STATEMENT BY THE PRIME MINISTER.

HC Deb 21 February 1916 vol 80 cc448-552

Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."

The PRIME MINISTER (Mr. Asquith)

I do not propose to add anything with regard to the general aspect of the present state of the War to what I said less than a week ago in the Debate on the Address. I shall for the short time I occupy the attention of the House confine myself entirely to the financial aspect of the Vote of Credit which I am now about to move. The House will observe, if it looks at the Order Paper, that there are two Votes which I am about to submit to them. One is a Supplementary Vote for the year 1915-16, and the other is the Vote of Credit for the coming financial year 1916–17. In taking these two Votes together, as I ask the House to do, we are following the procedure adopted a year ago. On the 1st of March last year I proposed the Supplementary Vote of Credit for 1914-15 of £37,000,000, and that was immediately followed by the first Vote of Credit in the forthcoming financial year, 1915-16, of £250,000,000. The ways and means necessary to cover the two Votes were granted by the Consolidated Fund (No. 2) Act, 1915, and received the Royal Assent on the 16th March. We propose, as I have said, to follow the same procedure this year. The only material difference, if it be material, being that the two Votes are taken eight days earlier than they were taken last year. It is absolutely necessary to cover the Supplementary Vote of the expiring year by a Consolidated Fund Bill. Without it we could not carry on the public service. But with regard to the second Vote, the original Vote for the year 1916–17, of course it might without legal difficulties be postponed, and a separate discussion taken upon it some day before the 31st March. But I think it is much more convenient to take the two Votes together, as there is a great deal of financial business to be got through—quite apart from these Votes at present—before the 31st March, and of course the House will have ample opportunity before that date of discussing the conduct of the War on the Motion, "That Mr. Speaker do leave the Chair," both on the Army and the Navy Estimates. So much for the question of procedure.

Now I come to the substance of the matter. I will deal, first of all, with the Supplementary Vote of Credit for the current finanical year. This is the sixth Vote of Credit to which I have asked the House to assent in the present year, and if it is approved, it will raise the total of the Votes of Credit granted for 1915-16 to £1,420,000,000, and the total Votes of Credit granted since the outbreak of the War to £1,782,000,000. I may remind the House how that gigantic total is made up. In the financial year 1914–15 we had three Votes of Credit—one or, the 6th August, another on the 1st November, 1914, and a third on 1st March, 1915, making a total of £362,000,000. For the present financial year Ave had, including the sum now asked for, on the 1st March £250,000,000, on the 16th June £250,000,000, on the 20th July £150,000,000, on the 15th September £250,000,000, and on the 10th November £400,000,000. The Vote which is now submitted to the House will add £120,000,000, making for the present financial year the figure I have already given of £1,420,000,000.

In proposing the last Vote of Credit, on the 10th November last year, I estimated that the Vote which I then proposed, £400,000,000, would, after making all the necessary allowances, and estimating that the expenditure was taken at £5,000,000 a day be sufficient to carry on the public service until about the middle of this month of February. The House will naturally wish to know how far and to what extent that forecast has been realised. Before I come to the actual figures, I may remind the House of the distinction which I drew on the 10th November—a very material and important one—between the total issue from the Vote of Credit representing the total payment of all kinds made out of the Vote by the Treasury, whether as final charges or as advances to sub-accountants, and the figures which represent the true adjusted expenditure.

4.0 P.M.

It is, of course, the latter, the true adjusted expenditure, as far as it can be estimated at the present time which is represented, after deducting unexpended balances; and in the category of unexpended balances we have to include, I think, for the first time, American securities which have been purchased, but which have not yet been realised, and which are applied in the form of dollars to meeting the payments in America. It is not until we make these deductions that we can arrive at the actual adjusted expenditure.

After making those allowances, the position at the present moment is as follows: The total amount of the Votes in the form of Votes of Credit up to date, in respect of the current year, is £1,300,000,000. The total sum which has been issued out of the Vote of Credit between the 1st of April, 1915, and Saturday last, 19th February, 1916, has amounted to £1,198,000,000; from which it follows, by subtraction, that the Treasury has still in hand, out of sums voted by Parliament under the heading Votes of Credit, the amount of £102,000,000. That sum, on the basis of the expenditure of £5,000,000 a day, will be sufficient to carry on the public service until about the 10th March—a period appreciably longer than that which I anticipated in November last. Let me turn from the figure that I gave just now as the total sum issued, to the adjusted sum which represents, as far as we can estimate it at pre sent, the true expenditure which has been defrayed in the period in question. The total actual issues from the Votes of Credit between the 1st of April and Saturday last, 19th of February, were £1,198,000,000. If, as on previous occasions, we make allowance for unspent balances in the hands of Army and Navy accounting officers, and for special advances made with a view to financing expenditure which will not come into charge until after the period under review, the total deduction required in order to adjust the account is £65,900,000. The result is that we arrive at an adjusted expenditure for the period in question of £1,132,100,000. That figure represents the best estimate which at present can be framed of our actual out-of-pocket expenditure in the period under review—that is, from the 1st of April until the end of last week.

Mr. JOYNSON-HICKS

made some observations which were inaudible in the Reporters' Gallery.

The PRIME MINISTER

Every allowance has been made. On the last occasion when I addressed the House I pointed out the figures showing the adjusted expenditure on Votes of Credit from the 1st of April to the 6th of November divided into three periods. I will not go into the details, but I will remind the House of what were the figures. From the 1st of April to the 17th of July, 108 days, the adjusted expenditure was £301,000,000. In the second period, from the 18th of July to the 11th of September, fifty-six days, the adjusted expenditure was £198,500,000, and from the 12th of September to the 6th of November, again fifty-six days, the adjusted expenditure was £243,600,000, making a total as between the 1st of April and the 6th of November, 220 days, of an adjusted expenditure of £743,100,000.

I come now to the period from the day following that, the 7th of November, down to Saturday in last week, the 19th February. That represents 105 days with an adjusted expenditure of £389,000,000. It follows that the aggregate for the financial year up to the 19th of February, 325 days, was £1,132,100,000. Taking the daily average rates of expenditure for the period, they work out as follows: From the 1st of April to the 17th of July, at £2,800,000 per day; in the second period, front the 18th of July to the 11th of September, at £3,500,000 per day and in the third period, from the 12th of September to the 6th of November, at £4,350,000 per day. The House will observe, as I think they did then, a very large increase in the daily expenditure as between the second and third of those periods. It rose from £3,500,000 per day in the second period to £4,350,000 per day in the third period. It is, therefore, right to point out, as I think I did at the time, that the figure for that third period was swollen by repayments to the Bank of England for various advances which it had made on behalf of the Government. As I then stated, further liabilities have been incurred by the Bank in respect of further advances to various Powers which have not yet been repaid and which would, in due course, be discharged out of the Vote of Credit. So far, however, it has not been found convenient to repay to the Bank of England any portion of those advances or certain other advances which have been made by them since I last spoke. Consequently the adjusted figure for the period with which I am now dealing—that is, the fourth period, from the 7th of November to the 19th of February—does not include any payment in respect of this liability of the Government to the Bank. In order to make a true comparison we must allow for that fact. If we add what is due to the Bank under that head but has not actually been repaid in the period under review, the daily average expenditure from the 7th of November to the 19th of February does not differ to any substantial extent from the daily average for the immediately preceding period, which was £4,350,000, and the average may be put now as between £4,300,000 and £4,400,000 per day. Of course I am speaking, let it be understood, entirely of expenditure out of the Vote of Credit.

It will be for the convenience of the House that I should give now, in continuation of the figures which I gave on the 10th of November, the chief heads under which this gigantic total expenditure has been incurred. I will give the figures first, and then make one or two comments upon them. First of all I will take, as I did then, grouping them together, Army, Navy and Munitions. From the 1st of April to the 6th of November, 220 days, as I then pointed out, the expenditure under those categories was £517,300,000, and from the 7th of November to the 19th of February, 105 days, or a little less than half the previous number of days, the expenditure has been £317,500,000, or altogether the total from the 1st of April to the 19th of February, 325 days, was £834,800,000. That is the amount which has been defrayed out of the Votes of Credit for the Army and Navy and Munitions. I think I mentioned, speaking on the 10th of November, the Bank of England, and the figure I then gave was £104,000,000. For the reason that I indicated a moment ago, that item of expenditure has not occurred at all during the period now under review, and, on the contrary, we have received £6,000,000 for pre-moratorium bills. Loans to Allied Powers and the Dominions up to the 6th of November amounted, I then stated, to £98,300,000, and they have been followed between the 7th of November and the 19th of February by a further expenditure of £70,600,000, making a total of £168,900,000. The last item, food supplies, railways, etc., from 1st of April to the 6th of November was £23,500,000, and from the 7th of November to the 19th of February £6,900,000, making a total from the 1st of April to the 19th of February of £30,400,000. It is difficult to follow these things in detail, but I will give the aggregate. From the 1st of April to the 6th of November the aggregate, that is out of Votes of Credit, was £743,100,000, and from the 7th of November to the 19th of February £389,000,000, the total from the 1st of April to the 19th of February being £1,132,100,000.

These are very dry figures, not in themselves very instructive, and therefore the House, I hope, will allow me to make one or two comments upon them. First of all, if you take the expenditure on the Army, Navy, and Munitions, the total figure of which for the period from the 7th of November to the 19th of February was £317,500,000, that gives an average for that period just over £3,000,000 per day as the actual expenditure upon Army, Navy, and Munitions. If from this we deduct the normal peace expenditure on the Army and the Navy, which has been taken throughout on the basis of £220,000 a day, the additional or net war expenditure on the Army and Navy Services, including Munitions, comes to £2,780,000 a day over the period we are now considering. This shows, the House will observe, an increase over the corresponding figure for the period from 12th of September to the 6th of November, when the total average expenditure on the Army, the Navy, and Munitions was £2,600,000 a day, or allownig £220,000 for peace expenditure. £2,380,000 a day. In other words, our average daily war expenditure on the Army, the Navy, and Munitions, from the 7th of November to the present day, has gone up £400,000 a day.

The next item upon which I should like to say a word is with regard to loans to Allied Powers and our Dominions out of the Vote of Credit. They show a very substantial increase, having grown, from £98,300,000, on the 6th of November, to £168,900,000. The growth in the rate of expenditure under this category is entirely attributable to the advances to Allies, which have been made directly from the Vote of Credit. The House will also bear in mind that this does not by any means represent the total amount which has been advanced to them—not by any means. It is simply the amount which has been advanced out of the Vote of Credit. That comes to £168,900,000. In addition to advances made directly from the Vote of Credit, there are the advances which I have already mentioned made by the Bank of England at the request of the Government.

Mr. D. MASON

Are those advances or loans to the Allied Powers?

The PRIME MINISTER

I am afraid I do not know the technical distinction between an advance and a loan. No exact total can be given under these two heads, but I think I can assure the House that the item of £423,000,000, given by the Chancellor of the Exchequer in his Budget Statement in September last in respect to advances to the Dominions and Allies, will not be exceeded during the current financial year. But when I say it will not be exceeded, I am afraid it will not fall far short of that colossal sum. So much for the elucidation of the figures of past expenditure.

Let us now turn for a moment to the future. I am sorry to be obliged to detain the House with so much on the question of figures, but it is essential that they should be brought together as a whole, so as to be understood by our own country, by our Dominions, by our Allies, and perhaps by our enemies. I stated a few moments ago that it was anticipated that the funds now in hand would last to about the 10th of March, leaving twenty-one days of the current financial year to be provided for. On the basis which has been adopted hitherto in framing our forecasts for the Vote of Credit, £5,000,000 a day for twenty-one days would require £105,000,000. After what I have stated many hon. Members may say, "Why do you say £5,000,000 a day, the expenditure never having reached, certainly never having exceeded £4,300,000 or £4,400,000?" I will answer that question in a moment. But let me take the provision of £5,000,000 a day as the safe sum which ought to be allowed for. That would bring us to £105,000,000 before we settle up accounts for the current financial year. Notwithstanding that, we thought it advisable to allow a margin, and the Vote has been increased. The sum which I propose to ask the House to vote is £120,000,000, which brings us to the sum required to make up the total allowed for in the Budget Statement of September last—namely, £1,420,000,000. It seems unlikely, and as far as my judgment is of any value I think it is unlikely, that this provision will in fact be required. But in dealing with these vast sums, and having regard to the emergencies which may confront us at any moment, we ought to err, if we err at all, on the side of precaution, and allow a very ample margin for contingencies.

There are two considerations on this point which I would ask those who are tempted to think we are demanding too much to bear in mind. The first is this: It is very uncertain what sums we may have to spend between now and the end of the financial year for purchasing American securities. The securities are paid for in the first instance by money provided out of the Vote of Credit, which consequently, as the House will see, has to bear a large suspense charge in respect of the interval that elapses between the time at which the securities are purchased and the time at which they are or can be converted into dollars to meet expenditure in America. You must make very ample provision for that contingency. The second point is this, tending strongly in the same direction: We hope between now and the end of the financial year to be able to repay substantial sums to the Bank of England in respect of the advances which, as I have already explained, have been made at the request of His Majesty's Government, and which have not yet been repaid to the Bank, and therefore have not yet been brought to charge against the Vote of Credit. Having regard to these considerations, we have thought it wise and prudent to fix the final Supplementary Vote for the year 1915–16 at the sum of £120,000,000.

I think that is all I need say with regard to the first of the two (the Supplementary Vote). It will be convenient, for the reasons I gave in my opening remarks, if I go on to deal with the first Vote, with which we have also to deal to-day, for the ensuing financial year 1916–17, amounting to £300,000,000. This, of course, will be the first Vote of Credit for the financial year 1916–17, and the tenth since the War began. I will not recapitulate the figures I have already given. If this Vote of £300,000,000 for 1916-17 be approved, it will raise the total Vote by way of Votes of Credit since the outbreak of War to £2,082,000,000, which is not only without precedent, but beyond the imagination of any financier in any country who has ever had to deal with any such matters. As regards the probable rate of expenditure out of this new Vote, I can only add to what I have already said that we cannot see at present that it is in any way probable that the expenditure from the Vote of Credit will rise above £5,000,000 a day. So far, as I have shown, it has not on the average gone beyond £4,400,000. I think £5,000,000 is a liberal estimate, and I do not think the Chancellor of the Exchequer is likely to exceed it. At present we are travelling on that basis. On that assumption, the Vote of £300,000,000 will last sixty days—that is to say, from the 1st April to the end of May. As I said before, I have confined myself entirely to the question of figures and estimates.

No Minister has ever asked the House of Commons or any democratic Assembly in the course of less than two years for the sanction of expenditure out of the Votes of Credit approaching, or anywhere approaching, £2,000,000,000; and the House may very reasonably require definite, positive, and categorical assurances that in the expenditure of these enormous sums adequate provision is being made and proper safeguards taken against extravagance and waste. The conduct of war and warlike operations upon such a scale as that which now prevails, and under conditions which could never have been foreseen, either by ourselves or by any other nation, of course gives rise to infinite possibilities of extravagance, carelessness, and actual waste.

The Retrenchment Committee which was appointed with the consent of the Government was confined by the terms of its reference—and I think wisely confined—to civil expenditure, because it was felt that supervision, interference, and inquisition by an outside body with the spending Departments during the stress of the War might hamper and paralyse the efficient conduct of the administration. The Government when they assented to—or, perhaps, insisted upon—that limitation of the reference to the Retrenchment Committee were not insensible to the importance, the vital importance, of providing some efficient and vigilant safeguard against extravagance in the military and naval Departments. The Finance Committee of the Cabinet discussed and considered the matter with great care all through the summer and the autumn of last year, and as a result of their deliberations, for some time past, in the three great spending Departments which are concerned with the prosecution of the War—that is, the Army, the Navy, and the Ministry of Munitions—we have had established and installed Committees—a Committee for each Department—composed of outside persons, men who have had great business experience and authority—in the case of two of these Departments presided over by Cabinet Ministers who have no connection whatsoever with the actual conduct of the Departments themselves. These Committees have week by week, almost day by day, been devoting their energies with, I think, very good results, not, of course, to interfering with administrative responsibility—that must rest with the heads of the Departments and with those who dictate the policy of them—but with taking adequate precautions and care that there should be no avoidable waste, and that whatever was done was done with economy as well as with efficiency.

I do not believe that we could have had better or more practical machinery for securing that the enormous sums which this House is willing, and even eager, to Vote for the successful prosecution of the War, and for the attainment of the end which we have in view, should be expended by the Departments immediately responsible under conditions which will secure that there is no avoidable waste and extravagance. This machinery has now been in operation for a considerable time, and is working, I have every reason to believe, with admirable results. I do not think under the conditions in which we live it would be desirable or even possible to substitute for that Committee anything more efficient, more prompt, and more easily workable. Having myself taken some considerable pains to follow the proceedings of these bodies, and to see what results they have obtained, I can assure the House that, in my opinion, very substantial economies have been effected. The War is now being conducted on this gigantic scale with the enormous resources which Parliament and the country are so willing—and, indeed, so eager—to bestow, so far as expenditure is concerned, under rigorous conditions which we hope and believe will prevent any substantial part of the money that Parliament votes, and the country has to raise by taxation and other means, from being devoted to any other purpose save the effectual and successful prosecution of the War.

I would feel an enormous, and, indeed, overwhelming responsibility, in asking the House of Commons to assent to this gigantic Estimate, and I could not do so, and none of my colleagues could do so, unless we were satisfied, first of all, that we had most carefully explored the ground, and that we were not asking Parliament to Vote a penny more than is required by the exigencies of our cause and the great historic responsibilities which we have taken upon ourselves. We could not ask Parliament to assent to that expenditure unless we were at the same time satisfied that every possible precaution was being taken to see that the money of the taxpayer was flowing exclusively into channels by which, and through which, we can most successfully attain the objects of the War. Having satisfied ourselves of these too things, we should be false to the trust which the nation and Parliament has reposed in us if we did not, in addition to the enormous burden that this country has so willingly undertaken during the past eighteen months, ask them to take upon their shoulders this additional loan, confident as we are—and as we always have been—that the justice of our cause necessitates it; confident also that the country will—as I am certain it will—respond to our call; confident also that our just cause will prevail.

Mr. LOUGH

I desire at once to assure my right hon. Friend the Prime Minister, speaking, I think, the opinion of everyone in this House—and if I may say so, of those who are at present leaving the House—that we have all witnessed with the greatest pleasure the spirit in which my right hon. Friend has commenced this new Session. I think I am right in saying that my right hon. Friend is the only statesman in Europe who occupies the position of Prime Minister of one of the Allied Powers who is in the same position now as when the War commenced. We rejoiced to hear the cheerful statement that he made to us last Tuesday when Parliament opened. He said that he and his colleagues had been having a stocktaking of the position, and we were delighted to hear so good and so cheery an account of it. He said the Allies still held their own well, and that if ever he was a pessimist he would not be one to-day. The House, I think, felt when he made that statement that the right hon. Gentleman, at any rate, is doing what he can—as in the eloquent peroration with which he concluded his speech to-day—doing what in him lies to maintain the liberty of Europe and to provide for the future of civilisation. The House, I am sure, will feel, having said that much, that I have no disposition to criticise the Prime Minister. I have only one complaint to make, and that is, that he is too loyal and too good to some of his colleagues. In the present instance what we are doing is to consider the statement that has been presented to us in a White Paper by the Treasury. If I make a few remarks on that White Paper—its form, and the difficulties which they place us in in the House of Commons—I am not making the slightest reflection on the Prime Minister. On the contrary, perhaps I should say that I am reflecting on my right hon. Friend I now see beside the Prime Minister, the Secretary to the Treasury.

The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu)

I should prefer it.

Mr. LOUGH

And certainly I should prefer it, too; so we are both in agreement there. My right hon. Friend need not be afraid, for the Financial Secretary to the Treasury is quite able to defend himself. In fact, on one occasion last year, when I made a few remarks, those remarks were combatted with such vigour, not to say violence, that I am sure the Financial Secretary afterwards regretted the vigour of his observations. [HON. MEMBERS: "Oh!"] Well, if he has not up to the present regretted it, I think, when he thinks the matter over, he will hereafter regret it. The fault I find with this Paper—because, after all, it is the White Paper we are talking about, and the Estimate that has been presented to us in the White Paper—is that it is constructed to conceal from the House of Commons that which the House ought to know. My complaint against the Prime Minister is that when he finds any of his colleagues have a leaky vessel in which they are going to bring up some proposal to Parliament, instead of saying to them, "Get your vessel repaired, and bring it up in proper form," he says, "I will bring it before the House." I say that, against the authority of the Prime Minister, especially in view of the great services he is rendering, the House of Commons is quite helpless, because any one of us will do practically anything the Prime Minister asks us. I set aside the words of the Prime Minister to-day—[HON. MEMBERS: "NO, no!"]—for the moment. I want the House to look for a moment at the way the Treasury is doing its business in this most vital matter. I complain very much about the great exaggeration of the cost of the War which the Treasury has put in circulation, especially through the mouth of the Prime Minister. Let us take one of the Votes to illustrate my statement, and so refresh the memory of the House. It was on 15th September that we first heard the statement that the War was costing £5,000,000 a day. There was no Vote to justify that statement.

The PRIME MINISTER

There was.

The CHANCELLOR of the EXCHEQUER (Mr. McKenna)

What was the exact statement?

Mr. LOUGH

That the expenditure would not exceed £5,000,000 a day. When a figure like that is mentioned from the Treasury Bench we assume that it is pretty close. On that day when that statement was put forward by the Treasury there was no expenditure in excess of £3,500,000 a day.

Mr. McKENNA

That is under the Vote of Credit; the other is the total expenditure.

Mr. LOUGH

The total expenditure does not really touch the whole item. There has never been anything like an expenditure of £5,000,000 a day. Again, in November, £5,000,000 a day was referred to. It was said to be a safe estimate, and the outside figure that the expenditure was likely to reach. Again it is not reached. It is only £4,300,000, or £700,000 short. The Prime Minister said that he rather trembled at mentioning this figure to the House, and rather trembled at the amount of the Vote he brought forward. Now he is bringing up a larger Vote—£420,000,000! He says that that large figure which he has mentioned has never been reached before. I would call attention to one other feature of the situation. In November it was estimated that the Vote of Credit would only last till the middle of February. Now the Prime Minister has told us it will reach till 10th March, so that these vast Votes, which, I believe, are brought in to deprive the House of Commons of its right of criticism, are much larger than is necessary. I would like to make one or two remarks about this £5,000,000 a day statement. If it were true it would not be a judicious statement to make, and I want to suggest to the right hon. Gentleman who represents the Treasury that he ought really to consider whether it would not be better to give us as moderate an estimate as he possibly can, rather than an exaggerated statement which he cannot make good.

Mr. McKENNA

It is strictly accurate.

Mr. LOUGH

made an observation which was not audible in the Reporters' Gallery.

Mr. McKENNA

If you do not dispute it, do not assert it.

Mr. LOUGH

Certainly I dispute it.

Mr. McKENNA

Five million pounds is the total expenditure, including Civil Service Estimates and expenditure on debt. The other expenditure is expenditure on Votes of Credit. The expenditure on Civil Service Estimates and expenditure on debt come to £500,000 a day. If you add that to the £4,500,000, you will get £5,000,000.

Mr. LOUGH

I am delighted the right hon. Gentleman has been able to make his defence, because I am satisfied the expenditure has never reached £5,000,000 a day. He says that if you add £500,000 to the £4,500,000 you will get up to the 5,000,000, but that only applies to the last hundred days. I am speaking of the whole year, and I do suggest it would be better for him to give us a moderate statement of the actual expenditure, rather than an exaggerated one. It is impolitic to make these exaggerated statements, which depress our own people and delight the enemy. What can be more delightful to the enemy forces than to read of these statements I We have already pushed the expenditure up to £5,000,000 a day, and then the public outside and the newspapers go further. We have all seen the statement that the expenditure is probably now nearly £6,000,000, whereas the truth is it has never reached the figure put forward by the Treasury. There is a good deal of panic about the expenditure, which really has been brought about by the Treasury. I greatly deprecate it. Why are proposals constantly put forward in the newspapers to increase revenue? A universal tariff is suggested. A blockade of our imports is suggested, and, indeed, in some cases has been put into execution. Suggestions are made that would destroy existing industries, and prevent new industries from being established. All this has sprung up out of the panic created by these exaggerated statements. Just to make good my case in reply to the Chancellor of the Exchequer, let me point out that the Prime Minister has brought forward a Vote of Credit to-day which makes the total of the Votes of Credit this year £1,420,000,000. I would ask my right hon. Friend whether I am not right in saying that the only addition made to that for the expenditure this year is about £130,000,000 or £140,000,000 for the ordinary expenditure less the expenditure on the Army and Navy? My right hon. Friend assents to that.

Mr. McKENNA

No.

Mr. LOUGH

Surely the right hon. Gentleman will admit that the total expenditure is only £1,560,000,000, or thereabouts, for the year! Five million pounds a day would be £1,825,000,000.

Mr. McKENNA

When was it said that the expenditure was going to average £5,000,000 a day?

Mr. PRINGLE

Do not ask him to go over it again.

Mr. LOUGH

I admit these words were not used. I never said it was stated that it would be £5,000,000 a day for the whole period of the year, but I would point out that there has been no month or week in which it has been £5,000,000 a day. I deprecate altogether this giving of the expenditure per day. I sometimes wonder where the Chancellor of the Exchequer got it, and I have come to the conclusion that it is a relic of his old and happier Bar days which he has brought down to the House of Commons. When a great case is going on at the Bar, I believe, there is a refresher paid to counsel of 250 guineas or so a day, and all the expenses go on with the refresher, and so they say the case is costing £1,000 or £2,000 a day. And now my right hon. Friend is talking of the cost of this War, and saying that it is costing £5,000,000 a day. It does a great deal of harm. I would like to be allowed to finish my little calculation in which I have been interrupted twice by the right hon. Gentleman. The total figure for the year is about £1,560,000,000, but that includes £423,000,000 of loans, as we heard to-day and that brings the expenditure on the War at once down to about £1,140,000,000 or £1,150,000,000. I have seen the figure of £2,000,000,000 previously suggested. Now when we come to what I earnestly believe to be the end of the first period of the War, it has only been half what is calculated. Our total expenditure, then, is about £1,100,000,000.

Then what has been done with regard to expenditure? The House pressed the Government to put on new taxes earlier than they did. I quite agree that the present Chancellor of the Exchequer, when he took up the duties of his high office, to a certain extent did fulfil the anticipation of the House in that respect, and he put on a heavy Income Tax such as this country has never seen before, and the result is this year he will get £320,000,000 towards the cost. Perhaps that is conservative, and I should not wonder if the total reaches £350,000,000. That only leaves about £800,000,000 to be borrowed. That is a gigantic sum, far more than this House ought lightly to undertake. I believe if we had not spoken of £5,000,000, £3,000,000 would have been regarded as a tremendous sum to mention. There is no other nation which could undertake such an expenditure, but it is a very different thing to borrow £800,000,000 and having to borrow £1,800,000,000. That is the position, and we see nothing in the future which will raise the cost materially. There was a statement published, I believe, last week, which was only a repetition of what was said on 15th December—that our total dead-weight debt at the end of the year would be £2,200,000,000. Take off £700,000,000, or, I will say £640,000,000, and then the debt is only about £1,600,000,000. Then take off the loans to the Allies, not only for this year, but for the first half-year, and you have to take off another £600,000,000 or £700,000,000, and so you get to the more modest, but still gigantic, figure I have mentioned. These figures are sufficiently great to satisfy anybody.

Mr. D. MASON

I think the right hon. Gentleman forgets that the floating debt is about £400,000,000.

Mr. LOUGH

The floating debt is a passing thing.

An HON. MEMBER

Where does it pass?

Mr. LOUGH

It will have to be consolidated. There have been the advances made to the Allies. Does not my right hon. Friend believe that when the War is over they will be put into the consolidated debt? That is probably going to be made good. Now, I believe, the House recognises that not only is the amount exaggerated, but the loans and capital expenditure are too much mixed up with the ordinary expenditure, and I would appeal to my right hon. Friend really seriously to consider whether the statement might not be made in a really different form. After all, these are loans to the Allies and Dominions. It is a very curious fact to notice that these loans are not more than we give in normal years of peace. I do think an attempt might be made to keep that part of the expenditure by loan which will probably be recovered separate from the actual expenditure on the War. I would like to give one reason which appeals to me. I think the words casually used in this House about these loans might be taken up hereafter against us, and it might be said that they were never intended to be loans, but a free gift. I think it is a great pity that that should be the case. I think they should be treated as loans, and certainly, because this is not the only service which this country is rendering in the War. We are using our gigantic Army and Navy and doing everything to make the loans a good asset. I do think that would be a good reason for a more careful separation of these forms of expenditure, and for giving them to the House of Commons in a different shape.

Really the reason I rose was to make an appeal on behalf of the House of Commons. The effect of the statements that are presented to us is that the control of the House of Commons on the expenditure of the nation has been absolutely destroyed. I know that before the War steps were taken in this direction. The House of Commons had almost lost its control on the national expenditure, and I greatly deplored it should be so, but I know in time of war it would be hard to give proper or complete control to the House of Commons. The Government, however, is maintaining complete secrecy in regard to all expenditure connected with the War. The merits of secrecy are greatly exaggerated. For instance, why, after three or six months have passed, should not the House of Commons be allowed to examine some of the expenditure? Look at the difficulty in which we are placed. Suppose I have some example of extravagance, I know nothing about it. It is only rumour, gossip, that I have heard, yet I am a Member of the House of Commons, and there are no means by which I can get at the truth. I will take one example of the stories I have heard with regard to the purchase of hay. A friend of mine was taking a ticket at a little country station, and the stationmaster said, "Here is a funny thing. My friend said, "What is it?" The stationmaster pointed to six or seven military men under an officer and two noncommissioned officers. There was also a lady typist. A machine came for packing hay. They had been there a fortnight, but no hay had come. I heard another story about hay at a place not 40 miles from London. It was the sowing season. I heard this from a farmer. The hay was all bought, and suddenly the farmers got an order to take it to the station. They had to take their horses away from sowing wheat and use them for carting the hay. I heard at the very same station that there were some hundreds of motor lorries and thousands of horses belonging to the Army being exercised daily.

5.0 P.M.

My Friend asked why were those horses and lorries not used, and the answer he received was that they belonged to a different party. I am not going to say that there is a word of truth in those statements, but I know there are many curious stories being told. I heard that the hay had been bought at different prices each month. I do not know whether these statements are true or not, and that is the difficulty the House of Commons has been placed in ever since this War started. The Prime Minister told us that he had appointed a Cabinet Committee to examine expenditure in the Army and Navy. We do not question that the right hon. Gentleman is doing everything in his power in that direction, but that is not the Constitution of this country, which is that the House of Commons shall know all about the expenditure. People pay the taxes passed by this House, and they imagine that we know where the money goes, but we are deceiving the people in this respect. We do not know where the money goes, and we are perfectly helpless. I know that the difficulties are great, and suggestions were made to meet them in the early days of the War. I know it was suggested we should have a closed Session, but I think that is perfect nonsense. There is a supposition that anything upon which the free opinion of the House of Commons is obtained must he published to the four winds.

I appeal to the Prime Minister, as he has been good enough to listen to my remarks, to consider whether, after the War has gone on so long, the time has not come to restore the constitutional control of the House of Commons over the vast expenditure which is going on. I remember a reference made some years ago by a previous Government to a Committee of the House of Commons to consider the expenditure apart from any question of principle. I think something of that kind might be done, and the question of principle with regard to the expenditure might be excluded. The Prime Minister appears to think that this would interrupt work, but I think proper safeguards could be taken against that result. The question might be referred to a large Committee of this House, and they might meet in secret. [Hon. MEMBERS: "No!"] At any rate, I think something ought to be done to enable the House of Commons to control this gigantic expenditure, and we should have some means given to us of seeing that the old securities of the Constitution are preserved. I was delighted with the Prime Minister's statement to-day. I did not believe during the autumn that the expenditure was anything like that which it was stated to be. I believe this country will be able to carry through this vast undertaking, and I was also pleased to hear a cheerful statement of the Prime Minister last week with regard to the general operations, together with his statement that the expenditure is substantially less than he gave us to expect. In regard to these great burdens I appeal to the Prime Minister, and also to the Chancellor of the Exchequer, who knows the case that can be put up for the control of the House of Commons, to consider whether in one shape or another Parliamentary control within certain limits might not be restored.

Mr. D. MASON

The right hon. Gentleman who has just sat down has made a very interesting speech, but I do not propose to follow him in all his calculations. I propose to offer a few observation on the enormous sums which have been voted. In the House of Commons we ought not to pass lightly these enormous sums without being quite certain as to whether we are getting full value for our money, and inquiring whether the conduct of the War is all that it should be. Just as is the case when a client goes to a banker for a vote of credit, the House of Commons is entitled to look into the action of the Government which is asking for so large a sum. When we come to look into the whole conduct of the War and the expenditure of the various Departments connected with the Government, I do not think we find any great cause for satisfaction in any one of those Departments. If we turn to diplomacy I do not think we have any great reason to be proud of our record. If we turn to finance there we find a steadily declining credit. Even upon the great question of the freedom of our voluntary service that principle has been given away, and in face of all these facts I think we are entitled to hesitate and to ask whether it is advisable for us to go on voting these enormous sums. There is not any doubt in our minds as to the justice of our cause, for we are all united in that, but it should not be possible to take these Votes of Credit so easily as they have been given to the present Government

On many points some of us have very grave misgivings. The Prime Minister said rather lightly that the House of Commons voted these large sums willingly, but I think the right hon. Gentleman ought to draw some distinction between the willingness shown with regard to past Votes and the willingness which exists with regard to still further Votes of Credit, and our readiness to proceed merrily on our way while this enormous expenditure is going on. I have grave misgivings as to whether these enormous sums are being properly used, and as to whether every advantage has been taken of opportunities for bringing this War to an honourable conclusion as soon as many of us desire. The Prime Minister, in reply to some questions which I submitted to him the other day certainly gave me a very unsatisfactory answer. I put some questions with regard to certain advances alleged to have been made to Belgium, and the right hon. Gentleman took refuge in the denials which had been made by the Belgium Legation to some other proposition, quite distinct to the one which I submitted to him. On this matter what we ask for is frankness. While we ought not to give away one iota of our just rights, I think we are entitled to know, particularly having regard to this exhaustive and enormous expenditure, what position we stand in. We want to know if there is any truth in these rumours which have been circulated from time to time, and whether there is any possibility of honourably concluding this interminable struggle which seems to be proceeding more or less on the same lines to-day as upon the last occasion when we voted a huge sum of money in this House. Perhaps on another occasion it will be more appropriate to develop that point, but I wish to emphasise at the moment that the willingness which the right hon. Gentleman seemed to think existed by no means exists in the minds of many of us here as to whether this money is being properly spent.

I wish to deal rather with the particular financial position to-day as it stands. The Chancellor of the Exchequer on a former occasion stated what we had to do was to raise a total of £1,590,000,000. He said that £190,000,000 had been expended on the Navy; that our loans to our Allies and the Colonies amounted to £423,000,000; the Army was responsible for £715,000,000, and other miscellaneous items came to £92,000,000; there was £67,000,000 for interest on the Debt, and other services took £103,000,000, making a total of £1,590,000,000. For this purpose we are now being asked to pass another huge Vote of Credit. How are we to finance this enormous sum? What is our position with regard to the raising of the various amounts necessary for the carrying on of the War? There are three methods by which we arc doing it. In the first place, by taxation and loans; secondly, by maintaining our export trade; and thirdly, by living on our capital and selling our available securities. The Prime Minister referred to the organisation of American securities, but he did not very clearly indicate what the amount was, and perhaps in the public interests he will be able to tell us that amount if he thinks it is advisable to do so. It would be most interesting to know what amount of American securities the Government are now holding. In a sense that is a liability that may involve a loss to the taxpayer, and it would be interesting to know what amount is held in suspense by the Government, for it may possibly amount to a very large sum. I assume that these are the three methods by which it is proposed to finance the War. We are certainly raising large sums by taxation and by loans, and we are certainly living on our capital. It is quite evident that if we gradually liquidate our vast holdings in American securities and invest the proceeds from the sale of them in 5 per cent. Exchequer Bonds, using the proceeds to further finance the War, by that means we are gradually affecting an important reserve of this country. This plan is not correcting the exchange. When our valuable securities are exhausted we shall be in the position of attempting to raise the vast sums necessary by maintaining our export trade.

I should like to ask the Prime Minister what he proposes to do when American securities have become exhausted. He will not be in the position that he now is to finance this gigantic sum, because he will have exhausted that reserve. You may be able to establish your credit with the United States, but the position is very grave, because you are not correcting the American exchange, and if you are not able to do that when you are purchasing American securities freely, how can you do it when that security comes to an end? I think these are very important questions for the House of Commons. With regard to maintaining our export trade, that again is affected by this adverse exchange and the withdrawal of a large number of men for the Army from our industrial classes for service abroad. We are entitled to ask, "What are the plans of the Government for the future? "I have already referred to the enormous floating debt of something like £400,000,000. That ought to be refunded, and that will entail a further large loan. One would like to know how the Chancellor of the Exchequer proposes to correct the exchange, to stimulate the export trade, and to refund the floating debt. The right hon. Gentleman says that it would not be relevant to this Debate, but it is relevant in this way, that unless we see some means of financing these enormous credits it is foolish to vote them lightly.

I should like to call attention again to the financial position. I do not know if hon. Members have taken the trouble to study the figures, but they are really alarming, looking at the enormous excess of imports over exports. When one knows that this extravagance is going on in the country, and that there is little or no effort on the part of the Government except by committees passing academic resolutions from time to time, one cannot but say that the Government are not really facing the position or taking any definite measures to improve it. We have often heard of dilution of labour, but the continual dilution of the currency by the action of the Treasury is one of the causes which bring about this unfavourabe exchange, and their panaceas, such as the purchase of American securities, do not go to the root of the evil and do not correct it. The question ought to be faced, and it ought to be grappled with in a more definite way. We may be the richest empire in the world, but even the richest empire in the world cannot indefinitely carry on a war of this gigantic character and finance our Allies almost entirely, as we are doing, besides maintaining a large Army in the field ourselves. We must have regard to what we are facing, and we must have some regard to these problems. Mine may be a voice crying in the wilderness, but I do submit that the Chancellor of the Exchequer has not faced this problem of really getting us out of the difficult position in which we find ourselves. My right hon. Friend treats the matter rather lightly, but I do ask him to give some grave consideration to it. It is no light matter; it is really a serious matter, and is worthy of the consideration of the House. There ought to be some more definite action taken by the Treasury and the Government. If they wish to retain the confidence of this House, they will in some way or other have to face the problem before long.

Sir F. BANBURY

What problem?

Mr. D. MASON

The problem of maintaining our confidence. They come here and ask us to vote these large sums thinking that we shall, as perhaps we are rather inclined to do, vote them automatically; but I can assure them, though they may not be aware of it, that there is a great deal of lack of confidence in them in this House, and they are living in a fool's paradise if they think that we are all delighted with their diplomacy, with their conduct of the War, or with their financing of the War. They probably have no conception of the lack of confidence in them which exists in this House, in the country, and in the Press. They appear to treat the matter lightly, and some of them seem to think that because they have created a Coalition Government they have placated the Opposition. But they may get a rude awakening some day. I venture to suggest that a great deal of the support which they have got has not been so much because of confidence in them as because of loyalty to the country and to the British Constitution itself.

Sir F. BANBURY

It is no doubt a very serious question as to how we are going to obtain the money which we are voting to-day, but that seems to me a question which should be raised on the Budget, and is not one which really concerns us at the present moment. I do not quite share the pleasure of my right hon. Friend (Mr. Lough), who seems to be very pleased because the Vote of Credit is not as large as he thought it might have been. I am very glad the expenditure has been rather under £5,000,000 a day, but I think the Government were quite right in overestimating it, because it would have been a very difficult thing for them if, after asking for a Vote of Credit on a certain estimate, they had had to come down and say that they had under-estimated the expenditure and must ask for a larger sum. Though I do not share the pleasure of my right hon. Friend, I must say that it does seem to me that an expenditure of £2,000,000,000 is very enormous, and, whilst I am quite certain the House will vote this sum with the greatest alacrity, and will be prepared to vote any further sum which may be required for the carrying on of the War, I was very glad to hear from the Prime Minister that at last—I think he said in the late summer or early autumn—he had appointed a Committee, or, rather, three Committees, to supervise the expenditure of the various Departments, and to see that no unnecessary waste or extravagance was incurred. May I ask the right hon. Gentleman if he can give us the names of the three chairmen of those Committees. It was news to me that these Committees had been set up. and it might be useful to various Members of the House who have information as to waste of money or extravagance if they knew the names of the different chairmen, so that they could communicate with them and place their information before them.

Sir JOSEPH WALTON

They were all announced in the House.

Sir F. BANBURY

I did not know it; and, curiously enough, one or two Members came to me and asked me, if I was going to speak, whether I would ask for the names. If they have been already announced, there will be no harm in announcing them again, but there seems to be some doubt about it, though, of course, it does not really very much matter if the Chancellor of the Exchequer will announce them now or when he speaks again. There can be no question that there has been a very serious waste of money. I myself, last Wednesday, drew attention to two cases which had come within my own knowledge where there had been very considerable waste of money. It must be remembered, if the War is going on—and I understood my right hon. Friend to say that it is going to be over in six months—

Mr. LOUGH

I did not say that.

Sir F. BANBURY

I do not like to lay down any time or to venture any opinion, but it cannot be doubted that it will take a very considerable time and that very large sums of money will have to be found again. It is, therefore, of the most vital importance that full value should be obtained for every shilling we spend. Nobody in the House will deny that very large sums of money have been spent and very inadequate value obtained. I am very glad to think that perhaps the hon. Gentleman opposite is a member of one of these Committees as he seems to know who are the chairmen.

Sir J. WALTON

They were issued in response to questions which I put down in each case.

Sir F. BAN BURY

Apparently the hon. Gentleman is not a member of any of the Committees. I am sorry, because perhaps he might have exercised his great talents in securing the necessary economy. Nobody can doubt that the House will grant the money willingly to carry on the War, and the only question is that when the money has been granted it should be spent in a proper and efficient manner. That is a self-evident proposition, and I earnestly hope the Government will consider it. I am afraid that they have not given it that consideration which they ought to have done, and there is a growing feeling, not only on this side of the House but also on the other side of the House, that steps should be taken to secure economy in this direction. There is very much more to be obtained in this way than by setting up a Committee to see that people do not smoke cigarettes or anything of that sort, which appears to be occupying the energy of the War Savings Committee, and I earnestly hope that the Government will give it serious consideration. I do not want to ask any questions which I ought not to ask, but I should like to know whether the House will be informed at some time or another as to the financial result of the purchase of American securities. I do not want to press the right hon. Gentleman on that point now. I myself have always thought that the operation would result in a loss, and my opinion has not changed, but I should like to know. I presume we shall know whether the operation has resulted in a loss or profit, and I think we ought to know it as soon as possible. The Prime Minister, I understood, alluded to the bills which were taken up by the Bank of England at the commencement of the War, I think some £3,000,000, and I understood him to say that a certain proportion of them had been taken up. There, again, I do not want to ask a question if it is not in the interests of the country that it should be answered, but that was a very hazardous operation—I will not say a doubtful operation—and I think the House ought to know eventually whether it has resulted in a very large loss or not, I should like once again to ask the Government to be really very careful in the manner in which they are going to spend these sums of money which I feel sure the House will readily grant.

Sir J. SIMON

I do not desire to follow the right hon. Baronet who has just spoken (Sir F. Banbury) on the general topics to which he has alluded, but I wish to ask the attention of the House for a short time to one aspect of the larger question which is involved in the presentation of these stupendous proposals. The Prime Minister has told us how enormous are the sums which the House is now asked to authorise the spending of, and in authorising such a large expenditure, as I trust we shall unanimously do, it is very necessary to inquire whether there are not ways in which, as matters are now, the practice of the Department is involving serious waste. I will confine myself this afternoon to a very small portion of the part where, I venture to think, the military authorities are acting, not only in a wasteful and uneconomic way, but in flat defiance of the terms of the Act of Parliament. I wish to call attention to some of the methods adopted by military authorities during the Parliamentary recess to secure additions to the Army. As the House knows, the appointed date under the Military Service Act is not yet reached. That date is 2nd March. But it inevitably happens, and it is quite right, I think, that it should happen, that since compulsion is impending, any men who remain who really are slackers should feel in advance the pressure of that impending compulsion. I think it is right that such consequences should follow, and it is the desire of all of us, if there be slackers who have failed to come forward voluntarily without excuse, that the knowledge that compulsion is close upon them should bring them in before the date actually arrives.

But the treatment I complain of is not the treatment of slackers. It is the treatment of men who responded to Lord Derby's call and were rejected. There has been, I am sorry to say, widespread misrepresentation as to the position of these men, and by means of this misrepresentation men have been induced to believe that if they do not come forward again they will be compelled under the Compulsion Act. That is utterly untrue, and it is very unfair to the men who volunteered patriotically when the call was made for volunteers. But it is the more inexcusable, because the proposal that such men should be liable to be compelled under the Compulsion Bill was a proposal that was made in our Debates by the hon. and gallant Member for South Birmingham (Captain Amery). That proposal was debated and resisted by the Government, and rejected by the House. I have heard it said that the hon. and gallant Gentleman in proposing that change in the Bill was making a proposal of which the War Office were not unaware at the time, and with which they sympathised. If the Amendment had been accepted, there would have been nothing more to be said. The Amendment, however, was rejected. But the consequence is that men all over the country—men who offered to enlist and were rejected under Lord Derby's scheme and who, therefore, in truth and in fact are outside any possibility of compulsion—have been told by the military authorities that they are liable to be compelled, and have been, by this means, induced to offer themselves afresh. I really do not think that on this matter, so far as the Act is concerned, there is anything in doubt. The words of the Act are exceedingly simple and plain. They provide, in the First Schedule, that men who have offered themselves for enlistment, and have been rejected since the 14th August last, are not men who have to apply under this Act for exemption, but are excepted from the Act altogether. They are just as much excepted from the Act as are women, or clergymen, or those who are already serving in the Army or the Navy, or people who are not British subjects. The House will observe that the exception necessarily applies to every Derby volunteer, and the date from which it applied was the 14th August, because that was the date of the National Register.

Mr. RUTHERFORD

I should like to ask a ruling as to whether this has anything to do with the Vote of Credit, because if we are going to discuss the Derby scheme groups, and the Military Service Bill over again, I do not know how we shall deal with the Vote of Credit. I thought we were here to say whether we would let the Government have this Vote, and to discuss the expenditure of it.

Mr. DEPUTY-SPEAKER

It seems to be a question of military administration which the Vote of Credit is intended to cover.

Sir J. SIMON

Yes, and I am raising the question in accordance with the principles which govern the proceedings connected with Grants of money by this House. Indeed, there is no other place than the House of Commons where it is possible to secure that men who are being misled by the military authorities shall be given their rights. I was pointing out that this exception applies to every Derby volunteer, because the Derby campaign did not begin until after the 14th August. The Act says nothing whatever about holding a certificate of rejection. It says that a man who has offered himself for enlistment and has been rejected is outside the Act. He is outside the Act equally whether he holds this certificate or that certificate or no certificate at all. Some people were not given certificates. Many were promised them, but were never given them. In many places the explanation was given that the War Office had not sent the forms of certificate in sufficient numbers. It would be intolerable if people are to be deprived of their rights under an Act of Parliament because, forsooth, through no fault of their own, they do not hold a particular certificate. Moreover, the exception applies whether a man was attested or not. It does not say attested men who were afterwards rejected are outside this Act. It says that men who offered to enlist are outside it. Some offered to enlist and were rejected before they were attested. Others offered to enlist, and were attested and were subsequently rejected. But, whichever it may be, they are outside the Act, and the War Office has no right whatever to cut down or qualify or alter that provision in any way whatever. If there is a dispute, as there may be in some cases, as to whether an individual is or is not within the Compulsion Act, that dispute is not to be adjudged by the War Office, or by the recruiting officer, or by any military authority whatever. It is to be adjudged and decided in a Civil Court by the authorities prosecuting a man for failing to turn up when called upon to do so, it being for the man to show that he is under no such obligation.

I am sorry to use language which may seem severe, but I have had so much evidence of what has been happening during the last few weeks that I speak with good warranty when I declare that the proceedings of the military authorities have latterly been wholly inconsistent with these plain provisions, and grave injustice has been done to thousands of innocent patriotic citizens, whose only fault is that they have believed what the military authorities told them. I am not here defending shirkers or slackers at all. But when the hon. and gallant Member for South Birmingham proposed as an Amendment to the Military Service Bill, that men who had come forward under Lord Derby's scheme, and been rejected should none the less be liable to be compelled, his proposal was resisted by the President of the Local Government Board (Mi. Long), who on 20th January said: These men have done their best. They have not been in any sense of the word shirkers. They have done something more than their best, because they have been actual sufferers in consequence of what they have had to undergo, because a man who comes up for admission to the Army and is rejected on the score of medical unfitness has that fact to carry with him as a burden for the rest of his life, unless, happily, another medical examination disposes of it. These men have done all they can. They have been rejected, whether rightly or wrongly, in respect of medical unfitness.… And then the right hon. Gentleman went on to say: We ought not to make suddenly changes which may give rise to the feeling on the part of the men that they are being unfairly or ungenerously treated. It cannot in any circumstances be said of these men that they were shirking their duty. On the whole, the course I would recommend is that the Bill should be allowed to stand as it is. I believe the indirect effect of the Bill will be to bring all these men who want to come in. As regards the small minority who have got their certificates improperly, and who, therefore, are the worst kind of shirkers, all I can say is that if there were any other means by which we could bring them in, I should not hesitate to ask Parliament to give them to us."—[OFFICIAL, REPORT, 20th .January, 1916. cols. 721–2, Vol. LXXVIII.] The criminal law would certainly be available for dealing with people guilty of criminal fraud, and therefore that does not come into this question at all. In spite of the right hon. Gentleman's plain words, in spite of the rejection by the House of the Amendment of the hon. and gallant Gentleman, in spite, too, of the plain words of the Bill, the moment that Bill received the Royal Assent, and when Parliament had dispersed, the military authorities began peremptorily to summon those who had been rejected to undergo further medical examintion. The recruiting officers told them that if they did not come forward again they would be compelled, and an Army Order was issued. The only extract from that Army Order I have ever seen is one quoted in the papers, and is to the effect:— It will be necessary for all men who have already been rejected on medical grounds to be medically examined again unless they can produce Army Form B 2505 (A), or Army Form B 2512 (A), showing the date and cause of rejection. That is quite untrue. The military authorities have no conceivable right to issue Army Orders to amend an Act of Parliament. I heard my right hon. Friend the Under-Secretary for War (Mr. Tennant) say to-day—and no doubt he was entirely innocent of any intention to mislead or deceive in what he stated—heard him say that these Army Orders were really in tended to apply to men who wanted an armlet. What a pity the War Office could not make that a little plainer!

The UNDER-SECRETARY of STATE for WAR (Mr. Tennant)

I tried to.

Sir J. SIMON

I may say that people who have come forward on the strength of that quotation have been told that they ought to attest again. I say further that people who produced these very forms had them taken away from them and were compelled to attest. I want to know whether the Government is going to keep people who have thus been misled against their will as members of the Army? Rejected men who produced these certificates had them taken away from them, and in some cases the certificate was torn up in their presence. They were told that the certificates were not worth the paper they were written on. Some were induced to undergo a further medical examination, in the belief it was merely for the purpose of getting an armlet as rejected men, and by these means rejected men have been added to the Army. It unfortunately happens the answer my right hon. Friend gave on the last day of last Session to the hon. Member for Derby (Mr. Thomas) has contributed to this false impression. I wish to make it quite clear I entirely acquit my right hon. Friend of any deliberate intention to mislead anyone. Everybody who has practical experience of a Government Department knows how difficult it is for those who have even very few questions to answer to get full material and to really understand the reply one is giving. We know, too, that for a year or more my right hon. Friend has had the chief burden in the matter of answering questions, and inevitably he has often had to give the House information with which he has been supplied, but which did not accurately state the facts.

But while I acquit my right hon. Friend, I am quite unable to acquit some of those who have been instructing him to give these answers. It is impossible to believe that the facts I have had brought to my notice during the last fortnight or three weeks from all over the country are the result of some casual or accidental mistakes. They are the result of perfectly deliberate statements which may be traced, I have no doubt, to the highest quarters in the War Office itself. My Tight hon. Friend has said that he is not aware of any answer he has given which misled anyone. But what was his answer? It was that it was necessary for a man who had attested under the Derby scheme to. be re-examined medically. In that he was wrong. It is not necessary. Unhappily that answer was given on the last day of the Session, and therefore the only way in which my right hon. Friend could correct it was to correct it, as he very courteously and frankly did, in correspondence with myself a fortnight later. If he thinks no one has been misled by this answer, I must call his attention to several cases. I do not exaggerate when I say that I have had hundreds of letters about this matter, and no doubt many Members of this House have received many such letters. I think I am well within the truth when I assert that this most serious misunderstanding has brought most serious consequences with it. I am going to give the House and my right hon. Friend one or two examples. Here is a letter from a man at Chesterfield. This is what he says:— The answer which Mr. Tennant gave to Mr. Thomas in the House led everybody to believe that everyone who had been rejected would have to undergo another medical examination or become a conscript. My only son tried to enter the Army direct last November. He was rejected as medically unfit. The doctor remarked at the time, 'This boy is not strong, and if sent into the trenches it will be certain death to him. This gentleman goes on to say:— In view of Mr. Tennant's answer this young man— Incidentally, I may add that he was a young man who had worked his way up from an elementary school to a university— this young man offered himself again as a volunteer, and was promptly accepted. Here is the case of a man at Hampstead. This man was rejected and given the Blue Army Form B 2512 (A)—the only one which the Army says is the correct one. He was given the blue Form endorsed "Not accepted—medically unfit." Nevertheless he was summoned to appear at the White City, and join the Colours on 15th February. He went to inquire at the Town Hall Recruiting Office, Haverstock Hill, when he was told that it was necessary for him to be re-examined. He had to undergo that ordeal again, and the same doctor who examined him before crossed out his previous endorsement and re-endorsed it, "Fit, Class IV." He was handed an armlet and 2s. 9d. was forced upon him. Here is a case from Birmingham. This man did not have the blue form but a white certificate. I have seen the whole document; it is a printed document, it is an official document, and there is not the slightest justification for the War Office repudiating it. It says:— This certifies that Mr. So-and-So has been examined and is not accepted, being medically unfit. None the less he is told that the certificate is of no use to him. He goes on in his letter to say: I have no objection to submitting myself to reexamination as a voluntary act, but I do object to being compelled into it by a threat of Conscription, which I deem to be in direct contravention of the Act. I think the House of Commons will sympathise with a man who has been grossly misled. Here is a case from another part of the country in which a man has twice offered and has been rejected as medically unfit. He says:— On applying for the armlet I was told that I should have to be reattested. He was promptly passed as being fit, undergoing no medical examination whatever. Although he had been rejected as medically unfit he is bluffed into applying again, and when he applies again they do not proceed to examine but promptly proceed to take him. He says:— I have since been called up in Group 6 on 29th February. I do not wish to keep the House by giving many illustrations, but I can assure the House and my right hon. Friend that this has occurred again and again. I pass over two or three cases, but I should like, to read this letter. This man says:— I was told I must be re-examined before getting an armlet, as the blue form did not state the nature of my complaint. As the right hon. Gentleman said just now that he had no information about these things, perhaps he will listen to this letter, which goes on:— To my surprise I was passed for Home service, and the officer in charge refused to return my blue rejection form.… He had no right to do that. I refused to be attested on account of my previous rejection and the cause of the same. Perhaps the right hon. Gentleman will observe this:— I have written to Whitehall— I suppose that means the War Office but my letter was simply sent to the local recruiting officer. I have written several times demanding the return of my blue form, but they refuse to return it. Does anybody justify that? It is a gross disregard of the terms of an Act of Parliament, and this on a subject which was debated in the House of Commons when the Government in terms rejected the very plan which the War Office is proceeding to carry out. I have a letter from another gentleman, who says:— After the publication of Mr. Tennant's reply to Mr. Thomas's question, I called at the recruiting depot for advice as to my position. What ought he to have, been told? That Mr. Tennant had made a mistake, that it was all quite wrong, and that he was perfectly free from compulsion. This is what he was actually told:— I was told that, in spite of the fact that I was previously rejected and hold Form B 2512 (A), that I was not exempt from service, and that unless I attested under Lord Derby's scheme I should have no right to appeal when the Military Service Act came into force. In these circumstances I submitted myself for examination by the doctor, who placed me in the group for sedentary occupation, clerical work, and I was duly attested Group 13. Here is a case from Hampstead in which a man was twice rejected, the second time at the Mansion House on 11th January, and given Army Form 2512 (A), marked "Unfit—rejected on medical grounds." On 1st February he received a notice to join the Colours on 15th February. He went and was asked to produce his rejection paper. He says:— This I did, and, in spite of my protest, it was taken away from me and the word 'Attested' was stamped on it in place of the word 'Rejected.' I complained and I was told that it was the law and that it was no good arguing about it. I am now told that I have been enlisted in Class 4 and will be put on clerical work, and must appear at the White City in accordance with instructions or be treated as a deserter. The cases are perfectly endless. That is not all. Not content with this, the military authorities, within the last three or four days—I believe since I put down my questions to my right hon. Friend—have gone a step further. There is no question here of some misunderstanding on the part of some recruiting officer. I have here a yellow form which comes from the War Office itself; it is Army Form W 3236. That form, as I understand, has been supplied within the last few days by the War Office to the military authorities all over the country, and they are sending it out to all and sundry, without the slightest regard as to whether the man has offered himself under the Derby scheme and has been rejected or not. It is a paper which professes to be sent out to men who belong to the Army Reserve. It says:— You are hereby warned that you will be required to join for service with the Colours on—.You will also present yourself at the recruiting office—on .—Particular attention is called to Section 15 of the Reserve Forces Act. That only means that if a man does not present himself he will be prosecuted or otherwise dealt with. Only this morning a particular instance came to my notice of a man who happened to have with him his own blue rejection form. Here it is, marked Not accepted, under standard, St. Paul's Churchyard, 22nd November, and initialled by the authorities. He went with this blue form into the City of London this morning and said:— What is the meaning of this? I hold a rejection form. The people there said:— That is no matter, it is compulsion now. Here, within two miles of the House of Commons, there are people sitting and, in the name of the War Office, cheating these people into the Army. I do not mean to say that everybody is taken in by this trick. I am glad to say there are some people who are not. I am glad to read one more letter from a man who was not. He got this preposterous yellow form announcing, under penalties, that if he did not turn up and join the Army after a few days he would be treated as a deserter. He knew what to say, and this is what he said. He writes to the recruiting officer:— I acknowledge receipt of Army Form W 3236 dated the 17th inst. calling me to the Colours. I confess I do not understand the meaning of it seeing that I presented myself at So-and-so on 17th November, 1915, and was examined by Dr. So-and-so and another medical man and was rejected on Army Form B 2512 (A), because of defective feet, and on that account was not able to attest. If I had been fit I should have long ago been with the other members of my family serving, but as I have been wearing surgical boots and two irons on both legs for four years, until I went to business at about sixteen years of age (when I had to choose a sedentary occupation) it amazes me to be put among the conscripts. If, however, the Army can fit me out with surgical boots and irons from the same institution, namely, the Orthopædic Hospital, so that I can do arduous work, I shall have something to thank the Army for. As I am exempt under the Military Service Bill, 1916, I shall be glad to know if a new Act has been passed which I have not yet seen compelling rejected men to come up again. If so, let me know and I shall be there. We shall all agree that that gentleman showed a proper spirit. He knows the difference between an Act of Parliament and this extremely misleading counsel offered on behalf of the military authorities. It is quite impossible to suppose that what has been going on in this way has been going on without the knowledge of the people at the War Office. I entirely acquit my right hon. Friend, who has had a great deal to do, and who, probably, has no special concern with this matter, but that persons in authority at the War Office know that this has been going on is beyond all dispute and doubt. It really is a very surprising thing that when we have debated in this House within the last three weeks the conditions under which compulsion is to be applied, when the hon. and gallant Gentleman opposite (Captain Amery), acting, if I am not mistaken, on a suggestion from the War Office or with their knowledge, proposed to change the Bill so as to allow these people to be dealt with, and when this proposal was rejected from the Government Bench by the President of the Local Government Board for reasons given—it is a most surprising thing that within three or four weeks these poor people are being bustled, deluded, and bullied into the Army: Notice the extraordinary inequality with which it works. They try it on somebody who has the sense to read an Act of Parliament and who does not believe whatever the military authorities tell him. He resists them. Every poor man, every bullied man, every frightened man, every timid man goes and asks at a recruiting office and is told. "Oh, yes, if you do not come in you will be compelled and will be marked down as a conscript."

The Prime Minister has been urging us this afternoon to believe that immense as is the sum we are called upon to vote, it is all being administered by the Departments concerned with a most intense regard to economy. Very likely! What about the War Office? Every one of these people who were ridiculously bluffed into the Army, even those who have to do sedentary work, is paid 2s. 9d., immediately becomes a member of the Army, and is withdrawn from an occupation where he hight contribute towards the making of national wealth. The only economy I know of in the matter is this: that as soon as he is unfit and breaks down—as he is bound to break down in the course of a few weeks or months—the War Office will turn round and say, "No pension for you. You have broken down because of some weakness or some physical incapacity which existed in you before you joined the Army, and therefore, since you were not medically fit when you were bluffed into the Army by these ridiculous devices, we throw you aside and refuse to give you any pension whatever." I can not believe the House of Commons will allow people thus deluded to suffer. I ask my right hon. Friend, who I am certain has desired nothing but to see fair play, and has shown it very often in this House—and I believe it of him as much as ever—I ask him now, on his own authority as the Minister in this House who is responsible for the reputation of the War Office, will he promise us here that ©very man who has thus been, by the representations of the War Office and of Ministers of the Crown, and because of his answer, I am sorry to say, brought by false representation into this position, should be given the chance of getting back to where they ought to be as men who volunteered and did their best, many of whom volunteered over and over again, but were rejected because they were not fit, and who ought not now, by this contemptible device, to be gathered in as though they were potential conscripts?

6.0 P.M.

Mr. TENNANT

I can assure my right hon. Friend—it is unusual for me to answer him in Debate in this House—that I hope I shall be able to display that proper spirit of which he gave us so good an illustration in a letter which he read from one of his correspondents. I can assure the House and my right hon. Friend that any evidence which is brought to me or to any of my colleagues purporting to show that anything in the nature of false promises—or fraud is rather indicated in the statement of my right hon. Friend—done on behalf of a great public Department is a matter which we regret, and which we resent in the utmost degree. I was going to ask my right hon. Friend what kind of evidence he had to show that men who were properly outside the Military Service Act—and men who have been medically rejected since 14th August are—had been cajoled in the manner of which he has given us a number of instances. It came as a surprise and a shock to me to hear those instances. They are quite new to me. I regret them very much indeed. My right hon. Friend has informed the House that he considers that these instances of improper treatment are done with the cognisance and at the instance of persons in authority in my Department. I am sorry he should think that. I personally do not believe it. I know that in the past recruiting officers have done some quite wrong things, and it is not always possible to back up everything which is done by subordinates in a very large Department covering. I do not know what percentage of the population at present but a very large one. It stands to reason that wrong things will be done sometimes, and I have to stand up and be made a scapegoat for them. I will cer- tainly make it my duty to inquire into what has been done, and to try to remedy this state of things. I should like to explain exactly what the position is. I am sure my right hon. Friend knows and understands Acts of Parliament better than I can, but it is quite clear from the Act that persons who have been rejected as medically unfit since 14th August, 1915, are outside the four corners of the Act of Parliament. That is not the same thing as saying they are entitled to an armlet. When you come for an armlet it is not an improper thing for the War Office to ask, "For what reason have you been medically rejected?" It is quite possible that in the event of a man being rejected for some minor defect he may still be of service to the country in other capacities. I think that is a perfectly proper position for us to adopt and one which I shall defend so long as I am in my place. I hope the House will understand that I have not only no desire that patriotic and innocent citizens who have attested voluntarily should not be cheated, but on the contrary I have every desire to see that their proper interests are safeguarded and that no action—official or private—shall be taken by which they should be made unfortunate sufferers. I will undertake to see what can be done to remedy a state of things which has been represented as widespread—although I sincerely hope that my right hon. Friend is mistaken in his estimate. I cannot believe it is so widespread as he seems to think—as to bullying people to go into the Army. The majority of complaints I receive are not that persons are being bullied to go into the Army but that the tribunals are excepting and exempting people right and left who ought to go into the Army. That is the burden of the song that reaches me. Those of us who are responsible in the War Office for administration are melancholy when we hear tales of this kind. Of course it is very disquieting to us, and we are only anxious to see that the law is properly enforced, and that nothing outside the four corners of the Act of Parliament shall be done. Having said that, having given the undertaking which I have given, I hope the House will be contented with that statement.

Captain AMERY

I am not sure that the answer of the right hon. Gentleman really completely disposes of the case which the right hon. Gentleman (Sir J. Simon) has made, and which I think he was fully justified in making. It seems to me that it is a very undesirable thing that any Government Department should attempt to stretch the terms of a law passed by this House. I am very strongly in favour of compulsory military service. I should have preferred to see a much more extensive and drastic Bill than that which has been passed. But the compulsion I should like to see in this country is compulsion voluntarily taken upon itself by the country through this House. It seems to me that strong evidence has been brought forward by the right hon. Gentleman, and, as I think, has reached a good many Members of the House—certainly it has reached me—that on grounds of military necessity an attempt may have been made—I do not want to prejudge that case—to extend the terms of the Military Service Act in order to include people who were specifically excluded from it. The remedy, if there are military reasons—and I believe there are good military reasons—why a great number of these men ought to serve their country, is not any form of executive action, not even a certain amount of suggestion in connection with armlets which may induce people to come forward to serve when they otherwise would not have served, but an amendment of the law.

The right hon. Gentleman (Sir J. Simon) referred more than once to the fact that an Amendment on this question was proposed by myself. It seemed to me that there was a very obvious oversight and a very obvious unfairness in the Bill as the Government proposed to pass it. How does the situation stand now? Anyone who came forward to serve his country any time between the outbreak of the War and 14th August, 1915, and was rejected, is liable to be called up and may be examined as many times as the War Office want to re-examine him if it alters its standard. If, on the other hand, he hung back after more than a year of war, but was induced to come forward after the Derby scheme was inaugurated, when indirect compulsion was in full swing, when he was informed that if the right number of unmarried men did not come forward he certainly would be compelled, if he took good care to hustle through when a great crowd was being examined and was rejected easily, if he took a moment when his health was run down and he was temporarily unfit and was then rejected, then he is absolutely excepted; he is not exempted. He is entirely outside the purview of this Bill and is in the same position as a parson or a woman. That does not seem to be a satisfactory state of affairs at all. We need men badly. The limitations of this Bill make the need all the greater. It is a perfectly open secret that during the three weeks in which the hurried campaign was carried on—and the hon. Member (Mr. Thomas) has often pointed out how hurried it was—the standard of medical examination varied greatly from place to place and from week to week, and if to-day the military authorities are short of men or think they can take men of a lower medical standard for certain purposes, they are free to call up again the men who offered themselves for service before 14th August, 1915, but they may not touch men who offered themselves for service since, many of whom are a great deal fitter than the men who offered themselves before, and in many cases more or less committed a fraud in managing to secure their rejection.

That seems to me a very undesirable state of things, and it seems to have been the result entirely of the false attitude which the Government has taken up with regard to this measure. Instead of taking a perfectly reasonable line and saying that the Derby experiment had shown that voluntary service alone was not going to meet the needs of the country and then introducing as comprehensive and as militarily useful a compulsion Bill as they could, they thought they would satisfy certain interests by saying that their Bill served no particular military purpose but was there only to fulfil the Prime Minister's pledge. It was a Bill which my right hon. Friend (Mr. Bonar Law) said did not pretend to be the best way of dealing with the military situation, and it was therefore always put on the ground of fulfilling a certain pledge. I remember very well when there were only five or six Members in the Committee and my right hon. Friend (Mr. Long) rejected an Amendment which I thought should certainly have been accepted and which, judging by the attitude of the military authorities since, they must have desired to see accepted. My right hon. Friend at the beginning stated some of the arguments in favour of the Amendment, and, looking round for the cheers which did not come, stated some of the arguments against the Amendment and at once, hearing cheers from the hon. Member (Mr. Thomas) and another hon. Member sitting beside him, he collapsed. It is because of that sort of thing that I think that even on this Vote of Credit it is as well that this matter should be raised. There are two principles involved. One is the principle of the reign of law in this country, that the law is above the power of the Executive, and that no man is subject to the Executive except in such matters as the law prescribes. That is one important principle. Another principle, more immediately bearing on the conduct of this War, is that we would wish, and I hope the Government may learn by this particular instance that it is really less trouble in the long run to frame your measures in regard to the military needs and the purpose of carrying on the War, than from a desire to placate this or that section of the House of Commons, and end by producing unsatisfactory measures which lead to worse troubles.

Mr. THOMAS

I do not think that we are justified in deprecating this matter being raised to-day. I think it ought to appeal to all sections of the House. During the passage of the Military Service Bill there were naturally strong differences of opinion, and sometimes heated and passionate feeling was shown. Although a small number of us who voted against the Bill, who felt very strongly against the Bill and did all we could to defeat the Bill, we made the promise that when the Bill became law we would take no step to cause industrial trouble outside and to render the position of the country more difficult in this grave and troublous time. Therefore, that promise having been kept, and we having fulfilled our side of what one might call a moral obligation, we are at least justified in saying to the Government, "It is also your duty to carry out your side of the bargain, and clearly your side is to see that the Act of Parliament is administered fairly, honestly, and impartially to all concerned."

I am afraid that there is an inner history to this little unfortunate Amendment, because, as the hon. and gallant Member (Captain Amery) said, the President of the Local Government Board adopted a rather remarkable attitude. When the Amendment was moved the President of the Local Government Board immediately got up and said that he had an open mind on the question, and that he was waiting for an instruction from the House, and he regretted that there were so few Members present. Some of us did not take the trouble to oppose this Amendment for the simple reason that we were assured that the Bill was only intended to deal with those who had not taken advantage of the Derby scheme, and clearly we came to the conclusion that by no stretch of imagination could you say to a man, "You are a slacker" if he had offered himself and been medically rejected. That was the position we took up, therefore we did not treat the Amendment seriously on its merits when it was moved by the hon. and gallant Member, but purely on the grounds that I have stated. Then the President of the Local Government Board said, "Seeing that opposition is now raised to this Amendment, I do not intend to accept it." It was passed over, but on the day following the Bill becoming law—and this is very significant—Major Lucas, of Cardiff, issued publicly through the Press an instruction demanding that all these rejects should present themselves again. Having taken part in the Debate, and knowing what had happened in this House, I got hundreds of letters from South Wales, and I would here remark that it was apparently copied in other parts of the country, not in South Wales alone, but in all parts of the country it is being done, as my right hon. and learned Friend (Sir J. Simon) has shown. I naturally' assumed that it was done inadvertently, and in order to put the matter right I put a question to the Under-Secretary for War, to which reference has been made. I asked the simple question, whether a man having offered himself and been medically rejected since 14th August was exempt from the Military Service Act? I knew he was exempt, but I felt that by putting the question and getting an authoritative answer from my right hon. Friend (Mr. Tennant) it would not only clear the air, but act as an instruction in all parts of the country. To my amazement the reply of the right hon. Gentleman was published before I got it. I saw the reply in the London newspapers before I had received it myself, and tremendous publicity was given to it.

Mr. TENNANT

I remember my hon. Friend having the question down on the Paper. Did he ask it orally?

Mr. THOMAS

No, not orally, as the House was rising the next day. Will hon. Members notice the significance of the matter? The Press attached so much importance to it that it was immediately boomed as an instruction to these people. So serious a view did I take of it that as the Bristol Conference was sitting on that day I sent a telegram immediately to my hon. Friend the Member for Attercliffe (Mr, Anderson) and asked him to draw the attention of the congress to what I felt was a violation of the Act. What followed? My right hon. Friend (Mr. Tennant) then had correspondence with my right hon. and learned Friend (Sir J. Simon), and the matter was put right. At any rate, it was apparently put right in the form of the Under-Secretary for War agreeing that the original answer to me was incorrect.

Mr. TENNANT

Hear, hear!

Mr. THOMAS

That was the position; but all the time the War Office authorities have been continuing to do the same thing, and they are continuing to do the same thing in all parts of the country. To show the unfairness of it, let us take the answer which the right hon. Gentleman has just given on the question of the armlet. He must know, or if he does not know Lord Derby and those associated with Lord Derby could tell him, that the difficulty in regard to the armlets was not because they wanted to pick and choose as to the men who were entitled to them, but because the armlets were not supplied in sufficient numbers to go round. That is the history of the armlet. How, then, can the right hon. Gentleman stand here to-day and say because of a mere accident one man obtained an armlet where the armlets were supplied, and another man did not obtain an armlet because they were not made, the War Office is entitled to say to the man who did not obtain an armlet, "Before you can get an armlet you are to have another medical examination." That is the substance of the right hon. Gentleman's reply to-day. It is a monstrous position. It is most unfair. If the object is to do justice to all, I submit that all men who offered their services ought to be treated on an equal footing. There is some importance to be attached to the armlet. There are many men to-day, and women also, going into business houses, and unless they see an armlet they do not take very kindly to an individual if he happens to be of military age. There are many employers who are bringing pressure to bear upon men to obtain an armlet, and is it fair that when a man has done his duty, when a man has offered his services, and when a man has shown that he is not a slacker, the War Office should say, "Although we pro- mised you beforehand an armlet, we are now going to set up a new condition before you can obtain an armlet."

Mr. TENNANT

I think the hon. Member is under a misapprehension as to the date upon which this Order was issued about armlets. It was issued long before the passage of the Military Service Act. It was issued on the 16th of December last. That makes the whole difference.

Mr. THOMAS

No, no. I am not now dealing with the date. I am dealing with a simple principle. What was the armlet intended for? What was the meaning of having an armlet? Was it not that there should be some recognition to those who had offered their services? The first decision in regard to the armlet was that there should be a different armlet for those who were medically rejected. We protested against that, because we said we were not going to have men to walk about and advertise the fact there was something the matter with them, and we were not going to allow employers to take advantage of these men. Therefore we maintained that it would be unwise to differentiate so far as the armlet was concerned. The armlet was intended to be a recognition for those who have offered their services, and therefore I repeat that I hope the right hon. Gentleman will not stand to the position which he has just laid down. You have no right at this stage to further penalise people as you are penalising them.

Mr. TENNANT

indicated dissent.

Mr. THOMAS

It is penalising them. You must give consideration to the individual who is depending both upon an employer and upon other people. If he has shown that he is willing to serve his country, surely it is too late in the day for you to make fresh conditions now. It is not sufficient to point out as an excuse something that the tribunals are doing, because the tribunals are only doing to-day what they were told they had the power to do. Let it be observed that the Parliamentary Recruiting Committee issued a leaflet, and in that leaflet a number of questions and answers were given. One question was as follows:— Question: Supposing a man attests and he is indispensable to business. What is his "position? Answer; His claim will be considered. Question: But who will be conversant with the local circumstances? Answer: The tribunals will be composed of local people who are conversant with the local requirements. Because the tribunals are now doing that, we are hearing all manners of complaints about the tribunals. In any case, I submit that we ought not to view this question from the general principle of the Act being extended. If the Act has got to be extended, let it be extended by a Motion from the Government Bench, but do not let us attempt to do it by any subterfuge. I hope the right hon. Gentleman will now see that clear and definite instructions are issued in the name of the Government to the military authorities, and that it will be clearly laid down that advantage is not to be taken of these men. I hope that as a result of the Debate much dissatisfaction and misapprehension will be cleared away, and that those who have been deceived will at least have justice.

Colonel GREIG

I desire to add one or two words to what has fallen from the hon. Member who has just sat down. Those of us who supported the Military Service Act in this House—and there were many of us here who did so against the conviction of a lifetime—desire and intend—and in this view we follow the hon. Member for South Birmingham (Captain Amery)—that compulsion in this country shall be according to the law and not against the law. It was not our intention that any Government Department of its own mere motion, and according to its own caprice, should go outside the law as it had been laid down by this House and by the Legislature of the country. The speech by the right hon. Gentleman the Under-Secretary of State for War is an admission that this sort of thing has been going on, that it was done by those recruiting officers and others, though not absolutely directly by the War Office. It may or may not be the fact, but unfortunately there have been instances within recent memory when the decisions of this House have not been entirely sympathised with in that quarter. We all know the history of the Army Form E 624. An attempt was made to get around the Territorial Force Act. But briefly our position is, in accordance with the desire of the Government, in accordance with that of those who are our colleagues here who are ardent compulsionists, I believe, and whose view of the matter is the same still, that if we are to have further compulsion in this matter, if we are to take any other class, it must be done in accordance with the decision of this House and not with that of any Government Department.

Mr. PRINGLE

I think that the general sense of this House is that this question cannot be left where it was left by the right hon. Gentleman the Under-Secretary. His reply to my right hon. Friend the Member for Walthamstowe (Sir J. Simon) was not at all conclusive, and, indeed, in respect of one of the points raised, he has not substantially modified the unsatisfactory position taken up by the War Office. On the earlier occasion on which this question was mentioned in this House I understood from my right hon. Friend that the War Office only raised this question of reexamination when the man who alleged that he had been rejected could not present a particular form of rejection. That was the original contention, but even in regard to that it is as well to remember exactly the circumstances in which these forms of rejection, which are not recognised now, were granted. During the period of the Derby scheme the War Office did not distribute sufficient forms throughout the country. In consequence many of the local recruiting authorities had to print special forms in order to meet the demand from the men coming forward. Now the War Office have said that the forms thus issued have no value. It is a most extraordinary business, when we consider that this is being done in reference to an Act which was ostensibly passed for the purpose of the fulfilment of a pledge. Why what are we to think of pledges, if even when a pledge is embodied in an Act of Parliament it is to be treated only as a scrap of paper? We know now, however, that it is not only in regard to these despised and irregular forms that powers and exception are being taken. Even the regulation form is being treated as of no account. I have a number of letters here, and I find that the only reference to these forms occurs in a letter of Lord Derby to the Press on the 31st of January. It says: The following is an extract from the Army Order on the above subject. I think that my right hon. Friend said that there was no Army Order.

Mr. TENNANT

No, I did not say that.

Mr. PRINGLE

I will read the extract. It. will be necessary for all men who have already been rejected on medical grounds to be medically examined again, unless they can produce Army Form B 2505 (A) or Army Form B 2512 (A), showing the date and cause of rejection. These forms will be verified by a reference to Army Book 303 at the place shown on the form.

Mr. TENNANT

This was issued on the 16th of December, before the Compulsory Bill was before this House, and it referred only to such men as desired an armlet.

Mr. PRINGLE

I think that my right hon. Friend is misinformed. This appeared in a letter dated 31st January, issued only after the Military Service Act had passed. The real point was that this was made public by Lord Derby after the passing of the Act.

Mr. TENNANT

No. It is dated the 16th of December.

Mr. PRINGLE

My point is that the first publication of this Order to the public was on 31st January, 1916, after the passing of the Act, and that consequently it was only after the Bill became the law of the land that men were informed that they required these particular forms. There was no case whatever, before the passing of the Act through this House, in which a man was refused an armlet and required to undergo re-examination. Had the case arisen then we should have been told about it, and these cases would have been quoted in regard to the Amendment of the hon. Member for South Birmingham. It was obviously a matter which would have been brought to the attention of hon. Members of this House when that particular Amendment was being considered, but it was not mentioned then, obviously, because every man got an armlet when he applied for it, and when the armlet was introduced it was generally understood that it was presented to every man who had attested under the Derby scheme, and had been rejected, and indeed the statement was made as coming from His Majesty the King himself desiring everybody to wear an armlet. Yet we are told now that, in order to meet a special request of His Majesty, the men who desire loyally to follow his view, when they come forward and ask for an armlet, on the strength of their previous rejection, are to be refused the benefit granted them by an Act of Parliament. I think that every fair-minded man will describe that as a trick, and a subterfuge to get out of an Act of Parliament.

Mr. TENNANT

It is not really so.

Mr. PRINGLE

I am merely putting it as it would appear to every fair-minded man outside the War Office. Even the hon. Member for South Birmingham, who was inside the War Office, practically acquiesces in it, because he thought that if this was to be done it should be done fairly by the terms of an Act of Parliament and not by any other means.

Mr. TENNANT

I must interrupt my right hon. Friend. I am sure that he does not realise that the Army Order which he is quoting was issued on the 17th December, being dated the 16th December, and came into force long before the Military Service Bill was before this House. It was in the Press.

Mr. PRINGLE

Yes, but my right hon. Friend seems to think that this Army Order dealt with armlets. It does not.

Mr. TENNANT

May I read it? I am commanded by the Army Council to inform you that in continuation of War Office Letter No. So-and-so, it has been decided to issue armlets of the same pattern, subject to directions contained in the letter—and so on—to twelve classes of men as follows, and then follow the classes. But the whole of that letter is subject to the question of armlets. It is upon armlets, and then comes on the passage to which the right hon. Gentleman has drawn attention:— It will be necessary for all men who have already been rejected on medical grounds to be medically examined again unless they can produce the two Army forms mentioned, showing the date and cause of rejection. That was obviously because they wanted to know whether these particular cases of rejection were such as to preclude them from all forms of military service or not. That was issued on the 17th December. This is not a question of opinion, but of fact.

Mr. PRINGLE

I have never suggested that this Order was not issued on the 17th December. My point was in regard to a letter of Lord Derby, issued on 31st January, in which this was quoted without any reference to armlets at all. The real point of the matter is that, whatever may have been the intentions of those who issued this Order, it has been issued by recruiting officers, for the purpose of getting men who have been rejected to submit themselves to re-examination and so to put themselves outside the provisions of the Military Service Act. They were, in fact, told that if they had not these certificates they would be compelled. I have a number of letters here calling attention to this. I do not wish to detain the House, but I would like, however, to read the very latest of these, which shows the practice of recruiting officers up to the 19th of February. That is Saturday last, after all that we have heard that these devious practices had been gradually suppressed by orders from the War Office, and that the recruiting officers who had been acting beyond instructions were now being properly schooled as the result of instructions received from the right hon. Gentleman. Here is a case in which one of these men who had been rejected had received the yellow form referred to by my right hon. Frind the Member for Walthamstow, and the reply was:— I fail to understand why this form has been sent to me as by the provisions of the Military Service Act, 1916, I am exempt, and this fact should already have been known at your recruiting office. I have here the reply, dated the 19th instant, from the recruiting officer:— The attached notice paper is returned to you and you must report yourself at this office without fail on the date specified or take the consequences. It will be very interesting to know what the consequences are. Apparently the War Office, or, at least, certain representatives of the War Office, are setting themselves up as superior to any Act of Parliament. We have here not only the all-dispensing power which we thought had been destroyed in the days of the Stuarts, which was then attempted to be used by Kings, and which is here to be solely at the disposal of recruiting officers, but we are told that men who have been rejected as unfit are of vital consequence to the military strength of the country. As a general rule, I listen to the speeches of the hon. Member for South Birmingham with great interest, but I confess that in regard to this matter neither this afternoon nor on the occasion of his Amendment could I follow him. The position he takes up is that the medically unfit are absolutely essential to us in order to win the War. That seems to me to be a novel proposition. I can understand the desirability of getting in the slacker who is medically fit, the man who is in the full vigour of youth, but in what way the man who is medically unfit, who has varicose veins, who has irons on his legs, who has defective eyesight, and so on, can possibly be represented as absolutely essential to the winning of the War is beyond my comprehension.

Captain AMERY

I certainly do not suggest that the unfit should be compelled to serve, but I do suggest that among those rejected in the hurry of the Derby scheme there were a good many fit men, and the right hon. Gentleman the Under-Secretary of State for War admitted this afternoon that there were men temporarily unfit who now, as the law stands, though perfectly fit, cannot be compelled to serve.

Mr. PRINGLE

I have a number of cases where the medical officer makes a mistake, and, so far as my recollection of the Derby scheme goes, the medical officer did not err on the side of stringency, if he erred on the side of laxity. Indeed, that is one of the arguments put forward to induce us to make a liberal deduction from the Derby figures—that many men have come forward who were absolutely certain to be rejected, in order to get their rejection. Consequently, I do not think that the hon. Gentleman would gather a great many from those who slipped through under the medical examination then. A man rejected for varicose veins last November visited the military authorities, and he was told that he must attest. He went to the town hall and produced his rejection form, but he was told that it was of no use, and that he must attest. He was passed, though he still has his varicose veins. I understand that the second point of the hon. Gentleman opposite was that a man who was unfit might be useful for other duties. But the Government gave another pledge during the course of the Debate on the Military Service Bill that there was to be no compulsory labour, and the other duties, we understand, are to be clerical duties—clerks in the pay office. The Secretary of State for the Colonies was one who said that there would be no compulsory labour, but compulsory clerking is very like compulsory labour. You are getting men reexamined not to be soldiers, but for other work. A man, if he has a cork leg, is to write forms in the pay office at Is and 2d. a day, work which can be done by women for that money. That is compulsory labour. Is the pledge that there was to be no compulsory labour in military service also to be a scrap of paper? There is no answer upon that point.

But what we really wish to know is what is to be the position with regard to this: There are three classes affected by this extraordinary military administrative action. There are certain men who have been cajoled or coerced into coming forward and being re-examined. That is undoubtedly true. The evidence was read by my right hon. Friend the Member for Walthamstow (Sir J. Simon); it is the evidence which I have here, and I think I may say it is the experience of very nearly every Member of the House at the present time. These men have been forced into the Army, contrary to the law of the land. They were entitled to be excepted after they had been medically rejected, but, nevertheless, owing to misrepresentations on the part of the recruiting officer, these men have been forced into the Army. Are these men to be allowed to go free now that this scheme of trickery has been exposed? We are entitled to an answer on that point. Are they to be allowed to go to the Law Courts and bring an action against the military authorities for having been brought into the Army under false pretences? [An HON. MEMBER: "Brought in illegally!"] Brought in illegally, for undoubtedly they have not gone in voluntarily. There is no answer on that question. I think the right hon. Gentleman should at least obtain some information as to the views of the Government on this point. Obviously if these men have been deceived, if they have been tricked into the Army, they should be entitled to go out of the Army if they now so desire. There is a further case.

Granted that these men have gone in though they have disease, and suppose they are put to some duty for which they are not fitted, and break down in performing that duty, are they going to be entitled to pensions? They are not at present. That question was raised last week in this House in the Debate on the Address, and we had a most unsatisfactory answer from the War Office on the point. We were told then that if a man entered the Army and broke down, his breakdown, if not directly due to his service, but due to some pre-existing disease, would not entitle him to pension, and if he died his widow would not be entitled to any allowance. Surely men brought in under these circumstances, who in the past have been rejected as medically unfit, whom the Army doctors know to be suffering from some disease, if they are now to pass in, and if they break down owing to the duties which they are called upon to discharge, should be entitled to rights of pension! There is a third point on which we shall desire absolute satisfaction, and that is that from henceforth, now that this trick has been exposed, there should be no more cajolery to get men into the Army. These are the three things upon which the War Office is bound to give a clear answer to this House. It is only in that way they can rehabilitate themselves in the respect of the people of this country. It is a trick worthy of the meanest pettifogging attorney. It is not worthy of a great Department, fighting a great war, trying to get round obligations which are inscribed on the Statute Book of the country. Surely the right hon. Gentleman himself realises the utterly intolerable position in which he is placed in being called upon to defend transactions of this kind. The Colonial Secretary, who, we all know, is a thoroughly straightforward statesman, must also have a supreme contempt for any such transactions. Surely, then, it is for the Government, at the earliest possible moment, and in the most authoritative way, to dissociate themselves from such transactions. The question is whether men have been tricked in being got into the Army.

Mr. TENNANT

If the hon. Member can produce one single man who has been subjected to trickery, undoubtedly he will be put back into the place he was in before.

Mr. PRINGLE

I have here a letter from South Shields, which I will read:— In November last I offered myself for enlistment under the Derby scheme at the central recruiting office in this town. I was medically examined and rejected, the doctor remarking, 'the training would probably kill you.' I received a brownish-coloured card certifying that I had presented myself for enlistment 'and was found medically unfit for service.' This certificate was signed by the recruiting' officer, South Shields area. On presenting this card at the same recruiting office, and requesting an armlet as unfit, I was told I 'must be medically examined again.' As, however, I was doubtful about that in view of Schedule 1 of the Military Service (No. 2) Act, I presented the certificate on Monday last at a recruiting office in Newcastle-upon-Tyne, pointing out that I had been rejected in South Shields. I was told that I could not have an armlet with that certificate; I would have to be medically examined again. As this confirmed my previous experience, I concluded re-examination was necessary, and inquired what was the latest date for such examination. I was told by Thursday, the 10th. Accordingly I was re-examined at South Shields on the 8th, and the doctor said he would mark my papers for clerical service, and I would be put to my own work, namely, a clork—thus showing that he considered me unfit for active service. I was duly attested and received my armlet. In view of your correspondence I feel that I have been misled into presenting myself for re-examination, when under the Act I am exempt from service. I would be grateful if you would inform me what my position is in the circumstances, and whether I can take any steps to effect my release from service. There is a case where a man by misrepresentation, and who was exempted under the Act, submitted himself for examination, it is true to obtain an armlet, and has been forced into the Army in this way. I ask, therefore, if you dissociate yourselves from those plans, why not make reparation? It is the only way of showing that your dissociation from these deceptions is not merely dissociation on the lips.; and until the right hon. Gentleman recognises that the War Office is bound to let free every man who has been got in by these deceptions, then I say the credit of the War Office has gone. There can be no faith in the pledges and promises which it makes in future. That is one of the things from which the right hon. Gentleman should dissociate himself. When I raised the point whether in practice the men are again to be released, he said, "No, they are to be kept." They have got them by a trick, and they are going to keep them now. We are living under the blessings of the Prussian military system. After all, under the Prussian military system conscripts are treated better than that; they are treated with honesty. Under the Prussian system they get a moratorium for civil debts, a thing that has never been done in this country. The man whose letter I have read has no moratorium for any civil obligations, but the Prussian whom you despise gives that concession to the man called up for military service. He has a little honour, which has been deficient in the Government. You have given your pledge that there is to be no compulsory labour, but you are getting compulsory clerks; you are getting round the pledges in this Act by using the device of granting armlets to get out of the Schedule. That is not straight, and until we have straightness, we shall continue to agitate in this House to have this matter put right. First of all, we want to see that every man who has been brought in by false pretences is excepted, or if he has gone in after being described as medically unfit, he shall be entitled to the rights and privileges which should be granted to him. In the third place, in future there shall not be on the part of any underling of the War Office a continuance of this system.

7.0 P.M.

Colonel YATE

I think we must all acknowledge what an unfortunate thing it is that the Government should have introduced such an illogical and unstatesmanlike Bill as the Military Service Bill, which became an Act of Parliament with all its incongruities and inconsistencies, upon which I will not dwell now. These things, I think, show to us what a chance the Act gives for escape from military service, and to agitate against it. All the letters read by the right hon. Gentleman the ex-Home Secretary seem to me not to have come from the working men of this country, but from a different class altogether, who try to get out of their duty. [HON. MEMBERS: "NO, no!"] I will say this, and I should like to congratulate the Prime Minister upon it, and it is the one point on which we can congratulate him, and that is that the opposition to this Bill throughout the whole country has never come from the real bonâ-fide working men of the country. Those are not the men who object. They are the finest men in the Army. It is from the bonâ-fide working men that the soldier comes, and it is to them he goes when his services are over. The working-man soldier is the finest, bravest, and most magnanimous soldier in the world. I congratulate the Prime Minister most heartily on the fact that of the thirty or forty Members who opposed the Bill in this House there is not half a dozen who ever did a day's manual work. I do not want to pursue that question, which has been settled long ago; but I desire to refer to the question raised by the right hon. Baronet the Member for the City (Sir F. Banbury), and that is, the securing of the proper expenditure of our money and seeing that we get value for it and that there is no waste. It seems to me that we are running this War on a peace basis instead of a war basis, and on a peace establishment. From top to bottom—from the Committee of the Cabinet to the permanent officials in the different Departments of the State, we see the same old peace system and red tape and officialdom are rampant and no change has been made. How can we expect to have a war run by a Committee of men who are all busily engaged in the onerous and important work of administration of the Department of which they are in charge? Not one of those men has leisure to look after the War and properly study its conditions. Take, for instance, the case of the Chancellor of the Exchequer. The whole of the financial responsibility of the country rests on his shoulders, and he has the everyday working of the Treasury, and he is engaged at present in making a Budget for the coming year and in preparing taxation which the Prime Minister told us he was summoning up courage to impose upon us. Can we expect the War to be administered either successfully or economically by men in that position?

All the six members of the War Committee of the Cabinet are fully employed in the administration of their own Departments. These are not personal matters. When we are running this War by a Committee of men engaged like the Chancellor of the Exchequer, I think our Allies must really and honestly believe we are mad. How on earth can they think we are in earnest when we put the conduct of the War in the hands of such men as that? I do trust the Prime Minister will give us a small Cabinet Committee to run the War, two or four, or whatever number it may be, of men who will not have any administrative duties to perform and who will be free all day and every day to study the questions of the War. If the Prime Minister does not do that, things will go on in the same dilatory, unsatisfactory, ruinous manner. In the Departments red tape and officialdom are rampant and no change is made. Look at the permanent officials. Is there any one of them who has been able to widen his horizon owing to the changes necessary? We have tried in various Departments to introduce business men. There has been a great cry for the introduction of business men. Where they have been introduced, what have they been able to do? I heard of one business man who was brought into a Department, who saw the red tape and all the trouble and bother, and who tried to correct these things and to get matters done in a better way. He sent up notes to the chief of the Department, suggesting this, that, and the other, whereas further reports and further information were asked for, and officialdom tried to postpone any action. At last the permanent official told the business man, "Either you will have to go, or I; I am not going to be bothered with all these suggestions of yours. I have enough work to do without it." The man, under those circumstances, gave it up, and the same red tape continued. In every Department you will find it is exactly the same old official routine—War Office, Admiralty, Board of Trade, every Department refuses to make any change. Look at what we heard two or three days ago of the delays in the requisitioning of ships and the enormous waste and expenditure incurred.

Look at the Army. It is exactly the same there. All the permanent officials in the Army are opposed to any outside interference. Take the Building Department. I can give an illustration from Leicester with which I am immediately concerned. We have a very fine hospital there with accommodation for 700. The whole of the county authorities rigged up that hospital, made it complete with extra buildings, and it became a great base hospital. The other day the War Office called for an extension, and the county authorities at once set about to do it. The War Office said "No," and informed them that they must have a Royal Engineer to do it. Good heavens! Do you not want every Royal Engineer at the front instead of wasting their time building nurses' quarters in hospitals? So it is the extra waste goes on, and no outsider and no business man is allowed to have a finger in the pie. It was the same way with the erection of huts all over the country. We had Royal Engineers, or so-called Royal Engineer officers, going about the country, not knowing anything about the localities, and building huts in places which turned out to be swamps, with the result that hundreds of thousands of pounds had been wasted. It is the same in every Department. Go where you will red tape rules supreme and business goes to the wall. The time has come when I think we must decide that this War must be run on a war basis and not on a peace basis, and we must have new men and new ideas, and it is the only possible way in which we can carry the War through. I ask the Prime Minister to give us a War Committee of the Cabinet which has nothing whatever to think of save the great problems of the War, and the members of which are entirely free from administrative control of Departments, and that the permanent officials be thoroughly instructed that some new method is to be allowed in their offices and red tape stopped. Until we get that change I think there is no possible hope that we shall have any real economy or stoppage of the waste which is now going on.

Mr. BOOTH

I was somewhat interested in the criticisms passed upon the Government by the right hon. Gentleman the Member for Walthamstow (Sir J. Simon). It was really refreshing to hear one who so lately sat on the Front Bench and to think that he has the courage himself to tackle the War Office. I should like, however, to warn him of the fate he is likely to meet. Whenever criticism has taken place in the past by one who is now a faithful henchman of his, I mean the hon. Member for North-West Lanarkshire (Mr. Pringle),. and by the right hon. Member for Kirkcaldy (Sir H. Dalziel), who usually sits adjoining me, they have been denounced by the Liberal Press as people who wanted to pin-prick the Government. We have now had exactly the same kind of speech from one of their own chosen Ministers, and I hope that the Liberal Press will deal far more gently with the right hon. Gentleman than they have dealt with the critics who have hitherto tried to keep to Government up to the mark in these matters. What does all this amount to? A few mistakes have been made by the War Office. They have been making mistakes ever since the War started, and they made more of them when the right hon. Gentleman was on the Front Bench than they are likely to do now that he has gone away. Of course, they are learning by experience. The Prime Minister announced to-day that they were learning economy, and he claimed as a proof of that that Ministers who cannot manage their own departments have now formed a Committee to see that we are economical, and in order to impress the House that there will not be as great waste of public money by the Government as when the right hon. Gentleman the Member for Walthamstow was a distinguished Member of it, and that money is to be more carefully tended in the future now that he is out of it.

What does all this mean? I really do not quite understand it, and perhaps one or two of the right hon. Gentleman's Friends will explain it to the House. Is it some new conspiracy or is the right hon. Gentleman the Member for Walthamstow dangling after the "Daily Mail" newspaper cart. What does it all mean I Whenever Lord Northcliffe ventured to criticise the War Office we were told that there was some foul conspirarcy, and that he was mixed up with some members of the Cabinet and of this House. I do hope that this will not be discovered now. I do beg of the hon. Member for North-West Lanarkshire to assure us that there is no conspiracy of this kind now, and that they are not in league with the Northcliffe Press. I mention that to show that when before this there has been criticism that is the kind of way in which it has been met, and I would just like to apply the same treatment to them to see how they enjoy it. I dare say it has as much foundation now as when it was made before. It was scarcely worth discussion then and it is scarcely worth it now. I mention it to give them a little taste of their own medicine. With regard to this matter, lot us look at it in the right perspective. I do not think there is any deliberate trickery on the part of the War Office at all. Recruiting agents will be zealous, and sometimes medical men may be a little slack in war time just as in peace time. I dare say what few instances there are have taken the trouble to write to the right hon. Member for Walthamstow and I should think they might amount to a few score, whereas we want millions to carry on the War. I do not think that in discussing this Vote we should confine it to such a comparatively small point as to whether a blue or a yellow form had the right number on it and was sent to the right person. It was said that probably all the Members of the House had received lots of these complaints about men being deceived. I have not received a single one, and I think my post is as large on the average as that of any Member of the House. I can tell my hon. Friend what the complaints really mean. There is no doubt that many medical men have been anxious to transfer men into the Army, and if, now that the Military Service Act has- been passed, my hon. Friends are going to take up these cases when they are happening by tens, why did they not take them up before, when they happened by hundreds I Before the Military Service Act, which they do not like, was passed apparently the War Office was perfect, while now, after the Military Service Act has been passed, it cannot do anything right. I do not understand it at all. What are the plain facts? The plain facts are that men have been taken by the thousands into the Army who ought not to have gone. But the great bulk of those have nothing whatever to do with the Military Service Act. All over the country men have been taken who were in receipt of insurance pay, and Members who have been administering the societies have been too prone to wink at it, because they avoided paying the benefits, and they thought it better for their societies. I think that was a great mistake, but it has been going on without any protest at all from my hon. and learned Friends. Now, however, when they think it makes a point against the Military Service Act, it is out of all perspective in their minds.

I had two questions to-day bearing on the subject. I am perfectly certain that I am within the mark when I say that you could raise a whole brigade of consumptives who have been passed by the doctors into the Army. I think that is a great mistake, because those consumptives will never get to the front; they will break down in training in this country, they will go back upon the societies as wrecks, and you will have immediately to pay. I do not remember getting much sympathy when time after time I put these cases. I think these men are entitled to sympathy. If they were immediately sent to a better climate there might be a chance for them; but to make them spend a winter in this country trench-digging and training in the open air is not the best way of dealing with consumptive cases. And then the War Office throws them back on to the societies. They are coming back by the hundred and by the thousand. But it is nothing whatever to do with the Military Service Act. It is owing to the fact that doctors were a little too lax. I would like to press upon the Government the rather terrible position in which they will put some of these people concerned. When men are broken down by disease and thrown back out of the Army the War Office disowns them. The insurance societies cannot stand it. I want to appeal to military men in this House. I have appealed to them several times. I have pointed out the close connection between these insurance questions and the military position. The connection is very close, and will be closer still in the future. Can they honestly say that it is proper for men who have been taken into the Army after medical examination to be thrown back upon the insurance societies after they have undergone a certain amount of training, and for the War Office and the country to refuse to honour their obligations? Societies cannot stand the strain. If you send these men back from the Army upon the insurance societies there will be a disaster which will recoil upon the men at the front as well; because these men have paid their subscriptions before they went, and they will come back to civil life, and have to live under an Insurance Act which will be unsound in its finance. Therefore I urge the matter, not merely upon the ground of equitable dealing, although that is an element in the case, but also upon the point of finance. It can never pay to take into military service men who are medically unfit. It is dead against all our understanding of the discussions in this House, and from the financial standpoint you will be heading for disaster.

I want to put two or three questions to the Chancellor of the Exchequer, I am not sure whether he will be able to answer them in this Debate, or whether he will prefer to make inquiries. My questions have reference to that part of the Resolution which deals with the maintaining of credit. When the War broke out the Treasury had to go into the City and save the banks from bankruptcy. They had to undertake to finance the paper which the banks held. Is that still going on? I do not know whether the Chancellor of the Exchequer can say how much money was involved, whether the Government are still liquidating that amount—I presume they are—whether they have lessened it in any substantial degree, how much has been the national loss written off as irrecoverable, and how much they hope to get back. I shall make no complaint if the Chancellor of the Exchequer cannot answer these questions to-night. There is a further stage of this Resolution, and there is also the Consolidated Fund Bill to be taken this week. I plead with the right hon. Gentleman to make some statement to the nation. This matter is canvassed far more than he thinks amongst the working men of the country. They have grasped the fact that the Treasury came in to save the banking and financial institutions by placing the national credit at the disposal of the City. That is the view the artisan takes, and that accounts for many of the demands he has made and many of the difficulties which have arisen; because he says in his own mind, "I think they ought to do as much for the working men of the country as they did for the financiers of the City," and I cannot see that that is altogether illogical. I wish the Chancellor of the Exchequer would make a statement showing that the matter is not of the great magnitude that has been feared. I would like to know also how much of the paper financed by the Government was German paper, and whether there is any German paper being financed in the City now. Some inquiries may have to be made in regard to that. I cannot see how international trade can be carried on without in some way or other paper being used. The trade which formerly existed in time of peace between Germany and America could not take place without the use of paper in different forms. The Treasury saved the credit of the banks in the City by guaranteeing the position and undertaking to cash these obligations. What proportion of that was German finance? What was going on at the time? British banks refused to support traders in giving credit. Take the case of a country like Roumania. The British trader who wanted to give credit in Roumania could not give it with the support of British banks, but the German trader who was cutting out the British trader had the support of the German banks. While the British firm could give only a month or two credit, the German firm could give six or nine months, and by means of this kind he captured the trade. The Deutsche and Dresdner banks come to London and open branches, their principal business being to discount the bills by means of which the German traders cut out our own countrymen. I should have thought that by this time the Government would have acquired some very important information. I hope a statement will be made. What did they find out when they went to the support of these banks in the City? I understand that it often works in this way. A German bank will advance to the German trader up to about 80 per cent on these bills for six or nine months. The German bank puts its name on the back; it comes to London and places it with a British discount house—not to the whole amount, but to more than three-fourths—so that in a great many cases British credit is financing German traders in Roumania, thereby enabling them to cut British firms who cannot get the backing of their own banks. Have all these obligations been cleared up now, or are any which are German still existing? When I say German, of course, I mean to include Austria.

I am not putting these questions in any hostile spirit to the Chancellor of the Exchequer. He was not at the Treasury at the time. I am not calling the transactions in question. It was a chance for the Government to realise how trade was pilfered from the British traders by Germans through the support of the banking institutions. I want to know whether there H in the City of London any financing of German trade by these institutions which the Government saved. If I had taken part in the Debate last week on the question of blockade I should have brought up this financial matter. I think a great deal could be done in the City to prevent this German trade, which for some reason or other is escaping our Navy. It is not of small dimensions. According to the official figures that I have just seen, during the first ten months of 1915 £8,000,000 or £9,000,000 worth of goods direct from Germany went into the United States. I do not think that that volume of trade was financed purely by drafts upon New York. They act and react. I am perfectly certain that if the whole resources of the City of London were used in this matter a considerable amount of the German trade now going on could be stopped. We have a right to use these institutions, because the State saved them at the time of crisis. If the State saved them by cashing German paper to such an enormous extent I do not think we are asking much if we ask now for the co-operation of these institutions in tracing wherever they can be traced any financial operations in the City which indirectly finance German transactions. I apologise to my right hon. Friend for pressing the matter in this way, but I have been given to understand that this is the proper occasion on which to put these questions. I assure my right hon. Friend that if his answer takes the form of saying that he will inquire and reply later I shall not regard it as in the least discourteous.

Mr. McKENNA

I am sure that—quite by inadvertance—my hon. Friend used an expression upon which I should imagine he does not wish to lay stress. He spoke of the action of the Government as having saved British banks from bankruptcy. I can assure him—

Mr. BOOTH

I withdraw the word "bankruptcy"; I mean difficulties.

Mr. McKENNA

I can assure the hon. Gentleman and the country that British banks were never in the slightest danger of insolvency. It is quite true that in the general interests of the trade of the country, the Government—I think most wisely—at the outbreak of the War stepped in in order to give a temporary relief in respect of bills accepted in this country, which bills at that time were a British obligation, but bills in respect of which there was no immediate prospect of receiving payment. The Government guaranteed the discounting or re-discounting of those bills, and there is no doubt that a very large liability was in consequence undertaken. But it was a liability which is only temporary, and a liability which has already during the War been very largely discharged. I have not now got the original figure of the liability undertaken by the Government in respect of pre-moratorium bills, and I do not wish to express any opinion as to a figure which I have not got definitely in front of me. It was a very large amount. It was stated in this House on 18th August last, I understand, that advances on pre-moratorium bills and other advances stood at £39,000,000; that is to say, that in August last the amount of liability had already been largely paid by the British firms that were obliged by discounting the bills under Government guarantee. Since 18th August, and up to the present time, more than £8,000,000 more have been paid off, including receipts on account of interest. As regards advances in connection with the Stock Exchange, I understand that they have now been reduced to a negligible figure. I hope that no one outside this House of whose misinterpretation of the action of the Government my hon. Friend spoke will hereafter be misled.

It was not in the interests of the capitalists, as capitalists, that the Government acted; it was in the interests of the State. The working classes of this country would have been the first to suffer, and would have suffered most. Unless the whole machinery of trade is kept going we cannot either import or export. It is not necessary now to enter into the details of that machinery. I am sure it is thoroughly understood by every Member of the House. But it is quite clear that unless the ordinary operations of finance and banking can be carried on, goods will not be transported across the sea and will not be held for sale in this country. It was, therefore, in the interests of trade, upon which so much of the success of our country in the War inevitably must depend, that the Government rightly determined and rightly resolved to ease the situation which was created by the outbreak of the War. On many occasions the Government has interfered in order to assist classes of traders and of workmen, and classes of every kind in the country, whose special interests have been adversely affected by this War. The Government interfered in the interests of the whole nation. It is an undoubted fact that no class, whether working, capitalist, trading, or manufacturing class, can be seriously injured in its work and prosperity except to the great detriment of the whole interests of the nation. I hope, when I have been able to supplement what I have said by giving the original figure of Government liability, I shall have given a full and complete answer to the question of my hon. Friend.

Mr. BOOTH

I asked specifically in regard to the financing of Germans. If the Government's answer at another time is satisfactory, well and good. What was really my urgent point was the financing of Germans.

Mr. McKENNA

If by the financing of German bills my hon. Friend means that the Government discounted bills on which there was no immediate British obligation, but on which there was an immediate German obligation, my answer to him is that at no time have any such bills been discounted by or on behalf of the Government. If his question was whether any of those bills were drawn originally by German firms, then, of course, a very large number were.

Mr. BOOTH

What was the proportion?

Mr. McKENNA

A considerable proportion of the whole, because a great many foreign bills have been accepted in this country. It was in respect of those acceptances that the obligation was entered into by the British Government. If my hon. Friend means to argue upon that that we ought to discourage in future acceptances in London, or the discounting in London of bills drawn abroad, I am afraid he will have the whole commercial interests of the City opposed to him. We look upon it as one of our great sources of national revenue that we are in the main the bankers and discounters for the world. I would humbly submit to him that it would not be prudent statesmanship to discourage that trade, which is at the present time, I believe, the admiration and the envy of all great commercial cities outside this country.

Mr. BOOTH

I am afraid I am being misinterpreted. I was dealing with enemy bills. I am dead against German bills or trade in any shape or form. I am not against other people's bills, but against German and Austrian bills.

Mr. McKENNA

I think there is perhaps a little confusion between the bills drawn before the War and bills drawn after the War. It may be quite a proper thing to say in this country that after the War no bill of German origin shall ever be discounted in London.

Mr. BOOTH

Hear, hear!

Mr. McKENNA

That is intelligible. But if it is to be said that it is a wrong thing to discount a German bill before the War in London, then really that involves the whole policy of discounting foreign bills. It was impossible before the War to draw any distinction between German or other foreign bills. Unless we were to divest ourselves of our whole interest in foreign bills, which would be a most unprofitable thing for us to do, we could not before the War distinguish between German and Austrian and other bills. What the policy of the nation may be after the War; whether we will say that we will not trade with Germany, or will not discount German bills, or that we will not touch anything that originates in Germany or is going into Germany, is quite another question. That is a matter of policy which Parliament will be hereafter called upon to settle. It would be quite erroneous to argue that the Government was wrong in not feeling for British firms that were under an obligation in respect of German bills drawn before the War.

I pass quite briefly to one or two other points which were raised. My right hon. Friend the Member for Islington (Mr. Lough) seemed to have some difficulty in understanding the nature of a Vote of Credit. At one time he spoke of it as if it were a loan, and at another time as if it were our sole source of expenditure. It is neither one nor the other. It is simply a single Vote taken to cover a whole mass of Supply, instead of our taking, as in the ordinary course we should take, a number of separate Votes to cover the expenditure of the Army, Navy, and the different other services in the War. It would be more accurate to speak of it as being more in the nature of a Vote in Supply. When my hon. Friend complained as he did—though I should not call it a matter for complaint—that the estimate of actual expenditure out of the Votes of Credit had never reached the figure which had been stated in the Budget Statement by me in September, I think he was comparing two figures which cannot be put one against the other. Last September I anticipated that our total expenditure, not only out of Votes of Credit—that is, Votes of Supply which are given in the Votes of Credit—but our total expenditure on all services would probably reach a rate of £5,000,000 per day before the end of the financial year.

Mr. OUTHWAITE

That was including the normal expenditure of the country?

Mr. McKENNA

Of course, that includes all expenditure upon all Civil Services and the new expenditure on the debt. That is a very large expenditure, and I should say an increasing expenditure on our debt services. These debt services and Civil Services expenditure together now are approaching—I have not the figure before me—but I think they now are approaching nearly £500,000 a day. If that figure be added to the expenditure of upwards of £4,300,000 a day out of the Vote of Credit, we are, in the middle of February, getting very near to the point of £5,000,000 a day. I anticipate that by the end of the year we shall almost exactly get to the estimate made in September last. The hon. Member for Coventry complained that we were not taking proper steps to maintain our credit. He was rash enough—I think I am right in saying—to call attention to the American exchange. My hon. Friend should remember that at the present moment we are at war—a little fact that he occasionally forgets. I would ask him to compare our rate of exchange with the American exchange, and with that of every other belligerent Power. At the present time the American exchange is kept at $4 76½ cents to the sovereign. The hon. Member was particularly criticising the action of the Treasury in not maintaining at the present time the American exchange. We do not wish the American exchange to be any higher than the figure I have given. An absolutely normal American exchange would be about $4 86 cents. It is 10 cents below. We do not wish the American exchange either to go up to the normal, or above; for the very simple reason that we are discouraging imports by keeping the exchange a little below par. My hon. Friend may think we are wrong, but it is quite a tenable hypothesis that we are right. So long as we keep the exchange at a point which is above the point which renders the shipment of gold a paying transaction—

Mr. D. MASON

My right hon. Friend knows as well as I do that gold continues to leave this country.

Mr. McKENNA

Does my hon. Friend think that gold is leaving this country at the present time for the United States?

Mr. MASON

Yes.

Mr. McKENNA

Does the hon. Member think that it is a paying transaction to ship gold at $4 76½ cents?

Mr. MASON

Obviously it must be. You do not export gold for the benefit of the Government.

Mr. McKENNA

If my hon. Friend looks at the export of gold with insurance and transport he will see it does not pay to export gold so long as the exchange is kept at a rate, such as it stands at present, and we are satisfied with that rate. When the hon. Member compares it with the exchange rates, say, of Germany or Austria, then he will see what trade means. Talk about British credit not being maintained! It is an absolute marvel, after eighteen months of war, that we are still almost the only open gold country in the world—that every sovereign's worth of paper can be exchanged for gold at the bank. And then to talk about our credit not being maintained! If my hon. Friend really understood the subject—I regret he does not—he could not use the language he has. Ha would know that two years ago it would have been thought absolutely impossible that we could raise these gigantic sums. My right hon. Friend the Prime Minister has stated that we have asked for Votes of Credit for over £2,000,000,000, and, notwithstanding this gigantic increase, we are still an open market for gold. The whole world can come and take our gold if it pleases it to do so. That is done on credit. It could never have been believed that British credit could have withstood this extraordinary test. We act with prudence and statesmanship, and an understanding of what credit means and value of credit to us. We can maintain our credit throughout the War, however long it may last. We have gigantic resources, but we have to husband our resources and add prudence and statesmanship. My hon. Friend asks what we are going to do when we have sold our American securities. Eighteen months ago he was an alarmist. A year ago he was in terror. Six months ago he had a panic. We are still alive, and our credit is good; and I will tell him a year hence, if the War lasts, what we have done to maintain our credit as high as ever.

Mr. THOMAS-STANFORD

I do not know whether I ought to apologise to the House if I go back for one or two minutes to the main subject before it—the Vote of Credit proposed by the Prime Minister this afternoon. I think, and I hope, the Prime Minister's speech will do something to dispel a considerable feeling of uneasiness with regard to certain aspects of the conduct of the War which has prevailed in the country. Some hon. Members in this House who are in constant touch with their constituents will, perhaps, agree with me that that uneasiness is less marked among people who are usually excitable or pessimistic than among the most sober-minded and the most levelheaded members of the community. That uneasiness is due not to any fear of the defeat of our Forces by land or sea, but to the consideration of certain financial circumstances which attend the stupendous undertaking in which we are engaged. The country has the most perfect confidence in the efficiency of the Navy. It has a belief, I think, not less perfect in the gallantry and ability of our soldiers. But it has no such confidence or belief in the Departmental and Ministerial management of the War. It would be rather strange if it had. The course of our recent history, both before and since the outbreak of the War, has been marked by a series of glaring instances of want of foresight and want of preparation. It has even been acknowledged by the candour of Ministers. The Minister of Munitions came down to the House and chanted his melancholy refrain of "Too late." I think that this uneasiness will be specially relieved by two portions of the Prime Minister's speech this afternoon. In the first place, the actual expenditure on the War which he put to the House is distinctly less than in his former statements, and in what he said about the establishment of committees to control expenditure I think the country will find some indication that the Government is bent on the economical conduct of the War.

The public has not been happy in the past about the Government's expenditure upon the War. We had at the beginning of the War most outrageous extravagance in almost every Department, and we have had at the other pole disagreeable incidents which undermine public confidence in the efficiency of the Government with regard to expenditure. I have had brought to my notice in my own Constituency lately a case of money due for the billeting of soldiers which has remained unpaid for over twelve months. This money is not due to any wealthy contractor or to a rich mercantile house, but is due to a poor lodging house keeper, to whom this withholding is a real hardship. I think that such instances of undue parsimony, not to call it by a harder name, do not tend to make the public believe that the financial business of the country is managed with businesslike regularity and efficiency. The Prime Minister spoke of the grave and unusual responsibility which devolves upon the Government in the matter of the expenditure of these vast sums upon the War. My own membership of this House does not go back, or scarcely goes back, to the pre-War period, but I am aware it is the right and duty of the Members of this House to exercise some control over public expenditure. In this crisis we seem distinctly to have lost that power. Our constitutional tradition has not survived the strain and stress of a great war. Whatever Ministers ask for, that will be given unto them. The Prime Minister asked to-day for a Vote of £420,000,000. It will be given after two or three days' debate. We can only express the pious aspiration that the money will be well spent, and therefore I think the country will be glad to have heard from the Prime Minister that the Government feel that a great and unusual responsibility devolves upon themselves in this matter. It would be an extraordinary thing if one of our most potent weapons should, through want of economy and reckless extravagance, break in our hands. Our resources, vast as they are, are not illimitable. We cannot go on indefinitely spending £4,000,000 or £5,000,000 a day, or importing hundreds of millions of merchandise in excess of our exports. Our capital is no doubt gigantic, but, for the purposes of the War, we can only rely upon such portions of it as are marketable abroad. Our far vaster capital is invested at home in railways, docks, factories, paving-stones, and whatnot. If economy, if careful expenditure, enables us to carry on for an extra day, an extra month, or an extra year, it may be that that day, or that month, or that year may give us the ultimate victory. Such is the importance of economy, and we cannot contemplate with anything like equanimity the possibility of the time arriving when a Minister will come down to this House, and, in this connection, shall also cry "Too late."

8.0 P.M.

Sir J. WALTON

In the first place, may I congratulate the Chancellor of the Exchequer on the very encouraging statement that he had to make to the House to-night, and I feel I am expressing the opinion of the whole House when I say that in the present Chancellor of the Exchequer we have certainly the right man in the right place. With regard to the question raised by my right hon. Friend the Member for Walthamstow (Sir J. Simon), I will not refer to that further than to say that it must be clear to the whole House that a serious mistake has been made. Upon whom the responsibility for that mistake rests we do not exactly know, but I wish that the Under-Secretary of State for War had been more emphatic in repudiating the idea that it was the intention for one moment of the Army to mislead any man who was called upon to attest; and not only that, but I wish he had clearly stated to the House that armlets will be issued on precisely the same terms and conditions that they were issued before the Military Service Bill was introduced.

Turning to the general financial situation, the stupendous figures that we have, as a House, to consider are something that must give us pause. We are asked again, though the last Vote of Credit was only-introduced on the 10th of November, to consider a further Vote of Credit for another £420,000,000, £120,000,000 of this being for the current year. I venture to say that, but for wasteful expenditure in the various Departments of the State, and especially in the fighting Departments, there ought to have been no necessity to ask the House for the £120,000,000 to carry us to the 31st March. For the next year we have to contemplate an expenditure of not less than £5,000,000 a day, and the question is how are we going to meet those huge financial obligations that will shortly come upon us, especially when, in addition to the huge expenditure to which I have referred, we realise that the imports into this country exceed the exports by £500,000,000 a year, if we include Government purchases We have already realised the greater part of our dollar securities towards meeting the excess of imports over exports. How' shall we meet our liabilities as the year goes on? We shall get a rude awakening if we do not, as a nation, frankly face the financial situation of to-day, and that which is to be developed in the course of the year. We must prepare in advance to meet and overcome the great financial difficulties with which we are confronted, and to which I am sure my right hon. Friend has already given his serious attention. If bankers, through the issue of large loans, lock up the money of their depositors, I ask, when the War is over, how they will be able to provide the necessary financial facilities to enable traders and manufacturers to carry on a greatly expanded trade, and produce largely increased exports to enable us to pay to foreign countries the debts we owe them. I urge upon the Chancellor of the Exchequer that the issue of any further loans should be postponed to the last moment, and we should rather look to raising the money we need by increased taxation. I believe there is practically no limit to the financial sacrifices the nation is prepared to make in order to carry this War to a successful issue, but if we are to avoid the danger of national bankruptcy the attitude of the whole nation must be changed both as regards public and private expenditure. It is the duty of the Government and of this House to give the nation a much more distinct lead in this matter than they have done up to now. The question of the economic exhaustion of Germany seems to be prominent in the minds of some people, but do not let us flatter ourselves that because of the heavy fall in the value of the mark that Germany is on the verge of either starvation or economic exhaustion. She has not our own difficulty in a large excess of imports over exports, because she compels her one and a half millions of war prisoners to till every yard of soil in Germany that can produce food, and in this way she is practically self-contained as regards her food supply.

The printing press in Germany turns out twenty, ten, and five-mark pieces of paper without any regard to the backing of gold she has, and with merely a Government guarantee, those pieces of paper are being passed from hand to hand in Germany and accepted as legal tender. The collapse that will follow the conclusion of the War will be such as has never been known in the history of the world in Germany, but meantime she is able to carry on to an extent that many people would not realise. After all this terrible War seems more likely to be ended by economic exhaustion than by fighting. What about our financial strength? It is magnificent, as the Chancellor of the Exchequer has just told us. We can outlive Germany in an economic sense, if we thoroughly organise and conserve our financial resources, but not otherwise. What about our wasteful expenditure, both public and private? Does anybody imagine that we are getting value for our money in the £5,000,000 a day we are expending? I question very much whether we are getting £4,000,000 in value for every £5,000,000 we expend upon the War. We discussed last Thursday the untold millions we are wasting by the mismanagement of our mercantile marine, and wasteful and avoidable expenditure is still going on I fear in every Department of the State. The Prime Minister has pointed out to-day that we have at last appointed Committees to try and effect economy in connection with the War Office and the Admiralty and the Ministry of Munitions, as well as in connection with the Home Departments of the Government. The Prime Minister spoke of those Committees having been appointed some time ago, and I regret to say that I think they were appointed far too late. It is only a short time ago that they were appointed, instead of being appointed immediately after the outbreak of war. It is for this House to see that those Committees investigate and report promptly in the different Departments with which they are concerned.

I hold the view that all imports other than those required for the prosecution of the War and for the national existence ought to be prohibited in order to bring about some nearer approach to an equal balance of trade as regards imports and exports. We need a thorough organisation of labour in order to apply it where it is most required in order to secure, if possible, an increase of our exports. What is being done in this direction? I think a conference of the best business men of the country might do a great deal of good. We talk of congestion in the docks of this country and delay in the unloading of ships, and a reduction in consequence in our carrying power of ships in the course of a year. If there were proper organisation at the docks, and a proper application of the labour available, this difficulty might be met, and a great deal of it is due to the lack of a proper distribution of ships arriving at our various ports, because they are sent to the wrong ports, which are too congested. A great increase in the carrying power of our mercantile marine might be secured if the men in the Army were offered the opportunity to volunteer to load or discharge Government ships at various docks in the country, and, of course, I would make it a stipulation that they should only be put to do this work when all the civilian labour available had been made use of. Consider for a moment what the actual position is at our docks. We have a certain amount of casual dock labour, and I can assure the House that only about half of it is fully employed. I wish the President of the Board of Trade could have been here to have this information, because it is absolutely well-founded. All the docks in London have the same call time; the result is that too many go to one dock and too few to another, because they can only go to one dock at the same call time, with the result that many men are left out. In Liverpool, where they have a proper organisation, they have different call times at the different docks, and if a man cannot get a job at one dock he has time to go to another dock where labour is not so abundant. At Tilbury, for example, there is great congestion of shipping and not sufficient dock labour, whilst at other docks in London men have been sent away because there is no work for them. It is true that they could get down to Tilbury by train, but they will not pay their own fare to get down there.

With regard to this £420,000,000 extra Vote of Credit, I would like to know have we properly and thoroughly organised our agriculture in order to secure the largest possible increase in our home production of food in order to lessen our dependence on imported food? Have the Board of Trade ceased their efforts to keep down the prices of the necessaries of life? In this respect we seem to lack evidence of their continued activities. Have they wearied in well-doing? We used to see in the newspapers every week that the prices of various necessaries of life had been fixed, but for months past I have not seen any communication of that kind from the Board of Trade, and I think it is high time they resumed this duty. With regard to waste in connection with the Army there are thousands of horses in connection with Infantry, because the higher officers of Infantry have a horse provided for them at the front at the cost of this country. There are thousands of soldiers employed in looking after those horses. So far as the Infantry goes I am assured on all hands that for those horses in our present method of warfare there is no military necessity whatever, and I am told that thousands of horses have never been used by the officers for whom they are intended for twelve months at a time. Not only do we keep horses there, but we occupy mercantile tonnage carrying oats and hay for those horses when that tonnage ought to be utilised in directions infinitely more essential, and this would tend to reduce the high rate of freights. I know that the Financial Secretary to the War Office has this matter under his consideration, for he told me in reply to a question that the men looking after the horses were trained soldiers, and would be utilised in fighting if they were needed. May I point out that they are not there at the critical moment because they are five or six miles behind the lines, and therefore cannot be utilised in that way. Even though it goes against the traditions of the Army, I hope my hon. Friend will have the courage to tackle this question, and I am sure he can save a large amount in Army expenditure in this direction.

I wish to say a word about the misuse of officers. At Etaples there is a base camp of twenty-six Divisions of the British Army with twenty-six commandants, each paid £650 a year, employed to look after the men. Surely by a little reorganisation fewer than twenty-fix commandants could quite well perform the duty of sending reinforcements up to their proper divisions. I should like to know the age of each of these twenty-six commandants. Are they "dug-outs" to any extent, for whom a nice soft job is thus provided. With this huge expenditure we cannot afford to have a single penny wasted, no matter what the previous claims of officers may have been. I will give the House an example of the misuse of these men. The 4th Yorkshire Battalion was reduced by Whit Monday last year to half its strength and for three months it had to do the full battalion's work in the firing line without any men in the support trenches. I say that it is absolutely criminal that men should be put to the extra strain of spending days and nights on end in the firing trenches. After months of effort I got a promise that reinforcements would be sent out, and 200 properly trained men were sent, but the balance were not half-trained. What was my surprise the other day when I discovered that out of the 200 trained men who were sent to France in October only thirty went up to join their battalion, while 170 of them were employed making hurdles at the Base, and it was four months after those 170 trained men landed in France before they arrived at the front to join their battalion. Common sense would tell us that if they needed men to make hurdles they ought to have taken the half-trained men and sent the fully-trained men to the front to fight with their gallant comrades. It would have been better still if they had sent 170 good old-fashioned labourers over military age across to France. They would have made hurdles infinitely better than soldiers who had never made them in their lives.

We have previously discussed the question of waste in connection with camps and hospitals, we have previously discussed the prices Army contractors are allowed to charge, and we have previously discussed the question of the cost of khaki. I would ask my right hon. Friend the Financial Secretary to the War Office if he can to-night give us an assurance that these matters are receiving the closest possible attention. One feels that the case with regard to the cost of munitions is very serious indeed. I do not believe that we get £1 in value for every £3 we send to the United States for munitions of war. I know that the cartridges are very defective, and that more than once they have been sent back out of the trenches, the men having refused to use them. I want to know what steps are being taken to take more care that our shells are effective. It is an absolute fact that on the day that the 600 yards of trenches were taken by the Germans, ten days ago, one of our boasted 8-inch howitzers sent twenty-eight shells, and out of those twenty-eight shells only four burst. It is criminal to send ineffective shells to our brave fellows to defend their lives and their trenches. The French, I am told, examine every shell before it is sent to the front, and very often they have to make changes to make them effective. At any rate, I am sure you would not find that out of twenty-eight German shells only four burst, and the balance in excess of that number means death to our brave British soldiers. I want to know what inspection is given in our case to the shells. I would spend money to any amount necessary to secure that these ineffective shells are no longer sent out to our men.

I know that the Ministry of Munitions are doing a great work, but they are producing munitions regardless of cost. In some cases they send the most contradictory instructions, and change their instructions about every fortnight. I am not speaking without knowledge. I have had a good deal to do with the setting up of a shell factory at Barnsley, in my own Constituency. We were told that we were to make a particular shell, and we were told the particular machinery to get, and the kind of lathes to prepare. Then, when we had got eighty lathes and other machinery ready for the work, an order came down from the War Office to say, "We do not want you to make that particular kind of shell; you must make another kind of shell."

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Forster)

Not the War Office.

Sir J. WALTON

I beg my right hon. Friend's pardon, the Ministry of Munitions. The sins of the War Office are great enough. I would not put anything on to their shoulders for which they are not responsible for the world. I am not speaking here to-night without knowing and recognising that my right hon. Friend is just as keen to prevent wasteful expenditure and to have everything done in the best possible way as I could be myself, and my criticisms, if warm sometimes, must not be taken as not recognising that, after all, those responsible in every Department of the State have had to tackle the most gigantic task that was ever imposed upon men in this world. I give them credit for doing their best, but sometimes outsiders may make suggestions, and it is only in the direction of suggestion, and not of undue reflection upon them, that my remarks are made. The Barnsley shell factory was ready to commence to turn out shells, but before they could turn any out they had to alter the whole of the eighty lathes, and they had to sweep away the other congregated machinery and get some other machinery. The result was that the shell factory was delayed beginning to turn out shells for several months. It is easy to criticise and easy to talk, but at the same time the financial outlook is so serious that we cannot afford waste, if by any possibility it can be prevented.

Mr. AINSWORTH

I should be glad to hear from my right hon. Friend whether, when we come to the Consolidated Fund Bill, we shall be allowed to discuss how far the Government and the War Office are doing what they can to consider the question of the Volunteer Forces in England and Scotland. Both these forces represent a very large number of men, many of whom might be usefully employed for Home defence and other analogous purposes, thus liberating men who are practically trained to be sent abroad where they might be more usefully employed. This is a question which is certainly interesting a number of Members of this House, and, if I could be given to understand that it could be discussed on the Consolidated Fund Bill, I should be glad to leave it to come on later.

Mr. KING

I do not think the Debate has been at all satisfactory from several points of view. I am sorry that the Prime Minister did not give us more information about the progress of the War and the policy of the Allies. There are many points in connection with the expenditure of the Government, the work of our Armies, and the objects of the Allies' policy, on which it would have been extremely well if we had had some more information. There are many points personally I would like to know about. I think we ought to have been told a little more about the advances to our Allies. We have been advancing money lately not only to Allies, but to neutral countries. That is a distinct advance of policy which has never been put before this House at all. We have advanced to one neutral country something like twenty millions sterling. [An HON. MEMBER: "What country?"] Roumania. It is perfectly obvious. We have bought grain from Roumania to the value probably of £10,000,000. It is admittedly a large sum, and it is quite clear we cannot get delivery of that grain until after the War. Is that grain being paid for in gold? It is a very serious matter indeed if we are actually paying out gold for goods which will not be delivered until the end of the War. I suppose the Government will not tell us any more about this matter. On this as on many other questions they will withhold from us what we ought to know. Great as my confidence is in the ability, intentions and integrity of Ministers, I submit that they ought to take the House and the country much more into their confidence than they have done.

There is another question I may mention. There are large objects of policy on which we get no information, and yet they are objects of policy which are absolutely fundamental for the understanding of the War and for explaining the position and intentions of other countries. At the same time they are absolutely vital to us in our future relationship with all the nations of the world. What are our intentions with regard to the future of Constantinople? This country sent a great expedition to Gallipoli which probably cost two or three hundred millions sterling and about a hundred thousand lives. Surely we ought to know the political objects with which that was undertaken. Was the political object which sent our men and our ships to Gallipoli to obtain the city of Constantinople for our Russian Ally after the War? That is a vital question of policy. One of the best informed publicists—I mean Dr. Dillon, the famous correspondent of the "Daily Telegraph," a gentleman who received recently the compliments and congratulations of our Under-Secretary for Foreign Affairs, has, in recent articles pointed out that if, as he assumes to be the case, the whole object of our Near Eastern policy has been to give Constantinople to the Russians, then the defection of Greece, the opposition of Bulgaria, and the hesitation of Roumania are all explained at once. If our policy had been clear and open before the world, and judicious as well, with regard to the future of Constantinople, we could have had all those three countries on our side fighting against the Central Powers. Anybody who has studied the politics of the Near East will admit that. Is it not inconceivable that we should have had no statement in this House of the policy of the country with regard to so vital a question as the future of Constantinople, a question which is absolutely decisive of the whole political attitude of the Balkan States. If that policy were, as I think it ought to have been, that until after the War we should give no promise and make no engagement of any kind—if that had been our policy it ought to have been stated. If, on the other hand, we have by secret and definite engagements already pledged the future of Constantinople to our Ally, with whose efforts and whose aspirations we have the greatest sympathy, then again I say we ought to have been told.

One of the great misfortunes of the country at this time is that we do not know what we are fighting for. This state of things cannot go on for ever. The country and the House have been willing to give a measure of confidence and support to the Government, which has been quite unequalled. I have given it such support and confidence as I could, but we do not get the return which we ought to have in the way of definite indications of the political objects the Government have in view. It is growingly difficult, not only for intelligent and patriotic men, but for our Allies and for neutral countries, to understand what we are aiming at, and what we are fighting for. The Government will not give us the information we think we are entitled to. It is extremely unfortunate that when Italy, whose aspirations we so admire, and whose gallant devotion to her national cause, a united Italy—the cause of Italia irredenta, which we all appreciate—when Italy came into the War no statement whatever was made as to the terms on which she entered, or what was expected of her, or what she mutually expected of her Allies. It is remarkable that whereas on the entry of this country into the War an elaborate diplomatic Blue Book was issued, showing the whole position and the reasons for the War, and when Turkey came into the War other elaborate Blue Books were published explaining diplomatically the whole situation, yet when Italy came in on our side and when Bulgaria appeared in the field as an opponent, our Government published no diplomatic correspondence in regard to those events. This is both very unusual and very unsatisfactory. The Government, confident, I suppose, in the fact that it had unwavering support from the Front Opposition Bench, who were either unable or afraid to criticise any single one of its actions, and confident later on in its position as a Coalition Government, consisting of both political parties with the Press of both sides also at its back throughout the country, this Government felt itself the more secure in its policy of obscurantism, and in hiding the facts—the political, diplomatic, and military facts—from the country more than ever before. In a time of war I do not expect to be told what is going on until considerably after events have matured. In a time of war I do not ask the Government to tell us immediately the development of the position as it is from day to day, but when my country is making unexampled sacrifices of men and of material, when it is saddling itself with millions of pounds of debt, which not only this generation, but future generations will have to bear, I do most respectfully say that the Government ought to take us more into its confidence and tell us more of the prospects and the proposals which it has to make and more of the definite, united objects which the Allies, as a whole, have in view. These are things upon which we get no information. I regret extremely that there has not been a more persistent demand in the House for information upon these subjects. I know that there are some explanations of that. One is, of course, that for years past there has been an amount of secrecy in foreign politics and a consequent lack of interest taken by the public in foreign political methods and objects.

There are other aspects of the discussion to-night which I have watched with considerable disquietude. The Debate to which we have just listened upon the action of the War Office must be said to be nothing less than humiliating. The Military Service Bill was passed, and within a few hours of its being passed the whole principle upon which it was based, which was to carry out and complement the Derby scheme, was thrown aside, and an attempt was made by the War Office to get behind the actual provisions, the spirit as well as the letter, of that Bill. Nobody could have listened to the speech of the right hon. and learned Gentleman the Member for Walthamstow (Sir J. Simon) without feeling that a very serious indictment had been made against the honesty, the good intentions, and the fair play of the War Office. Nobody could have listened to the reply of the Under-Secretary of State for War, whom we all in this House admire and like and than whom no one gets a more sympathetic and attentive hearing, without feeling that the War Office had absolutely no answer to make. The fact undoubtedly is that the Government have been given so much confidence by the House and have been so patiently followed and listened to and so steadfastly supported by the House and the country that it thinks it can do anything it likes without question, and the officials—especially the officials of the War Office—think they can stretch the letter and spirit not only of an Act of Parliament passed a few hours before, but of the Constitution and the whole traditions of public life to any extent in order to try to get a few hundred more men into the Army.

Hitherto I have not been inclined to doubt either the justice of our cause or our prospects or the ultimate victory of righteousness, but I must say that to-night—especially in view of the course of this Debate—the lack of information which is given to us, the spirit which is growing up in the administration of this country, and especially the attitude of illegal—I use the word advisedly—straining of the law by the War Office, I feel more depressed and more fearful of the future than I have ever been before. I may be told that if one man loses courage it does not mean that the nation is losing courage. I may be told that possibly I, at least, have failed in my patience, in .my confidence and in my faithfulness. That may be, but the influences which affect me are affecting many others, and the patience which I have observed is not boundless in other people. I have no doubt that at the present time there is an amount of anxiety and, I believe, a slackening of confidence in and support of the Government which I have not observed before. This is a very serious matter. On the whole I feel that we have had very little comprehensive support for our confidence and very little appeal to our intelligence from the Government. Personally, I have felt for some time that this War is tending to become obviously a war of exhaustion. For a year and a half at least there was a tendency in all quarters to say this will be, or at any rate may be, a War finished by a great victory, and our successive increases from 1,000,000 to 2,000,000 and so on to 5,000,000 in the Army, and the corresponding efforts and sacrifices made by other nations have been attempted because there has been the idea that by greater effort and sacrifice there might be attained a great military victory which would be of such a character as to be actually decisive to bring the War to its inevitable conclusion.

I have listened to the Prime Minister to-day and also to the speeches, for some time past, of other Ministers without detecting even the hope—there has been certainly no expression of an expectation—of a military victory, but I have not even detected in the speeches of Ministers the feeling that there is a hope of a military victory. That is very serious, and it means what I suppose really the country is making up its mind to, and also what the Government is facing, that this is not going to be a war of victory at all. It is going to be a war of exhaustion, and such military victory as there is to be attained is not going to be won by overwhelming heroism, great as that is, on one side or the other. It is going to be won by the side which in one way or another can hold out longer. I conclude from such journals as I read, and from such intelligent appreciation of military, critical, diplomatic, financial and general conditions as I can bring to bear upon the subject, that that is the position. All the facts point to the greater probability that this is going to be a war of exhaustion. That being so, I ask myself this question: Is the policy of the Government at the present time directed to face that issue? Are we really carrying on the affairs of our country in such a way that we are likely to be able to last out better than our opponents? Unfortunately I was not able to hear the Chancellor of Exchequer who, I understand, made some observations on this issue, but, speaking generally, I do not see that the policy which this country is pursuing at present is certainly calculated to last out longer than our opponents. That is my great anxiety. That is an anxiety which I am sure is shared by many other people, and that is an anxiety which is not fairly faced by the Government at present. Can we last out at the rate at which we are going?

There are various considerations which I feel I may possibly just touch upon in this connection. One is this: We are spending, we are told, £5,000,000 a day, or something less. Obviously we are spending over £4,000,000 a day—something like, at any rate, at the very lowest computation, £1,400,000,000 a year, and that must go on. Are we spending that money economically? As I understand it, Treasury control, the most effective control over public expenditure which has, I think, ever been developed in this or any other country, was thrown away at the beginning of the War over the big spending Departments. The Army was no longer under Treasury control as soon as its great era of wide expenditure commenced. The Navy was no longer under Treasury control as soon as its expenditure developed about four or five times the ordinary amount. The Ministry of Munitions was established, and it was immediately exempted from all Treasury control. That is not wise policy. It may make life easier for the gentlemen who work at the Treasury. Their life at present I am certain is far from easy. I am sure their existence is 'a very arduous existence, but the petty savings over education, over shutting up a few museums, the efforts, the explanations, the memoranda, and all the rest of it that the Treasury put forward, the deputations they receive and the answers that they got to save £50,000,000 by the closing of museums—it is perfectly ludicrous when we hear men who have seen the inside of the great spending Departments, the Army and the Navy, saying they believe that in almost every case 25 per cent. of the expenditure is unnecessary or wasteful, or extravagant, or might be curtailed. This is a very serious, I might even say a. very terrible position. The Treasury is at present straining at the gnat of a few museums, and is swallowing camels and camels of expenditure which is put before them by the War Office, the Admiralty, and the Ministry of Munitions. It would be terrible indeed in any case, but when it means that the lasting power of this country is placed in jeopardy, I look upon it as certainly the most serious issue which I have ever faced in my political life, and far and away the most serious question which has ever been discussed in my knowledge in this Chamber.

I very much regret therefore that the question which I put to the Prime Minister to-day was put aside, very politely, but I think in a tone which showed that the Prime Minister saw the seriousness of the question in a way that gave no satisfactory answer at all I asked the Prime Minister whether any attempt had been made to fix a limit to the size of the Army, and to the question of bringing our military expenditure and our ultimate financial resources into harmony. The Prime Minister replied that the subject had been receiving attention, but whether any decision has been taken on this matter I got no answer. I want to tell the right hon. Gentleman on the Treasury Bench (Mr. Montagu) that I think if the Government want to have the complete confidence of the intelligent members of the community they must adopt a different course. They can always get the confidence of what I may call the populace, the people who do not go very much below the surface of the real facts of the War, by announcing victories or by announcing great hopes or great achievements in some way or other. Whether they are really important or not, if they are only put forward in the proper way, they will excite enthusiasm and gain a certain amount of confidence. But if the country in its intelligent aspects, and if the really serious sections of the public are to be restored to confidence in the Government, they ought to be told definitely whether the Government can say this or not—that, with all the great expenditure that is now going on, with all the prolongation of the War possible before us, we are still in such a position that we can last the longest.

9.0 P.M.

I do not believe that that is possible until we do, in the first place, set a limit upon the size of our Army. In my opinion the Army has already grown to a size too great for real effective use; too great for real fighting purposes in France, and the stories that I hear and the reports that I receive in one way or another confirm me in that belief. There are a great number of battalions now in training which have been training in this country for twelve months. There are quite a number of battalions, I am told, where the average of physical strength and power of endurance is such that they cannot really be set to do the hard work that has to be endured by some of the regiments at the front. That all points to this, that our Army has been recruited to an extent and has been trained in a way that is not entirely effective. It has been recruited extravagantly. All these men have been withdrawn from the earning power and the producing power of the country; they are no longer wealth producers, but wealth wasters, without becoming real fighting men, and yet they are on the shoulders of those who are paying the taxes and producing the wealth which has to support them. I have tried to bring to the notice of the Government a consideration which I am sure is very widely felt and is growing in intensity, and it is this: Is the Government preparing for a war of endurance, a war in which we can win only by exhausting our enemy, and, if so, are we going on the right lines? Is our policy really directed to that end, and is the policy that is being pursued one which, on those lines, will eventually prove successful? I feel that that large issue has not been faithfully met by the House and that it has not been faithfully answered by the Government. I trust that during the course of the Debates, before the Vote of Credit is passed and carried through this House by the Consolidated Fund Bill, we shall have some sort of answer to the points I have brought before the House, namely, whether our financial resources are such and whether they are being husbanded in such a way and whether the whole policy of the War is being so directed that whatever the length of the War and whatever our sacrifices our finances and our material resources are such as to bring us through to victory.

Mr. OUTHWAITE

I wish to say a few words in support of the line of argument followed by my hon. Friend (Mr. King) in regard to an issue that I have raised again and again, and which I raised on the first occasion on which it was possible to criticise the War in this House, and that is the question whether our military operations are being coordinated to our financial abilities, or whether, in regard to our military, we are taking on ourselves a greater burden than this country can bear for the long period during which it will be probable we shall have to endure, if we are engaged in a war of exhaustion. I have criticised adversely the policy which led us to the campaign in the Near East. As the hon. Member (Mr. King) has stated, we have had no statement by the Government as to our object in going to Gallipoli. We have had various statements made in reports of the Greek Chamber, and by three successive Greek Prime Ministers, which give us some clue to the fact that the Dardanelles Expedition was undertaken for the purpose of securing Constantinople for Russia. We know that, because we find the Prime Ministers of Greece saying that they offered and undertook to come in at the time of the first Dardanelles enterprise, but that Russia opposed that action because she herself desired the conquest of Constantinople and did not wish to have a rival claimant in the operations. Therefore, I think it is quite clear that, although we have never had a statement made here, we undertook that operation for the purpose of securing Constantinople for Russia. The significant thing is that, so far as we know, this military operation at the Dardanelles was not undertaken at the advice of, but indeed against the advice of, our highest naval and military authorities. We know that it had not the sanction of our highest naval authorities, and I believe I am right in saying that it was not favourably approved in the first case by Lord Kitchener. It was a diplomatic manœuvre. It was brought about through our diplomacy, and we had to back up our diplomacy by force of arms. It seems to be a most dangerous method for us to adopt, to have this House kept entirely in the dark as to our diplomatic activities, as to our political objects, and as to our commitments to foreign countries, and then for the Prime Minister to come down here and ask for a Vote of Credit for £420,000,000. If you go on those lines it seems to me that you will undoubtedly bring this country down to bankruptcy before any great military success can be gained.

I do join my protest to that of the hon. Member against diplomacy being concealed entirely and our objects being concealed entirely, while we are asked silently, almost without criticism, to vote these gigantic expenditures, which will determine, I believe, our fate and the issue of this War. The Chancellor of the Exchequer dealt rather severely with my hon. Friend the Member for Coventry (Mr. D. Mason) because he suggested that British credit was not exactly what it used to be, and the right hon. Gentleman wound up his not very informative speech by a glorification of the condition of British credit. I hope when we have voted these £420,000,000 and the Chancellor of the Exchequer, as he will have to do, goes to the City to raise a loan that he will find British credit exactly what it was and will be able to get the money at 2½ per cent. or 3 per cent. or 3½ per cent. I hope that the security of British credit will be as good in the eyes of the bankers as ever it was. He says that it is, and therefore if the City of London, and those who have wealth in this country which is required for the conduct of this War, tell him that they must have 4½ per cent. or 5 per cent. I hope he will say that British credit is as good as ever it was, notwithstanding the War, and that they must deliver the wealth that is required for this War at the pre-War rate of 3 per cent, or 3½ per cent. That would be a very proper thing to do. At a time when we are commandeering, conscribing the flesh and blood of this country, men's lives, for a shilling a day, I think that it would be very fair for him to deal on the same lines with the financiers of the City of London. But so far as I can see, from the speeches made and the articles which have appeared in the Press every day, oh the Government War Loan which must follow this Vote of Credit, what they are saying is that it is to be a 5 per cent. Loan, and that one essential is that it shall be free of Income Tax, or that Income Tax shall be limited in regard to it.

I can understand if that is what is in the minds of financiers of this country the Chancellor of the Exchequer will get every support for riotous schemes for the flotation of loans. It is rather significant that a great financier the other day, Sir Edward Holden, addressing the shareholders of the Midland Bank, seemed to be in a most joyous mood as regards the expenditure of this country. He looked forward with absolute complacency to the day when we should have to raise £400,000,000 a year by way of taxation. I could scarcely understand it until I noticed that he said that in the case of future flotations it would be necessary to make them free of Income Tax. That is a most admirable condition for the financiers. If they can lend money not at the rate of 3 per cent., which prevailed before the War, but at 5 per cent., and then secure from the Government that that 5 per cent, shall be free of Income Tax, then the War is the most glorious proposition that ever came to the financiers of this country. It will leave them richer than they were before. I hope that the Chancellor of the Exchequer will not yield to any of the blandishments of the financiers of the City of London. What I regard with the greatest concern, in connection with the statement of the Chancellor of the Exchequer, as regards British credit, is the fact that such large sums can be raised by borrowing in contrast with the amount raised by taxation. We are constantly hearing of the need for economy, and we see these wretched, piffling, irritating little endeavours to limit expenditure by the closing of museums and by the skimping of some items in the education service, but the right way to enforce economy is by taxation. If you reduce the incomes of people by so much, you reduce their capacity for extravagance.

I held, at the beginning of the War, that you should have reduced the whole community down to something like a subsistence level by way of taxation, and taken the rest for the conduct of the War, and more particularly that the Chancellor of the Exchequer should open a new, and great, and fruitful source of revenue for the purpose of the War. At the beginning of the War a section of Members of this House drew his attention to the fact that there was a great field in this country to which he might go for revenue which was not taxed—that was, the land of this country—and that he should go to that source for the first revenue that he might require. The Chancellor of the Exchequer, I have no doubt, quite agreed with us and believed in the taxation of land values, as to which he expressed enthusiastic views before the War. I remember a speech which he made once, saying, "When they ask us to tax bread, we will answer them by saying, 'No, but we will tax land values.'" But it is suggested that there is an objection to doing this now on the ground that it is controversial and could not be done during a time of war. His view of the landowners of this country was that they would be so unpatriotic as to object to paying a tax upon the value of the land which men were being sent out to defend. I hope that they are not so unpatriotic as he conceives. I would desire to emphasise the encouragement of economy more than the question of raising fresh revenue. As the latter might not be altogether in order I believe that it would be in order to suggest a method of encouraging economy. There would be no better way of encouraging economy than by levying a substantial tax on the value of the land in the United Kingdom. You would not have then, as has been stated in the "Daily News" by a lady known in Tory circles, that in the country districts where she is, the farmers' sons hunt three days a week. If we had that taxation, the farmers' sons would have to work. If there is any difficulty in adopting this form of taxation because you cannot give the value, I would suggest to the Chancellor of the Exchequer that he should avail himself of the opportunity presented by the fact that the Prime Minister of Australia will shortly be here, and—

Mr. DEPUTY-SPEAKER (Mr. Whitley)

This is a proposal to go into Committee of Supply, and not into Committee of Ways and Means, for raising taxes. If I permitted the hon. Member to develop his present point, there are others who would like to indulge in a similar argument.

Mr. OUTHWAITE

I thought that perhaps I would be in order in referring to this as a means of reducing extravagant expenditure. I do hope that the Chancellor of the Exchequer, when he comes to the question of raising these loans on this Vote of Credit, will make no engagements which will secure the land against taxation. When we consider the question of these Votes of Credit for such vast amounts, and when we regard our general position, I think we have indeed need for economy. I do not think we ought to regard only our position to-day, but that we ought to give some consideration to the future which we are likely to be creating for this country. It seems to me that if we raise these vast amounts, if we spend them in any way unnecessarily, we are going to lay a terrible and most unjust burden upon future generations. At the beginning of the War I was in opposition to the diplomacy which led to it; at the same time, I do not think there was any greater optimist in the country than myself in relation to the outcome of hostilities. In this island I felt we could provide for ourselves; we had absolute command of the seas, and if we sent sufficient men to maintain the front, this country was absolutely certain of being in a far better position than any other belligerent. That was my feeling at the beginning of the War, and that was the ground of my optimism.

But that optimism has been shaken and nearly the whole basis of it destroyed by the action of the Government. I submit that we should limit as far as possible our military expenditure, and that we should rely upon keeping our industries going, so that the credit and the finances of this country may be behind our Allies. But if we extend our military operations, and if we draw men away from industry as we have done in greater ratio, and when we have this Compulsion Act to raise more millions of men, the result must be to curtail our industries, until the only output will be for the purposes of war and destruction. It is therefore I say that my optimism, which was very high at the beginning from the purely military point of view as to the result of the War, has passed away, and I do not think we can disguise from ourselves the fact that by this policy which is being pursued, by this flagrant financial expenditure, not only ourselves, but our Allies will have to set a limit to the powers of endurance in this country. I think the sooner we recognise that the better. Instead of talking about the credit of this country and raising thousands of millions by way of loan, the quicker we set our financial and diplomatic house in order, and the more we keep in view the possibility that some way may be found to bring about the close of this terrible War, the better it will be. It seems to me at present that it is going to bring about the doom of European civilisation, and, if a stop is not put to it, probably before many more months are over.

Captain BENNETT-GOLDNEY

I hope the House will forgive me if on this Vote for military requirements I again raise the question of our Air Service, which, I know, only a few days ago was raised on the Amendment moved by my hon. Friend the Member for Brentford. Of course I know another day is to be given for a full discussion of this subject after the Government have disposed of the financial business, but that, in all probability, will be more than a month hence, and I am of opinion that there are still many questions which ought to be asked and answered in this House now without any further delay. There can be no doubt that, both before the War and since, in spite of all kinds of warning from all kinds of sources, sufficient energy and money has not been spent upon many absolute necessities for the efficiency of the Air Service. But it is true, on the other hand, that the public have from time to time been lulled into the belief that everything was being done that could be done, and that so far as our air defences were concerned, everything was absolutely satisfactory. As a matter of fact they never have been satisfactory, and they are not satisfactory now. In this connection, by the courtesy of the House, I wish to refer again, briefly, to the exact words of one or two of the statements made by responsible Ministers, which have a very direct bearing on what I want to say. They were quoted in this House only the other day, and the right hon. Gentleman the Under-Secretary of State for War complained that he despaired of convincing the hon. Member for Brentford. All I can say on that point is that there was no justification for his complaint. How can the right hon. Gentleman expect us to be convinced when he remembers how seriously we have all been led astray by official utterances such as those which I am about to re-quote? First of all, I refer to the statement of the then Secretary for War, on 19th March, 1913, more than a year before the War. These are the words of the right hon. Gentleman: I may say, from experiments I myself have witnessed, that all the mechanical difficulties have been completely solved, and that the actual difficulty of hitting an aerial target at a considerable height, and moving at an unknown speed, has been enormously exaggerated, and that everybody concerned has been surprised beyond measure at the comparatively easy and remarkable accuracy which can be attained in firing at aerial targets. I only hope that the right hon. Gentleman, when he comes into this House, will explain to us how it is that none of these remarkable guns which we are supposed to possess, and which we may be paying for out of this present Vote, has ever yet succeeded, since the War began, in hitting and bringing down any of these aerial targets which have recently been flying with so much freedom over our Kentish coasts. I should like to know whether any of our new anti-aircraft guns; which I presume are also to be paid for out of this Vote, have yet been sent abroad, and, if not, whether we may have an assurance from the Government that the actual and vital requirements of our overseas Armies are being duly considered in connection with the requirements of our Home defence? As we have been informed by the newspapers—and I know perfectly well myself, having come from the district to-day—there was another daylight raid yesterday, and, as on previous occasions, the enemy aircraft left our shores unscathed. In this connection I want to remind the House of another daylight raid which took place also on a Sunday, at Dover, on the 23rd January. We were told by the former First Lord of the Admiralty—I remember it perfectly well—that any hostile airships or aeroplanes which reached our coast—he was speaking of the year 1914—would be promptly attacked by a superior force, a very formidable swarm of hornets. We heard of that swarm of hornets several times last week in this House. I have a very particular reason for asking about these hornets on the occasion of the raid in question. It was a raid over the first-class fortress of Dover. It took place in broad daylight. The Under-Secretary for War has given us some very characteristic information with regard to this particular raid and I desire to call the attention of hon. Members to the answers he gave in this House on the subject. These are his words: I understand that there were not three raids as stated (that was as stated by the hon. Member for Dover), but two, one of which took place during the night and one during the day. I may say for the information of the House that the daylight raid on Dover took place a little before one o'clock. I presume the right hon. Gentleman had not heard of the enemy aeroplane which was over Broadstairs about four o'clock on the same afternoon. That is another matter, and I will confine myself to this Dover one o'clock raid. Continuing his answer, the right hon. Gentleman said: The hostile aircraft were fired at by anti-aircraft guns both on land and sea. Four military aeroplanes and two seaplanes went up in pursuit, but the raiders were too far ahead to be overtaken. As they were virtually out of sight at the time before the British machines went up, I should say they were. On 26th January the right hon. Gentleman added the following information: On the occasion on which British aeroplanes ascended to attack the enemy the lapse of time between the sighting of the enemy aircraft and the ascent of British machines was that required to .prepare the machines for flight. In reply to a further question as to whether those aeroplanes ought not to be kept ready for flight, the right hon. Gentleman replied: They are kept ready for flight. What were the facts of the case? I am sorry to have to say it that the right hon. Gentleman by his answer, which I have been given to understand was partly based on a memorandum he had received from the Admiralty, gave an impression which was very far from being in agreement with what I know to have actually taken place. The machines were not ready and the officers were not present. I am not blaming the officers. I wish to be perfectly clear on that point. The Government had chosen, I presume as a matter of economy, to give them their mess some two miles away from their work, and we know that it was lunch time. But I am entitled to ask about the machines; were they armed, and, if so, where were the machine guns, and how was it that in the scramble which ensued at least one airman had to go up with only a Winchester rifle with some five rounds of ammunition and that this was all the armament he was able to find. But this is not all. I ask, and I am sorry the right hon. Gentleman himself is not here, but it cannot be helped. What happened in mid-air? The machines had started up after the enemy aeroplane was out of sight. What did happen—a battle between one of our aeroplanes and one of our seaplanes, both of which mistook the other for the enemy. But even then this was not enough, for having witnessed the fray our anti-aircraft gunners turned the fire upon both and in a vain attempt to bring them down managed to damage the tower of Walmer Church and injured some of the men in barracks. I ask quite seriously, are accidents such as these calculated to give us on this side of the House confidence either in the administration of the Air Service or in the explanations we receive from the Front Bench in regard to them. We are now informed, forsooth, that things are going to be better. All I can say is, I accept that statement, they could not possibly be worse.

I desire to ask one other question. I ask whether we have now on this Vote of Credit after eighteen months of war a sufficient number of fully trained air pilots and air gunners to man the large numbers of new and fast machines which the Ministry of Munitions is now delivering. Have we a sufficiency of these men and are we training them as thoroughly as we ought to both as pilots and as gunners. I have been told—and I have no doubt I shall be corrected if I am wrong—that at the outbreak of War we had no school of teaching at all for teaching our airmen to shoot from aeroplanes, and I think I am justified in adding that it was only in last September, more than a year after the outbreak of War, that the Government did at last start a school of the kind. In this connection I wish to know now, when we are voting this large sum of public money, whether this school, the only one of the kind we possess, is, at least, thoroughly equipped. Has it an experimental officer with his staff, in addition to an instructional officer with his staff? Has it a sufficiency of fully-trained pilots for taking up the young gunners under instruction, or is it dependent upon borrowing a pilot now and then when it may be convenient for some neighbouring station to lend one? I should like to have that question answered very particularly. I should also like to know if there is a sufficient supply of aeroplanes for the purpose or are there none? Certainly there are no air-sheds. Are there properly-equipped repairing shops, and, last but not least, are there healthy quarters for the men? No, Sir, there are not; there are none of these things at all. We were told the other day that the Government are providing some fresh landing places, and, in answer to a question from the hon. Member for Brentford, the Under-Secretary of State for War said that in the neighbourhood of London the Government were providing a certain number of suitable landing places for our airmen to land at night. He did not say they were adequate, but we may assume they are fully equipped with searchlights and flares.

What we are entitled to know on this Vote is, Are there any night-landing places being made ready also on the East Coast and in Kent, elsewhere than in Kent and the London districts? I could say a great deal about the neglect in providing adequate landing places at night for our men who have been obliged to fly some of our newest machines. All I will say now is that the Government has to bear a grave and serious responsibility in this matter, and there are other kinds of waste, preventible waste, besides waste of aeroplanes and waste of material. Only yesterday I happened to be walking over a large tract of ground which has been chosen, I believe, as a landing place for aeroplanes in a certain part of Kent. I found, to my astonishment, that although this land had been chosen for the purpose it had recently within a week or two been ploughed up. What on earth is the use of ploughing up land already become solid, which was suitable for the purpose for which it was going to be used, and which will now probably have to be sown as well as rolled? It is only an additional waste of public money. It may not be very much, but it is certainly an additional waste. Can the right hon. Gentleman inform us how it is that recently our antiaircraft guns at Dover only fired percussion shells, which rely for their efficiency solely upon direct hits? As they only fired percussion shells the other day, is it to be wondered at that the enemy aircraft, flying at 7,000, 9,000, or 10,000 feet high, escaped our gun-fire altogether? But it is useless to criticise unless criticism is accompanied or followed by a suggested remedy. I believe that the danger of hostile air raids can be largely decreased if only our airmen are given a fair chance to live. The enemy come over for the most part at a great height. In the daytime they come over in the sunlight, and they are virtually unseen until they begin to drop their bombs. Our machines have no time at all to get up. It is essential that they should be as high as, or even higher, than the enemy machines. If our airmen could receive earlier news of the approach of the enemy we should be in a better position altogether. We all know that flying is possible only upon certain days. I ask the Government if it would not be possible to provide an air patrol on the other side of the Channel on suitable flying days? I have talked to many airmen on the subject, and they see no difficulty in it. If we had such a patrol and another on our own coast I think we should get proper warning, and in that case not only London but the Midlands might consider that the bravery and heroism of our airmen would yet protect us from the more pressing dangers both of enemy Zeppelin aircraft and of enemy aircraft of other kinds. I only hope that the Government will see to it that they remedy some of the things I have indicated.

Mr. LYNCH

Vigour is the best economy. The real prudence is audacity. This is the theme which I desire to discuss to-night. I remember on a previous occasion, when I did not rise in a Debate similar to this, I consoled myself with the reflection that the occasion would recur, and that this spendthrift Government would place before us frequent opportunities of discussing its wastage of money. I know that they could plead all sorts of petty economies, but on the large and major issues their whole conduct of the War might be characterised as one great principle of waste. Do they think it a satisfactory situation that, after eighteen months of the most terrible war known to history, the forces of the Allies are still on the defensive, and their best and most encouraging bulletins are such as assure us that we still hold our own? There is a principle known to military men from the dawn of time, and often emphasised by those great masters of the art, Napoleon and Von Moltke, that a force which relies entirely on the defensive inevitably ends in capitulation. This is the situation taken into consideration with the fact that the actual resources of the Allies are superior to those of the Germans—superior in the number of men at their disposal, vastly superior in wealth, superior in the facility for transport. In the history of this War, all the great adventures, all the grandiose plans, and most of the successful coups have been to the credit of the Germans. And the Government are content with that. They put on a superficial aspect of optimism, and they desire us also to share that optimism. This is not the moment for optimism or pessimism. This is a serious moment, when we must take into account the realities of the situation, and face all these problems and deal with them in a scientific manner. The Government has not done that, and shows no sign of doing it.

In order to find out the cause in view of the terrible nature of the realities with which we are faced, one is tempted to go deep into the psychology of things. The fact is, we are led by men who are not fitted to lead at times of great crisis. These men have been elected for quite other purposes, and for those sophisticated and specious half virtues or negative virtues which have been praised in times of peace, but which are found so lamentably lacking when tried in the crucible of nations. So we find all these men, with their lawyerlike minds, their lawyer-like arguments, their insincere methods, and their want of realities, lacking in this crisis. I look upon the Treasury Bench, and I see many worthy and well-meaning men, but I fail to see what one should expect as the leaders of a great nation at a great time when the greatest stakes of humanity are being played for. I see only mediocrities—mediocrities even though they be gilded mediocrities. No doubt these mediocrities have uses, except in crises. In days like this we must have plain speaking. We must not be overawed by reputations, however great. We must turn the searchlight of realities on these men who are leading us or not leading us. We must not fail to criticise even ruthlessly men who are placed in the most exalted positions. I will begin with the Secretary of State for Foreign Affairs. His record during this War has been a record of disaster. Every name of every country in Europe stands to-day as a symbol of antagonism—Bulgaria joining the Germans, Sweden almost hostile, other nations which have the same reason as England for participating remaining neutral spectators, and even those who wish for the victory of the Allies having no great faith in that consummation. It might be said that the Secretary of State is not responsible for that state of affairs, but he is up to a certain degree. The main point is this, that he has not the quality, great as his qualities may be, of a great diplomatist placed in his situation and dealing with the difficult problems which confront him. He, the representative of this insular nation, has unfortunately what I may call the insular mind. There are men who, if they lived twenty years in France or Germany, would be completely untouched by their circumambient atmosphere or the spirit of the people—perhaps on account of their excellent and impregnable fortress of British qualities—but even those virtues, if you like to call them such, are virtues which mean failure in diplomacy if they deprive him of sympathy and understanding. All through this crisis, and also always before this crisis, which has only been the trial of men, the Secretary of State has never seen realities. He has never had that intimate sympathy and understanding of men and of event which would render him able to foresee what was coming, to enter into the inner meaning and spirit of movements; he has simply seen men through a glass darkly, and he has never recognised any situation until it has become historical.

He is one of the great failures of this War. Before the War he was what Bismarck once called a "great undiscovered incapacity." The War has succeeded in discovering him—both his virtues and his limitations. The fact of the matter is that he and others have enjoyed reputations which were not theirs; in the piping times of peace they would have gone their way to glory, and would have lived for ever on ornamental tombstones as pinnacles of British statesmanship. But, unfortunately for them and unfortunately for the country, they have been tried in this crucible, and they have been found wanting. That is perhaps not acceptable to the Front Bench, but if there was there at the head of affairs sitting on that bench one who would accept the statement and deal with it, it would be well for the nation. I should like to see such a man, I will not say a man of great learning, or of great statesmanship, but even a man of a rude force of character like President Lincoln; such a one would say as Lincoln said to his inefficient men, however great might be their reputations, "you are not fulfilling the task, you are not bringing the victory to this nation, therefore we must part with your services." There is no man in that Cabinet who has the courage, a sufficiency of moral courage, to take that attitude, and to demand that the country should strike in the right path even at the sacrifice of those reputations which have been built up artificially and under the shadow of which those concerned hide themselves in face of this House.

I will leave the Secretary of State for Foreign Affairs and proceed to discuss for a moment the Secretary of State for War. He has been a monumental failure in this crisis. His reputation, again, in great part is a newspaper and artificial reputation, which was never warranted by deeds adequate to that glory. He has been tried in the fire and found wanting. He has been the most disastrous man whom the nation could have selected for a position so prominent. Placed as he was in a position virually of a dictator, not only have his blunders been enormous, but they have not been the blunders of the fighting man. They have been the blunders of a weak hesitating, and vacillating man. It may be said that it is useless to rake up old histories, the old histories of Antwerp, Neuve Chappelle, Loos, and the Dardanelles, but the unfortunate position is, that the authors of these disasters are still the men who are entrusted with the direction of the War. I know it will be said, what is said secretly, that the Secretary of State for War has been deprived of most of his power and that he is now nothing more than a figure head. If so, that is a humiliating position for him, and it is a humiliating position for the Prime Minister also. If a man has been found wanting, he, the Prime Minister, has not the moral courage to dispense with his services, but saves the situation by the artifices and sophisticated devices of the second-rate man. First of all the Ministry of Munitions was taken from the Secretary for War, and then he was turned into a temporary Ambassador, and during his absence the Government had the courage to do, what they apparently flinched from doing to his face, stole from him a great part of his authority in the direction of the Ordnance; when they filched from him another part of his functions by appointing a Chief of Staff, who, of course, should have been appointed from the first day of the War, and to that Chief of Staff they entrusted many of the functions which had previously been performed by the Secretary of State for War, and they practically reduced him almost to a nonentity. Their plea is that this man—in a position so important, so exposed to the public view as the representative of the greatest activities of the nation at this time—is in the position where, after all, he can do no great harm.

Can there be any fact more damaging, any criticism more mordant, than the mere statement of such a fact, presenting the condition of mind which prevails amongst the men who sit on that Front Bench opposite. And these still produce the same causes to which are due the general lack of efficiency—the want of vigour and power, the want of the masculine virtues, of foresight, of boldness, of thought. On examination we see the explanation of the causes of failure, and the results are such as we might have expected. There is nothing in this War that has not grown from causes, many patent and all discoverable. The situation in which the Allies find themselves now is not due to a blow of fate; it is due to their conduct. Conduct is fate; it has brought these visible results. What are the results? After the ghastly example of Belgium, after the dismal failure of the Dardanelles—a failure rendered more dismal by the fact that it was in the nature of things to have made it a magnificent triumph!—the blunders were repeated in Serbia, and from the same causes—want of courage, want of moral courage, want of boldness, lack of the strong mind to shoulder big responsibilities and face unflinchingly desperate situations. I say again that those blunders would be forgivable if they were the blunders of a fighting man. They were the blunders of the man whose action was rather inaction; the blunders of men who drifted in their councils, and who drifted in their acts. If, instead of sending that hopeless expedition to the Dardanelles—when it became hopeless through lapse of time!—those men had been sent to the banks of the Danube, with an adequate proportion of forces from the various Allies, there could have been placed upon that river such a force that the Germans would never have dreamed of crossing it. That would have changed the aspect of the whole situation, military and diplomatic, in the Balkans. It would not only have prevented Bulgaria from coming in, but would have assured the adherence of Greece and Roumania, and would have been a menace to the very heart of the German Empire. What I say now is merely wisdom after the facts, but what I say now I said weeks and even months before these facts became realised, and when it was still possible to have acted upon such a suggestion. After these continual failures through sheer inefficiency, through sheer incapacity, what do they attempt in the end? An expedition which was almost more disgraceful than their abject failures, because it was a dishonest expedition, an expedition of a trifling number of men to face the overwhelming forces of the Germans—an expedition which was not a military expedition, but a Parliamentary expedition—a weak attempt to save the situation and to hide the face of the Government at the sacrifice of the lives of gallant soldiers, mainly Irish—but I will unite all, for in gallantry there has been no distinction. In this whole War one of the few bright spots is represented by the heroism of the common soldier, which has flashed out in this campaign as brilliantly as in the most splendid days of old.

I beg a little attention from the Front Bench. I will not proceed until I get it, because I know that their one reply to every situation is aimless gossip amongst themselves—the situation of Serbia and the desolation of Montenegro, and the inexplicable situation of Salonika! Again, what does Salonika correspond to If it was meant to be the beginning of an offensive operation the number of troops sent there is totally insufficient, for what could have been done six months ago with 500,000 men cannot be accomplished to-day with 2,000,000 men. The Germans are 10.0 P.M.

nearer their base than the Allies are. Again, I look upon the situation at Salonika not as a military situation but as one of those Parliamentary situations meant to save the face of the Government, and depending on the valour, the courage, and the genius of General Sarrail, one of the best of the French generals, but upon whose shoulders I fear too great a task has been imposed. For the situation at Solonika I have nothing but the gravest anxiety, for it presents to the German staff precisely the kind of problem which they love—that is to say, a concrete problem, a problem where all the factors are known. They know exactly the force there, and the resources of the Allies, and they can calculate the number of guns to bring upon them and the number of troops they must launch to the attack.

That, I believe, is their second best move; their best is an attack upon the Western front. There, again, you must not be led away by the foolish optimism which the Government pretends to infuse into our councils. We must examine the facts there carefully. My own belief is that not only is it possible for the Germans to break through the Western front, but that it is possible and better for the Allies to break through the Western front. I will not, however, pursue that particular aspect of the matter, but I will, before I sit down, give expression to certain practical principles. One of these is that we must abandon once and for all that foolish habit, which was so prevalent once, of saying, "We are not a logical people," "We will muddle through somehow," and that "Time plays for the Allies." None of those principles are true. They were never true at any time. Their expression is not a sign of wisdom on the part of those who utter them, however oracularly. It is simply a sign of a want of thought, or of shallowness of mind. Time will not play for us. Time would have played for the Allies if the Allies had made use of time. Time has played for the Germans, and their position is stronger now, and more consolidated, than a month after the battle of the Marne. Secondly, we must entirely give up the notion that we can starve the Germans out. That is impossible. They are organised too well. Even the famous Kaiser-bread, which was the object of so much derision of our comic papers, was not a sign of despair on their part. It was a sign of wise organisation, the husbanding of their resources. We must give up the foolish notion that we can beat them economically. The Germans are conducting this War far more economically than the Allies. They have organised their internal resources. This War will never be finished by an economic duel. I differ entirely on one point from a speech of the right hon. and gallant Member who was once First Lord of the Admiralty, and who is now serving at the front, when he said this War will be won by attrition. That opinion should be entirely abandoned. It will lead the Allies into false courses. Even allowing for the utmost attrition which has ever been claimed by the most imaginative war correspondent, or military expert—we all know the military expert—allowing for the loss of 6,000,000 Germans, killed, wounded, and missing, you will find—I will not enter tediously into figures—that, taking into account those of the wounded who return to the Colours, the new classes which have arrived during the eighteen months of the War, and the new accession into the ranks of the Central Empires of the Turks and the Bulgars, and taking into account also those whom they have organised and made available for their service in Belgium and Poland, you will find that the military strength of the Germans has hardly been at all decreased since the outbreak of the War. It is well to face the fact that this War can never be won merely by attrition, which is perhaps the most terrible and disastrous form in which a campaign could be won.

This War must be won, if at all, by beating the Germans in the field. Hither to the Government have made no plans towards that end—that is, no real organised plan which they are following out step by step in order to reach a destined end. I say that the programme of the Government, if it is not one of defeat, is at least one of preparation for a draw, and that would be one of the most terrible of all results. They may deny that; they may not have made their plans for that, but their policy will inevitably lead them to a draw unless they have made their plans for victory. During the whole of these months of war the Allies have been face to face with the Germans on the Western front and there has not been one great military operation conducted in great military style. True, there have been many operations where our casualty lists have been enormous, and the valour of our troops has been wonderful, and certain of these that the newspapers have claimed as "real victories," although there has been no real victory and nothing but slaughter. There has been no great military operation, but there have been foolish enterprises which have not been pushed to their legitimate conclusion; and all those great battles, glorifying the heroism of the common soldier, have nevertheless stigmatised the incapacity of their leaders.

I know it is possible for us to break through on the Western front because even that has been shown by our failures. When once we have broken through, instead of coming back again once we have made a breach in the enemy's lines, if we had poured in men and dashed forward to seize the German communications we should have secured a real victory. It is not a question of launching 20,000, 30,000, or 40,000 men, or of asking newspapers how many men are needed or consulting the House of Commons how many men they will sanction, because these problems must be looked upon scientifically, and estimated by the number of men calculated to make a victory of the enterprise. If in breaking through at Neuve Chapelle or Loos 40,000 men were required, they should have been provided; if 100,000 men were required, they should have been made available; and if 500,000 men had been necessary, plans should have been made accordingly, and the men should have been ready to march into the breach with their guns.

The Government has no plan of that kind, neither have their military advisers, and this after eighteen months of a struggle which we now look upon as having reached a kind of deadlock, but which is marked day after day with incessant slaughter, and in which the one thing that remains certain is the incessant stream of hemorrhage. You want a proper plan not drawn up by men whose incapacity has become so manifest, but by men who have the power to act, and who have the courage to follow the indications of their thought.

I think I was the first man in this House to ask for the recall of General French, and I say that if General Haig does not produce victories he should be recalled, and the best man available should be placed in his position, and if he fails to produce victory he should be recalled. That principle should be applied from the highest to the lowest rank of our officers. The men should be chosen for their merit only, and not merely for past services or the patronage of high persons, the friendship of Ministers, or for basking in the sunshine of Court favour. Their merits should be tested in the workshop of the War itself.

The men who are promoted to these positions should possess not merely courage and intellect, but also the quality, so difficult to define, but which is tested in action—the power of leading men to victory. The cadres of the officers should be rejuvenated, and you should have men who are not merely content to play a safe game; you should have men who are not merely desirous of maintaining the present situation, but men who are determined to win their spurs, who are full of ardour and dash, men capable of inspiring soldiers with the courage and confidence which they feel, and who are capable of magnifying and multiplying the spirit and the valour of every man in the Army. Those men are available in the British Army, and in every army, if one only proceeds to find them, and if the Government has the courage to appoint men to the highest positions who are capable of finding them, and who desire to find them.

No doubt the opportunity will arise again of pressing this point, and even if I were a voice crying in the wilderness I would hammer this point home again and again until it became prominent in public attention and produced a state of things which is destined to win the War. I would not have risen at all if I thought that even such a speech as mine would not have a good effect. I believe the Allies are fighting the great battle of liberty, and that should win to their ranks all those who are stirred by the finest emotions of our nature, all those who have courage, audacity, and energy, and not merely the negative virtue; all those who have faith in a great cause, inspired and inspiring, for that gives the promise and the gage of victory.

Mr. GINNELL

Most of what has been said on this subject to-day has had reference to the conduct of the War, but the Vote is really a cash Vote. It is one for an enormous sum of money, and relevant to that Vote is not only the conduct of the War in the field but the place and the mode in which the money is to be obtained.

Mr. SPEAKER

That matter is for the Budget.

Mr. GINNELL

Is it entirely for the Budget?

Mr. SPEAKER

Yes.

Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.