STATEMENT BY PRIME MINISTER.

HC Deb 02 August 1916 vol 85 cc332-450

The PRIME MINISTER (Mr. Asquith)

I beg to move, "That this House do now adjourn."

A long time ago I promised to make a statement to the House with regard to the proceedings at the Economic Conference at Paris, and I am at last able to redeem that promise. So as to put myself in order and provide facilities for discussion, I have moved the Adjournment of the House. It is desirable in the first place to make clear the intentions with which His Majesty's Government went to this Economic Conference. The main objects were two. One was to convince the enemy that the Allies, whatever their individual points of view may be on economic matters, are resolved to wage this War with as complete unity and determination in the economic as in the military sphere. The second object was to make such preparations for the period following on a declaration of peace as seemed essential to the Allies in view of the known attitude and will of Germany. The preamble of the Resolutions of the Conference contained in the White Paper have some words to which I should like to ask the attention of the House. I take the translation from page 6 under heading III., and the last paragraph but one of that heading. It is in these words: In face of so grave a peril the representatives of the Allied Governments consider that it has become their duty, on grounds of necessary and legitimate defence, to adopt and realise from now onward all the measures requisite on the one hand to secure for themselves and for the whole of the markets of neutral countries full economic independence and respect for sound commercial practice, and on the other hand to facilitate the organisation on a permanent basis of their economic alliance. That is the keynote of the whole proceedings, and it emphasises the fact that the view of the delegates at the Conference was that their deliberations were primarily defensive and not offensive. The War has opened our eyes to the full meaning and the manifold implications of the German system of economic penetration, and commercial and financial control of vitally important industries, and to the use to which vantage ground gained by this system can be put in war. It is difficult—indeed, I think it is impossible—to believe that Germany would not continue to be animated by the same spirit and policy when the War is over, and that she will start, be it observed, with certain very obvious and very considerable advantages. In the invaded territories, both in Belgium and in France, she has destroyed works and factories, and she has carried off large quantities of plant and of raw material, not to mention people, which have been sent to the industrial centres of Germany and of Austria. She has a large merchant fleet for the time being safely interned in her own ports or in the ports of neutral countries. It is evident, from the German trade papers, that the Germans are counting on these factors to impede the industrial and commercial recovery of the Allies.

They are already organising their industries—and do not let us be blind to this—for an attack on our Allied markets and for a vigorous and, if possible, a victorious competition in neutral markets. It is then in our view—when I say in our view I mean in the view of the Allied Powers—necessary to make thorough preparation for the coming of peace, and the Paris Conference and the resolutions passed there represent the attempt of the Allies to decide the general lines on which that preparation should proceed. The resolutions which have been circulated in this White Paper will, I think, be familiar to hon. Members. They are divided into three categories. First, measures for the period of the War; secondly, measures for the period of reconstruction after the War; and finally, permanent measures thereafter of mutual assistance and collaboration among the Allies. Taking the first category— "measures for the War period"—in regard to which there are three resolutions, they conform broadly to the general lines of British legislation and practice. In the main they will have the advantage, if adopted, of bringing up the practice of certain other of the Allied Governments to the standard already adopted by France and by the United Kingdom. By virtue of these resolutions, if they are adopted, the existing procedure in this country will be strengthened to some extent—I particularly want to call attention to this—by the second resolution under the heading A (2), namely, to prohibit trade with enemy subjects wherever resident. The method by which practical effect can be given to this resolution is that we must extend our black list, and that can be carried out without legislation, and steps are already being taken to have it done. That is all I need say in regard to the first category under letter A of the resolutions.

Sir E. CARSON

With regard to No. 3 in that category, are steps being taken to carry that out?

4.0 P.M.

The PRIME MINISTER

Yes. Now I come to category B, transitory measures for what are described as the period of reconstruction. The first of the resolution in the second category will, I believe, commend itself to everybody. Let me read its terms: The Allies declare their common determination to ensure the re-establishment of the countries suffering from acts of destruction, spoliation and unjust requisition, and decide to join in devising means to secure the restoration to those countries, as a prior claim, of their raw materials, industrial and agricultural plant, stock, and mercantile fleet, or to assist them to re-equip themselves in these respects. There is no point on which there will be less difference of opinion in this House, in the country, and among all the Allied nations than that it is an essential condition of peace that Belgium and Serbia shall be restored, not only nationally, not only politically, not only diplomatically, but materially and economically to the position in which they stood before the War, and that the devastated, spoiled parts of France and Russia shall be similarly re-equipped. The second resolution under this head is one of cardinal importance. Again, although the Paper is before hon. Members, I will read the important words: Whereas the War has put an end to all the treaties of commerce between the Allies and the Enemy Powers, and whereas it is of essential importance that, during the period of economic reconstruction which will follow the cessation of hostilities, the liberty of none of the Allies should be hampered by any claim put forward by the Enemy Powers to Most-Favoured-Nation treatment, the Allies agree that the benefit of this treatment shall not be granted to those Powers during: number of years to be fixed by mutual agreement among themselves. The effect of that resolution is to bind the Allies not to grant the Most-Favoured-Nation treatment to any of the enemy Powers either in the Treaty of Peace itself or in any other way for a term of years after the War and thus to secure what is all-important, the freedom of the Allies to make such commercial agreements among themselves or with neutral countries as they may think expedient without being hampered by the obligation to extend to the enemy Powers any concession made as the result of such an arrangement. The third resolution under this head is as follows: The Allies declare themselves agreed to conserve for the Allied countries, before all others, their natural resources during the whole period of commercial, industrial, agricultural and maritime reconstruction, and for this purpose they undertake to establish special arrangements to facilitate the interchange of these resources. What was the object of that Resolution1! Its object was to meet the attempts which Germany is believed already to have made to secure supplies of raw material in neutral countries, and the attempt which she will certainly make to replenish her own supplies immediately after the War. The Allies, as we conceive it, are under a bounden duty to take every practical measure to secure for their own use supplies which are produced in their own territories and to prevent any German control such as existed in some cases before the War.

Sir E. CARSON

Does that require Legislation?

The PRIME MINISTER

I do not think it will. I referred then to particular commodities in regard to which German control existed before the War. The House is familiar with many of them—dyes, spelter, magnetos, and optical glasses. Those are illustrations; they are very important, illustrations. We never realised, any of us, until the War broke out how we have allowed ourselves to become dependent with regard to these essential ingredients for the prosecution of some of our most important industries on sources of supply that were not only not within our own control, but that could be absolutely controlled by the enemy. That, I think, is a most important point. In determining the means to give effect to the Resolution, commercial treaties with neutrals will have to be taken into account, and each commodity, of course, will require separate consideration. The fourth Resolution under this head was in these terms: In order to defend their commerce, their industry, their agriculture and their navigation against economic aggression resulting from dumping or any other mode of unfair competition the Allies decide to fix by agreement a period of time during which the commerce of the Enemy Powers shall be submitted to special treatment and the goods originating in their countries shall be subjected either to prohibitions or to a special regime of an effective character. The Allies will determine by agreement through diplomatic channels the special conditions to be imposed during the above-mentioned period on the ships of the Enemy Powers. That Resolution was passed unanimously in view of the advantages, to which I have already referred, which German commerce and industry will enjoy as the result of their spoliation of occupied territory and their treatment of merchant shipping. It is intended also, if peace should come before the Allied countries as a whole, or any or them, have settled the economic system to be adopted after the War, to ensure that sufficient time will be given to enable those arrangements to be concluded without the danger of an immediate renewal of the system of German penetration which existed before the War. Now I come to what is vitally important—the Resolutions under the third category, which is headed "C," namely, "Permanent Measures of Mutual Assistance and Collaboration among the Allies." I call particular attention to the first of these Resolutions: The Allies decide to take the necessary steps without delay to render themselves independent of the enemy countries in so far as regards the raw materials and manufactured articles essential to the normal development of their economic activities. These steps should be directed to assuring the independence of the Allies not only so far as concerns their sources of supply, but also as regards their financial, commercial and maritime organisation. Then come important words: The Allies will adopt the methods"— The end has already been described. Now we come to the means: The Allies will adopt the methods which seem to them most suitable for the carrying out of this resolution, according to the nature of the commodities and having regard to the principles which govern their economic policy. In other words, the permanent measures of mutual assistance and collaboration among the Allies are left to their discretion. The objects having been definitely described and commonly agreed, the main governing object being economic independence in relation to the enemy country, the Resolution goes on to give by way of illustration—it is not intended as exhaustive—a few examples: They may, for example, have recourse either to enterprises subsidised, directed or controlled by the Governments themselves, or to the grant of financial assistance for the encouragement of scientific and technical research and the development of national industries and resources; to Customs Duties or prohibitions of a temporary or permanent character; or to a combination of these different methods. The choice and selection between any combination is left to the discretion of the separate Governments. The Resolution concludes: Whatever may be the methods adopted, the object aimed at by the Allies is to increase production within their territories as a whole to a sufficient extent to enable them to maintain and develop their economic position and independence in relation to enemy countries. I should like to say one word in passing in regard to the recommendation of financial assistance for the encouragement of scientific and technical research and the development of national industries and resources, because it affects us peculiarly and in an exceptional degree. Since the War began special attention has been given by the Government to questions embodied in this recommendation, and action, not at present on an ambitious scale but of a most fruitful kind, has been begun. I may add that it is not intended to await the conclusion of peace or the end of the transitional period contemplated by the Conference before full effect is given to this policy. The omens so far are very encouraging. I am speaking now of the United Kingdom. A large number of British industries have shown extraordinary enterprise and resourcefulness since the War broke out. There has appeared a greater disposition among individual manufacturers to co-operate by interchanging ideas, by putting their trade secrets, which hitherto they have jealously guarded, into the common stock, and by calling in all the available scientific and mechanical resources of the country for the purpose of increasing output and improving organisation. In certain trades, I am told, and I am sure it is true, already changes have taken place which amount to a positive revolution, and there IB scarcely an industry in this country which has come out of the ordeal of war without being braced and stimulated by the special difficulties which have had to be surmounted. I believe I am not using the language of excessive self-complacency when I say that the history of the War in the industrial sphere at home has been a history of grave and threatening difficulties courageously faced and successfully overcome. Perhaps—this is a digression, but it is an important point for us here— I may lay particular emphasis on two tendencies. The first is the development of trade associations for common action at home and abroad raising the average standard of production. The second, and not less important, is the recognition of the leeway which we have to make up as regards scientific research and the utilisation of its results and its application to technical and industrial purposes. In both directions there have been and are most stimulating developments. I will not enlarge for a moment, because it might broaden the area of discussion and divert it into special and particular channels, upon the special measures which the Government may adopt, or ought to adopt, to safeguard certain industries which are vital not only to our success in the War, but to our normal economic life. I would like, however, to add this general observation. The Government conceive themselves to be under an obligation to see that the benefits resulting from this new policy are fairly apportioned among all sections of the community. Labour was not specifically represented at the Paris Conference, but His Majesty's Government are anxiously considering with the representatives of Labour, at every stage, the outlines and the basis of our after-the-war policy, both social and industrial, intending to secure a fairer distribution amongst all classes of the products of our industries. The Conference, very wisely I think, left to the various Governments the selection of the particular measures appropriate to their own industrial and economic conditions in the furtherence of this common purpose. One method will suit the financial and economic conditions of one country, and a different method will suit those of another country. The resolution, as I have said, expressly leaves it to each country to determine the methods it will adopt. Before I pass from these resolutions let me call attention finally to the resolution D at the end of the Paper, which sums up in a convenient way the common purpose of the Conference: Whereas for the purpose of their common defence against the enemy the Allied Powers have agreed to adopt a common economic policy on the lines laid down in the resolutions which have been passed, and whereas it is recognised that the effectiveness of this policy depends absolutely upon these resolutions being put into operation forthwith, the representatives of the Allied Governments undertake to recommend their respective Governments to take without delay all the measures, whether temporary or permanent, requisite for giving full and complete effect to this policy forthwith, and to communicate to each other the decisions arrived at to attain that object. My right hon. Friend beside me (Mr. Bonar Law) has explained more than once to the House that the delegates went to the Conference in order to discuss and examine whatever measures might be proposed, and that the resolutions passed by the Conference would, it was clearly understood, be referred to the respective Governments for approval. They have already been formally and publicly adopted by the French Government, and the same course has been taken by His Majesty's Government—a decision which I hope will meet with the approval of Parliament. Some action has already been taken. The Board of Trade are actively engaged in devising schemes to render us independent of enemy supplies as regards dyes, spelter, and other important commodities. A State scheme of assistance to scientific and industrial research is in course of creation, and, indeed, has been already created. Investigations are being made by expert committees into the conditions and needs of a number of important branches of industry and trade, and into the problems of finance, and the question of commercial and industrial policy generally has been referred to a Committee—I think a strong Committee—a Committee which was collected from the point of view of representing not so much the interests or opinions of one particular section, but of representing every point of view that could reasonably demand recognition—a Committee of which Lord Balfour of Burleigh is Chairman. The Government further are communicating with the Dominions and with India in regard to the resolutions of the Conference, and as has already been explained, Lord Balfour's Committee has reported a Conference will be held with representatives of the Dominions and India to consider the whole question of the Empire's trade policy in the light of the resolutions.

I think everyone will be struck by the extent of the ground covered by these resolutions, and by the fact, which is not less notable I suppose, that they were discussed and debated and unanimously adopted in the short space of four days by a Conference in which the most divergent economic views and interests were represented. That fact is in itself a most complete demonstration of the solidarity of feeling amongst the Allies, and of their determination to subordinate their differences, or minor differences, to the one great aim of winning the War and guaranteeing security after the War. I was not myself present at the Conference, but my right hon. Friend who sits beside me (Mr. Bonar Law) was, and I am sure that he will agree, and the House will agree, that we ought to pay the warmest tribute to the skill and tact with which M. Clementel, French Minister of Commerce, presided over the proceedings; and it is perhaps right, and indeed necessary, that I should disclose the fact that three of the most important resolutions, namely, those relating to the Most-Favoured-Nation treatment, protection against dumping or unfair competition, and the adoption of measures to render the Allies independent of enemy countries as regards essential industries, were proposed by the British delegates and passed at the Conference in the form in which they were put forward, I am not, I think, betraying any secret when I say those resolutions put forward by the British delegates were drafted by my right hon. Friend the President of the Board of Trade, whose return to active political life we are all glad to welcome to-day, were approved by my right hon. Friend the Colonial Secretary, and afterwards by the two distinguished representatives of our Dominion, Mr. Hughes and Mr. Foster, who took part in the Conference itself.

Finally—I am sorry to detain the House so long—there are two important points to which I think it right to draw attention. The first is the declaration of the common determination of the Allies to obtain reparation for the countries occupied by the enemy. From that determination the Allies have not swerved, and in these resolutions they reaffirm it. The second is that these resolutions are in no sense aimed at neutrals. Our attention has been called to the fact that some uneasiness appears to have arisen in neutral countries, more especially in the United States of America, with regard to the consequences of the resolutions of the Conference, and there seems to be a feeling —I do not say it is widespread—that the resolutions may be directed at and aimed against neutral countries, and impose unique, abnormal, and undue restrictions upon them on the part of the various countries whose representatives signed the resolution. That is not the case. The resolutions contemplate only necessary measures in self-defence against economic aggression threatening the Allies' most vital interests, and in carrying them into effect I need hardly say that every endeavour will be made to ensure that neutrals do not suffer; in fact, our interests and the interests of neutrals in this matter are the same. The determination of the Allies to defend themselves against aggression from elsewhere is or ought to be a pure guarantee that we shall pursue no aggressive policy towards other people. I am told that there is some apprehension, not in neutral countries, but in our own country, that in carrying out these resolutions we may involve some departure from our traditional policy of Free Trade. There are very few older and there is no more ardent Free Trader in the House than myself.

Mr. SNOWDEN

You were a Voluntaryist and against Conscription at one time.

The PRIME MINISTER

I carried on the fight for Free Trade, I think I may fairly claim—I will ask my right hon. Friend here if he does not agree with mc—as strenuously as any man in this country for the best part of ten years.

Sir C. KINLOCH-COOKE

You did it very well.

The PRIME MINISTER

If I did not believe in it, I should not be here speaking to-day and asking the House to sanction the policy of the Government in approving these resolutions. I believe that we are left practically free in this country to pursue the policy which is best adapted and most suited to our own economic and industrial needs. No one who has any imagination can possibly be blind to the fact that this War, with all the enormous upheaval of political, social, and industrial conditions which it involves, must in many ways, and ought to if we are a rational and practical people, suggest to us new problems or possibly modifications in the solution of the old ones. I would regard it as deliberate blindness to the teachings of experience if you were to say we had forgotten nothing and had learned nothing from a War like this.

I am not surrendering any convictions I have ever held. I am asking the House of Commons and the people of these Islands to envisage, as our friends across the Channel say, the new conditions of the world-wide problem. I ask them to take part with the Allies, with whom we are fighting side by side in a struggle which we all believe to be essential to the preservation of the freedom of the world, in securing for the future not only protection against the possibility of military domination, but also true, well-grounded and lasting independence. None of us who approaches the matter with a free mind and with the lessons which the War has taught us, everyone, it does not matter whether you are a protected or a Free Trade country for this purpose, all of us have been too dependent on the chances and risks which we did not adequately foresee and against which we certainly did not satisfactorily provide. I trust and believe that, as a result of this free interchange of opinion between the different Allied countries, associated together as they find themselves in a cause which is equally dear to them all and the success of which we believe to be essential to the future freedom of the world, we shall be able, on the general lines laid down in the resolutions of this Conference, each in our own country and each subject to the modifying conditions of our own special economic and industrial interests, to work out a policy of common action which will make the peace which is to come at the end of this War a lasting peace and a peace which will redound not only to the credit of our arms, but to the stability of our industry and finance.

Sir E. CARSON

I do not rise for the purpose of making anything in the nature of a speech, but I should like to ask the Prime Minister, with a view to elucidating them in Debate, a few questions on the matters he has just put before the House. I am perfectly sure that, on the general statement the Prime Minister has made, the House and the country will be well satisfied that it is the intention of His Majesty's Government to take care that the economic aspects of the War during the War and at the end of the War will not be lost sight of, and that the benefit of the lessons which we have learned during- the War will be made available for the future interests of this country. At the same time I should like to add this: it is all very well to talk in general terms and it is all very well to lay down resolutions in general terms, but the matter about which I am most concerned and about which I am going to address a few observations to the Government is how far it is necessary for the Government to produce to this House their plans and when the House may hope to see and discuss those plans. I am particularly pleased at the announcement made by the Prime Minister to-day, not for the first time, that the Government as a Government have bound themselves to these resolutions with our Allies. That is completely satisfactory. We cannot go back upon that any more than we can go back on our arrangements with reference to not making peace one without the other in the long military struggle that is going on upon the Continent of Europe. I look upon that as pre-eminently satisfactory, and I hope that the House, in the interests of the War and in the interests of the Allies, will recollect that that is an accomplished matter, and that controversies may not arise which would seem to be inconsistent with the considered action of the Government which they have undertaken to carry out in conjunction with the other Allies who are engaged in this War. What I would like to ask the Government is this, especially as my right hon. Friend the Secretary of State for the Colonies will be perfectly sure to intervene in this Debate at some time: As I understand the first part of the White Paper, dealing with "Measures of the War period," so far as I can see, that requires no legislation at all. I should be glad if my right hon. Friend could conveniently elaborate a little more when he comes to speak what are the actual actions under that portion of the resolutions which the Government are now taking. I know, of course, some of them. I know about the winding up of the various German firms in this country and matters of that kind, but there are other matters, particularly in Part III. of the first part— by unifying the lists of contraband and of export prohibition, and particularly by prohibiting the export of all commodities declared absolute or conditional contraband. I should be very glad if the right hon. Gentleman would elaborate that and tell us how far, since these resolutions were passed, we have extended the laws of contraband and what arrangements are being made for raking care that throughout the Empire, in conjunction with our Allies, the exportation of these goods is being absolutely prohibited. That is an important matter with reference to the blockade of Germany, and very likely a great deal can be done if that is effectively pursued by His Majesty's Government. For immediate purposes, the most important part of the Resolutions seems to be the second part—paragraph B. As regards paragraph B, we cannot get to work too soon. There may be differences and there may be battles to fight out on some of the terms of the permanent matters that are to be arranged. I notice, for instance, a phrase of this kind in paragraph C: Having regard to the principles which govern their economic policy. That is a kind of phrase which can give rise to any amount of debate and discussion in this House in relation to future fiscal matters. But as regards paragraph B, that is what we want to have ready at the moment peace is declaicd—indeed, we want to have it thoroughly understood before we enter upon peace negotiations at all. I should be glad to see at an early stage that the Government, who have bound themselves with the Allies to carry out these resolutions, should have now ready, cut and dried, everything that is necessary to carry out the provisions of paragraph B. Some of them can be carried out without legislation, but I do not believe that all of them can be carried out without legislation. I interjected a question to the Prime Minister when he was speaking as regards one of them, to which I will refer in a moment, and he said he did not think legislation was necessary. Let me, with all my heart, congratulate His Majesty's Government upon the abolition in relation to the Germans of all idea of ever giving them the advantage of the Most-Favoured-Nation Clause. We have now got a clean slate as regards treaties by the outbreak of war— I mean treaties with the Huns and the Austrians and our other enemies. Let us take care what we put upon that slate. For my own part, having been for many years a Law Officer during two wars, and having had to deal with this question of the Most-Favoured-Nation Clause over and over again in its many complications and its many uses, I would like to see it abolished out of diplomacy altogether. I know of nothing more pernicious than the setting up of the Most-Favoured-Nation Clause between one country and another with regard to the system of economic policy that we pursue. That, however, is a very interesting subject for the international lawyer to go into, and for the moment all I say is that nothing pleases me more as regards these transitional resolutions than the fact that we are to hear no more in relation to German treaties of the Most-Favoured-Nation Clause. That can be done, I admit, without legislation, and I am glad of it, because I am not at all sure that it would not be a very difficult matter for this House to deal with. As regards the third paragraph of these resolutions in paragraph B, I am not at all so clear. It says: The Allies declare themselves agreed to conserve for the Allied countries, before all others, their natural resources during the whole period of commercial, industrial, agricultural and maritime reconstruction, and for this purpose they undertake to establish special arrangements to facilitate the interchange of these resources. It is upon that I asked the Prime Minister whether it would not be necessary to have legislation, and he said not.

THE PRIME MINISTER

I said I thought not.

Sir E. CARSON

Of course, I quite admit that. I would like to know what it means. It is a very wide paragraph, and I should like to know from my right hon. Friend the. Colonial Secretary how the Government propose to translate it into action. You have to undertake to establish special arrangements to facilitate the interchange of the resources of each country. The resources of each country are not in the possession of the Government. They are in the possession of individuals. How are you to facilitate the interchange of the resources of this country, say, of coal, with France, Italy, or any other of our Allies? How are you to do that, and how are you to interfere with the businesses of those who carry on the develop- ment of those resources, if you are not going to have legislation? I cannot myself see how it is to be done. I entirely approve the principle. I hope the principle will be carried out to the very fullest extent. I hope that it is not merely a pious opinion—I mean that I hope we will not have appeals such as we often have in this House, as if they were going to settle something. We appeal to the patriotism of coalowners, or of iron masters, but what we want to know is, and it cannot be delayed, is what is the definite scheme of the Government and what is the definite scheme, when we can get it, of the Allies to make the resources which each country wants from the other available under the terms of these resolutions? I am not going to pursue the question at present, but I tell the Government that this is a matter we shall have to pursue, and we shall expect that this resolution, which is of a wide and platitudinous, character, shall be translated into active words by the Government, and shall be so put upon record in its details that people in this country will know how to carry out what has been solemnly arranged with our Allies in that respect.

The same thing applies with more force as regards paragraph 4— In order to defend their commerce, their industry, their agriculture, and their navigation against economic aggression resulting from dumping or any other method of unfair competition, the Allies decide to fix by agreement a period of time during which the commerce of the Enemy Powers shall be submitted to special treatment, and the goods originating in their countries shall be submitted either to prohibitions or to a special regime of an effective character. There, again, we want to know what that means. We want to know what you are going to do to prevent dumping. Have you the power? Does that involve any consideration of a change of fiscal policy? I quite agree with the right hon. Gentleman that at the end of this War all these old cries of Tariff Reform and Free Trade will have no meaning in relation to what is your object under these resolutions. Your object is neither Free Trade nor Tariff Reform. Your object is to benefit this country and to hit Germany, and nothing else, and let neither Free Traders nor Tariff Reformers be chuckling over the victories which may come out of this. As I understand these provisions, they have nothing whatsoever to do with either of these old contentions, and, indeed, I think he will be a brave man who will go to the country and say, because you are Free Traders, or because you are Tariff Reformers, we advise you to learn nothing from the War which we have just gone through. Some of the saddest incidents which have occurred in the early delay of carrying on the War have been from want of prevision and foresight in relation to what would happen as to the import of goods from enemy countries during the period of war. I remember the President of the Board of Trade, whom we all welcome back to-day as a very able expositor of all the business of the Board of Trade, saying there is one thing we should take care of and that is that everything that is necessary for the organisation of our industries in peace or of our operations in war, we will take care in future, can be and will be manufactured within our own Empire. That is a sound principle, the soundest that we could have learned from this War, and I shall be very glad if the Colonial Secretary will give us some indication of when we are going to get a statement from the Department as to what it is proposed to do to carry out these resolutions. I am not going to dwell now upon the resolutions in (c) and (d), which come later on, for permanent use, but these are resolutions which may arise at any time, and we ought to know that the Government are really working them out in detail, and the Government ought to be able to tell us how far it will be necessary to have legislation to carry them out. I believe the policy contained in these resolutions is just as vital to the interests of this country and to the carrying on and the prosecution of the War as anything that has ever emanated from the War Office, and I believe that nothing at this stage of the War will encourage our people, who are suffering so much throughout the length and breadth of the Empire, more than to know that above all our stern resolve is that never again will the Germans be allowed so to intertwine themselves in our economic and financial relations as almost to clog the very wheel when we have to proceed into large operations, as we had to do at the commencement of this War. This, if we are able to carry it out, will be as vital to victory for this country as any victory we can win in the field of war.

Sir J. SIMON

I think every Member of the House must feel grateful to the Prime Minister for giving us an opportunity of discussing these resolutions, for though they are in parts vague, and indeed in some places platitudinous, they none the less involve very important questions of policy in their application, and the really important question is not the sort of speech which may be made in recommending them to the House as resolutions which will not run counter to the wise fiscal policy of this country, whatever that may be, but the really important question is what is going to be done under them, and I entirely agree with my right hon. Friend (Sir E. Carson) when he said it was in the second of the three compartments of this resolution he found what is immediately important for practical purposes and that it is highly desirable that we should know what the Government really moans by it. I do not, in saying that, in the least forget that the first part of this resolution is of the greatest possible importance, but then there is no one in the House, I do not care what his economic or fiscal opinions or prejudices may be, who could possibly quarrel with any of them. Whatever a man calls himself in economic debate, if he is a British subject he is agreed with every other British subject that we must take every step in the economic as well as every other sphere to defeat the enemy, and nothing which can be said in this Debate by anyone will therefore quarrel with proposals immediately and directly addressed to that end. But there is a very great difference between proposals which come under the first head in this White Paper, and which are proposals already, I am glad to think, for the most part in operation which are addressed to strangling the enemy while we are fighting him, and the proposals which follow under heads B and C. The first question I should like to put to the Government is this: What is the main object of the proposals as I find them set out in paragraphs (b) and (c)—that is the proposals which are to be adopted after the War? Are, those proposals designed as a means of punishing Germany? Is it punishment? Are they designed for the purpose of promoting the security of our own race and nation, or are they proposals which are connected with the promotion of trade? It is very necessary to know whether in the mind of the Government they are one or other of those three things. So far as punishment is concerned, no punishment can be too bad for those who are responsible for the excesses which Germany has committed during the War. But there is in my judgment the greatest possible objection to trying to devise a scheme of punishment by adopting a particular trade policy after the War, and that is— it is elementary enough—that it is a delusion to suppose that a buyer, whoever he may be, when he purchases an article from a seller is doing it because he wishes to confer favourable treatment, the most favourable treatment, or any other sort of treatment of a friendly kind upon his customer. It is not true, and the only reason why people buy things is that it is to their advantage to buy them and not because it is to the advantage of other people to sell them, and therefore if this policy here suggested for our adoption after the War is a policy which is recommended to us on the ground that it is a way of punishing our enemy, there are very much better ways of punishing him, and the proper way is to beat him soundly while we are fighting him, and not to adopt a system of fiscal punishment after the War is over.

5.0 P.M.

But it may be said in the second place that the object really is to promote our national security. If it is, and in so far as it can be proved to be well devised from that point of view, there is no one I know of in the country who will do other than rejoice. If there be any specific point on which our national security requires that we should adopt these special methods after the War is over, in heaven's name let us adopt them, but do not let us adopt them at large, by vague and platitudinous phrases, until a specific case with reference to a specific evil and danger is fully and thoroughly made out. A reference is made in the resolution to dumping. That is a very old controversy. I was interested to learn from this resolution that when the representatives of these different Allies met in Paris they discussed that subject amongst others. I looked in the French text of the resolution to see what is the French for dumping. It appears to be a word which they learnt from the British representatives. The French for dumping is dumping. It is very difficult for the House of Commons to judge how far there is this specific evil of dumping to be provided especially against by exceptional measures immediately after the War, and I wish very much we could have some information from the Prime Minister about it. Is it really true that the result of the strangle hold which the British Navy has upon German industry is that our enemy is not only not hard pressed, but is engaged in piling up immense quantities of commodities which he proposes to bestow upon us at a very low price the moment the War is over, and, if that is the case, where is the evidence of it? The evidence cannot be got from these resolutions, even though those who took part in the Conference in the second resolution adopt language of this sort. They declare that: The Empires of Central Europe are to-day preparing in concert with their Allies, for a contest on the economic plane which will not only survive the re-establishment of peace, but will at that moment attain its full scope and intensity. Is that really well founded by any ascertained facts? If so, what are the facts? It is very desirable that we should know. I heard a statement made that? when the War is over, and that means when our enemies have been soundly and completely defeated, Germany, our enemies, will be found to have considerable stocks of sugar which they will be prepared to put upon the British market. Even if that were true, I would like the House of Commons to pause before they decided that was an absolutely unmixed evil. Let us consider how the thing is likely to be regarded both by the working classes and the manufacturers in this country. Before the War sugar stood at a price which, as compared with its price now, means that sugar is now something like two and a half or three times as expensive as it was before the War began. If it were true—and we have no evidence at present to show it—then, when the War is over, one of the consequences would be that the price of sugar in this country would go very rapidly down, and I should be very much surprised to learn that the working classes or the manufacturers of this country, who need sugar for their raw material, were going to set up a howl. So far as I know, the only effect of taking artificial measures to keep European beet sugar out of this country when the War is over will be that you will maintain the high price of sugar, and you will have to draw your supplies from a distance rather than from comparatively close sources. You will, no doubt, do some good to the people who like to charge high freight and prices, but that you will confer any benefit on the people of this country I deny. That is the second of the three reasons which may be put forward for these resolutions so far as they are proposed to be applied after the War.

What is the third? It is one about I which we heard very little from the Prime Minister. Really, nobody who looks at the matter fairly can doubt that these I resolutions are designed, no doubt honestly, and most ingeniously designed, to promote, to sustain, and to improve the trade of this country after the War. That is a perfectly fair question to put for discussion—and I hope nobody is simply going to rely upon some ancient formula—but the thing is far too important to be dismissed with a mere general phrase. The Prime Minister recommended this particular resolution with all the skill and adroitness that we are accustomed to. He will forgive me for saying that there is another member of the Coalition Government, who, I think, from past practice, might have been expected to do it, with even greater skill, and that is the First Lord of the Admiralty. He has for years past been accustomed to explain that we may all combine upon certain aspirations expressed in the form of trade propositions without really getting into controversy at all. This becomes the more serious because there is a very great difference between the step which the Coalition Government is now taking and steps which at first sight are similar, which they have taken on other subjects in the early history of the War. I do not doubt, and I speak sincerely, that the Liberal and so-called Free Trade members of the Cabinet are just as devoted to our past fiscal system as they are devoted, let us say, to the principle of voluntary service or to the cause of self-government in Ireland. I do not doubt it at all, but there is this great difference between the cases: when you are dealing with a question like voluntary service, or like self-government for Ireland, and when the Liberal Members of the Coalition Government have found it right to suspend during the period of the War pressing their own point of view, nobody is exposed to any reproach because, upon his judgment, he thinks that is the proper thing to do, but to-day the Coalition Cabinet is coming forward and recommending to us and the country proposals which, by their expressed terms, are only to operate when the War comes to an end. I would like, therefore, much more assurance than we have at the present time that the various members of the Coalition Cabinet are all equally satisfied with these proposals.

I understand that these proposals are satisfactory to the Secretary of State for the Colonies, but I am bound to say that does not very much encourage me, when I consider the controversies of the past, not because I want them renewed, but because those controversies expressed a real and fundamental difference of view as to what was the real basis of British Grade policy. It is perfectly foolish to suppose when there was that honest fundamental differ-once of view existing before the War, which is suspended by common consent, or ought to be suspended, during the War, that, none the less, when we are through the War we shall find that controversies of that sort have entirely disappeared. I am prepared to admit, and I would be the first to admit, that lessons of the greatest value may be drawn in the economic and fiscal sphere from the terrible experiences of this terrible War. Of course, that is true, but really, if we are going to draw such lessons from the experiences of the War, let us have some regard to two or three elementary and proved facts. In the first place, of all the belligerents in this War, we are the only one, either on the side of the Allies or on the side of the Central Powers, which could possibly have proposed, carried through, adopted and accepted, a Budget like the recent Budget of the Chancellor of the Exchequer. I believe a calculation has been made that the total taxation for war purposes raised by Germany since the beginning of the War is something like £25,000,000. To put aside all peace taxation, the facts show that we are raising for the purpose of war expenditure something like £300,000,000. I am bound to call attention to that, and to couple it with this fact, that this country is also the only country, whether on the side of the Allies or on the side of the Central Powers, which has pursued the fiscal system to which this country has hitherto been devoted. Therefore, by all means let us examine the case if there is a specific case which calls for special treatment, and by all means let us draw any lesson which may be drawn from the War, but do not let us begin with the ridiculous assumption that we have hitherto lived under a system which enables us to raise these enormous sums of money and to beat the enemy, but that it is only at the end of it that we are to learn anything which is of value and importance.

That leads me to a question which I would put respectfully to my right hon. Friends on the Front Bench. Surely the basis upon which they went into this Conference, and the basis upon which they desire us to consider these resolutions, is that we are going to win, and that we are going to see at the end of the War a situation in which we and our Allies are able within proper measure to insist upon terms. If that is the case, I would very much sooner see an economic conference where we are going to enforce terms upon our enemies which will result in an expansion of the trade of the world, and which will really promote peace and prosperity, rather than that we should go in for adopting just the same kind of restriction which has failed to enable Germany to win. Let me turn to two or three of these resolutions and make a comment upon them. In the first place, I would like to say a word about the Most-Favoured-Nation Clause. I was surprised to hear the right hon. Gentleman (Sir E. Carson) speak of that resolution, with all his experience, as if it had no other consequence but this, that we refuse to give favourable treatment to Germany in future. The Most-Favoured-Nation Clause is not limited in its operation to that; if it were, there is not one of us who would not be prepared to contemplate with equanimity the refusal of favours to those with whom we might hereafter be trading on the continent of Europe.

The esence of the Most-Favoured-Nation Clause is that it confers certain possible advantages to the parties bargaining, and that it confers specific advantages upon ourselves. The very essence of the Most-Favoured-Nation treatment, as far as our own trade is concerned, has been this: that so long as we do maintain it, or so long as we think it suits our interests to adopt it, we are able thereby ourselves to get an entry into the foreign market on terms most favourable to ourselves. I do not doubt that these powers in Central Europe, actuated by the same feelings of intense hostility which actuate ourselves, though on very much poorer grounds, if left to themselves, will very likely propose all sorts of tariffs against all sorts of Allies who have taken part in this War. The real question is, is that going to be for the economic advantage of the British Empire or not? It cannot be got rid of by drawing up a resolution which speaks about the Most-Favoured-Nation Clause as if that Clause was not a mutual or reciprocal Clause.

I will now take the fourth resolution, which is very important. It provides: In order to defend their commerce, their industry, their agriculture and their navigation against economic aggression resulting from dumping or any other mode of unfair competition the Allies decide to fix by agreement a period of time during which the commerce of the Enemy Powers shall be submitted to special treatment and the goods originating in their countries shall be subjected either to prohibitions or to a special regime of an effective character.

HON. MEMBERS

Hear, hear!

Sir J. SIMON

If these things could be settled once and for all by rubbing our hands and saying that is very good, the world would be a much simpler place than it is to-day, but these things have to be looked at a little more closely. Is it not contemplated that at the end of the War our defeated enemy is going to pay indemnities, that he is going to be made to pay in meal or in malt, in coin or in goods, for the terrible and devastating destruction that he has caused? How do you suppose our enemies are going to do that if at the same time, in a spirit of cheerful enthusiasm, we announce that we are in favour of provisions which are going it may be to prohibit the sending out of goods originating in the enemy countries, whether directly or indirectly? In the second place, whatever else may happen at the end of the War, there is not a man in this House or out of it who does not desire that there shall be peace at the end of the War. If that peace is to be secured, is it not very necessary to consider how we are most likely to secure it with the small neutral nations of Europe? To my mind Resolution No. 4, if it is going to be acted upon—it may not be intended to be acted upon, in which case I have nothing to say—will be the most certain means of throwing countries like Holland and Belgium into the arms of Germany that could possibly be conceived. Just consider what is contemplated. It is intended that we and our Allies shall, by stringent and drastic action, secure that goods originating in Germany or Austria are to be prohibited or to be subjected to the most stringent restrictions. It is obvious that that cannot possibly mean goods that come through the Elbe, the Weser, or any of the German ports. It must apply to German goods which pass through neutral countries. Has not the experience of the past months shown us that though we were quite justified by our position as a belligerent in interfering with this trade, it has been a matter of the greatest difficulty to persuade neutral nations that we were justified. When the War is over how are you going effectively to stop cargoes coming from Sweden, Norway, Holland or Belgium merely on the allegation that they contain goods that originated in Germany? I find it at present quite impossible to believe that these particular proposals have really been thought out, and I most heartily concur in the request of the right hon. Gentleman (Sir E. Carson) that if this really means business we should see in black-and-white what is the business that it means.

Then the argument is used, and I am quite prepared to accept it in all cases where it is proved and established, that we ought to pay more attention to what are called key industries, and ought to make sure", at any rate as regards these key industries, by which I understand are meant industries the continuance of which within our own borders under our own control is essential in the event of war, and that we ought to take more pains to see that these key industries are really promoted and preserved within our own country. Be it so. But that is no argument at all for adopting general principles of this sort which extend to the whole list of products coming to central Europe; and, indeed, if we are going to talk about key industries, what is preeminently the key industry in this War? The pre-eminent key industry of this War is an industry in this country which, by the common consent of all trained controversialists, this country is supreme. It is shipping and transport. That is the key industry of this War. This War could never have gone on in the circumstances in which it has if it had not been that, thanks to our own policy of open ports, we had got the greatest shipping in the world. And I do submit to the House of Commons that it is not wise for us to be led away by a series of general phrases, even although those phrases are actuated by a very natural indignation, into adopting and confirming a policy which may have such unfortunate results. The indignation is quite natural and perfectly inevitable and perfectly righteous, but I wholly deny that it is wise for us to adopt, whether in concert with other communities or not, changes which may have consequences far different from, and far greater than, those immediately intended when we were acting under the spur of a most righteous indignation with a despicable foe.

That is all I say this afternoon about it. It is obvious that the matter must be discussed much further on other occasions. So far as the period of war is concerned, these immense interferences with trade are perfectly inevitable, perfectly justified and right. But do not let us on that account suppose that they do not produce very serious and uncomfortable results. Is there a man in this House who really studies the problem of the system by which commerce is financed who does not see the risk which we are running of the centre of the world's trade passing from this country to America? Is there a man in this House who does not see that the thing which is facing us when we have won this War is the filling up again as rapidly as possible of the immense void which this War has made in our own resources and our commercial prosperity? Is there a man who does not see that the thing which is really the key to British trade is the ability to compete with others in the great neutral markets of the world? Take those three considerations—how are they affected by proposals such as these? In the first place, you may carry any number of resolutions you like; you may adopt the most extreme and drastic measures against your enemy that you please, but nothing that you can do is going to affect trade between Germany on the one hand and America on the other hand, and just in proportion as you may be, from feelings of the most intense indignation when this War is over, led to divert the natural course of trade, you will throw the Central Powers more and more into the hands of the immense powerful American interests, with the result, among other things, that, if unhappily we ever found ourselves in a contest in Europe again, I do not believe that, we could count on the same sort of friendly favourable neutrality as that which we have experienced from the United States.

The second point is this: Surely, immediately after the War is over, we ought to do everything we can to restore the bill on London, the exchange on London to the position of pre-eminence which it enjoyed before the War. No man acquainted, for instance, with the accepting houses in London will say that their condition to-day is the same as it was before the War. It cannot be so where it is necessary for as to interfere with this free exchange. But for us deliberately to say that we are going to continue to interfere with ii after the War is over does appear to me to be a most amazing and preposterous proposition. Take a single example. There are very large exports of coffee from Brazil to Europe. Everybody who pays any attention to these things knows perfectly well that before the War practically the whole of that trade was financed in London. Vessels that never got into the harbours of these Islands at all, that were going to the Continent of Europe, may be to Hamburg, were none the less carrying cargo which was financed by bills on London. They are not doing it to the same extent to-day. Ask any great accepting house, and they will tell you to what an extent the dollar has taken the place of the pound sterling for the purpose of transactions of that kind. Ask yourselves whether the first of all our necessities after the War is not to remove as far as possible these temporary but necessary restrictions in order that London may again establish itself as, what it can only be under a system of free exchange, the centre of the commercial world? Lastly, take the third large consideration to which I drew- attention. What is to be the position of this country, of its manufacturers and merchants, in the great neutral markets of the world if the policy involved in such resolutions as these is really applied and carried out?

Nothing that these resolutions can do, nothing that any policy adopted here can do, will in the least affect the freedom of Germany to deal in those neutral markets. At present we can compete with her on very favourable terms, because we compete on terms by which we are able to purchase at the cheapest prices without any artificial restrictions of any kind, and every step that is taken which is going more and more to divert the trade of the Continent of Europe into other channels than our own is not, as might be supposed by the authors of those resolutions, going to increase the prosperity or opportunity of British trade. It is going to increase the severity of competition in those very markets where we can, under our existing system, hope to hold our own—indeed, to increase our hold. I say nothing this afternoon on some matters that must certainly be most carefully considered before these changes took place. I do not know at all what the view of the Government is as to the future trade of India if restrictions of this sort are made. The greater part of India's cotton crop went before the War, and in the ordinary course would go again after the War, to Germany or Austria. What are you going to do about that? The truth is that the large lesson to be drawn from the experience of the War in the fiscal sphere is this: You may have, as I said, to interfere most drastically—I do not care how drastically you interfere for the purpose of winning the War—with the course of trade; but the lesson to be drawn is that direct and intense interference with trade, important as it may be, is nothing like as important as the indirect, I will say the uncalculated and it may be the incalculable effect on British trade which may be produced by such proposals as these. I have the greatest admiration for the experts working in a Government Department who deal with this matter, and for the ability of those who bring forward those resolutions, but I deny that it is within the competence of our Government, wisely or safely, to supplant the free enterprise of British traders, for by that enterprise and by that alone we once secured, and we may again obtain, commercial supremacy over all the many nations of Europe.

Mr. CHURCHILL

The right hon: Gentleman has used a number of arguments which taken severally seem to me and I think to many in this House, very reasonable and very clearly stated. But I am not at all convinced by what he says as to whether he would advise the House this afternoon to express disapproval of the proposals which the Government have put forward or not, because after all that is the point and the only point which is before us at the present time. I quite agree with the tone in which the right hon. Gentleman spoke of Free Trade and Protection as not being a live issue, and as not being material at all at the present time. That is quite true. But I think that, having stated that general proposition, he might have gone further and carried it into effect by not putting a number of obvious Free Trade points which it is not necessary for us to pronounce an opinion upon or enter into at the present time, because the issue with which we have to deal is a severely practical issue appropriate to the great emergency of the present War.

Sir J. SIMON

So is Free Trade.

Mr. LEIF JONES

Are they obvious?

Mr. CHURCHILL

They are obvious to a great many of us. I am of opinion that we should not be drawn into elaborate discussions of this kind in which, on both sides, we are little competent to take part to any extent, and none of which affect us. One issue lies before us this afternoon, namely, to give whole-hearted support to this remarkable document which has emanated from the Paris Conference, and I say that, in regard to this document, the first great question which we have to ask ourselves is: is it a good war measure? Does the publication of this document and the authority on which it is based and the conference at which it was adopted assist us at the present time to carry on the War in common, and does it damage and impair the power of our enemies? I do not think that there can be any possible doubt that it does tend to promote mutual confidence and solidarity among the Allied nations who are fighting together; that it offers encouragement and comfort to the small nations which have been so relentlessly stripped and mutilated in these struggles; that it exercises an effect upon the German authorities and makes it difficult for them to carry on any of the credit operations which are still open to them; and that it has a discouraging effect on their merchants and traders and shippers. And from those points of view it seems to me that the course taken by the Allies in the proposals now put before the House is one which requires not any hesitating and doubtful acquiescence, but the wholehearted and spontaneous approval of Parliament. Then we must ask ourselves, in the second place: Is it a good reconstruction measure for the period immediately after the War?

Sir J. SIMON

That is the point.

Mr. CHURCHILL

Those who listened to the Prime Minister drawing attention to the treatment which Belgium and Serbia and the occupied districts, very important economic districts, in France have received cannot possibly doubt that we should be now considering every measure that will restore those nations to their past prosperity in advance of any other consideration which affects what you may call the general prosperity of the world, and, still more so, the particular prosperity of the enemy with whom we are fighting. Last of all, we should ask ourselves: Is it a good peace measure? There are certainly some features of our economic system as it existed before the War which will never be retrieved after the War. For instance, I cannot conceive that any opinions on fiscal and economic controversies would ever stand in the way of our making ourselves self-contained in all that regards preparation for war and the production of war material. I name that only as an instance; there may be other cases. But, broadly speaking, the general effect and value of this document, as a peace measure, will be governed, like everything else will be governed, by what kind of peace we are to get. For all the future of this country, the solution of every question, depends on our reaching a complete victory in the field. If we gain a complete and overwhelming victory in the field, good solutions for every question, commercial, economic, political, and Imperial, are open to us. But if the victory were not a complete victory, if we reach an inconclusive peace, then it is perfectly certain that only very inferior solutions of every question, external or internal, will be open to us. One of the reasons why I venture very respectfully to resist the keen and cogent arguments of my right hon. Friend (Sir J. Simon) is that they may be met with equally keen and cogent arguments of the Protectionist variety, whereas the only thing that matters now is to win the War and get out of it with security and honour.

If we were to reach an inconclusive peace—not that it is in our minds, and not that it is a situation which we contemplate—then we should have immediately to prepare for the renewal of war, because an inconclusive peace means a period of suspicion and danger, and of anxiety and immediate preparation on the part of all the principal belligerents for a renewal of the struggle at the first favourable moment. If we reach an inconclusive peace we may be perfectly certain that the period of preparation for the renewal of war will follow it, and I can conceive that far more drastic economic measures of an exclusive and anti-German character will have to be taken than anything we necessarily contemplate in the scope of this document, because our preparations will have to be made to keep our potential enemy as weak and poor as possible, and to secure the greatest gathering together of all our resources for a renewal of the conflict, that it may be carried to a triumphant conclusion. But if, on the other hand, and when, on the other hand, we reach a victorious and final peace, and if and when the German is decisively beaten in the field, and Prussian militarism is definitely overthrown—if we reach a situation like that, then the defeat of Germany in the field may well produce a reaction in the internal government of Germany which will create a wholly different situation from any which we have the right to contemplate now—which may, among other things, give the German democracy effective control in the policy and government of their own country, and I for one should certainly not prejudge now a view which it would be appropriate then to wholly different circumstances and conditions from those which we have any means of foreseeing at the present time. That time may be very far off, and I am not sure that there is any language in regard to it which we can usefully use at the present time. But so far as immediate steps are concerned, I feel convinced that the measures proposed by the Government will add to the strength of the Allied Governments in carrying on the War to a successful conclusion, and in re-establishing injured and damaged countries at the end of it, and will at the same time inflict serious injury, annoyance, and preoccupation on the enemies with whom we are engaged in this deadly grapple.

Mr. WARDLE

With regard to these resolutions, there are some of the measures with which we could agree during the War, and for the purposes of the War, the first part of the resolutions being absolutely necessary; but when it comes to the question of the resolutions as a whole, part of our difficulty is this, that they go beyond the war measures, and they seem to contemplate, without anybody knowing really what the result will be, certain measures in regard to Germany and the Allies. For my part I feel in a somewhat difficult position in speaking upon these resolutions. There are two things I feel bound to say on my behalf and on behalf of some of my colleagues. First of all, I should like to say that we who belong to the Labour party have never been believers in what I may call the policy of laissez faire. We, at any rate, have never subscribed to that. The interest that we have in the problems raised by these resolutions, particularly in so far as they affect policy after the War, and not during the War, is very naturally a great interest, because whatever that policy may mean to manufacturers, and from the point of view of business, for labour it is a question of employment, of wages, and of security, which are everything to the working classes of this country. I may go so far as to say that we shall watch with exceeding great care any proposed alteration, or any policy which in the smallest degree would have the result of reducing the standard of living of the worker, or in any way affect his security with regard to employment. I may refer to the fact that labour was not consulted about those matters in the Paris resolutions, but I submit that labour in reference to all those questions should have a voice, and a fair representation should be offered to them.

We have watched with interest during this War the breakdown of the old arrangements and the growth and extension of State action in various directions. So far as we are concerned, that has always been our policy. We believe that State action, rightly directed, can do much to establish, in regard to the sphere of labour, improved conditions, and to assist our people. We noticed, too, that but for the assistance of the State many of our great industries would have broken down. Banking, transport, munitions, shipbuilding, and all these things had to be brought into closer relation to the State during the War than ever they were before. It is perfectly true to say that the whole system of our banking credit would have broken down in this country at the beginning of the War if it had not been for Government action to uplift it and bolster it up, to use a homely Yorkshire phrase which I believe everybody will understand. We are against those who, with private interests to serve, seek to reap where they have not sown. The Government, it is true, have had to take charge and assist in many trades and industries, and for the purposes of this War they have had to control many of the largest. If they had taken a little more control, in our judgment, especially in regard to shipping, there would have been a better state of things at present. I desire to say this in reference to the Labour party: We are out to secure for our people security and sustenance. We are not very much concerned at the present time with regard to the friction between Free Trade policy and Tariff Reform. We believe that certain of these doctrines on both sides are of assistance in certain conditions, but we feel that the sacrifices made by Labour during this War entitle its voice to be heard, and entitle it to have some share in the final settlement, whatever it may be, when it does come. May I say here that I do not think the House and the country have altogether realised some of the sacrifices that Labour has made during this War. It seems to me to be assumed that the sacrifices that Labour has made with regard to its trade union regulations were a simple and an easy matter to accomplish. It was not. Those sacrifices went to the very root of Labour organisation and the protection of the labourers' lives. Having made those sacrifices during the War, in any proposals of reconstruction or in any attempt to reconstitute industry after the War, Labour feels that it has a right to share in that reconstruction.

Three things stand out, from our point of view. First of all, we desire that there shall be a new reading of the status of the working man of this country, that he shall be more a man than he has been considered to be in the past; that he shall be taken more into consideration, brought more into vital relation with industry, and made more a part of the whole machinery of business, and that in a way different from any that has been followed before. If this House and the country desires the loyal co-operation and adherence of working men—qualities which they have shown during the War —to national aspirations, they will have to take the working men more and more into consideration, and give them a greater voice than they have hitherto had in the control of industry. Another thing to be done is that the reward of work will have to be greater and more secure than it has been in the past. The old conditions which prevailed during the past will have to be done away with, and a reasonable guarantee of a living wage should be given to all classes of workmen, as part of whatever reconstructive proposal may come about in regard to the future. The standard of living of the workpeople must not be reduced, but if possible very much bettered in the future than it has been in the past. If any of these Paris proposals would have the effect in any degree whatever of reducing the standard of living, then in so far as they would have that effect we should feel bound to oppose them. With regard to the whole of the proposals, so far as we are concerned, we shall watch with anxiety and with care, so that the interests of our clients may not be neglected, and that so far as they are concerned these resolutions shall not prejudice them in any way. May I say in so far as they betoken a determination and desire that Germany shall never again have the same opportunity as she has exercised during this War—that in so far as Germany, whether for military reasons or for economic reasons, I will go so far as to say personally, though I will not commit any of my colleagues in regard to this matter—that if Germany declares economic war I shall be prepared to fight her economically with economic weapons. When we come to the end of the present War, if such a state of things takes place as the right hon. Gentleman who spoke last indicated, and if there was a possibility of the people of Germany controlling the destinies of Germany and controlling them in the sense in which we understand the words liberty, freedom and democracy, then I for one would like to hold out and extend to them the hand of liberty and freedom also; but that day, I am afraid, is a long, long way off, and if Germany wants, desires or prepares, or intends to carry out an economic war after the military war is finished I shall be prepared to see this House and the country take such steps as are necessary to fight them on those grounds also.

Sir L. CHIOZZA MONEY

I should be rather sorry if it went out from this House that the exceedingly able speech, and I need hardly characterise it as such as all his speeches are, of the right hon. Gentleman the Member for Walthamstow (Sir J. Simon) represented the last word that is to be said on this all-important subject on behalf of those who have been and still are Free Traders. In another field of controversy, I refer to the Irish question, we have had men who have been bitterly opposed in the past, not ashamed to say on the floor of this House that in view of the conditions that have been created by this War, they were anxious to find ground for agreement, and anxious to shake hands with each other for the general welfare of the country and for the cause we all have at heart. I do not despair of it being found possible in connection with what has been a controversy in some respects fiercely if not bitterly conducted in the past, to find common ground for agreement in endeavouring at once to secure during the War and after the War the defence of the country, the punishment, and I do not hesitate to use that word, of the enemy, and the welfare of the people of our country and of the Empire at large, and also of our Allies. The speech of the right hon. Gentleman seemed to me to fail chiefly in this, that it had very little regard to the practical facts of the situation. Let me illustrate. In his opening remarks the right hon. Gentleman began by posing this problem to the Prime Minister. He said, "Do these proposals amount to punishment or are they to promote the national security or are they to improve the trade and industry of the country?" He seemed to think that in answering those questions he was propounding a problem to the Prime Minister exceedingly difficult to answer, and that the answers must necessarily be inconsistent with each other. If my right hon. Friend had just reflected upon one or two outstanding instances which have occurred during this War, then I am perfectly sure he would not have put the questions.

I will take one of the chief materials necessary to the prosecution of trade in peace and for the prosecution of what are called "war trades." I refer to the very important material commercially called spelter. What happened to spelter in Europe? A German industrial trust, by a diligent process of monopolisation and exploitation, possessed considerable stores of the raw material in their own country, and they extended their operations over the borderline to Belgium and into the British Empire, and got hold of some of the best material to be found in the British Empire, in Australia. By a series of agreements which ran to 1921 they monopolised the zinc concentrates of Australia. They produced a German trust which practically controlled the whole of the spelter output of Europe and controlled the raw material in the British Empire. When war broke out we found ourselves in this extraordinary position, that the raw material of our own Empire I had been bargained away to the enemy, and by legal form we were not able to avail ourselves of it. My right hon. Friend says that it is impossible at one and the same time to punish the enemy, to promote national security and to promote the trade and industry of the country. Let me point out that the case of spelter is as complete an answer as possible that you can have all those three things at the same time. If we set up, as we are setting up, and this is no fancy picture, with the assistance of the Government in this country, the great spelter industry, what shall we do? We can utilise ourselves the raw material of our own Empire, we can punish the enemy by depriving him of materials which he improperly obtained and monopolised, and we can, in the words of the right hon. Gentleman, promote the trade and industry of the country. I could give instance after instance, if it were convenient now to do so, of our somewhat unfortunate experiences of the same order. The right hon. Gentleman referred to the instance of Indian cotton, and asked where it went to. He said that it went to Germany, and he seemed to think we would punish India if we prevented it going there. It is our duty to promote the industries of India and the United Kingdom, The cotton of India, like that of Egypt, need not go to Germany in future. It can be worked in India or in Egypt, or in the Home Country in this war. I could give many other instances to illustrate the same point, and many of which are, no doubt, familiar to hon. Members.

I will take one other matter which the right hon. Gentleman mentioned somewhat triumphantly, and as if conclusive. He spoke of key businesses, and said that shipping was the key industry of this War. I do venture respectfully to differ from him. Shipping has been the Achilles heel of this country and will be much more so in the future than at present. It was very fortunate through certain naval dispositions that we were able to contain the German Navy and to prevent more than a casual raid upon our shores. If hon. Members will reflect upon what was accomplished by the "Emden" and by submarines in their very infancy, I ask anybody to pause before they assert that shipping is the key industry in time of war. On the contrary, it is an industry which is now causing the most terrible anxiety, and after the War in each succeeding year wilt cause more and more anxiety. Shipping in its turn depends on two things. Those who know the history of shipping in this country, know that it depends first, on coal exports, which almost more than anything else have contributed to the building up of a great mercantile marine in this country, by affording outward freights to balance our heavy import freights in food and raw material. It depends upon that, and it also depends, as every Free Trader is entitled to claim, on the fact that we have built up a great commerce through it. Beyond that it depends on the manufacture of iron and steel, and upon trade routes, which are mutable. I do ask the right hon. Gentleman to pause before he again asserts that the key industry of this War has been shipping.

6.0 P.M.

I pass from the speech of the right hon. Gentleman, as I do not propose to answer it point by point. I think it much more useful, if I may, to make my own case. What is required is a policy of national and Imperial defence and development. That in my opinion is not inconsistent with the policy in some degree of punishment. It is the fact that Germany in peace practised economic warfare. That is an established fact. It is the fact that Germany, to the best of her ability, and I have a large amount of evidence which I cannot give in a speech, is now preparing for economic warfare at the end of the War. She is making contracts, I can give the facts, actually in every market in the world, or endeavouring to make contracts, for the supply of materials in order to enter upon a commercial warfare at the end of the War. Indeed, if one had not evidence, would not one expect that to be true? The third point in that connection is that it has been entirely proved by the War that the United Kingdom, in many important respects, has neglected her own economic advantages and those of the British Empire. As to the first of those points we have the facts as to spelter, which I have pointed out, and I could also give the instances of nickel and the oleaginous products of West Africa and many others, where the Germans in the past secured either monopolisation or improper control of the materials of the British Empire. Now as to the neglect of our own relative advantages. My right hon. Friend the Member for Walthamstow said something in this connection about our triumph in finance, and those who have supported Free Trade in the past have undoubtedly the pleasure and the pride at this moment to point to the successful financial operations of the United Kingdom. But at the same time let us see not only the strength of that finance but its weakness, and what may be its additional weakness in the future. What has been the only considerable problem in connection with our finance? It has not been the raising of internal loans. Germany has had no difficulty in raising internal loans for the carrying on of the War for two years, and that although she has been deprived of her export trade. She is not doing at the present moment more than 5 per cent, of the export trade she was doing in 1913, and yet she has been able so far to finance this War for a period of two years. That being the case, would it really be surprising if the British Empire—[An HON. MEMBER made a remark which was inaudible in the Reporters' Gallery.]—That is not the point. The point is: Has she been able to raise economic resources for prosecuting the War? The answer is, "Yes," and, if she has done so while deprived of the major part of her commerce, would it be surprising if we, possessing the command of the seas, were able to do the same thing?

Our difficulty has not been with regard to internal loans, but to financing our external obligations. What are our external obligations? The chief has been this: that we have been buying from America, Sweden, Holland, and other places the materials of war. What materials of war have we been buying? From America, iron, steel, machinery in enormous quantities, acetone, and many other things; from Sweden, iron, steel, and magnetos; from Holland, margarine in enormous quantities. Why have we been buying these things in war from these places? Because of the neglect of these industries in this country in the past, and, as I pointed out—and I beg the House to realise this—this is a most terrible danger to ourselves, so great that if I were to tell the House of the contents of one ship sunk by a submarine they would recognise how-terrible it is. We have been buying these things at great danger to ourselves, because we did not either prosecute these industries at all, as in the ease of zinc—we have next to no zinc industry—or were prosecuting them to an insufficient degree, as in the case of margarine. I cannot agree with the Prime Minister that no one in this country pointed out these things before the War. I never ceased to point them out. I remember in the year 1911, three years before this War began, I had a controversy with Sir Hugh Bell as to the dimensions of the British iron and steel industry. I remember writing an article under this heading, which speaks for itself: "British Iron Stagnation." The stagnation to which I pointed, and which was unfortunately the fact, greatly endangered our position in this War. Because we had not enough iron and steel, and because we have not enough at the present time, we are compelled to import iron and steel at great risk during the War. We have also to finance external obligations which would not have existed if we had progressed in the iron and steel industry as Germany progresses. Or, take Swedish iron and steel. I have gone into this matter with experts, and I speak, therefore, not only from my own knowledge, but after learning the experience of experts. I have had the advantage of talking to those best able to speak on the subject. Take Swedish iron. I am told on the best authority that the iron we are now importing from Sweden, at great risk and cost, can be produced in this country; that tool steel can be made at similar, or even less, cost.

Major WEDGWOOD

How about royalties?

Sir L. CHIOZZA MONEY

My hon. and gallant Friend asks how about royalties. Royalties are so small a proportion of the cost of a ton of iron that you may put that point aside as an absolute negative. I cannot make him believe that; I can only tell him it is true. But, at any rate, including the royalty I assert that we can make that Swedish iron here relatively cheaper than has been done. Yet we are importing it in this War, and we have all the trouble of financing the external obligations which my right hon. Friend points to as a triumph. Is it a triumph? It is a weakness. Surely it would have been a greater triumph if we had been able in this country, as our enemy is able largely to do, to dispense with these external supplies and to carry on the War without them. Is that urging that we should undertake home industries for which we are not suited? Most certainly it is not. I do assert now, as I asserted before the War, that taking that industry as a whole there is no country in the world where iron and steel can be made better or cheaper than it can be made in this country. That is true of iron and steel as a whole, and if you compare Germany, for example—to give only one point, it would be wearisome to go into many details—the iron ore and coal in Germany are so far apart that the cost of transport by rail of the ore is so great in Germany that on that point alone we have a tremendous pull over the Germans in the making of iron.

Sir A. MARKHAM

In Silesia they have all the material on the ground. Surely there are no ores in this country which can possibly replace the Norwegian ores.

Sir L. CHIOZZA MONEY

Oh, yes, that is so. I have the authority of the late Mr. J. Stephen Jeans for saying that the German ore has to undergo a greater cost per weight in Germany than we can get imported ore for in this country. On the second point I venture to assure him, and I would not' say it if I had not had the assurance of an expert, that we can make iron in this country, to be used for the purposes to which Swedish iron is put in this country as good as Swedish iron. Indeed, not long ago, at a test in Sheffield, tool steel was made out of British iron, and it was found to be equally good to the tool steel made out of Swedish iron. If my right hon. Friend will make inquiries from Professor Harbord he will know.

Sir A. MARKHAM

I know all about it.

Mr. OUTHWAITE

He is an expert!

Sir L. CHIOZZA MONEY

I should not venture to differ from my right hon. Friend had I not also satisfied myself on this point. Therefore, while we can say truly that our finance has been successful, a weakness has been revealed in regard to it in this respect, that we have had to finance external obligations which need not have existed. On the iron and steel point, I think that the action which has been taken by the Minister of Munitions to increase the dimensions of the iron and steel industry will be of the greatest service economically when peace conies. There is no reason in the world why we should not possess in this country an iron and steel industry as great as that of Germany. We did possess it not many years ago, and I think we can possess it again. I totally disagree with those Free Traders who say that because an article is imported at any particular time that that ' is a reason why we should go on importing it, or that the importation itself is a proof that we ought to import it. If I may go back not very far in economic history, in the middle of the eighteenth century, we did import very much more iron than we made. Suppose anybody had said then that that was a proof, and that therefore we ought to go on importing iron in this way and not to have a big iron industry ourselves. Obviously they would have been wrong. The fact that we imported iron at that time, instead of making it ourselves, simply was because we did not know how to utilise our natural advantages. We found out how to utilise them, and so built up a very big iron and steel industry. Later, in recent years, we have fallen behind relatively in the techniques of many branches—not in all—of the iron and stool industry, and it is because we have not exploited thoroughly our own natural advantages that we have reached the position in which our iron and steel imports are assuming very great proportions.

It is a mistake to assume that either Britain or Germany will be ruined or made bankrupt at the end of this War. The real capital of Germany and this country will be almost intact. It is true that Germany will not possess quite the magnitude of material establishment that she would have possessed if the War had not been fought for a period of years. But her greatest asset, which is also our greatest asset—her coal—will remain, her iron ore will remain, her mines and forests will remain. The greater part of her material establishment will be where it was.

Sir A. MARKHAM

She will have no iron ore.

Sir L. CHIOZZA MONEY

That is perfectly true; in one particular she will suffer.

Sir A. MARKHAM

Twenty-one million tons out of 24,000,000.

Sir L. CHIOZZA MONEY

Yes, but that depends on the political issue. As my right hon. Friend opposite said, our view with regard to what is necessary to do at the end of the War will depend largely upon the political issue. If, of course, for example, Prussia is so far humiliated and dethroned that the German Empire is disintegrated, and with no prospect of being bound together again, then economic surveillance on our part will be unnecessary, and my right hon. Friend put his finger on a factor which would, of course, result from such an ending to the War. Let us hope it may be so. But at present we can only speak of Germany as she is, and speaking of the German Empire as she is at this moment, I say that her capital, like our own capital, will be for practical purposes intact. My own view, and I think that of those best qualified to speak with regard to industrial matters, is that it will not be many years, or before a much greater part of the twentieth century has elapsed, before the production of wealth in the civilised countries of the world will be very much greater than it was before this War began. Therefore those people who think that we cannot at one and the same time punish Germany and get an indemnity from her are reckoning really without the economic progress which is bound to take place in all countries in the very near future.

Now have the Allies power to perform what I have called an economic surveillance of the enemy? Well, as a matter of fact, the British Empire and her Allies count for a very large part indeed of the economic strength of the world. They cover about 800,000,000 of people, which is about a third of the population of the world; and the British Empire alone possesses about one-fifth of the land of the world. With her Allies she possesses a very much larger proportion and some of the richest land in the whole globe. Those, therefore, who hold that the Allies, if it is necessary—I stipulate that, if it is necessary; it may happily be unnecessary—but those who say that, if it is necessary, the Allies cannot bring economic power to bear on the enemy without punishing themselves reckon without the economic facts of the case. We really have the power, if it is necessary, to inflict any degree of economic punishment that we care to inflict upon the enemy. Take our own case, take the exchanges between the United Kingdom and the German Empire, and let us see how the matter stands. When the War broke out the United Kingdom was the best market of the German Empire. On the other hand, the German Empire was, comparatively speaking, an inferior market for the United Kingdom.

Mr. OUTHWAITE

We sent them the best part of our exports.

Sir L. CHIOZZA MONEY

Oh, no! My hon. Friend who made that interruption has clearly not considered the trade between the two countries. Let me give him a very broad sketch of it, and he will see that I do not speak without knowledge of the case. What were our exports to Germany in the year the War broke out? Cotton, woollen yarns, waste, noils, etc., together with coal, and herrings, we exported to the value of £20,000,000. Other British goods that we sent made another £20,000,000. One half of our exports to Germany in the year before the War consisted of yarns, coal, and herrings. In addition to that £40,000,000 worth of British produce we did a middleman's trade with Germany of another £20,000,000. That middleman trade consisted of passing into Germany the materials of the British Empire, and of other new lands, to be worked up to the very greatest advantage in Germany. On the other hand, what were the British imports from Germany? Of manufactured articles— chiefly articles fully manufactured, together with sugar, also a manufactured article, the production of which by modern methods is of the highest skill—what is the total? Our imports were £67,000,000. Add to that other articles, amounting to £13,000,000, and we find that in J913 we got imports from the German Empire of £80,000,000, while the exports of our own productions were as I have described, the balance, of course, being, as every elementary student of this subject knows, paid for by the middleman trade of which I have spoken; by the shipping services, and by the interest on money lent in various parts of the world.

Mr. L. WILLIAMS

How did that compare with France?

Sir L. CHIOZZA MONEY

I am not dealing with France at the present moment, but only with one point. Is it possible to bring economic pressure to bear upon the enemy without, as some people say, cutting off our own noses? That is the point to which I am addressing myself. On that point—the Germans know it well!—we are able to bring an irresistible pressure to bear upon the enemy, because of the German purchases from ourselves which were so necessary, while our purchases from Germany were exceedingly small. As I have shown, these purchases from Germany very largely consisted of articles produced by industries which from various reasons we have either not taken up at all or insufficiently taken up. Already in the War we have got rid of some of our dependence upon Germany for some of these things. There was our dependence upon Germany for zinc, for dyes, and for chemicals.

Mr. SNOWDEN

made an observation which was inaudible in the Reporters' Gallery.

Sir L. CHIOZZA MONEY

I know that. I say we are doing it. I did not say it was done! There was our dependence for optical glass, amongst other things. It is perfectly true that we have not yet done it, but, as I say, we are doing it, and successfully. We are getting rid of our dependence on Germany for many other things, and indeed the progress made during this War—even in time' of war—has been extraordinary, showing how much progress might be made if we apply to industries in time of peace those principles for which the hon. Member for Blackburn has so long contended in and out of this House. I understand that he is going to speak. I am perfectly sure that we shall not get from him a speech explaining Free Trade in the manner of the Manchester School, such as we have had with such ability from my right hon. Friend the Member for Walthamstow. The hon. Member for Blackburn is, of course, a Socialist. As such he will rejoice at the success with which the Governent in this War has either established new industries, or promoted or stimulated production in old ones. I am perfectly sure he will view with the greatest pleasure the prosecution of that policy after the War as during the War. We have got an irresistible economic power in dealing with Germany. Germany largely depends upon the British market and upon the British Imperial market. Germany largely depends—and this is even more important—on materials drawn from the British Empire. Britain, on the other hand, has in Germany a relatively small market and of diminshing importance. Therefore there is really no real economic interdependence between the two countries. That is true when every allowance is made for the triangular trade with which economists in the House are perfectly familiar Such as when Germany sells some manufactured article, and we, by lending money, say, to Peru, import that manufactured article from Germany. The invisible exports which are the receipt of interest from Peru pay for the receipt from Germany of a piano, or dye, or something of the kind. Even when that is taken into account it is true that we are not dependent upon the German market; whereas, on the other hand, Germany is very largely dependent indeed upon the market of the United Kingdom, and upon the market of the British Empire.

In all the circumstances of the case, then, what has the nation a right to expect from Free Traders on the one hand and Protectionists on the other? In regard to Protection, a situation which would be most regrettable, and a thing that I am sure the country as a whole would never consent to, would be, if the exigencies of the War lead to proposals, which I am bound to say I have seen, to impose duties on the imports into the United Kingdom of British Imperial produce. I have actually seen—

Mr. SNOWDEN

It is dealt with in the scheme.

Sir L. CHIOZZA MONEY

Where? It is no part of the scheme before us.

Mr. SNOWDEN

Yes.

Sir L. CHIOZZA MONEY

Then I will give way to my hon. Friend and ask him to kindly show me where it is?

Mr. SNOWDEN

You will find it on page 8 of the White Paper before us, where the right is reserved to impose Customs Duties.

Sir L. CHIOZZA MONEY

The right! What? My hon. Friend says page 8 reserves to the contracting powers the right to impose Customs Duties on the products of our Colonies?

Mr. SNOWDEN

Yes.

Sir L. CHIOZZA MONEY

Of course it does nothing of the sort. My hon. Friend is a fair-minded man and I am perfectly sure he will not read it that way.

Mr. SNOWDEN

I will deal with it later.

Sir L. CHIOZZA MONEY

Though I am quite prepared to give way now for my hon. Friend to tell us, he prefers to do it later, when I shall have no opportunity to reply. [Laughter.] At any rate there is not a fraction of support in any single word in this document for the idea that this country either engages or promises to levy Import Duties upon the productions of its own Colonies. I am perfectly sure that when I say that I shall have the support of the majority of this House, and, indeed, of the nation outside this House. After this War it would surely be the very worst thanks we could give for the loyal support of the Overseas Dominions to begin to levy Import Duties upon their products! I pass to the second point. I believe also that the nation will expect that the Government of this country will maintain Free Trade relations with our present Allies. So far as I am concerned, the Free Trade area must not only embrace the whole of the British Empire, but also embrace the Allied Nations. There remains the question of neutrals. There is also in this contract not a single word which suggests that this country must impose Import Duties upon the trade of neutrals. In that connection I should like to remind the House of what the right hon. and learned Gentleman the Member for Walthamstow said. We should, he said, drive the neutrals into the arms of the enemy, because the enemy would send his goods into the neutral countries. We should, he continued, be bound to take those goods from neutral countries because we could not distinguish their origin. In that the right hon. and learned Gentleman shows, as in the other case to which I referred, a lack of knowledge of practical trading. What happened before the War? Germany had duties against British products, but the very geographical configuration of Germany compelled her to import a large part of that produce through, for example, Holland. Did Germany find herself unable to distinguish between what was British and what was Dutch? Did that drive Holland into the arms of this country? Most assuredly not! Did it drive other neutrals into the arms of this country? Again, assuredly not! If any hon. Member cares to examine the trade of Germany with European countries they will find that Germany did far more trade with those neutrals than we did. With that particular course, again, she did not drive neutrals into the arms of another nation. In regard to the neutrals, my own view as a Free Trader is that the Free Trader area after the War should include not only the nations which constitute the British Empire but the Allied countries.

Mr. OUTHWAITE

When you speak of a Free Trade area do you suggest they will take off their duties against us?

Sir L. CHIOZZA MONEY

The answer to that is that when the Cobden Club gave its medal to Canada for taking off a little bit of the Canadian duties against us, it did not demand before it handed it over that Canada should take off the whole of the duties! I do not see the relevance of my hon. Friend's suggestion. All I contend for is this—that after the War we should not punish those who have been our friends. Also I think that the country will have the right to ask from Protectionists or Tariff Reformers that the exigencies of the War shall not be made an excuse for the erection of a general tariff. On that point the document before us, as I have already pointed out, enables us to take an alternative course. We are not compelled, for example, if we desire to increase the production of wheat in this country to do it in any way which ties our hands. Obviously, we can increase the wheat production in several different ways. We can do it as Germany does, by imposing import duties—a crude method! We can do it by bounties which are favoured by hon. Members opposite and on this side. We can also do it by a third method which I myself favour. We can adopt the Socialist policy of using a certain amount of British land for the production of wheat and buying the produce. This proposal, I find, is one that is favoured by a number of thinking men. Perhaps it is a bold proposal, but at any rate it is one that— whatever its merits, right or wrong—can be carried out within the four corners of this agreement.

The country, I think, has the right to say that Free Trade with the enemy after the War is out of the question, and I confess that I know no greater disservice that could be done to Free Trade in this country than the suggestion to be made by Free Traders that there shall be Free Trade with the enemy after the War. If I have any knowledge of the trend of public opinion, I should say that the party who proposed this would be swept out of office, and the man who proposed it would never in his lifetime have a chance of representing a constituency. I will proceed a little further, and say what I conceive is the view which the nation expects Free Traders to take, in view of the exigencies of the War. There must be no further neglect of essential industries, and I should like to say in that connection that I do not draw that hard line of distinction between war industries and peace industries which some have been tempted to do. The real fact of the case is that in modern war when, as we see, the whole nation goes to war, it is very difficult indeed to distinguish between what is a war industry and what is a peace industry, and we do not know in the development of modern industry what next will assume importance. We do, however, know that certain metal and chemical and other industries are absolutely essential both to peace and war, and those we must have at any cost, and what I call Free Trade of the Manchester School says, "Either private enterprise must supply those necessities or we will not have them." I do not think that is the view of the modern Free Trader. The modern Free Trader was ready to adopt before the War, in connection with any industry, any weapon of Governmental interference, except Import Duty. Because of the facts of which I have spoken; because of the economic penetration of Germany; because Germany has pursued war in time of peace, the Free Trader is now prepared to restrict trade with the enemy, while desiring to preserve the largest possible area of Free Trade. There must also be a termination of Imperial laissez-faire. The resources of the Empire must be co-ordinated and organised. A beginning was made in that direction before the War by the Royal Commission on Imperial Conservation. That was the beginning of a policy which, in one sense, is utterly opposed to the conception of Free Trade, but not the more modern conception of Free Trade. In view of the things which the nation has a right to say to the Protectionists—for example, that you must not impose duties on the Colonies, and the right which the nation has, on the other hand, to say to the Free Trader that to expect, after what has occurred during these two years, things with the enemy shall be after the War exactly the same as before the War—I say, balancing these things, can we get on to a common ground, the keynote of which shall be the organising of home resources, the organisation of Imperial resources in concert with our Allies and in concert, if possible, with as large a portion of the area of the world as possible, for the full development of those resources, and, therefore, for the benefit of every inhabitant of the Empire?

I am one of those who believe that the resources of the United Kingdom have not yet been fully exploited. I have already expressed the opinion, which I believe to be a scientific opinion, that the production of wealth in the future can be enormously greater than it has been in the past. We can, therefore, make this profit out of the War. We did not enter into the War with the idea of profit—nothing was further from our thoughts. The Government, as I considered at the time, entertained the most exaggerated view of the misery and destitution which would be inflicted on the country by the War. We have not suffered as they thought we would suffer. We did not enter the War for economic gain. One has only to read the speeches of Viscount Grey to see that he expected we should suffer very greatly indeed in the economic sense. We have not suffered as we expected to suffer, and, indeed, I think we can entertain the hope that out of the difficulties and danger of the War, the country may make a further great step in economic progress. I believe that if all parties join in a policy of national development, a very large part of the fiscal controversy can go by the board. I do not mean that either side need necessarily sacrifice its principles. The Protectionist, on the one hand, can claim the virtue that he desired to create a larger body of industry, a larger production of wealth; the Free Trader, on the other hand, can claim that he desired to obtain the same result, believing that in the perfectly free interchange of products a larger wealth could be secured. The two aims, at least, are not inconsistent, and I believe that on the lines I have indicated, the Government taking a larger share than ever before in the development of the country and the development of the Empire, the common aim may be achieved.

Mr. SNOWDEN

I can very well understand the interest that has been manifested by hon. Members opposite in the speech to which the House has just listened, and I can equally well understand the meaning of the cheers with which the statement of the hon. Member was greeted that the time has come when those who have hitherto differed upon questions of fiscal policy should unite together on a common ground. We know quite well what that common ground is in the minds of the hon. Members who cheered that statement. Their idea is that those who in the past have been—as the Prime Minister to-day declared himself still to be—ardent Free Traders, should abandon their past ideas, principles and policies and find a common ground on the Tariff Reform platform. The hon. Gentleman who has just sat down said that if I had an opportunity of speaking in this Debate the House would not hear from me a speech of the orthodox Manchester school. I am afraid I shall have to disappoint the hon. Gentleman. The first time I spoke in this House, more than ten years ago, I spoke in defence of Free Trade, and I then advocated Free Trade because I believed that all those industrial, economic and social reforms in which I had been for many years interested depended for their realisation upon the maintenance of the Free Trade policy. I believe that more ardently to-day. I oppose the resolutions which are now being discussed in this House, because I believe that the adoption of this policy will be fatal to the future welfare of this country, to the future of international relations and to the future of world peace. I decline to consider these proposals from any standpoint other than the point of view that they constitute one more surrender by the Liberal Members of the Government to the principles of the Tory Members of the Cabinet. I decline to consider these proposals on any other ground than that they are to commit this House, the Government of this country and the country itself to the establishment of what we have known as Tariff Reform during the agitation of the last fifteen years. I was amused by more than one of the observations made by the Prime Minister this afternoon, but particularly by his statement that these proposals were agreed upon unanimously by the British Delegates, to the Paris Conference. How could it be otherwise when we know the political principles and the past record of the majority of the British representatives at that Conference? Two out of the three British representatives at that Conference are pronounced Protectionists. One of them has been for the last twelve or fifteen years the most powerful and the most successful protagonist of Tariff Reform in this country, and this document in its nebulous and indefinite character might have been a speech of the notorious Mr. Hughes, with all the rhetoric and denunciation excised by the Colonial Secretary and Lord Crewe.

I repeat that we have witnessed this afternoon one more surrender of Liberal principles to the Tory party. The Prime Minister came down this afternoon and assumed a character which he must by this time be very accustomed to wear. While he pronounced a funeral oration over Free Trade, he told us, as he told us on the last occasion when he surrendered voluntaryism, that he still remained an ardent Free Trader. The Prime Minister was an ardent Home Ruler some time ago. Home Rule now appears to have been abandoned. The only thing the Prime Minister has left to surrender is his office, and I would respectfully suggest for the sake of his future reputation, that he should relinquish that as soon as possible and leave the carrying out of Tory principles to those who believe in Tory principles—to leave attack upon civil liberty, the adoption of militarism, the abandonment of Home Rule, and the institution of Tariff Reform to those who may carry out those ideas and those matters with enthusiasm. If he were to take that course, then he would release from an unwilling submission those members of his party who followed him through all this very much against their own will.

I have stated more than once that I have never been a supporter of the Coalition Government, and if the Division Lobby records were examined it would be found that I have on very few occasions supported the Coalition Government. The speech of the Prime Minister this afternoon is not only an abandonment of Free Trade, but it is another breach of a pledge. This Debate is taking place under conditions which make it impossible for the House to register its opinions on this question, because no vote can be taken. The Prime Minister told us that the British representatives at the Conference were unanimous in their support of these resolutions, and that is supported by a statement in the Memorandum itself. We were told by the Prime Minister some months ago, when the question of the British delegation at this Conference was raised in this House, that neither the Government nor the House of Commons would be committed to anything that might be done at that Conference. I have here the actual words of the Prime Minister, and nothing can be more definite, and they justify up to the very hilt the charge that I made just now, that by the course the Government have now taken they are committing a breach of a pledge which is not less serious than a great many others which already stand to their record. On the 9th of March, in replying to the right hon. Gentleman the Member for Tyneside (Mr. Robertson) and my hon. Friend the Member for Hexham (Mr. Holt), the Prime Minister said: But both my right hon. Friend and my hon. Friend expressed some apprehension—and here I come to what is strictly material to the Vote before the House—as to the contemplated or possible administrative action of the Government in the conference which is about to take place in Paris. I wish to say in the plainest and clearest terms that no such apprehensions should in future exist; that nothing will be done and nothing will be said by the representatives of His Majesty's Government in Paris which will in any degree fetter the free action either of the Government or the House of Commons. … My hon. Friends may rest assured that our representatives will return from Paris absolutely uncommitted, as far as the Government and Parliament are concerned, to any specific measures to be taken in the, I hope, the not very remote future. What does the Memorandum itself say? The very last paragraph reads— Whereas for the purposes of their common defence against the enemy the Allied Powers have agreed to adopt a common economic policy on the lines laid down in the resolutions which have been passed—

Mr. BONAR LAW

Will the hon. Member look at paragraph (d), where it distinctly says that anything done at the Conference should be referred to the Government?

Mr. SNOWDEN

The last paragraph of the recommendation proceeds— and whereas it is recognised that the effectiveness of the policy depends absolutely upon these resolutions being put into operation forthwith, the representatives of the Allied Governments undertake to recommend their respective Governments to take without delay all the measures, whether temporary or permanent, requisite for giving full and complete effect to this policy forthwith and to communicate to each the decisions arrived at to attain that object. Our representatives were committed to these resolutions, and not only were they committed to them, but they were committed to recommending the acceptance of these resolutions by the Government, and, therefore, to enforce the acceptance of those resolutions by Parliament itself.

Sir L. CHIOZZA

Read the paragraph.

Mr. SNOWDEN

I decline to consider these resolutions on any other ground than that this was an attempt on the part of the Protectionists to use the circumstances of the War in order to carry out the policy with which they have for many years been identified, and which has three times been rejected by the sober judgment of the country. Precisely the same thing happened in regard to compulsion and the Military Service Act. The Coalition Government is itself an instance of the way in which the Tory party in this House are using the circumstances of the War in order to gain aims which the country would never accept or endorse when they come to a sober frame of mind. [An HON. MEMBER: "What about the War!"] I know we are told that the War has altered everything, but the War has altered nothing which past experience has proved to be good and beneficial to the country, and least of all the War has altered the justice and wisdom of Free Trade as a fiscal policy. As the right hon. Gentleman the Member for Walthamstow (Sir J. Simon) stated in a brilliant and effective speech this afternoon, it is because of the Free Trade policy of this country that we have been able to continue the War so long. For some time some of our Allies in the field have been maintained only because of the financial assistance of this country. In regard to Australia, represented by the: notorious Mr. Hughes, the patriotism of that country rests upon the economic basis of loan obtained from this country.

If the War has done anything, it has shown the wisdom of our past Free Trade j policy, and it has proved the necessity of holding fast to that policy more tenaciously in the future, because we shall need our Free Trade policy to deal with the serious industrial and economic problems I with which we shall be faced after the War. We shall have after the War keener competition in trade than we have ever known, and we shall want industry relieved of every unnecessary burden. One I of the effects of the adoption of the policy of this Memorandum would be to increase still further the appalling cost of raw materials in this country, and that would make it far more difficult for this country to recover its lost position in the markets of the world. Upon what hypothesis is this proposal made? The answer to that question is to be found in the Preamble of this Memorandum. All that follows is justified by the statement that there is an intention, which has already taken practical form amongst the Central Powers, to establish a Customs Union amongst themselves. There is no foundation for that statement. There has been in Germany, as in this country, a great deal of arrant nonsense talked about what is going to be done after the War. I believe certain proposals have been made in Germany on those lines, and they have been abandoned because they were found to be impossible and impracticable.

What gave rise to the talk that did exist on this point some time ago? The speeches of politicians in this country, the writings of journalists, leading articles in newspapers in this country which for the last eighteen months have been agitating for the very policy of economic reprisals which is laid down in this Memorandum. The hypothesis is false, and therefore all that is built upon it has no foundation. Of course, I have no doubt that after the War Germany will seek, as she has done in the past, to extend her commercial sphere, and she will do it with greater activity even than she has manifested before. But what is there wrong in that? [An HON. MEMBER: "Chicanery!"] Is it wrong to seek to extend one's trade? Have not prominent members of the Government for the last twelve or fifteen years before the War been holding up German commercial methods as a model for this country? Have we not sent dozens of deputations of working men to Germany to see German industries? What did the "Times" newspaper say since the War began about the way in which German commercial supremacy has been established? On the 24th September, 1914, the "Times" said: How did Germany originally secure this trade? She won it fairly by silence, intelligence, and hard work and adaptability. 7.0 P.M.

There are three ways in which commercial domination can be secured. The first is by trading with other countries, the second by lending money, and the third is by lending brains. Is it not a perfectly legitimate thing to seek trade? Why have we bought from Germany in the past? Why did we have all that trade with Germany which has been referred to? Was it to confer an advantage on Germany or to please the Germans? British traders, with all their faults and shortcomings, are not quite so foolish as that. They have traded with Germany because they believed it was to their advantage, and the Germans have traded with this country because they believed it was to the advantage of Germany. Trade is a mutual advantage. I see before me my very old Friend the Member for Keighley (Sir Swire Smith), who has been prominent in Free Trade controversies, and he often pointed out that for something like fifty years the spinning factories in the West Riding of Yorkshire had been supported by German trade. What is going to happen to them? Where are the compensating advantages to come from What is to become of the Lancashire spinning mills who make the yarn to which my right hon. Friend referred? This policy of seeking trade domination has been permanently the British policy for more than 100 years. We have carried that policy to such a point of success that we already dominate territorially one-fifth of the surface of the earth and practically the whole of the water surface of the world. With regard to the second point, the lending of money in order to secure commercial domination, no country in the world has carried out that policy to the extent that this country has done. We have the investment of British capital in foreign countries, not by any means confined to the Empire, amounting, I believe, to something like £4,000,000,000. The remarkable development of the Argentine during the last twenty-five years is almost wholly due to British capital and the lending of British brains. Has that been a bad thing for the Argentine? This Memorandum says "yes." I wonder what the British shareholders in the Argentine, those who have their capital invested in the Argentine, will say to that, because British capitalists in the Argentine are not to come within this proposed economic union. They are not to get the advantage of it; they are to be aliens, or at the best neutrals, and they are going to be penalised by the policy which is laid down in this Memorandum, if this country should be foolish enough to adopt it.

These proposals are based upon other fallacies. They are based upon the fallacy that the present alliance of the Allies is going to be permanent. There is nothing so mutable as political alliances. Every one of the nations now at war, with the exception of Great Britain and Germany, have fought each other within recent times. For a thousand years we have been at peace with our present enemy. Is it reasonable to suppose that there is something uniting the Allies on this occasion which has been absent as a cementing influence during former wars? It is not the case, and it is far more reasonable to suppose that as soon as the fear which keeps the Allies together at the present time loses its potency this political alliance will dissolve and other interests will arise. How is this proposal going to be worked? My hon. Friend said that there was nothing in the Memorandum which even suggested that there should be a tariff in this country upon the imports from our Colonies. But I am dealing with these proposals as a scheme to adopt Tariff Reform, and is not that part of the Tariff Reform programme? What was the greatest blunder Mr. Chamberlain made in the early days of this campaign? I believe if that blunder had not been made Mr. Chamberlain might have carried his proposals for Imperial Preference. It was that we should put a tax upon food. It can hardly be disputed that this scheme can only be carried out by all-round tariffs—of course, graded—the lowest tariff for our Colonies, a higher tariff for our Allies, and a still higher tariff for neutrals. What is going to be the effect of that? What about those compensatory advantages which are to be given to the Allies? What is the compensation that we shall gain? This scheme simply means that just as we are bearing, and have during the whole of this War borne, by far the greater part of the burden, though, as the First Lord of the Admiralty said, it does not involve invasion or a serious risk of invasion, we are asked to adopt a policy which means that we are to carry these Allies upon our backs. They are to gain all the advantages, and we are to bear all the suffering and all the burden. The hon. Gentleman who sits here (Sir L. Chiozza Money) said that these proposals would not injuriously affect neutrals, but surely, if we adopt a general system of tariffs in this country, it will be a disadvantage to neutrals. Germany's extreme desire to extend her trade after the War will, as the late Home Secretary said, inevitably bring about a closer economic sympathy and unity between the neutrals and the Central Bowers, and we know that it is very likely that closer economic unity will result in political alliances.

My most important objections to these proposals arise from the fact that they will affect very injuriously international relations in peace. They are based upon the idea that hate and enmity are to be permanent. There is nothing at all new in all these explosions of hate that we hear in all the belligerent countries to-day. There never has been a war when the same charges have not been made upon both sides as are being made to-day. Everything that is being said about Germany to-day was said about France during the Napoleonic Wars. Everything that is being said about Germany to-day was said by responsible newspapers and by leading statesmen about Russia at the time of the Crimean War. A more recent instance is that of South Africa. No paint was too black to be used against the Dutch in South Africa at the time of that War. We have had illustrations during this War of the extraordinary and rapid change of public opinion in regard to individuals and peoples. Take the case of the right hon. and learned Member for Dublin University (Sir E. Carson), who was anathema to the party sitting upon this side before the War. Yet he was described by one of the leading newspapers in the country two days ago as being the most influential and responsible politician in the House of Commons. I object, more than on any other ground, because if this policy be carred out it means that we must abandon all hope of peace in Europe. Why the very word used in the Memorandum and constantly occurring is the word "enemy," and that is used not only in regard to the proposals which are to be adopted during the War, but in regard to the proposals to be adopted after the War. The Central Powers are to be the enemies after the War.

Sir A. MARKHAM

Hear, hear!

Mr. SNOWDEN

I can understand that position, but you must take the consequences. It means that you are going to have Europe permanently divided into two hostile countries. It means that there is no hope of the realisation of that ideal so magnificently set forth at Dublin by the Prime Minister—the abolition of competing alliance, and the substitution of a concert in Europe. What becomes of the more recent declaration of the Prime Minister made a few weeks ago at the banquet to the French or Russian Members? When replying to the German Chancellor, he said that we had no desire to injure Germany. We desired that Germany should have the fullest opportunity for her legitimate expansion. This is the comment on the Prime Minister's answer to the German Chancellor! What is going to be the effect of this upon Germany? Are you going to adopt a policy which is going to permanently alienate the whole of the people of Germany because of the sins of the military class? The folly and criminality of thinking that peace can be established on the basis of hatred and antagonism passes my comprehension altogether. Peace is very largely determined by economic considerations. I am not going to enter into the causes of this War. There are many, but I believe the main, cause is to be found in the diplomatic competition that has been going on for the last thirty years for spheres of financial and economic exploitation in Northern Africa. I believe in Northern Africa that the policy of the open door should have-been adopted, giving to every nation equal commercial opportunities, instead of allowing a nation like France with a declining population to approriate such immense valuable territories in Africa, and at once to close the door to every other nation, because there is no country in the world which has treated other nations so badly in the matter of commercial opportunities as France. Are you going to continue this, policy? If you are, then you must be prepared to face the consequences.

No; there is a better way of meeting the problems which will arise after the War. It is not by adopting Protection, it is not by increasing the cost of living which the working people feel hard now and will feel to be an intolerable burden; but it is by utilising to the utmost limit all the resources of the country. We must deal far more drastically and radically than we have ever attempted to deal in the past with the question of education. May I, in regard to this matter, contrast the action of Germany and ourselves at the present time? Germany instead of reducing its expenditure upon education at a time when it needs all the money for the prosecution of the War is increasing its expenditure upon education in order that the brains necessary for securing commercial! domination after the War may be ready to undertake their work. What have we done? We have made our Department of Education moribund. The Minister for Education is never seen in the House. To-day he could not even attend to answer questions, and a Junior Whip had to take his place. When the Education Vote was before the House it was shown that he is so little in touch with his Department that he had not time to prepare a speech and must read a speech written out for him by-one of his secretaries in the office.

Sir E. GOULDING

Jealousy!

Mr. SNOWDEN

We must not be content to spend £16,000,000 on education; we must spend a great deal more if we are going to win trade supremacy after the War, in the way in which, according to the "Times" newspaper, Germany won trade supremacy before the War. Then we shall have to follow on with the policy of national economy which we have been compelled partially to adopt during the War. I have urged year in and year out in this House—the enormous burden of rich idleness. Can you hope to succeed if you revert to the old condition of things after the War? One thing this War has done: it has shown the enormous wealth of this country. We shall have to do away with unproductive labour. Everybody physically able will have to be usefully and economically employed. I may say, in passing, that we shall have to deal with the expenditure upon liquor. This country cannot afford, in view of the severity of trade competition in the future, to spend £160,000,000 a year—it was £180,000,000 last year, but I was taking what I considered to be a fairly average figure— upon what is altogether, in my opinion, an economic waste. Then we shall have to extend the principle of State control. We shall have to put the railways really under Government control; we shall have to organise the mines. We shall have to organise the land. These are the only sound lines upon which we can move. On these lines only can we legitimately achieve commercial trade domination.

I shall strongly oppose these proposals, because I believe they are the negation of everything that we professed in regard to this War. It is said to be a war to end war. It is a war for the destruction of militarism. Now, what do these phrases mean? Do they mean anything at all, or are they simply words used by politicians in order to mislead the country, and to beguile men into a fight and into risking their lives in what they honestly believe to be a great and glorious cause? If the Government and the House of Commons and the country adopt these proposals they give the lie to every reason that has been given for Britain's participation in this War. There is only one word which can adequately describe these proposals, and that word is "madness."

Mr. BONAR LAW

I was present, as the House knows, at the Conference at which these resolutions were adopted, and I should like, if it were possible, to convey to the House something of the impression that was left on my mind as to the views which were held by the representatives of all the nations which were gathered there. They had, as the House knows, every kind of political and economic position. It was supposed, perhaps, by some, that because we were the only Free Trade country, and the others more or less had adopted tariffs, that their interests were different from ours in regard to this matter. Nothing could be further from the truth. Countries like Italy and Russia, which have depended in the past on Germany for financial aid and as a market for their goods, were far more interested in the continuance of their trade after the War than we could possibly be. Well, the one dominant feeling was this, that these resolutions would help us in the struggle in which we are engaged. I think it is not uncharitable to the hon. Member who spoke last when I say that it is the knowledge that that is the effect of them, which made him speak of them in the terms he did. I do not think that is unfair.

Mr. SNOWDEN

That is untrue.

Mr. BONAR LAW

The hon. Member says it is not only unfair but untrue. If I misjudged him I apologise; but I have not heard a single word from him since the War began to give me, in the smallest degree, the impression that he was trying to enable us to win.

Mr. SNOWDEN

I am not in the least responsible for the construction which the right hon. Gentleman places on my words. I have done a great deal more to bring this war to an end than the right hon. Gentleman has done. [HON. MEMBEES: "How?"]

Mr. BONAR LAW

I really do not want to have an altercation with the hon. Member. If I have misrepresented him or misjudged him I am sorry. If he means he tried to bring the War to an end by suggesting an ignominious truce, then I do not take his view. Well, in one respect, the last speaker and my right hon. Friend the Member for Waltham-stow got on the same ground. The hon. Member who spoke last, among many other bitter sayings about the Prime Minister, accused him of a breach of faith in connection with these very resolutions. But he found, I think, as he was reading the last Article himself, that he had forgotten to read beforehand, and the very words he read proved that the pledge given by the Prime Minister was absolutely fulfilled. That pledge was that the Government and the House would not be bound, and what actually happened was that at the Conference it was made plain, not only by us, but by all the representatives, that they were not there as plenipotentiaries, but that everything they did was subject to the approval of the Government, and that was specially stated in the resolutions themselves.

I said that the hon. Gentleman and my right hon. Friend were alike in one respect, and it was rather a novel respect to me. They both pointed out how, at the point of the bayonets, so to speak, of the Unionist Members of the Cabinet, the Liberals were shedding their principles one after the other. That was new to me, and as I heard it I could not resist saying to my right hon. Friend the Prime Minister that I rather enjoyed it. For more than a year I have looked on in silence when, from every quarter, we Unionists were told that we had sacrificed every principle that we had ever possessed. I have read a great many times and I have been told often that I myself was in the pocket of my right hon. Friend—

Mr. L. JONES

They may easily both be true.

Mr. BONAR LAW

I do not deny the proposition. It is pleasing to me to discover that there is a little view on the other side, and that now hon. Gentlemen on that side of the House see that there is a Coalition Government, and that they cannot expect to have everything precisely their own way. I am not going, if I can help it, to be led into an ordinary Tariff Reform speech. As I listened to the speech of the right hon. Member for Walthamstow it carried me back to what seemed prehistoric times. It is a kind of speech of which I have heard many from him and I have tried to answer several. That is not what I want to do now. But there is one argument used both by him and by the hon. Member who has just sat down (Mr. Snowden) to which I think I may refer in passing. I do not deny for a moment that under our Free Trade system this country has developed an amount of wealth and accumulated resources which are not equalled by any other country in the world at this moment. Well, I will put this to the House as a whole. If we are considering a question of strength in a war there is something to be said on the other side. Let the House remember this, that our command of the sea presumably does not depend on Free Trade, because we had it long before we were a Free Trade country; and if you can imag- ine this country placed in the position in which Germany is, of having all her external trade cut off, I would ask hon. Gentlemen how long we should have been able to do what Germany has done and carry on the War in spite of that? I am not going to use that as an argument in favour of Tariff Reform, but it does show that there are different kinds of resources, and that, from the point of view of military strength, production is at least as important as commerce and shipping and these other things. But that really has not very much to do with it. My hon. Friend behind me the hon. Member for North Hants (Sir L. Chiozza Money) suggested that after the War we ought to look upon these questions from a rather different point of view. I thought as I listened to the speech of the hon. Gentleman who spoke last, and to that of the right hon. Member for Walthamstow, that, though they might have learned a good deal during the War, they had forgotten nothing to which they gave expression before. I do take the view that it is not unreasonable to think that in a world convulsion like this things have changed, and that it is reasonable for everyone to look at the whole question involved — the question not merely of what particular fiscal policy or anything else you hold, but of all the problems involved in national and economic development—from an entirely new point. That does not mean, as the hon. Member suggests—in my case it does not mean—that we expect other people to say that they have been wrong and that we are right, and to adopt our views. Nothing of the kind. In my belief the effect of the tariff is greatly exaggerated on both sides. It is really a question of organisation more than of the method by which you are to carry out that organisation. That is my view, and it seems to me perfectly plain. I do not think anybody will deny that so long as war is possible, and you have to regard war as something against which you must guard yourself, the ordinary question of what is the best method of exchange does not apply. It is quite obvious, for instance, that if we had depended on Germany for the supply of our iron and steel out of which we make munitions we never could have carried on the War, and it is equally true that if Germany had depended on us they could not have carried on the War. Therefore, this whole question has to be considered, not merely from the point of view of what foreign exchange would pay best, but what method of national organisation will make the nation strongest in the event of war becoming a necessity. I say again, I do not want to prejudge, and nothing here does prejudge the method of organisation which this country is going to adopt. But again I point out that all our old arguments about what is called Imperial Preference and all that kind of thing must be looked at from a new point of view, as a result not so much of the War, but what we feel the consequences of the War might be. It is not a question of whether it pays us equally well to, trade, say, with the Argentine, of which the hon. Member has spoken, or with Canada. If we can afford to trade with Canada instead of with the Argentine, it means that in a war Canada will have increased strength which she will throw into the scale, and that is an element which everyone has to take into account. I wish to say further, in regard to this whole subject, that hon. Gentlemen on either side of the House who think that we who are members of this Government, and who have in the past belonged to different parties, are always thinking of how we can help our own old creeds are entirely mistaken. The whole point is this, whether it was wise or unwise— and after all that has happened I think it was wise, and I think the nation is stronger to-day than it would have been under any regime—but, whether it was wise or unwise, we did it for the purpose of carrying on the War, and I can assure the House, speaking not only for myself but for all my colleagues, that we are not trying to get an advantage either for our party or our principles in anything we are doing now. As regards the question of Unionists joining the Coalition Government, that meant more or less a continuation of the status quo. Everything that has been done in this country is a direct result of the War and I think ought to be done, whatever may be the fiscal views of the Government which happens to be in power.

May I point out that to Liberal Members of the Government one curious result of hon. Members' criticism is this: the three resolutions which have been condemned or criticised were, every one of them, drafted—I do not know whether that is praising or condemning them— before he had consulted with me by the President of the Board of Trade. He looked upon this as a natural thing to do in view of the changed conditions during the War. That was his view. I am inclined to think that what, perhaps, has been too much overlooked in this matter is that we Members of Parliament who have made politics and political fighting our main occupation for many years, possibly have not learned the lesson of the War quite as much as those outside who are not entirely occupied by party fights. That is possible on both sides. With regard to the speech of the right hon. and learned Gentleman the Member for Walthamstow, what does it mean? It could mean only one thing, which was clear and obvious, that the moment peace is declared you are to allow Germany to come here with her goods precisely as she did in the past. I venture to say that, not merely now, but for a long time to come, any candidate for Parliament who made that proposal would have a very small chance of getting in, and any party which made that proposal might at once abandon all prospect of ever holding power for this generation at all events. I think that is certain. [HON. MEMBERS: "Oh, oh!"] I do not know why hon. Members jeer at that unless they think we should rise superior to the ordinary passions of human kind, like the hon. Member for Blackburn! Well, I am not superior to them, and as long as I believe that there is a danger of finding in the future as we have found in the past that German commercial penetration in the British Empire, or anywhere else, meant the setting up of a military organisation which was to have war always in view, which was a preparation for war, and was using its commercial organisation for that purpose—as long as I believe that to be possible, I am not prepared to allow German goods to come in here as they did before.

With these remarks I would like to look at the resolutions which have been criticised. What do they amount to from the point of view of the Free Trade and Tariff Reform controversy? I will not say anything about those relating to the War period only. They, I think, would he accepted by everybody, because they are part of the method of carrying on the War. My right hon. and learned Friend the Member for Trinity College (Sir E. Carson) asked me some questions about them in the course of his speech. As a matter of fact, these resolutions, in effect, are only laying down what is being done now and has been done for some time by Great Britain and France, therefore there is not very much that we have to do in regard to them. I hope the effect of them will be that the attitude taken up by our Allies will be strengthened in the same direction.

Mr. HOLT

Has the right hon. Gentleman any reason to believe that Japan will act in accordance with them?

Mr. BONAR LAW

I had no reason to believe otherwise. Their delegates accepted them.

Mr. PRINGLE

Has Italy done so as against Germany?

Mr. BONAR LAW

I think I have enough to do to answer the criticisms without answering for all our Allies. If we turn to the particular resolutions which have been criticised, I would take those for the transition period. The right hon. and learned Gentleman the Member for Walthamstow spoke as if these were the abandonment of every principle of Free Trade. He ridiculed the idea that the Germans had accumulated stocks which might come over to this country suddenly after the declaration of peace. I know that there has been a great deal of rumour that such stocks have been accumulating, but I admit I have not been able to get proof of it. It is not in itself so absurd as hon. Gentlemen think. Of course, Germany will not take men from work connected with the War for the purpose of accumulating stocks, but they have no export trade at all, and if there are factories and women willing to work in them which are not required for war, what is more likely than they should be utilised in order to accumulate stocks which might be available for sale after the War? Apart from that, without considering what would be the best system permanently, I ask the House to remember that the industry of every country engaged in the War has been completely upset by the War. Here at home we have turned our pruning hooks into spears everywhere. In France, and still more in Belgium, it has been upset, not only in that way, but by the seizure of a large part of the industrial resources of those countries and of the machinery to carry them on. When the War ends we all know it will take a good while to get back to the old methods. Does anyone really suppose that, whatever the ultimate victory may be, it will not be a serious disadvantage to any of the Allied countries who are our enemies—or, as the hon. member for Blackburn preferred to call them, our late enemies—pouring in their goods at a time when we are trying to get up production, and very likely preventing us from recovering the position we occupied before the War? I do not think that anybody would say that that is not in itself a reasonable thing to do. In other words, it means only this: I think it is evident that the Declaration of Peace will not make it possible at once to return to the normal conditions in any way. For some time to come we shall have to continue State control and State organisation; and while that is going on, apart altogether from any feeling about Germany, it would be utterly idiotic to allow those goods to pour in without giving us an opportunity to recover the ground lost during the War. That is my view.

There is something more to be said about it, and I think my hon. Friends behind will not think it is unreasonable. I have said that we who, on the whole, do believe in a different fiscal system from that which has prevailed in this country in the past, in joining this Government accepted the status quo as meaning that, during the War we were not entitled to try to alter it, and we have acted up to that principle. But something else surely is involved. The War has altered people's minds, and it is not unreasonable to say that it is not only right, but obviously right, that there should be some security that the moment the War ends that there will not be a recurrence to the old system before the country has had time to consider whether it would prefer another system or not. I hope hon. Members will think that is reasonable. It is one of the effects of this arrangement that it will keep out German goods, not necessarily either by tariff or by prohibition, and will keep them out for a long enough time at least to give the country an opportunity of deciding whether or not it is going to adopt the system recommended by the right hon. and learned Member for Walthamstow or some other system.

I would like to say this, further, about these resolutions: The permanent ones are not very dangerous, in my opinion—I mean those in Clause (c)—from the point of view of the State. What do they amount to? Only this: that all the Allied countries, having found from experience what it means to be dependent upon Germany for some of the vital industries on which not only the national security but other interests depend, have passed a resolution that they will try to make themselves independent of Germany in future for that class of industry. I think that is a reasonable thing to do from every point of view. I am sure of this, that if hon. Gentlemen were to keep in mind how much we suffered during the first days of the War from the fact that we had that dependence, and also the fact that nothing really but the fact that we were an Island enabled us to have long enough time to make up for the harm this state of things bad inflicted, they will consider it is not an unreasonable resolution for every one of the Allies to come to. That is all I need say about the resolutions except this: It is not mainly a question of tariffs. Every word that was said by the right hon. and learned Member for Walthamstow implied the view that everything connected with trade should be left to take its ordinary course. That is his view. That means not merely tariffs. It means that any attempt, such as was announced the other day, of trying to get banking facilities between Italy and this country, or any attempt to make those arrangements between Russia and this country, is equally to be condemned.

In my view, that is quite wrong. It is not a question of tariffs at all; it is a question of reasonable organisation, and, if we were to look at this from a common-sense point of view, we should realise quite clearly that though, as the hon. Member for Blackburn said, in the past Allies had become enemies—well, that has happened, and may happen again—yet I do not think there has ever been a war in civilised times where the Allies have felt so united or so much in sympathy with each other through the suffering they have undergone, and through the knowledge that that suffering was imposed upon them by methods which they never would have adopted and which were brutal in the extreme. That must leave a feeling, and that feeling found strongest expression at this Conference in Paris. That is all it amounts to, and I do not see how anyone should object to it. It amounted to this, and it was expressed over and over again in speeches: "We are standing by each other now in war. We are fighting together, we are suffering together, we have died together. The War will have upset everything in all our countries, and a long period, probably a generation, will pass before these countries have recovered from the blows which have been inflicted upon them by this War." The feeling of the Conference was— and I share it—that as we have stood by each other in war so, if possible, we shall stand by each other when the period of reconstruction comes after the War. That is all. Is it from the point of view of good feeling, apart from anything else, and national interest, and of common sense not a reasonable thing to say that if, by arrangements of this kind, by the good will that exists between these powers, we can arrange with financial help that industrial penetration on the scale which in the past has helped to develop Russia to the advantage of Germany should go more towards Great Britain and to France, will anyone say that that is not an ideal which we have a right to aim at without being told that we are denying all the principles on which this War has been fought?

Mr. HODGE

As a friend and colleague of the hon. Member (Mr. Snowden), I rather regretted an expression that he used with respect to the Prime Minister of the Commonwealth of Australia. Many of us have partaken of the hospitality of our colleagues on the other side, and those of us who have come in close contact with that gentleman know the great amount of work he has put in for the labouring parties of that great country. Previous to the starting of the great controversy of Tariff Reform against Free Trade I was somewhat of a heretic so far as Free Trade principles were concerned. Just previous to the beginning of the present century the iron and steel trades of this country were very much harassed by the dumping of iron and steel from both Germany and America. As has been very well said by the hon. Member (Sir Chiozza Money), our steel industry, while possibly not decaying, has not made that advance it should have made, and the chances are that that has been due to three causes: Firstly, the Cartel system in Germany; in the second place, the facilities the German Government has given to their manufacturers in the way of cheap freights, and also the fact that the Government of that country gives bounties upon pig iron, unfinished steel, and the finished product that found its way into other countries. I held in those early years that that was unfair and illegitimate competition and I endeavoured, as representing the workmen, to get the employers into a conference for the purpose of seeing whether we could not prevail upon the Government to give us fair play, and the fair play that we had in our minds was that the country of origin should not be permitted to sell in this country at a price lower than they sold at in their own, because we felt assured that given fair play we could beat either the Germans or the Americans. It has been said that we have not progressed in steel making as we should have done. At one time we were second to America, and we have permitted the Germans to beat us by processes which were discovered and patented by England, which does not seem very much to our credit. At the present moment we are greatly deficient in the steel necessary for the winning of the War, and at the desire of the Ministry of Munitions new plant is being put down all over the country. I dare say by the time those additions are completed, the expenditure will be considerably over £10,000,000, and probably £15,000,000, and the question I ask myself is, "Has that new plant to lie idle, and has the capital expenditure to be lost?" If so, it appears to me that it will to some extent come out of the pockets of the workers, because the first thing the employers do when they cannot pay interest on capital is to attack wages. I want therefore to protect myself if I possibly can. There are 20,000 men from the iron and steel trades who have from first to last been fighting in the trenches. When they come back I do not want German products to be dumped in this country for the purpose of keeping those men out.

Again, my hon. Friend (Mr. Snowden) asked us, Did we want another war after this War? Was not one of the main arguments, not only of Free Traders but more particularly of labour men, if you want to preserve European peace, make your exchange of commodities as free as possible? Do not have Tariff Reform, because it will do something to irritate the Germans. We left them a wide open door while their door was closed to us. Did it prevent the War? Has it prevented their hymns of hate? They may wish to take the Hun to their bosom after this War is over, but that will not be the desire of the great mass of the people of this country. I think that what was said as one of Lord Kitchener's last utterances, that they should have a period of twenty-one years of penance is the right kind of policy that we ought to pursue. Surely the doctrines of Bernhardi and the others is a demonstration that they do not understand chivalry. They do not understand the British system of knocking a man down and picking him up and forgetting about it. They look upon that as weakness upon the part of the people of this country. I think we must do everything that is possible to punish them so far as this is concerned.

From these Labour benches we have made speeches in favour of a minimum wage of 30s. a week. But I do not think we were ever told where the wage was to come from. To my mind this War has compelled some of us to realise that all the truth does not lie on the one side or yet upon the other, but what we want to do is to bring our practical knowledge and our reasoning powers to bear upon a problem of that character. We all know what the wage of the agricultural labourer is—15s., 16s., 17s., and I suppose in no case over 18s. a week. The husband has now gone to fight for his country, and his wife is getting anything from 50 per cent, to 75 per cent, more money than ever she handled in her married life, as the result of her husband going away. Her standard of life has increased. The standard of life for her children has been improved, and to my mind when these men are discharged and come back it is inconceivable that they can come back to their former standard of life. In what way is the Government going to help to solve that problem? I wonder in what way the problem can be solved other than by some Customs duty, subsidy, or bounty. It must come from one source or the other. I do not bind myself to the particular method whereby this can be achieved, but I think the House and the employers in the country must realise that after the War in all those instances where the lower-paid men have had their wages increased and in some cases their standard of life improved you are going to have a revolution if you seek to drive those men back to pre-war conditions. So far as the iron and steel trades are concerned, the advance in wages as the result of the War has more, than met the increase in the cost of living. Take the making of pig iron as an example. The men men in that industry have had their wages raised 109 per cent. This makes them very much better off than, was the case under pre-war conditions. The labouring man who was earning probably 3s. 4d. per shift all of a sudden has got his wages doubled. It is going to be a very hard thing to get that man back in his old low—too low—standard of life considering the class of work that he is engaged in. I want to know how far the opinions I am expressing now meet with the approval of the workmen engaged in the iron and steel industry. During the last five weeks I have attended fifteen meetings convened under the auspices of five different trade unions engaged in that industry, and I have put before them my opinions with respect to the decision of the Paris Economic Conference, my own opinions with respect to the minimum wage and these other matters, and in every instance they have been received with enthusiasm and unanimity. Hence I say that the statements which have been made with respect to what will result in the event of a General Election are well and substantially founded.

Then some people seem to be afraid that if we do anything in this direction it may result in an increased cost of living. That does not alarm me. I have been to Australia, where they believe in tariffs, and I find that the standard of the workmen there, and the standard of the working women, is ever so much better than in this country. My hon. Friend (Mr. Snowden) said that in Free Trade lay our hope of social reform. The social reforms they have had in Australia are incomparably superior to anything we have had in the Old Country, which is much wealthier. In Australia I discovered that they look upon children as a national asset while the father is away.

8.0 P.M.

The result was that the mother with her children was given a sufficient weekly sum that would enable her to bring up her children properly and be a mother to them and look after them, instead of having to go into the factory to work and leave her children neglected. So far as old age pensions are concerned, they are much in advance of us. Therefore, in my opinion, the worker has nothing to fear so far as that aspect of the matter is concerned. Again, in that country, I discovered that one of our greatest manufacturing firms were anxious to start a similar factory there, but it was impossible to comply with the Factory Laws and other legislation in Australia with respect to the conditions under which the people should work and live. Swedish and Norwegian matches were going to be dumped into Australia, and that firm said, "We do not care what wages you make us pay so long as you permit us a fair return on our capital expenditure. If we are going to spend our capital, then you must give us some protection." The result is that you have got one of the finest factories in the whole world, on the very best of conditions, and, in addition to that a decent living wage for every man or woman who is in the employ of that firm.

So far as we are concerned, we do not blame the Germans for seeking to get all the trade that they can. What we want to do is to take lessons from them, in regard to their organisation. That is where we have failed, and I must here make a charge against our employers that even when they have had the way pointed out to them they have not taken it. Some twenty years ago I suggested in a conference with the steel makers of this, country that they ought to take up the question of technical education. I said that if they gave their men an opportunity of learning the principles of combustion, and the theory of their trade, and if they gave them some knowledge of the chemical action of the ores, etc., that they put into the furnace, instead of the men working by rule of thumb the working costs and the repair costs would be reduced. They simply smiled at me, and one of the managers of one of the largest concerns in the North of England said: "You want to make all the men managers." That is what we want to do, and then we shall have the skill and the knowledge to beat any other country in the world. What we want to do is to realise the great necessity of doing everything that we can, not only by way of technical education, but also by realising the necessity of scientific research. I only desire further to impress upon this House and to impress upon employers generally the fact that they must realise that whatever is done for the benefit and the improvement of industry in this country, the worker ought to get something out of it, not only so far as improved conditions of labour are concerned, but by the raising of the standard of life.

Mr. BIGLAND

I wish to say that I was more than satisfied with the opening speech of the Prime Minister on this historic occasion, and I was grieved that two hon. Members allowed the discussion to fall to a rather lower standard, and to a rather lower plane than the lofty attitude adopted by the Prime Minister. Surely the hon. Gentlemen who have spoken against the House and the Government? confirming the view and attitude of our representatives at the Paris Conference, forget that this Clause 3.which has been so much discussed, states:— The Allies declare themselves agreed to conserve for the Allied countries, before all others, their natural resources during the whole period of commercial, industrial, agricultural and maritime reconstruction, and for this purpose they undertake to establish special arrangements to facilitate the interchange of these resources. Surely they forget that the object with which we went to war was to stand by Belgium and these other countries which have been denuded of their factories and towns and all that they counted dear. Surely, the object of the War is being carried out in this resolution, that before all others the Allied countries pledge themselves to conserve for these countries their natural resources during this period of reconstruction. I, as one who knows the commerce of the Empire and the world, maintain that it is possible for the British Empire to do more to rebuild Belgium and the North of France, Poland and Serbia by an economic resolution such as this, than by any amount of money that the Belgian Government after the War can possibly receive from the German Government. I do not believe in the reconstructive power of a large money indemnity that may be paid by Germany to Belgium. The Belgian factories and towns are ruined, and the Government of Belgium could not use that money if it were put into their hands to rebuild these factories, unless there was some kind of permanent promise given to the men who build the factories and the workers in the factories, that they should have employment. All these years these workers in Belgium cannot stand against the competition of the whole world unless they are helped. Those of us who have been in trade for forty years know that in the pre-war days the worker of Belgium could stand against all comers, and we have now pledged our word that Belgium shall be reconstructed, that her walls and gates that were broken down shall be rebuilt, and that we in this alliance promise to stand by them. I know that it is foreign to many people's ideas that this reconstruction shall be brought about, not by putting the tariff against German manufacturers, but rather by attacking Germany at the very base of her industry, by withholding from her the raw materials of which the British Empire hold a monopoly. It is abundantly clear, to my mind, that in many of the products of the British Empire and her Allies we can so feed the infant industries of Belgium that they can start again to trade for themselves and to build up their export business.

The instance of metals was spoken of by the hon. Member for Northampton (Sir L. Chiozza Money). He showed that in the British Empire we have a mineral wealth that the world did not know of, and that we did not know of. The people of Belgium will want those metals, and if we say we will put on an export duty on mineral products and many other vital products that we can supply, and we will decline to give equal terms to the enemy in neutral countries, we shall be practically saying to the capitalists and workers in Belgium, "Here are 600,000,000 of people wanting to give you a preference for the things you make before we buy in the rest of the world the things that we need." That is an absolute guarantee that in Belgium and these other Allied countries there will be, during these years of reconstruction, actual employment at remunerative rates for them and the men who rebuild their factories. It has not yet been realised the wealth of our Empire in the raw produce that we possess. I have only to mention that in such an article as jute, which enters into so many matters of business the whole world over, we have an absolute monopoly, and if we say that there shall be £5 per ton Export Duty in India on jute, which shall be remitted entirely to our Allies and ourselves, then we put the Belgian and the French worker with something in his hands in the form of raw material wherewith he is going to reinstate himself and his work. I have no doubt that in other parts of the Empire the people of Australia and New Zealand will say, "If it will help to rebuild the North of France and Belgium we will put an export duty on wool, and the German woollen worker and woollen spinner shall not manufacture on the same beneficial rates that the spinner and worker in Belgium and the North of France shall enjoy." We can go round other parts of the world and see how through our own resources we can feed the industries of our Allies. It may be said that some of us who advocate this policy are advocating too great an ideal of generosity, but to my mind there is no gift that we can give big enough for the men who have fought with us in this great War. I was very pleased with the Prime Minister's statement that the policy that he has propounded to the House and the country tonight does not involve the proposition that we shall make a bargain with France and with Russia, but that we shall give what we are giving to them willingly, freely, and openly. I do not want to begin bargaining with our French and Russian Allies about the different items of our trade. What we give let us give it openly and freely, and let us take pleasure in their enjoyment of the raw products of our Empire in which we are so wealthy.

Let me mention something which has come to my notice in the last few days. Our Ally France has sent three members of her Government over to converse with us as to whether we could oblige her in years to come with 1,000,000 tons of nuts and seed and oil-bearing products. She knows that the British Empire contains these valuable products which she needs, and she says, "Can you give us 1,000,000 tons?" We have studied the matter, and we say, "Most certainly: out of our Empire we can help you to the 1,000,000 tons you require." When we examine what Germany did in pre-war days we find that she took 1,400,000 tons of these seeds in a year. Surely if we are going to help our Allies, France and Belgium, we can reasonably put an Export Duty on this export from the British Empire to all countries except our Allies and ourselves. That would immediately give the French producer of all the by-products which he makes from these raw products a great advantage in selling in the neutral markets of the world as against the German. The German who wants 1,400,000 tons of seeds, if he comes to the British Empire to buy it, must pay this duty. The Colonial Office has already proposed to have an Export Duty of £2 per ton on the kernels exported from British Possessions on the West Coast of Africa, which would mean a difference of £4 a ton on the oil that Germany will have to soil in the neutral markets of the world, as against the Allies' manufacturers.

The Member for Walthamstow was quite willing, he said, to differentiate against our enemies if we could show any particular line of articles in which it will be valuable to build up the industry of this country. I have mentioned just this one trade on the West Coast of Africa. We have there almost a monopoly. We control 87½ per cent, of the palm oil and palm kernels of the world. They had become in pre-war days the necessity of German industry, and so greatly did Germany covet those Possessions that by trickery she ruined our manufacturers of those articles, by giving bonuses to her own people at home, and in a period of ten years she succeeded in ruining in Liverpool men who crushed those seeds which their own steamers landed in Liverpool. And though the same palm kernels were shipped from Liverpool to Hamburg and the manufactured oil came back again to Liverpool, the Germans succeeded in ruining the manufacturers in Liverpool. Surely that is a case for the Member for Walthamstow to consider as to whether, in the case of a product grown within the British Empire, we shall not act in a way to prevent 230,000 tons out of 300,000 tons of the total produce being taken from our Dominions, handled in Hamburg, and thence distributed to all the countries of the world, even to Canada and Australia—to prevent British products manufactured in the enemy country being sent to our own Dominions overseas, when by a simple act of, shall I say common business acumen, we could turn the channel of that trade into our own works, keep our own workmen engaged and bring along with that numberless other occupations. Members who have spoken from the Labour Benches were and are I know most anxious on the question of security, the question of permanently holding employment in this country. I have studied this issue for years and years, and I am profoundly convinced that the resolutions now submitted to us are the best resolutions that I have ever seen which will bring a continuation of labour to our own great factories and cities.

I am satisfied that when the Report of this Committee which is now sitting comes before this House we may expect progress to be made, and I am pleased to know that the Prime Minister has not forgotten the desire of the nation that the sister States shall participate in the solution of this question, but that, after this Committee has arrived at a decision it will arrange for a conference in which all parts of the Empire shall meet, and that the decisions of this Committee shall be submitted to them and they will be submitted to this House. The Prime Minister has said, in answer to the right hon. Gentleman the Member for Dublin University, that in his opinion it would not be necessary to pass legislation in order to carry out these resolutions. I differ from the Prime Minister on that point, because when we come actually to do the things that are set forth in these resolutions we shall find it absolutely necessary to do so. We shall not be able to rebuild Belgium, to assist France, to do our work with Italy in the way in which we hope to do, we shall not be able to cancel the old treaty which we have got with Japan, which was such a mistake, unless we pass through this House certain legislative measures which will enable us to carry these measures out, and I do not doubt that the people of this country and the Members of this House will readily give their Government any backing which they need in order to get such a desirable matter accomplished.

To me this is the beginning of great things. To me the future of the Empire is one of those great romances which we, living in this day, have been permitted to see. We have no conception yet how much the Empire can produce. I claim that while we propose to give such open treatment to all our Allies and to ourselves we are not making any bargain with them by freely giving them these great opportunities in our markets. But while we discriminate against the enemy countries we shall be able at a later date to open the door to all the neutral countries and give them the same opportunity of trade in the British Empire, provided that they will give the opportunity to the manufacturers of this country to market the produce of their handiwork in these neutral countries. We shall be able as business men to make a business deal with all neutral countries that will come in, and I say as a business man that we will offer them such terms that they cannot refuse to come in. The only condition I should attach to allowing them to come in would be that the opportunity that they give to our workers should not be given to the workers of the enemy country. I take it that we cannot, for this generation at all events, ever contemplate the possibility of the products of enemy countries either entering our own Empire or the territory of our Allies or any country with which we make a commercial treaty on the same terms as before the War.

Sir J. RANDLES

I take the opportunity of referring to the visit which I paid with some twenty Members of this House to Paris about a month prior to the Economic Conference. We had an opportunity on that occasion of coming in contact with the representatives of the Parliaments of all the Allied countries, and there was in those discussions remarkable unanimity of spirit and a strong desire to arrive at a common understanding for the common benefit of the Allies. The feeling which seemed to me to be predominant in those discussions was this: That we-were all together taking burdens in war which would later on impose enormous burdens in time of peace, and that if in the after-war period it were in any way possible for the Allies by mutual consideration and mutual help to afford each other economic advantages, it was most desirable that such advantages should be offered and secured. The burden of the discussion went very largely in the direction of doing whatever we can, without injuring our own national interests, for the common good of the common Allies. To-day I was very glad to hear the speech of the Prime Minister. I think one of the most important things that we who are not actively engaged in the War, but who are doing very necessary work at home, is that we should have some idea of what the whole decision and policy of the Government will be in relation to matters concerning our productions, our manufactures, and our commerce. The lines cannot be too clearly laid down, because great industries will not be developed unless those concerned have some fairly clear idea of the lines and policy which will be adopted by the nation in the period which will come after the War. But with such confidence as will be derived from that knowledge, and with the speech of the Prime Minister to-day fresh in their minds, I think that the people of this country will understand that it is quite safe to go in for developments which they would not otherwise undertake, and to prepare for a production of goods for sale abroad which otherwise it might be very risky to make preparation for.

Security is the one great thing which will enable our country to develop its manufactures. It is not merely the possession of gold or of wealth. An hon. Member opposite made a good many references to the interests of manufactures and to the iron and steel trade. Fifteen or twenty years ago manufacturers in this country had a vastly larger iron and steel output than Germany, but in the last year preceding the War the total manufacture of iron and steel by Germany was larger than that of the whole of the Allies put together. If that enormous development had not taken place, or if the production of the Allies had gone ahead in the same ratio as that of Germany, it would have been absolutely impossible for Germany to have declared war at the time she did. The nation that has a superfluity of iron and steel, and the most men, is the nation to succeed, according to all the canons on which predictions may be based. Germany had men ready for iron and steel development; she had an enormous advantage over all of us, and she was able to storm our Armies for a long time with a prodigious output of metal for which she had previously arranged. If the stimulus now being applied to iron and steel manufacture in this country could have been applied in the period when we were ahead of iron and steel manufactures of the Central Powers, I think myself that there would have been no possibility of this War. I understand that it comes within the contemplation of the Government, in connection with the resolutions of the Paris Conference, that it should be a consideration with this country as to whether we should not put ourselves, by some means, into such a position that the same thing cannot happen again, and that we cannot be outclassed in the production of munitions of war, in the form of iron and steel, as we were in this case.

I think that a stimulus now being given to this industry will be such as will ensure, if the policy of the Paris Conference is carried out, the continuance of our markets and our manufactures in this particular item. The hon. Member for Blackburn in his speech referred to the possibility of what may occur in regard to the principles of the Manchester School, and as to what will happen to the Lancashire cotton mills if the policy the Prime Minister advanced be pursued. The hon. Member might have known that the question had been very fully considered in Lancashire, and that in Manchester the question has been so much considered that the chamber of commerce of that city has entirely altered its complexion and its view, and whatever was the predominant policy of the Manchester School in the past and of its chamber of commerce, the policy contained in the speech of the Prime Minister and in the resolutions of the Economic Conference held in Paris, is the policy of the Manchester School and the Manchester Chamber of Commerce to-day. These are considerations which will have their influence in the future, and I am glad that the Prime Minister has not let the time slip away before making clear such considerations as have been advanced by himself and the Colonial Secretary. These things are now in the mind of the country, and we may look forward to a time when manufacturers' productions, and the possibility of their increase and not of their diminution, shall be the first consideration of the Government of this country, knowing that the output must be kept up, production maintained, and wages paid which will increase the comfort and happiness of the worker's home, while making it impossible for a War like this to be again waged by Powers which have taken advantage of opportunities in other countries for penetration and for commerce, all the time that they were preparing a military blow that would establish them as a military Power dominant, over other countries—a thing which no nation could tolerate, and the chance of which this nation, amongst the first, is determined to deprive them.

Mr. CARADOC REES

There are two main divisions in these resolutions, and as to what ought to be done during the War I think everybody in the House is in agreement. I deprecate discussion of what is to be done after the War. As the right hon. Member for Dundee (Mr. Churchill) to-day said, what we shall do after the War will depend on the position in which we find ourselves and our Allies and our enemies when the War comes to an end. It is impossible to say how we are going to find ourselves, our Allies, or our enemies, and it seems to me unwise, at any rate, to state what we are going to do when we do not know the circumstances which are going to be in existence at the end of the War. We should leave it alone until the War is nearing the end, when we can see more clearly what the conditions are going to be. I deprecate discussion of what will happen after the War is over, because there is a danger, a danger which has been seen in the House to-day, of Free Traders thinking that Tariff Reformers are trying to take advantage of the War in order to score some party advantage, and that the Tariff Reformers may think that the Free Traders may want to take up a position after the War by which they will gain some party advantage on their side. It would be far better that everyone of us should retire from public life than that the impression should be conveyed that at a time such as this either Free Traders or Tariff Reformers were trying to secure a party advantage. That is why I deprecate this discussion which cannot lead to anywhere and cannot do anything, because we do not know the circumstances under which the War is going to end. We started on this war as a united kingdom. It is quite true that latterly there have been dissensious in one part of the kingdom, but it is gratifying to know and to believe that as far as the War is concerned we are still a united kingdom and that every part of the United Kingdom, every nation within the United Kingdom, is heart and soul for the ending of this War victoriously.

My hope has been, and I take it that it is the hope of many other Members, that when this War is over we shall find not that we are a united kingdom but a united Empire, and that we shall have moved from being a united kingdom to being a united Empire, and unless something like that happens all the blood that has flowed will, I think, have flowed in vain, and all the lives that have been lost will have been lost in vain unless we take a big step forward towards being a united Empire. What do these discussions mean which took place in Paris? Instead of dealing with constitutional questions they deal with economic questions, and whenever people begin to discuss pounds, shillings and pence, differences of opinion arise and bitterness is created, and instead of moving forward you find obstruction everywhere. My suggestion is that this constitutional question of moving forward from a united kingdom to a united Empire will not be solved economically. Mr. Chamberlain tried to solve the constitutional question economically, and now, instead of facing the question and getting along with it, we have the economic question drawn right across the path. Another danger we are in, I think, is this: I listened to the hon. Member for Birkenhead (Mr. Bigland) and what he said about tariffs and the Empire, but are we not really in this House losing sight of the present perspective. We have moved a long way since the War broke out. The Empire is not the United Kingdom. The Empire is being built up by the men in South Africa as truly as by the men in the United Kingdom, and by the men in Canada and in New Zealand and Australia and India, and we go on talking here as if what we said was to be binding on the Empire. South Africa is not going to allow Downing Street to say what is going to be done to the Territories which she has won, and Australia and New Zealand and Canada are not going to sit down and see Downing Street settle what is to be done with all the places they have helped to conquer. They will want to be consulted. We are starting wrong in this matter. We go on negotiating and talking as if we were the Empire when, in fact, though we are perhaps the most, important part of the Empire, we are only a part of the Empire. Other parts of the Empire ought to be brought in in some way constitutionally, and this question ought to be dealt with as an Imperial question by all parts of the Empire combined.

The defence of the Empire, I think, is found in making the Empire worth defending. That is the great thing, and that is why all these Colonies have rushed in, because our Empire is worth defending. I agree with the other Members of the House who want to destroy German trade, but more important than the destruction of German trade is the destruction of the German spirit of aggression, the German spirit of domination. The danger is that that spirit of aggression and that spirit of domination, unless we take a great step forward towards Imperialism will grow in us, and the end of the War instead of being a victory may be turned into being a defeat. If we go forward Imperially on the lines laid down by the late Sir Henry Campbell-Banner-man, and, instead of taking away, give greater liberty, we will tend to make the Empire strong. What I am afraid of and concerned about is these economic questions and discussions as to what may be done after the War when we do not know what the conditions after the War will be, and when we do not know what great constitutional questions there will be awaiting to be solved, and that ought to be solved promptly and to be tackled quickly. Now is the time, when the sons of the Empire are fighting shoulder to shoulder and when the blood of the Empire has been poured out at every part of it, to move forward in that direction, and that is why I deprecate these discussions about pounds, shillings, and pence. The foundations of Empire were never laid on them. The basis is not broad enough. The basis is not big enough. The Empire is founded on the character and the comfort and the contentment of her children.

Mr. CAREW

I listened with the greatest interest to the speech of the Prime Minister, which showed us what we may hope from the result of the Paris Conference and also to the view of the right hon. Gentleman the Member for Dublin University. I also thought that a good deal of consideration should be paid to the remarks that fell from the right hon. Gentleman the Member for Walthamstow (Sir J. Simon). If one follows what he said, without entering into the merits or demerits of Tariff Reform, a very big question lies behind it, and that is how far we are going to allow the punishment of Germany to go without injuring and weakening the commercial superiority of our own country in the future. I think the great point that we have to bear in mind, as the last speaker has ably shown, is that in settling what is to happen after the War we must have our Colonies, the men who are fighting so bravely with us, in conference as to what they think is the best plan to adopt. There can be no shadow of doubt that we have in the past paid too much attention to the claims of the consumer and perhaps ignored too much the claims of the producer, and that we have allowed Germany to occupy a most dangerously strong position in many of the vital requirements of this country, which to my mind constitutes a very great danger to the security of our Empire. That must not occur again and it should certainly be guarded against. I am not one of those, I confess, who imagine that for all time we are going to exclude Germany from trading in this country without receiving a very great setback to the commercial supremacy of this country. I believe that eventually a middle way will be found, though I would not for a moment suggest that Germany should come back after the War on the same terms as before the War began. As long as possible we should reserve our trade within our Empire and the territories of our Allies by making Germany pay severely for her wanton and barbarous aggression. I do not think that that course would alienate the trade of neutral countries or place our Colonies and ourselves in any position of disadvantage. Above all, I think the feeling throughout the country and what most of us desire is that those who are responsible for this immense tragedy should suffer, and that they, rather than their dupes, should in the future pay the penalty that must inevitably fall upon them.

Mr. GORDON HARVEY

Before I deal with the resolutions, I desire to put one point to the representative of the Government. I would rather have put it to the Colonial Secretary had he been in his place. The Colonial Secretary criticised a point raised by the hon. Member for Blackburn (Mr. Snowden), who said in his outspoken way that the Prime Minister had broken a pledge which he had made in this House with reference to the Paris Conference. Of course I am not going to accuse-anybody of breaking pledges, but I think, there is a little matter which should be cleared up, and I would ask the right hon. Gentleman to endeavour to have it cleared up to-night. The Prime Minister, in answer to a question, said some time ago that the House of Commons had unfettered and free action with regard to these resolutions. I should like him to make it perfectly clear how the House of Commons is to take action consistent with the unfettered and free character which the Prime Minister allowed to it—whether there is to be a Division; whether the resolutions are to come up separately and be divided upon; or in what way the House of Commons will be able to affirm or deny the principle of the resolutions. A few moments ago an hon. Member made a statement of which, I think, notice should be taken. I felt it very keenly and resented it very deeply. He alluded to men like the hon. Member for Blackburn and those of us who opposed these resolutions as men who were desirous of taking back the Hun to their bosom. That is quite unnecessarily abusing those who differ from you, and it adds to the embarrassment of those of us who are trying to approach with caution and moderation what is a very difficult and delicate question. The Noble Lord the Member for the University of Oxford (Lord H. Cecil), speaking in this House on Monday last, put in a very strong plea against hurrying a settlement of the government of Ireland during the progress of the War. He stated that none of us ought to make up our minds decisively and conclusively as to how we should treat Ireland after the War while the War was still in progress. He gave us a guiding maxim, which I thought was a very wise saw. He said that you are not always wise when you are quarrelsome. I rise to urge the same consideration, deliberation, and caution in approaching this question, as the Noble Lord commended on the question of the Government of Ireland.

I propose to state briefly my objections to the policy embodied in these Paris Resolutions. Before doing so, may I echo the sentiment recently expressed in this Debate as to the impropriety of undertaking a subject like this at a time most inconventient and when it is impossible with calmness and deliberation to discuss matters of high finance and questions concerning the trade interest of the Empire. I must maintain that the Government in agreeing to the policy of these resolutions is binding itself to the upsetting of the whole fiscal practice of this country. We all know how highly controversial the fiscal question is, and I venture to say that there should have been more solid ground before the Government ran the risk of throwing this bone of contention amongst us in a time of Party truce. If the Liberal Members of the Coalition Government have changed their minds on these things, I can only say that it is a course to which they have accustomed their supporters. But I must express my view that it would have been far better to have reserved the question of how we are to conduct our trade and manage our finance after the War until we had won the War, and ascertained the conditions of peace that we could obtain.

I thought that the Prime Minister, in recommending these resolutions to us, did not go very deeply into detail. He rather sought to comfort us with some platitudinous and voluminous phrases. He appeared to me at one time almost to reduce himself to this—that this was a necessary policy because we must bluff Germany, Germany having previously bluffed us. The Colonial Secretary in all probability takes a deeper view of this question. It may be that he thinks that at last we are about to see introduced the new Heaven and the new earth for which he and his Friends have been contending so long. I am convinced that in this country there is a righteous and growing wrath against the German people, and the German Government, and every deliberate act of inhumanity, every monstrous circumstance which unhappily belongs to this War, increases and augments the popular passion of the people. I am inclined to think that the prejudice so created will last for a considerable time to come without the stimulus of resolutions such as this. I am a trader, and therefore one of those men who, in the opinion of some, will be the first to give offence by rushing for profits by dealing with Germany; yet I venture to say that I believe there are thousands in this country who to-day view, and for a long time to come will continue to view, with the very gravest repugnance and dislike the resumption of anything like intimate relations with those with whom we are at war. I believe that the trading community will, generally speaking, do all they possibly can to divert into other channels the trade they are accustomed to do with Germany. But I would plead that this question should be left there.

9.0 P.M.

I believe that the Government has made many mistakes of this sort before in that it has never understood the instincts of the people, and has preferred to try and coerce rather than to lead them in the execise of those higher principles most of them possess. The Prime Minister today reminded the House that this is a great Empire, and that we are acting, and must act, in this present matter not by ourselves, we are connected with a tic to other great nations in the Grand Alliance. My hope, and I am sure the hope of every Member here, is that that alliance may last for many long years in peace and mutual intercourse. Alliances such as this, however, are things of very delicate and fragile structure. If anyone likes to turn back and refresh his mind by a study of the Thirty Years' War he will there see how alliances were made and cemented, and appeared to be likely to last, and how they split away in the course of that long war over and over again, when the old conditions had changed, and the alliances that looked so strong were broken and destroyed by some stupid action on the part of some high person in power. I have the very gravest doubts whether the policy indicated under these resolutions is a policy likely to cement and render lasting and durable the very alliance in which we trust for victory. I am going to make an assertion which, I own, is a rather bold assertion to make, and it is this: that I do not believe that Russia, when these things come to practice, will ever be found willing or able to boycott German goods. She could not do it if she would. She has a great trade with Germany, which is of supreme importance to her. It amounts, I believe, to something over a hundred millions a year. Anybody, considering her geographical position, and how, for many months in the year she can only trade with Germany and no other nation in Europe, must feel the difficulty attaching to one of our leading Allies of the proposals in these resolutions, and they will be, as I understand, almost impossible of fulfilment. I would ask the Government to consider that if this great difficulty which I have alleged exists in regard to Russia, that it must in practice exist in regard to some parts of the British Empire itself. I am going to bring my practice and experience as a business man in here and put a little point before the House which I trust hon. Members will think worthy of consideration. I refer to India. I take it that if we as an Empire are to exclude German trade that, of course, India, as part of the Empire, will be called upon to do the same. What will happen? India has a cotton crop, enormous in quantity, cheap, of which she uses part, but the larger part of which she is forced to export. It goes in increasing quantities to the Far East, to China and Japan, and a little conies here—a little and rather a diminishing quantity. A very large amount of that cotton finds a regular market in Austria and in Germany. I ask, if you deprive India of her output for this large crop, where are you going to find alternative markets for its consumption?

Mr. SHIRLEY BENN

Send it to Manchester!

Mr. HARVEY

I can assure the hon. Member who interrupted, and the Government, that if they took what we call Surat cotton into Lancashire in a very short time those in the mills would rebel. We could not do it. Here the whole machinery has been adapted, and continues to be adapted, to an entirely different sort of article; to a fine, long staple cotton, which we get from America, from Egypt, and elsewhere. What I want to point out is that from this high-class cotton we make high-class yarns in which we are supreme. We get a quick production which gives our operatives good wages. If we have an alternative market for Indian cotton in Lancashire we shall have first to reconstruct our mills, and then we shall have a slow, difficult, and laborious production, with wages reduced. If we cannot do that, what is India to do? I venture to prophecy what she will do. India will at once say, "If you will not take my cotton, I must use it up myself." Well, let her do it. We have never objected to Indian competition, but I am quite sure it will not stop at legitimate competition. India, deprived by State enactment from the power to sell her products, will set up at once a violent agitation for protection, to stimulate her own production, and use up the produce which we have refused to allow to go to legitimate quarters. And against whom will she demand protection? Not against Germany: that is a mere bagatelle of no significance. She will demand protection against Lancashire goods, and BO you work round the vicious circle until you arrive at dissatisfaction to all the parties concerned.

I thought I might be permitted to put one point to the House, being able—I say it with all modesty—to speak with some authority and experience on a matter of this sort. I do not propose to detain the House by a full discussion on Free Trade against Protection, for it appears likely we shall have many opportunities in the good days to come. I just will say in conclusion that I agree with many of the speakers to-day in urging upon the Government to use more peaceful means to attain the great end we all desire for the protection of commerce. Educate our people. Open up to all the advantages which knowledge gives. Do all that a Government can do legitimately to facilitate communications. See that your railways are managed in the best way. Tackle the question of preferential rates. It is far better to develop the resources we have than to go into these difficult and probably fatal experiments. I have the honour to represent Rochdale, which Richard Cobden represented for many years, and which was the home of John Bright, and I can never in this House hear this controversy mentioned without feeling it incumbent upon me to take some part in the Debate; and I just say this, because I understood that Cobden pressed the country to have Free Trade, not only for material reasons, but he based his argument largely on the grounds of ethics, humanity, and morality, and he tried to extend this system of Free Trade as a vehicle and an instrument for the increase of peace amongst the nations of the world. It is rather significant to me to find that we are now asked to depart from Free Trade to barriers and tariffs, amidst the spread of human hatred and animosity.

Mr. S. BENN

I wish to approach these resolutions neither from a Tariff Reform standpoint nor a Free Trade standpoint. The men who represented the Allies in Paris undoubtedly did what they thought was best for their countries when they put forward the resolutions we have to-day. My object in rising is to suggest to the Government one or two little points, as one who traded for many years among foreign nations, for the benefit of our country. In the first place, if we are going to have inter-Allied trading we ought to have the decimal system. We ought to have a basis upon which we could all work and where the traders would know exactly where they stood. The second point I want to make is this: If we are going to carry on the trade amongst the Allies we ought thoroughly to understand what the needs are of the Allies. We do not do it to-day, and if we want to capture the trade, and France wants to capture it, and Russia wants to capture it, and Italy wants to capture it, and we are to carry on the trade, we ought to have people who thoroughly understand it; and I want to suggest to the Government that they ought to establish at once inter-Allied commercial colleges in the different countries, that they should bring young men here from France, Russia, and Italy, to mix with our young men, to be taught the commerce of our country, and to go out understanding our country and knowing our language. The same thing should happen in Paris, Petrograd and Rome, and at the end of the War, when we go into this thing, we should have a staff of men who would understand the trades of the different countries of the Allies and be able to advise. They could be made trade commissioners, or could go out as missionaries of trade between the Allies, and, if we had that system, and we had the proper technical education here, bringing our people up to the very height of commercial work, of business principles, and all the most skilful manufacturing, I believe that the Allied countries could very quickly regain to a great extent the enormous sacrifices that they have made in this awful War. We have gone into this War, as we all know, not on account of business, not because we were afraid of Germany, but we went into it because Germany sacrificed the very highest principles of civilisation, and we were determined that we would aid those countries that were attacked by Germany in putting down once and for all that military despotism that has brought this fearful catastrophe upon the world. I am not going to take up the time of the House; all I beg is that the Government, if they go into this, will go into it with their eyes open, and will go in for organisation, and of having the main trade to get and to keep, and work up the trade of the Allied nations. If they do so, I am confident we shall succeed.

Sir CROYDON MARKS

The hon. Member for Rochdale (Mr. Gordon Harvey) made a statement as to what Russia is likely to do after the War in regard to trading with Germany, and he said she was likely to act in a way contrary to the views expressed by the Russian representatives at the Conference. I take it that those representatives are just as fully acquainted with the possibilities of their trade between Russia and Germany as anybody in this country can be, and they probably know better than most of us how their needs in the future can be met, and they know this as well as anybody in this House. Therefore to be raising difficulties as to what may be the arrangements of Russia after the War, when the Russian representatives have approved of these resolutions, is somewhat unfortunate in this House at the present time. It has been suggested by the hon. Member for Rochdale that we should not make any arrangements now and that we should wait until the War is over before setting our hand to any proposals for continuing with our Allies in a method which will keep the War from starving other people hereafter as it has been killing them during the fighting. As was pointed out by the Prime Minister, Germany has enriched herself by the machinery she has stolen from the country she has devastated. She has taken care to put out of condition Belgium and northern France to such an extent that both those two territories will not be able to compete against her with regard to the manufactures Germany will produce by all the plant and machinery she has robbed from those she has murdered. To suggest to-day that we should wait until the War is over before making arrangements for continuing our help to our Allies appears to me to be making the suggestion that because we have not been devastated, and because our plant has not been taken away, therefore our trade not being in jeopardy we need not worry about the other people, but let the War end itself first and then let us see what we can do.

Mr. HARVEY

I am sorry to interrupt the hon. Gentleman, but I did not mean anything of the kind which has been attributed to me.

Sir C. MARKS

I accept the hon. Member's denial, but I took his words down and I thought they had reference to not making any arrangements now but waiting until the War was over, and unfortunately I was unable to put any other interpretation upon what would be the possible result than that which I, perhaps unfortunately and unintentionally, gave as my interpretation in opposition to what possibly was the intention of the hon. Member. A suggestion was also made that India might be giving us some trouble hereafter by reason of that which we may do. I do not think it is quite becoming on the part of any hon. Member of this House at a time when we are all seeking to find a cord to bind the whole Empire together that there should be an anticipation with regard to trouble concerning an industry that might be carried out in Lancashire to-day if they would only do what the hon. Member finds to be a great difficulty in their way hereafter—namely, remodel their work, alter their machinery, and make a different kind of staple to that which they have been in the habit of making. After this War there will be hundreds of thousands of workers ready to engage in trade and work in mills and factories who never have engaged in trade before. There will, therefore, be a surplus-age of labour available for such new industries as those which can be created if the manufacturers themselves will be a little more alert in the future than they have been in the past, and be willing to undertake the experiments that have been referred to in order that they may get the trade that Germany has previously considered her own.

I hope that the outcome of this War has shown, as I have knowledge that it has already demonstrated in many departments, that we have within our own realm resources that have hitherto been believed to be outside the realm. I believe that we have within reach of our Empire sufficient skill, science and knowledge, granted that we will take advantage of it, to enable us to market the world with regard to some of the industries that we have allowed our enemies to have as monopolies. We can do this if we alter our methods, and the War is showing manufacturers how they can alter it. There are people in trade who never dreamed of being in trade until this War came about. There are people working day after day in industries who will find they are just as skilful as those who have been working for years in those industries, and when the War is over and we have these hundreds of thousands of semi-skilled people to deal with the products of the War, we shall be able to use this semi-skill, provided the world knows that we are to have the advantage of that which our Allies can give us with regard to supplying us with the materials that we ourselves cannot obtain from our Dependencies, with which we are to be linked in a way which we have never been linked before. The hon. Member for Rochdale also suggested that we are embarking on what we term the upsetting of our fiscal practice. There has been a good many things upset besides our fiscal practice during this War, and if we are going to be content to rally round the standard and say we prefer an idea rather than practice, some of us will be left pretty seriously in the background and we may lose what we otherwise might secure for ourselves. I am not in the least afraid in regard to the suggestion that has been made that we are altering our opinions and altering our methods. I have spoken at peace meetings before to-day very strongly. I have been bitterly and strongly opposed, as I am still, to organised militarism, but when one is dealing with a nation that makes militarism its god and ignores everything that is not connected with militarism there is only one way of dealing with that nation, and that is to use a superior militarism against them and put them in such a position that they can never oppress the world again by that method. Hence the methods which I have hitherto considered the best will have to be altered if we are to live again without fear of menace from another nation or from another set of people who may grow up with a revengeful feeling in them unless they know that it is utterly impossible, no matter how they may try, for them ever to be strong enough to conquer the Allies in the federation they will form.

I want, with all the strength that comes from conviction born of a desire to be peaceful, and with all the strength of a conviction which comes from an adherence to Free Trade, to say that when I find my enemies not only content to ignore all the principles upon which I have considered hitherto the world should be governed, and ignoring the principles upon which I think we should live, I will alter my opinions and my methods concerning some of the subsidiary things, and after all trade is subsidiary where morals are concerned and when life is at stake. Then I will alter those things that make for the betterment of the world. I have been extremely pained that any suggestion should have arisen in this House to-day that there should be between any of us any possible difference of opinion that the Allies are linked with us in commerce as well as in war, or that the arrangements that have been made now will not be carried out hereafter when the trouble of the aftermath of war will be upon us pretty badly. I hope that there will be an opportunity hereafter of a full discussion upon the details which have to be entered into in order to carry out this policy, but, taking the policy as outlined by the broad resolutions and regarding them as giving a lead rather than a positive direction to the Allies, I assure the Government, no matter what may have been their opinions in the past, that I am voicing the opinions of my Constituents when I say, unhesitatingly and wholeheartedly, that we shall support the resolutions that have been proposed.

Mr. ILLINGWORTH

I have listened to very many interesting speeches to-day, and not the least interesting was that of the right hon. and learned Gentleman the Member for Walthamstow (Sir J. Simon). Had he delivered that speech two and a half years ago, or ten years hence, I should have been in thorough and hearty agreement with every sentiment that he expressed. I have all my life been one of those who have been thoroughly convinced that the only policy in normal times for the wealth and well-being of the inhabitants of this country is that of Free Trade, but war alters everything. It does not alter every man, but it alters nearly everything else in the country. There have been many measures taken by this Government interfering with trade and altering the natural channels of trade which, had they been taken in times of peace, would have wrecked any Government within a week. We Free Traders, though these measures have been against our cherished and most dear traditions, have not objected to them actively, and the mere fact of signing peace will not kill the spirit of war nor avert the consequences of war. The aftermath of war will go on for many years, and unless we take some means to deal with the effects of this War the trade of Germany will, in all probability, get the advantage. I will just give a short quotation from a speech made by the German Chancellor last autumn, when they were so thoroughly defeating the Russians. He said: We want, not peace with honour, but peace with money, a peace inflicting immense indemnities upon our enemies, and making them contributory States to an all-powerful Germany. That combined with Bismarck's old saying: Leave our enemies nothing but their eyes to weep with. shows what our position would be and that of the whole of the Allies were Germany to win the War. They have out-Bismarcked Bismarck in the treatment of Belgium, Northern France, and Poland, to say nothing of Serbia, because I am confining myself to the manufacturing parts of the countries of our Allies. They have destroyed—I speak with special knowledge— all the businesses of those districts. They have not been content with savage outrages on the population. The have removed from the machinery all the brass. They have removed all the self-acting tools worth moving to Germany, and everyone who is conversant with manufacturing industries knows what that means. Not content with that, they first moved the principal workmen and interned them in Germany. Afterwards they went lower down the scale and removed men, and they are making them work in Germany, so as to make absolutely sure that every business in the whole of these districts will be definitely and finally disorganised, and that after the War they shall have the whole of the trade, or at any rate the greater part of the trade that has been conducted by the firms in these devastated countries. Just try for one moment to picture ourselves in the same position. Suppose, for the sake of argument, that the whole of Lancashire and the West Riding of Yorkshire had been invaded and every business ruined and the organisation of every business destroyed. What would our feelings be, and what would our position be? Suppose that France and Russia had been more fortunate and had not been invaded, suppose they had possessed control over the enormous quantities of raw materials of which we have control, and had allowed Germany free access to their markets, leaving us to flounder and to try and regain our business as best we could. That will bring home the feeling of resentment that we should have had after the sacrifices that we had made. We should have been definitely ruined and condemned to many years of starvation and hardship.

I have just looked up a few figures with regard to materials that are controlled by the British Empire and our Allies. I am more specially interested in textiles. We control 80 per cent of the wool of the world. The whole of jute practically is controlled by Great Britain. Fifty per cent. of flax is produced by Russia and only 6 per cent, by Germany and Austria. The Allies produce 60 per cent, of hemp, and from 60 per cent, to 70 per cent, of silk. You can hardly call rubber a textile, but we control 75 per cent. The signing of peace will not avert the consequences of war. We must take some means —I am not at present prepared to say what means—to ensure that Germany does not have free access to the raw materials that are controlled by Great Britain and our Allies. I know that there are many practical difficulties, but I hope that something will be arrived at to control them effectively. It has been my lot, for many weary days, to listen to the evidence of expert business men in various parts of the country in order to get their ideas. I am not one of those who believe that any superman exists in any trade, or connection of trades, who has more knowledge than everybody else. We have been getting the opinion of all these men of business in order to devise some sort of policy for the Government, and it is extraordinary the diversity of views one hears expressed. When after examining many hundreds of firms, we have arrived at our conclusions, those conclusions will be sent forward to the Government for their consideration. Unless something of this sort is adopted by us, instead of being friendly with our Allies after the War, there will be such a state of soreness that we shall be almost immediately turned into enemies. The German Government, all the time, has taken care to try to point out—it is untrue, but still they have been saying it—that we are allowing our Allies to do all the fighting and that we are getting all the benefits, including the higher shipping rates. After the War they will point to us and say, "England, Great Britain, and her Colonies had no invasion, none of their trade organisation was destroyed, and now they are probably getting the greater part of the trade that you have lost, and that is all you have got out of the War." In fact, the Allies will get the bone and the Germans will get all the meat, and create disunion amongst us which will last for many years. I should like to ask hon. Members not to come to a definite conclusion as to the resolutions of this Paris Conference. It will take a long while to decide what to do, and I trust the people will take into consideration the altered conditions in existence to-day, and reserve an open mind, and, after all the evidence has been collected and put before them, then, and only then, come to a definite conclusion.

Mr. ROBERTSON

I think many Members must have felt as I have felt, that the very interesting Debate we have had today has been one which it is extremely difficult to focus. I do not think I have ever heard a Debate in which hon. Members spoke from so many different, disparate, and utterly irreconcilable points of view. My hon. Friend the Member for North-East Cornwall (Sir Croydon Marks) stated that the only way to repress a nation such as Germany was to beat her to her knes. With that I thoroughly agree. That is my feeling. All through this Debate the real issue before us was how best to defeat Germany. I subscribe to my hon. Friend's proposition; but why did he go on to say, after declaring what was the only means of doing it, that we really must take some other means of doing something else after the War is over? My hon. Friend seemed to talk himself into a certain temper, and then, having talked himself into that temper, he had to fuse the two sides of his doctrine. What he suggested cannot be done as an economic procedure. The hon. Member who spoke last, if I understand him right—and perhaps I did not—laid it down in one part of his speech that it would be a disadvantage to us if the enemy were to get raw materials from us after the War is over. I understood my hon. Friend to argue that we must not allow Germany to get raw materials from us after the War in keeping with several things said before. Did not my hon. Friend put this proposition: That we must, when this War was over, not allow Germany to get any of the raw material she might get out of the British Empire? Then, in the next breath, he seemed to regard it as a dire calamity that we should get any raw material out of Germany. Surely he cannot have it both ways. Surely our commercial men might be able to divest themselves of this extraordinary habit of talking as if we were doing trade with somebody from a purely philanthropic motive. My hon. Friend never had any such motive. He will not, I am sure, regard that as an offensive statement. He never went into any trading transaction except for the purpose of benefiting himself. Any goods which come into this country from Germany after the War will do so because there are those in this country who want them in order to benefit themselves, and not in order to benefit Germany. And, as my hon. Friend himself has realised that it would be an advantage to Germany to get certain raw material from the British Empire, surely it should not be an insuperable difficulty for him to see that it might be an advantage to us to get some raw material from Germany; and if he can see that, why cannot he acknowledge it? The hopeless confusion into which this Debate has plunged arises primarily out of that habit of regarding a trading transaction as one by which you confer a benefit on the other person. A trading transaction is one in which both sides hope to be benefited. But surely the men of this country know and believe in their hearts that in trading with another country they do not do so for the benefit of that country.

The great difficulty is that the recommendations of the Paris Conference are extraordinarily vague, general, and confusing in themselves. The right hon. Gentleman the Secretary for the Colonies, in the very temperate and conciliatory speech which he delivered some hours ago, put to himself and us that very point. He said, "What do these propositions really amount to?" I welcome the question. I think the only clear answer that the right hon. Gentleman gave was to the effect that they did not amount to very much— a very safe statement indeed. I think it would be going too far to put any strict construction upon them and to take them as something in the nature of a State document, or a treaty, or anything of that sort. They are only recommendations, of no strict construction, and they can be made to amount to nothing at all. First of all, it is intimated that the members of the Conference merely recommend these proposals, as the right hon. Gentleman (Mr. Bonar Law) pointed out, to the favourable consideration of the Governments. They have all stipulated that it is left to the respective Governments to apply the agreement in terms of the trade policy of those Governments. If that means anything at all—and I should be corry to think that the right hon. Gentleman who was a party to the proposals did not intend them to mean something—it means just this: that the free trading member of the Entente will carry out those proposals as far as possible in terms of its Free Trade policy, while the Tariff members of the Entente who have the Most-Favoured-Nation treatment, to give or to withhold, will carry out the pro- posals, if their Governments ratify them, in terms of their tariff policy. The right hon. Gentleman did not suggest to us that for one moment we were committed to any specific line of action whatever, and that is, of course, a complete vindication of the Prime Minister against the virulent attacks of the hon. Gentleman the Member for Blackburn (Mr. Snowden). The pledge that the Prime Minister gave in regard to this Conference was simply to the effect that the delegates could come back to us uncommitted to specific measures. They have come back uncommitted to any specific measures.

A set of recommendations like these which are, as the hon. Member for Blackburn expressly said, nebulous and indefinite, cannot therefore amount to what he alleges—a repudiation of the pledge of the Prime Minister. The hon. Gentleman the Member for Blackburn again and again in that way stultified his own argument, first of all aspersing the document as nebulous and then alleging the Prime Minister had, by an absolutely nebulous document, destroyed a specific pledge to this House. Nothing of the sort has taken place. But a document like this inevitably sets a whole number of persons of different points of view arguing on different lines. My hon. Friend the Member for East Northants (Sir L. Chiozza Money), in his very able and brilliant speech to-day, tried to steer upon an even keel between many of the conflicting ideals of those with whom he is associated. My hon. Friend said the question was what scheme in particular of all the schemes that have been formulated in connection with these recommendations are we really committed to. Of course, he might have said in so many words that we are committed to no one of the schemes, but it remains equally clear that those with whom he acts and with whom apparently he is now in sympathy—those to whom the Paris recommendations are only, as it were, a very partial indication of many of the things they would like to do—all those different schools of people want to do a whole lot of things on the hint of the Paris recommendations to which my hon. Friend the Member for East Northants could never give his approval at all. For instance, my hon. Friend very warmly insisted— Never under these proposals could we propoes to put a tariff on the products of our own Dominions. But he avowed that he had actually seen a proposal to that effect. Where did he see it? Where could he see it save in one of the journals which are advocating continually this uncomprehended policy of economic retaliation on Germany after the War. It is only in that quarter that my hon. Friend could see such a proposal. My hon. Friend, of course, repudiated it, as one knew he would. After repudiating that proposal, he went on to say: Surely after this War we can never dream of putting tariffs on the products of our Allies. Again, that is what I should have expected him to say. I regard that line of policy as an essentially detestable one, but it is involved in the policy of building up a tariff system on such lines as are hoped for by all those who have advocated a tariff system. That is what those who merely generally advocate what they call a trade war will not face. We have heard nothing from them to-day—at any rate the portions of the speeches I have heard did not meet the economic criticisms incurred by all who advocate what they call a policy of economic war or a trade war after the real War is over. I confess that I listened with great astonishment to the hon. Member for East Northants when he spoke of the Germans as having already taken steps for carrying on economic warfare by means of contracts they were placing in various countries. I think my hon. Friend would on any other occasion agree with me if I urged upon him that the use of the word "warfare" as applied to trade is an extremely misleading line of argument. The assumption that there is anything in common between the processes of trade and the processes of war is so absolutely opposed to the facts that any metaphor or any metaphorical line of argument you may found on that basis is certain to land you in fallacy; because if the word "warfare" is to be used in that sense—that is, carrying on the processes of competitive tiade—remember that you are always in a state of civil warfare, in respect of the fact that your own traders are always competing with each other. Is that a happy state of things? You cannot have it both ways. If you are going to say, "We are going to have warfare," and then merely justify that proposition by saying that the Germans are placing contracts wherever they can for raw material all over the world—if that is your whole justification for regarding the great processes of competition between nations as one of warfare, then carry out your metaphor to its proper conclusion and avow that immediately after the War is over we are to be plunged into a state of civil warfare at home, inasmuch as all traders are competing with each other, always have done, and always will.

Sir L. CHIOZZA MONEY

We have it now.

Mr. ROBERTSON

My hon. Friend must know in his heart that no economic question will ever be, served by the use of the metaphor he used. It wholly confuses the subject. I will give the hon. Friend some more serious illustrations. I am bound to say that while I listened with great anxiety to his speech I was unable to draw from it any general notion as to what he was driving at in his economic position—not as regards his suggestions, some of which were very clear. It is very remarkable that in quite a number of his practical proposals he was entirely at one with the hon. Member for Blackburn (Mr. Snowden). They are both State Socialists. I hope that may be a means of bringing them together in other respects, as they are very far from being at one in regard to their feelings towards this War. I do not dispute for a moment the clearness of my hon. Friend's proposal when he urged something in the nature of State Socialism and organisation of the forms of production, an improvement in production of the soil, and so forth. I am not going to discuss those things, because I sympathise so much with his ideals that I should be sorry to seem to clash with him by suggesting that he has no very clear working scheme in view.

Sir L. CHIOZZA MONEY

They are in practice now.

Mr. ROBERTSON

He seemed to me to use a very dangerous term when he controverted what was said by the right hon. and learned Member for Waltham-stow about key industries. The right hon. and learned Gentleman had said that surely of all key industries the most notable in the present war was that of shipping. I suppose the rational meaning of the phrase "key industry" is an industry upon which other industries turn. I am not sure that shipping is the most typical key industry in that sense.

Sir L. CHIOZZA MONEY

He said it was.

Mr. ROBERTSON

Quite so; but in the practical sense, which surely is that a great many other industries turn upon it. That is a reasonable use of the words. If my hon. Friend the Member for East North-ants is going to be purist enough to object to that use of the phrase "a key industry," what are we to say of the phrase he himself applied to shipping. He said that British shipping, instead of being a key industry to this country, was the "Achilles heel" of this country, and several hon. Members cheered him. If he is going to be a purist of purists, what does the "Achilles heel" metaphor mean? It is the source of death.

Sir L. CHIOZZA MONEY

In certain circumstances, as in the case of Achilles.

Mr. ROBERTSON

There is only one sense in which the heel of Achilles becomes a significant metaphor at all.

Sir L. CHIOZZA MONEY

When you hit the heel!

Mr. ROBERTSON

Quite so. When we are told that shipping is the Achilles heel of this country we are told that it is by shipping that Great Britain is going to have her fatal blow as a nation. If my hon. Friend did not mean that, let him drop the habit of purist criticism of other people's use of metaphors. Of course, the metaphor was absurd. I have really more serious points upon which to join issue with my hon. Friend, and I am glad to be able to discuss them purely as economic issues without raising any reproaches as to any political elements involved. I heard my hon. Friend, with great astonishment, arguing that it was only through neglect, through our own remissness, and so forth, that we were behind Germany in the production of iron and steel, and I think he added margarine. He seemed to think that our remissness in the matter of margarine was as great as our remissness in the matter of iron and steel.

Sir L. CHIOZZA MONEY

It is a very serious matter.

Mr. ROBERTSON

So is everything.

Sir L. CHIOZZA MONEY

It is especially serious.

Mr. ROBERTSON

There was a time when my hon. Friend would have seen that it was not the economic ideal of every nation to manufacture everything. If you are going to bring in margarine, iron, and steel I do not see why you should draw the line at anything. There is nothing which will not come in useful at some time. I have no doubt we should have done better if we had more margarine, but —speaking as a consumer of margarine in War time—there are things which I would have missed more myself.

Sir L. CHIOZZA MONEY

May I take the opportunity of informing the right hon. Gentleman that several expert committees have been appointed to deal with the subject because of its great seriousness. It is serious as respects shipping, which he also, I think, rather misunderstood, and in various other directions. If he makes inquiry he will find that I am very well informed on that subject.

Mr. ROBERTSON

I know my hon. Friend is well informed on the points he discusses. I know he usually is, and I have often turned to him for information. But no amount of statement of that sort throws any light for me on the proposition he has just committed himself to. Perhaps we had better come to the more serious side of the matter, which, after all, is iron and steel. If his proposition meant anything at all, it meant that there is just exactly as much resources in this country in the way of ores as there is in Germany.

Sir L. CHIOZZA MONEY

Germany imports a large quantity of ore.

Mr. ROBERTSON

Yes, and so do we, but will my hon. Friend, with his undoubtedly abundant information, dispute this, that in point of ores Germany is richer than this country?

Sir L. CHIOZZA MONEY

In certain ores, not all.

Mr. ROBERTSON

In the total quantity of ores. Of course, my hon. Friend will not dispute it. He is well aware that Germany is on the whole considerably richer in the total quantity of iron ores than this country is.

Sir L. CHIOZZA MONEY

Not effectively: not in economic effect.

10.0 P.M.

Mr. ROBERTSON

I think there was a time when my hon. Friend entirely agreed with me that the development of her iron ores was the main foundation of the modern economic prosperity of Germany. I am afraid he has forgotten some of the opinions he held a few years ago.

Sir L. CHIOZZA MONEY

On the contrary, I clearly said then what I say now on this ore question.

Mr. ROBERTSON

Let us come to another aspect of the matter. My hon. Friend developed an argument to the effect that this country was a much more important market to Germany, if I understand him aright, than Germany is to us. But again I could see no kind of connection between the evidence he gave and the proposition. It is perfectly true that we bought more things, that is, received more things, from Germany than Germany received from us. Need I go through the form of reminding my hon. Friend of the circular process of international trade? I know I need not. When he nods assent to that I know he is granting all that I am disposed to assert in respect of the irrelevance of that proposition of his. There is no point in telling us that Germany sent us more things than she took from us. My hon. Friend knows perfectly-well that for every pound's worth of goods we take from Germany the account is balanced somehow, and that there is a perpetual circular process, a reciprocity of trade, in which the benefits gained are mutual. Surely he need not be told, what one has apparently to tell some other hon. Members now sitting around him, that in any act of trade between any two countries each country enters into it because it expects to benefit and each trader expects to benefit. Again, I consider that the whole of that line of my hon. Friend's argument is irrelevant. But what impressed me most in his speech was this: there are two vital propositions that he ought to prove if he is going to give any kind of serious significance to the recommendations of the Paris Conference, One of these propositions is this, that you can, as he says, inflict economic punishment without injuring yourself. That is for me a vital question. I am not in the least going to appeal to-night to anything in the nature of international good feeling, except in so far as it exists between us and our Allies, and there, I suppose, I shall have all Members of the House with me. I am not for a moment going to suggest that anything is to be gained by taking up a humane attitude towards Germany. I am not conscious of any humane feeling in that direction myself. But it does not matter in the least whether you love or hate—it does not matter in the slightest degree what are the feelings with which you enter on a given fiscal policy. The results of that fiscal policy are in terms of economic law, and not of your feelings at all. That is where it was incumbent upon him to show that you could enter upon a fiscal policy which will injure German trade without injuring ours, and that I defy him to show. He may, with his knowledge and his ingenuity, take up such a case as spelter. He took up the case of spelter, and said the Germans were getting an advantage through the use of Australian spelter. But he did not show that even by refusing to let them get Australian spelter you had done them any profound harm. It did not occur to him to attempt to show that the Germans could not get spelter elsewhere. That is no step towards proving or making good the suggestion that you can have a fiscal policy which will injure the enemy's trade and not injure your own. He knew he had none to give in respect of that. He will forgive mc for addressing myself to his speech, because it really is by far the most important of those I have heard to-day. I hope he will not suppose that I am speaking disparagingly, but when we are in a discussion of this sort we want to get at some economic result. What we are discussing is a point of economic science, and it is natural and it is right that I should address myself to the speech of my hon. Friend because he is the one, of those who have spoken, who has by far the widest economic knowledge —I mean of those who have spoken in that sense—and he is the best able to appreciate any economic argument that I urge.

The other important point is this: I understand it was brought forward by my right hon. Friend (Sir J. Simon). If you start any such policy as seems to be hazily indicated in these nebulous recommendations of the Paris Conference, if you start on some vague policy of Protection which is to meet more or less all the conflicting and divergent schools of sentiment which are now raging around us in terms of war feeling—if you are to do any of these things you ought to consider how you are going to affect the trade of neutrals, and my hon. Friend quoted a phrase from the right hon. Gentleman to the effect that if you start on a boycott against a State you call enemy, meaning, I presume, Germany—I do not suppose he was thinking of Turkey—and if you further give preferences to the trade of our Dominions and the trade of the Allies, whether on the same footing or in different degrees, you will drive the neutrals into the arms of Germany and Germany into the arms of the neutrals. That is an economic fact that is really relevant. There is no use spending our time in expressing our sentiments in regard to the War. I believe I might cope with even some hon. Members opposite in expressing my sense of abhorrence of this spirit, the policy, the feeling, the whole drift of modern German evolution. I could easily compete with some of my hon. Friends on that line. But what has that to do with the question? The question is, What will be the effect of a certain economic policy entered upon on certain hazily indicated lines? And I defy my hon. Friend, at his leisure, speaking under the best possible conditions in the way of reflection—I am not speaking sardonically, but in a spirit of perfect good will to my hon. Friend, who is an old friend and comrade and fellow fighter of mine, towards whom I shall never feel anything—

Sir L. CHIOZZA MONEY

You are not addressing yourself to pro-Germans.

Mr. ROBERTSON

My hon. Friend knows I am not. I have indicated that my feelings are as strong against Germany as those of anyone else here. But when he went on to say that Free Trade with Germany after the War would be intolerable, was he talking in an economic sense? I quite agree when you say that if there is to be a confederation or a fraternal embracing between us and our former enemies after the War it would be utterly repugnant; and I quite agree it will never take place. I have the greatest difficulty in understanding how traders are going to come together again. I am not afraid of all these processes of flooding this country with German goods by way of a trade transaction. The Secretary of State for the Colonies seemed to have that fear on his mind very much. I am not afraid of this country being flooded with German goods after the War. Who is going to buy them? Who is going to ask for them? You need be in no great alarm about the rapid resumption of ordinary trade between the two countries. They probably hate you as much as you hate them. Leaving it at that, the question is, what is to be the effect of your policy oh neutrals. May I briefly indicate what is going to happen? You start a tariff in which you may or may not put your Colonies and your Allies on one footing. In that connection the right hon. Gentleman will have a great deal of trouble with those associated with him. Some will want to protect home agriculture against Colonial agriculture; some will want to protect Colonial trade against that of the Allies. You are contemplating a tariff of five degrees—a tariff to protect home trade, to let in the Dominions on the first floor, the Allies on the second floor, the better neutrals on the third floor, the worst neutrals on the fourth floor, and the worst enemy, I suppose, last. There may be a middling enemy to come in between. I wish the Secretary of State for the Colonies joy of the introduction of such a Tariff Bill if it falls to his lot to introduce it from that side of the House in the years just ahead of us. That is what is going to happen. Under a tariff of that kind, whether of three complexions or five, if you are going to give special terms to Allies and Dominions as compared with neutrals and enemies, you will have your enemies giving the best terms to the neutrals and getting their trade, and you will lose it.

I do not dispute that you can do that if you are going to set aside all concern for opulence; if you are going to make the one mistake that Adam Smith made, the one blunder that he made, when he said that defence is of more importance than opulence—although he later refuted that doctrine by showing that opulence was the sinews of defence. The old proposition was, "If you want opulence, have a tariff." The new ground is to be "If you want defence, never mind opulence, if you want defence have a tariff, be poor and strong with a tariff." If that is to be the new doctrine it will be rather more interesting a Debate than the old one. The old one was a little exhausted. I will grant that such a position may be taken up by patriotic statesmen, and I have no doubt whatever of the patriotism of mind and spirit in which the right hon. Gentleman (Mr. Bonar Law) faces the question. He told us in so many words that we shall have to face this question from an entirely new point of view. I did not quite follow him there, because this entirely new point of view is a point of view from a forgotten page of Adam Smith. There is nothing new in the point of view of preferring defence to opulence.

An HON. MEMBER

made a remark which was inaudible in the Reporters' Gallery.

Mr. ROBERTSON

The old advocates of a tariff now tell us that it meant poverty. That is what I gathered from the observation. We are having new points of view with a vengeance. Are we going to get strength by that means? Are we going to get strength by taking up an economic line of policy that will create on the one hand a sort of Zollverein among those who are Allies, within the Entente, and a Zollverein not merely between our present enemies, but between them joined up with all the neutral States of the world? Where is your strength in that? Somebody has been impugning the common sense of Free Traders because they were thinking of commercial well-being at such a time as the present. If they were thinking only of commercial well-being their common sense might be impugned, but I impugn the common sense of those who tell us they are going to advocate a policy which will have the effects I have described. Let me, in all seriousness, urge upon the Secretary for the Colonies to face these consequences of the Paris Conference, if we are going to have any consequences at all. The right hon. Gentleman smiles. Perhaps he thinks that these recommendations are not meant to have any consequences at all.

Mr. BONAR LAW

I smiled because I have learned that it is better not to interrupt.

Mr. ROBERTSON

The right hon. Gentleman knows that I would give way to him so that he might make the most appropriate reply he can. It follows in evitably from anything like a consistent application of a policy of waging what you call a trade war in time of peace that you will be on good terms with your Allies—

Major HUNT

Why not?

Mr. ROBERTSON

I leave the hon. Member to settle that with the hon. Member for Northants. They are both Germany smashers, and they must hammer out their policy. I commit myself to this proposition—that if you set up that system you will drive the neutrals into the arms of Germany, and as you give the neutrals worse terms, Germany will give them better term,, and she will enter into a trade alliance with them. Probably hon. Members may be aware of the fact that there is a very strong new movement in the United States, instigated by the "Times" newspaper, they tell us, for having a Customs union for North and South America against the rest of the world. That combination would come in against you. You would have Germany being on good terms with these neutrals while you would terms with these neutrals while you would be on bad terms with those neutrals, fiseally speaking, because if you were to give better terms to your Allies and your colonies you could not give better terms to the neutrals.

An HON MEMBER

made a remark which was inaudible in the Reporters' Gallery.

Mr. ROBERTSON

If we are to give Free Trade all round, then there is no dispute. I do not put this matter forward on any ground of mere idealism. I put it on the ground of national interest, and I maintain that any consistent development of the lines of policy I have indicated will mean the gravest blow ever struck at British trade. These recommendations really arose—as the hon. Member for Blackburn perceived, though he could not make use of the fact—out of a complete misconception of what is happening on the Continent. These recommendations avow at the outset that they are formulated because the enemy were understood to be preparing certain lines of trade policy there on a par with these. I have no doubt the right hon. Gentleman will remember that those were the grounds on which the Paris Conference took action, and it is by way of guarding against that line of trade policy that these recommendations are formulated.

Mr. PRINGLE

He said he had no evidence for that.

Mr. ROBERTSON

I had not the pleasure of hearing the speech, and I will not attempt to mediate between the contending parties on this point.

If there is anything certain about what is going on in Germany it is certain that the whole of the German line of planning economic war after the War has been broken down as completely as anything of the sort ever did. It has broken down absolutely as far as our knowledge goes. Surely my hon. Friend (Sir Leo Chiozza Money) ought to be glad to hear it. Surely he ought to be pleased to know that conspiracies against economic law will always be defeated. I trust that the right hon. Gentleman the Secretary for the Colonies will get ultimately out of this particular mess, in a way that I will indicate, though I confess that I do not see how he is going to get out of the other mess which he has made for himself in West Africa. Because, while he has set his hand to this solemn declaration that the purpose of the Allies is to secure all the rights of neutral countries and to secure the maintenance of sound commercial practice everywhere, the right hon. Gentleman has dictated to the Crown Colonies of West Africa a policy of export duty on palm kernels which will hit not the Germans merely, but the French and Russians. The export duty will hit everybody indiscriminately in the interests of British trade. Ostensibly it is directed against Germany, but it strikes equally against France. That is the first action which the British Government has taken after the Paris Conference. I do not see how my right hon. Friend is going to get out of that particular entanglement save, perhaps, by acceding to the request likely to be made to us by the Allies to leave well alone. His first action is going to recoil upon our own Allies. They may be perhaps a little sorry that they ever urged this Paris Conference at all. My view of the Paris Conference in a few words is this: These absurd proposals were first made in Germany, and these idle menaces of incompetent Germans created a great deal of indignation and apprehension in allied countries. The Conference was held in order to give some scope for the starting of one idle menace as against the other by those of our own country and of the Allies who thought that the German menace should be met in that fashion. Seeing that the German proposals have all broken down, it seems that the best thing that can happen to us and to these recommendations is that, the ground for the recommendations having been taken away, the recommendations should follow the ground that gave rise to them.

Mr. LESLIE SCOTT

I am sure that the House has listened with great interest to the right hon. embodiment of economic policy who has just spoken, but do we really think that the country as a whole thinks that the economic policies that we discussed before the War are to be treated by us on one side or other as the guide for the solution of the problem which now faces us? I have listened with great interest to almost the whole of this Debate, and the feature of it that has struck me the whole time is that the greater part of it has been out of sympathy with the prevailing opinion of the country at large. I do not believe that the country at large has much doubt about these Paris Resolutions. The last speaker was pleased to suggest, after a violent speech in opposition to them, that they mean nothing. The people at large, I believe, regard them as a sound embodiment of an agreement to attempt the attainment of certain definite objects. They do not profess to deal with methods. They only deal with objects. For a moment I want, if I may, to summarise what those objects really are. Does the right hon. Gentleman really feel satisfied with the economic position into which this country has got itself by the principle of laisser faire which has been followed? I am merely talking about Government watchfulness, Government help, and Government organisation. Germany has done all that. We have done nothing. As the result, a state of things has come to exist which was utterly unsatisfactory. I have listened carefully to the Debate, and I believe that, with the exception of the casual reference by the Member for East Northamptonshire (Sir C. Money) and the hon. Member for Gorton (Mr. Hodge), there has not been a single allusion throughout the Debate to our agricultural industry. The fundamental and basic principle of these resolutions, as I understand them, is an agreement by the Allied countries to do everything in their power to develop their own resources so as to make themselves, so far as possible, independent of the enemy Powers. What is the greatest of our national resources, our greatest industry? It is agriculture. Two hundred millions a year in pounds sterling is the total approximate production of British agriculture. It is far and away our greatest industry; yet in this Debate, save for the exceptions I have named, there has been, practically speaking, continuous silence on that subject. But are we to take that as an illustration of the kind of treatment of the subject which, as I understand, was contemplated by those who framed these resolutions? Take for a moment the difference between this country and Germany. In the last few days there has been published a Memorandum on German agriculture, prepared by Mr. Middleton, of the Board of Agriculture, which, to my mind, is pregnant with interest to every Member of the House concerned in this question. It retails the history of German agriculture, and it describes its marvellous progress through the last few decades, at the same time that German industrial progress has been so extraordinary. The two have gone together.

Industry has not been sacrificed to agriculture, but in spite of its enormous development, they have succeeded also, in their agriculture, with Government help on various lines, some of which would commend themselves at once to every Free Trader in the House. I believe that they have succeeded in enormously increasing their agricultural output and their agricultural industry. I will give a figure or two. The population of Germany employed in agriculture is at the rate of just over eighteen persons per 100 acres; in this country it is six per 100 acres. Germany has a population three times as many as we have on the soil. Take their cultivated land. In this country we have a total ratio of acres under clover of 32 per cent., and in Germany it is 60 per cent. The Germans have forty-six acres per 100 growing corn, and we have under twenty. They have ten acres out of 100 growing potatoes, and we have one and a-half. What does those figures mean? Where should we have been in this War had the Gorman submarines been substantially more successful than they have, and had we not been able to cut off their cruisers at once? What is the underlying premise upon which these resolutions are based? Is it not this, that the Allies must join together to see that this unprovoked war is not repeated in the future under circumstances under which we can again be similarly at the mercy of Germany, and possibly under circumstances much less able to resist German attack from the sea by submarines. That is the essential thing, and that being so, surely to take merely this aspect of the question, agriculture, it must be obvious to everybody that it is the business of this country at once to take all possible measures to give the right kind of State assistance as contemplated by these resolutions, whatever they may be, in order to make sure that the agriculture of the country does succeed in producing from the soil of the country something like what is practicable and profitable. Other countries have done it as well as Germany. Denmark has done the same sort of thing. Since 1871 Denmark has increased her total area of cultivated land by 1,000,000 acres or more. It has altered the ratio of acres to arable land from 1,800,000 arable in 1871 and 3,500:00O under grass to, in 1912, 4,500,000 arable and 2,700,000 under grass, and at the same time increased the output for every acre under the plough. Wheat, for instance, has been increased from thirty-four bushels per acre to forty-two, and her stock and dairies have been increased. All that has been done by various measures, different measures from those adopted in Germany, by Government assistance.

The burden of my song upon that is this, that these resolutions passed at Paris do not in themselves predicate any particular method of carrying out the objects laid down. They leave that open. There are many methods of doing it, but can we have any doubt that the resolutions saying that that object ought to be attained are resolutions we ought all to support. Just think for a moment where we are in this matter, for this question is typical of all others. Some speakers have suggested in the course of the Debate that there is no need for hurry, and that all these matters can be left till after the War. In regard to agriculture, any attempt to leave, them over until after the War would, in my judgment, be absolutely fatal. I will give the House two figures on that. Before the War, in English and Welsh agriculture, there were 750,000 agricultural workers. Nearly one half of them have joined the forces or gone into munition works. At the end of the War their must be casualties, disablements, and emigration to the extent of at least 100,000. In addition, do we imagine that all the agricultural labourers who joined the forces are likely to return to agriculture? As has been pointed out, their separation allowances are nearly as good as their total wages before the War. Nothing will induce them to come back to the old conditions of life, and you may see that deficit of 100,000 workers increased to 200,000. Where shall we be at that time? During the last forty years 4,000,000 acres of arable land have gone under grass, reducing the output of food in this country to an enormous extent. The one thing we want now is to increase our home-grown food supply. If you have this deficit of labour at the end of the War, where are you going to be? You will merely see the same process repeated, of farmers unable to get labour being forced to put their land under grass. We shall see the very reverse of the object that we want to achieve. We shall see the food supplies of the country still further reduced.

Mr. D. MASON

Will you propose a duty on grain?

Mr. SCOTT

If it is necessary, yes. If the hon. Member had done me the honour of reading the report to which I put my signature, he would have seen that.

Mr. MASON

How will that be consistent with this Memorandum? That will not please Russia, one of our Allies.

Mr. SCOTT

It is absolutely consistent with the Memorandum, which merely says that the Allies undertake by appropriate methods, whatever they may be, to develop their resources. We have got to find the way of doing it. It has got to be done, or else we are faced with ruin in agriculture. We want to see the agricultural population of this country increased, not diminished. Let me put what for want of a better term I may call the happiness and health argument. Does not the hon. Member think that this country will be better off with a larger agricultural population, in receipt of good wages, with good houses, with a career in front of them, liking a country life Would not that be an advantage to this country? That is included in these Paris resolutions as an object which has got to be secured somehow. Instead of discussing academic questions of economic science, about which a right hon. Gentleman just now said only a few Members of the House know anything, let us consider practically how that can be done. Other countries have done it, and if other countries have done it we can do it. Little Denmark has done; it, Germany has done it, and we can do it. In my judgment, unless we tackle this question of developing our agricultural resources in pursuance of these resolutions at once, before the end of 1916, working out our legislative programme in order to do it, we shall be faced with this fact: The one opportunity that we shall have will be when demobilisation comes at the end of the War. In my opinion a great number of soldiers who were previously engaged in urban occupations, or in mining, will, after the War, say, "I am not going back to a shop or a factory or an office; I am not going underground again; I want God's sunshine and God's air; I am going to live above ground in the open air in the country. If I cannot get a good enough living in this country, I am going abroad. That is the danger we have to face from the point of view of the nation—and it is a danger for the nation?

There is another aspect of it: the possibility of the nation failing in its duty to the men. My own view of what is pregnant in the Paris resolutions is the statement of the principle that who have got to develop our resources in order to do rightly and justly by the millions of workers who have gone to fight for us. We cannot see these men come back to this country to the old rates of wages, and the old conditions of life. It is our duty to see that they come back to proper conditions of life. In order to do that I say we must do, in the case of agriculture, what Germany did, give, I do not say high prices, but stability to the industry, so as to plant, in the mind of the farmer a sense of security against the possibility of ruin such as he knew in the 'eighties. Farmers have long memories. They remember wheat at 18s. They know that if they have three bad seasons running it will spell ruin for most of them. In those days landlords had enough money to afford reductions of rent, and to save many a farmer from bankruptcy. Next time it happens I do not believe they will. They will not have the money to do it. If we are going to save our agriculture, and to make it possible for that industry to afford the conditions of life for the men, we must ac" now, and do the necessary things by the industry, in order that the men may have proper conditions of life. If it is to be done, it must be done before demobilisation. It is urgent. If it is not done now, we shall have disaster upon us before we know it. I have ventured to deal with this question of agriculture because of all the industries in this country it is the most vital from, at all events, the point of view of health and the vitality of the stock of the nation, and because it also illustrates, in my humble judgment, the kind of view that ought to be taken of these Paris resolutions. They are self evidently right. I believe the country as a whole accepts them without question or cavil, and that is it only academic disputants in this House who raise this sort of discussion. We have got to put our heads together and find a way of carrying them out. I trust that the Government will carry them out soon.

Mr. HEWINS

I desire to detain the House for a very short time while I recall hon. Members to the subject that is really under discussion—the Paris Resolutions; why they were adopted, and what is meant by their adoption. So far as I know the circumstances, I should like to say that the Prime Minister's declaration will be received with profound satisfaction, not only throughout this country, but in the Empire and amongst our Allies. I should like to emphasise that last statement, "amongst our Allies," because there has been a little doubt during the War as to whether the United Kingdom meant to have any economic policy at all. The point of view from which we ought to regard these Resolutions is really set forth in the division into three parts of the Resolutions themselves — during the War, the transitional period, and after the War. I confess I do not understand at all the views of hon. Gentlemen who have tried, in the course of the discussion this evening, to revive the controversies of some years ago. What on earth have those controversies got to do with us when we are in face of Armageddon? I heard one hon. Gentleman discussing whether the fact of this great struggle would not constitute a special exception to a general case. I have no interest whatever in these problems, regarded from the point of view of the period before the War. Here we are sitting down, as it were, before the wreck of the world, and we are asked to prescribe the principles upon which that world is to be reconstructed. Is any man guilty of such folly as to suppose we are going to rule out any method of dealing with that situation or of criticising any method advanced for dealing with that situation from the point of view which might have been entertained before the War? These resolutions, the Paris Conference itself, originated as a war measure. The point was whether we should during the War sit down together as Allies and decide on the course of procedure -which would weaken or wreck the German economic system, and therefore assist us in winning the War. That was the point when these questions first came before us.

The German economic system is known perfectly well. It rests upon two conditions. The first of those conditions is the organised economic system of the Central Powers as expressed in the commercial treaties which bind them together; and -the second is the control which the Germans exercised over the raw materials produced in the British Empire. If you take the first of those conditions—the commercial treaty system of the Central Powers—it is perfectly obvious that if you can take such steps as will set up another system centred in England and France and the British Empire, you will thereby make the maintenance of the old German system quite impossible. I take it these Resolutions do effect that result. Their cardinal, feature is the Clause regarding the Most-Favoured-Nation treatment. I think some hon. Members have commented on that particular Resolution, and argued as though we were, after the War, to treat the Central Powers generally as we did before the War; but really is that a business proposition? Can you go before the British people at the present time and ask them to offer the same economic terms to Germany and Austria which you would to France and Belgium? Hon. Gentlemen know perfectly well that that proposition will not for one moment be accepted by the people of this country or of any of our Allies. If you cannot do that, and it is politically not possible to do it, you are at once landed in the resolution adopted at the Allied Conference that you should refuse the Most-Favoured treatment to the Central Powers; but, directly you do that, you are obliged to alter the general interpretation of your Most-Favoured-Nation Clause. You are obliged to differentiate against certain Powers. It seems to me, therefore, that you will be forced back, by the circumstances of the case, upon the historic interpretation of the Most-Favoured-cumstances of the case, upon the historic England for hundreds of years.

If you take that important step, really all the other economic consequences follow. How are you going to differentiate against Germany and the Central Powers? All the commercial treaties we have are divided roughly into three parts. In the first place, you have those dealing with the treatment of alien traders in your country; secondly, those dealing with your maritime regulations; and, thirdly, you have those dealing with your tariffs and industrial and commercial regulations. The Paris resolutions cover all those points. They lay down distinctly that you should differentiate against the Central Powers with regard to alien legislation and maritime policy, and in regard to industrial and commercial legislation. Supposing you take that step, it seems to me impossible to doubt that the economic system which is centred in Berlin at the present time must fail. The German system rests upon the Most-Favoured-Nation Clause as interpreted by British international lawyers, and if we alter that the Germans will have to reconstruct their tariff system. That will take them a long time. Is there any avoidance of that? The Liberal Government before the War had approached every single one of our treaty countries with a view to modifying the Most-Favoured-Nation treatment we were giving them, and they did that in pursuance of a resolution adopted at the Imperial Conference in 1911. In view of the state of Imperial opinion, it is quite impossible that the Government of the day could have avoided carrying that resolution to its conclusion.

Now I take the control of metals within the British Empire. It is inconceivable that the British people are going to consent, after the War, to allow our nickel and other essential requisites of production to be exploited by German Jew financial syndicates. That is not a proposition which you can seriously make, and if you cannot do that why talk as the right hon. and learned Member for Walthamstow did just as if we were going to introduce Free Trade with Germany after the War? These resolutions adopted at Paris start with the assumption that the War has really happened. There are certain prohibitions and the Dominions have asked for a preference and it has been granted. Our Allies asked for modifications and they have been granted. The measures you have taken during the War have established every one of the principles set forth in the Paris resolutions, and you cannot assume that when the War is over you can just wipe off the slate all those movements that have taken place during the War which are going to leave a permanent mark upon your commercial system. New trade routes have been opened. We have had to administer the blockade, and for that purpose we have had to set up a most elaborate machinery in the neutral "countries, and that has led to the creation of new interests; and if this House passed unanimously a resolution that we should go back to exactly where we were you cannot as a business proposition do that. The resolutions adopted at Paris assume certain inevitable consequences of what has 'taken place during the War. When these consequences assume that we are going to form an alliance with our present Allies permanently, and that we are going to organise the British Empire, why should we hesitate to go straightforward with our scheme?

Take the case of France. There is a certain amount of feeling amongst old-fashioned Protectionist circles who stand in much the same relation to the French Chamber as our old-fashioned Free Traders who do not want a modification of the old Protectionist system at all. If you look through the classification of French industries you will find that there is no country in the world with whom our interests are so much dovetailed as they are with France. Of all our Allies we can best form a close association with France at the present time. Italy presents great difficulties, because we have allowed Germany to permeate into Italy, where we formerly had a monopoly of trade. You will have German influence to cut us off— German finance, German banks, and all the rest of it. The solution of the problem is largely a financial one. There are also difficulties in the case of Russia. But there is no single country which we recognise as an Ally at the present time in regard to which there are insuperable difficulties in the way of forming a close commercial alliance. We do happen to contain in the British Empire practically all the essential raw material of all the essential industries.

If the right hon. and learned Gentleman the Member for Walthamstow (Sir J. Simon) had had any practical experience of war, he would know that it was the absence of control of these essential industries which led to the loss of tens and hundreds of thousands of lives of young Englishmen. Everybody knows the terrible confusion at the beginning of the War when all our munitions development were held up because we had allowed the control to pass into German hands. I understand that he wishes to resume that situation after the War. I see the hon. Member for Mayo (Mr. Dillon) sitting there. I should like to ask him whether he does not see in this vast scheme of economic organisation some hope for Ireland. I do not think that there is any direction of our national life and interest in which the carrying out of the Paris resolutions will not give us new health and new life and lead us to hope that we shall solve many of the problems which have hitherto baffled us. For these reasons, I welcome the statement of the Prime Minister. I am sure that it will be welcomed throughout the countries of our Allies. I do not think that there is any disposition among those, who have taken any part in the old fiscal controversy to engage again in that weary round of intolerable argument about purely abstract questions of tariffs versus Free Trade. Personally, I have never taken part in that controversy. I absolutely loathe it. It is totally irrelevant to practical issues. I welcome speeches like that of the hon. Member for East Northamptonshire (Sir L. Chiozza Money). Let us put all this on one side and let us forget that intolerable round of insensate argument, and resolve to consider these questions from the point of view of the security of our country and the interests of our Allies. If we apply practical tests I am quite sure that we shall have an ideal before us worthy of the attention of all the Members of this House.

Mr. MACKINDER

In the few minutes that remain I do not want to go into any general question, but I want to deal with a practical point in regard to the transitory measures, the second out of the three blocks of resolutions that are set out in this Paper. It is an important point, as I think, because it does figure in this block of the transitory measures— that is to say, it is a matter that is ripe for immediate attention. The first resolution of that block B deals with the declaration of the Allies and their common determination to re-establish the countries suffering from acts of destruction, and their decision to join in devising means to secure the restoration of those countries. There will be, I take it, a general desire, in the event of the War being so far victorious that we carry it into the occupation of a portion at any rate of the enemies' country, to make our enemies, and especially our chief enemy, pay in the main for the restoration; in other words, if it is in our power, we, having undertaken that those countries shall be made good—the Prime Minister mentioned specially Belgium and Serbia—will endeavour to make the enemy pay the cost. If that is to be so, that must mean an attempt to levy an indemnity upon Germany, at any rate for that purpose. It has been argued that if you do inflict an indemnity upon your enemy as part of the terms of peace then you will stimulate, as compared with your own trade, the industries of the enemy country by the very fact that you are creating, by levying an indemnity from that country, a demand for the goods which are required in order to do the actual rebuilding of the destroyed country.

The point I want to put forward is this, that we ought especially to guard against that, and we ought to guard against it in. this way: we should see to it that, though the interest only doubtless be paid by the Germans, and the money at the time may be raised in the international market; we-should see to it that the Germans, in supplying the articles that are necessary for this reconstruction, shall supply not merely high grade materials but low grade articles, and by the low grade I mean those which contain a large amount of raw material and comparatively little labour, and that they shall not be allowed to regain a market for their high-grade industries where the amount of raw material used is small, and where the amount of labour is very high. The process by which Germany has prepared for this war, as I understand it, has been that she has passed the trade between the two countries through a sieve in such a manner that, while the values of exchange are equal at the point of exchange, the values going from this country to Germany contained comparatively little labour and comparatively much coal and other raw materials of the country, whereas the materials coming from Germany contained a very large amount of labour. Now, however, if we can secure it, we ought to take care that when we inflict an indemnity upon Germany we do not permit of a restoration of those large labour-employing industries, but force Germany to pay in raw materials, in low grade articles—articles in which there is comparatively little labour. That is a matter for a scientific tariff which alone it seems to mo can accomplish it.

Mr. REA (Lord of the Treasury)

I ask leave to withdraw the Motion.

Motion, "That this House do now adjourn," by leave, withdrawn.