of war are not now accepted for enlistment.
    Sir A. MARKHAM: Is my right hon. Friend aware that recruiting bands are stationed outside factories which are supplying munitions of war, and are taking men away from these factories to join the Colours?
    Mr. TENNANT: I am not aware that men whose services would be useful for the manufacture of munitions are being recruited for the Army.
    Sir A. MARKHAM: I will send my right hon. Friend cases.

    METROPOLITAN POLICE.
    Mr. C. DUNCANasked whether constables in the Metropolitan Police who had enlisted as ordinary recruits in His Majesty's Forces and, in order to do so, had to resign from the police service,

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    are now protected by the retrospective provisions of The Police (Emergency Provisions) Act, 1915; and, if so, will he state why their wives and families are not yet in receipt of the weekly allowances to which they are entitled from the police funds?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir J. Simon): The Act applies retrospectively to any constables who enlisted with the consent of the Chief Officer of Police of the force to which they belonged, but not to those who resigned and enlisted without such consent.

    MACHINE GUNS.
    Sir FREDERICK CAWLEYasked what proportion of machine guns had the British Army per battalion, and what proportion had the German Army at the commencement of the War; what steps were then taken to remedy the deficiency of machine guns at the commencement of the War; and on what date was the first order placed for machine guns in America?
    Mr. TENNANT: I answered a question on this point put to me by the hon. Member for the West Toxteth Division on the 21st instant. I do not think it would be in the public interest to give the detailed information asked for in the last two parts of the question, but I may assure my hon. Friend that every possible step is being taken to increase the supply of this weapon.

    MEMBERS OF HIS MAJESTY'S FORCES (SPEECHES AND LETTERS).
    Mr. HOGGEasked the Under-Secretary of State for War whether his attention has been called to the practice, which is increasing, of members of His Majesty's Forces, both in and out of the House of Commons, delivering speeches, writing letters, etc., dealing with questions of policy; whether he can say if any action has been taken with regard to such practices; whether, if any action has been taken, it has been taken in all cases; and whether he can say in which cases it has been taken, and what was the nature of the action in such cases?
    Mr. TENNANT: This question has been engaging my attention. I would point out
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    to my hon. Friend that there is a distinction between statements made outside the walls of Parliament, and those made inside. Questions of policy seem to be proper subjects of discussion by Members of Parliament. It has been the immemorial custom to consider statements made inside Parliament as privileged. I am not able to define precisely the limits within which that privilege may be applied. Such a definition is as difficult as would be one delimiting the boundaries of good taste and, while it may be possible to overstep the borders of the one, there may be a liability to violate the neutrality surrounding the other. I think the traditions of this House and the good sense of hon. Members should prove an adequate safeguard.
    Sir A. MARKHAM: Are we to understand that officers, who are Members of the House of Commons, and who have returned from the Front, are not to be allowed to make any statements in regard to the conduct of the War? Is my right hon. Friend aware of the case of Captain Jorsy de Knoop, of the Cheshire Yeomanry, who has been refused permission to return to the Front, by reason of having stated—what is perfectly true—that we were short of ammunition?
    Mr. TENNANT: In answer to my hon. Friend, I do not think the description given of Captain Jorsy de Knoop's speech is wholly accurate. He cast a certain amount of slur upon those in high authority. That is a question of discipline, and ought to be dealt with in the ordinary way by the military authorities. What I should like the House to realise is that any gentleman who is good enough to give his services to the country, and is a Member of Parliament, is not thereby debarred—it is not proper that he should be so debarred—from discussing questions of policy. If, however, he discusses other questions, questions, for instance, relating to military discipline then I think a different rule should apply.
    Mr. HOGGE: May I ask the right hon. Gentleman, for the sake of information, whether, when a Member of this House is an officer on full pay, he is entitled to make speeches in the House concerning military authority, or whether it is not the practice that Members of this House attached to the naval or military authorities only make such speeches when they are on half pay?
    Sir H. CRAIK: Before the right hon. Gentleman answers, I should like to ask him whether the privileges of a Member of this House are defined by any Department of the State, or whether they do not stand upon an altogether different footing, and cannot be interfered with?
    Mr. TENNANT: Yes, Sir, I think the hon. Member opposite is quite right in his definition. It is not possible, as I have said in answer to the main question, to lay down a definite rule. In regard to the other point, of course it is quite true that hitherto it has been the custom of Parliament for Members who were serving with the Forces of the Crown either to be seconded or to be placed on half pay, in order to enable them to discharge their Parliamentary duties. In this War, owing to the large number of hon. Members who have been good enough to come forward and serve the State, that practice has been abrogated during the War.
    Mr. PRINGLE: Would the right hon. Gentleman's Department not consider the special circumstance that this House has passed a special statutory provision to enable these Gentlemen to accept commissions without vacating their seats, and is not that to be taken into consideration in regard to the way they exercise their rights of speech?
    Mr. TENNANT: I do not know that I quite understand the point referred to by my hon. Friend, but so far as I do, I think the hon. Gentleman opposite (Sir H. Craik) was emphasising the exact differentiation as between the two cases mentioned.
    Sir G. SCOTT ROBERTSON: May I inquire, Mr. Speaker—
    Mr. SPEAKER: The hon. Gentleman must not wave me down. [Laughter.] He must give notice of any further question.
    Sir G. SCOTT ROBERTSON: On a point of Order. First of all, may I explain that it was only in my way of speaking, and I had no intention of being out of order. May I ask if it is not allowable, considering the very interesting point which has been raised, for a Member who puts very few supplementary questions, to put one on a point which I am sure will be in the interest of the House on this very interesting occasion?
    Mr. SPEAKER: We already have had six supplementary questions on this one.
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    There must be some limit, for there is a moment when supplementary questions tend to become a general debate. When hon. Members rise first on one side, and then on the other, it is evident to me that the time has come when a stop must be put to questions.
    Sir G. SCOTT ROBERTSON: I would like to ask whether, at the end of questions, supposing there is sufficient time, I might put a supplementary question on this point to the right hon. Gentleman?
    Mr. SPEAKER: Perhaps the hon. Gentleman will let me see the question, and also give notice to the Minister concerned.
    Sir G. SCOTT ROBERTSON: Is the Under-Secretary for War aware that there is a general feeling of uneasiness in the country that officers of the headquarters staff criticising the Government in this House are acting as mouthpieces of the Field-Marshal commanding in France, and can he say anything to allay that feeling?
    Mr. TENNANT: I was wholly unaware of any such feeling. If it exists—of which I have the gravest doubts—I would say, in order to allay it, that there is not a word of truth in it.
    Mr. T. M. HEALY: May I ask you, Mr. Speaker, whether it is right, without notice to this House, so that we may have an opportunity of judging the nature of a question, that an attack should be made on the Commander-in-Chief?
    Mr. SPEAKER: That is one of the difficulties of hon. Members putting supplementary questions without notice. I do not think the hon. and learned Member was here earlier this afternoon when the hon. Gentleman thought he was ill-used because I had suppressed his supplementary question. I have now allowed him to ask it, chiefly for the purpose of letting the House see how right I was on that occasion.
    Sir G. SCOTT ROBERTSON: May I first of all make a remark before asking a further supplementary question?
    Mr. SPEAKER: We must not have any more supplementary questions.
    Sir G. SCOTT ROBERTSON: May I ask, if the officers of the headquarters staff were to come into this House to-night and criticise the Field-Marshal—
    Mr. SPEAKER: The hon. Gentleman will see that that is quite out of order.
    Mr. CATHCART WASON: May I now ask Question 37, which was passed over?
    Mr. SPEAKER: Yes.
    Mr. CATHCART WASON: I beg to ask the question standing in the name of the hon. Member for North Westmeath (Mr. Ginnell), whether the initiation of the present policy of the British Expeditionary Force on the Continent to kill Germans rather than conquer them dates from his visit to the front, and accounts for the phenomenon that no prisoners of war are now being taken; whether recruits are being informed of this new condition of the War and its reciprocal consequences; and whether this House or this country will be afforded an opportunity of expressing its opinion of the policy of killing men after they have laid down their arms?
    Mr. SPEAKERcalled upon the Chancellor of the Exchequer to reply.
    Sir G. SCOTT ROBERTSON: Mr. Speaker—
    Mr. SPEAKER: I have already called upon the Chancellor of the Exchequer.
    Sir G. SCOTT ROBERTSON: On a point of Order, Mr. Speaker. Will you allow me the opportunity to make a personal explanation?
    Mr. SPEAKER: When I ask the hon. Gentleman to resume his seat and I call upon the Chancellor of the Exchequer, in ordinary courtesy he should wait and hear what the right hon. Gentleman has to say.
    Sir G. SCOTT ROBERTSON: I apologise very sincerely for my seeming discourtesy to you, Mr. Speaker; but an attack was made upon me by the hon. and learned Member for North-East Cork (Mr. T. M. Healy), who said I had attacked the Field-Marshal Commanding in France. I want to know when I shall have an opportunity of replying to that attack and repudiating it most emphatically? [An HON. MEMBER: "Take the Albert Hall!"]
    Mr. SPEAKER: The hon. Member must take the first opportunity he gets.
    The CHANCELLOR of the EXCHEQUER (Mr. McKenna): Question No. 37 standing in the name of the hon. Member for North Westmeath (Mr. Ginnell)
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    was postponed by him and consequently was not answered; but as the question contains a scandalous and wholly false attack—
    Mr. GINNELL: On a point of Order, Mr. Speaker. Is a Minister entitled to answer a question which has been openly postponed?
    Mr. SPEAKER: Certainly, if there is any attack upon any private individual.
    Mr. McKENNA (continuing his answer): Upon the British Expeditionary Force. I desire to take this opportunity of saying that there is no foundation whatever for the allegations contained in the hon. Member's question.
    Mr. CATHCART WASON: On that, may I ask you whether your attention has also been called to the certain fact that a question such as this must necessarily cause much loss to many of our gallant soldiers at the front, and also be productive of much bitterness and entirely unnecessary feeling?
    Sir A. MARKHAM: Will the right hon. Gentleman ask the United States Government to convey to the German Government that the hon. Member opposite is not of sound mind?
    Mr. PRINGLE: I desire, with reference to this question, to ask you, Sir, whether it appeared upon the Paper with your approval and knowledge?
    Mr. SPEAKER: My attention had been called to it, but I am placed in a very grave difficulty. The question in the ordinary course of things would be a perfectly regular one. It does not violate any Parliamentary rules, and, however much I might deprecate it appearing on the Paper, if I were to strike it out we should have the hon. Member and other hon. Members attacking me for not having carried out the ordinary rules, and for having struck out a question of this character. Hon. Members have a great responsibility, just as great a responsibility as I have, and they must act according to their best lights.
    Sir A. MARKHAM: Can any inquiry be held into the state of mind of the hon. Member?
    Mr. SPEAKER: If we were to begin inquiring into that kind of thing, I do not know where we should end.

    EX-SOLDIERS (PROFICIENCY PAY).
    Mr. JOWETTasked the Financial Secretary to the War Office whether all ex-soldiers who re-enlist are entitled to proficiency pay; if so, whether he is aware that in certain cases soldiers who re-enlisted over nine months ago have not yet received it; and will he see that these men are paid this allowance?
    Mr. FORSTER: No, Sir. It is necessary that they should have a total of two years' qualifying service.
    Mr. O'GRADY: Is the hon. Gentleman aware that great dissatisfaction exists in consequence of this proficiency pay not being paid to ex-volunteers at the same time as it is being paid to ex-soldiers? There are many cases of ex-volunteers who have served for a great number of years who are debarred from this proficiency pay.
    Mr. FORSTER: I am quite well aware that that is the case; but the whole question is being considered.
    Mr. O'GRADY: I will put a question down for Thursday.

    OLD AGE PENSIONS (DEDUCTIONS).
    Mr. CLYNESasked the Chancellor of the Exchequer if he is aware that old age pensioners are being informed that the acceptance of additional assistance during the War will proportionately reduce their pension; and whether, in view of the reduction in the value of the pension owing to high prices, he can take steps to give the full benefit of the pension to the aged poor, many of whose former supporters and relatives are now engaged in war services?
    Mr. McKENNA: I would refer my hon. Friend to my reply to my hon. Friend the Member for Blackburn on Thursday last and to previous statements made on the same subject.
    Mr. BUTCHER: Will the right hon. Gentleman issue instructions to the pensions officers, in order to secure unanimity of practice, and so that those concerned may know that mere temporary assistance granted to them will not debar them from obtaining the full amount of their old age pensions?
    Mr. McKENNA: That is the rule, and, so far as I am aware, there has been no
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    departure from that rule. If the hon. Member will communicate to me any case where he knows the rule has been infringed, I shall be glad to consider it.
    Mr. BUTCHER: Will the right hon. Gentleman, in order to secure the observance of this rule, issue proper instructions?
    Mr. McKENNA: In the absence of any information that there has been any breach of the recognised rule there can be no reason for making another rule, but if the hon. and learned Gentleman will inform me of any case in which there has been a breach, I shall be very happy to deal with it.

  MUNITIONS.

    COMMISSIONS AND PROFITS.
    Mr. FELLasked the Chancellor of the Exchequer if, in view of the profits being made by agents in the shape of commissions on contracts connected with the War with the various Government Departments, adequate steps are being taken to make such profits liable to Income Tax; and if he will consider the possibility of making the contractors special agents for the Government to collect such Income Tax at the source before paying over any money, directly or indirectly, in the shape of commission to such agents?
    Mr. McKENNA: Income Tax will be assessed and collected in the ordinary course on the profits to which the hon. Member refers.
    Mr. FELLasked the Chancellor of the Exchequer if, in taxing the extra profits made by contractors during the War, he will take steps to include in such extra profits the sums being made in the shape of commissions by agents' runners and go-betweens between such contractors and the Government?
    Mr. McKENNA: In connection with any scheme for the taxation of war profits the point to which the hon. Member refers will not be overlooked.
    Mr. FELL: Does the right hon. Gentleman think that he will be able to secure the full Income Tax and the extra taxes on these properties?
    Mr. McKENNA: We had better wait. I would rather not at present express an opinion upon it.

  WAR LOAN.

    SCOTTISH BOARD OF AGRICULTURE.
    Mr. COWANasked the Secretary for Scotland whether his attention has been called to a suggestion that the accumulated balances, amounting to about £400,000, derived from the annual Grants to the Scottish Board of Agriculture, for the purposes of the Scottish Small Landholders Act, should be temporarily invested in the new War Loan; whether he can state where these funds are now lying and what rate of interest they are returning; and whether, in the event of that rate being materially less than 4½ per cent. per annum, he will consider the desirability of adopting the suggestion referred to?
    The SECRETARY for SCOTLAND (Mr. McKinnon Wood): The answer to the first part of my hon. Friend's question is in the affirmative; the balance of the Agriculture (Scotland) Fund is at present on bank deposit receipt in Scotland; to the extent of £375,000 the deposit earns interest at 2½ per cent. per annum, and to the extent of £55,000 the ordinary deposit rate of 2 per cent. In view of the fact that the fund is being constantly drawn upon in the exercise of the administrative duties of the Board it would not be suitable to invest it in a permanent security, but the question of securing a more remunerative investment in Government securities is at present under consideration.
    Mr. COWAN: Does the right hon. Gentleman suggest that if those balances, amounting to nearly £400,000, were invested in the War Loan now before the country that they would be unrealisable?
    Mr. McKINNON WOOD: No, Sir, I do not suggest anything of the kind.

    FACILITIES TO TROOPS.
    Sir GODFREY BARING: To ask the Chancellor of the Exchequer a question, of which I have given private notice, namely: Whether he will arrange, in conjunction with the Postmaster-General and the military authorities, for facilities to be given through the Field Post Offices, to the troops serving abroad for the purchase of the smaller bonds and vouchers of the new War Loan?
    Mr. McKENNA: Facilities for subscribing to the War Loan will be afforded to the troops serving abroad as far as possible. Detailed arrangements are now under consideration.

    SECURITIES.
    Mr. MORISON: I beg to ask the Chancellor of the Exchequer a question, of which I have given him private notice, namely: Whether an applicant for stock or bonds of the new War Loan, having paid up in full in cash, will have the right of designating the particular holdings of Consols, or other securities named in the prospectus, to which the "rights of conversion" to which he is entitled shall be applied?
    Mr. McKENNA: The options attaching to holdings of 4½ per cent. War Loan can only be exercised by holders in respect of Consols, 2½ per cent. and 2¾ per cent. Annuities, or 3½ per cent. War Loan, belonging to them.

    DECEASED NAVAL MEN (ADMINISTRATION OF EFFECTS).
    Mr. JOWETTasked the Secretary to the Admiralty if he will expain why the death of William Francis Maw, late of His Majesty's ship "Good Hope," was not notified to the father until six months after it occurred; whether the father of the deceased, who is a Civil servant of thirty-three years' standing, is obliged, in accordance with instructions contained in Form 14 M.C., to attend with two householders before a clergyman of the Established Church to whom he is personally unknown to prove his right to the administration of the effects of the deceased, although ministers of other religious denominations and various city justices could certify his identity on their own know-edge and without the assistance of two householders; and if, having regard to the natural disinclination of relatives distressed by reason of bereavement to go through the process of attending with witnesses before a stranger concerning mere matters of property, he will arrange some alternative method of proving identity for persons to whom the present method is distasteful and objectionable?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara): As regards the first part of the question, I think that my hon. Friend is misinformed. The "Good Hope" was lost on 1st November, 1914, and I understand that Mr. Maw was advised of the death of his son on the 21st of that month, and that he acknowledged the receipt of the notification on the following day. The forms sent

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    in this case are those prescribed in connection with the Navy and Marines (Property of Deceased) Act, 1865, and if Mr. Maw had made representation to the Department as to any difficulty in complying with the instructions, his representation would have been given full consideration. With regard to the last part of the question, I may say that the subject of the procedure for obtaining administration for naval assets is already under consideration.
    Mr. SNOWDEN: Is the right hon. Gentleman aware that there is very widespread dissatisfaction with this practice?
    Dr. MACNAMARA: There is an Order in Council in connection with the Act of 1865, but, as I have said, I think the whole question requires consideration, and is being dealt with.
    Mr. SNOWDEN: Will it receive urgent consideration? Great dissatisfaction is going on at present.
    Dr. MACNAMARA: It is being considered, and I will see what I can do to meet the point.

  CENSORSHIP.

    INTERVIEW WITH THE POPE.
    Mr. GINNELLasked the Secretary of State for the Home Department, if the powers of the Press Censor are being exercised impartially throughout the United Kingdom, will he explain why the passage in a recently reported interview with the Pope, in which His Holiness said that Cardinal Mercier had not been arrested or imprisoned but was free to move about in his diocese, freely published in Great Britain, has been suppressed from the report in Ireland; and, now that the alleged imprisonment has exhausted its purpose of assisting recruiting in Ireland, whether, in the interest of truth, he will allow the interview with the Pope to be published as fully in Ireland as in Great Britain?
    Sir J. SIMON: I have already assured the hon. Member that the Press Bureau exercises its powers impartially. I am informed that neither the Press Bureau nor the Irish Government gave instructions for the omission of the portion of the reported interview with the Pope to which the hon. Member refers; and a prohibition which has never been imposed cannot be removed.
    Mr. GINNELL: Can the right hon. Gentleman account for the omission of this particular passage in Ireland?

    DISPATCHES FROM HEADQUARTERS OF ALLIES AND ENEMY.
    Mr. ELLIS GRIFFITHasked the Home Secretary whether the censorship is applied to official dispatches sent to this country from the headquarters of the Allies and of the enemy?
    Sir J. SIMON: I have communicated with the Press Bureau, but the meaning of the right hon. and learned Gentleman's references to dispatches is not clear. Probably a reference to the former Solicitor-General's answer on the 20th April last will furnish the information required.

    PARLIAMENTARY SPEECHES.
    Mr. ELLIS GRIFFITHasked the Home Secretary whether the censorship is applied to speeches delivered in both Houses of Parliament?
    Sir J. SIMON: The Press Bureau does not censor speeches in Parliament.

    ALIENS IN PROHIBITED AREAS.
    Mr. BUTCHERasked the Home Secretary whether he will take steps to amend the Defence of the Realm Act (Regulations) by providing that no naturalised alien of German or other alien enemy origin who still owes allegiance to the Sovereign of his country of origin shall reside in or enter upon a prohibited area unless provided with a permit from the registration officer of the district; and whether, following the precedent of the Aliens Restriction (Belgian Refugees) Order, 1914, he will take steps to amend the Aliens Restrictions Orders by providing that all aliens resident in this country, whether in prohibited areas or not, shall be registered, and that no alien shall reside in or enter on a prohibited area unless provided with a permit issued by the registration officer of the district?
    Sir J. SIMON: Both these suggestions have been carefully considered, but for reasons difficult to state briefly in oral reply it has not been found possible to adopt them. I shall be glad to confer with my hon. and learned Friend privately on the matter if he will give me the opportunity.

    BOARDS OF GUARDIANS (APPOINTMENTS).
    Mr. ELLIS GRIFFITHasked the President of the Local Government Board whether a circular has been sent to boards of guardians requesting them not to give appointments to men of military age; and whether this rule is acted upon in any and what Government Department?
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Long): My Department issued a circular on the 21st May to boards of guardians and other local authorities, suggesting that, where vacancies occur, appointments should not be made of men who are eligible for the Army or Navy or for other national service. The same rule is being acted upon in the Department.

    AEROPLANES.
    The following questions stood on the Paper in the name of Mr. LYNCH:—
    31. To ask the Minister of Munitions whether, in view of the fact that aeroplanes have shown great possibilities of use, apart from their function of scouting and otherwise acting as adjuncts to the military and naval forces, he will proceed to develop the aeroplane service as a new arm of the offensive and defensive force of the nation?
    32. To ask the Minister of Munitions whether, by creating a Department of his office devoted to fostering the production of aeroplanes, by co-ordinating the efforts of all private firms engaged in their manufacture, and by establishing new factories, it would be possible to increase the output to 10,000 within the next six months; and whether he will take the steps necessary to that end?
    33. To ask the Minister of Munitions whether, in view of the dispatch of Sir John French of 20th November, 1914, referring to aeroplanes and saying that no effort should be spared to increase their numbers, he will speed up the production by selecting standard types for the machines themselves and all the parts in particular and by organising a sufficient number of workshops in regard to this object?
    Mr. LYNCH: Not seeing the Minister of Munitions in his place, I beg leave to
    1632
    postpone these questions until he arrives to-day.
    Mr. TENNANT: I have been asked to answer them.
    Mr. LYNCH: May I say that yesterday I had no intention whatever of offering any offence to the Under-Secretary of State for War. What I meant was, that the Minister of Munitions, being responsible for these matters and being there in his place, should have answered them, and not simply have given a stereotyped answer through another who is not responsible.
    Mr. SPEAKER: Does the hon. Gentleman want an answer to the questions or not?
    Mr. LYNCH: I wish to postpone them until the Minister of Munitions is here.
    Mr. TENNANT: Perhaps I may be allowed to explain that the Minister of Munitions particularly asked me to answer these questions, because the question of aeroplanes is not within his province; perhaps in those circumstances the hon. Member will allow me to give the answer.
    Mr. LYNCH: On a point of Order—
    Mr. SPEAKER: It is perfectly obvious that this is in the Department of the War Office. If the hon. Member insists on putting the question to another Department, he must take his choice of having an answer or not.
    Mr. LYNCH: I will take my choice of not having an answer.

    DEFENCE OF THE REALM ACT (CASES IN IRELAND).
    Mr. GINNELLasked the Chief Secretary if he will specify in each of the thirteen cases in Ireland in which persons have been expelled from their homes and business under the Defence of the Realm Act, the nature of the charge and of the evidence; if the accused was summoned before any tribunal, what its constitution was; whether he was allowed to offer any explanation or defence; and what the duration of the sentence is?
    The CHIEF SECRETARY for IRELAND (Mr. Birrell): I may say generally that in each of the thirteen cases referred to the order was issued by the competent military authority on the ground that the

    1633
    person named in it was suspected of acting in a manner prejudicial to the public safety or the defence of the realm, but it would be undesirable to give more precise details of the nature of the charge or of the evidence. The regulation under which action was taken does not provide for the establishment of any tribunal other than the competent authority. Any representations made by or on behalf of any person on whom such an order has been served are duly considered by that authority. In two cases the orders have now been withdrawn, but in the remainder they are still in force.
    Mr. GINNELL: How long have they been in force?
    Mr. BIRRELL: I cannot say that.
    Mr. GINNELLasked the Chief Secretary if he will specify, in each of the eight cases in Ireland in which persons have been deprived of their employment in the public service for alleged offences relating to politics, the nature of the charge and of the evidence, the time and opportunity afforded for defence or explanation, the constitution of the Court adjudicating, and the Statute, if not the Defence of the Realm Act, under which the proceedings were taken?
    Mr. BIRRELL: The general grounds on which the employment of eight persons in the public service in Ireland has been terminated were given in my reply to the hon. Member of the 23rd instant, and I do not consider it desirable to give details of the charges or of the evidence in individual cases. Where there was any suggestion that the conduct of the persons affected had been misrepresented, full opportunity was afforded them of rebutting the charges brought against them. The termination of service was directed in each case by the head or heads of the Departments concerned in pursuance of the powers vested in them and governing the employment of the persons dealt with.
    Mr. GINNELL: Can the right hon. Gentleman explain how these vacancies were filled up—whether they were filled by the appointment of those members of the Civil Service who gave the information?
    Mr. BIRRELL: I feel pretty certain it was not so, but I am not in a position to give the hon. Gentleman definite information.

    CIVIL SERVANTS (MILITARY AGE).
    Mr. NEVILLEasked the Prime Minister whether the Government offices are now engaging for Civil Service Employment men of military age and medically fit for active service?
    Mr. McKENNA: So far as circumstances permit, appointments are not being made to posts in the permanent Civil Service for which the candidates would be of military age, and the open competitions for such posts have been suspended. Instructions have also been given to Departments that temporary posts should be filled either by women or by men disqualified for service with the Forces.
    Mr. PRINGLE: Could my right hon. Friend say whether it is the case that his Department is refusing permission to men of military age to enlist, although their duties could be discharged by women clerks?
    Mr. McKENNA: No, Sir; I do not think my hon. Friend is correctly informed. Government servants of military age whose services can be dispensed with are allowed to enlist.
    Mr. PRINGLE: If I bring a case to my right hon. Friend's notice, will he inquire into it?
    Mr. McKENNA: I will inquire into it.
    Mr. THORNE: Is this not an economic form of compulsion?
    Mr. McKENNA: No, there is no compulsion or refusal. It depends entirely whether the services of the Government servants are necessary to the State.
    Mr. NEVILLEasked the Prime Minister whether he will cause a census to be made of all Civil servants employed in Government offices of military age and medically fit for military service, with a view to ascertaining how many can be spared for active service without detriment to the public service?
    Mr. McKENNA: I do not think that any very useful purpose would be achieved by the acceptance of this suggestion.
    Mr. NEVILLE: Can the right hon. Gentleman say whether there are not a large number of men employed in Government offices who want to join and whose services could be spared?
    Mr. McKENNA: No, Sir, I do not think so. Generally I think a great many have enlisted now, and the number who could further be spared is probably extremely small.
    Mr. NEVILLE: Would it not be a good thing if there was a list kept showing how many Civil servants had already joined?
    Mr. SPEAKER: That is another question, and perhaps the hon. Member will give notice of it.

    LONDON FIRE BRIGADES.
    Commander BELLAIRSasked the Prime Minister whether the Government will require during the War the suspension of the agreement by which the men of the London Fire Brigade can give a week's notice and so prevent any further loss of men such as has necessarily occurred through Reservists being called out, and needless loss through men being tempted by high wages in South Africa to throw up their positions after they have been made valuable assets by their training?
    Sir J. SIMON: I fully appreciate the difficulty in which the London Fire Brigade has been placed by the loss of men who have joined the fighting forces, though I believe only one man has gone to the Union Forces in South Africa. Both the War Office and the Admiralty have, at my instance, agreed to take no more recruits from the members of the Metropolitan Fire Brigades, for they are discharging a patriotic duty in protecting London from the risk of fire.
    Commander BELLAIRS: With reference to the statement about only one having gone to the Union Forces in South Africa, is the right hon. Gentleman aware that I am referring to the general labour situation tempting men away from the London Fire Brigade?
    Sir J. SIMON: I did not know there was more than one.
    Commander BELLAIRS: That is only the Union Forces.
    Commander BELLAIRSasked the Prime Minister whether he is aware that there are eighty-five professional and volunteer fire brigades in the Metropolitan Police area; whether he is aware that there are in addition a number of fire
    1636
    brigades on the borders of this area as well as a number of privately-owned fire and salvage brigades, such as belong to the railway and insurance companies; whether he is aware that the system of control of the eighty-five fire brigades and of the other bodies by county, borough and urban district councils is such that full co-ordination of this personnel and matériel equipment is impossible; and, in view of the menace to which London and outlying parts are subject from aerial attack, will the Government bring the fire brigades under a single control such as is exercised in the Metropolitan Police, or inquire into the matter by a Committee of the Cabinet?
    Sir J. SIMON: I am aware that there is a large number of professional and volunteer fire brigades in the Metropolitan Police area outside the administrative county. As already stated in reply to a previous question on this subject, a conference of the heads of a number of these brigades was held by the Chief Commissioner of Police and a scheme of co-operative working agreed upon. The London County Council Fire Brigade have a considerable number of motor fire engines, and should, in the event of fires occurring outside their boundary, be able to give very effective help if the chief attack were upon an outside area; and there are also outside the administrative county a number of motor fire engines available.
    Commander BELLAIRSasked the Prime Minister whether he is aware that the fire brigade in France and some other countries is organised as a regiment for the whole country, so enabling the resources to be distributed where they are most required; and whether he will charge one Minister with the co-ordination of the fire brigade resources of the country, so as to distribute men and material with due regard to the areas most threatened by aerial attack?
    Sir J. SIMON: I am not aware that the fire brigade service in France is organised as a regiment for the whole country, though I understand this is the case in Paris. Conditions in the two countries are so dissimilar that it cannot be said with certainty that an arrangement suitable to France would be suitable to this country. Our system depends on local control and local initiative; and an attempt suddenly to change it would, I fear, involve loss of efficiency.
    Commander BELLAIRS: Who is responsible in future for the fire brigades, and is there any Minister responsible in this House?
    Sir J. SIMON: I think it has already been explained to the hon. and gallant Gentleman that the fire brigade in London is a local force. I am not aware that the London County Council has, in any way, authorised the suggestion that it has ceased to be so.

    Prisons (Scotland).
    The following questions stood upon the Paper in the name of Mr. KING:—
    15. To ask the Secretary for Scotland whether his attention has been drawn to the fact that in 1914 704 prisoners were sentenced for prison offences to sleeping on a wooden guard bed; if he will state the kind of bed thus used and the maximum term for which a prisoner may be condemned to sleep on it; whether he is aware that in England no prisoner may be deprived of his mattress; and whether he will consider the making of a similar rule with respect to prisons in Scotland?
    16. To ask the Secretary for Scotland whether he will state what is the maximum term for which a prisoner in Scotland may be sentenced to solitary confinement for a prison offence; and what was the average term for which the seventy-five prisoners sentenced in 1914 to such confinement were so sentenced?
    17. To ask the Secretary for Scotland whether his attention has been drawn to the fact that in 1914 no prisoner in Scotland was sentenced to solitary confinement except at Peterhead, where seventy-five prisoners were so sentenced; and whether, in view of the fact that elsewhere in Scotland the punishment has been found to be unnecessary, he will order the abolition of the punishment?
    Mr. McKINNON WOOD: Would my hon. Friend postpone these questions till next Tuesday? I have not yet got the information for which he asks.
    Mr. WATT: Are we to understand that the last time the hon. Member for North Somerset (Mr. King) was in Scotland he spent most of his time in these institutions?
    Mr. McKINNON WOOD: I could not hear the question of my hon. Friend, and
    1638
    I am sorry, because it appears to have been witty. I must ask him to speak up. Would he mind repeating the question?

    Public Elementary Education (Statistics).
    Mr. KINGasked the President of the Board of Education when the annual volumes, Statistics of Public Elementary Education (England and Wales), will be issued; why Part II is generally published months before Part I. is issued; and whether in future some attempt will be made to issue these volumes, even if reduced in scope, so published that the information given is up to date?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Herbert Lewis): Part I. (Educational Statistics for 1912–13) was issued in December last Part II. (Financial Statistics for 1912–13–14) is now with the printers. This follows the usual order of publication. Part II. relates mainly to the financial year 1912–13, but some figures for 1913–14 are included. Part II. cannot be completed until the audited accounts of local education authorities have been received. Some advance financial figures for 1913–14 were published in January last [Cd. 7764], and some educational figures are given in Appendix VIII. of the Board's Report [Cd. 7934]. But in view of the depiction of the staffs of the Board and of local education authorities I can give no undertaking as to the dates of issue of statistics.

    Irish Agricultural Organisation Society.
    Mr. GINNELLasked the Secretary to the Treasury, seeing that officials of the Irish Agricultural Organisation Society interfere with the business and sometimes increase the expenditure of statutory bodies whose expenditure in salaries and in other respects is under public control and that the society receives State aid, will he state the names of all the officials of this society paid £100 a year or more, with the salary and expenses of each in the last completed financial year?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): I fear I cannot give the hon. Member the information he seeks.
    Mr. GINNELL: Will the right hon. Gentleman say what is the reason for concealing this information?
    Mr. MONTAGU: The Development Commission who make this Grant satisfy themselves that the expenditure on salaries is not excessive. Without the consent of the society, therefore, I have no power to give the information.

    Civil Service, Ireland (Promotion).
    Mr. GINNELLasked the Chief Secretary for Ireland what provision against abuse and in the interest of efficiency is made in the arrangements now in operation in the Civil Service in Ireland for promotion consequential upon political espionage?
    Mr. BIRRELL: The principles governing promotion in the Irish Civil Service remain unaltered.
    Mr. GINNELL: Will the right hon. Gentleman not inform the House how promotion goes on when some members of the Civil Service spy upon and report their colleagues?
    Mr. BIRRELL: I know nothing at all about that. If the hon. Member refers to the Order in Council of January, 1910, he will there see the principles upon which we continue to act.

    Prison Service (Officers' Pay).
    Mr. CHARLES DUNCANasked the Secretary of State for the Home Department whether any decision has yet been arrived at with respect to the petition from the officers of the prison service for an increase of pay; and whether the Treasury Committee has yet reported with respect to the need for an increase of wages to temporary warders?
    Sir J. SIMON: The petition of the prison officers was submitted to the Treasury for consideration along with other applications from the Civil Service. I would refer my hon. Friend to the reply given to him by the Secretary to the Treasury on the 18th of May.

ORDERS OF THE DAY.
  BILL PRESENTED.
    NAVAL AND MILITARY WAR PENSIONS, ETC.
    "To make better provision as to the pensions, grants, and allowances made in respect of the present War to officers and men in the Naval and Military Service of His Majesty and their dependants, and the care of officers and men disabled in consequence of the present War; and for purposes connected therewith." Presented by the Chancellor of the Exchequer; supported by Mr. Walter Long, Mr. Montagu, and Mr. Hayes Fisher; to be read a second time To-morrow, and to be printed. [Bill 110.]

    NATIONAL REGISTRATION BILL.
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Long): I beg to move, "That leave be granted to introduce a Bill for the compilation of a National Register."
    The justification for the Bill which I have now the honour to ask the House to allow me to introduce is to be found in language used by the Prime Minister in a speech delivered in this House on a very recent occasion, which I am confident profoundly moved all those who heard it and which, I believe, most faithfully represented, not only the views which are held in the country, but also the overwhelming desires of the vast majority of our people. The Prime Minister said:—
    "We have for the moment one plain, paramount duty to perform—to bring to the service of the State the willing and organised help of every class in the Kingdom."
    May I, as an illustration of that, quote a remark attributed to one of our most distinguished old soldiers and citizens, Sir Evelyn Wood. It was reported of him that a short time ago he had a conversation with some Member of the Government, and he said:—
    "You want my services. They are at your disposal, but I ask you to tell me what I am to do. Sweep a crossing? Yes, give me the broom."
    That I believe to be the feeling of everybody in this country, and the object of this Bill is not to coerce labour, but to secure complete and general and satisfactory organisation. Before we decide what we are going to do with our resources in a time of great national crisis, it seems to me to be obvious that we must ascertain
    1652
    as carefully as we can what those resources are. I would venture to illustrate this by a very common reference to ordinary business relations. Surely the ordinary business man not only takes stock of all that he has and what he can do with it, but he does something more—he keeps a careful record of his financial position. He has, in other words, his bank book, which tells him what he has got, what securities he has available, which of them are already mortgaged for other purposes, and which he can usefully employ for the said purpose of the moment. It is in order that the State may do this that I ask the House to enable a national register to be formed. It is not to be wondered at that the first thought which occurs to anybody in connection with all these various questions, some of which have already been debated in this House, has reference to our naval and military Services.
    We are not in the ordinary sense a military nation, and, if being a military nation means adopting the principles of militarism, I hope that we never shall be. But, though we are not a military nation, our position during the last nine or ten months has been really remarkable. I can only compare it to the state of affairs surrounding a beehive which by the onslaught of some big bully, not knowing what he is dealing with, has been momentarily disturbed in the pursuit of its peaceful occupation The air is full of a busy crowd of little insects determined to defend themselves, their lives, and their possessions. Our Empire, not our country alone, is a great armed camp; the seas of the world are covered by our sailors, and we know that not only is this great military force on sea and land unparalleled in its size as compared with anything we have ever possessed in this country before, but, as it is unparalleled in its size, so I venture to submit it is unparalleled in the splendour of its acts ever since the War began. Surely our first duty is to support these heroes on sea and land by giving them all the men they want, all the munitions they want, and all the support they want, in whatever form it may be. This, I venture to submit, is not only our paramount duty but it is a duty which we must perform, if, as the hon. Member for Gorton (Mr. Hodge) said yesterday in that fine speech which moved the House and which will appeal to the country, "we are to retain those liberties which we value more than any other possession that we have."

    1653
    There is not only a vast mass of sailors and soldiers, but what have our workers been doing? In the munition factories we know now that volunteers are crowding to aid us in producing what is required. In other fields of labour, in our coal-fields, not only have enormous masses of men gone to the Colours, but the work has been going on steadfastly and continuously, and wherever you go you find the same earnest desire on the part of the citizen to do his share in this great national work. But while it is our paramount duty to support our sailors and soldiers on sea and land, it is none the less our duty to see that our productive powers are so organised that our trades and our industries here at home are kept going prosperously and successfully, and, beyond that, it is in my humble opinion none the less our duty, if we are to maintain a sound financial position, to see that our export trade, if possible, is also carried on successfully. The Government believe that all this is possible for our country. The Government believe that the country have no need to be dismayed at the gravity of the crisis with which we are confronted. They believe that our resources are sufficient, if they are mobilised and organised; they believe that we can meet the crisis, as we mean to, successfully, and that we can bring our people through it in such a way that, when peace comes, they will find themselves in a position far more satisfactory than might to the ordinary mind seem possible. These are our paramount duties: to maintain our Navy and our Army, to maintain our industrial and our financial position. Can anybody say, with all this strong feeling in the country, can anybody say in his heart and conscience that he believes we are doing to-day all that we can possibly do? Do we not know that there is room for improvement? Are we not prepared to make that improvement? I believe the answer to that last question will be unanimously in the affirmative. This Bill is intended to provide the machinery which will give that organisation without which you cannot secure what we want, the maximum output at the minimum of cost.
    I wish to give two very simple illustrations—I have come across hundreds of them myself—of the result of the present system which, without disrespect, I may perhaps be allowed to describe as a somewhat haphazard one. In one case a man to my knowledge is now assisting in the production of munitions of war as a result of chance, for he was happy to see an advertisement
    1654
    in the paper which enabled him to place his services at the disposal of the country. In another case, active labour engaged on work which could easily be done by older men has now been transferred to more productive services. There are hundreds of thousands of these instances, as we all know from our own experience. It happens almost every day that one has applications from people saying, "I am ready to work; I am ready to do this, I am ready to help; what am I to to? Where am I to go?" We do not know where to send them or how to direct them. We do not know what resources we have got, and we must have that knowledge before we can use those great resources to the very best advantage.
    The proposal of the Bill is that there should be a compulsory registration of the people of this country, male and female, between the ages of fifteen and sixty-five. That registration will not be a central one, as I see it stated in some quarters, but it will be essentially a local registration, and it will, of course, be available not only for use by our large local authorities, but for use by our central authority. In the forms which will be issued to everybody, and which will have to be returned promptly, questions will be put as to their age and their employment, and they will be asked to state whether they are willing to volunteer for any special form of labour with which they are specially acquainted, other than that ii which they are now engaged. They will be entitled to receive—and will receive a certificate, stating that they have been registered, and I, for one, hope and believe that they will regard that certificate as a badge of honour. This registration will be under the control of the Local Government Board, but it will be conducted by the boroughs and urban and rural sanitary authorities throughout the country, under the advice and control and with the assistance of the Registrar-General, as in the case of the Census. The cost of this will be borne by contributions from the Exchequer on a basis to be settled between the Treasury and the Local Government Board. There are guarded penalties in the case of non-fulfilment of these obligations.
    That, I think, completes the provisions of the Bill which will, I hope, be in the hands of Members to-morrow, and they will be able, therefore, in conjunction with this brief statement, to appreciate for themselves what is the scheme which the

    1655
    Government now submit. I believe it will enable the Government and the State to take the fullest advantage of the circumstances of everybody for the benefit of the State. The moment is a great one in the lives of all of us. Our duty, I believe, is a sacred one. We owe it to ourselves; we owe it to posterity that in this great vital struggle we shall leave no stone unturned, and we shall leave nothing undone that can aid us in securing the victory we are determined to secure. I believe we are fighting against tyranny for freedom. I am confident, from information which has already reached me, that I can appeal to the local authorities of this country—to their patriotism and their sense of public duty—to help the Government in securing promptly a full register of the kind described. I have received innumerable offers from volunteers. I may specially mention the school teachers of this country, and my right hon. Friend the Secretary for Scotland tells me that he has received equal assurances from the school teachers of Scotland that they will be willing to aid during their holiday time. All the local officials, almost without exception, have pressed their services on the Government. This is a grand voluntary movement to secure knowledge of the forces which the country possesses. I believe that the local authorities, I believe that the country at large, will aid us and come to our assistance and give us this information in a comparatively brief time, and it is because the Government hold that this measure is necessary in the discharge of a great solemn duty which has been laid upon them that they ask the House now to allow them to introduce this Bill.
    Mr. GINNELLrose—
    Mr. SPEAKER: Does the hon. Member rise to oppose the Motion?
    Mr. GINNELL: I oppose it, unless the Government gives an explicit undertaking that this Bill shall not be applied to Ireland, either by Amendment or otherwise, and that no Bill of this nature shall be introduced for Ireland. As the Chief Secretary does not rise in his place to give that explicit undertaking, I must to the best of my ability oppose the introduction of this Bill. The refusal of the Government to give that undertaking amounts to a threat that something of this sort is about to be applied to Ireland, either by an Amendment of this Bill or otherwise.
    1656
    In these circumstances, knowing as all of us do in Ireland, and as the Chief Secretary himself must know, that Ireland is not a country to which to apply such a Bill, I am left no option but to oppose this proposal. The ordinary decennial census in Ireland is not taken under the Bill introduced for Great Britain. There is always a special Bill authorising it. The President of the Local Government Board has announced that this Bill will be compulsory; this Bill will require rules and forms to be filled up by the people, and there will be penalties for refusal to fill them up. According to the statement to which we have just listened, the drawing up of these rules and forms is to be taken away from the House and to be entrusted to the Local Government Board or some such authority. I think the country will watch with some interest whether this House is going to surrender its right to determine for what sort of forms and rules it shall give a blank cheque to the Local Government Board to impose penalties, and what the penalties are to be. These rules and penalties should, in my opinion, be distinctly set forth in the Bill, and this House should be given a full and ample opportunity of discussing them and modifying them from whatever shape in which they are introduced into a shape in which they can be safely worked.
    There can be no justification whatever for imposing such a Bill upon Ireland, since this House and the British Government have persistently pursued the policy of killing and preventing almost every form of industry attempted in Ireland. This special census will require special forms and special penalties, and we are here to insist upon knowing, before the Bill passes and before the census is taken, what sort of forms and penalties those are. For the House to abrogate its right—not only its right, but its duty in this matter—and to subject the people to forms and penalties of which the House knows nothing, would be a betrayal of its trust to the people who have elected it. This Bill, furthermore, is obviously intended not only to be a pilot of conscription, in regard to which the Government are holding up their scheme, but in itself will be more than half enacting a Conscription Bill, because it would prepare the ground and subject the people to that kind of discipline on which conscription will be based, and because opponents of conscription, if this Bill were passed, would be deprived of every logical argument against

    1657
    that measure. The House and the Government can hardly expect that in the event of such a measure as this being enforced with penalties upon Ireland that it will not run a strong chance of being resisted, and resisted with considerable force. In the event of the operation of this Bill being resented in Ireland, the people resenting it, and those advising them to resent it, will be able to quote the language used on a corresponding occasion by the right hon. Gentleman the Attorney-General with reference to another Bill. He said:—
    "Yon will be told that to resist it will be illegal. Of course it will be illegal."
    He went on to say:—
    "Therefore, do not be afraid of illegality. There are illegalities which are not crimes."
    If that language is to be used in connection with enforcing this Bill in Ireland, the Coalition Government will be able to put up their present Attorney-General to identify himself with that language and to justify its use in Ireland by other people as its use has been justified by him. Perhaps these considerations did not occur to the right hon. Gentleman before introducing this Bill, and for that reason I would strongly recommend him to ponder upon them before proceeding further, and I would recommend the Chief Secretary to ponder on them before extending the operation of this Bill to Ireland, either by amendment or by any other means whatever.
    Question put, and agreed to.
    Bill ordered to be brought in by Mr. Long, Mr. McKinnon Wood, Mr. Birrell, and Mr. Hayes Fisher. Presented accordingly, and read the first time; to be read a second time To-morrow, and to be printed. [Bill 111.]

    FINANCE (No. 2) BILL.
    Considered in Committee [Progress, 16th June].
    [Mr. WHITLEY in the Chair.]

    NEW CLAUSE.—(Extension of Relief from Income Tax in Favour of Savings Banks. 57 and 58 Vic., c. 30.)
    (1) The exemption from Income Tax chargeable under Schedules C and D, conferred by Section thirty-six of the Finance Act, 1894, on penny savings banks and other banks for savings, shall extend to all income of the savings bank which is
    1658
    applied in the payment or credit of interest to any depositor, and that Section shall have effect accordingly.
    Provided that, where the interest paid or credited to any depositor in the year for which exemption is claimed exceeds the sum of five pounds, the bank and any branch thereof shall make a return to the surveyor of taxes for the district in which the bank or branch is situate of the name and place of residence of every depositor to whom any such sum has been paid or credited and of the amount thereof, and unless such returns are duly made the bank shall not be entitled to any relief under this Section. Any such return shall be made on or before the first day of May in the year following that in respect of which exemption is claimed.
    (2) The provisions of this Act conferring relief from Income Tax in respect of expenses of management shall apply to savings banks and other banks for savings as they apply to companies whose businesses consist mainly of investments.
    Clause brought up, and read the first time.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): I beg to move "That the Clause be read a second time."
    4.0 P.M.
    This Clause deals with the Income Tax payable by savings banks. Under the Income Tax law as it stands at present, a certified savings bank is entitled to exemption from Income Tax on its income from investments which are invested with the National Debt Commissioners. So far as the ordinary department of a certified savings bank is concerned, in which the limit of deposit is £200, they are compelled by law to invest all their profits with the National Debt Commissioners; therefore they get exemption from Income Tax. But so far as their special investments branch is concerned, in which the limit of deposit is £500, and so far as certain savings banks are concerned that are not certified savings banks, there is no general exemption from the Income Tax, although under the Finance Act, 1894, any savings bank, whether certified or not, is entitled to relief from Income Tax on such of their income from investments which goes to pay or credit interest to an investor of less than £5. On everything else those savings banks have to pay Income Tax. They do not, as a rule, recover the Income Tax which they have paid from their depositors. The reasons for that generally are, firstly,

    1659
    that it is very doubtful under the existing law whether they have the power, and, secondly, if they did, there is such a large number of investors that the procedure would be very complicated. The consequence is that the revenue obtains tax on a large amount of income which ultimately goes to exempt persons, and this tax falls upon both those who are liable and those who are exempted. This has been the state of the law up till now, with the exception of some banks which have succeeded in getting extra-statutory arrangements from the Inland Revenue under which a percentage of their total income, which was held to be roughly the amount which would go to exempted persons, is exempt from liability.
    But this arrangement, which has been more or less satisfactory up to the present, becomes very serious now that the Income Tax is so high. Savings banks usually allow their depositors interest at 3 per cent. They get from their investments about 3½ per cent., and Income Tax at 2s. 6d. in the £ on 3½ per cent. interest represents a diminution of that interest by about seven-sixteenths per cent., so there is not much balance left for the savings bank management, and unless something is done to prevent the savings bank paying Income Tax, which they are not really liable to, it might result in very disastrous liquidation. Two alternative methods might be adopted. You might give them power to deduct Income Tax, and then allow the depositor to recover from the Inland Revenue, That is a very complicated machinery, which I am quite certain in this case the House would not approve. The next alternative is to exempt from Income Tax the whole of their profits which are used for the payment of interest to depositors whether under or over £5. This is a departure from the principle of Income Tax being paid at the source, but by the provisions of this Clause the savings banks are required to give to the Inland Revenue officials a list of those to whom interest of more than £5 is paid, so that it will be possible for those who are really liable to be directly assessed, and the information that we get from the savings banks will make sure that no one will escape. The cost of this relief would be about £25,000, but then, as this is a cost to the Exchequer by the loss of Income Tax to which really, strictly, under the law they
    1660
    were never entitled, I think it is a cost which we may well undertake. The second part of the Clause deals with the expenses of management, extending to savings banks which are not companies the exemption of management expenses which was allowed to insurance companies under Clause 8 of the existing Bill, which the House has already passed.
    Question put, and agreed to.
    Clause added to the Bill.

    NEW CLAUSE.—(Amendment of s. 5 of the Finance Act, 1914.)
    Section 5 of the Finance Act, 1914 (which provides for the taxation of income in respect of foreign property), shall not apply to income arising from the sources specified in that Section of an assurance company so far as that income arises from the investments of the foreign life assurance fund of the company, but a corresponding reduction shall be made in the relief granted under this Act in respect of expenses of management.
    Clause brought up, and read the first time.
    The CHANCELLOR of the EXCHEQUER (Mr. McKenna): I beg to move, "That the Clause be read a second time."
    This is a Clause which gives relief to British life insurance companies which are carrying on business both at home and abroad. Under the Act of last year all the foreign investments of such a company were rendered liable to Income Tax even though the income was not brought home. Strong representations were made that the effect of that change of the law was very injurious to those companies, as in competition abroad with other companies not equally affected they would have to raise considerably the rates of premium. I was told, and I accept it as a fact, that companies would be face to face with one or other of two alternatives. Either they would have to give up their foreign business altogether because they could not compete with their foreign rivals, or else they would have to separate their foreign business entirely from their home business, with the result that we should not only lose the Income Tax from the foreign business, but also the control of the whole capital engaged both at home and abroad. In these circumstances we have thought the best course to adopt was, at any rate as a temporary measure, to meet the difficulties of these companies on the footing

    1661
    of the relief which they themselves stated as necessary, and to leave the subject for further investigation and examination by the Committee which is inquiring into the whole of the Income Tax laws. I said our relief was on the footing of their requirements, but I should add by way of precaution, on the footing of their requirements as I understand them, in case it might be stated hereafter that we had not done everything which they asked. We allow a deduction from the expenses of management for the purposes of Income Tax, but it is quite clear that as they will not pay Income Tax under this exemption they ought not to be allowed the benefit of the further reduction in respect of a sum which they do not pay.
    Mr. JAMES MASON: Will the amount of management expenses allowed for be in proportion to the English investments?
    Mr. McKENNA: There will be separate accounts kept of the cost of management. They would know what their foreign management was. I do not think it would operate in proportion. Of course it must be clearly understood that any profit brought home will be charged Income Tax. It is only in respect of that profit and income which is not brought home that the relief is given.
    Mr. T. M. HEALY: I wish to remind the right hon. Gentleman that by some means he has forgotten to put forward a number of other Amendments to which the late Chancellor of the Exchequer was committed. Last year they were embodied in a Bill which was read a second time. Although we are in the midst of a War a definite pledge was given by the Government when the House agreed to split the Finance Bill into two, and it was suggested that we should have a much larger opportunity for discussing Amendments on the second Bill than on the Bill immediately devoted to taxation. The Bill immediately devoted to taxation is that which received the Royal Assent last November. There were two matters on which the then Chancellor of the Exchequer last year yielded, and they were in the Government Bill of last year, but owing to the War and the general collapse these Amendments were dropped. I rise, not for the purpose of objecting in any way to this Clause, but to remind the Government that we expect a realisation of the promises which were then made. I would specially remind the right hon. Gentleman that one dealt with licences and the other dealt with the question of tenants' improvements
    1662
    in Ireland, which the Government agreed in certain circumstances to exempt, and brought in Clauses in their Bill which in consequence of the War were dropped. It must not be supposed that we shall allow them to be dropped altogether out of proposed legislation of this kind.
    Mr. BRYCE: Has any estimate been made of the respective Amendments which are involved in the proposition which my right hon. Friend now makes, and the relief which has been granted under the Act? Will he tell us how these figures compare, because it is very difficult to arrive at an opinion in regard to the proposition unless we know that?
    Mr. McKENNA: I have not the figures at my disposal, but if the concession is necessary on the grounds I have stated I do not think the amount will be a relevant point. If my argument is right, we should not only lose the amount of the concession, but we should also lose the control of the capital engaged in the business.
    Mr. BRYCE: Ought not the two things to be taken separately? Why should my right hon. Friend take away with one hand what he gives with the other? Why should he take away the relief granted under the Act in respect of expenses of management?
    Mr. McKENNA: Inasmuch as we do not propose to charge Income Tax on the major sum, there is no ground for deducting from that major sum the amount relating to a further concession. We deduct the amount in the further concession because we charge Income Tax on the major sum, but inasmuch as we are not charging Income Tax on the major sum, there is no reason to make any deduction from it.
    Mr. HEALY: Will the right hon. Gentleman either now or on Report stage go back to the last Government Bill, and embody the non-contentious Amendments in this Bill?
    Mr. McKENNA: The hon. and learned Gentleman's first point, I think, relates to the 1912 Act. There is an Amendment on the Paper dealing with that, and I would rather wait till we get to it before I deal with the point. On the second point I have not acquainted myself with the subject, but I will make inquiries without delay.
    Question put, and agreed to.
    Clause added to the Bill.

    NEW CLAUSE.—(Relaxation of Duty in the Case of Spirits Used in Hospitals.)
    (1) The Commissioners of Customs and Excise may authorise a person to receive spirits without payment of duty for use in the preparation in a public hospital of tinctures and other articles to be used for medical purposes in the hospital in the like manner and subject to the like conditions as they may authorise the receipt of spirits for use in art or manufacture, and Section eight of The Finance Act, 1902, shall have effect accordingly.
    (2) The like allowance shall be paid in respect of spirits received for use in a public hospital as aforesaid as is payable under Section one of The Revenue Act, 1906, in respect of spirits received for use in art or manufacture, and the provisions of that Section with respect to the payment of such allowance shall have effect accordingly
    (3) If the treasurer or other responsible officer of a public hospital shows, to the satisfaction of the Commissioners of Customs and Excise, that any tinctures or other articles which contain spirits or in the preparation or manufacture of which spirits were used have within the preceding six months been used for medical purposes in the hospital he shall be entitled to obtain from the Commissioners repayment of such amount as he shows to their satisfaction to have been paid by way of duty in respect of the spirits contained in or used in the preparation or manufacture of the said tinctures or other articles.
    If any person, for the purpose of obtaining any repayment under the foregoing provision, knowingly makes any false statement or false representation he shall be liable, on summary conviction, to imprisonment for a term not exceeding six months with hard labour.
    (4) For the purpose of the foregoing provision the expression "public hospital" means a hospital supported by any public authority, or wholly or partly out of any public or charitable funds or by voluntary subscriptions.
    Clause brought up, and read the first time.
    Mr. BRIDGEMAN (Lord of the Treasury): I beg to move, "That the Clause be read a second time."
    My right hon. Friend has deputed me to move this Clause, because it is the outcome of a rather long discussion which I had with his predecessor. He has met me
    1664
    very handsomely, and has inserted safeguards which his advisers thought necessary to prevent the Clause from abuse. I hope that if I move it from this side of the House, instead of the other, and if I get the support, not only of the present Chancellor of the Exchequer but of two previous Chancellors of the Exchequer, the Committee will realise that it is a most desirable improvement. Hospitals make use of a large amount of spirit in their various preparations, and the rectified spirit has been found to be the only satisfactory solvent of most preparations. If I give one example of the great hardship of this duty it will be enough. I am informed that last year the London hospitals bought 195 gallons of rectified spirit, for which they have to pay £256. Of that £256 a sum of £229 represented duty, and the other small amount was the cost of the spirit. I think everyone will agree that that is a very heavy impost to place upon a charitable institution. At any time the claims of hospitals for considerate treatment are, I think, justified, and they have certainly an overwhelming claim at a time like this, because everyone knows what a tremendous strain has been put upon our ordinary hospitals as well as our military hospitals by the War, and how splendidly they have met the demands made upon them. I think hon. Members will agree with me when I say that the difficulty that confronts the treasurers of hospitals in keeping up their subscriptions is a very severe one at the present time. I do not know whether I ought to be glad or sorry to say that probably a good deal of the money which now will go to the War Loan might, under other circumstances, have been secured by the treasurers of hospitals to help the finances of those institutions. I reaffirm that the hospitals have an overwhelming claim at this time, and one which I feel sure the Committee will agree is just.
    The objects of this Clause are, first of all, to give a supply of duty-free spirits to the hospitals for the preparations which they make themselves under the regulations which prevail under Section 8 of the Finance Act of 1902, and also to give a rebate on tinctures and other things which they buy ready-made, if they can prove that they have been used for the hospital. These exemptions are subject to compliance with such regulations as the Commissioners of Excise may require, and anybody who makes a false return is

    1665
    liable to a fine of £20. I think the Committee will agree in the main with the Clause. I see that there are a considerable number of Amendments down, which I think are not hostile to the intentions of the Clause, so much as they are intended to prevent the possible abuse of the privilege. To my mind, the fact that the regulations and restrictions are considered sufficient by those very careful guardians of the public purse who preside over the Customs and Excise, ought to be a sufficient guarantee for this Committee. However, I know that my right hon. Friend the Chancellor of the Exchequer will be very glad to consider any Amendment, if it is possible to strengthen the provisions against any abuse, and I do hope that those who think there is any danger of that kind, will not oppose the whole Clause. When you come to realise that a concession has been made of duty-free spirit to arts and manufacture, and that some of these manufactures consist in making explosives, I am sure the Committee will feel that the most beneficent use to which spirits can be put, namely, in the treatment of sick and wounded, deserves, at any rate, a similar privilege to that which is granted in regard to the manufacture of munitions of war. I beg to move.
    Mr. HEALY: Is there any registration of the persons who are to get this privilege? I suggest that there should be some method of registration, so that everybody should not be allowed to put in a claim. I take it that this will include chloroform?
    Mr. BRIDGEMAN: I think that that would be one of the regulations which would be made by the Commissioners of Customs. The definition Clause in Subsection (4) practically restricts it to people who are responsible for the working of the hospitals.
    Mr. HEALY: I do not think so, although I have looked at it from that point of view. You begin by authorising the person to receive the spirits, and then you define public hospitals. Does not the person get this indemnity, or modification, provided he satisfies the Government that he is going to supply public hospitals? The definition of public hospitals would not cover the word "person." The person will be any person. Any person could get it, provided that person is going to supply a public hospital. I am heartily glad that the hon. Gentleman has brought in this Clause—and I congratulate him on his
    1666
    new position—but at the same time I desire that by some means, by registration or otherwise, that in regard to the persons who engage in the supply of these things, such as chloroform, ether, etc., we should know who they are, so that we should have some means of effective check in later years.
    Mr. GLYN-JONES: Appreciating, as I do, and as I think, in all probability, every Member of this House will appreciate the desire of the hon. Member (Mr. Bridgeman) to do something to assist the hospitals, I am sorry to say that I am bound to oppose the Clause. I may say at once that I am doing it because I have been asked to do it by the organisation which represents the medical profession of this country, namely, the British Medical Association, and also by the Pharmaceutical Society, which represents the pharmacists of the country. The fact that this Clause appears on the Paper is not due to any new burden which has been placed upon hospitals as a result of this Finance Act or of any financial measure this year. The Committee knows that there was a good deal of discussion over the increased duties on alcohol. First of all, the Government proposed to double the duty, and then to add 1s. 6d. per gallon duty on immature spirit, but the Bill to which this Clause is proposed to be added excludes from the operations of this new duty—which is the only new duty imposed, namely, the 1s. 6d. duty on immature spirits—all medicines, so that there is no additional burden placed on hospitals in that respect.
    The hon. Member for Oswestry, as he has told us, has taken very great interest in this question, and he has put on one or two occasions questions to the former Chancellor of the Exchequer. On the last occasion the Chancellor of the Exchequer said he would deal with the matter in the Finance Bill. It did not occur to anyone—at least it did not occur to me, and it certainly did not occur to the medical profession—that that meant that there would be any attempt in the Finance Bill to remove the whole duty on alcohol used in hospitals. Obviously the medical profession would desire anything that would assist the hospitals. It is the last thing that they would want to do, to place any difficulty in the way of the hospitals, but I would point out this danger to the House: that there are many ways of assisting hospitals other than by making a rebate on certain taxes which they pay, if by assisting them in that way you do

    1667
    perhaps more mischief than good. The first difficulty is the difficulty of defining what is a hospital. The Clause defines it in this way—
    (4) "For the purpose of the foregoing provision the expression 'public hospitals' means a hospital supported by any public authority, or wholly or partly out of any public or charitable funds or by voluntary subscriptions."
    It is quite clear that any institution of any kind that could, in law, bring itself within that definition, is entitled to claim from the Commissioners such privileges as they give to hospitals under this Clause. That will not be a matter of interpretation for the Commissioners; the law defines what is the institution that is to get this privilege, and it is defined in this wide way: Under the Clause as it stands any place where the sick are surgically or medically treated, whether by qualified or unqualified people, would come within that definition. There are, as is well known, institutions run by unqualified people, by quacks, and so long as that person running that institution gets some charitable funds, or voluntary subscriptions, the institution becomes a hospital within the meaning of this Clause. It is also well known that there are a large number of nursing homes run for profit. I do not want to say anything which may be misunderstood, but there are numbers of these nursing homes run for profit by private individuals, and it would be quite easy for these nursing homes to comply with this definition and come within its scope. Then there is the other class which is to come into this Clause, namely, any institution of a public authority. Does that mean workhouse infirmaries, fever hospitals, and so on? What this Clause would do would be to relieve the local rates of the cost of their local institutions at the expense of the national Exchequer. If the House thinks that it ought to do that, then let it do it, but we have here raised the whole question of the relief of the local rates of this country, and surely this is not the proper way to do that. If you want to relieve the boards of guardians from the taxes which they pay upon the alcohol which they use in their institutions, why not also equally relieve them from the taxes which they pay on their buildings? If you are going to relieve them of their taxes upon alcohol you make a grant out of the Exchequer amounting to an indefinite sum, and it seems to me that if you
    1668
    are going to do that there is no reason why you should tax a local authority ort its infirmary, or its fever hospital, or its sanatorium, or that you should not relieve them of any other contribution which they make on these buildings to the national Exchequer.
    Rectified spirits of wine paying duty will cost 4s. a pint; duty free it will cost as many pence. Imagine what the state of things will be! In a public institution, however well managed, hundreds of people will have access in one way or another, at some time or other, to the tinctures which are medicines and which come within this Clause, because, as the hon. Member for Oswestry pointed out, there are two things to be done under this Clause. The hospital is to get its rectified spirit, for anything in which it makes in the way of medicine, subject to certain conditions, free of duty, but it is also to be able to get a rebate on all the tinctures used in medicines which it purchases. Take, for example, tincture of orange. It is there because there are certain drugs which, as some of us know, perhaps from experience, are not very pleasant to take, and this is a flavouring tincture, a medicine with a distinct value as a medicine, but it is added in order to make the article more palatable. That tincture conies within this Clause. It is about double the alcoholic strength of brandy. A pint of it would cost 6d. Dilute that pint with an equal quantity of water and you have got a quart of what some people would call a nice, palatable cordial at a cost of 6d. a quart. Is it certain that that is the state of things which it is wise to bring about?
    May I call attention to the fact that the British Medical Association, which represents not only general practitioners but very largely surgeons and others who hold hospital appointments, have thought it necessary to send a representation to the Chancellor pointing out these difficulties? Associated with that representation is the Pharmaceutical Society. What they say is:—
    "There are many disadvantages to the practice of medicine in general which might follow if alcohol were permitted to be used in hospitals under conditions which differ from those obtaining outside. There is no doubt that if alcohol in hospitals were duty free the present economic restrictions on its use would entirely disappear, and preparations largely consisting of alcohol would be used more frequently than they are now. This would be unfortunate, because the tendency of recent years has been to limit the use of alcohol in the use of medical preparations so far as is consistent with efficiency, and many new preparations have been brought into general use because they have been found to be quite efficient, though containing little or no alcohol, and are therefore cheaper than the older preparations."

    1669
    Then I would point out another consideration, which I do not think would appeal at first blush to the layman. They say:—
    "It would be unfortunate, too, if students who after they have qualified would have to prescribe or use preparations containing duty paid alcohol"—
    that is £1 on rectified spirits, or about a guinea a gallon—
    "were trained under conditions in which the cost of alcohol had not to be considered. This would lead either to an extravagant use of alcohol in prescriptions, for which the public would have to pay, or to their haying largely to unlearn the habits of prescribing what they had been taught in the hospital."
    Then they point out that the possible effect of such prescriptions of preparations containing alcohol as a drug on the National Health Insurance should not be overlooked. The Drug Fund is overdrawn. There is not sufficient money now to meet the demands made on the Drug Fund. Members of the House have no doubt been approached by insurance committees and by pharmacists pointing out that pharmacists have been discounted—that committees have not been able to pay them their full bills. What is the effect of training medical students under a system where the cost of alcohol does not matter and then turning them out to order the same thing which cost a few pence in the hospitals and will cost many shillings outside? What is the effect going to be on the Drug Fund of the Insurance Act?
    It is well known that some of these large institutions have in the course of the year scores of thousands of out-patients. The out-patients are within this provision, as to duty free alcohol, of which, because of its dearness, the Revenue have allowed certain common liniments to be made. You have got to make them with spirit. They are made with methylated spirit and not rectified spirit. Once this concession is given the hospital would have to make the liniment with rectified spirit rather than methylated spirit, as methylated spirit would cost the hospital rather more than rectified spirit. The result is that all these liniments would be made of rectified spirit. In the case of a number of these people who go to the hospitals it often happens that the physician in prescribing does not specify the amount. The patient takes the prescription downstairs, the dispenser looks out through the pigeon-hole, takes the prescription and says, "Where do you want to use this liniment?" They are so fond of it that they say, "All over me." This is a most common practice amongst poor persons, who leave the hospital now with methylated spirits, but who in future will leave with a pint of
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    rectified spirit which will have cost the hospital 3d. or 4d., but is worth outside many shillings. That is not a thing which ought to be overlooked. Then as to the hon. Member's safeguard, how is the provision as to allowing the duty-free alcohol, the raw alcohol, to make preparations to be safeguarded? The Clause says that it is under the provisions of the 1902 Act, under which the manufacturers are able to obtain duty-free spirit, but if Members will look at that Section of the 1902 Act they will see how almost impossible it is, if any good at all is to come out of this concession, to apply it to the hospitals. The Clause says:—
    "Where, in case of any art or manufacture carried on by any person in which the use of spirits is required, it shall be proved to the satisfaction of the Commissioners of Inland Revenue that the use of methylated spirits is unsuitable or detrimental they may, if they think fit, authorise that person to receive spirits without the payment of duty for use in such art or manufacture upon giving security to their satisfaction that they will use the spirits in the art or manufacture and for no other purpose, and the spirits so used shall be exempt from duty: provided that foreign spirits may not be so received or used until the difference between the duty of Customs chargeable thereon and the duty of Excise chargeable on British spirits has been paid,"
    and then we have
    "(2) The authority shall only be granted subject to compliance with such regulations as the Commissioners may require the applicant to observe for the security of the Revenue and upon condition that he will to the satisfaction of the Commissioners, if so required by them, render the spirits unpotable before and during use and will from time to time pay any expenses that may be incurred in placing an officer in charge of his premises."
    There the Revenue—it was so difficult to manage that—had to provide for an official being placed on the premises and the expense of that was cast upon the manufacturer. In 1906 that was modified to this extent, that the manufacturer had not got to bear the cost of this Revenue official being on his premises, save in exceptional circumstances. I wonder if the hon. Member has really discussed the matter with any hospital authorities, and

    1671
    has he discussed with them what kind of supervision they would expect and what kind of supervision is in fact exercised on the provisions which are made to apply to them.
    First of all, they have got to have an officer to see that the conditions are complied with, and then when they came to deal with manufacturers the great safeguard was that the Commissioners could require them to make the spirit unpotable. Of course that did not matter at all when dealing with manufacturers, but here you are dealing with medicines, which are used for internal purposes, all of which are potable. It is very difficult to define "potable." If you look up the dictionary you will see that it says "fit or suitable for drinking." All medicines are fit or suitable for drinking, or else they would not be ordered, except liniments for external purposes. Then if it is to be a question of palatable, I should be sorry to have to define that, because that is all a matter of taste. There are people who think that methylated spirits are palatable. If it really does mean that the Commissioners, if they granted this, are going to compel the hospital to make drugs, which are not in themselves unpleasant, unpleasant by using a spirit which is to be made unpalatable, then I think that the effect of that on the art of medicine is extremely serious.
    Everybody knows the great difficulty which doctors have got in getting patients to take medicine because the patients say that the medicine is nasty, and doctors do everything they can to make it pleasant, especially when dealing with children. But not only are you not trying to make drugs more pleasant to consume, but you are making drugs, which are not in themselves unpleasant, unpleasant if you use alcohol as solvent, in order to get free alcohol. That seems to me to be obviously undesirable. When you come to deal with the question of rebate, you find that they are entitled to get the rebate upon all these tinctures, subject to certain restrictions which the Board of Inland Revenue may make, and neither the House nor the hospital, nor the profession, knows what that means. I think that I have said enough to show that this thing is not as easy as at first appears, and that there are difficulties. That is very strongly borne out by what happened some months ago, and I think that the House will be interested to learn what has taken place
    1672
    meantime. The hon. Member for Oswestry on 10th March asked the Chancellor of the Exchequer—
    "If he will consider the desirability of providing in the Finance Bill for the supply of duty-free rectified spirit to hospitals for the making of tinctures under similar restrictions to those which regulate the supply of absolute alcohol, free of duty, for the purpose of research in clinical laboratories and colleges?"
    Mr. Lloyd George said:—
    "The general question of the use of spirit is under consideration, but I am afraid that it would not be possible to grant this particular exemption."
    The hon. Member then asked:—
    "Is the right hon. Gentleman aware that the Loudon Hospital alone has spent £256 on tinctures of this kind, of which £229 is duty, and could he not at any rate make an exemption in favour of tinctures and solutions of iodine; I think it will be easier to do that?"
    The Chancellor replied:—
    "I could supply the hon. Gentleman with the reasons given to me by the Customs as to the difficulty in making a discrimination. I will hand the paper over to him."
    That was the official position in this House in March. Since that time, the hon. Member for Oswestry has been appointed to a position on the Treasury Bench, and it may be that he has been able to convert the Commissioner of Customs to the view of the feasibility of doing this; but I frankly say that those who know the difficulties do not see at present how it is to be done. What they ask for is this. They say in their circular:—
    "Representations have been made by our association to the Chancellor of the Exchequer that the Clause may be dropped, and that the whole question of duty-free alcohol in medicine be referred to a special committee for consideration and report. We earnestly ask your support in the House in support of this recommendation, as under the Finance Act the position of hospitals is not in any way worsened in regard to the use of spirits. Our associations are of opinion that the suggestion of delay is reasonable."
    That is signed by Mr. Alfred Cox, Medical Secretary to the British Medical Association. If this Clause is proposed in consequence of some promise made to the hon. Member for Oswestry, it certainly was not a Parliamentary pledge, but if it was a Parliamentary pledge, does it amount to one for dealing with this matter in the Finance Bill. There is another pledge which the Government have given, and which I think ought to be borne in mind, namely, that they will introduce nothing in this House which is not necessary for the conduct of this War, and which is controversial. They have given that pledge, which I think is an excellent one, and in a case like this, where there are serious objections from the whole recognised body of the medical profession, and from the recognised body of pharmacists—and I have taken the responsibility of

    1673
    saying so—I do appeal to the right hon. Gentleman that it is not fair, that it is not right, that he should at this moment proceed with this Clause.
    There are plenty of ways of dealing with it in the meantime. If it is desired to give relief to hospitals, let it be done quite apart from spirit altogether, and if the right hon. Gentleman consents to do this I can assure him the medical profession and the pharmacists' profession would want to help him in improving the position of hospitals, and, if it can be done in that manner, they would place no difficulties in the way. Is that an unreasonable thing to ask when we are at war? We have this proposal in the Bill, and the secretaries of associations have been calling their members together from all parts of the country to consider it, and this at a time when they have a good deal else to engage their attention. The country do not understand this sort of thing. I am very sorry to detain the House at this stage in trying to bring this about. There is a string of Amendments on the Paper, and in normal times I am bound to say that I should have felt it absolutely my duty—unless the Government dropped the Clause and agreed to go into the whole subject systematically, in order to apply it to medicine generally—to use every form of this House in order to defeat the proposal. That is not possible at this time. The medical profession and the Pharmaceutical Society, having made these representations, and there being no evidence of an organised representation from the hospitals in regard to it, I do think that the Chancellor of the Exchequer would be justified in taking into consideration the representations of these bodies, and in not proceeding with the Clause to-day.
    Sir HENRY CRAIK: The hon. Member who has just sat down will not doubt that I recognise the great authority with which he speaks, an authority that I myself cannot rival. I attach very great importance to the arguments which he brought forward, and I also attach great weight to the representations which have been made. I suppose that there are many representatives who have members of the British Medical Association in their constituencies. I am bound to say, however, that although I have received this communication from the British Medical Association, I cannot find that it has been supported by any general communication from other members of the medical profession, some five thousand of whom are
    1674
    constituents of my own. That gives me some reason to doubt whether the arguments, weighty as they are, which the hon. Member has adduced are sufficient to lead me to oppose the Clause. I think the matter has been fully discussed. I am not quite sure that the medical profession is so universally against it as the hon. Member assumes, for I think I should have heard from outside representations in that sense. I have not received any, and while I attach great weight to some of the hon. Gentleman's arguments, yet I should like to urge some other considerations which lead me, on the whole, to give my support to the Clause. In some respects I think the hon. Member's arguments had the weakness of being a little too strong, and now and then perhaps a little far-fetched. We were told by the hon. Member in the earlier part of his speech that this Clause would have the effect of transferring the burden on the rates to the National Exchequer. Is not that a little far-fetched? There are a great many hospitals in this country, perhaps the bulk of hospitals in this country, which do not draw anything from the rates, and which are supported by voluntary contributions, and surely you should not deprive these voluntary institutions of an advantage in doing their benevolent work because of the incident that some trivial small expenditure might be transferred from the rates to the National Exchequer.
    Mr. GLYN-JONES: In this Clause the hospital is defined as a place supported by any public authority, and it is to the institutions supported by public authority that I applied that argument.
    Sir H. CRAIK: I have no doubt there would be a very slight relief to the rates. One must remember that these institutions, supported by the rates, are not institutions which require the most of our benevolence, and the institutions which do require our benevolence are at this time placed under great difficulty owing to the pressure which has fallen on private benevolence of every sort in consequence of the War. I am not inclined at all to think that all the dangers which the hon. Member foresees would, in fact, be realised. I do not think that hospital attendants would find in these medicines something which might have a lowering effect upon them and cause them to drink. I do not think that in any ordinary, well-regulated hospital—and I know something of hospitals, and as a governor I ought to

    1675
    be attending a meeting of the governing body of a hospital near here if I were not detained by the Debate on this Bill—any disorderly conduct of the kind suggested would occur. I am quite prepared to support any sort of safeguard which the hon. Member may think necessary, and which the Minister in charge of the Bill may think proper to adopt. I think possibly it might be well to confine the Clause to medicines for the use of any patient, and that would solve one difficulty which the hon. Member thinks is likely to occur. I think, also, that it is right and proper to restrict the benefit to those hospitals which are not run for private profit. There are certain classes of homes, certain institutions, which are really carried on for commercial purposes, and I do not think that they deserve this special consideration. If the Chancellor of the Exchequer or the hon. Member in charge of the Bill thinks it proper to confine the Clause to those institutions that are not carried on for private profit, I should be very glad to agree to that, and to know that one, at all events, of the difficulties which the hon. Member has raised was guarded against.
    But I am not quite sure that I see great weight in some of the arguments he adduced on the part of the British Medical Association. I know the authority of that association, and I should be the last to derogate from it, knowing how many of my own Constituents are members of it. But I do not think their arguments carry complete conviction. They allow that this is a gift, and they admit that their communication appears like looking a gift-horse in the mouth. I go further: I think it does. This is a gift by the Chancellor of the Exchequer, and I think we may take it that it is a very considerable gift, and an advantage so far as it goes. I do not want to raise difficulties on the very inception of this proposal. The British Medical Association in their circular do not apparently think that this is an advantage which should not be obtained; all they say is that if it were delayed the hospitals would not be put in a worse position than they are at present, and that the matter might be referred to a Special Committee for consideration and report. The British Medical Association do not say that there is no grievance, nor that this grievance ought not to be cured; yet it seems rather ungracious to propose that the Clause which is to be embodied in
    1676
    the Bill should be thrown overboard, and that we should be asked to postpone the gift until the Greek Kalends—until a Committee has been appointed and reported. It is not likely that a Special Committee can be appointed now, or that it could turn its attention to the subject.
    5.0 P.M.
    This is an urgent matter. We know the difficulties; we know that at this moment hospitals are reduced in their resources from private benevolence. We know that the necessary charges for this kind of rectified spirit required for the purposes of the hospitals were tremendously heavy, as the hon. Member has pointed out. We know that out of the sum of £260 no less than £220 in a fever hospital was paid for spirits. It is now proposed, I am very glad to know, to relieve them of that burden. I chink we might also trust to the regulations which have been laid down by the Commissioners. In Section 8 of the Finance Act of 1902 we have a distinct settlement of the conditions under which regulations are to be issued by the Commissioners in the case of the use of spirits in any arts or manufactures. In the case of arts or manufactures it was really a far more difficult thing to stop the abuse of such a relief than it is in the case of hospitals. "Arts and manufactures" is a very widely-expressed definition. All sorts of institutions for carrying on arts and manufactures might be relieved from the duty on spirit, and it might in the case of such a very large class of arts and manufactures be a real danger. This danger was considered to be sufficiently guarded against by the regulations laid down in Section 8 of the Act. Similar regulations will be laid down under the present Clause, because it embodies Clause 8 of the Act of 1902. Will they not be sufficient for carefully managed institutions like hospitals if they are sufficient for the very wide range of art and manufacturing institutions using spirits, and which were given exemption under the Act of 1902? Representing as I do a very large section of the medical profession, I cannot, even after the arguments brought forward by the hon. Member, take the responsibility of rejecting this Clause and of refusing to accept what I think is the very handsome concession made by the Chancellor of the Exchequer. By all means introduce safeguards, if they are necessary, and restrict your exemption, if you like, to those hospitals which are not run for

    1677
    private profit, and restrict it, if it should be considered necessary, to in-patients. You can lay down the rule that those medicines, which it is said may prove to be so palatable, should be under the regulations laid down under Clause 8 of the Act of 1902. I cannot, of course, speak for the Chancellor of the Exchequer, and I do not know whether he contemplates those restrictions. I think there is a great deal to be said for them, and that it might be well to guard against some of the fears which the hon. Member has expressed by consideration of those Amendments, but I cannot join in the responsibility of rejecting the Clause, which confers a very considerable benefit upon very deserving institutions.
    Mr. LYNCH: It seemed to me at first that this Clause was a fairly simple matter. The first serious objection to that view was the receipt of this circular from the British Medical Association. I was, of course, greatly impressed by the weight of authority, but as I read the arguments which they adduced in that circular I must say their authority began to dwindle, as none of their arguments were very convincing. I had somewhat the same experience to-day in listening to the hon. Member for Stepney (Mr. Glyn-Jones). He himself enjoys an exceptional reputation in this House for his extraordinary and enviable knowledge of drugs, but as he developed his arguments I began to find that none of them would hold water. He has a highly analytical mind and I am inclined to think he has given to chemistry what was intended for metaphysics. His research enables him to find reasons and excuses and arguments which would never occur to any mind of common sense. Take, for instance, his argument that these drugs would become so useful that they would be freely prescribed. That seems to me to be equivalent to a remark I once heard in the case of a surgeon who said that the knives were too blunt, but the authority seemed to think they would do harm if they were sharp. The hon. Member for Stepney seemed to think that if the medical officers of hospitals had too free a range they would be likely to run riot in prescribing drugs which were not useful in particular cases which they had. Then, again, there was the argument of students learning expensive prescribing in hospitals, and afterwards mulcting their poor patients outside. From what I have seen of medical men outside I am inclined to think they forget a good many things they
    1678
    learned in hospitals. One of those things most sharply brought to the imagination afterwards is the art of not prescribing expensive and unattainable drugs. I think that argument also vanishes.
    There was the argument from the case of out-patients. The hon. Member drew an imaginative picture of an out-patient coming to a hospital for some liniment and desiring to be painted all over his body like an ancient Pict or Scot. From what I have seen, an out-patient goes to a hospital because he has serious need of some relief. It is not exactly a matter of enjoyment to wait in an out-patient's department of a hospital for a long time to receive often what the hon. Member thinks is very summary attention and inadequate treatment, and then to apply the medicine he receives for the benefit of his case. I think very few out-patients go to a hospital unless they feel that they are somewhat seriously ill, and that they require really serious treatment. I think even if they require liniment that they would never use it over the whole of their bodies simply on the ground that it was inexpensive. I think the Clause is not quite wide enough in scope, and I would like to see another Clause introduced which would give relief not only to hospitals but in the case of drugs used in research. I do not know whether the Chancellor of the Exchequer intends making any concession to men engaged in scientific research with regard to the cheapening of drugs. Recently Sir William Ramsay, who is not a man to waste words, wrote a rather urgent letter pointing out the great expense that is imposed on men of science in the purchase of materials for research. I think it would be a very good thing if relief could be given in cases of proper research. Finally, with regard to the possibilities of abuse of this privilege in institutions which were not public institutions of a wholly charitable type, I have myself suggested an Amendment, and I have some hopes of having it accepted, which would clear the ground in that respect. I believe, in spite of the circular of the British Medical Association, that nine-tenths of the members of the profession would thank the Chancellor of Exchequer for having introduced this Clause, which is a very serviceable Clause to great hospitals, especially at this time, because it really does arise out of the conditions of the War. The objections to it, urged so ingeniously, are really somewhat far-fetched and almost metaphysical.
    Mr. BOOTH: I rise to protest against the Committee of the House of Commons at this time being asked to spend hour after hour upon this matter when we are engaged in a life-and-death struggle with a foreign enemy. It is with the utmost difficulty that I sit here listening to this discussion, and, to be quite candid, I do not feel able to do it. Looking at the newspapers to-day, I am distressed beyond measure. I warned the last Government when it kept on bringing in things like this that it had nothing to do with such matters, and that its only duty was the vigorous prosecution of the War. Month after month they continued to do so despite what I told them, and finally came the great change. I do say it is an exceedingly bad start for this Government, which has been put in power to beat the enemy, to ask us to deal with things which have been called metaphysical, and in which we are told about the British Medical Association or the Pharmaceutical Association, or which have to do with the intricacies of the manufacture of drugs. I am not equal to it, and I protest against it with all my mind and all my soul. I do say it is bringing us to a straining point that we should have Government Whips coming here to-day—
    Sir GODFREY BARING: Is the hon. Member in order on this Clause, which deals with a specific point, in referring to what should be discussed?
    The CHAIRMAN: I think on the question of whether or not the Clause should be read a second time the hon. Member is entitled to make a protest against the further consideration of it, but I should not allow him to argue the matter.
    Mr. BOOTH: I do not want to argue it. It needs no argument; it only needs to be stated. If I am asked to sit here hour after hour for discussions of this kind, I shall decline to obey the Government Whips. I can use my time better. I have been spending nearly the whole of the day in inducing people to subscribe to the War Loan, and rather than remain here for such discussions I would sooner go back to that work.
    Mr. McKENNA: I think my hon. Friend is under a complete misapprehension. The Clause proposes nothing more than to give certain relief to hospitals.
    Mr. JONATHAN SAMUELmade a remark which was inaudible in the Reporters' Gallery.
    Mr. McKENNA: If my hon. Friend does not want the Clause, and if it is seriously contested, then, of course, a pledge having been given, we shall have to consider the matter. But that is not the point of my reply. I was referring to what was said by the hon. Member for Pontefract (Mr. Booth). This is evidently a Clause which ought to be discussed. We must remember it is a Clause which proposes to give relief to hospitals, and hospitals are now being used in a manner in which they have never been used before. And to speak of this as a waste of time, and of the discussion as one that ought not to be undertaken is, according to my humble understanding of the matter, a complete misreading of the argument.
    Mr. BOOTH: I am sure the right hon. Gentleman does not want to do me an injustice. What I am protesting against is the controversy. I have not stated whether I am in favour of the Clause or not. If it is agreed to, well and good; but what I am against is the House of Commons being plunged into controversies.
    Mr. McKENNA: My hon. Friend says that he complained against the late Government bringing up matters of controversy which did not relate to the War. How are we ever to know if such a simple matter as this is going to be the subject of controversy or not?
    Mr. EDGAR JONES: We had a long discussion before on Second Heading.
    Mr. McKENNA: This is a new Clause. How are we to know whether it is to be treated as a matter of controversy or not? If it is to be treated as a matter of controversy, under the pledge the Government will not proceed with it; but we never could know whether it was going to be a matter of controversy or not, and we should be rendering discussion absolutely futile if no Member were ever to be allowed to express an opinion for or against a proposal without being told that he was wasting time. I really think my hon. Friend has not done justice to the merits of the Amendment or the opposition to it.
    Mr. BOOTH: During the War.
    Mr. McKENNA: That is entirely another point. The only question now is how far this Clause is a proper Clause to bring before the Committee. This is not the final stage of this Clause. Very serious arguments have been raised against it. Those arguments will have to be considered,

    1681
    and may lead to amendments of the Clause. What I suggest to my hon. Friends is that, if they will give the Clause a Second Reading now, we will do our best to come to terms with the opponents of the Clause, and if satisfactory terms are not arrived at, we shall always remain bound by your original pledge not to carry through business to which there is serious opposition. Such an arrangement will give everybody time for further consideration. It is obvious that we are all agreed in wishing to give relief to hospitals. The question is as to the method by which it should be given. If the Committee will allow the Clause to be read a second time now, on Report either we will withdraw the Clause, or, if we come to terms with the general sense of the Committee, we will be able to go forward with it.
    Mr. CHAPLIN: I rise to support most heartily the proposal made by the right hon. Gentleman, rather than delay these proceedings any longer. My sympathies are very greatly with the hon. Member who protested against the length at which the Clause has been discussed. Those who have listened to the Debate from the commencement must feel that this is not a controversial subject, and cannot justly be so called, because my hon. Friend (Mr. Bridgeman) began his speech by saying that it was the subject of an agreement between himself and the late Chancellor of the Exchequer.
    The CHAIRMAN: Perhaps I ought to intervene on the question of procedure. I understood the Chancellor of the Exchequer to suggest that the Clause might be added to the Bill now, and, in a certain event, withdrawn at the Report stage. I am afraid that that would not be permissible under our procedure, because it would be, in a sense, imposing taxation by withdrawing a relief which had been granted in Committee. The reverse procedure would be possible—to withdraw the Clause now, and bring it up again on the Report stage.
    Mr. J. SAMUEL: I think that the Chancellor of the Exchequer in a matter of this kind ought to take into consideration, not so much the views of the medical profession, as the views of the ratepayers and those who manage public institutions. I can assure him, from a very long experience in the management of one very large institution, that we have year after year reduced the consumption of spirits to a minimum.
    Sir G. BARING: On a point of Order. Is the Chancellor of the Exchequer prepared now to withdraw this Clause?
    Mr. McKENNA: We must listen to objections.
    Mr. SAMUEL: I am very strongly opposed to the cheapening of alcohol or spirits in our public institutions. For a long time I have been connected with a large institution containing 1,700 or 1,800 patients, and we have reduced the consumption of spirits there to a minimum. In years gone by, when the consumption of liquor was considered to be popular and essential, I have seen doctors in that institution who themselves became victims to the practice and were discharged from their office in consequence. There is really nothing more dangerous than to give this relief to hospitals. It is not essential. If the right hon. Gentleman is anxious to give relief in a practical way to the ratepayers and the subscribers, I will tell him how to do it. There is a large consumption of sugar in these public institutions.
    The CHAIRMAN: That would carry us a long way.
    Mr. SAMUEL: I am giving an illustration of how to give relief to these public institutions.
    The CHAIRMAN: I have no doubt that other Members might give other illustrations.
    Mr. SAMUEL: If we were not at the present time under a truce this Clause would be fought most bitterly from this side of the House. I am certain that it will give umbrage to a large number of public men who are trying to manage these institutions economically and well and to the best interests of the patients. If the right hon. Gentleman proceeds with this Clause, he will cause great discontent to public men in the provinces at any rate. I agree with the hon. Member for Pontefract (Mr. Booth) that the Clause should not be introduced because it is controversial, and I beg my right hon. Friend to withdraw it.
    Mr. BRIDGEMAN: I am entirely in the hands of my right hon. Friend in regard to what should be done with this Clause. But as to its being controversial, let there be no mistake about this: I could not know that it was controversial. I proposed it from the other side of the House, and it was accepted by the late Chancellor of the Exchequer. Nothing could be better

    1683
    evidence for me that it is not controversial than the right hon. Gentleman's acceptance of my proposal when I was on that side of the House and he was on this. As an hon. Member seems to doubt whether I had any acceptance of the proposal from the Minister of Munitions, I should like to say that on 20th May I received from the right hon. Gentleman's private secretary a letter which I can show the hon. Member. I do not see that it makes any difference whether I got a pledge in writing from the Treasury or a pledge across the floor of the House. I can only say that so far as I was aware it was an uncontroversial proposal, and I disclaim any sort of idea of introducing a proposal which would be hotly opposed. I still think it might be possible to come to some arrangement by which the abuses feared by hon. Members can be met. I think they will be taking a great responsibility if they prevent the granting of this great boon to hospitals at a time like the present. I will withdraw the Clause now and bring it up again on Report, when I hope we shall be able to come to some agreement.
    Motion and Clause, by leave, withdrawn.
    Mr. KING: Mr. Whitley, I rose while you were putting the Question, and I called you by name. Have I not a right to speak because the Clause is withdrawn?
    The CHAIRMAN: The hon. Member has no right to get up to make a speech when the Mover of a Motion has asked leave to withdraw. It is for the Committee to say first of all whether it gives leave to withdraw. If it gives leave, the Motion is withdrawn.

    NEW CLAUSE.—(Exemption of Motor Ambulances in Respect of Duty on Motor Spirit.)
    Any person using motor spirit for the purpose of supplying motive power to any motor ambulance when used as such shall be entitled to an allowance or repayment of the duty paid in respect of the motor spirit in the same manner as a person using motor spirit for purposes other than the supply of motive power for motor cars.
    Clause brought up, and read the first time.
    Mr. MONTAGU: I beg to move, "That the Clause be read a second time."
    I do not think that this is a controversial Clause. It relates to spirits, but only
    1684
    to motor spirit. I move it on behalf of the Chancellor of the Exchequer in order to carry out a pledge given in this House on the 16th April, 1913. There is a Clause on the Paper in the name of the hon. Member for Paddington (Mr. Percy Harris) dealing with the same subject. Our Clause does exactly what the hon. Member's does, but it avoids a practice which many Members of this House dislike if it can be avoided, namely, legislation by reference. At the present moment motor fire engines are exempted not only from Motor Licence Duty, but also from Motor Spirit Duty. Motor ambulances are exempted from Motor Licence Duty, but they have never been exempted from the duty on motor spirit. This Clause is to put them in this respect on the same footing as motor fire engines.
    Mr. WATT: Will the right hon. Gentleman say whether the Treasury have considered the wisdom or otherwise of exempting from the Spirit Duty motor cars used professionally by veterinary surgeons? Members of the medical profession were exempted under the original proposal, but veterinary surgeons were not. I have had numerous representations from veterinary surgeons that the exemption enjoyed by the medical profession should be extended to them. The exemption is being extended by this new Clause, and I wish the Secretary to the Treasury to say whether the Treasury, after consideration, have come to the conclusion that these gentlemen should be excluded from the advantage of this exemption. Personally, I think veterinary surgeons should get the same exemption as members of the medical profession. Apparently the Treasury have taken the other view. Having entered my protest, I hope that on a future occasion veterinary surgeons will be considered.
    Mr. MONTAGU: I am much obliged to my hon. Friend for his remarks. This Clause does not refer to motor cars, whether belonging to doctors or to veterinary surgeons, but only to motor ambulances.
    Question put, and agreed to.
    Clause read a second time, and added to the Bill.

    NEW CLAUSE.—(Relief from Income Tax in Respect of Interest on Bankers' Loans.)
    A person shall be entitled to deduct from profits and gains the amount paid in

    1685
    any year for interest on bankers' loans, whether such loans shall have been made continuously for the whole period or not.
    Mr. PETO: I beg to move, "That the Clause be read a second time."
    In moving this Clause I am dealing with only one of the many inconsistencies in the administration of the Income Tax Acts. I think I shall be able to show that in this matter the administration is so unjust and so contrary to public policy, particularly in view of the issue of the new War Loan, that it is most desirable that at any rate this particular anomaly and injustice should be removed. Until quite recently the form of certificate relating to a claim in respect of bankers' interest had on the face of it certain questions, the third of which was:—
    "Has the loan been in existence continuously for at least twelve months?"
    Although that question was answered in the negative, as it would be in the case of most people who have advances on general securities from their bankers, the claim for Income Tax paid was allowed. Last year this was disallowed. The effect of that is somewhat peculiar, because on this form the banker who gives the certificate is required to state formally that—
    "This interest bus been accounted for by Mr.—in full, without deduction for Income Tax, and has been or will be included by the bank as part of their profits in respect of which an assessment has been or will be made, and duly paid under Schedule D of the Income Tax."
    In effect, that means that the banker is paying the Income Tax. In spite of that the Treasury refuses—except on the rare occasion when the loan is in force for the whole of the twelve months—to allow this as a reduction from the income of the individual. In other words, they claim to have this Income Tax twice over from two people. That is entirely contrary to the practice of the Treasury in respect of certain other matters. In the case of the occupation of tenements, the occupier deducts the Income Tax which he has to pay from the landlord, because the rent forms part of the income of the landlord. That, of course, is the usual practice. The same thing obtains in the payment of interest on a mortgage. It is only in the case of bank interest that, owing to the banker being in a somewhat different position to the mortgagor, or landlord, namely, that he is actually in possession of his client's money, that the banker deducts in the ordinary way the interest which is due to him, and the unfortunate person who pays that interest is unable
    1686
    to get a return of the Income Tax on it, unless he can state that the loan has been in force for the whole twelve months.
    That seems an extraordinary illogical position. Take two people, one of whom gets an advance of £2,000 from his banker for six months, say, 4 per cent. His claim would be disallowed. Another person asks for a loan of £1,000, and supposing it is current for the whole of the twelve months, his claim would be allowed, although the amount of deduction from the income of the two individuals is absolutely identical, that is £40. In one case the Income Tax is allowed, and in the other it is not. It seems to me curious that it should be an arbitrary rule, that unless a loan has been in force and current for the whole of the twelve months no allowance is to be made. It is entirely contrary to equitable business principles. Where there is an ordinary debit and credit account running, it is always usual to allow any counterclaim, or set-off. In this case, if a man has an income of £1,000 derived from dividends from securities, a part of which he has bought by means of a loan from his bankers, he is not allowed to pay Income Tax on the real amount of his income—that is, the amount of income, less the amount of interest he has to pay to his bankers—unless in a certain arbitrary and unusual conditions of affairs, which is not good business, of having an advance from his banker for the whole of the twelve months.
    It is also perfectly clear that, in relation to the present War Loan—and this is a point of special interest to the Chancellor of the Exchequer—this particular injustice is a very unfortunate one. Let me, if I may, give my own case. For many months past I have not thought of making any investments. Anything I had paid to me, or saved, has been put upon deposit at my bankers, waiting for the Chancellor of the Exchequer, who I knew sooner or later would come for all the money that anybody could find for his War Loan. Mine is not a round sum. In the ordinary way I should ask my banker for a loan for whatever I should think it likely I should be able to repay in at least six months. What will be the effect? Income Tax will have to be paid on every halfpenny of the money that has been on deposit, perhaps at the rate of 2 per cent. or 3 per cent., or whatever the banker may be pleased to allow. Income Tax will have to be paid

    1687
    on the dividends received on 1st December, and although a man may make an investment for £5,000, £2,000 of which he has to take on loan from his banker for the six months, he will not be allowed to set against the income he will be paid on his investment the interest he will have to pay, probably 5 per cent., to his banker for the six months on money borrowed to assist in the finances of the country.
    I think, therefore, the Clause is not open to the criticism which was made by the hon. Member for Pontefract. I am inclined to think that under the existing circumstances, when parties in this House have disappeared, that we might have one advantage in a simple matter of this kind. The Clause I put is non-controversial altogether. We might have the opportunity of showing, whether or not we agree with the Clause in principle, whether we think it desirable that this particular anomaly and injustice of Income Tax administration should go on under present circumstances or whether it should be terminated. I hope the Chancellor of the Exchequer will see his way to agree to this very simple proposal that I put forward, but in the event of his not having some very strong argument against it—which I cannot conceive!—to show me that I am wrong in thinking that any injustice is at present done, I certainly propose to divide the House upon this Clause.
    Mr. MONTAGU: The present law on this subject is a little difficult, because if a man borrows from his banker for business purposes, whether he borrows for a part of a year or for the whole of the year, he is allowed to deduct as part of his expenses the interest upon his banker's loan; so that in the form in which the hon. Member's Clause was originally upon the Paper he did not propose any amendment at all of the law. In the form in which he now moves it, he does propose an alteration of the law, because if the loan from the banker is not for business purposes, but is annual in its duration, or, if I may use a horrible expression familiar to those who know this subject, a quasi-loan, which runs for more than a year, and on which interest, as I understand it, is not chargeable at the end of the year, but at periods analogous to the end of the year, then, although he cannot deduct in making his return,
    1688
    the banker is bound by law to give a certificate of receipt to the Commissioners of Inland Revenue, and when the taxpayer claims repayment of Income Tax on this receipt the State is bound to repay it. The hon. Member wants to go further than that and allow a man either to deduct from his income, or to have repaid to him, the tax which he pays, for, I think, partly private loans for broken parts of the year from his banker. As at present advised, it does seem to me very difficult to distinguish that form of casual loan, or overdraft, from any of the many other expenses which the Income Tax payer has to meet with in the course of the year. That is the conclusion which we had formed before we had the advantage of hearing the speech of the hon. Gentleman. If he will desist from his bloodthirsty threat, and not press this Clause to-day, I will consider it and the speech he has made between now and the Report stage, and see whether a Clause to meet his views cannot be framed.
    Sir JOHN SPEAR: In supporting the Amendment, may I say that I hope the Chancellor of the Exchequer will be able to accede to the request of the hon. Member for Devizes, as he met the hon. Gentleman a while ago in defending the interests of the Post Office depositors—that is on the ground of convenience. Surely from that point of view, as well as from that of my hon. Friend, the concession might be made. Everyone connected with business knows that some of our most able business men have occasionally to have an overdraft from their bankers in order to successfully carry on their business. They should be able, I cannot help thinking, in making up their accounts, to deduct the interest so paid, so as to get the correct balance of their net profits. May I point out that at the present moment it is more than ever important that something should be done in this direction. The great liberality of the interest of the new Loan will make it very difficult for traders to have that accommodation at the banks on the same terms as they have hitherto done. There will be great danger of that seriously embarrassing our trading community. We know that a good deal of the money in the banks, lent at a low rate of interest by bankers to their customers, will be invested in the new Loan, and the banker, in order to meet the requirements of those who wish for an overdraft, must charge a higher rate. The time, therefore, is opportune for the Chancellor of the

    1689
    Exchequer to meet the case put forward by my hon. Friend. We want the trading community to maintain that position it has hitherto had. Since some of them will be handicapped by any action of the new Loan, I certainly think they ought to be met in this particular instance, so that this grievance can be removed by the acceptance of the Amendment.
    Mr. ANNAN BRYCE: The hon. Member who spoke last is not quite right in what he said. I thought the hon. Member who moved this Amendment pointed out that anyone who is in business does get the allowance on the interest, whether the loan is for twelve months or shorter. The Secretary to the Treasury stated—and of course it is the fact—though I have never been able myself to understand—
    Sir J. SPEAR: Certainly it is not the case with the farmers.
    Mr. ANNAN BRYCE: Whoever does not claim it does not know the law. Everyone in business who borrows from his bankers, and has it as a charge on his business, is not merely allowed to claim for repayment, but may count it a charge before his accounts are made up. There is one point to which the Secretary to the Treasury did not allude, and which I should recommend to his notice, that is the fact that the banker's interest pays Income Tax twice over. That has always seemed to me an absolutely preposterous position. In the case of interest, so much of it goes to the banker as profit, and part is diminished by the banker's expenses, and therefore is taken by the State as Income Tax twice over. I hope that the Secretary to the Treasury, when he comes to consider the case made by the hon. Member, will endeavour to make the thing as easy as possible. Personally, I do not think there is any reason why it should not be allowed to be deducted exactly as in the case of the Super-tax and as in the case of the business firm.
    Mr. PETO: I am sorry not to agree to the proposal of the Financial Secretary. It seems to me that the principle of withdrawing everything in the hope that something will be added on some future day can be carried too far. This is an arbitrary distinction between people who are and who are not in business, and really is quite indefensible. The hon. Member for Tavistock pointed out, for instance, that farmers are regarded as private individuals. The reason for that is that they
    1690
    do not, as a rule, pay their Income Tax under Schedule D. They are therefore penalised, although they are the very people who ought not to be. They ought to be allowed to deduct the interest on banker's loans, whether these are for a short or a long period. I am sorry the Financial Secretary will not accept this Amendment. But in view of the fact that he did not challenge the justice of the arguments I put forward or give any reason of national importance why it is undesirable to make this trifling but very necessary change, I regret I cannot withdraw the Amendment, and if the hon. Member for Tavistock (Sir J. Spear) will tell with me, I propose to challenge a Division.
    Mr. MONTAGU: May I make another appeal to the hon. Member? I do not challenge his arguments, because I want to meet them. I have not the slightest desire to oppose what he wants to do, but I merely ask that we should have time to consider before the Report stage the exact terms of the amendment of the law. Income Tax is not a thing on which one can legislate at a moment's notice. I am not sure, and my advisers are not sure, that the drafting which the hon. Member proposes will effect any change in the existing state of the law. I do, therefore, most earnestly appeal to him not to divide the House. If the hon. Member proposes the Amendment in the present form I shall be bound to ask the House to resist it.
    Sir GEORGE YOUNGER: I hope the hon. Member will accept the promise of the Secretary to the Treasury.
    Mr. PETO: As I now understand that it is a question of drafting, and possibly my wording may not be watertight, of course, on the understanding that the right hon. Gentleman will accept the principle and carry it into effect, I will withdraw the Amendment.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Relief for Sailors and Soldiers on the Active List.)
    No deduction for Income Tax shall be charged or made from the pay of any sailor or soldier of His Majesty, irrespective of the total amount of his income, provided that such pay does not exceed the sum of four hundred pounds per annum, and in cases where the pay of any sailor or soldier

    1691
    exceeds such amount, Income Tax shall be charged and collected only on such part of such pay as exceeds the said sum.
    (2) In this Section sailor and soldier shall mean and include all sailors and soldiers for whose pay provision is made in the Estimates presented to Parliament for the Navy and the Army, but shall not include any sailor or soldier who has been placed upon the retired list.
    Clause brought up, and read the first time.
    Mr. POLLOCK: I beg to move, "That the Clause be read a second time."
    This is a Clause designed to effect a simple measure of justice. At the present time there is a large number of men engaged in the forces of His Majesty who left positions of far greater value, and are now giving their services to the country and receiving the small pay of an officer. A portion of the pay of an officer is, of course, exempt from Income Tax. Take the case of a man who is receiving £300 as salary. He would be entitled to deduct, and have repaid to him Income Tax on £160 a year; while a man in receipt of £400 would be entitled to have repaid to him the Income Tax which is deducted on a sum of £150 a year. I think everybody agrees that it is rather hard to expect soldiers in the field to be able to pay the same attention to matters which belong entirely to the civil side of their life, as they would under normal conditions if peace prevailed. This Clause is an endeavour to prevent our imposing a real injustice upon soldiers in the field. If this Clause is not adopted, the ordinary course would be this: Pay would be made through one of the Army agents to those who are entitled to receive such pay, and officers thereupon would be entitled, upon filling up the proper forms and transmitting them through their Army agents and other channels, to a repayment to them of a sum which, in the first instance, has been improperly deducted from their pay by the Treasury.
    I do not believe there is very much money involved in this from the Treasury's point of view. I think this is a mere question of an act of justice on the part of this House to the gallant men who are serving their country in the field. The purpose of the Clause is that with regard to pay up to £400 a year there should be no deduction for Income Tax at all, the presumption being that the officer or other person who is receiving that sum would be
    1692
    entitled, as and when the opportunity offered, and when papers were placed before him, to a deduction in respect of an adequate proportion of the sum, or rather a reimbursement of the Income Tax which had been improperly deducted. The result of the Clause would be that in most cases the State would have acted with full justice to those serving her well, and if there were any injustice at all it would be the State which would be the sufferer, because by the State's generosity it would not have deducted the amount which, under ordinary Income Tax law, they would be entitled to deduct, although at a later stage there would be a right of reimbursement or abatement from the sum so deducted.
    A soldier is entitled to certain privileges by the law of the land. As I mentioned on the Second Heading of the Finance Act, his will has always been a matter which has received favourable consideration at the hands of the courts, and he is entitled to make a will which would not be valid under ordinary circumstances if made by a civilian. I urge the Committee to pass this Clause so that we may I pay in full, sums which have been undoubtedly well earned by men to whom those sums are paid. Instead of putting upon them the burden of receiving back the sum which the State is not entitled to deduct, let the State first of all pay in full. I only urge a favourable consideration of this Clause by the Financial Secretary. It really only amounts to this: that, whereas a certain number receive their pay after a deduction is made, if the Clause is accepted no such deduction will be made, and in most cases those who would be entitled to receive back sums improperly deducted would have that burden withdrawn from them.
    Mr. MONTAGU: As I understand the Clause of my hon. and learned Friend, its chief object is to avoid troubling the sailor or the soldier with the complicated business of making returns in order to get relief; but his second object is to relieve altogether from payment of Income Tax the income of any sailor or soldier who receives under £400. I do make the most earnest appeal to the House on this subject. The Inland Revenue authorities assure me that the Clause would cost the Revenue £970,000 a year. We cannot afford, just for pure instincts of sentiment, however admirable that sentiment is, at this time to increase so substantially the

    1693
    cost of carrying on this War. As I have said on this subject in this House before, the services which sailors and soldiers render to their country to-day cannot possibly be measured by any financial payment at all. We read from day to day, and we yearn for greater opportunities of reading, of the valiant deeds and the unfaltering bravery of all our soldiers and sailors. But you cannot say, "We will let you off twopence of taxation in consideration of the great services you are giving to the State." If you do not think the soldiers and sailors are adequately paid, then the proper thing is not to let them off taxation but to increase their pay. And it is because of that that already during this War the pay of junior officers in the Army has been increased.
    It seems to me that the Income Tax is always and obviously graduated by our Statutes with reference to the means of people. On the other hand, remuneration for service is not in any way concerned with the general financial position of the person remunerated, but only with the value of his services. To regulate the amount of an individual's Income Tax by reference to the value of his services would seem to me very nearly as inconsequent as to regulate his remuneration by reference to the amount of his other sources of income. But I would point out that if the hon. and learned Member's desire is to save the soldier trouble, then I do not see he would accomplish very much by his proposal, because he would be still liable to any Income Tax on any private sources of income, and still be liable to obtain by a form the abatements to which he is entitled. Therefore we propose to do all we can to meet that second intention of the hon. and learned Member by an administrative arrangement.
    At the present moment the Inland Revenue is considering the best means of simplifying the procedure for sailors and soldiers. We are not going to issue any more forms of return to sailors or soldiers unless they are asked for, and the general principle on which it is proposed to act is that, where a doubt exists, the officer, while the War lasts, should be given the benefit of the doubt. Where there is sufficient information available without troubling him, that information will be utilised and he will not be troubled. For instance, where allowances were known to be granted in 1914–15 they will be continued for 1915–16, unless promotion or something of that kind shows that the
    1694
    officer is no longer entitled. Where there is absence of information as to private income, the Service pay will be regarded as total income for purposes of abatement and for relief. I can assure my hon. and learned Friend by those indications the Inland Revenue propose to do everything in their power to avoid troubling the soldier and to avoid taking from him any tax for which he is not really liable. But I do ask the House to resist a proposal which will cost us a large sum of money, which seems to me to act unfairly as between officers who pay Income Tax and private soldiers who pay indirect taxation, and would appear to me to be a poor way of showing our gratitude for the services they render, and nothing like so good a way of increasing their emolument as by increasing their pay, should such an increase be thought desirable.
    6.0 P.M.
    Mr. PETO: I wish to say a word or two in reply to the arguments put forward by the Financial Secretary to the Treasury. The main arguments seem to be that this Amendment would cost £970,000 a year. Earlier in the year I had some correspondence with the present Minister of Munitions when he was Chancellor of the Exchequer in regard to this question, and he did not put forward any objection on the ground of cost. On the contrary, he told me that the cost would not be considerable. The last argument put forward by the right hon. Gentleman was that to do justice to the officers in this way would be unfair to the private, and I want to deal with that argument, because it is one which has been put forward before. I do not believe that it is an argument that holds water. The special War taxation which has been imposed upon articles of consumption applies mainly to alcohol, tobacco, and tea. In regard to tobacco, the members of the Expeditionary Force not only do not pay the War taxation, but they pay no taxation at all, because their tobacco is taken out of bond, and when it is sent from this country they get the tobacco absolutely duty free. The same applies to alcohol, and the only article that remains is tea. Officers do not have a separation allowance, while privates, or rather their dependants, do have a substantial separation allowance, and do not have the cost of the maintenance of the breadwinner of the family, which forms a large part of a working man's expenses. I think there is nothing in the argument that for these reasons you must not do justice to the officer.

    1695
    In peace times the ordinary Income Tax is chargeable on all salaries whether military or civil, and on all incomes at corresponding rates. That is a perfectly just principle, because every citizen, whether engaged in military operations or any profession or industry, benefits more or less pari passu with others in the expenditure of the ountry's income, the total amount derived from taxation. We are, however, at the present time paying a double Income Tax. The main charge is for the cost of the War, and the principal item in the expenditure is the payments to our soldiers and sailors. The Financial Secretary says the Government have made some advance in pay recently in the junior grades of officers, but may I point out that captains of twelve years' service get 1d. a day less than they did under the old scale, and majors also get less. Therefore, the advance referred to does not apply to a great many officers, and all that the right hon. Gentleman's argument amounts to is that some small increase has been made in the pay of some ranks, and on that account it is claimed that the Government are perfectly justified in deducting Income Tax at 2s. 6d. in the £, although it is admitted that half of that tax is to meet the expenses of the War. Therefore, you are asking those who undertake military duties not only to give their services, and in many cases their lives, but you are asking them to make provision by a very substantial deduction from their small incomes to pay their own pay. The right hon. Gentleman says that this is a very trivial thing, and he argued that we cannot liquidate the debt we owe to the officers of our Army and Navy by making them a remission of taxation. Of course, we cannot, and nothing we shall ever be able, to do will liquidate that debt. But is that any justification for making this deduction, which is a charge that ought to be borne by the civil population, who cannot go on active service, and are we justified on that account in making this deduction from their pay.
    I can assure the Financial Secretary that I received a very much more sympathetic reply when I wrote to the hon. Member for the Blackfriars Division (Mr. Barnes), who at that time was leading the Labour party, and as he is now on quasi-military duties for the Minister of Munitions in Canada, it is not out of place for me to say that I received the warmest
    1696
    commendation from him, and he hoped that I should go on and bring forward this matter of the Income Tax upon officers, because they get precious little pay and they ought not to be subjected to a tax which makes such big inroads upon their incomes. I find from correspondence with the late Chancellor of the Exchequer that although he did not promise to carry this proposal into effect he regarded it sympathetically and said he thought it was something which he would have liked to incorporate in his Budget, the main argument put forward being that it might do some injustice to the private. When this matter was raised before, the Under-Secretary of State for War, on the 10th February last, said:—
    "I will represent what has been paid to the Chancellor of the Exchequer, but I would like to point out that there may be many officers—I do not say a majority or a minority—who are not so deficient in the goods of this world that they should have a deduction from their taxation."
    My hon and learned Friend in drafting this Clause has met that argument, and we only ask that it should apply to the first £400 a year of pay or income, and even in the case of those officers who have got private means it is a very small matter whether the £400 they are paid is allowed to go free or not. In the case of officers who have practically got no means independently of their pay and have to keep wives and children without any separation allowance and provide lodgings and everything else for them, I think, considering the cost of living in this country, it is perfectly monstrous that the Government should resist this new Clause and insist upon deducting Income Tax from their small pay exactly in the same way as they deduct Income Tax from men in civil life, who for one reason or another have been unable to give their services. For these reasons I hope my hon. and learned Friend will persist in pressing this Clause upon the attention of the Committee, and I can see no possible reason why he should not divide the Committee upon it, and let every Member of the House have an opportunity of voting which way they think on a matter of this kind without any relation to political prejudice or anything else.
    Mr. POLLOCK: I want to ascertain a little more about this point than is contained in the answer which has been given by the Financial Secretary to the Treasury. I cannot make out whether his answer was scornful or sympathetic. If the right hon. Gentleman will not meet my point I am ready to divide the House

    1697
    upon my Clause, and I should like to see the names of those hon. Members who are ready to register their votes against this Clause. I am not unfamiliar with the Income Tax Act. Does the right hon. Gentleman mean that he is going to pay all the pay to officers without any deduction at all, or does he say that he will deduct a certain sum according to certain procedure and returns which have been made in the past? If he is going to make the payment without any deduction for Income Tax I ask under what Section, what power, and under what statute is he going to do that. If he says he has got the power, I wish to know under what legislative authority he is going to act. If he has not got that authority I am not going to accept his answer that by some administrative authority, without any right or power to do it by statutory authority, he will make this deduction in cases where this particular deity who lives in the Revenue Office thinks some returns have been made in previous years, and if, according to this deity, there has been no promotion and matters remain much as they were before this person, who is quite unknown, will kindly see that the whole pay is remitted in spite of the duty of the Department to deduct the Income Tax when it is paid. That is the sort of statement to which we have become accustomed. If the Financial Secretary means that he is going to take power to see that in every case at least there is no deduction in respect of £160 a year, and says that he is going to bring in a Clause, on Report which will enable him to do that, then I understand his position. If he has not that power, and if he does not intend to take that power on Report, or at some other time, the right thing for us to do would be to divide the House on this new Clause. It is all very well to say that, we cannot liquidate the debt to our officers. That is so, but we can take power to prevent us doing an act of injustice, and it is because I do not see any legislative authority at the present moment to prevent this injustice being done that I adhere to my Clause.
    Mr. BUTCHER: I need hardly say that I deprecate as much as any one else that we should have a hostile division at times like this, but this is a matter upon which many of us, and many people outside, feel very strongly. Unfortunately I did not hear the right hon. Gentleman's speech, but I understand that he based his refusal to accept this proposal mainly upon the
    1698
    ground of cost. When you are spending £1,000,000,000 a year I think that is a very thin pretext to justify a distinct want of generosity towards men who are laying down their lives. These men are giving up everything. You ask the civilian population to make sacrifices, but what are the sacrifices which we who stay at home are called upon to make as compared with those who fight our battles and lay down their lives. They give everything. Even if it should involve some increase of taxation upon those who remain behind, I should like to see the hon. Gentleman who would object in this House, or on any platform in the country, to pay the small quota of increased taxation which is necessary to do this act of justice to our officers. We have been told that the proper way to deal with this matter is to increase their pay. I was told the same thing when I made a protest against the Death Duties. In that case there was a concession made which I think was totally inadequate when you consider the circumstances. I was told the proper way was to increase their pay, but was that ever done? Not a bit of it.
    There was a totally illusory increase of pay given to officers some six or eight months ago, which gave a very small increase to junior officers, but I think I am right when I say that the increase given to senior officers such as captains and majors was almost infinitesimal. What is the good of putting us off with excuses of that sort, saying, "Increase their pay"? We would increase their pay if we could. If the Chancellor of the Exchequer will get up and say, "I now promise to give an increase of pay to these men equivalent to the amount of the concession which is demanded," we shall be all agreed; but if he will not, then I certainly advise my hon. Friend to press the Chancellor of the Exchequer to make this concession, and, if he does not, to divide the Committee, although personally I hate the thought of a hostile Division. Perhaps that is too strong a way of putting it; it is a Division which would really enable us to take the sense of the House. I therefore withdraw the expression "hostile"; probably it is a totally wrong one. It is a decision which would really inform the Government what Members think upon the point. There would be no question of party or even of stigma on the Government; it would only help them to carry out the wishes of the House.
    Mr. McKENNA: The speech to which we have just listened very accurately explains the meaning and purpose of this Amendment. It is an Amendment intended to increase the pay of officers.
    Mr. PETO: To prevent a dimunition of pay.
    Mr. McKENNA: No, that was not the speech that was made. The explanation was made quite frankly, clearly, and fully. I congratulate the hon. and learned Member, and I am not quarrelling with him at the moment. He has stated, quite fairly, what the Amendment does and what it is intended to do. It is intended to increase the pay of officers.
    Mr. BUTCHER: That certainly was not the point of my speech. My point was this: Here you have an enormous increase in the Income Tax on account of the War. Men are losing their lives as the result of the War, and say that they ought not to have their incomes very largely diminished by the War as is done by this increased Income Tax.
    Mr. McKENNA: I think that is a second thought. The explanation the hon. and learned Member now gives is not the Amendment. The Amendment does not propose to relieve officers of the extra Income Tax during the War; it proposes to relieve officers with incomes under £400 of all Income Tax, and it is therefore in effect and in intention a proposal to increase the pay of officers.
    Mr. POLLOCK: The hon. and learned Member was not in the House when I moved the Clause, and I do not think that he heard my speech, but as I drew the Clause and as I am responsible for it perhaps he would like me to put him right. The purpose is not to increase the pay of officers; it is to prevent the State acting unjustly in paying over sums in respect of which the State knows that the recipients have a right of abatement. That is altogether a different point, and £400 a year is chosen because it is up to that point that abatements are sanctioned.
    Mr. McKENNA: I cannot congratulate the hon. and learned Member upon his draftsmanship, because his Clause does a great deal more than he says.
    Mr. POLLOCK: I really do not mind whether my draftsmanship is good or not. That is a small, stupid point.
    Mr. McKENNA: If we are going to divide, we must really understand what we are dividing about. We are going to divide about a proposal to relieve from all Income Tax, not merely Income Tax proposed for the purposes of the War, all officers with income under £400 a year. That is in purpose and in effect to increase the pay of officers. There is absolutely no answer to the argument put forward by the hon. and learned Member for York (Mr. Butcher) that these gallant officers who are making such sacrifices for their country are entitled to the fullest recognition by the country. There is no answer to that argument, but it does not stop at £400 a year or at a relief of £20 a year. That argument, if it is to be interpreted in money, must be taken at a very much higher rate. But I do not think it is an improper thing to remind the hon. and learned Member that it has never been the habit of this country, historically, and I hope it never will be, to weigh the qualities of an officer nicely in the money scale. In resisting an argument of that kind one runs the risk of being charged with failing to recognise the claims which officers have upon the country. It is not the duty of the Chancellor of the Exchequer on the Finance Bill to determine what the officer's pay ought to be. If there is a proposal to increase the officer's pay, let it be brought forward in its own guise. Let the proposal be made to the Secretary of State for War that he should increase the pay of officers, and I see no reason why it should stop at £400 a year. An officer who receives £450 or £500 a year and who is not less gallant is equally entitled to consideration. Consequently, I would submit to the Committee that we should be very ill-advised in determining in Committee on the Finance Bill what should be the right scale of pay for officers.
    With regard to the point of the hon. and learned Gentleman that he intends, by this Amendment, not to increase the pay of officers although his Amendment relieves all officers under £400 a year of all Income Tax, but to legalise the practice of the Inland Revenue officers in paying officers their pay in full up to £160 a year, I would say that I think the hon. Gentleman is mistaken in supposing that any legal authority is required. The Inland Revenue officers, provided that they do not make any illegal payments, are perfectly justified in meeting in every way in their power the convenience of the taxpayers, and I hope that will always be their practice.

    1701
    There is absolutely no reason to deduct Income Tax before payment of the income when you know that the recipient of the income will be entitled to recover the Income Tax. No legal authority is required to enable the Inland Revenue officers to refrain from deducting the Income Tax when they know that the Income Tax will have to be repaid. I think, under those circumstances, that this is a question, if it is to be discussed and divided upon at all, which must be divided upon and discussed in Committee upon the Army Estimates. It would be really an abuse of a Revenue Bill to take the occasion to effect a complete change in the scale of pay of officers. Let the Committee mark what they are going to do if they accept this proposal. A junior officer, junior in relation to his seniors, who receives the pay of £400 a year is to get his pay in full. He is promoted, and as the result of his promotion or on account of his services his income is raised to £420 a year. He immediately has to pay Income Tax, and the result is to reduce him below—[HON. MEMBERS: "No!"]—to reduce him down—[HON. MEMBERS: "He pays Income Tax on £20!"] Then that does not arise.
    Sir G. YOUNGER: What junior officer is in receipt of £420 a year?
    Mr. McKENNA: I said "junior in relation to his seniors." In these circumstances, I beg hon. Members to proceed with the Finance Bill by arguments which appertain to the Finance Bill, and not to mislead the Committee into questions of purely a military character.
    Mr. NIELD: Is the Chancellor of the Exchequer quite right in saying that this is additional pay? It is certainly limited to officers on active service. And when he appeals to history is he quite right? Does history show him that the Income Tax ever stood at this figure at any time, or that there was ever such circumstances as we are called upon to face now? This simple proposition is that officers on active service—it certainly should not be extended to officers who are not on active service—ought not to be called upon to pay the additional Income Tax brought about by the War in which he is personally engaged. That, so far from being extra pay, is merely a recognition that he is already giving such service to the State and ought not therefore to make a pecuniary sacrifice as well. If it is limited to officers on active service, the right hon. Gentleman's argument does not apply.
    Mr. GRETTON: The right hon. Gentleman astonished some of us on this side of the House by the argument which he applied to this Clause. I do not use the words offensively, but I never heard a more flagrant instance of special pleading. The Finance Bill is the proper place to discuss any relief to taxpayers from taxation, and that is what this Clause proposes to do. The Chancellor of the Exchequer may not approve of the proposal, but to say that we ought to go to the Minister in charge of the Army Estimates and ask for an increase of pay instead of proceeding by this Clause is an argument with which the Minister in charge of those Estimates would not agree. We are proposing to relieve certain officers of the excessive taxation which the War entails. If the Clause does not do that to the satisfaction of the Chancellor of the Exchequer, then unless he contests the principle he should help us to so draft the Clause as to carry out the principle for which we are contending. We contend that those fighting in the War should not be subjected to the very heavy taxation imposed upon those at home. That is what we are proposing and those are our arguments. [HON. MEMBERS: "No!"] I did not hear the Mover and the first reply, but those are the arguments which have been used, and it is on those arguments that I take the proposal. Will the Chancellor of the Exchequer accept an Amendment to insert the words "exceeding one shilling in the pound," so as to bring back the taxation on this £400 to the scale which was usual, and which prevailed before the War commenced? That would meet both our principle and the argument of the right hon. Gentleman. We are not proposing to increase their pay. I should like to get the whole of the Clause, but, if I cannot, I am certainly prepared to accept an Amendment of that kind if the Chancellor of the Exchequer will agree. Otherwise, I am afraid that we shall be obliged to divide the House and take the sense of the House on the whole Clause.
    Sir GEORGE TOULMIN: I hope that the Chancellor of the Exchequer will not consent to accept this Amendment. I do not think the Finance Bill is a measure upon which one should enter into any differentiation between classes. The question of the rebate which should be given to officers ought not to be introduced here. More than that, the Amendment

    1703
    which has been moved differs very materially from the speeches which have been made in support of it. The effect of the Amendment would be to increase the allowance of £160 given to Income Tax payers to £400. It is to be given to every officer, and not merely to poor men, because the words are to the effect that it shall be irrespective of the total amount of income the officer may have. He may, in fact, have an income running into many thousands of pounds. I do not think there is any reason why a differentiation should be made in respect of the Income Tax on such incomes. The differentiation is also to be made wherever the pay exceeds £400 a year. This proposal is quite different from the speeches which have been delivered. There is one point on the other side of the Amendment with which I rather disagree, because it provides that a man who has given his services, and has been wounded and retired, is not to receive this allowance. It is only intended for those on active service. I hope the Chancellor of the Exchequer will not accept the Amendment.
    Mr. CHAPLIN: I am sure everyone of us would be glad to do anything in the world to promote the welfare of those men who are serving us so very gallantly abroad at the present time. But I own that what has passed through my mind during the last few minutes, while I have been listening to this discussion, is a doubt whether our gallant officers out there would themselves quite like to be treated in this particular manner. I present that idea for the consideration of my hon. Friends. I heartily wish we could have heard in this discussion the personal opinion of an officer. I am a little uneasy on this point. When I think of the gallantry of these men, and of the splendid service they have done, and are doing, for us, I cannot help feeling, personally, that one of the last things they would have in their minds is what they are going, or are not going, to be paid.
    Question, "That the Clause be read a second time," put, and negatived.

    NEW CLAUSE.—(Suspension of Land Valuation.)
    The duties of the Commissioners relating to the valuation to be made of all land in the United Kingdom pursuant to Section 26 of the Finance (1909–10) Act, 1910, shall be suspended during the continuance of the present War.
    Clause brought up, and read the first time.
    Mr. E. JONES: I wish to submit a point of Order with regard to the effect of this Amendment on the Finance Bill. Would it not, if incorporated in that Bill, make it impossible for the Bill to receive the certificate of Mr. Speaker that it is a pure Money Bill? I may recall the fact that on two previous occasions similar Amendments to this have been ruled to have that effect. I will ask if this particular Amendment will not have the effect of causing this Bill to cease to be a pure Money Bill under the Parliament, Act?
    Sir G. YOUNGER: I submit that that is not a point of Order. I do not see how it comes within the rules of order. If the House of Commons chooses to put a Clause of any sort or kind into a Bill to which it is germane, it is entitled to do so. There is not a Revenue Bill this year, so far as I know, and, therefore, we shall have no other opportunity of dealing with a question of this kind.
    The CHAIRMAN: Certainly I should be going rather outside my province if I were to answer a question of this kind, because it will be for Mr. Speaker, when the Bill reaches its final form, to say whether or not it can receive a certificate as a Money Bill. Members of the Committee can form their own opinion as to the effect in that direction of this particular Amendment, but it is not for me to rule it out of order on any such ground.
    Sir F. BANBURY: I beg to move, "That the Clause be read a second time."
    The object is to suspend during the War the operation of the Increment Value Duty. I have carefully put it in that form in order to avoid any charge being brought against me of breaking the truce. Attempts have been made, I believe, to say that this Amendment does break the truce. When that statement was made to me I pointed out to the hon. Gentleman who made it that it required some argument on his part to prove it. The only argument he could advance was that if the Clause was suspended it would make it more difficult in the years 1916 or 1917, whenever the end of the War came, to make the valuation. I pointed out to the hon. Gentleman who made that observation that it would be quite as easy in 1916 or 1917 to make a shot at the value of a property in 1909 as it would be in 1915. If the valuation had to be made on the value

    1705
    at the present moment, there might be something in the argument which was addressed to me. But as it has to be made upon the value as it existed in 1909, six years ago, it really makes no difference whether the valuation is made in the year 1913, or 1914, or 1915, or 1916.
    The hon. Gentleman could not dispute that argument, and so he fell back on the statement that in his opinion it was a breach of the truce. I told him, "Your opinion is not a sufficient argument, and the mere suspension of the Act of Parliament is not a breach of the truce, because already a very controversial Act of Par-has been suspended, namely, the Irish Land Bill, and if you can suspend one Act of Parliament without its being a breach of the truce, it is as easy to suspend another." I contend that in bringing forward this Amendment I have done nothing which can be held to be a breach of the truce. I have also been very careful to leave out any reference to the Mineral Rights Duty, because that does bring in a considerable amount of money with practically very little expense, and, as my desire is to afford the Chancellor of the Exchequer every possible facility to obtain money, I have been most careful to leave out the Mineral Rights Duty. I do not know whether the Committee is aware that at the present moment there are really only three duties—the Increment Value Duty, the Undeveloped Land Duty, and the Reversion Duty, and of these but one is being collected. I am not proposing to suspend all three duties. I am only proposing to suspend one, because the other two have already suspended themselves. I will bring forward proof of that statement.
    I think, too, I shall be able to show that the Increment Value Duty is really not being collected. It brings in £50,000 a year, and my authority for that statement is the late Chancellor of the Exchequer, who, on the 19th May, in answer to a question put in this House by the hon. Member for the Leith Burghs (Mr. Currie) informed him that the estimated yield from the Increment Value Duty that year was £50,000. I have looked at the Revenue Account, and I find that the cost of collecting it is about £600,000 a year. Therefore what I am endeavouring to do is to save the Chancellor of the Exchequer £550,000 a year. I know he will tell me he cannot get rid of the men who are collecting the duty, but I am going to show him a way by which he can otherwise employ these
    1706
    gentlemen, and thus save the nation £550,000. I had the pleasure of listening to a great speech by the Prime Minister at the Guildhall this afternoon, and the right hon. Gentleman said that the great thing he wished to emphasise, a thing which was very vital and necessary, was economy, and that there should be no waste. Making a short speech myself later on, I ventured to suggest to the meeting my hope that the Government would I set us an example which I was sure we would be anxious to follow. I am now going to give the Government an opportunity of setting an example with regard to economy and waste. No one will contend that this annual expenditure of £600,000 in order to collect £50,000 is not an absolute waste. I had better give some evidence in support of my statements so far as they have gone. In this House, on the 19th May this year, in answer to the hon. Member for the Leith Burghs, the late Chancellor of the Exchequer said:—
    "For the current year the Increment Value Duty is estimated to yield £50,000. The collection or Undeveloped Land Duly and Reversion Duty is temporarily in abeyance, owing to judicial decisions."—[OFFICIAL REPORT, 19th May, 1915, col. 2366, Vol. LXXI.]
    I think I have shown from the mouth of the Government itself—from one of its greatest Members, if he will allow me to say so—that two of the three duties are already in abeyance, and that the remaining duty is only bringing in £50,000 a year. I am not at all sure that I have not a case here showing that the remaining duty is practically in abeyance as well, because as a result of decisions in the Law Courts a great portion of it cannot be collected unless those decisions are reversed. I have the decisions here, but I do not propose to trouble the Committee with them. I shall probably be told that, according to the late Chancellor of the Exchequer, at the present moment, something like 3,700 are employed in collecting this £50,000 per year at an expense of £600,000. In 1913–14 the number was 4,650, but that was reduced as a result of 1,000 members of the staff having been given permission to serve in His Majesty's Forces, and further of the balance available at the beginning of the year 1915–16 the services of some 1,700 will have been dispensed with in the course of the year, so that although the actual figures at the beginning of the year showed that 3,650 men were thus employed in this particular Department, 1,700 men will have been taken away by the end of the year. Supposing that is so, there still remain 2,000 men.

    1707
    I have had a letter from a gentleman in the Civil Service—I have his letter in my pocket; perhaps I had better not mention the Department—who has been lent by one Department to another because the Department for which he was working had not any work for him and the other Department was short. This gentleman writes to me to say he wants to serve in the Forces, but that the Government will not let him go because the Department to which he has been transferred says there is a demand for men. I would suggest, if the right hon. Gentleman says in reply to me that he could not dispense with the services of the 2,000 gentlemen who are employed upon the valuation staff because they are permanent members, that he could use one of them in order to let this gentleman who writes to me join the Forces, and he could use the remainder in whatever work is necessary. There is no need to dismiss them. They could be used in making munitions or anything else, or in any military work which is necessary at the present moment. I think I have clearly shown that to continue this valuation during the War is a mere waste of money, and that at a time when we are spending £3,000,000 a day and are adding to the National Debt at the rate of £1,000,000,000 or something of that sort, we should be absolutely foolish to spend £600,000 in order to get £50,000.
    I am told that what these gentlemen are doing is not actually sitting in their office doing nothing, but that they are going round and making certain valuations. About ten days ago I had a letter from a gentleman saying that he proposed to call at my house in London to make a valuation. I wrote to him and pointed out that it had taken him a very long time to come, and that as he had waited from 1909 to 1915—that is, six years—it would not hurt him to wait another year if by so doing we were enabled to get another silver bullet with which to carry on the War. He wrote to me and said he was coming to see my house. That was ten days ago. I have the letter in my pocket. I wrote back to him saying that nothing would give me greater delight, and that he would be received with every courtesy, but I ventured to suggest that he would be occupying his time more advantageously to the State if he were to join the service of the Crown and fight for his country abroad, or did something in connection with the great
    1708
    question which was before us, namely, the War. He did not answer that letter, but he gave me notice that on a certain day Mr. So-and-so would come round. I told my servant to be very careful to attend to him and to show him every courtesy. He came round. My daughter happened to be sitting in one of the rooms when he came in and looked round and said, "Ah, a very pleasant room—very nice!" He was delighted. A lady friend of my wife's told her the next day that a gentleman—I do not know whether it was the same gentleman—had come in and had looked round her house. She was in her drawing-room. He said to her, "Your wallpaper is much prettier than the wallpaper in the room of the adjoining house." She said to him, "I think you would be using your time much better if you were fighting the Germans instead of coming round and making observations as to my taste in drawing-rooms, or as to the taste of my neighbour in her drawing-room."
    No doubt these gentlemen are doing this. I do not blame them. It is not a very unpleasant occupation to go round and look over houses. If I were interested in the architectural development of the country I should be very glad, if there were no War going on, to go round and see how people were decorating their houses. I submit, in all seriousness, that this is the wrong time to do that sort of thing, and that even if we were getting a sufficient sum of money from the taxes to provide for the expenses, even then we had better not do it. As a matter of fact, what are we doing? We are losing £550,000 a year, and putting nothing into our pockets. It might, perhaps, interest the Committee to know what the result of all this has been. The result is that since the beginning of these taxes they have yielded £689,000, and the cost has been £2,938,000. If you deduct one sum from the other, you will find that the loss to the State is a little over £2,000,000. What does that mean? It means that we are minus a "Dreadnought." [HON. MEMBERS: "Oh, oh!"] Instead of having a "Dreadnought," or an old age pension provided out of these taxes, if we had not had these taxes we could have had one more "Dreadnought" than we have at the present time. I think I have made a good case. [Laughter.] I am glad it meets with the general approval of the House. In these circumstances, I do not think it will be necessary to say anything more,

    1709
    unless the Chancellor of the Exchequer is, if I may say so with all respect, foolish enough not to accept my new Clause.
    Mr. McKENNA: I will follow the example set by the hon. Baronet in making an entirely uncontroversial speech, and will try, as far as I can, to submit my case to the Committee, as he has done, without expressing any opinion on the merits of the taxes, although, perhaps, in the closing part of his speech the hon. Baronet was misled into a momentary abuse of the taxes. But I am sure that that was a slip. He intends only, as his Clause says, to suspend the operation of the Land Valuation Department. Am I right in that? May I take it that the hon. Baronet intends only to suspend it with the intention of resuming the full activity of land valuation after the War?
    Sir F. BANBURY: That is the New Clause.
    Mr. McKENNA: That is what the hon. Baronet intends?
    Sir F. BANBURY: Unless Parliament otherwise determine.
    Mr. McKENNA: Of course, Parliament can always change its mind. The intention of the hon. Baronet is to suspend the operations of this Land Valuation Department, and to resume them in their entirety when the War is over. I think I shall be able to show clearly that the hon. Baronet's proposal is quite impracticable. I am treating it only as a serious proposal.
    Sir F. BANBURY: It is a serious proposal.
    Mr. McKENNA: I am treating it as a serious proposal, based upon economy, without expressing any opinion upon the merits or demerits of the taxes. I am entitled to take that view. In the first place, let me say that the hon. Baronet is mistaken in saying that £550,000 a year is being spent for the purpose of receiving £50,000 a year. Whether it is right or wrong to spend money on valuation is one question, but if it be assumed to be right, if it be assumed that those who think it right believe it to be the case that valuation serves purposes besides the mere collection of that very tax, if that is true, it is a false argument to show any relation between the amount raised by a particular tax and the cost of the valuation. Therefore we must not assume that the cost of the valuation is only justified, or can only be justified or must fail to be justified,
    1710
    according to the amount of revenue now raised. The hon. Baronet is too good a financier not to know that the valuation has had a very considerable effect in bringing in revenue in other ways. [HON. MEMBERS: "No!"] Undoubtedly that is so. Undoubtedly the effect of the valuation has been to raise materially the revenue from the Death Duties.
    Sir G. YOUNGER: That was done before you started this valuation.
    Mr. McKENNA: I think not.
    Sir G. YOUNGER: It was done the year before.
    Mr. McKENNA: I think it has had that effect. However, I do not want to go into anything controversial or to discuss the taxes upon their merits. I am only arguing that those who support that valuation do so and have justified it upon grounds quite independent of the amount of revenue annually raised by the Increment Value Tax. Let me explain to the Committee the nature of the Land Valuation Department, which is what the hon. Baronet proposes to suspend. The corps—that is to say, the permanent body of the Land Valuation Department—is a staff of established Civil servants of nearly 600 in number. They have rights. They are Civil servants with established rights. [An HON. MEMBER: "Just like a soldier?"] Yes, like a soldier; and they cannot be suspended by a Clause of this kind without committing a breach of faith.
    Sir F. BANBURY: You can use them for other things?
    Mr. McKENNA: Not without their consent.
    Sir F. BANBURY: Will they refuse it?
    Mr. McKENNA: I do not know whether they will refuse it or not. I do not know whether the hon. Baronet thinks the House would be justified in passing a Bill which made use of his time, and used him for other purposes without his consent. After all, these are human beings and Englishmen, and are entitled to the same rights. The fact that they have entered into a bargain with the State to sell their services for a particular purpose does not entitle us to treat them as chattels and dispose of them in that way.
    Sir F. BANBURY: The right hon. Gentleman must not misrepresent me. Nothing in my Clause says they can be

    1711
    obliged to do other work, but it will be open to the right hon. Gentleman to say, "We will pay you, but you must do other work."
    Mr. McKENNA: I am not at all sure about that. These are gentlemen qualified as valuers, and not qualified to do other work. If we suspended them, we should have to abolish their office or pay them in full. They could say, "You can either get rid of me on the abolition of office terms, or pay me in full while you suspend my office." That is what they are entitled to under their contract. The first effect of suspension is that we continue to pay—although we are now paying for their established services—and get nothing for it. That is the effect of the economy, because we have suspended their work and have to continue to pay for it. The first effect is that these gentleman, who are the most expensive part of the staff will have to be paid whether we employ them or not. Of these 600, a small percentage are serving with the Colours, and as far as they can be spared, they are allowed to enlist.
    Mr. J. SAMUEL: The noble 600!
    7.0 P.M.
    Mr. McKENNA: In addition to the 600 there were, before the War, approximately 4,100 temporary members of the Valuation Staff on monthly engagements, recruited for the purpose of the original valuation. Independently of the War, as the valuation approaches completion, that staff becomes redundant. This was recognised in the Estimates for the current financial year, which allowed for a reduction of not less than 1,700 men, in addition to the loss of the services of 1,000 men already enlisted with permission. So that in our Estimates we have already contemplated a reduction of the dismissable staff. [An HON. MEMBER: "That is apart from the War?"] Yes, apart from the War, as the work progressed, we have allowed for a reduction of 1,700, and we have allowed 1,000 to enlist, with permission. That reduces the dismissible staff to 1,400, instead of 4,100. This process of reduction will necessarily continue during the War as others are allowed to go as soon as and whenever there is no work for them to do. The Committee must remember that already 97 per cent. of the valuations have been made.
    An HON. MEMBER: They are all wrong.
    Mr. McKENNA: That is not the point. But for the War the 100 per cent. would have been done before last March. There remains to be done 3 per cent., which will shortly be finished.
    Mr. CHAPLIN: Are all the agricultural valuations made?
    Mr. McKENNA: I think the right hon. Gentleman will see what is the point of difference between us. Ninety-seven per per cent. of the valuations have been made. I do not say completed. I am not going to conceal the point. It is part of my case. They will be only completed after agreement.
    Mr. EVELYN CECIL: Undeveloped Land Duty?
    Mr. McKENNA: It is valuation. It does not matter whether it is for one duty or another. I quite recognise that the hon. Gentleman was led into a mistake by the speech of the hon. Baronet, who did not draw the distinction which he should have drawn between the duties and the valuation. Not all of these valuations have been settled. The owners or occupiers did not agree. It is a provisional valuation. Here comes in the point of agreement of all parties on the case for economy. The final settlement cannot be made until after the War, in many cases because the owners, occupiers and persons interested are not here. After the War there will be an accretion of the staff due to the return of the thousand who have been allowed to enlist and will be taken back. We require to retain the permanent staff to do the permanent work of valuation. The valuation has not only to be made but has to be kept up. For that purpose a permanent staff has been engaged and established and must and will be kept. But it is quite obvious that the temporary staff, which was nearly seven times as large as the permanent staff, will not be required once the valuation is completed, is not in a large measure required now, and may almost all be allowed to go during the War, provided that a sufficient number are retained to come back after the War, when we are once again in a position to settle the valuation. We have to retain our permanent staff because it is an established staff and has permanent work to do. We have to do the valuation of the remaining 3 per cent., which will shortly be done, and we have undertaken to take back a certain number of the temporary staff who have enlisted with

    1713
    permission, and when we get them back we shall be in a position to complete our work. I do not think on examination it will be found that on any ground of economy this Amendment could be accepted. I would ask hon. Members opposite to search in their hearts, if they support this Amendment, whether it is because they dislike the taxes, and, if that be the case, I would appeal to hon. Members on both sides of the House—let us leave this controversy alone during the War. All that can be done in avoiding extravagance we are doing. We are keeping the permanent staff, and we have made arrangements for the return of those members of the temporary staff who will be needed for the completion of the work, and in the meanwhile we are only retaining such men as are necessary to do the work which we have in hand.
    Mr. CHAPLIN: I think I must be very careful in any observations I make upon this subject. I have no right or title whatever to speak for any of my Friends sitting on my right. Perhaps in the views which I shall express on this question they may be in total disagreement with me. Neither have I any formal right to speak for many of my hon. Friends behind me, though I think on this subject probably a great many of us will be very thoroughly agreed. I think my hon. Friend (Sir F. Banbury) made a statement which was conclusive for his object, namely, to show that an enormous sum of money had been wasted up to the present time in connection with the Valuation Department. He showed that an immense economy would be effected by the suspension during the War—and he was careful to limit himself to that period—of the present Valuation Department. We heard from the right hon. Gentleman that the services of many people employed in that Department have been terminated already, and there has been a very large reduction in the staff. This very afternoon the Prime Minister and my right hon. Friend (Mr. Bonar Law)—two great leaders for years in this House—have been speaking at the Guildhall to urge upon all classes of the people in every direction the absolute and urgent necessity of making every reduction in expense that is possible during the continuation of the War. In a great measure their colleagues in this House absolutely refuse to practice what they are preaching. [HON. MEMBERS: "No, no!"] I do not say with regard to the whole of
    1714
    their staff, because something has been done in this direction already. That strengthens and confirms the case which I have submitted—I hope in not too strong language. I may have said it with emphasis, but what I said was merely the absolute facts of what has been going on this afternoon. My hon. Friend has been urging this same duty on the House of Commons. I am, personally, in entire and absolute agreement with him.
    The right hon. Gentleman, in the first place, says that the course suggested by my hon. Friend is quite impracticable, and that my hon. Friend is quite wrong about the purpose of the Act. Whether he is right or wrong about the purpose, it appears to me that he is perfectly right as to the result. The enormous expenditure is not denied, and the trifling sum that is derived for revenue is absolutely admitted. That is the case of my hon. Friend. I do not see what more there is to be said on the subject. But I think the Chancellor of the Exchequer was mistaken in one or two particulars. My recollection is clear upon this point, that as regards the Death Duties provision was made for dealing with them at a separate time and quite apart from anything connected with land valuation. He spoke with great pride of the permanent staff of 600 who are still retained, and he told us in addition that it was quite impossible to terminate their arrangements with the Government without a breach of faith. I was very sorry to hear it, because I said to myself, supposing this valuation continues in the future to be as great a failure as it has been up to the present, are we to understand that although it has failed we are still to go on paying this permanent staff, because that is the position in which we are left by the statement of the Chancellor of the Exchequer.
    Mr. McKENNA: Not quite. The hon. Baronet put this as a temporary arrangement, and that the work was to go on after the War. If we dismissed the staff now we should have to re-enlist a new staff, consequently we should be getting rid of 600 men and should then have to pay 600 new men to continue the work.
    Mr. CHAPLIN: I quite acknowledge that 600 new men would have to be found if it was to go on.
    The CHAIRMAN: I would remind the right hon. Gentleman (Mr. Chaplin) and

    1715
    the hon. Baronet (Sir F. Banbury) that the proposal before the Committee is merely the suspension of the land valuation during the War. Therefore we must assume resumption afterwards.
    Mr. CHAPLIN: I was replying to the Chancellor of the Exchequer, and I was going to say that although that undoubtedly is the proposal before the Committee at this moment, yet when the right hon. Gentleman talks about the staff being reappointed, or another staff being selected, a great many things may happen before then. He speaks of that with very great confidence, but I cannot conceal from myself the possibility that if this land valuation continues to be such a failure as it has been in the past, that perhaps another Government when the War is over—
    HON. MEMBERS: That is it, you are coming to the point now.
    Mr. CHAPLIN: Yes, and it is even conceivable that the Chancellor of the Exchequer might himself be a Member of that Government, and for the financial welfare I should be heartily glad if he were, so far as I can judge of the way he has filled his position up to the present time. Therefore I do not think that the argument of the Chancellor of the Exchequer in regard to the staff was deserving of any very great consideration. He says that 97 per cent. of the valuations have been made. I was very much surprised to hear that. I have been favoured with some information on this subject, consequently I intervened to ask him, "What about the valuations of agricultural land, have they all been made? I am advised that they have not all been made. This is the information I have got:
    "The Courts have decided that all the valuations hitherto made of agricultural laud have been made on a wrong and illegal basis."
    That is the decision of the Courts. That is the position of the Land Valuation Department at the present time, and it has been so for a very considerable time. What has been the result of that?
    "Since that decision was given no more such valuations have been served for any agricultural land or for any property where there is garden grounds or trees or anything growing on the land."
    In view of that information, I have considerable difficulty in reconciling the statement of the Chancellor of the Exchequer that 97 per cent. of the valuations have
    1716
    been made. Probably he was not aware of this fact. My informant goes on:—
    "The valuations of all these classes of property may therefore be divided into two categories: (1) those valuations served prior to the judgment of the Court, which are now pronounced illegal, and of which there are an enormous number, and (2) those which have never been served at all and which are extraordinarily numerous in the case of agricultural land."
    Unless I have been misinformed, and unless all that I have said in support of this proposal of my hon. Friend can be contradicted, I shall still remain of the opinion that I think the proposal in this new Clause is one which the House of Commons would do wisely and well to accept.
    Mr. OUTHWAITE: The hon. Member who moved this Clause suggested it as a mere matter of saving a certain amount of public revenue, but I think we see something very much more in it than that. He says that no breach of the party truce is involved in this Clause, but I maintain that whatever may be done in this House it will lead to a breach of the party truce outside these walls if this Clause is adopted. The object of the Clause is to scrap the machinery of land valuation, to ensure that when the War is over there shall be no machinery in existence, and it will have to be built up again. We have our suspicions, because we know that the land-owning party in this country have opposed these land valuation duties because of the valuation. It is valuation they have been afraid of. The Scottish Land Values Bill passed this House and went to the Lords, and it was thrown out there. The great fight over the Budget of 1909 was over valuation, and when we have had Revenue Bills brought up to amend this valuation we have had the most bitter opposition to face. Therefore, I say that we see in this Clause of the hon. Baronet's a determination to scrap land valuation. We believe, at any rate I do myself, that there is to-day, or there will be in the future, a very much greater reason than in the past why certain classes of this country who are represented by the hon. Baronet should wish that this valuation should be discarded. We know that immediately the War is over the great issue before the country must be the cost of the War, and very important questions will arise out of that. Taxation will have to be considered, and undoubtedly new forms of taxation and new sources of taxation must be sought for. The politics of this country will circle round the question of taxation in the first place, and certainly the issue must arise as to the question of the taxation of land. Therefore, the hon.

    1717
    Baronet, knowing very well that that must come about, is desirous, and naturally desirous, to see it rendered as little likely as possible that the taxes should be levied on land, and for that purpose he desires to see the valuations scrapped.
    When this War is over, when great industrial unrest arises, and when the men who have gone to the front return, I believe there will be developed, and I have no doubt the hon. Baronet realises it too, a more determined attack upon the land monopoly of this country than in the past. Land valuation is the machinery of that attack, and I can well realise the determination of the hon. Baronet to take advantage of the opportunity to see that valuation put an end to. For my part I raise my voice against any attempt to sell the past on the part of the Government in this matter. The Chancellor of the Exchequer has made a statement which will satisfy very largely myself and those who stand for land value taxation reform, but it does not satisfy the hon. Baronet. I should resist to the uttermost, and I am sure my Friends will also resist to the uttermost, any attempt whatever to alter the condition of affairs as regards valuation, because it will have the effect of breaking up the political truce if this Clause is proceeded with, and because I believe that the men who have gone to fight for their country abroad when they return to this country will be determined to have a greater share in it than they have had in the past. Look at the incitements which are being made at the present time to men to recruit. Here is a poster I got from the Recruiting Committee. It says, "Your country needs you." It represents a Highlander gazing down upon a village, and underneath are the words, "Is not this worth fighting for?" I maintain that those people who have gone abroad to fight for their country will, when they return, be, determined to fight for a greater share of their own country here. We were told at the start, but we do not hear so much about it now, that it was a fight against Junkerdum. I find that is translated as landlordism. Our men are now fighting against landlordism, Prussian landlordism and its results, and when they return they do not want to find landlordism more firmly established here. We have had experience in the past on that score, and history would repeat itself if this Clause were accepted. The people of this country once before fought against militarism and a military despot on the Continent. What
    1718
    happened then? When they were fighting to overthrow the despotism of Napoleon, the landlords here were filching from them the common land of England and Wales.
    Mr. POLLOCK: Is this speech in order?
    HON. MEMBERS: You do not like it. What about the party truce?
    Mr. POLLOCK: I understand, Mr. Chairman, that you had ruled that the question was that of suspension during the War. Is the question of Napoleon and his despotism, which the hon. Member is now coming to, in order in accordance with your ruling?
    The CHAIRMAN: The fact is that I tried to get the right hon. Gentleman the Member for Wimbledon (Mr. Chaplin) to keep to the Clause, but he departed from it, and I thought it proper to allow a reply to what he said. But after this speech I think we might get back to the subject of the Clause.
    Mr. OUTHWAITE: I was devoting my remarks to the question whether this is a breach of the party truce or not. I am only saying in this House what will be said on many platforms in the country if this issue is raised, and it will certainly be raised in Scotland, as I was about to show when I was interrupted. Whilst the Scottish Highlander was fighting over a century ago for his country and his hearth and home, at that very time, in 1814, the Southern clearances were in full force, and the smoke was rising from the Strath of Kildonan and people were being driven out to the bleak North Coast. They were expelled from their homes, and their homes were burned. This shows whether the party truce will be broken or not if you raise this question of the taxation of land. We have seen during the last few days, and we have seen it on other occasions since the beginning of this War, many limitations of liberty by the custodians of liberty. Under the Defence of the Realm Act freedom of speech has almost been abolished. We have seen restrictions placed upon labour, and in many other directions we have seen liberty limited, but in this measure of land value taxation we see an extension of liberty, and we who stand for that cause are not going to submit in any way whatsoever to the selling of the past by the Government at the present time. If this Clause were accepted, or if the Chancellor of the

    1719
    Exchequer showed any disposition whatsoever to meet the hon. Baronet and his proposals, I can tell him that this Clause and this question will be taken outside the walls of this House on to every platform in the Kingdom to determine whether, whilst men are fighting for their country, landlordism shall be more firmly established in it.
    The CHAIRMAN: Now that we have had one speech from either side, each of which went beyond the new Clause entirely, I hope the Committee will support me in restricting discussion to the subject of the Clause, which is the temporary suspension of land valuation during the War.
    Mr. J. M. HENDERSON: I am not one of those who favour this valuation, but I think that although the valuation has been most extravagant and has cost us far too much money, and though I still think it is a costly toy, yet when we are so near finishing it we might just as well finish it. We have been rather misled as to this valuation and as to the methods of it. I remember the Scottish Bill and I remember Lord Shaw saying very clearly that all that was wanted in the valuation was another column in the return to be filled up. That was quite right, but when we come to the valuation under the 1909 Act, my right hon. Friend the Minister of Munitions (Mr. Lloyd George), who was then Chancellor of the Exchequer, seemed to get persuaded by a lot of doctrinaires to introduce a most elaborate—
    The CHAIRMAN: We are diverging again from the question raised by this Clause. The question is whether the valuation should be suspended during the progress of the War.
    Mr. HENDERSON: I was coming to that. The valuation has been to a large extent accomplished. I will not go as far as my hon. Friend who said 97 per cent., because a lot of the valuations are still in abeyance. But the great bulk of the work is done, the staff is now being diminished, and I think that it would be a very extravagant thing to stop the work now and recommence it after the War is over. I think that it had better go on and be finished. Let us be done with it. What it will produce hereafter is another matter, but I would appeal to the hon. Baronet to withdraw his Amendment and let the thing go on.
    Mr. J. A. PEASE: During the period of the War it does seem to me advisable that the Government should, as far as it can, economise in every department of public expenditure It is also important that if there is to be a suspension of any of the work connected with this Department the machinery should remain in existence and should be capable of being utilised the moment the War is over. The hon. Baronet proposes to suspend the operation during the course of the War. Many of us believe that that will not be real economy. The Government, by proceeding with their valuation will, in the long run, I think, economise most by maintaining some of the permanent staff on this work. But I do suggest to the Government that perhaps it might be possible not to employ the whole of the staff of 600 during the remaining period of the War. Six hundred seems to be a large number. Several of them might possibly be relieved of their duties in order to join the Colours; others might possibly be qualified to help in another Department. But I know how difficult it is, when you have specially qualified Civil servants in one division, to remove them to another Department in the hope that they can properly undertake the work of other officials, when they have not been trained to those particular duties. It is possible that some little transfer might take place, but I think that the important thing which we might all agree to in these times is to keep the machinery running and reduce so far as possible the staff. I am informed that the reduction this year as compared with last year will amount to a saving of £120,000. That, at any rate, is a substantial sum saved for the country, and I think that if the Government indicate that they are trying to economise so far as they can, at the same time maintaining the machinery of the staff at their work, which should be taken up with increased vigour as soon as the War is over, perhaps we might come to an amicable arrangement in connection with this proposed Clause.
    Mr. SANDERSON: I support the proposal of the hon. Baronet simply on the ground which he has put, namely, that it is so desirable for us to economise. I hope that I shall abide by your ruling and not be led into the controversial matters which were dealt with by the hon. Member below the Gangway. I agree with what the right hon. Gentleman said just now. In regard to a Department of this

    1721
    kind it is, of course, necessary to keep some of the officials, I suppose all the permanent officials, in active service, and I want to make it quite clear that the hon. Baronet when he was speaking never suggested in anything which he said that those permanent officials should be dismissed, or that any attempt should be made to dismiss them. The only point he made was this: Inasmuch as there was no valuation going on at the present moment the services of those gentlemen might very well be utilised for other purposes. With regard to what the right hon. Gentleman the Member for Wimbledon said in reference to agricultural land, I think that he was perfectly correct when he said that agricultural land at the present moment lies in two categories, first, that which has never been valued at all, and secondly, that which has been valued, and the valuation of which has been entirely upset by the decision of Mr. Justice Scrutton. As to that which has not been valued, the valuers do not know upon what principle to proceed. Therefore the valuation of the land is entirely at a standstill at the present moment. With regard to that which has been valued, the valuations of which have been upset by the legal decision, nothing can be done until that matter is settled.
    Everybody knows the case which is referred to, the Inland Revenue Commissioners versus Smythe, in which the decision of the very learned judge upset all the valuations which had been made with reference to agricultural land. That decision is at present the subject of appeal which will not be heard until the Michaelmas term, some time after October, because I see it marked in the list as adjourned until Michaelmas sittings. If it is heard then I suppose that whichever party loses will go to the ultimate tribunal, the House of Lords, and in all probability, so far as we can see, that ultimate decision will not be arrived at until some time next year. I sincerely hope that by that time the War will be over. It may not be, but I hope that it will be. At all events, my point is that a very considerable time, not a few weeks and a few months, but it may be a year from now, must elapse before we can get a final decision with regard to that matter which will enable the valuers to ascertain the right principles on which to make their valuation. Therefore the consequence is obvious. If you cannot have ascertained the principle on which you are going to value your agricultural land, why can you
    1722
    not agree to the proposition which is now made by the hon. Baronet that you should suspend all valuations during the continuance of the War? The Chancellor of the Exchequer said that if this Clause is carried we shall have to go on paying our permanent servants their salaries, and they will have nothing to do. May I join issue with him on that, not in any controversial spirit? I cannot help thinking that if those 600 servants had it put to them, "The House of Commons has decided that during the War this valuation is not to continue. Do you mind assisting the Government in other matters which are I more pertinent to the War?" every one of the 600 would agree, and they would be only too glad to do it, because they would prefer to be employed in some Department which is more connected with the War, than in adding up figures or perhaps inspecting property which could be perfectly well done in the year 1916 or 1917.
    I agree entirely with the closing words of the Chancellor of the Exchequer when he said let us leave controversy alone during the War. That is just what the hon. Baronet the Member for the City of London is proposing to do by this Clause. These valuations are the things which have given rise to more controversy and more annoyance than anything that I know, except perhaps the papers which we receive in connection with Income Tax from the right hon. Gentleman's officials. But all that controversy and annoyance will be done away with if the right hon. Gentleman will only accept the Clause which the hon. Baronet the Member for the City of London has proposed. In reference to the statement that 97 per cent. of the valuations have been made, I suppose that, strictly speaking, by the card, that is correct. I dare say that the valuers have made provisional valuations in respect of 97 per cent. of the total. But that means that they are only at the very beginning of it. That does not give any material information. We want to know what is the percentage of the valuations which have been completed, and how many of those completed valuations will now stand, having regard to the decision of Mr. Justice Scrutton in the case of the Inland Revenue versus Smythe. I do not suppose that he has got those figures at the present moment, but the point is that though we have now I believe passed the statutory period when the valuation ought to be re-done, for it should be re-done every five years, here we are in this ridiculous position that we have got nowhere near

    1723
    the end of the first valuation. The statutory period has elapsed, and these valuers have to go through the operation—to my mind perfectly ridiculous—of making an estimate of what the site value was on the 30th April, 1909, whereas we ought to be now reconsidering that valuation.
    When you remember the figures that the hon. Baronet gave this afternoon, which have not been contradicted, you will see that whatever the purposes—and I do not care what they are—of these land valuations were, the fact remains that you are spending an enormous amount of money at the present moment and you are not collecting anything like what you ought. You are spending something like £13 in order to collect £1, and this at a time when every penny that can be saved is of value. The Chancellor of the Exchequer the other day appealed to us to go down to our constituents and ask them to be economical, and yet here he is absolutely approving of a scheme which is so extravagant as my hon. Friend has pointed out. If my hon. Friend does not get any further satisfaction out of the Chancellor of the Exchequer on the point, I hope that he will take the matter to a Division. That is not raising any controversial questions: it is trying to postpone them and at the same time to save money for the country.
    Sir G. TOULMIN: I do not think that anyone can have any doubt after the course of this Debate as to whether the truce has been broken or not. It is perfectly evident that this is a wanton interference with the agreement that has been arrived at. Not one single word has been said by any Member who supports this Amendment in favour of the statutory discontinuance of this valuation, instead of the administrative economies which are being undertaken by the Chancellor of the Exchequer. No one would object to the conduct of the Department in such a manner as would use the Members of that Department, so long as the work was carried forward in the best possible way, during the present emergency, but that you should shove this ramrod into the machinery at the present moment is I think absurd. I do not believe it to be economical, and I have very great difficulty in believing that the hon. Baronet who introduced this Amendment was sincere in suggesting that that was his main consideration. The War is to be over next spring, it is
    1724
    said, but, for the comparatively short time which is to elapse, according to the hon. Member who has just sat down, we are to have this Department thrown into confusion, and a number of permanent established Civil servants thrown out of their offices.
    We are referred to a speech in which the Prime Minister has made the appeal that there should be no waste. It is a very bad business that does not pay for bookkeeping, and a great many of us look upon this valuation as the foundation of our national bookkeeping, and we want a straight line to be drawn and permanently established whereby that portion of our national estate, the land, may have its value entirely known, and a just amount of taxation put upon it. The weakness of the argument of the hon. Baronet is shown by his continued repetition of what is practically a false argument, that the whole of this expenditure of £600,000 a year has been incurred in order to get £50,000 worth of taxation. It is perfectly well known to anyone who cares to know anything about it, that the valuation itself is considered to be of great political value, and because this is a political question, therefore, you make this attempt to break the truce. I do not wish to speak very long upon this question, from the very fact that it is a breach of the truce. I believe that each Member of this House at the present moment feels that he is not Member alone for those who elect him, but for everyone who is taking part personally, or by those dear to him, in the War. I do not think that there is one of my opponents in Bury who would have wished that this question should be raised at the present moment. I believe that each of us feels that he is Member, not merely for those who voted for him, but for every elector in our constituencies, and I think it is a breach of something that ought to have been an honourable understanding, that such a question should have been raised at this present moment.
    Sir G. YOUNGER: I think the hon. Member opposite is really unnecessarily excited. I am quite certain that there is no intention whatever of any breach of the Parliamentary truce. [HON. MEMBERS: "Oh, oh!"] I am speaking for myself, anyhow. Nor do I think that anyone seeks to press the Amendment on the right hon. Gentleman, if he is not prepared to accept it, and if he shows, as he has shown, very reasonable cause why he should not.

    1725
    The right hon. Gentleman knows, as we all know, that this valuation has for all reasonable and practical purposes at the present moment a ramrod in its machinery. Yet you want to supply oil to machinery which is standing. No one wants to go back to old controversies or raise them now. There is time enough when the new Government comes into power, with a different view from that which is held by hon. Members opposite. I think there are certainly greater economies than the right hon. Gentleman has yet been able to make in his Department. I do not ask that established officials should be interfered with in any way, but I wish to point out from information that has been sent to me, that a large number of these temporary appointments that have been cancelled have been in the case of men who are older than forty years, while men in the same office, under that age, have been replaced. If in any particular office, while the War is going on, they cancel the appointment of ten or a dozen temporary clerks, I should certainly hope it would be the appointments of those under forty and not of those over forty. I know of a case where the appointment has been cancelled in the case of one over forty, and I do not think that ought to be. So long as the right hon. Gentleman does his level best to reduce the quantity of oil applied to the standing machinery, I am sure we shall be satisfied.
    Mr. RAFFAN: I have no desire to aggravate feeling in regard to this matter, but it is impossible to acquit hon. Gentlemen who have raised this discussion of a deliberate attempt to break the political truce. They are offered by the Chancellor of the Exchequer those administrative economies they have asked for. Why then has this Debate been proceeded with, and why have we been told in speech after speech that unless we give them something further there is still this threat of a Division? We are told that 97 per cent. of the valuations have been made, and this Amendment says that the other 3 per cent. under no circumstances must be proceeded with. It may be wise or it may be unwise to proceed with the valuation, but what business man, having expended nearly £3,000,000, which we are told is the amount in this case, in accomplishing 97 per cent. of the work upon any undertaking, would break down at the last 3 per cent. of the work remaining to be done, without spending the small additional sum necessary for the purpose of setting
    1726
    the whole machine going. What does this Amendment propose further? Every case of valuation is to stop. Not a single valuation is to be made. The hon. Baronet says that all we have got to do is to find out how things stood in 1909, and then we would see what was to be done after the War. But if the hon. Baronet were to sell his property, this beautiful property, with its beautiful wallpaper which excites so much admiration, would it be as easy after the War as it would be to-day to ascertain what the value is now, and when the property has changed hands? He knows very well that it would not. He knows that it is not easy to assess the increment, and he knows that what we propose to achieve is not merely the bringing about of some administrative economies. This proposal seeks to smash the machine, and we will not stand idly by while that is attempted. I urge that the political truce should be maintained. May I remind hon. Members of the terms of that political truce? It is not a truce that applies simply to the two great political parties, the great Conservative party and the great Liberal party. It is a truce, we were informed by the leaders on both sides, which was to extend to every section of this House, however small it might be, if it represented a distinct section of opinion. The Prime Minister speaking in this House on 31st August said:—
    "It is our desire that no party in any quarter of the House should gain advantage or should suffer prejudice from the suspension for the moment of our domestic controversies."
    We say in the clearest manner that in our view we would suffer prejudice, and those opposed to us would gain advantage, if the proposal contained in the new Clause were carried out. That is sufficient to show that the political truce would be broken if the Amendment were carried. Can anyone expect a party truce to proceed on that basis? The right hon. Gentleman the Leader of the Opposition, now a Member of the Government (Mr. Bonar Law), said on the same occasion:—
    "It is certainly our desire, as a result of the War, that nothing should be done in regard to any controversial matter to place any of the parties to the controversy in a worse position than they were in before the War broke out."
    So far as the hon. Members with whom I am associated are concerned, we have observed the political truce to the full. We believe—I do not know whether hon. Gentlemen are aware how profoundly we believe—that if the taxation of land values, which we have advocated so often from these Benches, were adopted, you

    1727
    would find a method to finance the present War infinitely superior to any other. We find to-day that our local authorities, because the House is unable to give them the financial assistance intended, in consequence of the War, are now threatened, in many cases, with the greatest financial difficulties, and they could be relieved from these to-morrow if the proposal of land values which we have so often advocated here were adopted. We believe that it would secure great advantages to the bulk of the people of this country—
    The CHAIRMAN: I think the hon. Member is going back to the larger question of the merits of land valuation. We are agreed that the discussion should be confined to the Clause, and to the matter of the suspension of the valuation.
    Mr. RAFFAN: What I desire to say—and I hope it will be in order—is that we have not raised this question because we desire to maintain the political truce. That is the point I make. I appeal to the hon. Gentleman opposite that, when we have made these sacrifices which, whether he believes it or not, are very real sacrifices to us, he and those associated with him should act in a corresponding way, and not press this matter. We, for our part, do not intervene to prevent these administrative economies for which the Chancellor of the Exchequer presses. I would point out that here is a staff of some 4,650, according to the figures given by the Chancellor of the Exchequer. That number is reduced automatically by dismissals which are contemplated in this year's Estimates, till it is reduced to 1,400. The right hon. Gentleman thinks that it can be still further reduced, making a permanent staff of 600, who cannot be dispensed with. We do not interfere and say that those economies should not take place but we do say that this machine, which we regard as of great importance in the bringing about of a reform vital to the interests of the people of this country, should be maintained. It could not be maintained if this proposal be pressed to a Division and carried into effect. I appeal to the hon. Baronet, who is as anxious as any of us, that we should concentrate ourselves upon the War—even should there be some expenditure of money which he thinks unnecessary and wasteful—and by so co-operating bring nearer the period when these controversies may be renewed,
    1728
    when the House will be freer to deal with them, and when we shall be able to advocate those great reforms to which we are so much attached.
    Sir JOHN ROLLESTON: I should like very much to support the Motion of the hon. Baronet that the Land Duties should be suspended during the War, as an important economy bearing on national expenditure, but as you, Sir, have ruled that we cannot do that, then I bow to your decision, and we shall probably have to bring these matters up outside the House. Although this is a democratic country, this House, which is the great platform of the nation, where grievances can be brought forward, where burning questions of great interest can be decided, but which have no effect on foreign relations or on the War, is subject to a merciless closure.
    8.0 P.M.
    The CHAIRMAN: I am sorry I cannot allow that to pass. If the hon. Gentleman had read the Clause we are discussing he would have seen that it proposes suspension of the land valuation during the War. All that I have done is to ask the Committee to discuss the proposal before it. If the proposal had been to repeal the land valuation, then, of course, the whole question would have been open to discussion, but that is not before the Committee now.
    Sir J. ROLLESTON: I regret the proposal was not to repeal the land valuation. I bow to your ruling, but I regret that the discussion has been shorn of its chief interest.
    Mr. MONTAGU: May I ask the Committee if it would be possible to come to a decision. The matter has been very fully discussed. There are a large number of other very important new Clauses on the Paper, and it is getting late. As I understand the object of the hon. Baronet is that he desires, forgetful of all old controversies on the merits of the Land Taxes, to achieve economy during the War. As my right hon. Friend the Chancellor of the Exchequer pointed out, to a very large extent the Motion which he has moved would not achieve it. There is a permanent staff and a temporary staff. With regard to the permanent staff, we can assure him that some members of military age have already been allowed to enlist and join the Colours, and whenever it is possible to spare the services of an individual member we shall continue to allow enlistment from that permanent

    1729
    staff. With regard to the temporary staff, there is already a reduction this year over last year in the Estimates of £123,000, and during the current year I can give him my undertaking that the Inland Revenue will do everything in their power to speed the work which must be done, and to reduce that temporary staff as the work progresses, and we do hope to make substantial economies even on the money which the House of Commons has voted. I do not think we can go further, and I would urge the hon. Baronet to withdraw the Motion.
    Sir F. BANBURY: The right hon. Gentleman has met me to a considerable degree. As I understand, he considers it advisable to economise in his Department, and that he will, as far as is possible, withdraw and reduce that temporary staff, and that the permanent staff shall be given other work if it is possible to do so.
    Mr. MONTAGU: No. I only said we will continue to allow those to enlist who can be spared from the valuation work.
    Sir F. BANBURY: That is with regard to the permanent staff. I think the right hon. Gentleman could have gone a little further. In the War Office, for instance, a large number of temporary clerks have been engaged for a month or two months, and it would be perfectly possible for the right hon. Gentleman to avail himself of the services of gentlemen of the Land Valuation Department in the War Office. That would not in any kind of way interfere with the continuation of the Land Valuation Department afterwards, because they could go back. A large number of officials are being lent in that way. If the right hon. Gentleman will give me an assurance that as far as possible he will do that, then I shall be pleased to withdraw the Clause; otherwise I must go to a Division.
    Sir J. SPEAR: I wish to support the Clause on a ground that has not yet been mentioned, and which has been pressed on me frequently by my Constituents, and that is that the continuation of the valuation during the period of the War is having a very serious effect, and detrimental effect, on recruiting. [An HON. MEMBER: "HOW?"] Because many men are engaged in the valuation who are well qualified to enlist in the defence of their country. Young men say to those addressing recruiting meetings, "Here is the Government calling on us and all the
    1730
    while employing eligible young men about a valuation that cannot come into operation for a certain number of years." I submit that that is a strong consideration, and I hope the right hon. Gentleman will make the greatest possible reduction in the staff. As to economy, practice is better than precept. The Government have asked us to be economical and they should practice what they preach, and might surely reduce some of the expenses in this case. Let me say a word about settlement, not in any controversial sense. I confess at once I believe there could have been a better way to have a valuation of the land of the country than that which has been adopted, but if we could have a complete and equitable and fair valuation of the whole of the land of the country and of the property of the country, I think it would be beneficial. Unless this system is postponed, it is impossible to attain that. The Chancellor of the Exchequer told us that 93 per cent. of the valuations have been made, but they have not been agreed upon and may be upset by the decisions of the Court, so that practically there is no valuation settled. Having regard to the circumstances of the case and the necessity for every true Briton to do what he can for the country without distraction, I think this is not time for settling such a controversial question as is raised by this Motion. Hon. Members opposite think I have given away my case by saying that. Let me say I feel strongly that this question has reduced the output and interfered with the food supply and made it dearer, and has deterred the building and the provision of cottages for the working classes.
    Hon. Members opposite say that we have raised controversy. That is not so. We could make out a case that the action that has been taken is disastrous to the country. We ask that this should be suspended until the War is over and then we might try to make out a fair valuation. It cannot be done now, having regard to the fact that a large number of the parties interested are at the front fighting their country's battles. The 93 per cent. is entirely ficticious. You might have taken the rate books of the country and copied the valuation from them and have been quite as correct as you are now. Therefore I submit that we shall have to begin again. I honestly say let us begin and try to make a job of it, but this is not the right time, as so many are at the front, and it is wrong for the Government to

    1731
    push forward this question. I appeal to them to suspend the matter from every point of view, and especially from the recruiting point of view, as it has been thrown in my teeth that we are addressing meetings in favour of recruiting while the Government are employing all those fine young men going about valuing. When we have a settlement let it be a settlement by consent, and not a settlement that shall be dragooned oh an unwilling people, who, after all, have to live and carry on their industries under this valuation. It is, therefore, important that the valuation should be just, equitable, and well considered, so that we shall be able to carry on our industries in the highest interest of the country.
    Mr. McKENNA: We are so much in agreement. It is on the ground of the very arguments put forward by the hon. Gentleman who has just spoken that the staff has been reduced by some thousands.
    Sir J. SPEAR: Not nearly enough.
    Mr. McKENNA: We are getting back to the merits. Let us assure the hon. Baronet we shall treat this Department exactly as we treat all the others. Where economies can be effectively made administratively we shall make them. Where the services of any member of the staff can be better employed in the War service in any other Department we shall lend them. We are doing everything we can administratively, and we do not think we need any help from Parliament to do it. I hope we shall now come to a decision.
    Sir F. BANBURY: On the assurance of the right hon. Gentleman I beg to withdraw.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Allowance in Respect of Duty on Spoilt Beer.)
    (1) If it is proved to the satisfaction of the Commissioners of Customs and Excise that any beer which has been removed from the entered premises of a brewer for consumption has accidentally become spoilt or otherwise unfit for use and, in the case of beer delivered to another person, has been returned to the brewer as so spoilt or unfit for use, the Commissioners shall, subject to such regulations as they may prescribe, remit or repay the duty charged or paid in respect of the beer.
    (2) If any person contravenes or fails to comply with any of the regulations made by the Commissioners under this Section, he shall in respect of each offence be liable to an excise penalty of fifty pounds.
    (3) If any person for the purpose of obtaining any remission or repayment of duty under this Section knowingly makes any false statement or false representation, he shall be liable on summary conviction to imprisonment for a term not exceeding six months with hard labour.
    Clause brought up, and read the first time.
    Sir G. YOUNGER: I beg to move, "That the Clause be read a second time." This Clause is introduced in completion of an undertaking given last year by the Chancellor of the Exchequer when the Beer Duty was very much increased. I do not think I need explain its provisions, further than to say that it carries out the undertaking with regard to the duty on spoilt beer.
    Mr. MONTAGU: I hope the Committee will accept this Clause. The late Chancellor of the Exchequer made a promise to consider the question. The duties on beer having been made very high, the question of spoilt beer is much more important. I think the Clause has been drafted in such a form, after agreement between the Customs and Excise and the hon. Baronet, as to protect the Revenue.
    Question put, and agreed to.
    Clause added to the Bill.
    Sir G. YOUNGER Sir G. YOUNGER had given notice to move the following

    NEW CLAUSE.—(Adjustment of Amount of Brewers' Licence Duty.)
    Notwithstanding the provision in the First Schedule to the Finance (1909–10) Act, 1910, in pursuance of which the duty payable by the holder of a manufacturer's licence to be taken out by a brewer of beer for sale is charged upon the number of barrels brewed by him during the preceding year, the duty on such a licence shall be charged on the number of barrels brewed during the current year. Provided that for the purpose of speedy collection of duty the same shall be collected upon the number of barrels brewed during the preceding year, but within one month after the end of the current year the amount so paid shall be adjusted, having regard to the number of barrels brewed during the

    1733
    current year, and any duty underpaid shall forthwith be paid by the holder of the licence to the Commissioners of Customs and Excise, or any duty overpaid shall forthwith be repaid to the holder of the licence by those Commissioners.
    The CHAIRMAN: This Clause appears to impose a charge on the same lines as the old question about the three years' average which, while it would relieve some people, would make other people pay more.
    Sir G. YOUNGER: In this particular case it does not. Owing to the enormously increased Beer Duty there is not a brewer in the Kingdom who is going to produce anything like the same quantity of beer this year as last year. By an extraordinary—shall I call it, fiction, the licence must always be prepaid, and the previous year's basis was taken in the Act of 1909–1910 in order to fix the Licence Duty for the following year. As it happens, the duty having been increased, there has been an enormous reduction of production everywhere. Therefore this Clause will give relief, and not impose an extra charge. Although you might read into it the possibility of such increase, there is no case where it will impose an extra charge. Under these circumstances, I submit that the Clause might be allowed to be considered. If it is not, I think that in the exceptional circumstances of the case, the right hon. Gentleman ought to extend the Resolution and recommit the Bill in order to do what is purely an act of justice. No one supposed that when Act of 1910 was passed, that the Beer Duty would be trebled. It is only right that this matter should be put right. I think the authorities realise that it is a fair thing to do. Moreover, it would place the tax in future on a very much fairer basis. The tax itself is indefensible.
    The CHAIRMAN: The hon. Baronet is now arguing the proposal, and not submitting a point of Order. I am afraid I must deal with the question as it appears to me. Clearly if the proposed alteration is made, some firms might have to pay more, although most of them will be relieved.
    Sir G. YOUNGER: Everybody will be relieved; but of course you cannot accept that.
    The CHAIRMAN: I am afraid I cannot. On that ground I must rule the Clause out of Order.
    Sir G. YOUNGER: Then I would make an appeal to the right hon. Gentleman to do something to put this matter right. It is a crying injustice as it stands.
    Mr. McKENNA: Perhaps it will be sufficient if I give the hon. Baronet an assurance that on another Bill—which cannot be very long delayed—we shall be very glad to consider the matter.
    The following proposal stood upon the Paper in the name of Sir G. Younger:—

    NEW CLAUSE.—(Amendment of s. 2 of the Finance Act, 1912.)
    (1) Any claim made under Section 2 of the Finance Act, 1912, shall, so far as the claim is based on increased rent, be made upon the person to whom for the time being such rent is payable, and not otherwise; and, so far as such claim is based on any increased premium, shall be made upon the person to whom such premium was paid, his executors, or administrators.
    (2) This Section shall have operation as from the date of the passing of the Finance Act, 1912, without prejudice to any proceedings actually pending at the passing of this Act.
    Sir G. YOUNGER: I beg to propose this Clause. It is a very important Clause, and is an attempt to do what the Chancellor of the Exchequer asked me to do in 1913—to construct an Amendment to Section 2 of the Finance Act, 1912, getting rid of many hardships and injustices which have arisen under that particular Section.
    Mr. MONTAGU: May I interrupt the hon. Baronet? There are various proposals on the Paper for dealing with Section 2 of the Finance Act, 1912. The Government do not care what is done in this matter, so long as an agreement can be reached. We should have to draft a new Clause, if it is decided not to repeal. Might I suggest that the hon. Baronet should not move this Clause to-night, but that he and my hon. Friend behind me (Mr. J. M. Henderson) should come to a conference at the Treasury between now and the Report stage, and see if we cannot come to an agreement? The hon. Baronet does not deal with the whole case, and we might get harmony instead of a long Debate if the course I suggested were adopted.
    Sir G. YOUNGER: I always try to meet any offer made to me from the Treasury Bench; but I must remind the right hon. Gentleman of the difficulty we are in. If you postpone the consideration of this proposal until the Report stage we get to the question of imposing an extra charge. I do not see that there is any way of avoiding that, if you are to do justice in the way of removing hardships which have undoubtedly arisen under this Section. As I said last year, I regretted its having been placed in the Finance Act in its present terms, because it had given rise to hardships and to claims which were monstrous, and which ought never to have been made. The intention of the Act was that whoever benefited by the monopoly value of a licence should pay his share of the new licence. The intention was to accept an Amendment to carry that out. If the Secretary to the Treasury can suggest a means by which, on the Report stage, we can introduce an agreed Clause, I shall be happy not to move this Clause now.
    Sir F. BANBURY: I understand that what my hon. Friend fears is that, if this Clause is postponed to the Report stage, it may be held to impose a charge on the subject. I do not know whether that is correct. I think it is a little far-fetched. I presume the argument of my hon. Friend is that at present the brewer, say, has to pay £60 on a licence, and under certain circumstances can claim back from the freeholder £30. That reduces the charge which he has to pay by £30. If we repeal the Clause, the brewer will have to bear the whole of the amount. Does that constitute an increased charge on the subject? If so, it must be done in Committee of the Whole House, and it is no use putting it off to the Report stage. I am not arguing that it imposes a charge. I have my doubts as to that. But we ought to know what we are about.
    Sir G. YOUNGER: If the Clause is repealed it will obviously increase the charge, not necessarily on the brewer, but on anybody who has the right to claim under Section 2. Similarly, if you limit the ascending scale right back to a point where someone who now pays gets off paying, there will be an increased charge on somebody else.
    Mr. MONTAGU: May I say, in support of the argument that it does not necessarily impose a charge to introduce a Clause which redistributes a charge, that when Section 2 of the Finance Act, 1912,
    1736
    was moved in this House there was no Money Resolution in Committee upon which it was founded. If that did not impose a charge, the redistribution does not impose a charge.
    The DEPUTY-CHAIRMAN (Mr. Maclean): As far as I have been able to gather from what the hon. Baronet himself has said, somebody else will have to pay. I am therefore against the Clause, being allowed to be discussed. On the Report stage this Amendment, or some modification of it, can be moved, and Mr. Speaker will then express his own view of the Clause. As at present impressed, I am against the Motion being discussed.
    Sir G. YOUNGER: I think the repeal suggested is going far too far. Has the right hon. Gentleman the Chancellor of the Exchequer any objection to the recommittal of the Bill, which will only take a few minutes in order to insert the Clause, and if we find we cannot move it on Report?
    Mr. McKENNA: I shall be very glad if we can come to an agreement upon the subject, but I should like to know something of the arrangements suggested before I commit myself.
    Mr. POLLOCK: Before we proceed, I really think we ought to ask the Government to be quite plain. I quite see the difficulty therein, but we have now got this matter before the Committee and also a number of Amendments which propose repeal. I have one to that effect. I have also an alternative to the hon. Baronet's Clause which embodies the Clause which was the Government's own Clause in the Revenue Bill of 1913, I think. There are various suggestions which have been put forward, and I hope the Government, before we allow this matter to pass and it becomes a subject of negotiation, will undertake to do whatever is necessary and to find the means of incorporating an agreed Clause if such an agreement can be come to in the Bill, and if necessary give us an opportunity of discussing this question of repeal before we part with the Bill. It will be quite unsatisfactory for us to allow this opportunity to pass and come to the Report stage, then move a Clause for the repeal of Section 2 and find Mr. Speaker ruling that you cannot do so. That would be very unfortunate; therefore if the Chancellor of the Exchequer will say that he will help us, even to the extent of the recommittal of the Bill or by doing whatever is necessary for us to have an

    1737
    opportunity of debate, I am quite ready to meet him if he wants it; and if he does not feel able to do that, then I ought to go on.
    Mr. McKENNA: As I understand the ruling of the Chairman, it is impossible to go on. I am not dealing with the Bill on its merits now.
    Sir G. YOUNGER: I am asking that you should come to an arrangement.
    Mr. McKENNA: I am anxious not to delay any longer over this Finance Bill than I can help. Obviously there must be another Finance Bill. If, therefore, an arrangement were not come to very quickly I would rather not recommit the Bill.
    Sir F BANBURY: On a point of Order. I am not quite sure whether I understand whether you, Mr. Deputy-Chairman, have given a ruling in regard to the first Clause of my hon. Friend, which, as I understand, is a Clause which the Chairman of Committees himself did give ruling upon. I now understand that the Chancellor of the Exchequer thinks that you have given a ruling also upon the Clause to omit the original Clause. May I point out that the omission of the original Clause is merely the omission of a Clause which was put in in 1912 to repeal the Clause which was put in in the Committee Stage in 1912. Therefore the repeal of that Clause does not add any duty, on the contrary it takes away duty. [HON. MEMBERS: "No, no!"] Well, it puts the position of affairs back to the same place that they were. I should like to know whether we understand that you rule that you cannot allow us to move the repeal of Section 2 of the Finance Act of 1912.
    The DEPUTY-CHAIRMAN: The hon. Member (Mr. J. M. Henderson) has a Motion down on that point. I will decide that when I come to it.
    Mr. POLLOCK: On a point of Order. We were invited by the Chancellor of the Exchequer or the Financial Secretary to consider this case. It is quite obvious there will be a very large number of Amendments or Clauses down on the Paper. Unless we know what your ruling is to be we shall not be able to enter into any arrangements to deal with all these Amendments brought up to deal with this point.
    Mr BOYTON: Do I understand, Mr. Maclean, that you rule out any discussion
    1738
    of this nature on this new Clause appertaining to Section 2, that is the Amendment or repeal of Section 2 of the Finance Act, 1912; because, if you are so ruling, you are perpetrating a great injustice.
    Mr. J. M. HENDERSON: I can quite see that the repeal or the redistribution of the duty might be debated on another Resolution. I can only appeal to the Chancellor of the Exchequer to give us the means of putting it in order in this Finance Bill, if the hon. Baronet and I can agree upon terms. I would just like to read out a few words from a statement of the predecessor of the Chancellor of the Exchequer dealing with this question. The right hon. Gentleman said:—
    "Section 2 had produced the grossest iniquity. The intention of the Government and of the House was perfectly clear. The Courts had given a totally different interpretation to it.…"
    The late Chancellor of the Exchequer was fully aware of the iniquity of this Clause. I need not go into it. But the relief intended to be given to the licensed holder is, in fact, given to the brewer—a thing that was never contemplated at all. At the same time, the ex-Chancellor saw that it was very difficult to get something which would ensure an equitable distribution of the burden. If my right hon. Friend will allow me to meet him at the Treasury to consider the matter, I shall be very pleased to see him. If not, it cannot be done in this Finance Bill. I would appeal to the Chancellor of the Exchequer to put the matter in a Resolution for the next Finance Bill.
    Mr. McKENNA: We are all agreed that something must be done. The only point is what can be done to bring both parties together.
    Sir F. BANBURY: My hon. Friend said he would be glad to meet the Chancellor of the Exchequer, but I have an Amendment down about which I feel very strongly. If the Chancellor of the Exchequer would prefer that we should have some short discussion together, I am perfectly willing to agree, if it is clearly understood that we shall have an opportunity, to be given to us by the Chancellor of the Exchequer, of moving the repeal of this Clause in some form or other this Session—that is, if we do not come to an agreement.
    Mr. McKENNA: This financial year, not this Session.
    Sir F. BANBURY: Can I get that assurance?
    Mr. McKENNA: I cannot give any positive assurance without the presence of the Prime Minister, but so far as I can pledge myself, I think the hon. Member will have an opportunity in the course of the present financial year to discuss this subject on a Bill in which I myself will introduce the necessary amendment of the law—if the hon. Baronet opposite and my hon. Friend behind me can agree upon a form of Amendment.
    Sir F. BANBURY: I do not want to undervalue the assurance which was given by the right hon. Gentleman, but the Committee must not forget that assurances of this sort have been given on two occasions before. Amendments would have been introduced into the Revenue Bill, but owing to a variety of circumstances the Revenue Bill was not passed, and I am afraid of that. The right hon. Gentleman talks about the financial year, but the injustice is going on all the time, and there is the great expense of the cases being put before the Court. It would take such a very little time, that I really must ask the right hon. Gentleman to say that within a short time, if we can come to an agreement, or if we cannot come to an agreement, we should have an opportunity of repealing this Clause. I am afraid we cannot postpone it indefinitely. It has been postponed from 1913 indefinitely, and, under the circumstances, I think we must have some understanding that we shall put an end to this expensive litigation which is going on, and put an end to it speedily.
    Mr. POLLOCK: I am glad the hon. Baronet accepts the suggestion the Chancellor of the Exchequer makes that the alteration can take place during this financial year. I think if it is during this financial year it would be satisfactory, because it would mean in the autumn, or something of that sort.
    Mr. McKENNA: I anticipate.
    Mr. POLLOCK: Then perhaps we may be successful if some person will endeavour to find some via media by which this Clause can be dealt with; but I should like to say to the Chancellor of the Exchequer that a good many on this side have an interest in the matter, and I hope the invitation to the conference will not be limited to the hon Member for West Aberdeenshire (Mr. J. M. Henderson) or the right hon. Baronet (Sir F. Banbury).
    Mr. McKENNA: Oh, no.
    Mr. POLLOCK: I am not sure, much as I love the hon. Baronet, that I am content to let him settle his views on Section 2 on that point, and, affectionate as I am towards the Member for West Aberdeenshire, I am not quite sure he would meet the case of the English people, because the Clause, as I understand, works uncommonly well in Scotland. My difficulty is about England, and I hope some of us who take an interest in the matter will be invited to attend the conference.
    Mr. BOYTONrose—
    The DEPUTY CHAIRMAN: I am afraid I cannot allow the discussion to continue.
    Mr. BOYTON: I must accept your ruling, but I have risen over and over again.
    Sir F. BANBURY: To be in order, I beg to move, that Section 2 of the Finance Act, 1912, be repealed.
    The DEPUTY-CHAIRMAN: That is a matter for the hon. Member in whose name the Clause stands.
    Sir F. BANBURY: That is down in my name.
    The DEPUTY-CHAIRMAN: But it is not here. The hon. Baronet knows as well as I do that the time for another Member to move a new Clause is at the end of the new Clauses.
    Sir G. YOUNGER: If you allow that to be moved I must ask whether the Motion is in order?
    The DEPUTY-CHAIRMAN: I think I must make an appeal to the Committee in view of the very complex nature of the question the Committee is now discussing, and especially after the arrangements which have been substantially arrived at, to accept the decision which was taken by the hon. Member in whose name the Clause stands.
    Mr. J. M. HENDERSON: Is there any advantage in moving it formally?
    The DEPUTY-CHAIRMAN: I do not think so.

    NEW CLAUSE.—(Amendment of 4 and 5 Geo. V., c. 10, s. 14.)
    The amount of interest repayable to the estate under the provisions of Section fourteen of the Finance Act, 1914, shall be

    1741
    calculated at the rate of 3 per cent. per annum from the date when the Settlement Estate Duty referred to in Sub-section (b) of the said Section was paid or, in cases where such duty was payable by instalments, from the date when the first instalment was paid, instead of from the fifteenth day of August, nineteen hundred and fourteen, and the said Section shall be construed accordingly.
    Clause brought up, and read the first time.
    Sir F. BANBURY: I beg to move "That the Clause be read a second time."
    The point of the Amendment is this: the late Chancellor of the Exchequer said, in consideration of the abolition of the Settlement Duty, "I will make the concession to the person who has paid already a certain sum in respect of the Settlement Duty. He shall be entitled to receive back that sum with interest at the rate of 3 per cent."—I forget what it was—"upon that sum." And now, instead, it is found that the Inland Revenue claim that, instead of receiving back that sum with the rate of interest at the date from which it was paid, all that they will allow is interest at the date of the passing of the Act, which was, I think, 1914. I am perfectly certain that the Chancellor of the Exchequer will agree with me that that is a misapprehension of what the House of Commons intended to do. It is perfectly clear that if a concession was made that interest should be allowed upon the sum which was paid on a certain date, the interest must commence to accrue from the date at which the sum was paid and not the date of the passing of the Act. The result of that, of course, would be that where a duty was paid ten or fifteen years before the passing of the Act, all the interest that the person would obtain would be, perhaps, a year's interest, instead of fifteen or sixteen years. It is evident that could not have been intended, and, therefore, I move this Clause.
    Mr. MONTAGU: If ever there was a controversial subject, the Settlement Estate Duty and its repeal, which some of us remember, is that subject. The proposal which the hon. Baronet makes would cost the revenue in the long run approximately, £3,000,000. Personally, I think that the date of the payment of interest which was decided by the House when the Finance Act of 1914 was under discussion is the right thing, and I do not think I could do better than read from the
    1742
    OFFICIAL REPORT of the speech I made on the Third Reading of that Bill:—
    "You do not deprive a man who has paid Settlement Estate Duty of any of the advantages which he got by means of that payment before the 15th August of this year. The 2 per cent. which a man paid may be regarded as an insurance against Death Duties. He has had that insurance, whether the estate was passed or not, up to the 15th August of this year; therefore what he is entitled to on the 15th August is the surrender value of the premium. We are paying him not merely the surrender value, but the whole 2 per cent., as though he had never had any advantage from it, and, in addition, because the payment cannot be made on the 15th August but is to be made at a subsequent date, we are allowing him interest on the 2 per cent. from the 15th August."—[OFFICIAL REPORT, 23rd July, 1914, col. 682, Vol. LXV.]
    That was the argument that was used by me on behalf of the Chancellor of the Exchequer when the Bill was under discussion, and I do hope the hon. Baronet will not raise so highly controversial a subject as the ethics of the abolition of the Settlement Duty.
    Sir F. BANBURY: I am not going to raise the question whether it was right or wrong to abolish the Settlement Estate Duty, although I have strong views on that question. What we are now dealing with is a question of fact, and it seems to me reasonable that interest should be paid from the date on which the Settlement Estate Duty was paid, instead of the date on which the Act was passed. That does not raise the controversial question as to whether it was wise to abolish the Settlement Estate Duty. With all due deference to the Financial Secretary, although he has made an extremely able defence, I am afraid he has not touched my point as to why it is just to take an arbitrary duty in this way. Of course I cannot do anything if the right hon. Gentleman insists upon taking up a hard and fast attitude, but I ask him to consider, not whether the Settlement Duty alteration is controversial or not, but whether in ordinary justice and equity he ought to concede the point I have asked for. May I ask him to give me now a short answer?
    Mr. MONTAGU: I have endeavoured to show the hon. Baronet where I thought he was wrong. The only reason that interest was paid upon the Settlement Estate Duty is because when we passed the Act we ought to have given it back. We could not give it back, but we say we will deduct it next time. The time to pay it back is when Parliament decides that he is entitled to repayment.
    Sir F. BANBURY: I will give an illustration. A certain person pays £1,000 in Settlement Estate Duty. The right hon.

    1743
    Gentleman says when the Act was passed last year it should have been paid back, and that as he could not do it he proposes to pay interest from the date of the passing of the Act. The person who has paid the £1,000 has lost all the interest after that time. If he had not paid the £1,000 he could have had interest, which he has been deprived of. Am I wrong in that contention?
    Mr. MONTAGU: Yes.
    Sir F. BANBURY: How?
    Mr. MONTAGU: All the time up to the 15th of August, when he paid that £1,000, he had benefit from it. He knew by that payment that if his estate passed he would not be called upon to pay Death Duties because he had freed it up to the 15th of August, and he could not have got better value for his money.
    Sir F. BANBURY: I will not press my point.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Death Duties—Killed in War Act.)
    The Death Duties (Killed in War) Act, 1914, shall have effect as respects the present War as if it applied to property passing on the death of any person whose death has been, or shall be, caused by an act of war on the part of the enemy forces on sea or land although such person may not have been subject to the Naval Discipline Act or to military law.
    Clause brought up, and read the first time.
    Mr. POLLOCK: I beg to move, "That the Clause be read a second time."
    Last year we passed an Act allowing certain deductions from the Estate Duty on the estates of those killed in the War. The measure of that rebate was founded on a calculation of the probable expectation of life. It is not a very liberal allowance, and at the time we passed that Act we had had no experience of peaceful citizens being killed by an act of war, and I do not know that this was even contemplated at that time. Since then we have had a number of citizens killed by means of raids from the sea, and I think a few have been killed by bombs. We have also had the cases of those persons who were passengers on the "Lusitania" and the other merchant vessels which have been torpedoed and sunk, and the passengers
    1744
    have perished in consequence. It seems to me a small act of justice to allow in those cases where the Death Duties become payable at a time which has never been contemplated before, that the estates should be entitled to the same favourable treatment granted by the Death Duties (Killed in War) Act, 1914. The amount involved is very small, and the number of persons in the case of the "Lusitania" whose estates would be affected would not be considerable. Consequently I think it would be an act of justice to those who have sufiered from what was undoubtedly an act of war, although they were not belligerents.
    Mr. McKENNA: I hope my hon. Friend will not press this Clause. In the case of those coming under the Naval Discipline Act, or military law, a strong appeal was made on the ground that it is undesirable for the State to make money out of the death of men who volunteered for the service of their country. A very strong expression of opinion—sympathetic to those who have volunteered to serve their country—was made particularly at the time when casualties were very numerous, and therefore the Government agreed to the moderate concession of last year. To extend that concession now is to reopen the whole argument. A person who is killed by a Zeppelin, or by a bombardment from the sea, is killed by a mere accident, and that particular person may not be serving his country. In fact, so far from doing that, he may be doing something detrimental to this country. You cannot tell who is killed. It may be that the person killed may not be at all a deserving citizen, whereas in the case of the Army and Navy there was a strong appeal made on behalf of those who were serving their country. I think it is quite a different consideration to say that we should give relief from Death Duties to a person who is killed by accident, even though the cause of the accident is something done by the enemy. It is not as if such a person was doing any action on behalf of the State. Although we sympathise with such a person being killed, he is not at the time in the performance of a State duty. Therefore, I do not think we ought to extend this concession which was given to members of the forces, to those who are the victims of accidents, because there is no real analogy between the two cases. For these reasons I hope the hon. and learned Gentleman will not press his new Clause.
    Mr. POLLOCK: I will not press the Clause, but I am not in the least convinced by the arguments of the Chancellor of the Exchequer. The right hon. Gentleman has appealed to me, and, of course, I respond, but I should have responded to his appeal without this argument, and perhaps more readily.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Extension of s. 1 of the Finance Act, 1914, to Collaterals.)
    The limitation to lineal ancestors and descendants referred to in Section one of the Death Duties (Killed in War) Act, 1914, shall be repealed, and the provisions of the said Section shall be construed as though they applied not only to property passing to the ancestors, widow, or descendants of persons killed in the present War but to all collateral relations of such persons.
    Clause brought up, and read the first time.
    Mr. RAWLINSON: I beg to move, "That the Clause be read a second time."
    I pray in aid of my Amendment those very arguments of the Chancellor of the Exchequer which my hon. and learned Friend (Mr. Pollock) so scornfully rejected a few moments ago. My Amendment is simply to extend the Clause which was passed in August last in order to make it a really operative Clause. It is restricted now to widows and lineal descendants of the deceased man who dies serving his country. The estate of a man who volunteers to serve his country does not at present receive any concession at all unless it descends to his lineal descendants or to his widow. My Amendment proposes that should be extended to the other relatives to whom the estate may pass at that particular time. The relief is really given to the estate of the deceased man, and if the right hon. Gentleman is right that the concession was made because of the virtue of the people who went to the War, then surely this extension ought to be made. I would remind the right hon. Gentleman that it was not a new idea last August. It was really an extension of what was done in 1900 with regard to those who fell in the Boer War, and I submit that this Act, which was a very necessary and proper Act in 1914, was unduly limited. Many representations have been made to me, and I think that this graceful concession to those who serve their country
    1746
    should apply whether their estates go to lineal descendants or any other descendants.
    Mr. McKENNA: I am bound to make another appeal to the hon. and learned Member not to press this Clause. After the rebuke which I received on the last occasion, I almost fear to raise an argument in support of my appeal, but I think that I have a very good case in asking him not to press the Clause. He speaks of "relief to the estate." We come immediately to a conflict of view. I do not understand the term "relief to the estate." I only understand relief to individuals, and I cannot regard an estate as a being who enjoys relief or suffers punishment. When you deal with the individual you have first of all the person who is serving his country and whose feelings you want to protect by some Parliamentary measure that will benefit his family. In the case of direct descendants, such as a wife or children, you have the case of a man who, when he was alive, lived with his family, who had the whole of the benefit of the father's fortune in common because there is a common enjoyment of the father's fortune. The father is killed in battle. If the State takes away from the wife and children any part of the fortune which they enjoyed in common for Estate Duty they suffer; consequently relief was given, and the relief would be likely to affect the mind of the man who was fighting.
    9.0 P.M.
    When you get to collaterals, what do you find? You find the brother who never had the slightest expectation of inheriting. He looked forward to his elder brother marrying and having a family and leaving his fortune away from himself. He suddenly and unexpectedly inherits the fortune of the deceased soldier. Is there any ground why that brother who has inherited what he never expected should not pay Death Duties? My hon. and learned Friend says that it is cutting down the estate. Yes, it comes out of the estate, but in whose hands is it? It is in the hands of somebody who had no right or title or expectation ever to have it. That is the difference between the two cases. I hope that my argument will not have as bad a fate on the present occasion as it had on the last, but I think it is sufficient ground for asking the hon. and learned Gentleman not to press the Clause.
    Mr. RAWLINSON: I certainly shall not follow the example of my hon. and learned Friend (Mr. Pollock). The right hon. Gentleman's argument has persuaded me more than I can say, not so much of the necessity for withdrawing the Clause as of the courtesy of the right hon. Gentleman, and of the skill with which he has made out apparently a specious case where there was absolutely no case at all. If he had not made that speech, I should not have withdrawn the Motion. The fallacy of his whole argument is this: The deceased gentleman is to have no sort of affection for his brother. When I used the word "estate," I meant the family property which has come down in the family for generations.
    Mr. McKENNA: It is not limited to that case.
    Mr. RAWLINSON: No, but that is the main reason for the Clause, and that is the case which is hit hardest. The man is really anxious to keep the whole of the estate together, and it is hard when he volunteers and goes to the War, and when his brother succeeds to the whole place, that some concession should not be made to the brother. I am perfectly certain that the right hon. Gentleman was wrong when he said that the individual concerned is the man who volunteered to go abroad. The man who volunteers to go abroad is affected if his brother will not enjoy the family estate.
    Mr. McKENNA: I do not quarrel with my hon. and learned Friend. I think that we are using the word "estate" in a different sense. I was using it in the technical sense of the Clause. I quite agree that in the case of what is generally called the family estate there would be a very strong sentiment, but that would be a very small proportion.
    Mr. RAWLINSON: The right hon. Gentleman appears to think it will affect money as well as land in the large majority of cases, but I think he will find it is mainly landed property. Still, he has done so well, that after the speech he has made I withdraw.
    Motion and Clause, by leave, withdrawn.
    Colonel WALKERrose to move the following

    NEW CLAUSE.—(Hotels, etc., and Receipts from Liquor.)
    Section forty-five of the Finance (1909–10) Act, 1910, shall apply in the case of
    1748
    licensed premises of the description there referred to in respect of which it is shown to the satisfaction of the Commissioners of Customs and Excise that the receipts from the sale of intoxicating liquor were in the preceding year less in the case of a restaurant than three-fifths and in the case of any other premises than one-half of the total receipts in that year from the business of all descriptions carried on by the licence-holder in the premises.
    Mr. MONTAGU: May I ask the hon. Member not to press this Clause? We want to meet him, as we agree there is a case. I have got an alternative Clause here. I do not know whether he has seen it. We propose to move it in this form in order to meet the difficulty of these hotel keepers.
    Colonel WALKER: The object of the Clause I have on the Paper is to meet some very unjust action which will undoubtedly arise among a very small minority in the trade, but if the Clause which the right hon. Gentleman suggests meets the case I should be quite content to accept it.
    Mr. DEPUTY-CHAIRMAN: There seems to be a considerable difference between the Clause handed in and that on the Paper. I think the Clauses handed in should come in their proper order at the end of those on the Paper.
    Colonel WALKER: I am quite prepared to accept that suggestion and will read the Government Clause in the meantime.

    NEW CLAUSE.—(Suspension of Minimum Duties.)
    The provision as to the minimum duty payable for publican's and beerhouse licences as enacted in Section forty-three of the Finance (1909–10) Act, 1910, and in Scale 3 of the First Schedule thereto, shall cease to have effect during the continuance of the present War and one year thereafter, and that Sub-section (4) of Section forty-five of the said Act and any other provisions of the said Act referring to the said minimum duty shall be modified accordingly.
    Clause brought up, and read the first time.
    Colonel WALKER: I beg to move, "That the Clause be read a second time."
    The object is to suspend the minimum duties which apply to Great Britain, and in a far less degree to Ireland. I propose it on account of the extreme hardships

    1749
    that arise in the case of licensed premises which are hardly hit by the new taxation in the large areas and towns. It is a Clause which I hardly think will impose any great burden on the Exchequer, although it may be the means of removing a great number of hardships.
    Mr. MONTAGU: I hope the hon. Gentleman will not press this Clause. He has three Clauses on the Paper dealing with this and kindred subjects. With regard to the first, the Government are endeavouring to meet him, although with a different drafting. With regard to the third, we propose also to meet him by a small addition to the drafting. I hope, therefore, he will not persist in this particular proposal, which has already been defeated once in the House of Commons.
    Colonel WALKER: I am quite willing to withdraw it.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Amendment of Currency and Bank Notes Act, 1914, s. 1, ss. 4.)
    In accordance with Sub-section (4), Section one, of the Currency and Bank Notes Act, 1914, the further issue of currency notes shall be stopped and all currency notes now outstanding shall be redeemed within a period of twelve months from the passing of this Act.
    Clause brought up, and read the first time.
    Mr. DAVID MASON: I beg to move, "That the Clause be read a second time."
    I hope I shall not weary the House with speaking on a somewhat complicated and dry subject. I will endeavour to be as clear and, at the same time, as brief as possible. When these currency notes were first issued—in August last—the then Chancellor of the Exchequer, the present Minister of Munitions, indicated to the House that it was an emergency matter, and when he was asked whether provision was made for the retirement of these notes he answered that when the occasion for them had passed the notes would be retired. The outstanding amount of notes is now £44,897,000. In the last few weeks there has been some reduction, but last week there was an addition of a quarter of a million, so that the total outstanding to-day may be put at £45,800,000. I asked the late Chancellor of the Exchequer some few weeks ago, having regard to his statement in August, whether he proposed to redeem them now that the occasion had
    1750
    passed for their being issued. He replied that it was public policy not to retire these notes. I endeavoured to get the right hon. Gentleman to meet me in Debate upon that point. I was unable to do so. I raised the matter on the Adjournment, and the Secretary to the Treasury replied, but I venture to think that he did not meet the points submitted by another Member and myself. I am glad now to have this opportunity of putting my argument before the present Chancellor of the Exchequer, in the hope that he with his great financial ability will endeavour to meet them.
    I am moving this Clause because I believe that the remaining outstanding of these notes is a menace to the financial position in the City of London to-day. There are two evils resulting from their remaining outstanding. I should like to say, before I develop my argument, that, personally, I am not in opposition to the issue of bank notes. When we discussed this question on the previous occasion the late Chancellor of the Exchequer and the Member for West Birmingham seemed to be under the impression that I was personally opposed to bank notes. I am in no sense opposed to the issue of bank notes, but the difficulty here is that this is an issue by the Treasury. It is Government paper money, and there is all the difference in the world between that and notes issued by bankers who are responsible for them and take precaution not to extend the issue indefinitely and to hold the proper reserves against them. There are many things that tend to give bank notes a character which does not appertain to the issue of paper money by the Government. I propose to refer to two evils which results from the excessive issue, as I believe this is, of paper money by the Government. There is, first, the rise in the price of commodities, and, secondly, the effect on foreign exchange.
    On a former occasion we discussed at considerable length in this House the rise in the price of commodities, and when that Debate took place I laid an argument before the House that this was one of the contributing causes, though not, of course, the sole one. There are many causes which have brought about the present rise in the price of commodities and the cost of living. I submit that this is one of the most important of the contributing causes. I propose to submit arguments in proof of that, and I hope I may be allowed to quote one authority in proof of that assertion.

    1751
    It is that of a great French authority, M. Frederic Bastiat, who, I think, very consistently points out how this effect is brought about. He is referring to the issue of paper money by the Government, and he says:—
    "Clever persons will take care not to part with their goods unless for a larger number of notes—in other words, they will ask 40 francs for what they would formerly have sold for 20, but simple persons will be taken in. Many years must pass before all the values will find their proper level. Under the influence of ignorance and custom the day's pay of a country labourer will remain for a long time at a franc, while the saleable price of all the articles of consumption around him will be rising. He will sink into destitution without being able to discover the cause. In short, once you wish me to finish, I must beg you, before we separate, to fix your whole attention on this essential point—when once false money (under whatever form it may take) is put into circulation, depreciation will ensue and manifest itself by the universal rise of everything which is capable of being sold. But this rise in prices is not instantaneous and equal for all things. Sharp men, brokers, and men of business will not suffer by it; for it is their trade to watch fluctuation of prices, to observe the cause and even to speculate upon it. But little tradesmen, countrymen, and workmen will bear the whole weight of it. The rich man is not any the richer for it, but the poor man becomes poorer by it. Therefore expedients of this kind have the effect of increasing the distance which separates wealth from poverty and paralysing the social tendencies which are incessantly bringing men to the same level, and it will require centuries for the suffering classes to regain the ground which they have lost in their advance towards equality of condition."
    I must ask the indulgence of the Committee for making so long a quotation, but this subject is so complicated that one has to refer to authorities in the hope that such an authority as Bastiat may carry weight with the Committee when, perhaps, my arguments would not bring about that effect. We know that great economists have told us this over and over again. When we realise that if you take the amount of paper money in circulation today as compared with a year ago, when I think I am right in saying that approximately the Bank of England issues represented £35,000,000, that to-day there is an increase in the Bank of England circulation, and that with this issue of £45,000,000 of Treasury Notes we have an increase in paper money of something like £80,000,000, we must feel that that is bound to have an effect on the prices of commodities. While that is not the only contributing cause, we do see evidence of it every day. It may, perhaps, be argued that the authority of a Frenchman is not sufficient to convince this Committee. I therefore call in another authority, that of a former illustrious Member of this House, the late Lord Goschen. He showed in his book on "Foreign Exchanges" how the same effect is brought about, and, if Members
    1752
    are anxious to confirm my argument, they will find ample evidence in Lord Goschen's book confirming what I have said. There is just one passage which briefly puts the point, which is so apt at the present day, with regard to the issue of paper money by the Government that, perhaps, the Committee will allow me to read it. He says:—
    "Sometimes Governments, simply for their own purposes, issue a quantity of paper money; the natural consequence will be over-importation."
    That is what we are seeing to-day. The excess of imports over exports to-day is something like £264,000,000. That is, possibly, largely made up of purchases on munitions of war, but it is not entirely due to that. I would ask the Committee to remember that they may possibly be misled by the belief that it is entirely due to that. I think I shall be able to show that the over-issue of paper money accentuates this adverse foreign exchange which is creating great uneasiness in the City, which is leading to a steady outflow of gold from this country, and which, if it goes on, may produce panic and disaster. On the question of over-importation Lord Goschen goes on to say:—
    "Prices will rise in consequence of the increase in circulation"—
    That is exactly what is taking place to-day—
    "and accordingly attract commodities from other markets"
    It follows, if you have a rise in prices, it will naturally attract an excessive amount of imports to this country. The quotation goes on:—
    "Or, over-importation takes place in the first instance, and governments in order to remedy artificially and apparently what can only actually be remedied by the cessation of the real primary cause, commit the fatal error of increasing the circulation by an issue of paper money."
    I think I have read sufficient. I am very sorry to have to quote at length these authorities, but I hope the Committee will understand that in order to deal properly with a subject of this character one has to go to the fountain head for the arguments which underlie the Clause I am asking the Committee to accept. It may rightly be asked, why does this excessive issue of paper money lead to an increase in the prices of commodities? My answer to that is, that as a result of the War there has been an immense shrinkage in the general trade of this country. I happened to come across this quotation the other day in a newspaper:—
    "For the week ending 14th June, we find the returns of the Bankers' Clearing House for last week gives a total of £225,000,000, showing a decrease of £104,000,000."

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    If you have a decrease of £104,000,000 in the commercial transactions of this country in one week, with an increasing amount of paper circulation, one of two things must happen. You have, of course, redundant currency, very largely increased, as it is, week by week. The result is that it forces prices to rise still further week by week. You have at the Treasury practically a printing press turning out these notes at the rate of £500,000 a week. They do not represent the work which the ordinary sovereign does when it passes from hand to hand. They are manufactured at the Treasury. No doubt the Treasury uses them in part payment of its liabilities at the Admiralty and elsewhere. It is a very easy way of paying your debts. All of us would probably be very pleased, indeed, if we had printing presses in our libraries, and, when we wanted to pay our debts, we had simply to turn a handle and issue these promises to pay. The same thing applies to the community as applies to an individual. When you find a State engaged in this most insidious of diseases as the use of printing presses, with an idea, if one may judge from the official announcements, of that going on permanently, I am justified in saying a warning word in regard to it. I do not argue for a moment that we are in the same position, for example, as Germany, which, of course, has pursued this policy to an extraordinary extent. We also know that the rouble is inconvertible, and that our Ally, France, has pursued the same policy.
    In view of the awful extent to which the nations of Europe have indulged in this most insidious and unsound policy in a time of war, one is appalled by the enormous liquidations which must ensue when they come to redeem this enormous mass of paper. I do not suggest, for a moment, that Great Britain is on a par with these other nations, but there is no doubt it is having an effect upon our foreign exchange. I come now to that point, which is the second point in my argument, of the evil which accrues from this issue of paper money. It is better to raise one's voice before that evil becomes too excessive. It is better we should utter a warning note now than when, perhaps, panic and great disaster has come upon the country, which may come if this is not stopped in time. Let me give a few figures with regard to the position of foreign exchange. I will concentrate on the foreign exchange with the United States
    1754
    of America, that great neutral country with which we are still carrying on a vast trade, and I am sure those hon. Members acquainted with the position there will confirm what I say. I observe opposite an hon. Member, bearing an honoured name, who must know something of finance, and who will confirm me when I say that the rate of exchange between New York and London has lately been at a figure which has hitherto been unknown in the history of this country, of course leading to a steady outflow of gold. It might be asked what effect has this issue of Treasury currency notes upon the rate of exchange. It is very easy to follow what effect it has. We all know what action is taken by the Bank of England when you find an excessive outflow of gold from this country. It endeavours, either by raising the rate of discount or contracting the currency, to turn the exchange in our favour. But it will be readily seen that it is practically impossible for the Bank of England to have any effect upon the rate of exchange or to contract the currency if you have a competitor in the Treasury turning out these notes at the rate of half a million a week. It is self-evident to anyone, without taking any trouble to study the position.
    That is precisely what is taking place today. The Bank of England has made efforts over and over again, but its efforts are futile. Money is more or less unlendable, though certainly lately it has risen to a certain extent owing to the Loan operation. It is hoped that the Loan operation, by offering a high rate of interest, will tempt the British investor to get rid of his American securities, and hon. Members have probably followed that within the last week or so the exchange has come a little in our favour as the result of sales of American securities back to America, I believe, rather than purchases by Americans of our Loan. But that is more or less temporary. If this course persists the fact of this continuous issue of paper money, and the effect it has in depreciating credit and in creating artificially cheap money, undoubtedly tends to make it impossible for the Bank of England to have any effect upon the rate of exchange, with the result, I believe, that if gold continues to leave this country at the present rate it may perhaps lead to some very serious disaster. When I am asked what benefit this Clause confers, I submit that while it is not the only remedy—perhaps economy is the most

    1755
    important; the reduction of our imports from America as much as we possibly can, and a sense of economy here in the purchase of certain commodities which we get from America—I believe it will unquestionably help very materially to alleviate this acute situation by giving the Bank of England the power to raise the rates for money and to turn the exchange in our favour by attracting American capital to this centre. If the rate of money is higher here than in New York capital will tend to flow from New York to this side, and when capital comes in on this side it has the same effect as if we were exporting commodities to America and creating a more favourable exchange. I believe that may be brought about by such action as I propose in this Clause.
    It might be argued by some that banks and others who have grown accustomed to these notes might say, "we want to be provided against the recurrence of panic. We want, if credit should dry up and there should be another possible crisis in the City of London, to have something available in the way of a credit instrument." I submit that that already exists in the power which we have to suspend the Bank Charter Act, and that, I believe, is ample power, should it be necessary, which Heaven forbid—I do not anticipate that it should be; we have got over the most serious part, I hope, of the crisis which obtained last August—to provide for any possibility of a recurrence of panic or of trouble in the Money Market; but this insidious power in the hands of the Treasury to continually issue these currency notes and to debase and dilute our currency, if persisted in, will, I believe, lead to and build up an amount of disaster and misery, and it is already creating great suffering, particularly to the working classes. The Labour Members are continually asking the Government to pass measures for fixing the prices of commodities, an almost impossible thing, because you cannot control all the forces of nature or trade which go to create those commodities, but you can do something here because this is something for which we are responsible. Their support might be appealed for, as I am appealing for it now, and here I believe is one cause which has undoubtedly led to the enormous increase in the prices of commodities. Therefore I think if by their agitation and the agitation of others legitimate pressure is brought to bear upon the Government,
    1756
    they may see their way to accept this Clause. This is a dry and complicated subject, but I hope I have put the case clearly and that it will receive, as I have no doubt it will, fair consideration from the Chancellor of the Exchequer.
    Mr. MONTAGU: I have had the advantage of hearing arguments very similar to those which my hon Friend has adduced this evening from him on previous occasions, and I have heard them argued and answered by the Minister of Munitions and my predecessor, the late Financial Secretary to the Treasury. If they failed to explain to him that the extract which he read to us from Lord Goschen, and those sound maxims of political economy from Professor Bastiat were wholly irrelevant to this topic because they dealt with the subject of inconvertible paper money while we are now discussing paper money which can now be exchanged into gold, I am perfectly certain that I am not competent to bring home to him our views when those who preceded me in this difficult task signally failed. I am perfectly certain of this, that if my hon. Friend took a canvass of the City now and said, "Prices have risen because of the issue of these currency notes, and the American Exchange is in its present position because of the issue of these currency notes, and I propose to use all my influence to get the Treasury to withdraw them and to substitute for them the gold sovereign, in order that we may have less gold to export to right the situation," he would find the City almost unanimously against him. The fact of the matter is that these notes are not only convertible, but we have built up against an issue of £45,000,000 a gold reserve of £28,500,000, and if my hon. Friend's policy had been adopted in its entirety last February the gold in the central reserve against an emergency would be no less than £28,500,000 less than it is to-day.
    Mr. D. MASON: My right hon. Friend is well aware that the reserve to which he refers has nothing whatever to do with the Bank of England reserve. It does not meet the emergency at all. It is not available for it. It is simply there for the purpose of converting these notes.
    Mr. MONTAGU: Because it is there to meet these notes the whole of my hon. Friend's argument with regard to the increase in prices and the American Exchange, owing to the inflation of the currency by this paper, falls completely to

    1757
    the ground. The true fact of the matter is that the American Exchanges, as he himself was forced to admit, have come to their present position by the enormous increase of our imports from America and the necessity of paying for them, that prices have risen by the tremendous inflation of credit which has been necessary to tide over the financial crisis, by the very large payment of separation allowances to soldiers' and sailors' families, and the general increase of consumption due to the prosperity of a large proportion of the working classes. I am perfectly certain he will find on investigation that his complaint against this currency is due to the fact that he has forgotten that it was convertible, and I am perfectly certain that anyone engaged in commerce would far rather leave the matter as it is now, with a gold reserve against it—and the issue has been practically stationary for a long time pact—than to have any definite and statutory limit.
    Mr. HOGGE: Although my name is also connected with this new Clause, I do not propose to keep the House for any length of time, because one recognises that although one raises these points, and we are entitled to raise them, we do not press them unduly. I think that is a fair way to look at the matter, and that is the way in which to get matters amicably settled. I always like to follow the Financial Secretary to the Treasury, because I recollect my first conflict with him a long time ago when we were both students, he at Cambridge and I at Edinburgh, and we took part in an inter-University debate. It was not on bank notes. He has said that his Friend and colleague the Minister of Munitions has already effectively disposed of my hon. Friend the Member for Coventry. I do not know how far the Financial Secretary to the Treasury reads the speeches of the late Chancellor of the Exchequer, but I have a quotation from the speech in which, according to the Financial Secretary to the Treasury, the present Minister of Munitions demolished my hon. Friend the Member for Coventry. Here is how he did it, and I commend it to the present Chancellor of the Exchequer to see what he thinks about it.
    "There is, first of all, the paper bridge, what is known as the dilution of currency. Diagnose it, disguise it as they will, there are many girders in the German financial bridge which are made of paper and no amount of paint and varnish will disguise that fact. It is a very easy method and a very tempting method. You appear to get over your difficulties in the simplest way, and it is very difficult for anyone to point out where yon are going wrong for the moment or for some time. But
    1758
    looking at it most carefully, it is simply an indirect method of levying taxes upon the income of the people."
    Is it true that a paper currency in Germany is inconvertible for all time?
    Mr. McKENNAmade an observation which was inaudible in the Reporters' Gallery.
    Mr. HOGGE: Then let us split the difference. You water the currency and prices go up. A country which has no foreign trade, and that is the position in which Germany is at present, can do it, but a country which has still a great international trade cannot do it. If you do it gold would vanish, and there would be an advance in prices which would be of a most serious character. That is a course which would be a false one for a Chancellor of the Exchequer to take in order to get over his difficulties in making a gold deficiency. On the question of convertibility and inconvertibility, I have yet to be persuaded on the point raised by the Financial Secretary to the Treasury. The right hon. Gentleman said that there is a certain amount of gold reserve earmarked for these particular notes, but if everyone who holds these notes came to the Bank of England and asked for gold, I believe there would be an emergency Bill in the House of Commons next day. That is perfectly certain. He would not like us to do that. I take it that the right hon. Gentleman agrees on that point. I do not, however, press it too far, but I do say that we have a right to make this point. What I am concerned about is not so much the present situation as the situation immediately following the declaration of peace, when we have secured a victory over Germany. I am certain of this, that at that time there will be great dislocation of trade. There will be a great amount of unemployment owing to the difficulty of re-absorbing the millions of men into the-industry of the country. The Chancellor of the Exchequer will, at any rate, agree that whether these notes are convertible or inconvertible, so long as you have these notes they do influence prices, and they make the prices higher than they ought to be. High prices at the end of the War mean, unless the people have the wherewithal to make the demand, that the supply will be limited, and a limited supply means unemployment. I think the hon. Member for Coventry and myself will be perfectly content if the Chancellor of the Exchequer would give us an assurance,

    1759
    which I am sure he is prepared to do, that he has that matter in view. It is quite a real and important point to get into employment as many people in this country as you can in that period of transition which will follow the declaration of peace, until we have our usual industrial conditions restored. If prices are high for any reason, and if one of the reasons is the amount of currency, it is perfectly obvious that to get them low prices must come down, and therefore the demand will be greater and employment will be greater. If the Chancellor of the Exchequer will keep that in mind I have no doubt that my hon. Friend will not pursue the matter further. Having raised it on previous occasions, and on this occasion we shall be content.
    Mr. McKENNAindicated assent.
    Mr. D. MASON: As the right hon. Gentleman has given us that assurance I will not pursue that matter further, but I would like to reply to the argument of the Financial Secretary to the Treasury. He is quite wrong in stating that Lord Goschen was referring to the paper being inconvertible. When similar circumstances arose that are arising to-day, this is what he said, speaking of the large efflux of gold:—
    "When, during a period of apprehension caused by a large efflux of gold from England to America, views were expressed in Manchester and Liverpool, that a much larger issue of banknotes ought to be permitted, this opinion tends manifestly to a depreciation of our currency. But as the consequence of the depreciation of the currency in any country is to offer inducement for further importation, by creating an appearance of high prices, and at the same time to increase the difficulty of paying for such importations, how is the filial balance to be paid? The efflux of specie shows that the balance of trade is against that country for the time; the equilibrium must be restored, when the specie is exhausted, by slackening importation and consumption."
    There is no proof at all as to Lord Goschen referring to the paper being inconvertible. He is referring to the augmentation of paper money in the country and the shrinkage of trade. The best proof, if any further proof is needed, of depreciation of currency, is the state of the foreign exchanges. The Chancellor of the Exchequer shakes his head.
    Mr. McKENNA: May I suggest to the hon. Member that we should not go over the same ground again. We have listened very carefully to everything he has said, and he is now restating his case. Is it worth while?
    Mr. MASON: I do not wish to weary the House, but I wish to emphasise that point.
    Mr. McKENNA: I think we know the point.
    Motion and Clause, by leave, withdrawn.

    INCOME TAX ACTS.
    Mr. SNOWDENhad given notice to move the following

    NEW CLAUSE.—(Income Tax Acts.)
    "That such provisions of the existing Income Tax Acts as entitle the occupier of agricultural land to be assessed under Schedule B at one-third of his annual vent be repealed, and the assessment of such persons to Income Tax be made under Schedule D."
    The CHAIRMAN: The new Clause which stands on the Paper in the name of the hon. Member for Blackburn would impose an additional charge by way of taxation, and is out of Order.
    Mr. SNOWDEN: Does it necessarily follow if the alterations suggested in this new Clause be made that there would be an additional tax imposed?
    The CHAIRMAN: Yes.
    Mr. SNOWDEN: I beg to submit that it might happen that the profits declared under Schedule D might be less than the assessment under Schedule B, and therefore it is a mere assumption that the Clause might impose an additional tax.
    The CHAIRMAN: I am afraid that I must use my ordinary sense in this matter. To some people, at any rate, it would mean an increased taxation.

    NEW CLAUSE.—(Allowance on British-grown Tobacco Exported or Manufactured in Bond.)
    (1) Where any unmanufactured tobacco grown in the United Kingdom is exported from a warehouse, or where any tobacco grown in the United Kingdom which has been deposited in any warehouse approved by the Commissioners of Customs and Excise under Section two of the Manufactured Tobacco Act, 1863, is shown to the satisfaction of the Commissioners to have been therein manufactured into cavendish or negrohead, there shall, subject to the provisions of this Section, be paid in respect of every pound of that tobacco an allowance of two pence.
    (2) The allowance shall be paid in the case of tobacco exported to the exporter,

    1761
    and in the case of tobacco manufactured in a warehouse to the manufacturer.
    (3) No allowance shall be paid under this Section—

    (a) in respect of any tobacco which, in the opinion of the said Commissioners, is not in a marketable condition or has not been fully cured; or

    (b) except upon production to the person by whom the allowance is to be paid of a certificate from the proper officer of Customs and Excise that the tobacco has been exported or manufactured into cavendish or negrohead as aforesaid.

    (4) No allowance shall be paid under this Section after the expiration of two years from the exportation or deposit of the tobacco, as the case may be.
    Clause brought up, and read the first time.
    Mr. BUTCHER: I beg to move, "That the Clause be read a second time."
    This is only a readjustment of taxation in respect of home-grown tobacco exported from this country, and also in respect of home-grown tobacco which is manufactured in this country into cavendish or negrohead. It is a matter of considerable importance in reference to the growing of tobacco in Ireland, which has already attained a considerable extent, and promises to be very much greater, and it is also of importance to the industry of tobacco growing in England. The question has been under the consideration of the Treasury for some time, and they have accepted this Clause after careful consideration. In certain cases a rebate of 2d. per 1b. is given in order to put home-grown tobacco on the same level as foreign-grown tobacco. I do not suppose that there is anyone who will object to putting home growers on at least as good a basis as the growers of tobacco produced abroad.
    Mr. MONTAGU: This matter was discussed by a deputation to me when I was Financial Secretary before, and this Clause was considered by the late Chancellor of the Exchequer. As soon as tobacco came to be an important article of produce in certain districts of the United Kingdom, it became essential to make a differentiation, comparable with other differentiations both with regard to tobacco and to spirits, and I think that the hon. Member has introduced a Clause which will be very welcome.
    Question put, and agreed to.
    Clause added to the Bill.

    NEW CLAUSE.—(Prepayment of Death Duties.)
    It shall be lawful for any person to pay into the Exchequer at any time any sum not less than ten pounds, and being a multiple of ten pounds, as a prepayment of such Death or Estate Duties as shall become due to the Exchequer from his estate at his death. Such prepayments shall carry compound interest at the rate of three pounds per cent. per annum until the date of death of such person so making prepayments and shall then, together with accrued interest, be deducted from any death or estate duties payable to the Exchequer from his estate.
    In the event of the amount of such prepayments and accrued interest being greater than the amount of Death and Estate Duties payable from the estate of such person at his death the difference shall be repaid by the Exchequer to the estate.
    Clause brought up, and read the first time.
    Mr. JAMES MASON: I beg to move that this Clause be read a second time. This Clause does not arise out of the War. Nevertheless it contains a proposal which I think would be of great advantage to a great many taxpayers, and in circumstances like the present would be of considerable benefit. Those who have prospectively in view of the payment of Death Duties, and who desire to provide for them as a great many people do in their lives, can only do so by insuring their lives, or by investing money with a view to its accumulation during their lives. Of course, by means of insurance they have to provide a considerable amount of profit to the insurance companies, and they have also the disadvantage of being obliged to pay regular yearly premiums, whether it is convenient or not. On the other hand, if they decide merely to invest their money so that it may accumulate, there is the possibility of a tremendous loss of capital through the depreciation of prices. What I would suggest is that the Treasury should permit any person to prepay in round sums money on account of Death Duties which will fall due on the death. This in many cases would be an advantage to the taxpayer, because it would enable him in years of prosperity or on the occasion of some windfall to pay off a certain

    1763
    amount of his Death Duties instead of accumulating the amount. I propose that, when the Death Duty fell due on the death of the individual, the duty would be calculated exactly as it is now, but that all the prepayments with the moderate interest of 3 per cent. at compound interest should be deducted from the amount to be paid. The advantages are that the individual taxpayer would be able to pay as much as was convenient to himself towards the sum which would fall due on his death, and, on the other hand, there would be no risk of loss because the death itself is absolutely certain. In addition the State would have the advantage—it is an advantage at the present time and is always an advantage, I suppose—of getting the money sooner than it would otherwise be got and, what is more, it would be equivalent to borrowing money at the small rate of 3 per cent. interest, which interest would not have to be paid until the death of the individual.
    Mr. MONTAGU: The hon. Member has introduced a very interesting topic, but I hope that he will defer the consideration of this matter until Death Duties are once again generally under discussion. What he proposes is to do for the free property of living individuals exactly what can be done now with regard to settled property. He wants to pay by instalments at a time when the individual has really no knowledge of what he will be worth at the time of his death, and this paying of instalments of an unknown amount will be leaving the way open to a quiet banking transaction on the part of the individual, who will be able to devote to this purpose any sum he likes, in multiples of £10, on which the State is bound to pay 3 per cent. compound interest for an indefinite period. I do not think that it would be as attractive to the taxpayer as the hon. Member suggests, because experience of all commutations of this kind, settled duties and other things, does not show that the taxpayer has taken advantage of them. The hon. Gentleman has himself suggested that it is part of a much larger question. The Clause, as it stands, would really have to be safeguarded, and as we have so many problems arising out of the War to discuss, perhaps he will be good enough not to press it.
    Mr. J. MASON: I am quite satisfied, and I ask leave to withdraw the Amendment.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Amendment of s. 45 of Finance (1909–10) Act, 1910.)
    Where the duty payable under the Finance (1909–10) Act, 1910, in respect of the licence for any such premises as are mentioned in Section 45 of that Act would, but for the provisions of this Section be the full duty and not the reduced duty payable under that Section, and the person applying for the licence shows to the satisfaction of the Commissioners of Customs and Excise that the receipts from the sale of intoxicating liquor in the preceding year were made to exceed, in the case of a restaurant two-fifths, and in the case of any other premises one-third of the total receipts in that year from the business of all descriptions carried on by the licence holder in the premises by reason cither that:—

    (1) the receipts from the sale of intoxicating liquor were increased on account of the addition to the duty on beer imposed by the Finance Act, 1914 (Session 2); or

    (2) the receipts other than the receipts from the sale of intoxicating liquor were diminished through circumstances connected with the present war;

    or for both of those reasons, then, for the purpose of ascertaining whether the reduced duty is payable in respect of the licence, the said Section 45 shall have effect as if three-fifths were substituted for two-fifths and one-half were substituted for one-third.
    This Section shall have effect as respects any licence taken out on or after the twenty-ninth day of May, nineteen hundred and fifteen.
    Clause brought up, and read the first time.
    Motion made, and Question proposed, "That the Clause be read a second time."
    10.0 P.M.
    Sir G. YOUNGER: I formally move this Clause, which is merely proposed to place the hotel keeper exactly in the same position as before, and the price of beer is not affected.
    Mr. MONTAGU: This Clause is proposed in lieu of a Clause proposed by an hon. Member early in the evening, and the Government promised to accept it.
    Clause read a second time, and added to the Bill.

    NEW CLAUSE.—(Restrictions of Hours (Extension of Belief.)
    Section nine of the Finance Act, 1914 (Session 2) (which provides for a reduction of Licence Duty where hours of sale are curtailed) shall, in addition to the cases therein specified, apply to cases in which the holder of any retailer's on-licence proves to the satisfaction of the Commissioners of Customs and Excise that, during the continuance of and in connection with the present War, the sale or consumption of intoxicating liquor on his premises has been suspended during any normal hours of sale either—

    (a) voluntarily at the request of any naval, military, or civil authority; or

    (b) under any order made under Section sixty-three of the Licensing (Consolidation) Act, 1910, Section twelve of the Temperance (Scotland) Act, 1913, Section twenty-one of the Licensing (Ireland) Act, 1833, or Section thirty of the Refreshment Houses (Ireland) Act, 1860.—[Sir G. Younger.]

    Clause brought in, and read the first time.
    Clause read a second time, and added to the Bill.

    NEW CLAUSE.—(Power to Invest Sums Paid Under the Workman's Compensation Act in the New War Loan.)
    When under the Workman's Compensation Act compensation payable to an infant is commuted, and also when a lump sum is paid into Court as compensation to a widow or dependant, the Court may order that the registrar of such Court shall invest same in whole or in part in any British War Loan, as though such security was expressly mentioned under Clauses 11 and 12 of Schedule 1 of the Workman's Compensation Act, 1906 (6 Edward VII.).—[Mr. Shirley Benn.]
    The CHAIRMAN: The Clause handed in to me by the hon. Member for Plymouth (Mr. Shirley Benn), to deal with matters relating to the War Loan, is outside the scope of the Bill, and this is not the occasion on which the subject with which it deals can be brought forward.
    Mr. SHIRLEY BENN: I thought the Clause might be in order because the Finance Bill undertook to amend the law relating to the National Debt and to make further provisions by which to make available for investment in the debt of
    1766
    the country certain substantial sums at present not available.
    Mr. DENNISS: The Workmen's Compensation Act of 1906 enables the County Court judge to invest moneys which are to be held for the widow or children of the husband who has been killed. The object of the Amendment of my hon. Friend is that the County Court judge, instead of investing in Consols or Annuities, should invest in the War Loan at 4½ per cent. In the Bill to amend the law relating to the National Debt I wish to call attention to Section 17. Under the general law certain persons cannot invest in any loan or in the National Debt—
    Mr. McKENNA: It may save discussion if I say that there is a Bill to be introduced to-morrow to enable trustees to borrow money for the purpose of investing in Consols if authorised by the trust. If they are not authorised by the trust, I doubt whether the hon. Member would be willing to press his Amendment.
    Mr. DENNISS: The County Court judge may invest the moneys awarded to widows and orphans of persons killed in factories, and he is entitled to invest in Consols at 2½ per cent. It is proposed that he should be allowed to invest in the New War Loan at 4½ per cent.
    Mr. McKENNA: The County Court judge is already entitled to invest in the new War Loan by the provisions of the new War Loan Bill.
    Mr. McKENNA: I beg to move, at the end of the Schedule, to add:—

    Part III.
    Where spirit which is permitted to be delivered for home consumption on payment of additional duty has, before the seventeenth day of June, nineteen hundred and fifteen, been blended with spirit which is permitted to be so delivered without payment of such duty, no additional duty shall be charged on any part of the blended spirit.
    Where spirit which is permitted to be delivered for home consumption on the payment of additional duty at the higher of the two rates specified in Parts I. and II. of this Schedule has before that date been blended with spirit which is permitted to be so delivered on payment of additional duty at the lower of those two rates, the additional duty shall be charged on the whole of the blended spirit at the lower of those two rates.
    Sir G. YOUNGER: May I state that I do not think that this would touch the real hardship of this particular case. The real hardship in this case is that you may blend with mature whisky whisky which is under two years old and it would be held up except for exportation. I do not know whether the right hon. Gentleman can deal with the matter in this Bill, but it is a real hardship, which to anyone acquainted with the trade is obvious, that any man who used spirit under two years old, before he knew anything about the Spirit Act, is really damnified seriously if he happens to have a home trade and not an export trade.
    Mr. McKENNA: I am aware of the difficulty which the hon. Baronet has referred to. He means the case of blends in which are spirits not matured which under the Immature Spirits Act are not allowed out until a certain period has expired. It is a serious difficulty if there is a large quantity, and if it is proved to be really hampering to the trade I shall be happy to consider the case. No evidence of that has been brought before me, and I assume I should have heard of it before now. I am quite willing to consult the hon. Baronet upon the point.
    Question put, and agreed to.
    Question, "That the Schedule, as amended, be the Schedule of the Bill," put, and agreed to.
    Bill reported; as amended to be considered To-morrow, and to be printed. [Bill 113.]

    WAR LOAN EXTENSION BILL.
    Read the third time, and passed.

    MUNITIONS OF WAR [EXPENSES].
    Considered in Committee.
    Motion made, and Question again proposed, "That it is expedient to authorise the payment, out of the moneys provided by Parliament, of any Remuneration and Expenses which may become payable in pursuance of any Act of the present Session to make provision for furthering the efficient manufacture, transport, and supply of Munitions for the present War."—[Mr. Lloyd George]
    Mr. HOGGE: As I was responsible for delaying this last night, I wish quite as frankly to acknowledge the courtesy
    1768
    which has been shown to us to-day by the Minister of Munitions, whom we have seen, and who has met a great many of our objections.
    Question put, and agreed to.
    Resolution to be reported To-morrow.

    SUPPLY.— [NAVY SUPPLEMENTARY ESTIMATE, 1915–16.]
    Considered in Committee.
    [Mr. WHITLEY in the Chair.]
    Motion made, and Question proposed,
    "That an additional number, not exceeding 50,000 officers, seamen, and boys, be employed for the Sea and Coastguard Services for the year ending on the 31st March, 1915, beyond the number already provided in the Navy Estimates for the year."
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara): In asking for authority to enrol and embody 50,000 more officers and men for the Royal Navy, making the number for the year 300,000, I should explain that we are at one and the same time satisfying Parliamentary procedure and looking ahead. These men are not, of course, required because of any immediate manning needs of the Fleet. We have under arms and under training all the men we want at present, and we do not expect any difficulty whatever in supplying all our future needs. We are now asking authority to have men ready as and when the future may require them. As I said the other day, in reply to a question put to me as to the present needs by the hon. Member for the Brentford Division (Mr. Joynson-Hicks):—
    "Ample provision has been made in the current Estimates, and the hon. Member may rest assured that no difficulty has been experienced, and none is expected, in meeting the large requirements due to the expansion of the Fleet."
    The number fixed by Vote A of the current Estimates, is 250,000. So keen has been the desire to join the Navy, and recruiting has been so good, that we have, I must tell the Committee, enrolled more than that number already. Apart, therefore, from any other consideration, from a purely Vote A point of view, if I may so put it, we are bound, as the Committee will see, by Parliamentary procedure to come and ask for further authority to cover the additional numbers recruited. That we now do. And, looking ahead, we think we ought to avail ourselves of the

    1769
    occasion which thus presents itself to ask authority to bring the additional number to be voted up to 50,000, and thus early take power to put that further number under training. Of course, I may assure the Committee that if requirements, as the War progresses, should demand something more we shall promptly come for authority to join whatever further numbers may be necessary. The additional numbers we are now taking power to enrol will be recruited for the Royal Navy proper, for the Royal Marine, the Royal Naval Reserve, and the Royal Naval Volunteer Reserves, as our discretion and judgment as to naval needs, working in conjunction with the recruits' preference for service, seem to render desirable.
    Mr. GEORGE LAMBERT: I congratulate the right hon. Gentleman upon his statement that the Admiralty are making and will make provision for the naval security of the country. I think it is a matter for congratulation that the Navy has proved itself to be well worthy of the confidence which the nation has reposed in it. The Navy is a great silent service. It is not the silence of secret importance, but rather of conscious power. There are no bulletins to bring to our notice the doings of the Navy; but somewhere there is a great Armada, which, vigilant and ready, enables us to sleep comfortably in our beds. I am not sure whether the sacrifices made by this country have not been somewhat minimised. I observed an article in a leading organ of the Press a few days ago in which it seemed to be suggested that the British nation was not making the sacrifices which the writer considered necessary for the prosecution of the War. I would like to ask any pressman, or any pessimist, where would the Allied cause be to-day were it not for the British Navy? If the German Fleet were supreme, the French coast would be open, and the Russian supplies would be in danger. The British Fleet has protected our commerce and our transport, and it has protected us against invasion by sea.
    Speaking as an old Member of the Board of Admiralty, I hope I may be pardoned for saying that I believe the Navy to be the master-key of the situation, and that it will exercise the predominant effect in ending this War. I hope I shall not be giving any information to the enemy when I say that I know that the Navy has an ample supply and adequate reserves of ammunition. I hope that, although the
    1770
    Admiralty are called upon to do all sorts of duties in all parts of the world—and there may be many attractive enterprises—no call, however imperious, will detract them from the maintenance in all its strength of the grand Fleet upon whch the security of the country depends. It takes one or two years to build a battleship, but it takes years to produce a trained seaman, and the most precious British possession to-day is, in my judgment, the officers and men of the Royal Navy. I welcome with the utmost pleasure the right hon. Gentleman's statement. I am glad that the Admiralty, if they err at all, will err on the side of national safety, and that they will take every possible precaution to maintain inviolate the strength and security of our naval supremacy.
    Mr. HOGGE: Does the right hon. Gentleman propose to take any of the 50,000 men for whom he is now asking for that section of the Navy which is largely being used as Infantry—the Naval Brigade; or are these men primarily for naval purposes?
    Dr. MACNAMARA: The additional 50,000 will be recruited for the Royal Navy proper, the Royal Marines, the Royal Naval Reserve, and the Royal Naval Volunteer Reserve, as our discretion and judgment as to naval needs, working in conjunction with the recruits' preference for service, seem to render desirable. I think my hon. Friend has at the back of his mind the thought that we might conceivably recruit men in such a way as not always to have full regard to the manning necessities of the Fleet. I can assure the hon. Member that those who are responsible for the manning of the Fleet—that is, the Second Sea Lord and the other members of the Board—as in duty bound, take the greatest care always to see that the requirements of the Fleet are fully met.
    Question put, and agreed to.
    Resolution to be reported To-morrow; Committee to sit again To-morrow.

    MAINTENANCE OF LIVE STOCK BILL.
    Considered in Committee.
    [Mr. WHITLEY in the Chair.]

    CLAUSE 1.—(Power to Make Orders for the Maintenance of Stock.)
    (1) The Board of Agriculture and Fisheries may, for the purpose of maintaining

    1771
    a sufficient stock of animals to which this Act applies, by order applicable to England and Wales or any part thereof—

    (a) prohibit or restrict the slaughter of animals;

    (b) prohibit or restrict the sale or exposure for sale of meat of immature animals which has not been imported;

    (c) authorise any local authority specified in the order to execute and enforce within their district all or any of the provisions of the order, and provide for the manner in which the expenses incurred by the authority are to be defrayed;

    (d) authorise any officer of the Board or of a local authority to enter any slaughter-house or other premises on which animals are slaughtered for human food and examine any animals or carcases therein;

    (e) prohibit or restrict the movement of animals out of any area in which the slaughter of such animals is prohibited or restricted;

    (f) revoke, extend, or vary any order so made.

    (2) The animals to which this Act applies are cattle, sheep, and swine.
    Sir F. BANBURY: I beg to move, in Sub-section (1), paragraph (b), after the word "animals" ["sale of meat of immature animals"], to insert the words "except male lambs of pure breeds and all cross-bred lambs."
    In the absence of my hon. Friend the Member for Tavistock (Sir J. Spear) I beg to move the ambit standing in his name. The object of the hon. Member in seeking to insert these words is to preserve a very valuable right to the farmers of this country. As the right hon. Gentleman is possibly aware, there is a very great difference between a calf and a lamb. The calf may develop into a very valuable meat-producing animal after having been kept alive for some two and a half or three years. A lamb four or five months old, though it will develop into a larger animal later, is still an animal very considerably below that status as a food-producing animal. If you are fortunate enough to get lambs at the end of December or early in January, you can very often—or it used to be so—sell them at Easter at as large a price as can be obtained in October or November. I am inclined to think that
    1772
    the Amendment will possibly be accepted, and therefore I do not desire to take up the time of the Committee.
    The PARLIAMENTARY SECRETARY to the BOARD of AGRICULTURE (Mr. Acland): I would ask the hon. Baronet not to press this Amendment. I think I can go a good way to meet the case that the hon. Member for the Tavistock Division and the hon. Baronet have in mind. I am not at all sure that the hon. Baronet was present when I introduced this Bill.
    Sir F. BANBURY: No.
    Mr. ACLAND: I would therefore repeat things I said then; that the Board of Agriculture realise to the full the difference there is, and must be, between calves and lambs. We have seen that there has recently been a tendency in the country for persons to say that they will not eat veal or lamb. That is laudable in the case of veal, although unnecessary in the case of lamb. As I said on the Second Reading of the Bill, the breeding and fattening of lambs, and the bringing of lambs to early maturity, is one of the best established, most scientific and most useful departments of all agricultural processes carried on in this country. We do not anticipate that we shall have to make any restriction on the sale of any sort of sheep, because we recognise that in the main, if farmers are not allowed to sell their lambs, they will have to sell their ewes, which would be a much worse thing than selling their lambs. They ought to keep as many ewes as their farms will carry, and sell their lambs quite steadily. If people, instead of knocking off lamb would knock off new potatoes, and stick to their old potatoes a bit, they would be doing much greater service to the State than foreswearing lamb, which is a perfectly right thing to consume, and the consumption of which will not really restrict the breeding stock of the country.
    The other thing I explained, or tried to explain, when the Bill was introduced, was that the annual returns of stock were collected as from 5th June, were returned to the Board in the few weeks that follow, and were collated by the beginning of August, and it might be that when the figures were fully ascertained we should find, although we have no anticipation at present, that there was either then or later, if the food supplies of this country were unfortunately interfered with, in some districts, unfortunately—I do not

    1773
    anticipate more than in some districts—a tendency to sell not only the normal lambs which would in any way be sold, but other lambs which ought to be kept for breeding purposes. We might find—though we have no indication whatever yet, and no desire in any way to restrict the sale of any class of sheep at present—that sheep were being sold at different times in such a way as to reduce the breeding stock below what was in the real interest—the permanent interest—of the breeders, and therefore we should like, if the hon. Baronet would permit us, to retain full power of action, instead of having our powers of action circumscribed in the way this Amendment would circumscribe them.
    The hon. Baronet proposes we should have no power to restrict the sale for slaughter of male lambs of pure breeds and all cross-bred lambs. I believe that might work quite well in some parts of the country under any circumstances. It would not work always. Take the black-faced Suffolk sheep, for instance. The first cross comes to maturity very quickly, and ought to be brought to maturity very quickly, and put on the market undoubtedly; and we should have no desire whatever, I think, to restrict that highly scientific and valuable process. But the second cross of these sheep does not come to maturity so quickly, is not so much an animal for the butcher, and is an animal which it might be necessary to preserve in the interests of breeding if our food supplies were very much interfered with. Therefore we would like to take this power, though it is not a power which, under present circumstances, we have any idea of using, in case such an emergency arose in which it might be desirable to preserve in full measure our breeding stocks. If it were done it would be in the interests of the farmers, and after consulting farmers and breeders, and certainly after consulting our Agricultural Advisory Committee. As this is only an emergency power, which we might perhaps have to use at the end of August, when perhaps the House for a few weeks will not be sitting, we would rather retain the power in full measure than circumscribe our power. I hope the hon. Baronet will be kind enough to be satisfied with the very strong assurances I have given that we do not intend in any way to interfere with the ordinary normal breeding of sheep for sale or slaughter, and will not press this Amendment.
    Sir F. BANBURY: I am much obliged to the right hon. Gentleman, but I may say that my hon. Friend attaches considerable importance to this Amendment, and so do I. Although the assurance is very satisfactory, something might happen to the right hon. Gentleman, and we might lose his services at the Board of Agriculture, and another right hon. Gentleman who might be put in his place might not take quite the same view. I quite see the point he has made in regard to ewe lambs, but supposing I altered my Amendment and suggested the words "except male lambs." I think that would be going in the direction the right hon. Gentleman wishes, because I understand he desires to preserve the ewe lambs under certain circumstances. The right hon. Gentleman admits that it is not likely that he will have to exercise that power, but if he did it would be entirely with regard to ewe lambs.
    Mr. ACLAND: The hon. Baronet will realise that I am not in a very easy position. The President of the Board of Agriculture is in another place, and I should not like to accept this Amendment without consulting him I will, however, give the hon. Baronet my personal view that I think we might accept his suggestion.
    Sir F. BANBURY: On that understanding I ask leave to withdraw my Amendment.
    Amendment, by leave, withdrawn.
    Sir F. BANBURY: I beg to move, in Sub-section (1), paragraph (e), after the word "such" ["such animals"], to insert the word "immature." I want to confine this proposal to immature animals. In the case of the swine fever regulations, although they may have done a certain amount of good, considerable hardship has been inflicted on farmers owing to the difficulty they have been put to if they want to move their stock, which may be quite healthy, out of one area into another. Unless the word I suggest is put in, it might be difficult to move a prize cow or a bull from one area into another. As the insertion of the word "immature" will confine the Bill to the purpose intended, I trust the right hon. Gentleman, in view of the way I have already met him, will accept my proposal. If he would accept this Amendment, and if he found his noble chief, as he was once described, owing to political differences of opinion, object to the insertion of this

    1775
    word, and if his Noble Friend omits this word in the other House, I would promise the right hon. Gentleman that I would have nothing to say on the Motion, "That this House doth agree with the Lords Amendment," when the Bill came back to this House. I do not see what political opinions can have to do with this question. As I have given way on one point I hope my right hon. Friend will give way in this case.
    Mr. ACLAND: I thought that I had gone a good long way to meet the hon. Gentleman on the previous Amendment, and I am sorry that I cannot undertake to refer this Amendment to the person who was spoken of as my noble chief. I do not think that it is a good one. Included in the classes of animals, the sale of which for slaughter is already prohibited, is the cow which is obviously or visibly in calf. That is a mature animal, and I must suggest to the Committee that the powers of restricting the slaughter of cows in calf or of sows in pig is really at present—and might be increasingly in the future—a power which the Board of Agriculture might wish to exercise in the interests of the preservation and maintenance of our breeding stock. Surely there might very possibly in certain areas in the United Kingdom grow up a tendency to slaughter these entirely mature animals, which might, if they were left alive for only a few weeks or months, produce their young and provide a future stock or supply for our people. We might, I think, quite reasonably and quite naturally therefore prohibit the slaughter of such animals. We have already prohibited the slaughter of cows which are visibly in calf and sows which are visibly in pig. We might have to extend that, and if we extended it in any district in which the slaughter of these animals had been prohibited and at the same time accepted the hon. Baronet's Amendment, our prohibition would become entirely useless, because persons who wished to sell these mature animals for slaughter would merely have to move them out of the area in which their slaughter was prohibited and immediately they got outside they might be slaughtered without any control. I do assure the hon. Baronet that it may be necessary even to extend the present action with regard to mature stock, namely, sows or cows which are about to produce their offspring, and if we do not take the power to prohibit their movement out of the area in
    1776
    which their slaughter is restricted or prohibited all our measures in that direction may be useless. I think I have gone as far as I could to meet the hon. Baronet on the other Amendment, and I hope that he will meet me by withdrawing this one.
    Sir F. BANBURY: May I meet the right hon. Gentleman by amending my Amendment? I admit that there is a great deal in what the right hon. Gentleman says. It might be necessary to prohibit the export of in-calf cows. I propose, instead of inserting the word "immature," that we should insert the words "immature or in-calf animals." If the right hon. Gentleman desires to put in the word "in-pig" as well I do not mind. That would meet the right hon. Gentleman and still give the farmer the opportunity of moving bulls or maiden heifers, or heifers which he desires to sell as maiden heifers. I think that is a reasonable proposal, and I should like to move the Amendment in an altered form—to insert the words "immature or pregnant."
    Amendment, by leave, withdrawn.
    Sir F. BANBURY: I will now move, in Sub-section (1), paragraph (e), after the word "such" ["slaughter of such"], to insert the words "immature or pregnant."
    Mr. ACLAND: If my hon. Friend, with his usual astuteness, can indicate how to tell when an animal is pregnant I might concede the suggestion. But I would ask him not to press for the insertion of the words, which in administration must entail great difficulty. I do not want to go into details of gynecology, but it certainly is difficult to insert words of this kind. "Immature" is bad enough and it is perfectly impossible, or at any rate extraordinarily difficult, to bring an action on the point whether or not an animal is immature; but with regard to the question whether an animal is pregnant, it would be necessary to slaughter it to find out, and therefore the object of my hon. Friend would be defeated by the steps necessary to discover whether the animal comes within his Amendment. I would ask him not to press the Amendment.
    Sir G TOULMIN: I hope that the Amendment will not be pressed. Either we must trust the Department or not. The Board of Agriculture is the most paternal Department in the State: it runs agriculture from the standpoint of the farmer,

    1777
    and it may be trusted to exercise these powers with a due regard to the interests of the farmers.
    Sir F. BANBURY: I understood the right hon. Gentleman to say that one of the reasons why he did not desire to have this Amendment made was that it might be necessary to put restrictions upon the slaughter of in-calf cows. That is no doubt an excellent thing. But a few minutes later he asks, "How can you tell when a cow is in calf?"
    Mr. ACLAND: I suggested visibly in calf. But for a man ordinarily conversant with the condition of animals to give evidence about pregnancy which occurs five months before the animal is visibly in calf is a very difficult thing.
    Sir F. BANBURY: Would the right hon. Gentleman take "visibly in-calf" instead of "pregnant." It is very well for hon. Gentlemen below the Gangway to cry "Oh, oh!" but this is a very important matter for the farmer. The right hon. Gentleman knows perfectly well that with the best intentions, when the swine fever regulations are carried out, hardship is inflicted upon the breeders of pigs, and I do not want to see it inflicted upon the breeders of cattle. I am prepared to do this. The right hon. Gentleman said that he would ask the President of the Board of Agriculture to accept the Amendment I proposed just now, to insert the words "male lambs." I will ask him to inform the President of the Board in another place that I have moved this Amendment, and to invite the President to consider whether or not some words to the effect which I have suggested should be inserted. If he will undertake to do that, I will withdraw the Amendment.
    Mr. LAURENCE HARDY: I hope the Under-Secretary will not accept this Amendment. There is a danger in it. It would begin to make an exception, and would rather favour the prohibition as affecting one particular sort of stock, namely, lambs. Lambs are the very sort of stock which mostly can be moved very largely from one county to another. All lambs are moved in certain districts from the marsh to the uplands and moved back again. Prohibition would be very serious in that case. I do not wish to move an Amendment on the subject, because in an emergency Bill of this sort I think we ought to trust the Board of Agriculture. If an exception is made as is suggested
    1778
    by this Amendment, it will look as if there would be leave given to specially prohibit what are called immature stock. That would be a pity. I would rather leave full discretion to the Board of Agriculture after the statement they have made, and not begin to have exceptions of this nature, otherwise you might be led into difficulties. I would point out to my hon. Friend who said there was a difficulty in describing what was "immature," that I notice that the word is used in an earlier Sub-section, and therefore difficulty might arise there.
    Mr. ACLAND: I accept the hon. Baronet's proposal. I will report to the President what he said, and absolutely reserve my right of saying what I think about it.
    Amendment, by leave, withdrawn.
    Question, "That the Clause stand part of the Bill," put, and agreed to.

    CLAUSE 3.—(Application to Scotland and Ireland.)
    (1) This Act shall apply to Scotland with the substitution of references to Scotland and to the Board of Agriculture for Scotland for references to England and Wales and to the Board of Agriculture and Fisheries, except that an order affecting any local authority in Scotland shall require the concurrence of the Secretary for Scotland.
    (2) This Act shall apply to Ireland with the substitution of references to Ireland and to the Department of Agriculture and Technical Instruction for Ireland for the references to England and Wales and to the Board of Agriculture and Fisheries.
    Mr. WATT: I beg to move, in Sub-section (1), to leave out the words, "except that an order affecting any local authority in Scotland shall require the concurrence of the Secretary for Scotland."
    Mr. ACLAND: I accept this Amendment.
    Mr. HOGGE: May we know the reason why my right hon. Friend has so readily accepted the Amendment of my hon. Friend, whose suggestions are not so frequently accepted with such readiness by that Bench?
    Mr. ACLAND: I can only suggest it was the personal charm of the hon. Member in communicating with the Secretary for Scotland. God forbid that I should step

    1779
    into these Scottish matters! I had a certain experience of them when I happened to be Financial Secretary to the Treasury, and I am very glad to have escaped The hon. Member who moved the Amendment has been in close and intimate consultation with the Secretary for Scotland. At any rate he has received from the Secretary for Scotland an assurance that his wishes in the matter can be carried out for the good of the country which they both represent.
    Question, "That the words proposed to be left out stand part of the Clause," put, and negatived.
    Clause, as amended, added to the Bill.
    Motion made, and Question proposed, "That the Bill be reported."
    Sir F. BANBURY: I think we ought to have the Report to-morrow. My hon. Friend (Sir J. Spear) is not here.
    Mr. ACLAND: The hon. Gentleman has been very ably represented by the hon. Baronet. I think I can reassure the hon. Gentleman, whose views I know very well, in a formal letter from the Board on the matter which he has in mind.
    Sir F. BANBURY: I hope the right hon. Gentleman will deal lightly with me in his report on the occurrences of this evening.
    Mr. ACLAND: I will do the best I can.
    Bill reported.
    As amended, considered; read the third time, and passed.
    The remaining Orders were read, and postponed.

    NATIONAL REGISTRATION [EXPENSES].
    Committee to consider of authorising the payment out of money provided by Parliament of any expenses and allowances incurred under any Act of the present Session for the compilation of a National Register. (King's Recommendation signified) To-morrow.—[Mr. Walter Rea.]

    NAVAL AND MILITARY WAR PENSIONS, ETC. [SALARIES].
    Committee to consider of authorising the payment out of moneys to be provided
    1780
    by Parliament of any salaries under any Act of the present Session to make better provision as to the pensions, Grants, and allowances made in respect of the present War to officers and men in the naval and military service of His Majesty and their dependants, and the care of officers and men disabled in consequence of the present War and for purposes connected therewith: (King's Recommendation signified) To-morrow.—[Mr. Walter Rea.]

  SIR G. SCOTT ROBERTSON.

    PERSONAL EXPLANATION.
    Whereupon Mr. SPEAKER, pursuant to the Order of the House of the 3rd February, proposed the Question, "That this House do now adjourn."
    Sir G. SCOTT ROBERTSON: I want to refer to an incident which occurred today at Question Time. I think you, Sir, have already expressed your opinion that I did not show any discourtesy to you personally, but in case some hon. Members might retain that impression, I should like to say here that if there was anything that happened which might have indicated any such sentiment on my part, I should be very sorry indeed. I might perhaps say the reason why the question arose at all. There were, only forty-two questions on the Paper, and I thought that as so many other persons had been permitted to ask supplementary questions it was particularly hard that I should not be allowed to ask mine. I am sure you were quite right in your decision, but nevertheless I should like the House to understand that that was really the position I was in. I imagined that the time was up till ten minutes to four and that there was no special urgency and no particular reason why this question should not be asked. The gesture to which you took exception was really not meant to be a dominating gesture of any sort. It was one of appeal—deprecatory: "Allow me to make my poor little question clear." But afterwards when the question arose and I was allowed to put it after Question Time, it will be in the knowledge of the House that the hon. and learned Gentleman (Mr. T. M. Healy) came in and not understanding at all what had occurred made a remark which seemed to infer that I was bringing some accusation or saying something detrimental to the reputation of Field-Marshal French. I saw the hon. and learned

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    Gentleman in the Library and explained that I meant to refer to this matter on the Adjournment of the House. After a few moments' conversation with him he told me that if he had been in the House at the beginning of questions he would never have thought of making the remark he did. Then we discovered, to our mutual pleasure and admiration, that if there was one person we both admired, perhaps more than anyone else at the moment, it was Field-Marshal Sir John French. Neither of us could express greater admiration than the other. Therefore, the hon. and learned Member for Cork advised me to go ahead now and he said he should not feel it necessary to come here. I should be very sorry indeed, both now and at any future time, if it could be supposed that I should urge any point with discourtesy to Mr. Speaker.
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    I admit at once that there may be occasions on which there may be differences of opinion, and if I held the opinion that the prestige or rights of a private Member were being in any way infringed, I should resist it with the greatest determination and persistence, but at the same time I should do it with the utmost courtesy. That is all I wish to say on this subject at the present time.
    Mr. SPEAKER: I should like to say that I never for a moment thought that the hon. Gentleman desired to show me any discourtesy at all—not for a moment. I hope that I said nothing and that I did nothing which might convey that idea.
    Question put, and agreed to.
    Adjourned accordingly at Three minutes before Eleven o'clock.