§ Mr. BOOTH
I desire to direct the attention of the House to a mysterious document purporting to call itself a prospectus. It is one illustration of the case referred to by the right hon. Gentleman opposite, when he complained that the House generally was not taken into very great consideration by the Government. This prospectus has not been distributed to Members. It is not available in the Vote Office. If we want information as to contracts which vitally affect a loan of £1,000,000 of the ratepayers' money immediately, and a further loan later on, we have to go into the City to a firm of solicitors. I decline to go into the City to any firm of solicitors to find out what are the intentions of the Government on a question of this magnitude. The House knows nothing of the whole proceeding, and I venture to say that this is a matter which requires the closest attention of the House. It is perhaps the first time in history when this has been done in this way. It may have been done at the time of the South Sea Bubble, but it has never been done since.
This is the first time of a great British Government forwarding a joint stock company, and with a modesty which does not always characterise them, they decline to state that they are the real parents of the scheme. I looked carefully through the document to see if there was any mention of the promoter's name, and to find out who selected the board, who selected the committee, and who has paid for the printing of this prospectus. There is no information on these points, and I venture to submit that the very cogent statements made in the "Times" were quite justified. What does that great organ say in its "City Notes" on Monday last? I may remind the Government that this is the only London newspaper which, so far as I am aware, was given an advertisement of this company, and I say that it is to the credit of the "Times" that their City editor was allowed to give an independent view, nothwithstanding the fact that in the adjoining pages there was a remunerative advertisement. What does it say about "The British Dyes Prospectus"? I ask the Government if they have any answer—I ask if they will really take any responsibility for this document or not. The "Times" says:—If the situation were different, and this issue were being made on the ordinary lines of a new 1641 commercial company, we should have to criticise the prospectus rather severely, for on the face of it the document is quite unsatisfactory, and has nearly all the faults that a prospectus can have. The necessary facts are not stated, and what is stated is misleading.These are not the words of a Back Bencher. They are the words of a great organ of public opinion in this country—one that is specially favoured from time to time by receiving the confidences of the Front Bench. The "Times" further draws attention to the bargain with Read, Holliday and Sons. It complains that proper particulars are not given, and then goes on to use these words:—The only point which is really at all clear in the whole prospectus is that a very good bargain was made by Read, Holliday and Sons with the Secretary to the Board of Trade. It gives no proper ilea at all as to how the new company proposes to succeed apart from any State necessity that it should. We hope for national reasons that the money will be provided, but it is regrettable that the issue should have been made by a prospectus which sets so bad an example to company promoters.I think that those are very important words. It is the Board of Trade which prescribes rules as to the balance-sheets and statements of companies. All these great insurance organisations have to make regular returns and submit to very searching questions. It is the Department of the Board of Trade, who I presume are going to father this scheme, who deal with the rules of limited companies, and one would have thought that they would know exactly what should be done in the case of a prospectus. They are quite aware, as a Government Department, of what the correct thing is when trying to get money from the public. We have looked forward, therefore, with a certain amount of keenness to the issue of this document in order to see the presentation of an ideal scheme, telling the subscribers exactly what the prospects of the scheme were. I also understand that it has had the assistance of some very distinguished lawyers in another place. I ventured, in a previous Debate, to think that the legal fraternity were in a considerable measure responsible for the scheme, but the President of the Board of Trade denied it. I have continued my inquiries, and my friends and foes of this scheme assure me that it has the support of distinguished lawyers connected with the Government. I do think that if those great lawyers and judges who occasionally have to sit in judgment upon company proceedings would just ask themselves the question how they would like to sum up and pass judgment upon a document of this description, 1642 perhaps they would realise their responsibility and take responsibility for this document and possibly for the whole of this jejune scheme. We are all familiar with the old lines,Take up this child and nurse it well,For in this house its fathers dwell.And the point of this will be presented to the Government again and again if they do accept responsibility for this scheme. The disappointed shareholders and the complaining employé will have the right to come to this House and arraign the Government in a way that has not appertained to any other joint-stock company. There are, I claim, three great omissions from this prospectus. The first is that it does not disclose the name of the promoter or say what his terms are. The second is that it does not give the balance-sheet of the large firm to be taken over; it gives a number of particulars of Read, Holliday's, from which one could gather that there is a certain amount of goodwill, which could be arrived at in some measure, and therefore you can make a certain kind of calculation. But there are no definite figures and there is no certification of profits and no auditor's statement. This is an exceedingly bad precedent. The rule is that when businesses are taken over the one thing on which you can rely is that the figures stated of the previous history of the firm are properly certified and audited and can be accepted. The intending investor of course asks himself whether that prosperity is likely to continue or not, but, as a rule, he does not question the career of the firm. I cannot understand this great Government Department being in any way associated with a document which omits so much.
The third omission is the absence of any mention of the manager. The question of the manager is ten times more important than that of the directors in a concern like this. There should be some information as to the management. Who is to run this business? I cannot think that the man's name is unknown. I cannot think that the scheme has gone so far and that there is not some man in view, especially if the matter is so urgent as the Government has stated. Why is not that gentleman's name put in? Where is the necessity for suppressing it? Some of the names put in inspire us with confidence. This is an instance of the slovenliness and in a sense the discourtesy to this House which have been shown. It is not conscious discourtesy, but is an instance of that discourtesy with 1643 which the Government seem lately to be getting into the habit of treating this House. This is such an instance of forgetfulness that they make no mention at all of such an important position as that of manager. I think that it is generally recognised throughout business circles in this country that the best service which boards of directors can render to their shareholders is to select the most capable manager obtainable and give him their support, knowing that the directors of a company cannot do anything which is at all commensurate in importance with the selection of a capable manager; and I regret very much to find that there is no indication on this paper as to who the gentleman is to be. The only little light thrown on the subject is that two gentlemen not connected with Read, Holliday's are to receive £10,000 each for the option of employing them, which is one of the most wonderful bargains ever made.
This prospectus, having mentioned the capital, goes on to say that the Government loan, which, if this issue is subscribed, will be a million pounds, will not be cumulative as regards interest and the interest is to be contingent upon the net profits, so that it is quite possible—and I should rather say that it is probable—that the taxpayer will get no return whatever for that million pounds except in some indirect way through the effect of the manufacture and distribution of dyes. We have got to risk it. There is another kind provision, that for twenty-five years there shall be no compulsory sinking fund. There are very many concerns which have a rigid sinking fund, but this is simply an invitation to slack finance. There are many concerns which would like to accept debentures without being compelled to pay interest or to put up a sinking fund for their repayment. Then we come to a delightfully poetic phrase. I venture to say that no playful company promoter in a wild flow of poetic imagination ever coined a phrase like this. After describing what may be done by the Government and so on, here is the last sentence in the principal paragraph:—It is thus seen that there may emerge in time, and if circumstances justify, a company whose resources might be £3,000,000 in subscribed capital.I do not know whether these Caledonian lawyers were thinking of some Scottish cattle-lifters emerging from a Scottish mist and sweeping down on the Lowlands, but I believe that never has any company promoter invited subscriptions to a public 1644 issue on such a statement as that. You are not merely to put up your money on the merits of the scheme and the history of the firm which is partially disclosed, but this also is given as an attraction, as a lure to the public to subscribe towards this hybrid scheme. They say thatthere may emerge in time"—I suppose it must emerge in time and space; I do not see where else it could emerge—a company whose resources might be £3,000,000.It is a statement like that on which people are to invest their money at a time of national emergency when the Chancellor of the Exchequer wants it all for the manufacture of explosives. The hon. Gentleman (Mr. J. M. Robertson) is a great literary scholar, but I do not think that even he, with all his literary reading, which is almost encyclopædic, can quote from any previous prospectus a precedent for this. No doubt he can say from what particular classic this phrase is taken. What is a German submarine? It emerges from the mist and the waves showing only its periscope. That is not a prospectus. This is a commercial periscope, an indication of what may emerge in time. The next phrase is that—The users of dyes who are shareholders in the company will have priority in the available supplies of the company.I presume that means that they are to have priority in the obtaining or the purchasing of the available supply. I do not see how they can have priority in the supplies themselves. It is an important point, because points like this, in reference to a prospectus, show carelessness. This document is a compromise, and persons of different views, in my opinion, have put it together. This particular portion is in the blackest ink. Probably the persons who drafted it know what it means, but it is simply an instance of how the prospectus has been drawn up.
Considering that the Government are fathering it, the prospectus ought to be an example in all respects to those who study it. Next we come to an intimation that the capital cannot be available for twelve months. There is to be 2s. 6d. payable on allotment, then the calls are not to be more than 5s. each, and no call shall be made for six months after allotment. That will bring the shares up to 10s. Then at intervals of not less than three months the subsequent 5s. calls may be made, so that it is only a year from now that the money at present being subscribed will be 1645 available to the company. That is a very excellent way of dealing with an evil which demands instant treatment, because the trade of the country and the occupation of the people are endangered. I will leave it to the Government to reconcile that point and pass on to one feature which is not merely an innovation, but a very dangerous innovation, in the history of joint stock enterprise. The Government, who are to subscribe this million pounds although they are promoters of the scheme, have decided that the money shall take the form of debentures. I do not think that any promoter of a scheme has ever had the audacity to put himself in that position. He generally takes an interest, if any, either in preference or ordinary shares. I have never known a case where the people responsible for the origin of a scheme decided that their interest should be confined to the debentures. Here they are to hold a mortgage or a monkey on this concern. But they make two conditions: one of them has practically no meaning—that this company shall remain British. As it was formed ostensibly to fight Germany and make dyes available in this country, presumably it will be a British company, but there is no security as to that.
If it is meant to be a protection against Germany buying it up after the War there is no protection whatever. If Germany came in to buy up the shares after a time of peace—suppose it was allowed by a complacent Government—to try to re-establish themselves in this country, and if they bought the shares, surely they would do it with the knowledge that their Government would back them, and their Government would find a million pounds to replace that of the British Government and they would get the company. It is therefore quite illusory to imagine that the condition made by the Government as a mortgagee is going to keep the company British. It must be British so long as their money is in. Do the Government contemplate actually taking a million of money out, and deserting the company, which would then cease to be British? Surely, if they are going to take the money out of the company, they should see that it is not to be left in the hands of aliens. According to a further clause, there are to be two Government directors, with power of veto. If only one of them should be there, he is to have power of veto over many things which his colleagues might do. I submit that the fitful intervention of two men, however clever they may be and however 1646 great their qualification, is not going the way to make a business prosper. Where is there a company which could work amicably under those conditions? Are those two men to sit there as Government spies? So far as I can see, that is their principal duty, as defined by this article. They are to see that the other men are not doing anything false to the principles on which the company is founded. I do not think that is necessary.
§ Mr. BOOTH
I will come to the remuneration later. The two directors are very distinguished men, no doubt, but I really do not think that the Government should put them in such a position, but should put them on the board and leave them free to rank with their colleagues, trusting to their independence and justice, and not tying them up in this way, giving them power to veto whatever their colleagues are doing. For myself, I do not think that any of the seven gentleman, who are also members of the board, are capable of conduct which would call for the exercise of such a veto, and the Government do not need two watchdogs to report proceedings to them. I venture to say that the business men of the country will view any such provision as one not likely to lead to the harmonious working of the board. It has been laid down in this House, and insisted upon again and again, that the Government must never have relations with any firm which does not pay fair wages.
We have heard from that Box, in relation to a certain firm, that it was not allowed to deal with the War Office because it was not of good financial standing. We all know that it is an indispensable condition, in order to do any business with the Government, the firm concerned must pay fair wages or trade union wages. Yet, in this prospectus, there is no consideration of that kind mentioned. They do not say, "You shall not have our money unless you pay fair wages." And as regards this point why not introduce the idea of co-operation? This is the money of the whole, community, of rich and poor alike, and, in introducing this company, surely it would have afforded a good opening for co-operation in labour interests, so that there should be a common object in working for the good of the State. But they have entirely forgotten to mention in the whole of this 1647 document whether any such idea was discussed in the committee. There is no stipulation that the employer shall erect machinery and make the promptest use of any discovery for which the Government is finding the money; I should have thought that those were businesslike stipulations.
They have got two nominees to sit on the board, who are to override their colleagues sitting in the room. As to those directors, I wish to say nothing disrespectful of them. They are eminent and capable men, men of brains, men of great business faculties. I hope they will not go to the board meeting save with the object of doing the best in their power for the company, and I certainly think that their selection is deserving of no criticism or opposition from me. I wish to ask, further, whether there is any scientist on the board? I do not know whether there are any university Members present, but if there are, I think they will agree with me that a company which is going to pay £100,000 for research ought to have some scientists or chemist on the board. And why is not there a labour man on the Board to whom the workpeople could lawfully look for protecting their interests? This is a matter which may effect research matters, in regard to which the workpeople would be entitled to know from one of their own representatives that inventions or processes to be introduced would be established in a manner to give labour proper consideration with regard to wages and conditions of work. But they do nothing of the kind. There is no representative of the workpeople upon this board.
The limit the qualification to a thousand pounds. I do not say that there are not working men in this country who have saved £1,000, but can you expect a man of moderate means and position to put his £1,000 in a very speculative concern of this description? The very fact that £1,000 is put down as a qualification is an intimation that no workman need apply for an appointment to this board. Then as to the offices of this company. I do not know where the board is to meet—whether in the North, or the South, in the Midlands, or in Scotland, but the prospectus is dated London, 5th March. What part of London? It does not even give the postal district, whether it is E.C., S.W., or anything. It has an office pro tem. at Manchester, in Dalton Street, a spot I know well; 1648 it is within a few yards of the room where the Anti-Corn Law League held their meeting. Little did they think that a Liberal Free Trade Government would commemorate them by having, right in the midst of this sacred area, pro tem. offices of a company of this description, with the name of John Dalton, at the corner of the street. The hon. Gentleman representing the Board of Trade will take it that there is nothing personal in what I say with regard to himself. He is one of the ablest, if not the ablest, debater on the side of Free Trade in this country. But I do not think that in any of those contests which were held in that Free Trade area it was ever contemplated that a Liberal Government would set up temporary offices in a street bearing the name of John Dalton, for the purposes of a company, called "British Dyes, Limited." The hon. Member for Mansfield (Sir A. Markham) asked, "What about the remuneration of the directors?" It is £10,000 per annum—£5,000 for ordinary services and £5,000 for special services.
§ Mr. BOOTH
I have obtained this copy of a prospectus from the City, and in this copy the remuneration is stated to be £5,000 per annum for ordinary services and £5,000 for additional or special services. The sum of £10,000 is divided in this way: £1,750 to the chairman, £1,250 to the deputy-chairman, and £1,000 each for the other seven directors. As to the committee, I wish to ask whether the committee referred to in the prospectus is to be under the board or what committee is in contemplation? Is the committee named here in the prospectus to be a committee within the meaning of this remuneration clause? The suggestion is, I do not pin myself to it, that this committee is to elect the board, and then the board is going to elect the committee, and I think the point is one that ought to be cleared up; but there is no indication in the prospectus. But that is the impression I gather, and it has been conveyed to me by more than a dozen Members of this House who have pressed me to get the point cleared up. We have the remarkable statement in the prospectus that this issue has been sanctioned by the Treasury.
1649 I ask any representative of the Treasury here or any Member of the Committee—I see two present, one sitting near me and one sitting vis-à-vis—to explain this matter. If we cannot get an answer from the Government I must ask one of these hon. Members. I understand that the Government set up what they called a Treasury Committee to advise upon any issues, the object being that if any money was wanted from the country no issue was to be sanctioned unless it was urgently necessary. This Committee, acting in a bonâ fide manner and in the interests of the State, refused, so I am told, their consent to this proposed issue. That is not denied. I received the information, which was quite startling, from an hon. Member, but it has never been officially stated by the Government that its scheme has been rejected by its own Committee. I submit that this statement in the prospectus does not correspond with what I have stated. The prospectus says this issue has been sanctioned by the Treasury. I understood, as far as I could gather from previous documents, that when the Treasury sanction issues they do not want it to be stated on the prospectus as an inducement to people to subscribe merely from the fact that the Government have approved the issue. I submit that it is not quite fair when an influential Committee presided over by an ex-Chancellor of the Exchequer, a man who formerly adorned a Treasury Bench and is now risen to great respect in the other House, and with two distinguished Members of this House on that Committee, together with several other distinguished colleagues, take the course I have indicated, that there is no mention in the public interests that the Committee declined to give their sanction to this scheme. This purchase has been made, and I suppose the Government over-rode their own Committee. The next paragraph of the prospectus is:—Minimum subscription, on which the directors may proceed to allotment, is fixed, by the Articles of Association, at seven shares.When legislation was passed by this House asking directors to state the minimum at which they would go to allotment, that was meant to be a safeguard for investors that they would not go to allotment unless a substantial amount of the proposed capital was subscribed. The Government have, I think, made some stipulation. I do not know what it is, but I think an answer was given that the amount was to be about £500,000. My complaint is that this is a very bad example to anyone issuing a 1650 prospectus. They go down to the bare minimum of seven shares, which is a legal and technical evasion of the legislation of this House. Do they want all companies to do that? They can do it, and they can quote Government sanction for doing it. I think it would be a misfortune for the investing public if this deplorable example were followed in subsequent issues.
I have felt it my duty to speak somewhat strongly. I felt free to do so because the issue closes to-morrow, and any remarks of mine which could only appear in to-morrow's Press would not affect the subscription. I should not have liked to have been an unwitting party by raising a discussion in this House to producing a smaller subscription than the Government wish. They have determined on the matter. They have not got the support of the House for this scheme and they could not pass it in normal times, and could only do so under abnormal circumstances. It is neither a Free Trade nor Protection scheme; it is neither a Government scheme nor a private company; it is neither a scheme suited to peace times or to war; it is part of everything and a mix-up of everything; it is a miserable compromise, such as has never succeeded in furnishing dividends yet. If the problem is as serious as the Government make out, there are only three ways in which they could tackle it: begin the manufacture of the dyes themselves, pay fair compensation to those engaged in the industry and take it all over, which is a course which would be advocated by hon. Gentlemen below the Gangway, and which would be a logical course, or help the industry by giving liberal bounties from Government funds to people who will extend their works and proceed to manufacture dyes. They could also impose a tariff against any competition, and induce people to subscribe because they would erect a wall round the industry and secure it from German competition. I venture to say, if the situation is as serious as the Government say, those three courses only were open to them. This is not on any definite hypothesis. You have a board which is incongruous and of mysterious origin, and you have fitful intervention by Government nominees. I venture to say that many many times there will be sorrowful requests from numbers of disappointed shareholders and employés to Members of this House, asking for the intervention of this House in the conduct of the concern.
§ Mr. PENNEFATHER
I rise with great diffidence and with great misgiving, because I am fully conscious of the fact that I have been such a short time a Member of this House that I cannot possibly have learned all the rules and unwritten laws which govern the proceedings of this august Assembly. Therefore, I think that the first thing I have to do is to throw myself on the mercy of the House, and to ask them to extend to me, to the fullest possible extent, that indulgence which I believe they are in the habit of extending to their young Members. It is a great satisfaction to me that on this, the first occasion of speaking in this House, I have not to rise to controvert what has been said by an hon. Member of the opposite side, but to express to a great extent my substantial agreement with a great deal of what he has said. The prospectus of British Dyes, Limited, is certainly, as he has described it, a most remarkable document, and it is not so much what is in it that is remarkable as what is left out. After studying the document very carefully, it has occurred to me that it is the work of two different people, one of whom is an optimist who can see a concern of three millions of capital emerging from a company where the authorised capital is only £2,000,000, and the other gentleman concerned appears to be a pastmaster in the art of withholding information while appearing to convey it.
The prospectus is extremely difficult to understand. I am confirmed in that view by the fact that the hon. Member for Pontefract (Mr. Booth), who has just spoken upon it and has endeavoured to analyse it, has not yet really been able to get to the bottom of it. One of the reasons why I believe hardly anybody in this House can understand this prospectus is because it refers to certain agreements, and because those agreements are only to be seen at the offices of the solicitors to the company in the City. I would suggest it would have been much more convenient for the purposes of discussion if the agreements had been sent up to this House. Yesterday I made it my business to go to the offices of the solicitors in the City. I was met by a clerk who asked me if I was an intending subscriber. I might have said "Heaven forbid," but I contented myself with saying that indirectly I might regard myself in that light, because I was a Member of this House, and that this House might be called upon to vote a million or so of money in connection with this scheme. Thereupon I was handed in 1652 the waiting-room some documents to peruse. I spent about half-an-hour reading them. I took a few notes, but I had another appointment and I found it was impossible to get all that I wanted out of those agreements. They were printed copies and were not the originals. I saw one of the gentlemen in authority, and asked him whether he could not send to me to this House a copy of the agreements in order that I might study them at my leisure and show them to my colleagues. The reply I received, very courteous and perhaps very proper, was that the solicitors were merely the servants of the directors, and that they could not furnish a Member of this House with a copy of those agreements for the convenience of this House without the sanction of the directors, but that they would try and get that sanction and would try and send them to me here. Up to this time I have not received that copy.
I do not propose to follow the hon. Member for Pontefract in criticising too severely the action of the Government in regard to this matter. I fully realise that they were in a difficulty, and that that difficulty was not lessened by the fact that they had to go and make negotiations in Yorkshire, because we all know when you go to do business in Yorkshire you meet a very capable class of business men. I think anybody who has read the prospectus will realise that Messrs. Read, Holliday and Sons, Limited, are eminently capable of looking after their own interests. I desire to draw attention to one or two omissions in the prospectus. The first omission which, I think, is a very important one, is that the prospectus refers to Option A and Option B, but does not state how long the options are in force or when they expire, which is a most important point. For the information of the House I may say that on referring to the agreement yesterday I found that these options do not expire until the 31st December, 1915. That is an important point, because in dealing with this matter a great deal turns upon the question of the urgency of exercising the option. The next error in the prospectus refers to the debentures, and I think I ought to refer to an omission in connection with this in the prospectus.
The prospectus ought to have contained information as to the share capital and debenture capital of Read, Holliday and Sons, but that is not mentioned. I find that the issued capital is 7,034 ordinary shares of £9 each paid. 1653 That is mentioned in one portion of the prospectus incidentally. In addition to those ordinary shares, and I think this may come as a surprise to many Members of the House, there are 9,000 cumulative 5 per cent. preference shares of £10 fully paid. As regards debentures, there are 46,900, or roughly 47,000, in £100 registered bonds at 4½per cent. secured by trust deed, the trustees being a Yorkshire Trust Corporation. It is stated in the prospectus that these debentures are to be repaid at the rate of £105, which is 5 per cent. premium. But according to the official records of the Stock Exchange, and I have referred to the "Stock Exchange Year Book" and another publication, those debentures, if paid off prior to 1920, have to be paid off at £110.
That may not be a very important point, but it amounts at least to two or three thousand pounds, and part of that money is to be found by the Government with the sanction of this House. Therefore, I think it is important that that point should be cleared up. The prospectus states that the debentures amount to £59,500, but if you add 10 per cent. premium it means that the new company has to find a considerably larger sum in order to redeem those debentures. There is another point which comes out of the agreements which I think may answer some inquiries which Members of the House have been making, and that is as to the salary which is to be paid to Mr. Lionel Brook Holliday and to Mr. Joseph Turner for their services in case they are called upon to render those services. The House will remember that whether those two gentlemen are called upon to serve or not, they are to be paid £10,000 apiece for the option of calling upon them, and in addition to that they are to be paid a salary, and the prospectus says the salary "mentioned in the agreement."
Would it not have been much more frank and straightforward for the prospectus to have said, "paid a salary of so much." Why was that sum kept out of the prospectus? One of the reasons why I went down to the City was to find that out. I found that the salary which is to be paid to Mr. Lionel Brook Holliday and Mr. Joseph Turner, to each of them is to be "not less," and I draw attention to those words "not less," than £5,000 per year. What is not loss than £5,000 per year? It presumably means more. It does not say £5,000, neither more nor less, but it says not less than £5,000. Therefore it may be, more, and who is to say how 1654 much more. Is it Mr. Holliday and Mr. Turner who have to say how much more, or is it the directors of the company? Is there an agreement as to that, and, if so, why was it not stated in the prospectus? These are comparatively small points. I now come to a more important point, namely, that if you read the whole of this prospectus from beginning to end you will not find a single reference to the £90,000 worth of preference shares which play an important part—a doubly important part—in option (b). Surely £90,000 worth of 5 per cent. cumulative preference shares is an item worth mentioning! It was only by going down to the City and inspecting these agreements—which we ought to have had here—that it was possible to find out that these £90,000 worth of preference shares existed, unless one referred to the official Stock Exchange Record, where, of course, they are given. The reason why I say these are very important in a double sense is, first of all, because £90,000 is a large sum, especially when that £90,000 worth of preference shares under option (b) would take priority of the £200,000 advanced by the Government, for which the new company has to take responsibility; and in the second place, because these 9,000 preference shares of £10 each have a voting power: they have one vote for every five shares.
The House will find that this is very material when they come to consider option (b). Really this option (b) requires very careful consideration, and I am afraid I must most reluctantly detain the House a little while in explaining this very intricate matter. The whole of this option (b) is wrapped in mystery which will be very hard to elucidate, but I will do it to the best of my ability as the result of considerable study of this subject. I think I ought to read out the words of option (b) from the prospectus. Option (a) is very simple. It merely gives the company the right of buying out Messrs. Read and Holliday, lock, stock and barrel, for the sum of £248,000 odd. Option (b) reads as follows in the prospectus:—In the alternative, to purchase from the said Lionel Brook Holliday 2,451 of the 7,034 issued ordinary shares of the company of £10 each (£9 paid) at the price of £22 10s. per share.…plus a certain proportion of profits, which is immaterial. Then comes the important part—and the purchaser is also bound to purchase on similar terms any other ordinary shares of the company which may be offered to the purchaser on like terms within three months of the completion of the sale of the said 2,451 ordinary shares.1655 This is a double-edged option. First of all, the purchaser has the option of acquiring the 2,451 shares of Mr. Holliday, but the moment the purchaser has exercised that option the vendor has the option on the purchaser of "plugging" him with all the rest of the shares at £22 10s. for £9. The option is no longer a buyer's option; it becomes a seller's option. It is very unsatisfactory from this point of view, because it really puts the vendors on velvet. The vendors have the option, if they think they have a good bargain, of "plugging" the buyer with all their shares at this particular price. If, on the other hand, the vendors think they can do better by waiting and holding out, they can "corner" the purchaser by refusing to part with these shares, and that means that the purchaser would be powerless, because he would not have a majority of votes at the company meetings. This is particularly important because the 9,000 preference shares carry 1,800 votes.
Therefore if option (b) is exercised, the purchaser will have no control over the company to which he has advanced £200,000—for this new company through the Government will have advanced Read, Holliday and Company £200,000—unless he buys up, not 2,400, for which he holds an option, but about 6,000 of these ordinary shares. That being the case, it might conceivably pay the vendors to "corner" the new company and say, "No; we refuse to sell these shares even at £22 10s. for £9." The vendors would really have the purchasers "on toast" Therefore, that is very important. It may be thought that it is a fantastic idea of mine that the vendors might possibly attempt a "corner" of the new company, or that it is necessary for the purchaser to hold such a large proportion of shares as about 6,000. But I would point out to the House that this possibility was foreseen by the Board of Trade officials or somebody when they first went into these negotiations, because the version of Option (b) which appears in the agreement is absolutely different from and entirely opposed to the version of Option (b) which appears in the prospectus. I will read the words of Clause (b) as it appears in the agreement. First of all there is an agreement that Lionel Brook Holliday will sell his 2,400 shares to the purchaser, and then the agreement goes on:—Lionel Brook Holliday agrees to use his best endeavours to procure other holders to grant similar options up to 6,626 ordinary shares. In the event of the said Lionel Brook Holliday not 1656 obtaining within six weeks from the date hereof the options from other shareholders which, with the option given by the said L. B. Holliday, will, if exercised, enable the purchaser to acquire 6,626 ordinary shares, these presents may be cancelled by the purchaser by notice in writing. Such notice, if any, shall be given within seven days of the expiration of the said six weeks.That is, the option to cancel would have to be exercised before the 22nd of January last. I respectfully ask the House to consider this question. If that was the view of the purchaser on the 4th December last, why has that view been altered? There is no such Clause that I could see in my hurried investigation of the agreement as that which appears in the prospectus, and the only conclusion I am driven to is that Mr. Lionel Brook Holliday could not induce his colleagues to give a firm option of the requisite number of shares to the purchaser. It is evident that the purchaser has not cancelled the option; therefore it seems obvious that there must have been some further supplementary agreement which does not appear in the prospectus, is not referred to in the prospectus, and was not shown to me when I called at the solicitors' offices yesterday. This is a point on which no doubt some Member on the Treasury Bench will enlighten us later. I think it is a most important point, and one on which the House requires to be enlightened.
In the meantime, we must accept for the purposes of discussion option (b) as it is printed in the prospectus. One must accept it for this reason—that, unless that Clause is correctly printed in the prospectus, any man who has applied for shares on the strength of this prospectus would, I believe, be legally entitled to cancel that application, or, if he did not do that, and the concern lost money—I do not profess to know the law, and doubtless I shall be corrected if I am wrong—he might come forward later on and claim damages from the directors on the ground of misrepresentation in the prospectus. Either of these results would be very undesirable.
After what has transpired it must be realised that if option (b) is stated correctly in the prospectus, it must be absolutely impossible for the directors to exercise option (b). They could not put themselves in a position in which they had no control over a company to which they had advanced £200,000. Therefore, the question arises: Why put in the prospectus an option which cannot be exercised? What is the object of putting in the alternative option if the directors have made up their 1657 minds and already know, as this extract proves that they must know, that they could net possibly exercise that option? Therefore, I rule option (b) as being out of the question, and will assume that the only possible option which could be exercised by the directors would be option (a), which means the buying out of Read, Holliday and Sons, Limited, "lock, stock, and barrel" by the payment of £248,000 odd. I would like now to turn to what the financial position of the company will be if that option (a) is exercised. That, of course, must depend largely upon a factor regarding which, at present, we have no information, that is, on what amount of money the directors will proceed to allotment? I believe it has been stated that they will go to allotment on applications for £500,000. They may get it. They have used very drastic means to get it, by imposing a certain amount of intimidation on the dye users.
I think it would be convenient if the hon. Gentleman opposite (Mr. Robertson) at this point would say whether he thinks they will get more than that or not. A reply might enable me to spare the time of the House. If the hon. Gentleman cannot say that he thinks they will get more, I am entitled to assume, for the purposes of argument, that they will not get more than £500,000—or not much more—and that they propose to go to allotment on about that sum. Therefore, as the basis of my calculations, I assume that the dye users will subscribe for over £500,000 of shares, and that as soon as that £500,000 worth of shares are allotted the Government will come forward and pay up £500,000. The words of the prospectus are:—The Government will pay up £1 for every £1 subscribed.'It has been stated in the letter from the solicitor to the company, which appeared in the "Times," that it is the intention of the Government, irrespective of the amount paid up, to pay the £500,000.
§ Mr. PENNEFATHER
That is a different point. I am now dealing with the question as to what the financial resources of this company would be if the £500,000 is subscribed by the public in the dye industry, and if the Government immediately hand over £500,000. It will again assist us if the hon. Gentleman (Mr. Robertson) would give an indication as to whether I am right 1658 or wrong in assuming that the Government will pay up £500,000 as soon as £500,000 of shares are subscribed, irrespective of the amount called up. I assume that is so?
§ Mr. PENNEFATHER
On that assumption I would like to give a calculation of what the liabilities of the company will be immediately after formation—that is to say, how much will the company have to pay out in the first few months, or possibly the first few weeks, of its existence; then I propose to turn to what cash they have available. The first thing the new company will have to pay out will be £248,000 odd purchase price to be paid to Read, Holliday and Sons—that is, assuming that the company is operating under option (a). Then there will be the payment of £200,000. I am not quite clear whether that will be a repayment to the Government of the money already advanced, or what shape it will take. The prospectus only states that the new company will be "responsible" for the £200,000 already advanced by the company to Read, Holliday and Sons. Then there will be about £62,000 for the repayment of outstanding debentures. If the prospectus is right in saying that these debentures have to be redeemed at 5 per cent. premium it will be about £62,000. If the Stock Exchange official records are correct the amount will probably be nearer £65,000. I am only, however, taking it at the former figure. Then there are these two sums of £10,000 to be paid to Messrs. Holliday and Turner for securing an option on their services (for which they each further intend to charge not less than £5,000 per year). This makes £20,000 more. Then there is £10,000 for preliminary expenses which have to be borne by this company. The new company will thus have to disburse £540,265, or possibly two or three thousand pounds more—take it at £540,000 in round figures. The sums available for the company to pay these disbursements out of are, as I assume, the Government loan of £500,000. It is not, so far as I can gather, certain that the Government are going to pay that up at once. I cannot say. I do not think anybody on our side of the House knows. There will also be the proceeds of the first call of 2s. 6d. per share on application and 2s. 6d. per share on allotment, or 5s. per share. Assuming applications for £500,000, that comes to £125,000. That added to the Government 1659 loan, if it is £500,000, makes a total of £625,000. From that we must deduct the present liabilities I have mentioned of £540,000, and the magnificent surplus of about £80,000 is left. I respectfully submit that at this point we have to consider what are the objects of the company which is going to start business with available surplus assets of a sum not exceeding £80,000 to £85,000. The prospectus here gives us the scheme. Apart from purchasing the business of Read, Holliday, it says, almost immediately after the names of the directors, and under the heading of "Operations":—After purchasing the business of Read, Holliday, the new company will continue negotiations, already begun, to acquire other dye-producing concerns.The next paragraph goes on:—Existing plants of companies whose undertakings this company may purchase or financially assist will be largely extended.Later it says:—The erection of entirely new works can be undertaken.I respectfully ask this House to consider how is it possible for a company with only £80,000 odd in hand, during the first six months of its existence, to undertake these far-reaching schemes? How can it acquire new concerns? How can it largely augment the existing machinery of concerns? How can it give this financial assistance to still other concerns? The first six months during this War—and we hope it will be over at the end of the six months—will be the most vital period of this company's existence in regard to rendering useful assistance to the dye-users of this country. If the company have not got the money at the beginning the whole utility of the scheme is to a large extent discounted. Again, suppose they start with this £80,000, that is all they have got for working capital, and for all this other work which they propose. They are sure to have spent that in the first six months—or before. Then they will have to wait, and at the end of the six months they will be able to make another call of 5s. per share. That will bring them in from the 6th to the 9th month of their existence another £125,000—I am assuming the first £80,000 is spent—but £125,000 six months hence to carry out the objects of this company is surely an insufficient sum, and, when they have spent that, they then only get another £125,000, and so it will go on.
I submit that this company will be in financial straits from the moment it goes to allotment; it cannot be otherwise. It 1660 will be a poor, embarrassed, weak company, unless the subscriptions are very much in excess of £500,000. Even if the subscriptions were a million pounds, this company would still be unable, through lack of financial strength, to carry out successfully the objects which are mentioned in the prospectus. Then, when the War is over, when peace comes, when military operations cease and a commercial war begins, what is going to happen to this company with its limited capital, when it has to face the competition of the importation of German dyes? It is obvious to anybody who knows anything whatever about business—I do not care what his political views or his economic views are—that when war ceases, when the present conditions of the dye famine give place to the condition of a plethora of dyes coming to this country, a company like this must be prepared to lose a good deal of money for one, two, or possibly three years, before it establishes its position. How can this company do it if it is so miserably under-financed?
Therefore I venture to plead with the Government for something less niggling, something less petty than this small and miserable, and probably inefficient scheme. I ask them to try and look at any concern of the kind—with which the name of this House is to be associated—in a broader spirit, to see whether they cannot offer something more worthy of this emergency. I do not think that is too much to ask. I am convinced, from my knowledge of the business men of the North of England (they are not all Mr. Holliday's or Mr. Turner's, who want to drive hard bargains and mainly get off with the swag). The business men of the North of England who use these dyes so largely are quite capable of being patriotic if appealed to in the right way. They did not come forward, perhaps, willingly to support this scheme. First of all, perhaps, they did not like the element of intimidation which it contained, and then their instincts as business men revolted against the details of the scheme. They know it is unsound, so they did not come forward very willingly.
But I believe that if a patriotic scheme were put before the dye users—and, after all, we are all dye users; there is not a man, woman, or child in the country who does not use dye in some form—I say that if it were put before the country that what we are setting out to do, and what the Government want the assistance of the 1661 country in doing, is to recapture this German dye industry—which is an industry in our midst, and ought really to be an English industry—and that, having recaptured it, we mean to hold it, to dig it in, to entrench it, and to make it impossible for the Germans ever to capture it back from us again; then, if that proposition were put by the Government before the country in a noble spirit and on a sufficiently large scale, and an appeal was made to the patriotism of the country, then I say confidently from my knowledge of the business men of England, particularly in the North of England, that they would respond to that appeal, and I believe the Government would have no difficulty in getting an amount of money which would enable a scheme of this kind to be carried out really effectively.
If it is not too late I would plead with the Government, if they have an excuse, if they can find an excuse, to abandon, this present scheme. The option over Read, Holliday's concern does not expire until December, 1915. I would plead with them, with all respect, that they should bring in something better, something nobler, something more worthy of a great country like ours in a great emergency like this, because if this industry is recaptured from us by the Germans it will, in my humble opinion, be nothing short of a national calamity, a national degradation, and an admission on our part that in this particular branch of industry we Englishmen are not able to compete with our enemies.
§ Sir FREDERICK CAWLEY
The hon. Member who has just sat down has made a most able speech and given a most capable analysis of the subject. I am not going to follow him in regard to criticism of this company; I want to deal with the general objection. The course which the Government has taken is a most extraordinary one, and I do not think anything can better exemplify the state of dictatorship which we are under. Nobody wants this scheme. Nobody wants it in the country and nobody wants it in this House, and if the scheme had come before the House in ordinary times it would have been laughed out and would not have had a dog's chance. But the Government took not the slightest notice of hon. Members opposite or of hon. Members on their own side, but went pushing on with it. It is a bad company-promoting scheme. I should like the hon. Member to give us a really detailed account of how the thing has 1662 come to pass. As far as I know the consumers of aniline dyes went to the Government to ask them to do something to relieve the present situation. They saw that as time went on the consumers of dyes would be short, and they wanted something done to relieve the present situation. Well, the Government have taken a long time. We have been at war now for the last seven or eight months, and at last the Government has come before this House with this great scheme, which is not a scheme of immediate relief for the present situation, but is more a company-promoting scheme for the future.
What we wanted done was something immediately. There were colours in France that might have been had. Everybody knew that the principal place to get colours was Switzerland, and now, forsooth, a company has been formed so that they can send raw materials to Switzerland and get manufactured dyes back again. Could not something of that kind have been done at the very first? Could not we have got some of these colours before now from Switzerland? And was it necessary to form a company with a million of money to get goods from Switzerland in exchange for the raw material sent out? I do not think it was. So far as I know, the first step the Government took was to form a Committee under the presidency of Lord Haldane, and they invited a great many representative men to sit on it. They did not do any Member of the House the honour of asking him to sit on it. There were two Members—I was not one—who asked to be put on that Committee, but they were not allowed to be put on. I frankly confess I should have liked to be on. I have been connected with this business all my life, but did not ask to be put on, though other Members, with qualifications such as I have, asked, but were not put on.
I should like to ask how many times the Committee met. I am told they only met twice, and that then this scheme was brought before the Board of Trade—I believe principally initiated by a lawyer—but it has never had the sanction of Lord Haldane's Committee. It has had the approval of some consumers, but are the large consumers in favour of it? I am told that the largest consumers in the country are not in favour of it, and I have been told personally by small consumers that they are not in favour of it. Who is in favour of it? The only supporters seem to be those at the Board of Trade. The 1663 consumers have asked the Government to help them out of a difficulty. I do not think myself that a single Member of this House has supported the Government in this scheme. It is true that the hon. Member for Swansea says that if the consumers want it they ought to have supported it. So they would if they approved of the scheme, but it has been cut and dried, and the only way they are asked to support it now is that they are told if they do not support it they shall not have dyes.
The scheme of the Government is, "We are going to buy the principal aniline colours in this country and we already have the option of the principal firm. We have made an arrangement with the largest makers in Switzerland and we shall give them facilities for transport and grant licences to send the raw material to Switzerland, and in that way we shall collar most of the trade for this country." You are going to buy up all the companies you can get into this combine, and get the principal Swiss manufacturers to send all their stuff, so that they can tell the people—and they do in the prospectus in so many words—"If you will not join us and subscribe to our promotion scheme we will not let you have any dyes." That is a very unfair thing, and the Government have no right to use public money to force people into a scheme which they would not go into otherwise. Suppose this thing is successful, and they get the money and buy up all the manufacturers in this country, what are we faced with? We are faced with a combination, or a trust or a cartel, actually promoted and supported by the Government. It is a most iniquitous position. I suppose the gentlemen who are promoting this company have always had in view what hon. Gentlemen opposite would do under Protection. What will be the position of the consumer under Protection? All the works of this country will be under one huge combine. There will be a tariff, so that there will be no foreign competition, and we shall have the very worst features of an American trust brought about and supported by a Free Trade Government.
It is the most reprehensible course that any Government could possibly have taken. This company has been formed, as the hon. Member opposite said, by intimidation, and the Government are fusing their great powers to help this one company. What about the £100,000 for 1664 research work? It is not going to be given to any university nor to any other company that may be started to do chemical and research work, but they are going to give all this money to this one company, with no sort of guarantee that it will grant licences for any new discoveries which may be made. That sum will pay a good many chemists, but if any other chemist discovers any other new product, what is he going to do? Is he going to hawk it round to other manufacturers and say. "I have discovered a new colour, and I will give you the licence to use it, and you will be a competitor of ours and we shall go on all right." It is not very likely they will do that. These chemists which the country are really paying for will be in the employ of this new company and working for it. The Government have no right to give public money to one company for their own profit. That is the reason why this company should not be gone on with. In my opinion, it is an unfair company and it is using public funds in a way which no Government ought to use them.
§ Sir PHILIP MAGNUS
I am certain that the House listened with very great pleasure to the lucid explanation by the hon. Member for the Kirkdale Division of Liverpool (Mr. Pennefather) of the prospectus which is now in our hands. I regret that the hon. Gentleman did not speak before a larger House than is here assembled, and I sincerely hope that his speech will be read by hon. Members in all parts of the House to-morrow morning. He has explained to us for the first time what is the character of this prospectus, and I may be allowed to say that I regret very much indeed that those particulars were not placed in possession of the Members of this House some days before. It is very difficult to make ourselves masters of the details of this prospectus, but surely, before the House is compelled to vote a very large sum of money for this purpose, hon. Members ought to have had an opportunity of expressing an opinion upon the details of the scheme, and possibly pass some criticism which might have been of some service to the Government. It is a very ungracious part to have to criticise in any way this scheme.
The Government were face to face with a very great difficulty. Dyes and dye-stuffs are essential ingredients for employment of an enormous number of persons engaged in productive industries in this country, and there was a possibility of a 1665 famine in dyes confronting the Government, affecting the employment of 1,500,000 persons. The Government, therefore, decided to do what they could to meet an emergency of this description, and all I can say is that if the scheme put forward by the Government showed, any chance of meeting the difficulties which we at present feel, or of doing what I am all anxious should be done, enabling this country in future to be independent of Germany in the supplies of dye-stuffs, then, even although the scheme might not be all that everyone would desire, we should do what we could to give the Government our thorough and unqualified support. I myself am certainly more interested in the prospect of regaining and of retaining this colour industry than in any other part of the scheme, and I must own that, as I understand the scheme, I see no prospect of our succeeding in so doing.
I am not in a position, nor do I desire, to follow the two previous speakers in discussing the financial provisions of this scheme. I am not able to do so. I do not understand finance, and I should be very sorry to be called upon to criticise the prospectus of any public company. There are, however, one or two points which have been partially touched upon by other speakers to which I desire in a few words to refer. The first of these is as regards the directorate of this company. I notice that the scheme provides that the directorate shall consist of not less than six, or not more than twelve, persons, and, according to the prospectus, there are already nine persons on the directorate. The directorate will be paid a sum of £5,000 a year, with an increased grant of £5,000 a year for any special service which they may render. The directors, therefore, may at once absorb a sum of £10,000 a year.
§ Sir A. MARKHAM
They can take £20,000 a year under the prospectus. They can vote the managing director whatever they like.
§ Sir P. MAGNUS
That includes the managing director. I think it will be found that nearly all the successful chemical industries of this country have been carried on not by a large board of directors, everyone of whom is a busy man engaged in other important business, but has been carried on by two or three persons devoting the whole of their time to making the industry a success. Here we have nine directors, each one of whom is a director of some other great 1666 important company. It surely cannot be wise to entrust the development of this new industry, involving experiments of a most difficult character, to a number of men, every one of whom has far more important business to occupy his attention than that connected with the particular company of which he becomes a director. There is another grave objection. When I was speaking on this subject about a fortnight ago, I pointed out that the success of every chemical industry depended upon the management of the company being entrusted on the one hand to a person of great commercial experience and, on the other hand, to persons of great scientific eminence. No chemical industry can possibly be carried on unless there are on the management men of high scientific attainments with an expert knowledge of chemical products. I have looked through the list of these directors, and I do not find a single one who can be said to have any great chemical knowledge or who would be regarded for one moment as a chemical expert.
It may be said that the directors have the power of appointing an advisory committee of scientific experts, but I would point out that an advisory committee is a very different thing from an executive or a management committee, and it is most important that chemists themselves should be pecuniarily interested in the success of this company and that they should form an influential part of the managing body. I do not know a single company in this country, or in any other country, dealing with chemical products on the management of which we do not find chemical experts. The hon. Member for Limehouse (Mr. W. Pearce) spoke on the last occasion when this was being discussed, and on the chemical business with which he is connected there is a manager closely associated with it who is an F.R.S. and an eminent chemist. I do not think, if you look through all the entire list of successful chemical industries, you will find that any one has had any chance of succeeding without there has been chemical experts on the management. One of the most important things is that when some new discovery is suggested, from whatever source it may come, the board of directors shall be competent to ascertain whether or not there is any value in it. That is not possible unless, on the board itself, there are men of scientific ability and knowledge. That is the second objection I have to raise to this scheme.
1667 The hon. Member who has just sat down has pointed out that the Government propose—and no one is more pleased to see it than I am—to devote the sum of £100,000, distributed over ten years, to chemical research, but the allocation and the control of that sum of money is left entirely in the hands of the board of directors of the company, on which there does not exist, according to the prospectus, a single person with a knowledge of chemistry. We do not even know that the £10,000 to be placed in the hands of the directors will be employed for chemical research. There is no indication as to the manner in which this money may be used. In any circumstances it seems to me remarkable that it should be proposed to devote £10,000 a year to research and that no part of it should be appropriated to the use of the universities, but that the whole of it should be under the direction of a number of directors who are not themselves scientific men. I should have thought that it would have been highly advisable that the universities of this country should have some part of this Grant, or, at any rate, that there should have been offered to the universities of the country some opportunity of bringing their discoveries before a competent body of men, who would be prepared to pay them very handsomely for any discovery which promised to be of value to them.
When this matter was being discussed a fortnight ago the President of the Board of Trade told us that this money was going to be devoted to technical education. I did not in the least understand how it was to be so devoted. I hoped that it might be given to the higher branches of scientific and technical education which are being carried on in the universities, and I certainly could not suppose that it would be devoted to the lower branches of technical education which are carried on in some of our smaller schools, but to my surprise the President of the Board of Trade told us that what this country wanted was second-grade chemists. "The difficulty we suffer from," he said, "is that there are not enough second-grade chemists; it is the business of the Government to produce a larger number of chemists in the second grade." I hope that that view will not be entertained by the directors of this company. What we want are chemists of the highest possible ability, and there is no chemical industry 1668 which necessitates a higher and more protracted scientific training than that connected with derivatives of coal-tar. I must say the statement to which I have referred was most unexpected, and I earnestly trust it will not meet with acceptance at the hands of this company.
I want next to say a few words with regard to the contract which the users of these dyes are expected to enter into. The contract requires all users of the dyes to obtain their dyes, for a period of five years after the cessation of this War, from this particular company. It imposes that upon them as a condition of their obtaining dyes at the present time. There can be no doubt whatever that the users of dyes during the War will be willing and glad to obtain their colouring matters from this company, because they will have no opportunity of obtaining dyes elsewhere. But how can we expect that the users of these ryes at the present time. There can be be willing to continue to take their dyes from this particular company?
The President of the Board of Trade said that they would be under no legal obligation to take their dyes from the company if they could obtain them more cheaply from any other firm. I particularly asked him whether they might obtain them from any foreign firm and he said, "Certainly, they might." If the user of the dyes objects to the prices which he is called upon to pay for them from this company he can complain and the matter will be left to the decision of a referee, who will have to ascertain that the prices charged by the company are reasonable. I do not know exactly what "reasonable" means in that connection. It is suggested that it is a price not higher than that at which the dyes can be obtained from any other firm. As soon as this War is over German companies will be sending great quantities of their dyes into this country; they will be dumping them down here, and it will be impossible for a British company to compete on equal terms with their German rivals in the price at which these dyes can be supplied. There is nothing in the agreement, nor in the words by which the agreement was interpreted by the President of the Board of Trade, which necessarily requires the users to obtain their dyes from this company, and, therefore, I see no chance whatever, in the scheme now before us, of our being able, as I would like to do, to recapture 1669 this industry from the German manufacturers and to secure its maintenance in our own hands. In a letter in yesterday's "Times," from that very eminent chemist, Sir William Ramsay, it was stated that there was no possibility of our being able to build up the industry unless, for some time after the War, we absolutely prohibited the importation of dyes into this country. That is exactly what the Government are trying to do and what they will not succeed in doing. They are trying to prohibit absolutely the importation of foreign dyes into this country by requiring users of this company's dyes to sign a declaration that they will not use foreign dyes for five years after the War. But there is no sanction for that contract, and I do not think it could possibly be enforced.
Therefore, it seems to me, with all respect, while this scheme, as placed before us, will not enable us to obtain immediately as we require them the dye-stuffs needed for our various industries, it holds out no hope whatever of enabling us to recapture from the Germans that trade, which originally belonged to this country, and to retain it in our own hands. I wish, very much, I could speak more hopefully of the scheme. I have sympathy with what the Government are endeavouring to do in order to meet an emergency of this kind, and I feel certain that, if they had taken the House of Commons more into their confidence, and if they had sought the advice of many scientific men who would have been able wisely to advise them, they might have brought forward a scheme which had greater prospects of success and by means of which there would have been a possibility of our being able to retain this important industry in our own country.
§ Sir A. MARKHAM
I first want to register my protest that hon. Members have been unable to obtain copies of this prospectus in the House, and have had to go to the City to get them.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson)
Did the hon. Baronet make an application to the Board of Trade?
§ Sir A. MARKHAM
No, I went to the Vote Office. We are voting a large sum of public money, and Members of this House are entitled to know the conditions under which they are going to vote it. I am utterly opposed to this scheme. I have 1670 had something to do with coal tar by-products, and I know the many difficulties the Government have to face in setting up these new works. It has been said that we in this country have allowed the Germans to go ahead of us, and that their Bardashee Works have secured a practical monopoly of the dye industry in Europe. But the House of Commons would do well to recollect that the trade of Germany is centred largely in banks and syndicates, and owing to their operations the German Bardashee Company, by the expenditure of something like £40,000,000, have built up works in Germany which have cost them, for research work alone, millions of money. It may be asked why the manufacturers of this country do not join together for the purpose of forming a great trust to compete with Germany. It has not been done for the reason that public opinion in this country does not like great combinations which dominate a whole trade, as has been the case in Germany.
First, I want to say a few words about the prospectus. I am not going to follow my hon. Friend the Member for Pontefract (Mr. Booth) in his humorous remarks about it. But I do think the prospectus is not one which the Board of Trade should put forward as a model for industrial companies to adopt. It errs in many important points to which the Board of Trade, being responsible for the correcting and bringing to book in Courts of Law of fraudulent balance sheets and prospectuses should have been the first to conform in every way, not only to the law, but to the intentions of Parliament. Let me first deal with the directors. The House knows that the real man behind this scheme from the beginning has been Lord Fletcher Moulton, who has given an enormous amount of his time to helping the Government in every way to bring this scheme, bad or good, to the position in which it stands. I look at this question from this position. I am a Free Trader. Here we are in the face of a national emergency, and I am not going to be bound by any fetish. I look at the question from the standpoint that we are going to spend a large sum of money, and, when we have spent it, are we going to be successful in competing with the Bardashee Works or not. As a matter of fact, I believe those works will smash this company within a very few years, even if the Government goes on finding the money.
What is happening now? If hon. Members will take the trouble to refer to the 1671 German technical journals they will find that the Germans are to-day manufacturing large quantities of material which they boasted at a recent meeting in Coblenz that they were going to dump in this country after the War. They had the impudence to say that. At another meeting of steel manufacturers, they also said they were going to dump into this country the surplus steel they were making during the War. If the Government start giving £10,000 a year to research work, which is very difficult and complicated, these second-class chemists cannot deal with a difficulty of this kind. We all know that it is not the second-class chemist but the super-chemist who is required for the dye business. In Germany, nothing in connection with the by-products of coal tar is wasted. Everything that passes through the Bardashee Works, from the time it enters it until it comes out, is used. In the face of that position, the Government come here, although their own Committee at the Treasury say that the scheme is an undesirable one, and not a single Member on either side of the House is in favour of the scheme, and seek by their charter to set up this company. We are going to lose every penny that we are now finding for what I really believe is nothing but a wild cat scheme. When the Germans have spent not merely tens of thousands a year, but millions a year, in research work, how can you hope, even if this research work is carried on for a number of years, to compete with them, having regard to the position they have arrived at.
§ Sir F. BANBURY
The hon. Baronet said that the Committee have stated that the scheme is undesirable. The communications which passed between the Committee and Treasury were private. The Committee were only set up to advise the Treasury, so that the statement was private as between the Committee and the Treasury. The Committee did say, however, that if any statement with regard to the Treasury was put upon the prospectus, it ought to be the usual statement which has been put upon all prospectuses.
§ Sir A. MARKHAM
That is not what appears on the prospectus. The hon. Baronet well knows that they were not the usual words that appear in a prospectus.
§ Sir A. MARKHAM
The statement was made by the hon. Member for Pontefract 1672 (Mr. Booth) and was not contradicted. I saw the Leader of the Opposition turn to the hon. Baronet and ask, "Is that true?" and the hon. Baronet nodded his head.
§ Sir F. BANBURY
It is not so at all. As to what passed between the Leader of the Opposition and myself I do not know that I am bound to divulge a private conversation. I did not nod my head in that sense.
§ Sir A. MARKHAM
We will not quarrel about words. It comes to this, that the Treasury Committee did not give this their hall-mark as they have given it to other schemes.
§ Sir A. MARKHAM
I do not know whether they refused it or not; I will not put it so high as that. I used the hon. Baronet's words, that they did not give it their hall-mark.
§ Sir F. BANBURY
That is not absolutely correct. What I said was that the Committee did say that if a statement were put upon the prospectus, it must be a statement in conformity with the statement which was put on all other prospectuses.
§ Sir A. MARKHAM
The prospectus says:—This issue has been sanctioned by the Treasury.What appeared in all the other prospectuses were words to the effect that the Treasury did not hold themselves responsible for any statements which were set out in the prospectus. The hon. Member opposite (Mr. Pennefather) made a very able speech to-night, and perhaps he will allow me, as an old Member of the House, to say that we should be grateful to him if he can elucidate other points as he has done to-day. The point I desire to make in regard to this prospectus is an entirely different one. The hon. Baronet opposite (Sir F. Banbury) is really playing with the issue. He knows perfectly well that this prospectus has not got the hall-mark. The hon. Member (Mr. Pennefather) said he thought that any shareholder who applied for shares in this company could seek to 1673 get his money back, because there had not been a full disclosure of all the facts in the prospectus.
I come to the directors. There is nothing in the prospectus which does not warrant these gentlemen voting themselves £20,000 a year. A director is to receive £5,000 a year, but they may vote themselves into a committee, and then there is another £5,000 a year. Not one of these persons knows anything about the business which is going to be done. Why you want to bring in all kinds of people who have never had anything to do with this trade and put them on this board I am at a loss to understand. All these people are wholly unacquainted with the work. That is the way the Government starts to build up a great industry of aniline dyes in this country. I want to know whether the Government are to use this for blackmailing manufacturers who do not come within the scheme itself? As an hon. Friend of mine pointed out, the Government are using this company for the purpose of forcing manufacturers to buy their dyes from it. It would be absolutely wrong that we in the House of Commons should vote money for the purpose of compelling manufacturers to get their dyes from a Government monopoly, and from that monopoly only. We were told the other day that that was not so, and that manufacturers could buy outside. That was not the impression I gathered from the balance-sheet itself.
Are we to understand that no manufacturer is to be prejudiced in any way by the fact that he has not subscribed to the issue of this capital? Of course, I at once admit the manufacturer is entitled to say, "We are not going to give a preference to you who have not subscribed, but we shall give that preference in the manufacture of the dye we actually make ourselves to our own shareholders." That is only reasonable. But if this company is going to send coal-tar products from here to Switzerland, and they are going to be manufactured in Switzerland and brought back, and the final products are to be sold by this company, you are going to put every manufacturer in the position that he can only buy through this company, and you are not, therefore, giving him fair play. All products which are manufactured by the company, qua manufacturing company, ought to go in preference to the shareholders of the company, but you ought not to give this company a right, as I think you have done under this memorandum 1674 of articles, to send the raw products to various countries, to make the products up and let this company finish them, and then create a corner against merchants who have not, subscribed.
I hope it will be made clear that that is not the intention of the Government. That is pressure which no Government ought to put on manufacturers. Will the Government tell us at the same time who was responsible for drawing up this prospectus? There is no promoter's name on it. That, of course, ought to have been on. I do not think it can have emanated from a Government Department. It must have emanated from some solicitor or company promoter. Whoever has done it has so fogged the issue that I should be ashamed to have my name put on the prospectus as one from which I should seek to get money from the public for the purpose of my business. If I could not put a more clear business statement on a prospectus on which I was seeking money from the public to carry on my business, I certainly would not make any appeal whatever. I hope we shall have an assurance that this company is not to be used for the prejudice of manufacturers, who know that the scheme is bad from the beginning, and that when the War is over the Germans will smash it and the shareholders will lose every penny they have subscribed.
§ Mr. HEWINS
On the last occasion when we had a debate on this very important subject, it was almost the most extraordinary debate I ever listened to. The speeches, especially from some hon. Members on that side of the House, showed an extraordinarily high degree of technical knowledge of the subject they were discussing, and yet, so far as I remember, there was not a single hon. Member who approved the scheme or who did not urge what were absolutely fatal objections to it. The only one who spoke, in favour of the scheme was the President of the Board of Trade. The prospectus does not meet one single criticism which was offered on that occasion. On the contrary, now that it is fully disclosed, we find it infinitely more objectionable than the rough draft of it given by the President of the Board of Trade. The prospectus itself is an outrageous document to be published by a public Department of this country. I will not characterise it any further. I agree with the hon. Baronet (Sir A. Markham) that I do not think any Member of the House would care to have his name associated with it.
§ Mr. HEWINS
Yes, there is one. I look at the Press. I take the financial criticism of the "Times," which is of a very high order. There has rarely been a more severe condemnation of any prospectus than you have in the "Times." Even the ordinary Press supporting the Government condemns this scheme. I take the ingenious way in which the "Manchester Guardian" condemns it. It had an interview with a technical expert which was fatal to the scheme, and it had a leading article showing that after the War dumping would probably begin, and so great was the economic efficiency of Germany that we could not do anything to hinder it. What I rose to refer to was this: I want to know precisely where we are. Parliament is going to adjourn in a day or two for a month. What is going to be done in that month? Where is this scheme going to be at the end of the month? Is the Government going on with it? I do not want to raise any question of a controversial type in the ordinary way. I know that some hon. Members, especially those on the Front Bench opposite, suffer from a kind of economic hysteria in certain circumstances, and therefore I will not put them to any strain.
But I wish to allude to one of the most important measures which this House has ever had to consider, and which has a very intimate bearing upon the present situation. I mean the Bill we passed yesterday—the Defence of the Realm Amendment Bill. What is the Government going to do about it? Under that Bill they can do everything which is requisite to develop the potentiality of dye-producing in this country. If they take their definition of war material in that Bill, it will certainly cover aniline dyes. I want to know, when the Government are organising the industries of the country for war purposes, are they going to apply the provisions of the Bill we passed yesterday to aniline dyes, or are they not? When they have these great powers entrusted to them under which, for instance, they could call to their counsels the right hon. Baronet (Sir A. Mond) and other great experts who command great amounts of capital and say, "Will you help us in relieving us from this war difficulty of aniline dyes?" They can take all these potentialities and develop them to the utmost, just as they can ammunition or the ordinary things required for 1676 war purposes. But are they going to do that? If they are, this scheme, which is after all, not yet really established, is totally irrelevant and unnecessary, and if they are not going to do that I want to know what is the bearing of this scheme upon another subject we were discussing yesterday in relation to the Defence of the Realm Consolidation Bill—the question of compensation.
The case is exactly analogous to the case of ammunition—in fact, some development of the coal-tar industry has a very direct bearing on the question. The workshops of the country are equal to the situation. If from the point of view of the Bill we passed yesterday you took manufacturers into consultation, the potentialities of the country are sufficient to get it out of its present difficulty in regard to aniline dyes. That is the information I get from technical experts on the subject. Are they going to do that? And if they are not do they wish the terms of their option with Read, Holliday and Company to be taken as a model as to the way in which you will deal with firms when you require them to organise their potentialities for the service of the country in time of war. It seems to me this is a very important question, but as was shown clearly yesterday, the Government had no plans whatever in their mind to carry out the Bill they were discussing. They apparently had not considered it. It is an ad hoc Bill to deal with a particular situation. They do not know where they are, and they have not considered that Bill in relation to the aniline dye situation.
When the Parliamentary Secretary to the Board of Trade replies I hope he will tell us exactly what the situation is, and, of course, supposing that they do carry out the scheme, what could be done under the Defence of the Realm Act which was passed yesterday? It still remains that you have to give some kind of security to manufacturers to take up this business. I do not wish to say anything discourteous to the hon. Gentleman opposite (Mr. J. M. Robertson), but for particular reasons I would rather that the President of the Board of Trade could have been here. It does seem to me that right hon. Gentlemen on the Treasury Bench are frightened of the controversy between Tariff Reform and Free Trade. I am not going to raise that controversy, but I wish to point out that if the Government really want to give the security which manufacturers require in regard to the manufacture of aniline 1677 dyes, it is not necessary to raise the question of Tariff Reform. There are scores of ways in which effective security could be given which do not require what hon. Members opposite are so much afraid of. I should have been only too glad to discuss alternative methods if they had shown the least disposition to meet manufacturers in that regard. Certainly no one could ask the Government to go into any kind of detail as to the particular measures they will adopt.
Who in this House, before we came down here two days ago, expected that we were to be asked to carry through in two or three hours what is nothing less than an industrial revolution? We had no warning that the measure would be brought in, and we did not know anything about it. When you look at the present financial situation and the manufacturing situation, I am perfectly certain that there is no man on either side of the House who would venture to say what the position will be after the War. Therefore, not being in a position to say what will be the position after the War, it is idle to give detailed pledges as to how you are going to carry out certain proposals. But you can give definite security. There are different ways in which it can be done. I would be very glad to discuss possible methods if we were only able to discuss them with absolute freedom. There are many ways in which you can achieve that purpose, and how important it is I will try to explain to hon. Members in a few words. There in more than one Member of the House, and there are many men in the country, who, to my certain knowledge, if that security could be granted, are prepared to find several millions for the manufacture of aniline dyes.
§ Mr. HEWINS
On a condition against the dumping competition of Germany after the War. I said on a former occasion that I hoped hon. Members will not suppose that I am trying at the present time to raise anything in the nature of Tariff Reform. I ask hon. Members to take it from me that I would not begin a Tariff Reform system by putting a tariff on particular forms of manufactures. I do not myself believe that Tariff Reform Members are going to be carried away in that manner. I believe that it is an entirely different proposition to deal with the conditions required in relation to the production of ailine dyes and analogous cases 1678 from carrying out a great scheme of national policy. Here we are at this crisis in our affairs. The Government have destroyed our banking system. They have destroyed our currency system. We are prohibited everywhere. We have scrapped the British Constitution. We have nearly a million under arms and hundreds and thousands are dying for the great cause in which we are engaged. There are certain things which the Government will not even consider. Suppose you do scrap our fiscal system, what on earth does it matter in comparison with the great issues of this War? How many of the old causes does the House suppose are going to survive the great flood which is altering everything? I do not want the hon. Member opposite to commit himself, but I ask the Government to consider this proposition from the point of view of giving a perfectly free hand looking to what can be done under the Defence of the Realm (Amendment) Bill which we have passed.
Is it desirable in view of the passing of that Bill to go on with this ramshackle scheme? Will not this scheme, which the Government are trying to establish, actually hamper the War Office or whoever is responsible for the administration of the measure, when they come to deal with certain questions of explosives and ammunition which are closely related to the aniline question? When that Committee has been appointed, and when you have got commercially your Lord Kitchener, he ought not to be hampered in such a vital matter as aniline dyes by the existence of this scheme which the Government is trying to pass without the ordinary ground of expediency. I can assure the Government that I am so much alive to the difficulties which will arise that, if I thought well of their scheme, I would not hesitate for a moment to give it my heartiest approval. I have no desire to make any capital out of this question for any particular cause. I would be willing to adopt any scheme which I believed would help the country through its present difficulties. I ask the Government to imitate the spirit in which we on this side of the House are acting. That is our attitude. I do not wish to make any kind of economic or political capital out of any one of these questions. We do ask the Government, before it is too late, to act in the spirit of those on this side of the House who supported the Bill which we carried yesterday. Let them 1679 call to their councils all manufacturers who can give any assistance in reference to this problem, and I feel perfectly certain that they will find a sufficiency of suggestion which can be carried out with advantage to the community and to the safety and security of all concerned.
§ Mr. ROBERTSON
It is obviously impossible for me to deal in detail with the hundred and one criticisms which have been advanced in reference to this scheme, but I will do my very best to deal with all the substantial points as I understand them. Unfortunately I did not catch the opening words of my hon. Friend the Member for Pontefract (Mr. Booth), but, as I understand, he shared the view expressed later by the hon. Member for Kirkdale (Mr. Pennefather), that they had not had proper access either to the prospectus or to the agreement made with the firm of Read, Holliday and Sons. I do not know whether my hon. Friend suggests that these documents ought to have been issued with the ordinary Parliamentary Papers. I do not profess to be an expert with regard to these matters, but I confess that it never would have occurred to me that that should have been done. I can only say as regards the hon. Member for Kirkdale that they were offered to him.
§ Mr. PENNEFATHER
No; I applied at the office of the solicitors yesterday. I stated that I was a Member of this House and gave my card, and they refused to allow me to take a copy with me. They told me that they might send one to the House—
§ Mr. PENNEFATHER
Excuse me, I understood the hon. Member to say that he understood that a copy was on the way to this House, but if it was on its way it has not yet reached me.
§ Mr. PRINGLE
I simply wish to say that my hon. Friend told me that he did not require it as he had extracted in the office of the solicitors all that he required.
§ Mr. ROBERTSON
I think that it is a very small point. The hon. Member is mistaken in one point. I do not think that he was entitled to go to the solicitor's office as a Member of Parliament and ask for it.
§ Mr. PENNEFATHER
May I suggest that as this House may be called upon to sanction the expenditure of £1,000,000 1680 or more of public money I, as a Member of this House who may be called upon to sanction it, had a perfect right to go there.
§ Mr. ROBERTSON
The Department concerned, the Board of Trade, would have been perfectly willing to give the hon. Member a copy of the document if asked to do so. But I merely wanted to explain that the solicitors were guilty of no discourtesy or of any unwarrantable action. The prospectus states that the agreement with Read and Holliday is open to the inspection of any applicant, and that is the proper attitude of the solicitor connected with the company.
§ Mr. ROBERTSON
The hon. Member has a perfectly clear right to come to the Board of Trade, the Department concerned. I can only express my regret that he did not do so, as he would have been supplied with a copy of the document.
Sir H. DALZIEL
Does the hon. Gentleman suggest that Members of Parliament are to go over to the Board of Trade to see these documents instead of the documents being brought here, and that we are to stand in a queue at Whitehall Gardens awaiting our turn to see them?
§ Mr. ROBERTSON
The right hon. Gentleman is perfectly well aware that I meant no such thing. Hon. Members of the House can communicate with the Departments concerned. I did not suggest that hon. Members should come to the Board of Trade and form a queue outside; and the House knows that that is not a serious interpretation of the expression which I used. The prospectus was issued on Saturday last, and I can only repeat that, if any request had been made to us for a copy of the agreement referred to in the prospectus, it would have been acceded to. The right hon. Member who spoke last often asks the Department for information, and the Department, so far as I am aware, always gives it with the utmost rapidity with which it can be given. In reference to the speech of my hon. Friend the Member for Pontefract, I rather think that he has been unduly excited as a good Free Trader by the contemplation of what we all admit to be the very exceptional situation which is created by this scheme. It is just as exceptional in its way, perhaps, as the War in which we are engaged. The War brought the House at once 1681 to the business of emergency legislation. We have had to pass measures, some of them I suppose quite unprecedented, collectively certainly quite unprecedented, dealing in all manner of ways with usages and liberties that had been part of the regular daily life of the country. We have had to interfere in all these ways, and I am not surprised that my hon. Friend, as a good Free Trader, is disturbed by this particular measure, which, of course, could not have come into existence and would never have been put forward at all but for the extraordinary crisis in which the country finds itself.
§ Mr. ROBERTSON
I fancy that there is a great deal of disturbance on both sides, and I fancy that it has somewhat affected the logic and the economic force of hon. Members' arguments. My hon. Friend proceeded to criticise the prospectus and used some very strong language about it. I observe that he grounded a large part of his case on the simple citation of some extracts from the City article in the "Times." He paid a high compliment to the writer of the City article in the "Times" in general and he practically invited the House to take their authority from that source. I confess that I was a little surprised that the hon. Member for Pontefract, as an experienced controversialist, should have so readily committed himself to that position and should have been so ready to endorse an attack of that kind. But the most surprising thing was that my hon. Friend made no allusion whatever to a very crushing answer made to the "Times" City article immediately after it appeared, and which was the most crushing exposure of the gross inaccuracies of that article.
§ Mr. BOOTH
My hon. Friend missed my point. The solicitors who replied to that article made no reference whatever to the quotations which I cited. I cited the portion of the City article which I thoroughly endorse, and the portion to which the solicitors in the controversy omitted entirely to make any reference.
§ Mr. ROBERTSON
The portion which my hon. Friend cited was simply language of disparagement and condemnation used by an authority who grossly misrepresented the financial facts, so that he is not so high an authority as my hon. Friend seems to think. It was pointed out that the writer in the "Times" City article stated as a fact that only £250,000 was to 1682 be called up at once on the 1,000,000 £1 shares offered for subscription, so that the Government loan to begin with would only be for the same amount. The solicitors pointed out the utter inaccuracy of that, and the writer of the article was bound to admit, when he referred to the subject later, that he had been mistaken and that the prospectus did really bear the sense which the solicitors stated. As a simple layman I am bound to say I cannot see how he could place any other sense upon that paragraph than that to which I have called attention, and if that authority is convicted of having seriously misrepresented the facts with regard to the company, I am bound to say the writer's disparagement of the prospectus has little weight. There is another passage which was quoted by the solicitors from the "Times'" City article as follows:—The only point which is really at all clear in the whole prospectus is that a good bargain has been made by Read, Holliday and Sons with the Secretary of the Board of TradeThen the letter in reply goes on to say:—If you really have any information which justifies this statement our clients will be glad to be supplied with it before deciding as to the exercise of the option. Our clients are officially informed that Read, Holliday and Sons, Limited, would be only too glad if the British Dyers Company did not avail itself of the option, and that if they (Read, Holliday and Sons, Limited) had to make the bargain to-day, they would insist on a very much higher price.The hon. Member laughs. I can inform the House, on the opinion of a high industrial authority, the option could be sold at a considerable advance to-morrow. [An HON. MEMBER: "Take the offer!"] My hon. Friend the Member for Pontefract slides away from the issue by calling "Hear, hear," to that interruption, but I would point out that if the option can be sold at a profit, then there is an end of the controversy.
§ Mr. ROBERTSON
Certainly, or I should never have dreamt of making it. I have that authority, and the fact, cannot be evaded that a very good bargain has been made in the opinion of very high authorities. I must express my regret that my hon. Friend, when informed of this fact, should merely applaud those who say, "Take the offer!"
§ Mr. ROBERTSON
I did not speak of any offer. I stated that Read, Holliday and Company would be glad to take the 1683 option back, and we have the evidence that it could be sold to-morrow at an advance. The hon. Baronet will be bound to admit that if what was stated be true, then his statement is wrong. The hon. Member for Pontefract spoke of discourtesy to the House, of slovenliness, of forgetfulness, but of justification for this criticism I am bound to say I find very little. He complained that no manager was named. He knew perfectly well that the prospectus indicates that part of the purchase terms, included Read, Holliday and Company, and included payment to Lionel Brook Holliday and Joseph Turner, and, in connection with those terms, there was the option of their services. In regard to the question of compulsory sinking fund, I think my hon. Friend will see that his remarks do not justify the aspersion of slovenliness. The strangest part of my hon. Friend's criticism was that the two Government directors gave no security whatever that the company will remain British—no adequate security. At the same time he protested against the presence of those directors as being Government spies on the board.
§ Mr. ROBERTSON
My hon. Friend says that we have not got enough security, and then says we have taken an unwarrantable course to get the security.
§ Mr. ROBERTSON
What does he mean? That they are not needed, and ought not to be put in that position? The hon. Member went on to point out that there was no "fair wages" clause in the prospectus. Just before he had said that he would trust the directors; and surely the directors may be trusted to see that fair wages are paid. Surely it may be taken for granted that the whole thing will be up-to-date from beginning to end. The machinery will, of course, be as up-to-date as possible, and it is not necessary in a prospectus of this kind to enter into such details. The prospectus is not addressed to the general public appealing for funds; it is addressed to owners of dyeing works in the country and others directly interested; and it does not in the least 1684 influence the ordinary investor to take shares; in fact, he is not wanted.
My hon. Friend further objected that there was nothing in the prospectus about co-operation. Does he really say that in an emergency scheme of this kind it is practicable to introduce co-operation, profit-sharing, or other industrial ideals? I think the proper course is to leave it to the directors of the company, and we ought not to be accused of lack of sympathy with the idea of co-operation because it is not introduced into a scheme which really does not raise the question. The objection of the hon. Member for London University is one of more importance. He pointed out that there was no scientific man on the board. I very readily admit that there is a great deal of force in that particular argument, but I would remark that there is also a very great deal of force in the argument on the other side. I have heard this matter debated frequently, and in my opinion the arguments do not balance. In my opinion, the balance finally comes down on the side of the practical course. I admit there are good grounds in past experience for the wish that you should have on the board of such a concern a chemist of great practical capacity, a chemist of genius. We know of great industrial concerns, the success of which is due to the presence of such a chemist amongst the men forming the board, but we also know of concerns, great chemical concerns, the ruin of which has been due to the controlling power of highly qualified chemists; and if we are to come to a business conclusion, we must weigh both sets of considerations. There are a great many business men who have discussed this particular point, and the hon. Member will believe me when I assure him that it has been very anxiously weighed and considered.
There are a great many business men who are quite convinced that it is a mistake to have on the board of such a concern a man of special technical knowledge, because the whole of the other directors are in his hands. He would be practically entitled to say, "I am the only man who has chemical knowledge of the matter, and you must settle it in that way." What then would be the position of the other directors? This is a very practical issue, and one that has arisen and been discussed in connection with the fortunes of many industrial chemical companies. I can only say I do not think it was the function of the Board of Trade to attempt to decide 1685 such an issue as that. They took, first of all, counsel with the great dye users, great practical business men, as to the general course to be pursued, and those dye users practically selected the directors. They took finally the view of the various experts they had consulted, and that view was emphatically in favour—perhaps I am going too far in saying emphatically, but their view was in favour, so far as things have gone, of not putting chemical experts on the board in the position of directors. I may point out that they are still at liberty, if they see reason to reconsider their decision, to co-opt a scientific man as a director. They actually put into the prospectus the power to appoint committees composed not only of chemists with theoretical knowledge, but—and this is a matter of some importance urged upon us not later than this very day—also dye users, men representing the dye trade and dye users. Those men complain that the scientific chemist was too apt to look into the scientific theory and not to think of the everyday needs of the dyer. Those committees will be composed of both kinds. The power is one which I think will certainly be used, since the composition of such committees is actually under consideration; and in view of that power to use chemical counsel to the fullest degree I really think the hon. Member for London University need not be under the apprehensions which he has expressed.
§ 10.0 P.M.
§ Sir P. MAGNUS
Has the hon. Gentleman considered the composition of directorates of the successful firms in Germany?
§ Mr. ROBERTSON
Yes, of successful and unsuccessful firms, both in Germany and in England. I am sure all of us would at once, unless we had a particular business prejudice, be prepared to say that the ideal state of affairs would involve putting a chemist on the board. But the hon. Gentleman is, I am sure, aware of cases where concerns have been brought to ruin in the hands of most eminent chemists. I have heard of schemes propounded by highly qualified chemists which have never emerged into anything. I think, when you realise that business men know these facts, that you ought on such an issue as this be content to leave the shaping of this particular concern to the practical judgment of the men in whose hands it now stands.
§ Mr. HEWINS
Surely the hon. Member does not say that there are no chemists in England with business capacity?
§ Mr. ROBERTSON
I made no such suggestion. I indicated that the opinion of business men who have discussed this point is that if you have an expert or two experts on a board of directors they practically command the situation, and either they are there for that or they do not count. It their special knowledge is to settle points they have really authority over the board, and a number of business men very much prefer on that account to be able to take their counsel without having their counsellor a co-director, when he would be practically in a position to give orders.
§ Mr. HEWINS
Is the objection of business men to chemists an objection that there are no chemists of business ability?
§ Mr. ROBERTSON
The hon. Gentleman is not giving a natural interpretation to my words. On the ordinary principle of averages I should say there must be a percentage of chemists with good business capacity. I said at the very outset, and surely the hon. Member cannot have forgotten it, that we all know of great concerns that owe their success to the presence on the management of highly skilled chemists. I stated also the kind of objection that is often made by practical business men, and which would appeal to business men. I am not saying whether they are right in their objection, but I did say it is not an issue which the Board of Trade can fairly be called upon to decide. The practical decision should be left I think to business men in charge of the concern. I do not think my hon. Friend will lay much stress on his point that there is no possibility of having a working man on the board. That kind of criticism brought against such a scheme as this surely is not part of his charge of slovenliness and forgetfulness. Then we had his dithyramb about the situation of the office. He remarked that I looked round suspiciously at the time. I do not wonder that I did. I have often heard my hon. Friend with the deepest interest, but I never heard him use a more preposterous argument than that.
§ Mr. ROBERTSON
I will let it go at that. We had references by several hon. Members to what was stated to be the opinion of this scheme by the Committee who advises the Treasury on new issues. I was a good deal astonished, since the deliberations of this Committee are supposed to be confidential, at the confidence with 1687 which certain assertions were made as to its decisions. My official information was that the Committee made no recommendation on the scheme on the ground that as the policy of the new company had already been decided by His Majesty's Government it did not come within their scope. My difficulty is that I do not see how this happened to come before that Committee. Here is a scheme which the Government is absolutely behind. I should have thought that that very fact would at once have excluded it from the scope of this Committee. At all events my official information is that they declare that they made no recommendation, on the ground that His Majesty's Government had already endorsed the scheme.
§ Mr. ROBERTSON
I do not know what they said on the score of what should go into the prospectus. I do not think that that was a matter to be settled by them at all.
§ Mr. ROBERTSON
They evidently had the matter before them. I have no right to make any comment upon that. They seem to have acted quite correctly in saying that they made no recommendation at all.
§ Mr. ROBERTSON
I can only repeat my official information, and express my surprise that my hon. Friend should get such knowledge of the deliberations of a confidential Committee.
§ Sir W. BULL rose—1688
§ Sir W. BULL
I rose to a point of Order. I wish to ask whether, if the hon. Gentleman reads part of a letter, he ought not to read the whole?
§ Mr. SPEAKER
He was not reading a letter at all. He simply said that his official information was so-and-so. There was no quotation.
§ Mr. ROBERTSON
I made no allusion to a letter. I now pass to what is for me perhaps the most important part of my hon. Friend's speech. After all these attacks on the scheme, he indicated that there were, in his opinion, alternatives or other ways of meeting the need. I am justified in assuming that my hon. Friend admits that there is a most urgent need for some means of providing dyes and colours.
§ Mr. ROBERTSON
Then I need not deal with my hon. Friend's alternatives. He gave me that impression. He said that this scheme was suited neither to peace nor to war, but that there were three alternatives open to the Government. They might make the dyes themselves; they might give bounties on dyes; or they might impose a tariff. I take it, then, that my hon. Friend regards every one of those alternatives as bad also.
§ Mr. BOOTH
What I said was that if the Government's case was good as to this being a very urgent matter, there were three ways which were perfectly consistent in which they could deal with it. I instanced those three ways, and I said that this scheme was not one of the three, but was a hotch-potch of several ideas—a compromise.
§ Mr. ROBERTSON
Then I will proceed to show how bad my hon. Friend's proposals are. He says first that the Government might make dyes themselves. If the Government had put any such proposal before the House, it would have met with much more serious criticisms than those which have been made, some of which are grounded on fiscal reasons, some on individual trade preferences, some on aversion to anything that looks like a departure from Free Trade, even in time of war. If the Government had proposed 1689 that they should start as dyemakers in this admittedly difficult industry, which requires great technical knowledge and business skill to conduct it, would not everyone, my hon. Friend the most loudly among them, have said: "Why on earth are the Government doing such a thing? Why can they not leave such matters to business men?" and I am certain that that judgment would have been endorsed by the whole country. For the Government to have started making dyes themselves at a time of emergency, when you wart the largest output in the shortest possible time, and you cannot risk going into experiments which might miscarry, would have been utterly preposterous. My hon. Friend's second suggestion was that the Government might give bounties on dyes. That would be an extremely bad mode of encouraging the production of the dyes required. You would have to give bounties on all the dyes produced. You would get all manner of dyes that you did not want, and you would have no security whatever that you would get the dyes you did want. You would have to pay bounties for unnecessary things in order to get the things that are necessary. As to imposing a tariff, I can only say that I am unable to understand how my hon. Friend could use the word "consistent" in that particular connection.
§ Mr. ROBERTSON
My hon. Friend is indulging in prediction, just as the hon. Member for Hereford (Mr. Hewins) has done. As he expressly avowed, no man in this House can possibly say what the conditions after the War will be, and yet he and all the rest of our critics have predicted in the most confident way what those conditions will be. There has not been a speaker to-night but has told us what is going to happen after the War. The tariff issue I will deal with later. I will turn now to the points raised by the hon. Member for the Kirkdale division (Mr. Pennefather) in his interesting maiden speech. He also criticised the prospectus. But again his evidence and proofs were not at all on the scale of his terms of disparagement. For instance, the hon. Member complained that the prospectus did not mention certain things, and then he said that it did incidentally make mention of one 1690 of the very things of which he was speaking. I do not see how a prospectus could, make mention of anything otherwise than incidentally. Then he went on to complain that as regards the salaries to be paid, a minimum was stated—not less than so-and-so—and he asked: "What is meant by 'not less'? Why do you not say 'neither more nor less'? Who is to say whether it is to be more?" I should have thought it was plain to those who are paying the salary are not to pay less, while if they see fit they have power to pay more. The hon. Member dealt at some length with the question of the various elements in the purchase price. My reply is that all that is material to the understanding of the commercial value of the concern, and its bearing on this company, seems to me to be given in the agreement, and the hon. Member has had access to the whole of the agreement. I will only say that the argument as to £90,000 worth of preference shares has no bearing on the case. The extracts in the prospectus indicate the whole sum, to be paid for shares of all kinds.
§ Mr. PENNEFATHER
Under clause (b) the prospectus does not communicate the whole sum to be paid. It simply refers to the ordinary shares.
§ Mr. ROBERTSON
Is that the ground on which the hon. Member suggested that he thought a supplementary agreement had been made? There has been no such supplementary agreement. I do not understand that particular criticism of the alternative scheme. In regard to the main criticism on option (b), the answer is that what the hon. Gentleman suggested might happen is prevented by option (a). I must repeat the proposition that I made before as to the vendors' position. When the hon. Gentleman put to me various questions I failed to understand that at that moment he wanted an answer. I thought he was putting his statements in a query form, and I hope he will not suspect me of any discourtesy. I thought he was putting in query form a proposition that seemed to me perfectly clear. The wording of the prospectus seems to me to be as plain as it can be made—that for every £1 subscribed the Government would subscribe the same. He asked me if that meant that if £500,000 was subscribed the Government would put down £500,000. The answer to that is "Yes." It never entered into my mind that there could be any other meaning.
§ Mr. POLLOCK
Would the hon. Gentleman be quite clear? The point is one of substance. The question is whether or not the Government will pay up £500,000 after 5s. per share—part only—has been paid, or whether the Government will, pari passu, pay up 5s. for 5s., 10s. for 10s., £1 for £1. It is an important matter, and I therefore ask for information. The words are "subscribe for every pound of share capital the amount for which there is a contract paid by instalments." Does it mean "as" and "when" the sovereign has actually been paid up?
§ Mr. ROBERTSON
I understood that there was no possibility of doubt as to the meaning of the word "subscribe." At an earlier stage I referred to the letter of the solicitors in which it was pointed out—
§ Mr. ROBERTSON
I alluded in an earlier part of the proceedings to the letter of the solicitors in the "Times." The expression "subscribe" I thought was clear. I think it is understood that there was a distinction between "subscribed" and "paid up."
§ Mr. POLLOCK
I do not want to interrupt for the mere sake of interruption, but there is a difference between the two, and we are only asking for information.
§ Mr. ROBERTSON
Yes, that is so. The hon. Member went on to say—and here again I tried to give general grounds—that if this money was not subscribed at the beginning and promptly and in large quantities, it would be no use. There is a good deal of force in that line of argument, but I would ask which of the speeches delivered has done anything whatever to encourage subscription? The hon. Member himself will hardly say that his particular line of criticism is likely to bring the people.
§ Mr. ROBERTSON
The hon. Member went on to say that he hoped we should first abandon the scheme. He says that we ought to provide a better, nobler, and greater scheme, and that if we only came forward with such a scheme we should get the money. My hon. Friend the Member for Pontefract, on the contrary, made a protest against getting any money out of the public purse, and said that the Chancellor of the Exchequer needed all the spare cash he had for State purposes. The hon. Member opposite would like to see a much larger amount spent, but what indication did he give of the basis of his scheme—unless he was merely speaking with something at the back of his mind about tariff? Unless he had some such conception in his mind, I can attach no meaning to his suggestion of the better, nobler, and greater scheme.
§ Mr. ROBERTSON
And made a speech which would prevent anybody giving any working capital at all. [HON. MEMBERS: "No, no!"] The disparagement of this scheme entitles us to demand what kind of scheme is proposed by opponents. No such proposition has been made!
Would the hon. Gentleman kindly deal with the sufficiency of capital to carry out the objects of the company?
§ Mr. ROBERTSON
I do not demur to the question, but if I discussed in detail every point raised I should not get to the end of the main criticism to-night. On that point I would only say that the sufficiency of the capital is a matter for the business judgment of the business men who are conducting this scheme, and I am not going to say in detail exactly how it can be considered sufficient. The hon. Baronet the Member for Prestwich (Sir F. Cawley) says that no one wants this scheme, and hints that the Government started to make a scheme without any need or urgency. I can only say no such scheme would ever have been touched or dreamt of unless there had been the most urgent demands from what everyone in the House knows to be a widely ramified industry, representing, as hon. Members themselves say, £200,000,000 of capital 1693 and 1,500,000 people. It was because of a very loud outcry, of indications of the danger of extreme distress in the future, that we framed the scheme. The hon. Baronet says you cannot get unanimity on this particular scheme. But you cannot get unanimity for any scheme; that is the trouble. There was the previous scheme, which had to be withdrawn because of the unsympathetic treatment, and possibly because of faults.
§ Sir F. CAWLEY
I mean that consumers asked to be got out of the immediate difficulty in time of War.
§ Mr. ROBERTSON
I understand the hon. Baronet. He asked me to tell him how the scheme came to pass, and why we pushed the scheme, and I am trying to indicate how it came to pass and to deal with his general argument, partly explicit and partly implicit, that something more could have been done to meet the difficulty immediately. I can say, on that head, his mere negative aspersions, for they are not really criticisms, are not well founded. He said everyone knew there were colours in France that might have been had. I had some means of knowing. Perhaps the House, with the aid of a little imagination, will be able to figure for itself what was the possibility of bringing colours from France after the War broke out, when the whole railway system was absolutely upset. As regards the history of this scheme, I think he is aware that we made very early attempts to make arrangements by which the dyes and the colours could be got from Switzerland, and it was precisely because no security could be given, because there was no kind of basis upon which you could provide anything like a continuous supply without establishing a company of that sort, because we found no other methods would suffice, no mere hand-to-mouth or temporary measure would result in any colour supply at all—it was on that score that this scheme was elaborated as it now stands; and I have to say, with regard to all these assertions about getting them more easily, that, so far as I am aware, there was no other way in which colours could be secured.
To say that no company was necessary is merely to ignore the overwhelming evidence put before the Government that a company was the only way in which colours could be supplied at all. There are large consumers in favour; I know also there are large consumers who do not like the idea 1694 at all, of providing for the future; that they would do anything they could for the present, but do nothing to establish this plan of a British colour-making industry for the future. As soon as the War is over, they want to get back to the old relations with the German producer. I know there are large consumers in that position, but what would be the position of the small consumer in the meantime? Any colours that would be bought would be at the mercy of the large consumers. The scheme of the Government is by far the most democratic and practical which has been produced for giving colours on the fairest basis to a large number of users, and the hon. Baronet's scheme would give no such facilities.
The hon. Baronet (Sir F. Cawley) opposes the scheme as a Free Trader, and hon. Gentlemen opposite oppose it as Tariff Reformers. Possibly between the two the Government scheme may be right. He says that we are using unfair methods and forcing people into the scheme. Is that a fair characterisation of a scheme which says that we require to have capital subscribed by the colour and dye users? That effort will be backed up by so much help from the Government, on the principle that if the trade will help themselves, the Government will help the trade. The hon. Baronet says that is threatening them, and another hon. Member says it is blackmailing. It is the best and the most obvious way of securing that help should be given to those who help themselves. The hon. Baronet the Member for Prestwich also objected to the provision made for the endowment of research, on the score that it was not going to be utilised in a sufficiently public way. The great progress made by the German industries of this kind was made with the expenditure under their own control. It was not the mere giving of Government Grants to universities, although I do not see why that policy might not also be justified.
§ Mr. ROBERTSON
This money will be spent under the practical control of a business concern, which is the way the German money was largely spent. The hon. Member for London University (Sir P. Magnus) raised a point which I have already dealt with, as to the presence of a chemical expert on the board. I deprecate his line of argument in that connection when he attacks the remark of the President of 1695 the Board of Trade to the effect that we want to multiply the number of second-grade chemists. He contends that what we want is a number of chemists of the highest ability—he was contemplating men of genius. We all agree in wanting me of genius, and nobody would limit our wants in that respect. But you cannot count on evoking genius by endowments; whereas you can count on evoking a supply of properly trained men. You may hope to do something by Government expenditure on education. The hon. Member opposite referred to a question which was raised in the last Debate, as to the position a consumer would be in after the War was over if he found he could get his supplies cheaper from another source than from this company. The best I can do is to read once more the actual phrase of this prospectus. Perhaps the hon. Member did not notice the particular expression used:—The referee is to have regard to all the circumstances, including the fair current prices at which dyes are being sold by other suppliers.A momentary dumping price would not be regarded by any referee as meaning the current price. I do not think that I can make the case clearer. It is a matter for application of ordinary business sense and integrity. If the hon. Member means to suggest that there will be a continuity of dumping prices against which we cannot fight, I would observe that here again we are in the realm of the prediction which has been so widely indulged in by so many speakers.
Hon. Members seem to me singularly rash in taking it for granted that after the War German trade will be conducted exactly on the same principles as before. Whatever might be the wishes of individual German traders in the way of resuming trade, it is perfectly conceivable that there might be a new Government policy which would deprive them of that privilege. There is an economic school in Germany which has long recognised that the supplying of dumped goods to other countries is making a present to those countries of national wealth without any adequate return, and, if that school is in the ascendancy, we might be in the position of finding Germany refusing to supply any dyes to this country. I only put it as a contingency—I leave prophecy to other hon. Members—but in that case, if we had not a supply of our own, we should be in a very grave position. This scheme, considered as a scheme from any point of 1696 view, cannot mean any vast national loss. At a time when the War is costing such fearful and monstrous sums, though I admit that a considerable sum is being embarked and risked, it is a sum that is not great in view of the needs of the trade being catered for. It is not a great amount to risk in a scheme which has for its object the immediate conservation of a great variety of industries, and the possible provision at the end of the War of a real living industry which may be able to hold its own against even hostile policy of the kind indicated by the hon. Baronet the Member for Mansfield. He left me a little doubt as to his position. He said he was "a Free Trader, but"—an expression which used to be very familiar to us in the controversies of the past. I am afraid that the "but" was to the effect that the German industry would be able to smash any effort we may make. I deprecate this confidence of prediction.
§ Sir A. MARKHAM
I shall certainly never, while I am in this House, vote for any trading whatever, directly or indirectly, with pirates and murderers.
§ Mr. ROBERTSON
That is a perfectly logical, consistent, and intelligible position, but I was dealing with the matter in the more philosophic form it sometimes takes of claiming that what we must do is to prohibit the importation of these things from Germany altogether. If I could attach any meaning to—I will not say the hysterical—but the eloquent words with which the hon. Member for Hereford closed his speech, he was appealing to us to give an undertaking now that we will prohibit the importation of foreign dyes when the War is over.
§ Mr. HEWINS
I said there were various ways. I indicated that way and two others. There are many ways, some of which we practice now.
§ Mr. ROBERTSON
I know the hon. Member said there were many ways, but this was the only one he advanced.
§ Mr. ROBERTSON
At any rate I consider this particular one utterly impracticable. If you are to put on prohibition it must be a prohibition either of German dyes only or of all foreign dyes, and if you prohibit all foreign dyes you prohibit dyes which you may be glad to receive, such as Swiss dyes. No one looks forward after 1697 the War is over to prohibiting these dyes when trade returns to its ordinary channels. If you do not prohibit all dyes—if you merely prohibit German dyes, all the German producers will have to do will be to cross the frontier into Switzerland and set up their works there. I do not think the hon. Member could have had that in mind, or he would not have advocated this scheme. The hon. Baronet (Sir A. Markham) laid special stress on the point how subscribers were to be dealt with in the matter of priority of supply, and the hon. Member for Pontefract (Mr. Booth) also discussed that question. Perhaps I may read that part of the prospectus which comes under the heading of "Priority of Supply":—It must be clearly understood that those dyes which the company can provide will, so long as the supply of such dyes is insufficient to meet the requirements of all classes of consumers, be primarily appropriated to supplying the want of users who are shareholders and have entered into an agreement to take the company's dyes.I do not feel myself able to use plainer language than that, and if the hon. Member thinks it unfair treatment I can only leave it to the House to pass judgment on the essential points of a scheme which has been framed to help those who are willing to help themselves. The hon. Baronet asked who drew up the prospectus. There were no promoters. That has been stated more than once. The prospectus was drawn up by the directors in consultation with the solicitors of the company, but I am quite unable to see what bearing it has on the serious issues of the scheme before the House.
I will now say a few words on the criticisms of the hon. Member for Hereford, whose distinguished position in the economic world entitles him to special notice. What seemed to be his real question was, "What are you going to do with this scheme under the Defence of the Realm Act?" The hon. Member said he had information to the effect that we had in this country all the resources for making the dyes and colours we want. If the hon. Member has that information I can only say that is not information which is accessible to the Government, and my comment on that is that the distinguished personages who gave it to him were very grievously mistaken indeed. We had some means of ascertaining the capacity of the country at large—not, perhaps, an absolute census, but something in the nature of a survey, and our information is to the effect that it is quite hopeless to think of producing the dyes and colours needed by 1698 the country by the simple plan of using the factories and institutions already in existence. It could not be done. As regards the possible ancillary use of factories now in operation, the hon. Gentleman suggests the commandeering of certain products of certain factories under the Defence of the Realm (No. 2) Amendment Bill. But as I understand it, that Bill is to have regard to the production of goods for war purposes.
§ Mr. ROBERTSON
I think the country would be surprised if we used that Bill for the production of dyes. The hon. Member says we are afraid of the controversy between Tariffs and Free Trade. I should be very glad indeed if we could get back to it, for that would mean that peace had been restored and we were back to the old, familiar, and fairly healthy position of fighting each other on that issue. If there is any point in the controversy that the hon. Member would wish seriously raised, purely from the point of view of this Bill, I am perfectly willing now, as I attempted before, to meet whatever may be in his mind. The hon. Member did nothing beyond telling us that there were a multitude of ways in which you would act, while he specified only one.
§ Mr. ROBERTSON
Perhaps I am doing the hon. Member an injustice, but he gave me only one, which was his suggestion that you would get several millions of money if you would give an undertaking that after the War was over you would prohibit the importation of these dyes. I have already dealt with prohibition. On the general suggestion I am totally unable to see the connection in the hon. Member's mind between the two propositions, that the worst possible way to inaugurate a tariff would be to inaugurate it by promising a tariff on one article, which is his own position, but which is flatly opposed to the position of the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain), and then to turn round and say it would be a splendid thing to set up in advance the prohibition of one import. To give such a promise, to commit or attempt or pretend to commit this House to tie its hands for the future, to say that one year, or it may be several years, hence it shall be bound to carry out a prohibition of the import of these 1699 articles, is a course that seems to me as disastrous from a Tariff Reformer's point of view as it would be to undertake to impose a tariff.
§ Mr. HEWINS
May I ask the hon. Gentleman to explain why the Government establish a scheme of prohibition of their own?
§ Mr. ROBERTSON
That was a scheme of prohibition during the War period. Surely the hon. Member does not suggest that the setting up of a whole multitude, of prohibitions—
§ Mr. ROBERTSON
Surely the hon. Member does not suggest that the setting up of a whole multitude of prohibitions during war time is the same thing as undertaking to pledge yourself to a system of prohibition in peace time! The two things are as wide asunder as the poles, and stand for two entirely different points of view. The whole policy I have been defending tonight is the same policy I have been defending as a Free Trader. I am sure my hon. Friend the Member for Pontefract will give me credit for having fought under that flag. He does not reverence the memory of the great Free Traders more than I do. The scheme of the Government is sincerely and confidently defended by me on that basis. The scheme suggested by the hon. Member of a promise of prohibition is a more outrageous thing than the promise of a tariff. It is a proposal for which we could not give a guarantee, for a Parliament might be elected two months hence which would refuse to submit to such a prohibition, and in that case every person who had put his money into that large fund of millions, which the hon. Member says could be raised, would be entitled to demand his money back on the ground that it had been got on false pretences. The Government, as I understand it, will certainly not attempt for a moment to back up or strengthen this scheme by giving such a preposterous pledge as that. The hon. Member must excuse my language in such an expression, because he himself could hardly allude to the Government scheme without calling it impossible or ramshackle, or something of that kind.
While we have had to-night, I freely recognise, a very considerable variety of voices all hostile to the scheme, they are hostile 1700 for very different reasons. The hon. Baronet (Sir A. Markham) is in a totally different position from the hon. Baronet (Sir F. Cawley). They are both against the scheme. Their reasons have nothing whatever in common. They destroy each other. Their reasons equally destroy the position of hon. Members opposite. There is no economic community; there is no political community between these various criticisms. They agree only in disliking this scheme. They also equally dislike each other's schemes. This is the one practical workable scheme before the country. That it has faults I should take for granted in advance. I never heard of a human scheme that had not. But the scheme as it now stands has been the result of an immense amount of patient, careful consideration in which the Government have had the counsel of highly-skilled, accomplished, and experienced business men. If the House in general were prepared to take up the position that some hon. Members do, to the effect that you would do better with no scheme at all, I can only say that if this scheme did not go through it would be a matter for very grave decision indeed what the Government should ultimately do. This is the honest best that we are able to put before the House, and I trust hon. Members will recognise that we have given a reasonable justification of the scheme.
The hon. Gentleman has convinced me of two things. I think the Government have been unbusinesslike in two ways. First, they should have given the advertisement of the prospectus in all the newspapers. The hon. Gentleman described it as a democratic prospectus. I say a democratic prospectus for democratic newspapers. My other objection to the way in which the Government have acted is that as they put the hon. Member (Mr. Falconer) on the directorate, the hon. Member (Mr. Booth) should not have been omitted. The scheme, therefore, can scarcely command my confidence. They were united, as we all remember, on a famous business committee, and in a directorate like this they should not have been divided. I am very glad, at all events, that this scheme has been introduced. I have known Read and Holliday's for a long time. The late Thomas Holliday tramped Ireland with me fifteen years ago, and I passed a Bill through this House for him. It was for taking over water powers in Ireland. I induced him to buy some property. 1701 He was still a Unionist, but he ceased to be so when the House of Lords rejected the Bill I am very glad indeed. It was quite a novelty to hear to-night that the Government have induced Read and Holliday to part with their works, which I knew and with which I was very much impressed. With regard to what the hon. Baronet said in reference to the Badische Works I should say, if we get to Berlin are we not going to get to Baden Baden? I can well understand that the Badische Fabrik might be settled by bombardment which may leave them short for a little time and may leave us short. Therefore, on all these grounds and on many others which I will not enumerate, I am heartily glad that the Government have started this scheme, especially as I can see that once you have started it it is idle to say that it is merely for the War. Money will be invested after peace and I firmly believe the Government have thereby to some extent, at all events, departed from the Free Trade fetish which I have not the smallest respect for.