STATEMENT BY PRIME MINISTER.

HC Deb 24 July 1916 vol 84 cc1360-427

Order for Committee read.

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

The PRIME MINISTER

This is the third Vote of Credit for the present financial year that has been presented to the House of Commons. Previous Votes for the same year were on the 21st of February a Vote for £300,000,000, and on the 23rd of May a further Vote of £300,000,000; then follows this for £450,000,000; and the totals of the three Votes altogether are £1,050,000,000. I ought to remind the House of the total number of Votes of Credit since the outbreak of the War, although by this time they are generally familiar. There were taken for the financial year 1914–15 three Votes, amounting in all to £362,000,000. In the financial year 1915–16 there were six Votes, amounting in the aggregate to £1,420,000,000. If the House assents to the present Vote the aggregate, since the outbreak of the War, of the whole of the Votes amount in all to £2,832,000,000. The amount of the Vote now submitted is £450,000,000. It is substantially larger in amount than has ever been asked for before. The Vote of that magnitude is asked for, not because we anticipate any great expansion in the near future of the rate of expenditure, but because we are asking the House on this occasion to provide a sum that will last rather a longer period than ever before—to cover, for instance, any necessary Parliamentary Recess.

I understand there is rather widespread misapprehension in regard to the statements made last week by my right hon. Friend the Chancellor of the Exchequer that the expenditure in recent weeks has risen from £5,000,000 a day to over £6,000,000 a day. The statement has been interpreted to mean that for some time past the expenditure on the Vote of Credit has been £6,000,000 a day. It has been suggested that the present Vote had to be hurried on in consequence of that reason That is a misconception. The Chancellor of the Exchequer was referring not to the expenditure out of the Vote of Credit with which I am alone concerned to-day, but the total outlay in respect of all the services. The Budget framed by the Chancellor of the Exchequer provided for a total expenditure for all purposes and the daily average amounted to an expenditure of £5,000,000 a day. Of this £5,000,000 a day about £4,380,000 was the average daily expenditure on the Vote of Credit, and the balance, about £620,000, is to cover all other services—the Consolidated Fund Services (which include the service of the Debt), the ordinary supply services, the Civil Service of the country, the Inland Revenue and the Post Office. The right hon. Gentleman the Chancellor of the Exchequer, in making his statement, explained to the House the reason why borrowing powers have become exhausted sooner than had been anticipated, but for this purpose the only relevant figure was the total outgoings on all accounts. I will point out the reason why the figure has risen from £5,000,000 to £6,000,000 a day. I am dealing for the moment, in presenting this Vote to the House, only with the expenditure out of the Vote of Credit, which is a different matter; and, in recent weeks, the expenditure out of the Vote of Credit has been, approximately, £5,000,000 a day The difference between that figure and £6,000,000 a day mentioned by the Chancellor of the Exchequer is accounted for partly by the Consolidated Fund payments, including Debt and ordinary Civil Service, and partly by the fact that expenditure in respect of the purchase of American securities has been heavier than the dollar expenditure in America. The excess of the amount spent on American securities over the amount of dollar expenditure in America does not of course represent the true figure; it is merely a transfer of assets from this country to America. For the moment the securities have to be paid for in cash and the money, therefore, has to be provided here. That is the whole explanation of the matter.

Turning to the Vote of Credit itself that I am now submitting to the House, I will first review the progress of expenditure since my last statement on the 23rd May; and the figures which I am about to give show the true expenditure for the period in question, after allowing, as we always have to allow, for unexpended balances in the Army and Navy accounting offices, and for the advances made for the purchase of American securities, which, as I have said, are not disposed of in this country, and, therefore, are an asset in hand. The Vote passed by. the House on the 23rd May raised the total Grants in respect of Votes of Credit for the current year to £600,000,000. I then estimated that the Grant sanctioned by the House on that day would suffice to carry on the public services to approximately the middle of the first week in August. The total expenditure for the period from the 1st April to the 22nd July was £559,000,000, and the Votes passed by the House in Votes of Credit £600,000,000. That shows a balance in hand of £41,000,000, sufficient to carry on the services for a little over one week. It follows that the existing Grant of £600,000,000 will be exhausted a little earlier than was anticipated. I said the middle of the first week in August, and actually it will be the end of July. Coming back again to my statement of the 23rd May, I dealt then in detail with the period from the 1st April to Saturday, 20th May, fifty days, and I pointed out that for those fifty days the expenditure under the various relevant heads was as follows:

• Navy, Army and Munitions, £149,000,000;
• Loans to Allies and Dominions, £74,500,000;
• Food supplies, railways and miscellaneous items, £17,500,000;

making a total for the fifty days of £241,000,000. We have to-day to deal with the period from the 21st May to the 22nd July, last Saturday, a period of nine weeks, or sixty-three days. Under the corresponding heads to those I have just cited, the expenditure for that period was:

• Navy, Army and Munitions, £230,000,000;
• Loans to Allies and Dominions, £82,500,000;
• Food supplies, railways and miscellaneous items, £5,500,000;

making a total of £318,000,000 for the sixty-three days. Adding those figures the totals for the period from the 1st April to the 22nd July work out as follows:

• Navy, Army and Munitions, £379,000,000;
• Loans to Allies and Dominions, £157,000,000.
• Food supplies, railways, and miscellaneous items, £23,000,000;
• Making a total of £559,000,000.

If you reduce those totals to average daily rates you will find that whereas the total expenditure out of Votes of Credit for the fifty days ending the 20th May were, approximately, £4,820,000, for the next sixty-three days the average daily rate rose to, approximately, £5,000,000, while the average daily expenditure for the whole 113 days was £4,920,000. I come now to that expenditure a little more in detail. The principal, but not unforeseen, cause of the increase lies in the expenditure on the Army, Navy, and munitions. For the first period up to the 20th May the expenditure on those services was just under £3,000,000 per day. In the second period the average rose to £3,600,000 per day. I must warn the House, as I often have had occasion to do since the War began, that these figures are only partly estimated, and the true expenditure cannot be exactly ascertained until long after the event. It is quite possible that some of the expenditure which is here attributed to the second period properly belongs to the first. Accordingly, the average expenditure on these three services for the second period has been a somewhat lower figure than £3,600,000. The average expenditure on the first period was underestimated in the statement I last made. However that may be, the fact remains that at the present moment the expenditure on Army, Navy, and munitions is at the rate, approximately, of £3,600,000 per day.

Mr. HOUSTON

Does that include munitions supplied to our Allies?

The PRIME MINISTER

Oh, no; our own.

Mr. CHURCHILL

Irrecoverable?

The PRIME MINISTER

Irrecoverable. The House will recollect—I have quoted the figure more than once before—that £220,000 per day represents the estimated figure on peace expenditure. You have got to strike that out to show the extra cost of the War, so that a sum of £3,600,000 minus £220,000 is the expenditure directly attributable in these services to the War, or a little more than £3,300,000 per day. I cannot think it expedient or in any way desirable that I should give precise details under the different heads, but I may make one or two general observations about these three heavy branches of war expenditure. The Navy expenditure proceeds at a fairly uniform rate. It is little, if anything, above the amount allowed for in the Budget estimate, nor is it anticipated that the Navy expenditure will appreciably increase in the near future. To come to the Army, so far up to now the high-water mark of Army expenditure, exclusive of munitions, was reached in November of last year, and fell off slightly, as compared with November, in December. From 1st of January to the end of June it remained fairly constant, with a slight dip, to the figures, the somewhat less, of November of last year. The total for July, the present month, will probably be rather higher than the total for November, and it is anticipated, if there is no change of policy, that the present level will be maintained in the near future.

I come now to munitions, the third head. Here, for reasons which I need not explain, the expenditure increases steadily and continuously up to the month of May. There is a slight falling off then, but May, June, and July is proving fairly constant. The general position therefore as regards those three Departments, the Navy, Army, and munitions, is that we may hope that the expenditure on the Army and Navy will not exceed their present level, at any rate in the near future, unless some great change of policy should be decided upon. Munitions expenditure at the moment is stationary at the highest level yet reached, but that, I am afraid, will possibly expand even now a little more. I come next in this detailed survey to the item "Loans to Allies and Dominions," which, as I have pointed out, amounts for the second period to £82,500,000, or an average of £1,320,000 per day. It was £74,500,000 for the first period, showing an average of £1,490,000 per day, but those figures axe very misleading, stated without qualifications, because for the first period the average of £1,490,000 per day included an item of £12,000,000, which, as I explained in my last statement of the 23rd May, was really a total from the previous year. When you allow for that, the expenditure in the second period in respect of advances to Allies has been on the average higher than for the first period.

Mr. HOUSTON

Does that only mean money, or does it apply to supplies, too?

The PRIME MINISTER

It may mean either or both. The figures of loans to Allies and Dominions are swollen as regards the period from the 21st May to the 22nd July by the fact that His Majesty's Government recently consented to advance a sum of £11,000,000 to the Commonwealth of Australia beyond the amount already agreed for war expenses, in order to enable that Commonwealth to deal with financial questions which have been impracticable hitherto, and in connection with the supply of wheat.

Mr. HOUSTON

Does that include the purchase of ships?

The PRIME MINISTER

No, wheat. The total of this expenditure could not have been foreseen in the Budget estimate which was raised for the second period to the 22nd July. To come to the last item—food supplies, and various miscellaneous heads—the expenditure for the last sixty-three days has been £5,500,000, or only one-third of the expenditure for the previous fifty days which under this head amounted to £17,500,000. That completes the analysis of the various items of expenditure in the past. If we look to the future, concerning the Vote of £450,000,000 for which we are now asking, I think that after what I have said and the figures I have given the House will agree that we would not be justified in assuming that our daily expenditure from the Vote of Credit in the immediate future will be less than £5,000,000 a day. On this basis the Vote now proposed will last until the end of October. But some margin must be allowed for contingencies, and it will be remembered—a very important fact—that any fresh Vote of Credit must be proposed ten days or a fortnight before the exhaustion of the current Vote, in order to allow time—that is, at any rate, five days—for the passage of the Vote and the Consolidated Fund Bill which follows. Therefore, if the House agrees to the Vote which I am now proposing, it will be necessary to submit a further Vote about the middle of October. That may seem a long time off. It would not, however, be practicable to have another Vote of Credit and another Consolidated Fund Bill extending over five Parliamentary days, if the House is to adjourn for a Recess, and it will prob- ably be convenient so to arrange that on the resumption of our proceedings time may be available for the discussion of other topics before a fresh Vote has to be proposed.

Perhaps it will be convenient if I summarise the figures which I have given for the present financial year. From the 1st April to the 22nd July, 113 days, Army, Navy, and munitions, £379,000,000; loans to Allies and Dominions, £157,000,000; food supplies, £23,000,000; making an aggregate of £559,000,000—call it £560,000,000 for 113 days. The averages per day work out as follows: Army, Navy, and munitions, £3,350,000; loans to Allies and Dominions, £1,400,000; miscellaneous, £200,000; making a daily average of £4,950,000, or just under £5,000,000. Those are the figures, subject, of course, to adjustments, as they have worked out during the currency of the present financial year, of which one-third has now passed.

Sir G. YOUNGER

asked a question which was inaudible in the Reporters' Gallery.

The PRIME MINISTER

I will ask the Chancellor of the Exchequer to reply to that.

The CHANCELLOR of the EXCHEQUER (Mr. McKenna)

We buy the securities here in England and pay for them here out of the Vote of Credit. The securities are then shipped to America and sold there. With the proceeds of the sale in dollars we pay for the munitions that we have bought. Therefore, it is a payment on account of munitions. We do not pay necessarily at the exact moment we buy here.

The PRIME MINISTER

I observe that there is a Motion standing on the Paper in the names of hon. Members in various quarters of the House. I believe it appeared on a previous occasion, but was not then moved. I will ask the Chancellor of the Exchequer to deal with the various points contained in that Motion; but there are one or two topics to which I will refer. One is the suggestion that these Votes of Credit should be moved by the Chancellor of the Exchequer. With regard to that I am in the hands of the House. If they like to approve that suggestion, nothing would give me greater satisfaction. My right hon. Friend would do it much better than I can.

HON. MEMBERS

No, no!

An HON. MEMBER

It is a silly idea!

The PRIME MINISTER

The only other point with which I will deal is the suggestion that Votes of Credit should be presented for smaller amounts. Let us see what the facts are about that. In 1914–15, the first year of the War, three Votes of Credit were taken, covering eight months of the War. In 1915–16, six Votes were taken. The average amount of the Votes was £237,000,000, while the biggest single Vote was that in November, 1915, and nearly equalled the Vote I am now moving; it amounted to £400,000,000. The magnitude of that Vote was due to the necessity of providing a sum sufficient to cover the Christmas Recess. The Vote actually lasted from November to the end of February. In the current financial year there have been two Votes, each for two months' expenditure, approximately. The present Vote is the third in the current financial year, and will provide, roughly speaking, for three months' expenditure, so as to cover the remainder, I will not say of the present Session, but of the current sittings and some short Recess, leaving time on the resumption of the sittings for the discussion of other matters before a fresh Vote is proposed.

I must again remind the House that owing to our procedure, devised in time of peace, and perhaps better adapted to times of peace than to times of war, each Vote of Credit and the necessary Consolidated Fund Bill or Appropriation Bill takes five days, or has to be put down on five Parliamentary days. You cannot get it in less than five days. I do not propose to alter that procedure; I am rather a stickler for our time-honoured procedure. Of course there may be exceptional cases, like that with which my right hon. Friend had to deal the other day, when he was coming to the end of his borrowing powers and it was absolutely necessary for him to renew them. But, as a rule, I am in favour of sticking to the old procedure. Although I am proposing these large Votes, I am and always have been a very jealous custodian of the rights of this House over finance, and I do not propose to abridge them in any way. Under our ancient procedure five Parliamentary days are allotted to proceedings of this kind. In addition to that, it must be remembered that the preparation of a Vote of this kind with the necessary calculations as regards the past and the forecasts of the future takes another ten days. That makes fifteen days, or three Parliamen- tary weeks before you can propose a fresh Vote of Credit. Therefore I do not think the House will regard this as an illegitimate extension of its confidence to the Executive of the day, although, as I admit, the Vote is unprecedentedly large. It might be serious if in the middle of critical operations of the War, or when domestic or foreign events required the close attention of Parliament, we had to earmark a corresponding amount of time for a second Vote, instead of taking the whole sum now. I trust that the House, in that spirit of generous patriotism which it has shown throughout the War, wihout relaxing any of its vigilance or traditional and ancient safeguards, will give the Government of the day this sum of £450,000,000.

Mr. CHURCHILL

The House will certainly not quarrel with the Prime Minister for adopting the practice of introducing these Votes himself. If any criticism is required upon the statement to which we have just listened it is that it has been too strictly limited to questions of finance. We have not had from the Prime Minister what he alone can give and what his moving these Votes would enable him to give, namely, a broad survey of, or at any rate some reference to, the general progress of the War and the state of the great enterprises for the furtherance of which this money is asked. I made the same observation when I had the opportunity of following my right hon. Friend on the 23rd May. As on that occasion, he has again confined himself to a simple, concise, and lucid, but bare statement of the national accounts, which might equally well, if the statement were limited to that, have been made by the Chancellor of the Exchequer. Very grave and important events have taken place in the two months that have passed. I had certainly looked forward to hearing from the Prime Minister, in asking for this immense sum of money, some reference to events like the naval battle, or the brilliant tactics of General Brusiloff, or the sustained and magnificent defence made by our Allies at Verdun. Even if it were not possible to comment on the other operations which are now in progress, I believe a statement from the Prime Minister on this subject would be bound, as on other occasions, both to instruct the country and to encourage and to gratify our Allies. I trust, while the precedent of the Prime Minister introducing these Votes of Credit may be adhered to, the right hon. Gentleman will be more and not less willing in future to take advantage of this event to inform the House of Commons and the country of the way in which the Government view the general state and progress of the War.

The right hon. Gentleman is well aware that this Vote of Credit really regulates the Parliamentary Recess, and from that point of view it is important. No one wishes to begrudge the Government the most abundant supplies or to hamper them in any way in acquiring the necessary funds, but it is very important that Parliament should keep control over the course of affairs. I do not gather from what the Prime Minister says that he contemplates any lengthened period in which Parliament will not be sitting. No one is desirous that Parliament should sit continuously, or for prolonged periods at a time. But it is to be deprecated, in the present state of affairs, that long intervals without Parliament being called together should occur. I do not suppose the right hon. Gentlemen contemplates more than five or six weeks interval without a meeting of the House of Commons and Parliament? There were questions on the subject to-day as to the intentions of the Government in regard to the Recess. It is not a matter which bears very much on the money Vote. I do not know whether the right hon. Gentleman can say whether or not he contemplates more than six weeks adjournment?

The PRIME MINISTER

I should not like to commit myself, but I am sure it will not be a very long adjournment.

Mr. CHURCHILL

My own view is that the House should facilitate the Government getting through the business, and that there should be meetings at frequent intervals in order that the situation may be kept well in hand. On the financial aspect of the right hon. Gentleman's speech I have only one observation to make, and that is, I am very glad indeed that he has corrected the unfortunate impression created by the loose and slipshod statement of the Chancellor of the Exchequer the other day. The right hon. Gentleman had to make a very considerable reference to that remark, but the reference was, I think, received with relief and satisfaction on both sides of the House. The Chancellor of the Exchequer said, in effect, that the War expenditure was now £6,000,000 per day. Those were his very words. That, he said, was one of the facts of the War. It was a very misleading way of stating the actual facts! It was calculated to cause unnecessary depression and anxiety. It now appears that the irrecoverable expenditure is only £3,600,000 per day. That is what the Prime Minister said.

The PRIME MINISTER

Out of the Votes of Credit.

Mr. CHURCHILL

The irrecoverable expenditure out of the Votes of Credit. Oh, I see!

Mr. McKENNA

It is only loose and slipshod!

Mr. CHURCHILL

It now appears that the expenditure is under £6,000,000 a day, and is a very much more manageable sum. The immense proportion of the money will, of course, be in the class which is not recoverable. I, myself, do not desire to deal with what may be called the general issues of policy to-day. But I desire to ask the House once more to turn its attention to the administration of the Army. I rejoice to see that we have at last a Secretary of State for War in this House. The War Office is the mainspring not only of the War but of the social life of this country at the present time. The fortunes of every family are in their hands and are affected by them. The continuous demand for decisions from day to day from the Minister responsible to Parliament must be extraordinary in the War Office administration at the present time.

In time of war these great Departments cannot possibly continue to work smoothly without the official head being continually present, and able to give his whole time to the business. The late Lord Kitchener did very hard work each day. He began soon after eight o'clock in the morning and he worked to eight o'clock in the evening, with hardly any interval. After dinner he was always, or almost always, engaged in further labours. My right hon. Friend has not been a very long time at the War Office. I understand he is working from morning till night. Persons of consequence beseech him continually to give decisions, and to give his attention to matters of grave consequence and of urgency. It was impossible that the War Office in time of war should be conducted by the Prime Minister in the odd hours that he could snatch from his own laborious duties, and from adjusting the recurring crises of the Coalition Government. When the office became vacant it ought to have been filled within forty-eight hours in the interests of the War. It ought not to have been left vacant, with only such time as the right hon. Gentleman could spare from his already most severe labours. It was not at all a satisfactory event, and I think it is one of those cases which illustrates the undue importance which is attached at the present time to mere political adjustments as compared with effective, energetic means to prosecute the War.

At last we have got a Secretary of State in the House of Commons, and responsible to Parliament. The right hon. Gentleman will, I venture to think, find a vast accumulation of administrative problems awaiting his attention. I shall, therefore, return to the subject which I brought before the House on two occasions in May, and I wish to inquire of the right hon. Gentleman what progress has been made in regard to the various matters which I then raised. The great question which the right hon. Gentleman finds awaiting him—apart from questions connected with the actual strategical or tactical conduct of the War—is the use of our man-power by the War Office. The facts and arguments I brought before the House when I last spoke were not seriously challenged. They were very far-reaching and startling statements. They were not seriously disputed. I do ont believe they can be seriously disputed by authority. They disclose a very unsatisfactory situation in many respects. I quite recognise what is due to a Minister who is only just in the saddle, and therefore I gave my right hon. Friend notice that I wished to raise certain points. I quite recognise and understand that he may wish to reserve his answer until he has been longer in his new Department. But I want to know what has been done, if anything, to increase the proportion of rifle-strength to ration-strength, and to keep the units—possibly difficult when a very great battle is going on—up to their full strength, and whether the right hon. Gentleman sees any prospect of being able to raise the battalions in the field from their present strength of just under 1,000 men to about 1,200? That, as I pointed out, would make the increase in the rifle-strength as compared with ration-strength out of all proportion to the actual number of men required.

5.0 P.M.

Secondly, what is being done to secure, as far as possible, that all fit men shall take their turns, especially men between twenty and thirty years of age, in the trenches in the fighting units? What has been done to provide, as far as possible, substitutes for young, fit, military males who are at present engaged in non-combatant services far from the front? What has been done to afford relief to war-worn soldiers, and particularly to wounded men, who are sent back time after time to the trenches which others have never visited at all? Does my right hon. Friend know—I am informed that it is the case and it seems so extraordinary that I put it in interrogative form—that wounded men on being discharged from hospital are immediately placed in what is known as category A? That is to say, they go back to their depots and home units as first for service. One would have thought that when a wounded man recovers from injury he would have been put at the bottom of the roster of trained and fit men, and would only have gone out after the whole of the list had been exhausted. I do not know whether the right hon. Gentleman can confirm or contradict that statement, that the wounded men are immediately placed in the first category? That seems to be very unreasonable and undesirable, and in many ways a harsh thing to do. I should have thought that it was one that, without the slightest detriment to supplying men for the Army, could have been attended to. What has been done about natives? We heard a eulogy of the services of India from the Secretary of State for India last week. I do not hesitate to say—because plain-speaking is not only legitimate but necessary at the present time—that India at the present time is playing an inadequate part in the waging of this great War. Those who have the true interests of India at heart should insist that she should take her proper place in this world struggle—of events which will so long after be recorded and looked back to by the world. I have heard nothing which indicates that any attempt is being made to use the manpower of India, or India's great resources effectively in the War. The India Office attitude is one of general apathy and obstruction. What about Africa? I asked before what use was the Government making of the African population, whether for war or for labour? There are the natives of East Africa about whom encouraging reports are spread by those who are acquainted with the country and with the military quality of these men. There are possibilities in South Africa. There is the native population of Nigeria. There are the native populations of the Soudan. All those great fields ought to be developed to the fullest possible capacity, and merely to say, "Oh, there are great difficulties," and "It is difficult to find officers and interpreters," and so on, is not dealing with the subject as its urgency and importance require. I am going to ask the right hon. Gentleman whether anything has been done to reduce redundant administration training staffs at home. I am quite certain, if he looks into the condition of some of those large fortresses at home, with depots in them, he will find great overlapping, great confusion and complication of machinery, undue multiplication of persons engaged in the training staff proportionate to the number of recruits they are turning out and handling, and generally the possibilities of reduction in the staffs, which will both save the public purse and liberate more men for the fighting front. Then the Prime Minister, on the occasion of the last Vote of Credit, promised that the brains of the New Armies should be brought into use in administrative posts on the Staff here and at the front, and I ventured to point out then for the first time there has happened in this country, what has all along been the rule in Germany, that the brains of the nation have gone into the military service. Now, after two years' fighting, it is astonishing they should be so little represented in the organisation and administration of the immense fighting machine which has now been brought into existence. All these matters are serious and urgent. I make no apology for bringing them before the House. We are fighting for our lives, and any useful means of advance towards the strengthening of our war effort is legitimate, and Parliament ought to give its attention to these matters. I hope that my right hon. Friend will be able to assure us that he will look at these figures—the administration of the Army at home, the supply of men, and the use made of men—with an open mind, and with a desire to repeat in the field of personnel the very great public service he has already rendered in the region of materiel.

I wish to touch upon another matter which is one of detail, but which matters very much to the officers and men who are fighting at the front—I mean the question of honours and rewards to the fighting troops. I am not concerned with the honours and rewards of the Staff and of the higher ranks, because, I believe, they are tolerably well provided for at the present time. Indeed, the proportion of rewards which goes to people who are not engaged in what I may call dangerous pursuits is very different from that which goes to the men on whom we depend for our lives and for the carrying on of the War at the present time. It is the privates, the non-commissioned officers, and the regimental officers whose case requires the sympathetic attention of the House and of the Secretary of State. Honours should go where death and danger go, and these are the men who pay all the penalties in the terrible business which is now proceeding I have not got the exact figures of the number of Victoria Crosses, Distinguished Conduct Medals, Military Medals, Distinguished Service Orders, and Military Crosses which have been issued in the War, but I am familiar with the general figure, and I have no hesitation in saying that the total is lamentably low considering the continued severity of the fighting, the great numbers of men engaged in it, the extraordinary frequency with which acts of gallantry and good service are performed, and the terrible losses both of life and limb with which the fighting is attended. I do not believe that you would be erring if you issued three or four times as many decorations and rewards to the privates and regimental officers of the Army at the present time. I do not think you would go one step beyond what was right and justified, nor would you go one step beyond what would be useful. People who never themselves go into danger talk airily about cheapening the British standard of decoration and reward. If you gave three or four times, or even five or six times, as many as you have given to the lower ranks of the Army, I am certain you could do it without conferring any reward upon a man who would not have gained the highest possible distinction, or, at any rate, marked distinction and notice, in any previous war. There is no question whatever of lowering the standard. The question is only that of meeting adequately the extraordinary performances of gallantry and courage which very large numbers of individuals are constantly displaying.

The House will forgive me for going into these small details, because they make such difference to the lives, the hopes and encouragement of our soldiers at the front. The Distinguished Conduct Medal has a money grant attached to it, I think of £8 or £9 a year, and that renders it not very suitable for a wide distribution such as I am recommending. It would be very expensive, and I venture to think that possibly it might be found advisable to restrict the Distinguished Conduct Medal more to cases where there is an injury and where there is an act of gallantry, and with the money saved, if you wish to do it in an economical manner, make a much larger issue of decorations to which an annual monetary payment does not attach. At any rate, I put that to the Government in case any objection is raised on that ground. I believe that there was a very good scheme prepared by Lord French's military secretary, General Lowther, who proposed to devote a portion of the money, that would otherwise be expended in the annual grants consequent upon the award of the Distinguished Conduct Medal, to a far freer distribution of a medal which carried with it no financial reward, and I think the right hon. Gentleman would be well advised if he called for that scheme. It was, I understand, rejected by the then administration of the War Office, but it was very carefully worked out, and I believe it had the approval of the then Commander-in-Chief in France.

Mr. HOGGE

Have you forgotten the Military Medal?

Mr. CHURCHILL

I know that a new Military Medal has been started and granted, but the distribution has been so limited and so niggardly, and the cases in which it has been given promptly on the spot are so rare and exceptional, that it has practically made no sensible impression at all upon the immense Armies we have now got in the field. I am well aware of that, and I am simply urging that a far larger and more prompt administration of that medal should take place continuously now. While I am on that point, let me draw the attention of my right hon. Friend to the great importance of promptness in the issue of these rewards. If you wait for Royal Birthdays, or other auspicious occasions, over and over again the men are dead before receiving the reward which they have so richly won. That has occurred in hundreds and hundreds of cases. What is wanted is a very much freer distribution of those Military Medals, which could take place on the spot, without reference to home. The Commander-in-Chief should be assigned certain numbers proportionate to the Armies he has, and he should be able to distribute these to the corps and divisions, according to the fighting, for the immediate reward of the men who perform acts of gallantry. With regard to the Distinguished Service Order and the Military Cross, I would urge strongly upon my right hon. Friend that they should be confined, as far as possible, in future to actions performed under fire or in the danger zone. The Military Cross particularly should be safeguarded in that way. This new decoration, brought into existence by this War, has been illuminated by a long series of actions of the highest military conduct and devotion by the young officers who have gained it, and I say it is nothing less than debasing its character when it is awarded at the same time to persons who have done very valuable and useful work 20 or 30 miles from the enemy lines. I do not underrate the importance of this work, but an enormous amount of the work being done in France is similar to what is being done in this country, and there is no reason why it should receive the rewards which are associated with acts of gallantry, and which derive their distinction from the fact that they are associated with those acts of great gallantry.

I wonder if my right hon. Friend is aware that promotion in the battalions at home is much quicker than promotion in the battalions at the front? It certainly seems to be a very anomalous state of affairs that one man should be a year or a year and a half in the trenches, in continual danger, and should actually make slower progress up the military ladder than his brother who has joined a Home service battalion and has not been ordered to the front. I was the other day given a copy of the French "Bulletin des Armées," which is a military publication circulated freely through the French Army, and which deals from week to week with cases of gallantry. They are recorded in a paper which is about the size of the "Spectator" newspaper. The long lists are written with the greatest care by the generals and the commanding officers of all the brave acts done by soldiers under their command, with their names mentioned, and where men have lost a leg or an arm. This circulates throughout the Army, and it is also sent to the homes and villages of the soldiers who are mentioned in the record. I have not considered very much in detail what the difficulties are, but I think it might be very well worth my right hon. Friend's attention to see whether in some way or other this might not be of use to our Army.

Then there is the question of posthumous honours. I dare say there will be differences of opinion on that, but it certainly seems anomalous that only the Victoria Cross can be given after death. For my own part, I certainly think that honours for gallantry ought, as far as possible, to be given when they have been earned, whether death has taken place or not, and I do think the decoration or medal when given should be forwarded by the War Office to the home, wherever there is a child or a woman who bears the name and who preserves the memory. Let us never forget how much these things are thought of by the people who are risking everything for us. To quote from Sir W. F. P. Napier's History of the Peninsular War:— Napoleon's troops fought in bright fields, where every helmet caught some gleams of glory; but the British soldier conquered under the cool shade of aristocracy. No honours awaited his daring, no despatch gave his name to the applauses of his countrymen; his life of danger and hardship was uncheered by hope, his death unnoticed. After a hundred years of change in this country and of democratic government we are again engaged in a great War. Immense alterations have, of course, been made in all our systems, but I believe that substantially there is as much difference between the standard of rewards for deeds of gallantry in the French and our own Army as existed in Napoleonic times. I do not believe that people in this country have any comprehension of what the men in the trenches and those who are engaging in battles are doing or what their sufferings and achievements are. Although we are reading full accounts of them, I do not think that realisation or imagination have been impressed on the people in any real or active sense. The trench population, these fighting men, are the people who require the care and attention of the House and the Secretary of State. Now I turn to material. It is, I think, a fact that in the ordinary day-to-day trench warfare, apart from battles, we lose more heavily than the Germans on an equal stretch of front. I dare say that statement will be disputed.

Sir GEORGE REID

When we are attacking?

Mr. CHURCHILL

I was not talking about that. In the ordinary currency of day-to-day trench warfare along our lines apart from battles, I believe—I have heard a great many people who are living continually there express the same opinion—that our losses on the whole from day to day are greater than the Germans'.

Mr. J. SAMUEL: T

hat is what the Germans are saying.

Mr. CHURCHILL

I do not care what the Germans say. The point is whether there is anything we can say which will lead to useful results. I think it is admitted to be the fact that the Germans have better trenches, deeper dug-outs, better communications, and better lights to use at night. I think all these facts are true. This, again, is due to the fact that the Germans have decided for a great many months past to make a permanent resistance on their present lines, and have prepared those lines from that point of view, whereas for the last twenty months we have always acted in the expectation that we are about to move forward at any moment. Of course, if the present offensive succeeds in breaking up trench warfare or rolling the enemy back to the Meuse or the Rhine the measures I am going to urge will not be needed so much, but I think it is prudent to keep the other contingency in mind. I urge upon my right hon. Friend very strongly that we ought to begin now our preparations to put the British lines in a thoroughly good state for the winter, so that our men will have as good a chance as the Germans, so that they may have as much comfort in their life in the trenches as the Germans, so that they will not lose more life than the enemy, and in order that the lines can be held by as few troops as possible, and our Armies have the utmost possible rest during the winter months. The foundation of a good trench line is a system of light railways far more extensive and elaborate than anything we have at the present time. It is only by means of light railways that all the enormous varieties and quantities of trench stores necessary for the making of a solid line and keeping them in repair can be conveyed to the Front, such as pumping machinery, steel dug-outs, revetting material, and all that variety of trench stores can only be brought in sufficient quantities to the front by a very elaborate and extensive network of railways and light railways. We know the enormous railway development with which Germany prepared the attack on Verdun, and even from the point of view of offensive and defensive operations the organisation of railways is essential to the highest realisation of ammunition supplies. Instead of light railways, we block our roads with enormous and costly motor transport. On the box of every motor sit two or three sturdy fellows who, I believe, unless it has been altered very recently, draw much higher pay than the men who are serving in the trenches, and all our arrangements are made as if our Army was continuously on the move or in a state of mobile warfare. I am not suggesting for a moment that the mobile transports should be broken up or dispersed, but rather that the light railways on a much larger scale should be added to the existing methods of transportation. In this War, proposals which seem enormously large and provision which seems generous and abundant three or four months later is found to have fallen far short of what was actually needed.

I am now coming to something which I hope will not strike unnecessary prejudice, but I hope my right hon. Friend will not hesitate to use African and Asiatic labour behind the lines for all purposes of carrying material and strengthening our fortifications. There must be great resources there, and in this matter I would not even shrink from the word Chinese for the purpose of carrying on the War. These are not times when people ought in the least to be afraid of prejudices. At any rate, there are great resources of labour in Africa and Asia which, under proper discipline, might be the means of saving thousands of British lives and of enormously facilitating the whole progress and conduct of the War. Remember that the Germans have what we have not got—that is, an enormous reserve of prisoners of war who have fallen into their hands in the early phases of the struggle. I have repeatedly spoken to my right hon. Friend on the subject of lights, and I know this matter began to receive his attention when he went to the Ministry of Munitions. The House, I do not suppose, realises what an important part they play. I am referring to the little rocket lights to illuminate No Man's Land. Unless the situation has been altered within the last few weeks I have no hesitation in saying that the German lights are in every way superior to ours. The German light burns brighter and longer, and goes much further. Let the House observe what follows from that. Our wires are repeatedly illuminated by the German lights and the machine-gun fire is directed upon them, consequently the work of constructing the wire entanglements become more dangerous and more costly. On the other hand, our lights cannot reach the German lines, and consequently the Germans do not have the same difficulty in keeping their wires in order; their wires are stronger, and consequently a much greater proportion of ammunition is required to cut them. These are very important things for the successful conduct of the War, and there is no excuse for these lights not being as good as the German lights, because they are only fireworks, and I should have thought that it would have been possible long ago to have supplied us with lights, not merely as good, but superior to any that have up to the present been used.

Then there is the question of telephones. This, again, is a vital matter, upon which the safety of the troops and the success of operations largely depend. The field telephone system of our Army now on the front, where it has been for twenty months, ought to be as good as that of New York. It is much more important in the fortunes of the War that it should be so, instead of which the worst experiences that have ever occurred in the London telephone system are enormously better than the best results ever achieved by the field telephone system as at present in existence. The Germans again have a better telephone system. It is larger and more effective than the field system we have. It is somewhat heavier, but it is quite portable enough even for mobile war, and, living in fortress lines, as we are now, there is absolutely no reason why the telephone system should not be raised to the highest possible pitch of perfection to meet what is necessary for the security of our lines and to facilitate the course of great operations.

The story of the steel helmets is one which reflects very little credit upon the perspicacity of our administration. We were about six months behind the French and even the Belgian Army in the general adoption of this valuable means of protection. [An HON. MEMBER: "Far more!"] Perhaps more, perhaps eight or nine months, and there was no reason why our men should not have had this protection at the same time that the French and the Belgians began to adopt it. Many men might have been alive to-day who have perished, and many men would have had slight injuries who to-day are gravely wounded had this proposal not been put aside in the early stages of the War. The Minister of Munitions the other day stated that the proportion of serious cases in the present offensive was exceptionally low As far as one may judge from the published list the fatal casualties appear to be about one to three or four of the total number which is not very different from the ordinary proportion; but if there had been any mitigation in the serious character of the wounds which on the face of it appears to be very difficult to understand, that can only have been derived from the fact that the number of serious head casualties have been diminished by the use of the steel helmet. I hope that the right hon. Gentleman will not be prevented from pursuing inquiries as to whether there are not other means of personal protection which can be adopted, having regard to the peculiar and special conditions of this stationary form of warfare. I hope that he will not be deterred by old-fashioned views from pressing experiments and the adoption of measures of this kind when the best method of protection has been devised.

There is only one other point which I wish to mention. The right hon. Gentleman, in regard to the supply of heavy guns has rendered an immense service to this country. When the whole of the story of the heavy gun supply has been made known, the House and the nation will know how much they owe to his persistency, foresight, and courage in the face of extraordinary opposition from the most unexpected quarters. We have a very great supply of heavy guns, actual and prospective, but no one knows better than my right hon. Friend that not only cannot you have too many, but you cannot have enough. There is no such thing as a maximum. The more heavy guns, the more ammunition, and the more long range guns you have behind your trench lines, the more you save the lives of our own soldiers and accelerate the conclusion of the War. I only make this suggestion to my right hon. Friend, because I think it is worth his attention, and that of the sister Department, the Admiralty. The use of old ships was very carefully considered before the War, and of course they were intended to be a reserve. When the newest ships on each side have injured each other in a naval battle, the old ones regain their old fighting virtue, because everything in warfare is relative. But after the decisive sea battle which has been fought—now that we know that we have an ample margin of superiority and strength, and that there are no unexpected features in the German naval warfare which they have devised in the last two years, and that they cannot face us at sea in a well fought-out action—I am of opinion that the results of that battle fully justify a reconsideration by the Admiralty of the use which might be made of the armament of some of the oldest class of cruisers and battleships.

After all, if these very old ships, and even ships that are not very old, but are of middle age are brought under the fire of modern ships it simply involves the hopeless and almost the instantaneous destruction of the vessel and all on board, without their being able to influence the course of events in any way. The Admiralty ought to press on night and day with every form of new construction, as I have no doubt they are doing, because that is the only form of construction that is really effective against the enemy and that ought to be brought under the fire of the enemy. That is the construction which saves the lives of our men, and does not expose them to needless and hopeless peril, On the other hand, I venture to think that a reconsideration of the position of a number of the older ships, the oldest ships on the list, might provide a very considerable reserve of powerful weapons with their ammunition which could be used to sustain our Army in the field. In case objection may be raised on this point, let me say that I do not believe that the difficulty of the mountings is a real one for this stationary warfare, with proper concealment. The ships, even with proper foundations, could be used while mobile mountings were being prepared. There may be other sources from which these guns may be acquired. I have ventured to take advantage of this Debate for the purpose of offering a few practical suggestions to the House and to my right hon. Friend, not in the slightest spirit of captious criticism, and before I sit down I would only wish to say with what high hopes the House looks forward to his tenure of this the greatest administrative office in the State, and how confident we are that his fertility, his resource, his energy, foresight, and determination will in this be productive of great and sensible results upon the fortunes of our struggling Army and will work towards the determination of the War.

The SECRETARY of STATE for WAR (Mr. Lloyd George)

I have listened with great interest to the suggestive and instructive speech of my right hon. Friend. He was good enough to give me notice of the questions which he intended to raise, and I am infinitely grateful to him for doing so. After all, I am new to this office, and, as he knows very well, it will take a very long time to master even some of the elements of the problems which he has suggested for my consideration. I have also had the pleasure of re-perusing the speeches which he delivered some time ago, more or less on these lines, in the House of Commons. They contained some very fertile and resourceful suggestions, but they are all suggestions which require the most careful and some of them even prolonged consideration. He knows very well with regard to some of them that they have been occupying my attention before I ever became Secretary of State for War, and I have been urging them with others for consideration. They are now being considered, but I am at this disadvantage that even if we have come to a decision with regard to some of them it would be highly inadvisable for me to announce it. There is a good deal of work and organisation. They will have certain effects upon Army policy, and it would be very injudicious on my part to give any public information with regard to them. All I can say is that some of the most important suggestions which he has made are receiving attention. I can assure him that I am not using that word in the official sense. On the contrary, they are being discussed, and I shall be very surprised if they do not lead to action. There are questions like the improvement of the trenches, and the improvement of transport. Those questions, as he knows very well, have been under investigation for some time, and already there has been a very considerable improvement in both. I am certainly not one of those who say that more cannot be done. I think that a good deal more can be done. That is the view of my advisers as well, and I think he will find that steps will be taken to continue the improvement which has undoubtedly been effected especially in some parts of the line. With regard to helmets, it is true that it took a long time for the military authorities to accept the French view as to their utility, but the moment they decided, there was no delay in the manufacture. The task was undertaken by the Trench Warfare Department of the Ministry of Munitions, and that particular branch I consider to be one of the most efficient business Departments that I have ever been associated with or that I have ever come into contact with.

Mr. O'GRADY

How long is it since they undertook the manufacture of helmets?

Mr. LLOYD GEORGE

I speak from memory, and if I am wrong my hon. Friend will allow me to refer to the letter, but my recollection is that the requisition with respect to helmets came in November. I believe it was stated in the House in answer to a question. Since then they have been manufactured at a prodigious rate. Hundreds of thousands—something approaching a million—have already been manufactured. There is this to be said, even with regard to the delay. I think it is without any challenge the best helmet on the battlefield at the present time. I am assured that it is a better helmet than either the French, Italian, or German helmet. It is not a thing of beauty. You could not comment on it for its artistic qualities, but it is an extraordinarily efficient helmet. It has saved thousands of lives, and wounds have been considerably modified as the result of wearing it. My right hon. Friend knows that I take his view with regard to protection. This idea of protective shields, whether for the head or any other part of the body, I believe, will be developed very considerably. Up to the present no Army has thought fit to utilise it. It has been tried by most Armies, but not very successfully. I believe that we shall, in this respect, as in respect of the helmets, revert to the old methods of warfare when protection of the body was not regarded in the least as detracting from the valour of the men who wore it. There is the question of rewards. A very considerable number of rewards have already been issued. Decorations: Total number issued and in course of issue up to date:—V.C., 160; D.S.O., 1,676; M.C., 3,851; D.C.M., 6,279; Military Medal, instituted, as be knows, I believe in March of this year, already issued, 2,046; total, 14,012. Approved, but not yet notified from the War Office: Military Medals, 8,000. My right hon. Friend will notice that they are considerably better than he apprehended.

Mr. CHURCHILL

I had in mind, of course, the list which the right hon. Gentleman has read out, but I had not the knowledge that an extra 8,000, or four times the existing issue of military medals, was under consideration. Of course that goes a very long way to meet my argument.

Mr. LLOYD GEORGE

Those are the facts at the present moment. I can assure my right hon. Friend that my military advisers very largely take the view which he has urged so eloquently on the present occasion, except that they do not agree that some of these medals should not be issued to men who have done effective and distinguished work in an administrative sense either in the field of battle or beyond its range. A good deal of the work which has been done is essential to victory, and some of that work certainly ought to be recognised by some decoration. Whether some of my right hon. Friend's views are correct, whether there is an undue proportion given to the administrative side in comparison with the fighting side, is a matter I am not competent at the present moment to express an opinion upon, but it will be looked into very carefully.

With regard to other questions, there is the question of the increase of the proportion between ration and rifle strength. There is no doubt that the whole question of the use of the man-power of the nation has got to be passed under review, and under very searching review. It is being done at the present moment, and there is no doubt that a decision will have to be taken with regard to it. I could not pretend to come to that decision myself. It would be extremely rash for me to do so in the course of the few days I have been at the War Office to come to a definite decision upon a matter of such magnitude and such moment. No one knows better than the right hon. Gentleman what a very difficult Department it is. There is no more difficult Department than the War Office. One has got to walk very warily. All professions are very tenacious of their traditions and their methods and principles of action, and I do not believe that any profession is more tenacious than the military profession; and therefore one must walk very cautiously and carefully before coming to a decision. I can assure him that this important problem which he has put before the House so forcibly is engaging the attention of the War Office, and a decision —an important decision—will be taken in a very short time. My hon. and gallant Friend the Member for Newcastle-under-Lyme (Major Wedgwood), who has been in another service, have been studying the possibilities of man-power and has got very strong views upon them. He has given me some important facts with regard to them and the limits of our resources in other parts of the Empire, and he is at the present moment putting those views before the officials of the War Office and giving them further particulars. This is a matter which you cannot come to a decision upon immediately. There is no doubt at all that our resources are infinitely greater than they appear to be in any of the papers which have been issued, and it is well that the enemy should know that. I am in general agreement with my right hon. Friend upon these topics. To what extent these resources could be utilised, the best way to utilise them, the time to utilise them—all these are subjects which call for careful consideration, and upon which there may be a good deal of difference of opinion; but as to the possibilities of victory, I have never had the slightest doubt about that. I am perfectly certain. I have no doubt that action will be taken, and will be taken soon, with a view to putting us in a position to enable us to make use of those great extra resources, those resources outside the United Kingdom which are at the disposal of the British Empire. The French, as my right hon. Friend knows, have freely utilised them to a very large extent, and there is absolutely no reason why we should not follow their example in this respect.

As to the question of lights, I believe ours were very inferior at one stage of the War to the lights which were in use by the Germans, but there has been a very considerable improvement on our side in that respect. Of course, the German lights make a greater impression upon the soldiers in our trenches than their own lights do, for two reasons. One of these reasons, is that the British light is a long way off from our men, and it does not seem to them to illuminate the whole sky. Naturally it has to be nearer to the German trench, whereas the German light is uncomfortably near you, and to that extent the illumination appears to be much greater in comparison than it really is; and besides there is a sense of danger which adds to the appearance of their light and affects to some extent the men's imaginations and tends rather to exaggerate its brilliancy and the illumination which comes from it. I am told that our lights now compare very favourably with the German lights. Of course, when my right hon. Friend first spoke to me about it our lights were rather inferior, but since then very considerable improvements have been introduced, and I am not at all sure that they are not better than theirs. At any rate, I do not receive the same complaints about them as I did about six months ago. Then we received many complaints, for the reasons I have given, about the impressions made upon the minds of the soldiers. The light which shows our soldier up to the machine gunner on the other side appears to be much more powerful than that which shows up the machine gunner to him. With regard to field telegraphs, I do not feel in a position to give an answer, but I will look into that and see if we can effect an improvement. There are some suggestions which I am afraid it will be impossible to carry out—some suggestions which the right hon. Gentleman has made with regard to the alteration of the proportion between ration and rifle strength. Some of them are practicable, others are not, and those which are impracticable are impracticable for reasons which I do not think it would be wise to give in public. I shall be happy to give to him or to any Member of the House in private the reasons, which are quite adequate, as assigned by me by those who are responsible for looking after that matter.

I agree with him as to the importance of increasing our gun power. I have always taken a strong view about that, and I shall never forget a conference which was held at Boulogne over a year ago between the French and English Artillerists. [An HON. MEMBER: "Between the British and the French!"] Quite so, between the British and the French. I have not often offended in that sense, and I stand corrected. It was a conference about the work of the guns between the British and the French Artillerists. Of course, at that time the French had more experience than we had in the War. They had much more powerful artillery, and they had used it on many occasions with great skill, and I remember there was a very expert French officer—I forget his name for the moment, but he was Irish in name. He may have been a descendant of the old Irish Brigade who fought at Fontenoy or some of those fields, and I remember how he impressed upon me the importance of the heavy gun at that time. The great programme which started then is very largely attributable to the advice given by this distinguished young Frenchman of Irish descent. who had been fighting in the battles in France with the Artillery for twelve months before that, and I think this country owes a debt of gratitude to him for the advice which he then gave, and also to General Du Cane, of the staff of Sir John French, who now occupies a post in the Ministry of Munitions, for his readiness to accept the views of a man who had this experience. [An HON. MEMBER: "Have you got his name?"] His name, I think, is Walsh. There is no doubt at all that not only in the earlier fighting and the fighting at Verdun, but also particularly in the recent fighting on our front, the heavy gun has saved life. [An HON. MEMBER: "Saved life?"] Yes, in the attack, it has saved British lives. It destroys the entanglements, it destroys the trenches, and, although it does not always destroy the thirty or forty foot deep dugout, it abolishes the exits and entrances, and smothers them up, and enables our troops to advance with less danger and less risk than attended their efforts about a year ago.

6.0 P.M.

I will say this, although I have left the Ministry of Munitions, with regard to the number of guns. It is perfectly true that we are turning out in a single month considerably more heavy guns than the whole British Army possessed at the beginning of the War. The British manufacturers and workpeople have successfully coped with our shortage of big guns. It is a triumph for our industry, and the greatest credit is due to the manufacturers and the workpeople for the way in which they have applied their skill and energy, and given their strength and time for the purpose of equipping the British Army in the field. All the same, we want more, and considerably more heavy guns, and considerably more heavy shells, which are the machinery for saving the lives of our men as well as for making a way to victory. And that is why I am delighted at the readiness with which the manufacturers, both employers and workmen, are prepared to give up their holidays, which they must now stand badly in need of, after the terrible strain which has been placed upon them for the last two years. I am delighted to believe that until the equipment is complete, until it is overwhelming, they are prepared to still go on turning out the guns and shells which are required to enable the British soldier to get a fairly clear road to fight his way through. The right hon. Gentleman has complained that the Prime Minister has not surveyed the military situation. I think it is a bit premature to do so. You cannot survey military prospects in the middle of a battle. I think it would be unwise to do so. My right hon. Friend knows what a battle is, a great confused struggle which appears to lean at one moment to one side, and at the next moment to the other side; and until the last moment of the decision comes no man can be certain of victory. Our prospects are good. I think I am entitled to say that our generals are more than satisfied with the progress they are making. I think I am entitled to say—brave men do not boast before the deed is done—that they are satisfied and more than satisfied, and they are proud of the valour of their men who are fighting. There is nothing in history to compare to them. Great as the British Infantry were in the days of Wellington and Napoleon, never have they been greater than they are now. One thrills with pride to think that one belongs to the same race as these men. And they are making headway against enormous difficulties; they are pressing back a formidable, a very formidable foe, a foe who has made a science of war for two generations, and given the best brains of his nation for the purpose of making it. They are a new Army, they are a citizen Army, in many respects an amateur Army, and yet they are hurling back veterans who have had all the thought and science of a great military empire at their back. I have no doubt at all in my own mind that, whatever happens in this battle or in any other battle, I feel now confident that victory is assured to us. There is the quality which our men are showing, the leadership that has been displayed, the improvement in the equipment. The fact which has given more encouragement to those who have watched it than anything else is the fact that these men, who have had only a few months' training, have shown that they know how to use the equipment. That was what gave us most anxiety. You cannot have gunners who take years to train as you have them in the Con- tinental armies, yet I have seen photographs taken from the clouds of German trenches which have been battered and there the craters followed the lines right through, and great gunners who have been at it all their lives came to me and showed with pride the work of men who have been only six months in training. It was the only anxiety which was felt. We had no doubt that British manufacturers could equip the Army. We knew the equipment was pouring in at a rate at which no Army in the world has ever been equipped. We knew that the guns were of the best patterns. Some of the best of the guns on the battlefield are of British design. What we were doubtful about was whether, in the course of a few months, you would be able to turn out men able to utilise these very delicate, subtle, complex machines in such a way as to hit a target three or four miles off, and a very small target at that. They have done it. It shows what we were certain of. There never was an Army composed of better material or a more intelligent Army. It is not merely that you have the intelligence and brains of a nation there. One could feel that they had put the whole of their brains, the whole of their intelligence, the whole of their energies and thought into it, and were concentrated all on perfecting their skill in such a way as to win victory for their country. That is why, beyond everything, that I feel confident. Numbers are on our side. All the other resources are on our side. There was only one fear that one had; that the years of training and thought on the part of the great military Empire might be something which would be insuperable. This battle has demonstrated that that is not so. British resourcefulness and British intelligence, as displayed in the fields of commerce in the past, has been able to snatch victories out of what appeared to be complete commercial disaster. It is going to snatch victory again in a few months out of what appeared at one moment to be something that was invincible There is no doubt at all that the lesson of this battle is that we have simply got to press on with all our resources and with all the material at our command and victory will be ours.

Mr. LOUGH

I desire to direct the attention of the House to the Vote of Credit. I do not in the least grudge the time that has been given to the interlude which has brought us this charming speech from the Minister for War. I am sure the whole House was delighted to hear the cheering words he has said about the situation, and we cannot but rejoice that he has given us so practical an illustration of the advantage we derive from his presence here. To turn to the question of finance, these Votes of Credit, which are so big, are the only opportunities we have for discussing the most momentous subjects with which the House of Commons can deal. The Vote before us is the largest with which the House has had to deal, not only during this War, but in all its long history. I, therefore, hope that my hon. Friends will turn their attention to one or two points in connection with it. After consultation with some of my hon. Friends, I have been able to formulate two or three propositions with regard to Votes of Credit. We ought to realise the reason for the existence of Votes of Credit, which is that there may be expenditure which is unforeseen and that there may be amounts wanted in a hurry in consequence of the War. For those two purposes we must have Votes of Credit. Although they are an invasion of the usual financial system, I do not wish to say a word against them, but would confine myself to the criticism that instead of the Vote being restricted to the necessities of the case, I fear that in a great many instances already there has been a disposition to extend it far beyond any necessity. Therefore the first proposition that we make is that with a view to the proper control of this House over finance we ought to do certain things.

Everyone will agree that this House has lost very largely its control over finance. The answer is made that this is war time, and the question is asked, "How can you control finance during a war?" I do not wish in any way to obstruct the progress of the War, but rather to assist it. We do not assist it by doing away with the system of checks on finance we have had in the past. Our control over finance in peace time has suffered almost as much as in war time. Since the automatic Closure of Supply was introduced, any Minister has been able to get any money he wants almost without any examination by this House. A very dangerous situation has been created, and it is quite time we should look into it. If at the end of the second year of the War within certain limits, this House can exercise very useful functions, it would be well to do so. We have had a curious announcement made within the last few days in regard to finance. At Question Time to-day a question was put about £6,000,000 which has been allocated to pensions. Why was that not mentioned to this House instead of to a casual deputation at the Treasury the other day? The amount involved is a large one and a great many Members are interested in the subject. There was also an amount of £8,000,000 spent on separation allowances which was announced for the first time outside the House. The control of the House over finance would be better maintained if the Chancellor of the Exchequer would remember the old traditions of the House and give us the first information with regard to such important matters as those I have mentioned. The control over finance is greatly limited and in the best interests of the State that ought not to continue any longer.

The second proposition we make is that the Votes of Credit ought to be for smaller amounts. We have had a little argument on that point already this afternoon. My speech has been answered before it was made by no less an authority than the Prime Minister himself. I should have liked to have had an opportunity of explaining what I meant, but it is equally satisfactory to do so to-night to the Chancellor of the Exchequer. The Prime Minister entirely misunderstood the reason why I suggest that Votes of Credit should be of smaller amounts. He answered the argument by satisfying the House that it was necessary to have a Vote of Credit for 100 days. I agree with him. I do not want the Vote diminished in order that the time might be shortened. I want it diminished for another reason and by another method. The way these Votes can be reduced is by abandoning the Ministerial plan of putting everything into a Vote of Credit. Whatever we can leave out of the Vote of Credit with safety to the State ought to be left out I will mention two or three things that have been included in the Votes of Credit since the commencement of the War which could have been left out, whereby the Votes could have been reduced and yet would have stretched over all the time the Prime Minister mentioned. First, there is the question of loans. All the great loans which have been made since the War started have been made under a Vote of Credit. This afternoon, when the Prime Minister was giving us an account of expenditure, he told us of the huge sums that had been loaned out of the Votes. I protest against that method. There is another method of dealing with these loans which would be fairer to the House, and it is time it was adopted. They ought to be dealt with in a Bill, introduced to authorise the Treasury to make the loans under any conditions the Government wish. The amount should be mentioned in the Bill. Then the Government could give any explanation of how the amount was used and could account to Parliament for it. That is the constitutional system; that is the way the matter has been handled in the past. I could mention many precedents; for instance, the Naval and Military Works Bills were all carried through in that way some twenty years ago. During the South African War the great loans made to South Africa were made by means of Bills passed through this House. Although there is no exact precedent covering this case, yet the old machinery established by precedent might easily be adopted. If it were, all this loan matter would be withdrawn from the Votes of Credit. That would be a very great improvement. The Chancellor of the Exchequer has from time to time exercised a most depressing effect on the country by his statement of the total amount of the expenditure on the War. I hardly exaggerate if I say that for a long time on Thursday, and for a substantial part of this afternoon, we have been occupied in having that statement explained away—that unfortunate statement that the expenditure on the War now amounted to £6,000,000 a day.

Mr. McKENNA

I did not state that. It was so reported in the Press, but I did not say so.

Mr. LOUGH

Here are the words from our OFFICIAL REPORT: The expenditure for some time now has been over £6,000,000 per day. That is a fact of the War."—[OFFICIAL REPORT, 17th July, 1916, col. 603.] That was the statement, and if my right hon. Friend did not intend to say so he ought to have been more careful, because it has been commented on and telegraphed over every part of the country. This was on the Monday. The explanation given by my right hon. Friend on Thursday and to-day, and by the Prime Minister, is that there was no such expenditure—that it was far less and is not likely to reach that sum. Is it not deplorable that we should have from the Treasury an erroneous statement of that kind getting circulated to every part of this country for the best part of a week? This evil would have been entirely avoided if we dealt at once with these large matters of loans. The loans which figure so largely in what is called the expenditure are a regular part of the business of this country. The great source of the wealth of this country arises from making loans to foreign countries and to our Dominions, and now during the War necessarily all that business is done by the Treasury. We have the Treasury acting instead of the Stock Exchange. The amount of the loans is not very abnormal. It is a regular and a profitable business, and I suggest that this mixing up of that business now necessarily done by the State with what is generally understood as national expenditure is a very deplorable thing. It seems to me that the effects of reforming that practice would be threefold. In the first place, the whole amount would be removed from the expenditure account, and everyone would know what the expenditure on the War is more accurately than they can possibly know under existing circumstances. In the second place, this House has a right to know more about these loans than is told them. They are suddenly put into a Finance Bill, or mentioned in Votes of Credit, and we know no more about it. It is highly desirable that as much information as possible should be given to this House with regard to them. We hear what the total amount of the loans is from time to time. The amount is so gigantic now that the House is hardly doing its duty to the people unless it watches the growth of the loans and asks for such particulars as can be given with due regard to the interests of the State. I believe also that if the loans were handled in the way I say, the security for repayment would be greatly improved. I do not doubt that the large majority of the loans will be repaid. If we emerge victoriously from the War, as we shall do, they will be good investments for the State, and, at any rate, we ought not to do anything now which gives a suggestion even that they are not perfectly good and well secured and that they will not be repaid in due time. I think these and other great benefits will arise from treating the loans in that way.

Then I come to a more extraordinary thing still—the purchase of the American securities. It seems to me a most astounding thing that this should be done casually under a Vote of Credit. My right hon. Friend made his statement last week about the great increase of expenditure, but when he came to explain the matter on Thursday he said that— During the last seven weeks the total Exchequer issues have been in round figures £300,000,000 … To-day we have had that reduced to £259,000,000. That is a very substantial difference. On the one hand this includes a large payment for dividend on War Loan … That ought not to have been included. That is a regular matter, quite different from expenditure. My right hon. Friend went on to say: The unforeseen and unforeseeable causes were, first, the rate at which American securities were sold to the Government; and, secondly, the rate at which the advances made to the Allies and Dominions were drawn upon."—[OFFICIAL REPORT, 20th July, 1916, col. 1179.] How was the purchase of American securities unforeseen and unforeseeable? We have been fighting over it for weeks past in this House, and there was a great Debate on it in the Finance Bill, and for my right hon. Friend to say it was unforeseen seems to me a most extraordinary statement.

Mr. McKENNA

The rate.

Mr. LOUGH

My right hon. Friend did everything he could to accelerate the rate. He imposed an Income Tax of 2s. in the £ on those who did not sell, and then said it was unforeseeable that people would sell. I think it could have been easily foreseen.

Mr. McKENNA

Not the rate.

Mr. LOUGH

That is the amount we might have to handle. I think it could have been foreseen in two ways. First, I do not think he ought to have bought any more than he wanted to buy, so he could foresee it that way. He could say he wanted £50,000,000 or £100,000,000 worth, and he need only have bought what he wanted. The whole purchase of these securities should have been done under a Bill also, and it would have been quite easy to keep everything secret.

Mr. RUTHERFORD

Must not all moneys that require to be provided in a Bill, or anywhere else, be provided for in a Vote of Credit afterwards? We are under that impression.

Mr. LOUGH

No. It is quite clear. A Vote of Credit is only an alternative method of finding money. The constitu- tional method is by Estimates laid before the House, which some Minister has to defend, and which any Member of the House may question. The Estimates are not included in the Vote of Credit at all.

Mr. RUTHERFORD

Everything else ought to be.

Mr. LOUGH

No, there is no need for it, and everything dealt with in a Bill would be excluded from a Vote of Credit too. Now my hon. Friend will see the argument I have submitted. We ought to follow, so far as we can, the precedent of our own financial system, which is putting forward Estimates, giving Members of the House information and letting everyone see what is going on as far as possible, but we must not pursue it to an extent which would be dangerous to the national interest. It is monstrous that a proper account should not have been opened. Just think what the securities are! They are paying these dividends. It is not expenditure at all. It is an investment. It is as good as gold in your pocket, and surely the amount ought to be provided for under a Bill. All this ought to be kept entirely separate from the expression "National Expenditure." Then there is the question of the commodities for sale or purchase—sugar, wheat, ships, meat, all those articles which are resold, and we understand resold at a good profit. Surely a separate account ought to be opened and there ought to be a Bill authorising the Government to do this, and they ought then to be kept out of the Vote of Credit. I am not making these suggestions in any way obstructively. I am suggesting an alternative method of handling the finance of the War, and the advantage which I suggest would arise would be that the huge figures of expenditure which we hear of, where everything is lumped together in a very unbusinesslike manner, would be avoided, and the statement of expenditure would bear some close relation to the fact. The Prime Minister has put a different complexion on the expenditure from what was current last week owing to the statement of the Chancellor of the Exchequer. I believe the Prime Minister has practically reduced the expenditure to £3,800,000, apart from loans. That must be a great relief to the country.

Mr. McKENNA

No!

Mr. LOUGH

£5,000,000 a day altogether, including loans. It has been £4,950,000 per day excluding Estimates——

Mr. McKENNA

And the Consolidated Fund Services.

Mr. LOUGH

It is £4,950,000 for 113 days. In those 113 days £180,000,000 have been disposed of by the methods I have just mentioned—loans, purchase of securities and commodities. They are not expenditure. The total expenditure on the War, if you take those off, amounts to a little more than £3,750,000 even during those 113 days. If that is so it is a great pity that these great figures should be mentioned by the Chancellor of the Exchequer. My right hon. Friend appears to be a little impatient, but I believe if we recall for a moment the figures of the Finance Bill of last year, all through last year the expenditure was very little over £3,250,000, and now, leaving out these points which I have mentioned, it is only £3,750,000. Look for a moment at the alternative statement which could be made of the cost of the War from that which the Treasury presents. At £3,750,000 in seven days the expenditure would be £24,000,000 or £25,000,000. But £10,500,000 a week is coming in from taxation, so that the amount we might have to borrow is only about £15,000,000 a week. The world is astounded at the readiness with which this country is bearing the tremendous expense of the War, and it is a gigantic expenditure even thus. But the reason is that the amount is very different from what we hear thrown at us sometimes casually across the Table. Last week there was ridicule expressed in the City at the statement made by the Chancellor of the Exchequer, and it is a pity that that should be so, and if these matters of the loans and the purchase of commodities, which are not expenditure, were dealt with in a business like way these great mistakes would be avoided. What would be the benefit of avoiding the mistakes? The mention of these huge amounts depresses our own people and must elate the enemy. I do not see why there should be any such exaggeration, and it is time a more correct figure was presented to the House.

The Prime Minister then directed attention to another matter, in which, quite unintentionally, he did not do me justice, and that was my suggestion that the Vote ought to be brought in by the Chancellor of the Exchequer instead of the Prime Minister. I wish he was here for me to say to him that I do not intend the slightest disrespect to the Prime Minister. Indeed, quite the contrary. The view I take about that is that this is a business proceeding. This afternoon, when we asked questions of the Prime Minister, he had always to get the information from the Chancellor of the Exchequer. I desire to strengthen the hands of the Government in the great crisis in which it is involved, and I resent having to make any attack on the Prime Minister. Our criticisms are levelled at the Department which is itself responsible, therefore the object I had in suggesting that the Chancellor should deal with these matters was also misunderstood. The Resolution says that relevant figures should be presented to the House. I think we have said enough to show, and that the whole Debate has shown, the need for relevant figures being given as time goes on. The sums of £5,000,000 or £6,000,000 that have been mentioned are really very irrelevant to the capital expenditure. The House does not nearly realise the extent to which this matter has been carried. We have not yet had the accounts for 1914 presented to us. Why should not everything that can be presented to us with safety to the public respecting the year 1914 be put at our disposal?

Mr. McKENNA

Here is a copy (handing a document to Mr. Lough) .

Mr. LOUGH

That is simply the summary we had at the time of the Budget. I do not mean a copy of that kind. I mean detailed expenditure, in order to prevent many of the complaints that have arisen about extravagant expenditure during the War. We have never had any Debate on the Report of the Auditor-General. We have had many complaints about extravagance, and, of course, one or two have been dealt with. My point is that after a certain length of time all these matters might be brought before us for discussion. I compained, when the last Budget was before us, of how wrong the Estimates were. I believe these complaints arise from the fact that all these large figures have been mixed up with the necessarily heavy expenditure of the State. I am not criticising the Chancellor of the Exchequer in a captious spirit. I am simply suggesting that this method of loans, purchases of commodities, the purchase of securities, and all these other extraneous matters, being lumped together, and speaking of them as expenditure, is very unsatisfactory, and especially when afterwards it is necessary to correct certain statements. I think that is a most unsatisfactory way of dealing with finance. In the Budget this year I think it was said we considerably underestimated the expenditure. But this is not the time to go into that. I only regret that such few opportunities are given to the House of examining this question. The details I have spoken of are matters of the greatest financial interest, and no other authority in the country except the House of Commons has any opportunity of dealing with them. We resent the question of finance being touched in another place. Therefore, I think the Chancellor of the Exchequer might endeavour, in connection with the Votes of Credit in this House, to restrict them to a smaller amount than that for which the present Vote has been drawn. Perhaps, having regard to the shortness of time within which the Debate can be carried on, if I moved my Motion it would exercise a restrictive effect upon the Debate; but if my hon. Friends think I ought not to do it, I will not close my speech by doing so. I would appeal to my right hon. Friend to consider whether he might not adopt a different system.

Mr. BARNES

I cannot claim to be a financial expert like my right hon. Friend (Mr. Lough), and I know very little of matters which are so familiar to him—methods of finance, all about American securities, and so on—but I am in agreement with him that the method which we are adopting to-day, and as has been adopted before, of asking for very large sums of money in a sort of omnibus Resolution covering all sorts of things, cuts into the rights and privileges of the House of Commons. I, therefore, want to support my right hon. Friend in his view that what is expenditure should be covered in the Vote of Credit, and what is not really expenditure should be left out and dealt with in some other way. That, I understand, is the gravamen of the charge brought by my right hon. Friend against the present system. It is not often that the Prime Minister leaves any doubt in anybody's mind as to his meaning, but even the Prime Minister, in moving the Vote of Credit to-day, left doubt in a good many minds. For instance, a question was raised as to what was going to America, whether it was money or goods. The Prime Minister did not clear that up. He made some ambiguous reply, and I question if many people know now whether it is goods or money, or both. That point is covered by transactions in securities. It does seem to me that some separate means for dealing with that question ought to be adopted, apart altogether from the Vote of Credit. Again, in regard to loans, so far as I could gather from the Prime Minister, I think he said that the loans to our Allies would amount to, roughly, one million and one-third per day. I cannot see how that can be lumped in as expenditure. We hope to get it back, and I have sufficient confidence in countries like France and Russia to believe that we shall get it back.

Mr. LOUGH

There are loans to the Dominions.

Mr. BARNES

I understood that £11,000,000 represents money which has gone to Australia quite recently. I suppose that is lumped in with the £450,000,000. These moneys are not expenditure in the ordinary common sense acceptance of the term. It seems to me they are good securities, and good investments. We must get the money back some time, and, therefore, it will be far better, as my right hon. Friend suggests, that the House of Commons should be treated more fairly, and that these matters should be dealt with separately from expenditure in the Vote of Credit. We want to have in the Vote of Credit all money that is expenditure pure and simple, and money which is not expenditure in that way should be dealt with in another manner. As my name was down in support of the Motion of the right hon. Gentleman, I desired to say these few words in support of him. I desire now to say a few words as an engineer, and as more or less representing the engineers in this House. In that capacity I want to welcome very cordially the speech of the Secretary of State for War to which we have just listened. I want to welcome it as being in such striking and pleasing contrast to a good deal that has been said by the Secretary for War and other people in times gone by to munition workers. Men can be led but they cannot be driven. I am afraid that in the early days of the War especially, and up to quite recently, a great deal was said in the way of driving men to do one thing or another, and in making statements about their drunken habits, and so on, which had not the effect of increasing the output. I am perfectly certain it had not that effect. On the contrary, in many cases it irritated the men. Give a man a bad character, and he very often lives up to it. In the early days of the War men were said to be drunkards, and figures were given as to the time lost through drink, which, as I know, were not true. It is very often said that figures cannot lie, but at any rate liars can figure, and I know that that is perfectly true in regard to a great many of the figures that were produced respecting the time lost by munition workers. A false basis was taken in many cases. I remember, for instance, figures being given in this House as to the amount of time lost in Manchester, where fifty - three hours were taken as the normal week. The night and day shifts were lumped together. As a matter of fact, the normal night shift is only forty-five hours. Therefore, the figures given presented quite a false impression of the amount of time lost by these men. Figures were given respecting other parts of the country conveying in the same way a false impression. Speeches were made by those occupying the seats of authority, putting down the average British workman as a drunken slacker. I am glad to know that a different tone and attitude is now adopted, and that instead of maligning the men in that way, the Secretary of State for War has made a good start by encouraging the men, as the First Lord of the Admiralty has so often done. I hope that that tone will be maintained.

I am very glad that recently, instead of promoting legislation to get a postponement of holidays, the plan was adopted of getting the men's leaders together and presenting the case to them fairly and squarely. That has had the desired effect so far as the men's leaders are concerned, and if necessary, I think, it might be extended, and the men themselves should be got at in the same way in the various districts. If that is done, and the tone adopted to-day by the Secretary of State for War is maintained throughout, I believe that not only shall we maintain our greatest record in the way of turning out guns and shells but we shall largely increase it, because, as I know, the men in the workshops on the whole, in spite of some lapses, are now at all events whatever may have happened at any particular time in some places, fully aware of the needs of the situation. Although the men may have been a bit slack sometimes, in some places—the men are sometimes unimaginative, as we are sometimes in this House—they are to-day throughout the length and breadth of the country seized with the absolute need for turning out more guns and more shells for the men at the front than ever have been turned out before; and I think that if they are encouraged by the sort of speeches we have had to-day from the Secretary of State for War, they will do it.

Sir F. CAWLEY

I wish to join the right hon. Gentleman (Mr. Barnes) in congratulating the Secretary of State for War on his improved opinion of the working men. I agree with him that the workmen now are seized with the absolute necessity of doing everything they can to find the requisite munitions of war. I am not going to follow the right hon. Gentleman (Mr. Lough) in his remarks upon finance, because he is an authority and I am not; but I do agree with him that the loans that we are making to our Allies and our Dominions ought not to be lumped in one large sum in our expenditure on the War. I think the two things ought to be kept separate. I merely rose to say that I think the House is very much to be congratulated upon two things. In the first place, I think the House is to be congratulated upon the fact that the Secretary of State for War is now a Member of this House. The arrangement we had previously, by which the Secretary of State for War. was in the House of Lords, and that he happened to be a man of very great eminence whom it appeared almost a crime to criticise, was a very great misfortune and a very great disadvantage to this House, and I believe it was a great disadvantage to the country. In the second place, I would like to congratulate the House upon the fact that we have the right hon. Member for Dundee (Mr. Churchill) as a critic of the Government. The two speeches he made a little time ago, and the speech he made to-day are, I believe, of the greatest service to this House and the country. For two years we have been allowed to know very little about what is taking place. It has been almost a crime to criticise the Secretary of State for War, and this House has really not been allowed to take very much of an intelligent interest in what has been going on. The Debate that we had on the speeches of the right hon. Member for Dundee a little while ago, and the speech we have had from the Secretary of State for War to-day in answer to the right hon. Gentleman's criticism are extremely useful. I very much question whether if we had had the same state of affairs previously as we have today, namely the Secretary of State for War in this House, whether our troops would have gone so long without helmets. I believe they would not. I believe we should have heard more about that question in this House and the soldiers would have got the helmets sooner.

There are many things which will now come before this House and be debated, to the great advantage of the country and the Army, and of which we have not heard before. I believe that the country has suffered during the last two years very much from the fact that we have had the Secretary of State for War in another place. The right hon. Gentleman the Member for Dundee referred to the question of promotions and decorations. The system whereby men who have never been out at the front have been promoted to a higher rank than those who have been fighting almost all the time has become very little less than a scandal. It is not the best way to get the best out of our officers, and the matter requires a great deal of looking into. In reference to decorations, I think it a pity that the same decorations should be given to men who have been fighting at the front risking their lives as are given to those who have merely been doing administrative work thirty or forty miles behind the firing line. It is really depreciating the value of the decoration, and it is not fair to those men who have carried their lives in their hands and done brave things, far more than their duty called them to do, to find that they have only got the same decoration as those who have filled the post of successful administrators thirty or forty miles behind the firing line, or not even that sometimes, but have been working in London. There are other matters which I might mention, but I will not trouble my right hon. Friend with them, but will merely repeat that the House is to be congratulated, not only on the fact that the Secretary of State is now a Member of this House, but that the right hon. Gentleman the late Minister of Munitions has taken that office. We all know that he is a man who does not shirk responsibility, and I hope and believe that our Armies in the field and in this country will benefit very much, not only from having a Secretary of State for War in the House of Commons, but for having the right hon. Gentleman himself as Secretary of State.

Mr. RAWLINSON

I desire to ask the Chancellor of the Exchequer a question. If it is inconvenient in the public interest to answer the question, I will not press it. I understand that a very considerable sum of this Vote of Credit is being devoted to loans to our Allies—I believe over £1,000,000 a day. Is there any objection to our knowing, first, how much has been lent to Russia, how much to France, how much to Italy, and Belgium and our Colonies, and can we know the figures as to whether any terms of repayment and similar matters have been entered into? If it is contrary to public policy that we should know this, I should be the last person to press it, but if there is no reason why we should not know it, surely it is a matter which the House of Commons, when dealing with this very large figure, should have before it.

Mr. J. M. HENDERSON

I support my hon. and learned Friend in his application, and, of course, I join with him in saying that if it interferes with public interest in any way I will not press it. But we have this fact that the public believe that a very large sum—£6,000,000 a day—is being spent, and we know perfectly well that that is not so, and that a great deal of that is being lent and is also being used in the purchse of securities, and is also being used—here we are on delicate ground—largely for the purchase of copper, sugar, and a great many other things. Ordinary commercial men would not treat this as expenditure, except in so far as it has been spent and the money used. I do not know how far the right hon. Gentleman can enlighten us, so that we should know how much of the total expenditure is represented by loans and how much—and I would suggest to him that he should lump the goods and, say, copper, sugar, and so forth—has been expended on the purchase of these things, and how much has been resold, so that one can see how much remains in capital account. Also we might have some similar information as to American securities. We should then see how much we have really had to expend—of course, excluding the loans to other people—as proper concrete expenditure. We know that a very considerable sum remains in stock and that a very considerable sum remains on loan.

Mr. McKENNA

I am very glad to have the opportunity of answering the question which has been put to me. When the Budget was introduced the total expenditure was stated by me to be anticipated at £5,000,000 a day. That expenditure was divided up by me at the time into various items: Army, Navy, and munitions, so much, civil expenditure so much, Consolidated Fund expenditure so much, and £450,000,000, if my memory serves me, advances to Allies and Dominions. The £5,000,000 a day expenditure which was stated as the average rate running over the whole year was an expenditure which covered all these items, including the recoverable items. No one could demur to my use of "expenditure" at that time as being total expenditure covering all our outgoings. Quite recently when explaining why it was that our borrowing powers were exhausted I used the term "expenditure" again in relation to the £5,000,000 a day, and I take all the fault to myself for not having made my explanation clearer, but I submit to my right hon. Friend that the term "expenditure," which I used in connection with the £5,000,000 a day as it was, if he had read the whole of my speech, ought to have been connoted with all the meanings which it had in connection with the £5,000,000 a day. I then stated that the expenditure for some time past had not been £5,000,000 a day but had been at the rate of £6,000,000 a day. I might tell the House now that during the last week the expenditure, using expenditure in the same way, has not been £5,000,000 a day but £4,000,000 a day. During last week up till last Saturday the expenditure issued during the week was just under £28,000,000. Consequently the average expenditure for the week was only £4,000,000; and I was explaining to the House why our borrowing powers had been exhausted and why we had not foreseen them being exhausted I ought, perhaps, to have gone at greater length into the matter, but I assumed that everybody was as familiar with the figures as my office compels me to be.

I know that anybody who analyses with care the figures week by week will see that the total figures are given every week, every Wednesday morning, I think, in the Press, and anybody could have seen for himself that in the preceding seven weeks the total issues have been £300,000,000 for forty-nine days, or at the average rate of £6,000,00 a day, instead of the figure of £5,000,000 a day which was the Budget estimate. While there is not going to be a permanent expenditure at the rate of £6,000,000 a day, yet certain circumstances which usually on one side balance the other all co-operated together to lead to a temporary increase, just as I hope other circumstances will co-operate together to lead to a temporary decrease below £5,000,000 a day in the weeks to come as they have done in the last week. Those circumstances were the very rapid rate at which American securities for some weeks came to the Treasury on sale, and the rate at which our Allies and Dominions drew their borrowings from us. Those are matters of which, of course, the House can see no one can ever be certain in advance. My right hon. Friend says that we ought to be certain as to the rate at which American securities can come. But we want all we can get. We do not want to stop the flow. If we shut them down at any given moment, when people were ready to come forward with securities it might have a most injurious effect upon the steady stream which we hope to get of securities of that kind. It so happened that for three weeks they came in at a very rapid rate indeed. They are still coming in extremely well. I cannot tell how fast they will come in next week, but if they come in more slowly the amount of issues to pay for them will be reduced. Against that I have a large dollar balance in the United States with which to meet munitions expenditure as it comes along.

I hope that I have made the point sufficiently clear now and that there will be no further misunderstanding as regards the statement of the expenditure being at the rate of £6,000,000 a day at a given period. Expenditure in that sense has the same meaning as expenditure in the Budget statement and includes the whole issues during the year. I have no reason at the present moment for anticipating that the Budget Estimate will be exceeded over the whole year. I hope that it will not be. My right hon. Friend assumed in the month of July that it was going to be up. He is wrong. But it is quite beyond my power to give him a guarantee that the expenditure will not be in excess of the Budget Estimate. I have not at the present time any reason for thinking that the Estimate will be exceeded. My hon. and learned Friend opposite has asked if I could give specific figures as to the advances to each of the Allies and the Dominions without injury to the public service. I am not sure that it would be a wise thing to do. Certainly I could not give all of them. I might give some with the consent of the Powers concerned. A total I have given. The total of the Budget Estimate was £450,000,000.

Mr. HENDERSON

Up to date?

Mr. McKENNA

That was given by the Prime Minister—£139,000,000. But I do not think that it would be consistent with the public interest to give the items in detail.

Mr. RAWLINSON

Or anything about repayment?

Mr. McKENNA

As regards repayment, the terms generally are that the loans are made on Treasury Bills which are to be rediscounted up to a certain period, varying I think, but not a long period, after the declaration of peace.

Sir C. HENRY

There is no fixed rate of interest?

Mr. McKENNA

No fixed rate. The rate was to vary according to the rate for the time being in this country. We take from the various borrowing countries bills corresponding to our Treasury Bills, which we undertake to rediscount as they fall due up to a certain period after the end of the War; the rate of discount at which we take the bills must depend on the rate of money for the time being in this country.

Mr. HENDERSON

Not necessarily the same?

Mr. McKENNA

No; the terms are not identical in every case. We have to consider the terms of variation. But the general rule is that out of those loans we do not make money, but we think it quite reasonable that the rates which we have paid should be repaid to us.

Mr. LOUGH

Rates of discount?

Mr. McKENNA

Yes; because what would be the interest is paid by way of discount.

Mr. J. A. BAKER

What proportion is allocated to the Dominions?

7.0 P.M.

Mr. McKENNA

I cannot answer that. In these Estimates it is quite impossible to prepare an exact estimate for each. The only thing that I could do would be to take a general survey of what probably we should be called upon to lend, not only having regard to the requirements of the Allies, but having regard to the power of the producer to produce the necessary goods. I should like to point out that probably the sum total which this country will need to find in excess of the needs for its own requirements is somewhere within the limits of the figure I have given.

Mr. HENDERSON

Will the loans be repayable in London in sterling?

Mr. McKENNA

Yes; they are all sterling loans. My hon. Friend asked me if I could make any statement as to how far the expenditure we have made in buying American securities and commodities of all kinds has been recouped to us by the sale of those commodities and securities. So far as sugar is concerned, the balance of trade now is fairly equal. We keep a stock more or less of some magnitude in this country, and consequently our weekly incomings and outgoings are fairly equal. Of course, there is always a balance to our credit in the capital stock which we possess. With regard to American securities here, another complication arises. If I were to speak of our total dollar balance in the United States—and I hope the House will not press me to state the figure—I should state a figure which would be in excess of what we have bought and paid for, because our dollar balance is made up of securities that we have borrowed, but a large proportion of those securities which we have bought have been themselves pledged as securities for loans with which we have paid for our munitions in the United States. I am not familiar with the figures as regards copper.

Sir C. HENRY

There is scarcely any.

Mr. McKENNA

We have stocks of some other commodities in large amounts, but the biggest item is American securities, and the next biggest is sugar. My right hon. Friend raised the question as to whether we could not take off the loans from the Vote of Credit and put them into some other Parliamentary form which would enable us to ask for a smaller sum by way of Vote of Credit. I am not sure whether my right hon. Friend has appreciated all the difficulties. If we are to make advances to the Allies and to the Dominions, I must first receive Parliamentary authority to issue the money from the Exchequer. If I am to receive that authority by Bill, then it is simply another Vote of Credit, in which case the Bill would correspond to the Consolidated Fund Bill. I would remind my right hon. Friend that the effect of this would be, in practice, that we would always have two Votes of Credit instead of one, each of them, of course, much smaller in amount. We would have one Vote of Credit for all other Services, and for loans we would have a Bill to authorise the issue out of the Exchequer of moneys required for loans. That would be substantially the same thing.

Mr. LOUGH

It would keep the items separate.

Mr. McKENNA

I agree; but it would mean that we would have to go through the same process of two Consolidated Fund Bills concerning really nothing but expenditure on the War. As the Prime Minister explained earlier in the Debate, each one of these operations encroaches upon five days of Parliamentary time. We have one Vote of Credit already every two months. Would it be reasonable to have it over twice in two months? It would not be a satisfactory way of spending our time. I am very glad that my right hon. Friend the Member for Islington—although his strictures on myself were, I think, unduly severe—has again and again called attention to the fact that the whole of our expenditure is not irrecoverable expenditure. It is very important to bear that in mind. The right hon. Gentleman must equally bear in mind that expenditure out of Votes of Credit is not wholly irrecoverable expenditure. We have always irrecoverable expenditure on the Civil Service Estimates and to meet the Consolidated Fund Service, and these two Services are growing day by day. We pay out of the Consolidated Fund interest on our Debt, and what was before the War an expenditure of well under £30,000,000 might very well be an expenditure of £100,000,000 a year for the Consolidated Fund Service. That item, as well as the Civil Service, has to be added to the Vote of Credit expenditure in order to get our total expenditure.

I hope the right hon. Gentleman will not press the suggestion that the Vote of Credit should be proposed by the Chancellor of the Exchequer rather than by the Prime Minister. It is a great advantage to have a periodical statement made by him. Me you have always with you, like the poor; and I think the Prime Minister, with his authority and great power, should make the regular statement in moving the Vote of Credit.

Mr. LOUGH

Will my right hon. Friend give us an explanation about the purchasing of securities?

Mr. McKENNA

It is only a means of exchanging pounds sterling into dollars. We do not buy securities to keep them; we only buy the securities as an intermediary between the sovereign and the dollar. We buy the securities here with sovereigns; we sell them in America for dollars, and with those dollars we pay for munitions, instead of using sovereigns to pay for munitions from here. It is a mere matter of exchange, and the securities are only used as an intermediary in effecting this exchange from sterling to the dollar. There is no more reason why there should be a separate account for this than in any other transaction by which we pay for our munitions. Let me put it in another way. We pay for munitions over here by cheque and my right hon. Friend would consider that a perfectly proper proceeding; but, instead of paying for munitions by cheque we pay for munitions by handing over American securities. They become as it were a new currency in the international market between ourselves and the United States, and it would be impossible to treat munitions paid for in that way on a different footing from munitions paid for over here by cheque in the ordinary way.

Sir C. HENRY

I was rather disappointed when the Chancellor of the Exchequer rose, for I thought he was going to give us some idea as to how this unprecedented Vote of Credit is to be financed. He told me the other day in answer to a question, that the present issue of Treasury Bills was over £800,000,000, and by this time there may be close upon £850,000,000. I believe the large majority of the financial world view with great apprehension this enormous amount, and I really think that when the right hon. Gentleman comes forward with a Vote of Credit of this amount he should give the House and the country some idea of how he is going to raise the money.

Mr. SPEAKER

The right hon. Gentleman the Chancellor of the Exchequer would have been out of order if he had attempted to do so, and I should have had to stop him. We are now concerned with the expenditure of the money, not with the method of raising it.

Mr. DAVID MASON

On the point of Order, Sir. I find that the Vote of Credit covers advances by way of temporary loans which otherwise would be raised by the issue of securities. Is not the hon. Baronet therefore entitled to refer to the temporary floating debt?

Mr. SPEAKER

This is a Vote of Credit to place the Government in funds for the purpose of spending money. The question of how the money is to he raised, whether by loan or taxation, or in any other way, is a matter which does not come before the Committee of Supply at all; that goes before the Committee of Ways and Means.

Sir C. HENRY

Would I be in order in criticising the arrangements in reference to Treasury Bills?

Mr. SPEAKER

We are now going into Committee of Supply, and we have nothing to do in Committee of Supply with the method in which the money is to be raised. We are only now concerned with the advance of the money which is to be spent.

Mr. MASON

I do not wish in any way to traverse your ruling, Sir, but I hope I am in order if I protest against this Vote of Credit without some guarantee from the Treasury that some limit will be put to this enormous floating debt. I would ask if I am not in order in referring to that subject.

Mr. SPEAKER

I do not think so. It does not seem to me to have anything to do with expenditure.

Mr. MASON

I regret that, because I had intended to support the hon. Baronet, but no doubt the Chancellor of the Exchequer will give the matter his attention. I should like to endorse what has been said by the right hon. Member for Islington, as to dividing up our expenditure. If I apprehend the sense of the country, what they wish to get at is the actual expenditure on the War at present. The Chancellor of the Excheqeur confuses the question by his misuse of the word "expenditure." It cannot under any circumstances be expenditure to invest in American securities or to advance money to the Allies or the Dominions. Expenditure surely is money expended in the conduct of the War. I do assure the right hon. Gentleman that the effect in the City and elsewhere by his statement was a very anxious one, and the way in which he has met the criticism shows that he recognises that fact. When the Chancellor of the Exchequer speaks of "issues" surely that is not the correct term. The usual acceptation of the term is an issue of securities.

Mr. McKENNA

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

Mr. MASON

I do think that if the right hon. Gentleman were very precise in these distinctions it would be very much appreciated. Any slight expression which is not quite technically correct is misconstrued and has a very severe effect on our credit, on the stock exchanges, and in other places where they are very susceptible to any such statement. The statement as to the six millions per day, which was made very emphatically by the right hon. Gentleman, as he will see from the record in the OFFICIAL REPORT, undoubtedly created a bad impression. With regard to this Vote I feel that we might have had some more definite survey from the Prime Minister. I agree with the right hon. Gentleman, the Member for Dundee (Mr. Churchill). I think it was rather disappointing that the Prime Minister did not in some way give us a more definite idea of policy, and even as to the holding out of some hope as to the possible termination of this War. I recognise that is a very difficult thing to state, but this is a very large sum to be asked to vote, and I think we are bound to appreciate the enormous responsibility attaching to every single Member of this House, and that we are entitled to a more definite outline of policy with regard to his views as to the future of the War. Then there is the question, what may happen after the War and as to peace. We had recently the very important pronouncement made by the President of the United States, and probably the most important statement on policy on the part of the United States for many years. The President spoke of joining partnership with all the nations. Has the Prime Minister any idea possibly of meeting that proposal, or does he regard it as likely to terminate the War? We should like to know what he thinks of a proposal of that kind, which was a sort of qualified intervention of the United States. Does the right hon. Gentleman intend to meet or support that proposal, or has he any idea of bringing it seriously before this House? Perhaps the Chancellor may convey that observation to the proper quarter. When we are asked month after month to vote these enormous sums we are entitled to some definite statement of policy, some more idea of finality on the part of the Government. What is their policy with regard to the War? or are they drifting on. We are entitled to something more definite with regard to the Near East, the Balkan Peninsula, Serbia, Macedonia and Bulgaria, and Salonika and their views as to our movements there. What are they going to do with this enormous sum of money? Have they any policy to offer us? I very respectfully ask to have some regard paid to that on the Report stage, when perhaps the Prime Minister may again speak, and when I hope he will give us some definite conception of policy on which such enormous sums are voted.

Mr. KING

I would point out to the hon. Member that his speech ought to have been made on No. 2 of the Orders of the Day, which is Ways and Means Committee. I assume that both the speech which he wished to make and the speech which the hon. Baronet (Sir C. Henry) began will be quite in order on that Order. As it is very important, and he has light to throw on the subject in question, I hope the hon. Gentleman will be in his place when that Order is reached so that he can deliver his speech.

Mr. MASON

That is with regard to the floating debt.

Mr. KING

The Chancellor of the Exchequer has given us a great deal of information that we ought to have had given to us before about the loans to our allies. Although I have asked questions on the subject I never knew before the way in which those loans were arranged, and that they were discounted every year, and up to a certain period after the end of the War. That is very important information which we have all been anxious to hear. We are greatly indebted to the right hon. Gentleman the Member for Islington West (Mr. Lough) for the way in which he raised the whole question of the financial control of this House. I have pointed out, and I think others have done so, that previous to this War there has never been any case of a loan to a foreign Power which was not embodied in a direct Bill for that purpose with the amount of the loan and the objects for which it was given definitely and clearly shown. Therefore, it is a very great departure, which has prevailed ever since this War began, to give large loans to Allies without the names or the amounts or the conditions being given. Though we all as a body irrespective of party have been very glad to assist the objects of the Government in the carrying on of the War in every way in our power, yet some of us have great respect for the traditional forms and rights of control the House of Commons always exercised over public expenditure, and we feel, not unnaturally, that a little more respect should be given to those forms and rights.

There was another important matter raised in debate, and I wish a fuller House had been here to listen to the speech of the right hon. Gentleman the Member for Dundee, and especially the frank way in which he stated to the House the actual superiority in certain military work and in certain military methods which the Germans show in face of the enemy. We heard to-day, very frankly stated, what he said about the superiority of the German trenches at the front, and his frank acknowledgment that, in his opinion, the losses in trench warfare suffered by ourselves were greater than the losses suffered by the Germans in the corresponding area of war centres. That is a very important statement, and I was very glad that the Secretary of State for War faced the matter so fairly and candidly. The statements which have been made, although heard in private, were not faced in public before, and now that we have got the vigorous and original genius of the new Secretary of State for War facing these questions, I am sure that it is only for the good and something probably to the benefit of our military forces. I would ask the attention of the Home Secretary to a matter which I regard as of really great importance and to which I directed a great number of questions recently. I refer to the policy which the right hon. Gentleman announced on the 29th June and the 11th inst., of approaching aliens who live in our midst and are of military age with a view to getting them to join the Army. Months ago I asked questions whether aliens would be allowed to join the Army and to hold the King's commission, and the answer for months was that they could not be admitted to the Army and would not be granted the King's Commission. But now a total change has come over the Government, and they have got to face the question. Having introduced compulsion upon all our men of military age, what are they going to do with the aliens in our midst? Enemy aliens, of course, have either all been interned or there are such few exceptions that enemy aliens can be disregarded: All neutral aliens, of course, we leave alone, though in some cases neutral aliens may be, and often are, very dangerous enemies. But I am not going to speak of that to-night.

I wish to speak of aliens who are members of friendly allied countries. How are we going to treat them? Before we had any opportunity of discussing this question the Home Secretary announced the policy which I venture to think was not well stated, and which has certain elements of danger. He announced suddenly to the House, without any discussion being held here, and when people who are interested in it had been asking in vain for information as to the intentions of the Government, that he was going to ask all alien friendly Allies to join the British Army, and that if they would not join the British Army they might have the opportunity of going before a tribunal which he would set up. If from that tribunal they did not get extension or exemption they were to be deported. His policy was put forward with a threat of deportation. I am going to tell the Home Secretary that, industrious, and in many ways eminently successful, as he has been—I acknowledge that very gladly—in beginning his policy for friendly aliens with a threat that they must be deported if they did not join the Army, he made a great mistake. If you want these people who are not citizens to join our Army do not go to them with a threat in one hand and the attestation paper in the other. Without any of these people really knowing that they were able to join the Army—because, although a notice has been published by the War Office, it is not generally known to the Press, and it was certainly not placarded all over the streets—the right hon. Gentleman goes to thousands of people who have been living in this country, and doing very useful work in the country, and tells them that unless they join the Army they are going to be deported. That was, if I may say so, a great error of tact, and I am afraid it is only going to make a difficult case—it is a really difficult question which has to be faced here, and I recognise that as much as he does—more difficult at the start if he is going to deport these aliens. I want to ask the Home Secretary whether in this policy he is really proceeding with the real approval of all our Allies? We know that with regard to sending Frenchmen of military age from this country to France to join the French Army we are acting with the consent and full approval of the French Government, and the same may be said with regard to the Belgians of military age of this country. They are, through the powers of the Defence of the Realm Act, and Regulations, practically forced to join the Belgian Army. That may be all right. But when you come to the question of Russians, Italians, Serbians, Japanese, and Portuguese, all of which countries are our Allies, you have not received from a single one of those countries, as far as questions up to Thursday last have been able to find out, a request that you will deport their citizens back so that they might join the Army. In fact, with regard to Russia and Italy, there is no necessity, and no desire, to have their men deported. What they want is money and munitions. In both cases, the Italians and Russians have plenty of men for their Army without wanting any of their citizens who are within our bounds deported. Of course, the case is really most difficult with regard to the Russians. There are in this country several thousands of Russians. They are mostly Jews, who have come largely through the unfortunate political and social disabilities under which they suffer in Russia, and largely as the result of actual religious persecution. They have come to these shores for a refuge and an asylum. There are probably at least 10,000 Russian Jews of military age in this country at the present time. I have had the opportunity of seeing several of them, and of receiving three deputations of different societies which have come to me on this subject. I find that all of them are, first of all, surprised beyond words that, without have any attempt made at anything like a voluntary recruiting campaign to get them to join the British Army, they are being threatened with deportation; and the feeling—I am quite sure I am right in saying so—where there is a large body of Russian Jews, as there is in the East End of London, and as there is also in Manchester, and in Leeds, is one of intense bitterness and indignation that they are threatened with deportation. Would it be a good thing, I am going to ask the Home Secretary, at the present time to deport any number of these Russian Jews to their own country? First of all, you have the fact that the Russian Government has not asked for them. Secondly, you have this fact, that Russia has no need of men at the present time, but has great need of munitions and of money. Thirdly, you have the difficulty of having to deport them by a long sea voyage to Archangel, where they are many hundreds of miles from any district in which they can be trained and mobilised for war. I suppose the duration of the journey of a Jew deported from here to some place where he could take part in warfare would be at least from three to four weeks. I think that is a very doubtful proposition, if I may say so. It would be, in my opinion, a very costly and unnecessary proceeding to deport Russian Jews to Russia.

I enforce my argument for two reasons. The first is that these Jews are all of them of great economic value at the present time. Anyone who is a good industrious worker, whether a British citizen or an alien friend, is of economic value at the present time. I am told there are at least 20,000 to 25,000 Russian Jews in the clothing trade working on khaki cloth, and that many of the firms, especially in London, could never have carried out their contracts for the War Office if it had not been for the Russian Jews. Why, therefore, deport them? I do not say that all these are men of military age. Some may be women, some older men, and some children; but I maintain that it would be a great economic mistake to deport any number of these Russian Jew tailors at the present time. Let me point this out. They are not taking jobs from anyone else. I know a certain section of the Yellow Press has declared that these Russian Jews are job-stealers. There never was a greater mistake, or a more absurd accusation. The Russian Jews especially are organised in special trades which they have established themselves. They have established quite a number of the woodworking trades in the East End, and I am told that the boxes in which our ammunition is stored and sent to the Armies in the field are mostly made by East End Russian Jews. I believe no inquiry has been made upon this subject. I believe the Home Secretary has really not acquainted himself with the fact. If he has, the facts that have been given to me by people who are of authority in this matter go to prove not that the Russian Jews are stealing people's jobs, but that they are making jobs for others. Of course, it is one of the facts of the history of our land and of that of other lands that the influx of a Jewish population is always of benefit for the country to which they come. Three hundred years ago there were no Jews in this land. We owe the influx of Jews into this country to the enlightened policy of Oliver Cromwell. I think he was enlightened in his policy, because though he was cruel to one small nationality let us remember that he was at any rate fair and just to another small nationality. What a position they take in society! There are twenty Jewish Members of this House. There are two in the Cabinet, and of those twenty Jewish Members ten have titles. I ask you to take any twenty Members of this House at haphazard and find two of them in the Cabinet and half of them with titles, and I am sure you would say at once that you had made a very fortunate selection of a very fine lot of men at haphazard. That shows what folly it is, what cruel folly it is, to embark on a policy which means setting the Jewish world, and especially the Jewish immigrant, against the Government of the country. I believe the Jews have enriched this land, have contributed to every class of intellectual and artistic work, that they have been great in finance, great in industry; and I believe they can be great in every department of life. I must say that whether a war is on or not, and whatever happens, it would be the greatest folly if you were to start on any policy of deportation of the Jews.

I am not going to sit down without making a definite suggestion to the Home Secretary. I want him to consider two definite proposals which I am going to put before him. First, let me say that, of course, I recognise this is a very difficult question. There is a strong feeling in our midst that these aliens who have been sheltered and asylumed here must make some definite and great sacrifice which we have a right to ask of them at this time. The problem is how we are to offer them opportunities for this sacrifice. I am going, as I have said, to make three definite suggestions to the right hon. Gentleman. I am going to say first: Do not be, in a hurry to deport them. You began your policy by threatening to deport them. Let that be a threat in the background, in case your proposals and other methods do not succeed, but do not go to them without attempting anything like a voluntary recruiting programme. There has not been a single recruiting meeting for Jews in the East End of London, and I am told there could not be now because this policy has been begun with a threat of deportation. Let the Home Secretary tell us to-night that he is not going to deport these men at once, but that he is going to give every consideration to their case and every possible inducement for them to enlist, and that he is going to give exemptions at least on a fair and generous scale, so that any man who is really doing national work and who is serving this nation to which he has come in an economic manner shall not, at any rate, be deported. My first proposal, therefore, is: Do not press the deportation threat more than necessary. My second suggestion is: These aliens, especially these Russian Jews, say, "We have been driven out from our own country by persecution and the disabilities under which we have suffered, and now we are here, as outcasts upon the earth, and we may have to go to another country before long." Cannot you give to these men as soon as they enter the British Army the full rights of British citizenship? If we offer to take them into the Army we ought, at any rate, to give such men the same pay, the same prospects, and the same pensions as we give to our own men. I also go further and say give them the full rights of citizenship. Do not force men to fight for you, and then tell them that, after all, they are aliens all the time. The third proposal I am going to make—and I do not put it forward with the same confidence—is this: I ask the Home Secretary to give serious consideration to the idea whether a special unit corps, regiment, or battalion might not be formed into which these men can go? They would then go into a "pals" company, as it is called, knowing one another, and you thus get over the language difficulty. There are thousands of Russian Jews, and many of them, I am told—at least 3,000 have come from or through Belgium since the War began—do not know the English language. Give them a special Jewish unit, and you get over the language and the religious difficulty. You get over the difficulty of special religious observances, like that of Kosher meat, which is a very serious difficulty now for many of these alien Jews who are strict and orthodox. I ask the right hon. Gentleman to consider these proposals. Do not scatter these men over the various regiments of the British Army. Give them a definite unit where they can work and fight together; and further, I repeat, consider seriously whether you cannot, as soon as they enter the British Army, admit them to the full rights of British citizenship.

Above all, let the Home Secretary not press his idea of deporting them until that threat is made wholly and absolutely necessary.

The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Herbert Samuel)

The hon. Gentleman has spoken, as I am sure everyone of us wishes to do, with a single-minded and philanthropic desire to be of service to a body of men who, and whose forbears, have suffered much, and who desire to find in this country a secure and lasting haven. There is no man more than myself in this House who can sympathise with that desire, and I thank the hon. Gentleman for the spirit of his speech. He recognised that there is a widespread public opinion amongst the British population generally that all who reside in this country, whether British subjects or the subjects of Allied nations, should be ready to make some sacrifice in the great cause in which the Grand Alliance is engaged. He recognises, as we all do, that there is in the East End of London, and in other parts of the country where large numbers of these Russian immigrants are collected, a very deep feeling—which may grow into a bitter feeling—if these able-bodied young men are not found to take some part in the burden which lies upon us all. The British population in these districts have been called upon to make the heaviest sacrifices. British young men are being compelled, where compulsion is necessary, to enter the Army. They have appealed frequently to the tribunals for exemption on the ground of business hardship, and have often been refused. They see, too, other young men, frequently at great inconvenience, even at heavy financial and other sacrifices, drafted into the Army in neighbouring streets; while in the neighbouring houses in those streets they see young men, many of whom have lived in this country all their lives, and who belong to the nationalities who are engaged in this War, exempted from all sacrifice, taking no part in the War and conducting their ordinary avocations just as if Europe were not plunged into this great cataclysm.

With regard to the Frenchman, the Belgian, and the Italian who lives in England action has been taken long ago. Those who are of military age and liable to military service in those countries have been sent to the countries from which they came in order to serve in the Army. That has not been done with the Russians, and the Russians have, therefore, hitherto been exceptionally treated. The Russian Government announced some time ago that that Government would be quite content if those nationals living in the territories of Russia's Allies would serve in the Armies of those Allies. There are in the United Kingdom probably about 25,000 men of Russian nationality between the ages of eighteen and forty-one. As the hon. Member stated, they were not until recently eligible for the British Army. On the representation of myself and others the War Office agreed to recruit a certain number of these—up to the limit of 2 per cent. of the total establishment of the British Army. That is a statutory limitation of the number of aliens who are allowed to be enlisted into the British Army. When that assent was given steps were taken to make it known to the population concerned that they were now eligible for the British Army. My hon. Friend minimised, somewhat unduly, the steps that were taken in order to bring this offer home to the persons concerned. It is not the case that I began with threatening them with deportation if they did not. serve in the British Army. Posters were issued in the East End, both in English and Yiddish, informing them they were eligible for the British Army, and inviting them to serve. Leading men amongst them were interviewed, a recruiting committee which had been established at Lord Rothschild's offices was set actively to work, and it was made known throughout the quarters chiefly concerned that they were invited and desired to join the British Army. It was only when it was found that those offers had what must be confessed to be very inadequate numerical results that the Government found it necessary to take further steps. Nor is it the case that the only alternatives open are: Enlistment on the one hand, or repatriation on the other.

There is a third alternative. Men may apply to the tribunals for exemption. If they are of great industrial value to this country, as the hon. Member suggests—and as I have no doubt a great many of them are—the tribunals can give them exemption from service exactly on the same footing as British subjects. On any other grounds of exemption which apply to British subjects these men may also obtain their certificates of exemption. I have stated that the tribunals will be specially constituted so as to contain men who are familiar with these classes of resi- dents in this country, and sympathetic to their point of view. There shall certainly be representation upon the tribunals of persons who may be regarded as well-disposed towards this class of the population. It is only when they have appeared before the tribunals, and exemption has been refused, and they have nevertheless declared, and definitely declared, that they will not serve in the British Army, that any question of repatriation can arise. Then, at that stage, if the individual concerned claims that he is a political refugee, and appeals for the observance of the continued right of asylum, that I have already undertaken at that stage—I have made it quite clear to the House, though it has not been recognised outside these walls—that that point will be further taken into consideration. We are most unwilling to do anything that may be regarded as an infraction of the right of political asylum which has always been regarded as one of the glories of this country.

Mr. KING

Will the same tribunal that grants exemption also consider the plea of political refugeeism or will it be another tribunal?

Mr. SAMUEL

These questions of procedure are being worked out by a Committee that I have appointed for the purpose, and whose Report I have not yet received. I think it is very possible that they will recommend that the Committee which is dealing with exemptions on the same grounds as British subjects will not deal with the other question.

Mr. O'SHAUGHNESSY

Will the political refugee be allowed to continue to live in this country after exemption from military service?

Mr. SAMUEL

That was just the point with which I was dealing. If they have been refused exemption, and consequently make an appeal on the ground that they are political refugees, that will probably be considered by a special tribunal.

Mr. HAZLETON

Has anything been done in practice?

8.0 p. m.

Mr. SAMUEL

Nobody has been deported at all under this system. The whole thing is in the future. I will deal with that point in a moment. My hon. Friend asks, What has been done? There is no question at the present time of deportation. In respect to their treatment in the Army, the War Office have undertaken that they shall have the same conditions with regard to allowances and pen- sions as British subjects in the Army. I come now to my hon. Friend's three specific practical suggestions. We are always glad to receive suggestions of positive and practical value which are not put forward merely to make our proposals of, no effect or as negative criticism. The first suggestion is that these men, if required to fight for this country, should be given the rights of citizenship. If they are good enough to be England's soldiers, they are good enough, it is urged, to be England's citizens. There is undoubtedly very great force in that contention. Men who are willing to fight for a country have shown by that very fact that they have, at all events, many of the qualifications to make them worthy of its citizenship. I took these considerations into account, and before I made any proposals I approached the Treasury on this subject—because it is partly a question of fee. The Treasury agreed that these men—that was the proposal at the time—if serving in the Army at the end of the War, should be eligible, without fee, for naturalisation if they conform to the statutory requirements. The conditions of naturalisation are laid down by Statute. There must be five years' residence, and the person must be of good conduct—for we cannot naturalise a person; for instance, of a criminal type. There must be certain qualifications. I think my hon. Friend agrees with me that these people who fulfil the statutory requirements, whose cases ought to be pressed forward at once and granted every consideration, are those to whom he referred, and because of their forming part of our Army. The Treasury agreed to that, and it has been announced that they would be made eligible specially for naturalisation without fee, but I quite agree there is much weight in my hon. Friend's contention that as soon as they have entered the Army, or, perhaps, very shortly after—as soon as they have given proof by good conduct and so forth, that they are worthy citizens—within two or three months, and before they are required to go out to fight, their case for naturalisation should be taken into consideration. I am now examining that proposal, and in a very sympathetic spirit indeed. It is not only the Home Office that is concerned, but some other Departments have to be considered in the matter. But, so far as I myself am personally concerned, I should greatly desire to accept the suggestion that my hon. Friend as well as others have made, and secure that, if the statutory qualifications are fulfilled, then on the ordinary rules which we apply as regards naturalisation those people should be naturalised at once and without fee. With reference to the suggestion that they should be enrolled in a special corps, there are disadvantages in that into which I need not enter at this moment. It will, perhaps, be enough if I say that that proposal is not at the present moment favoured either by pur military authorities or by representative men of the Jewish community in this country. I do not say finally and definitely that, under no circumstances, could it be considered, but from the expressions of opinion I have obtained from various quarters I do not think it has general approval, and, as at present advised, it is not a proposal I should desire to press the military authorities to accept. Thirdly, my hon. Friend urges that we ought not to be in a hurry to carry out deportations, and that time should be given to enable men to enlist voluntarily if they so desire. There is no question of any hurry. There seems to have been an idea abroad that already men are being sent to Archangel under deportation orders because they are not serving in the British Army, and although the special tribunal promised to consider their case has not been set up. That is not so. No action of any sort or kind has been taken in that direction as yet. The first step in dealing with this matter is to secure the registration of all persons concerned, and a Regulation has been made under the Defence of the Realm Act requiring them to register if they have not already registered under the previous Order. That registration is proceeding, and it will take some little time to be completed. Then there is the process of hearing cases for exemption before the tribunals, so that in any case some interval must necessarily elapse before final action can be taken. I need hardly say I have no desire, and the Government have no desire, to proceed to extreme measures in respect of any individual at all, and if my hon. Friend thinks that an active propaganda amongst them would yield fruitful result, I should be only too glad to give every facility for that propaganda to take place. If he himself would take part in it I am sure his influence would not be inconsiderable and that the result of his effort would be of no small value. That certainly can be done. There is time for such a propaganda to take place, and by all means let it take place, but I am sure the whole House, I think without any exception, will agree that we cannot allow the matter to rest entirely. There is a very real problem which must be dealt with, and I submit that the steps taken by the Government in no harsh or inconsiderate spirit are likely to have results of benefit to the cause of the Allies.

Mr. LYNCH

I will call attention at the beginning to the fact that on a day when some hundreds of millions of pounds are being voted we have before us a listless House which would be almost depleted were it not for the presence and good service of my Irish colleagues. On the whole I think that that listlessness of the House is a bad augury. It is not the calm and confidence of men who are sure of victory; it is rather the listlessness of men who have been accustomed to bad fortune, bad leadership, but have come to accept those as their normal condition. On previous occasions it has been my lot to criticise the Government somewhat tentatively and mildly. If time permits I will to-night lay my hand on the Ark of the Covenant. We see a Front Bench in which incapacity and vacillation find a home, on which sit those who are past masters of all the negative virtues, but where we find few of the qualities that make great leaders of a great nation at a great crisis.

In the present aspect of the War there is one bright spot and that is the dazzling courage of the soldiers themselves, so brilliant and so inspiring as to rival, not only the best days of this country, but perhaps throughout the whole range of history the best days of any country in the full pride of its martial fervour. And as to that I will make no invidious distinctions—nothing in the way of invidious comparison between the irresistible dash of the Irish, or the cool determined courage of the Australians, and the stubborn John Bull pluck of Englishmen. As I do not wish to offend any susceptibilities I will, of course, mention the Scottish and the Welsh, the gallant representatives of that gallant little country which is showing its prowess, not only on the fields of France, but also in the intellectual arena of this country. Of course, to be a Scotsman almost is to be brave and gallant in the time of danger.

But, if we vaunt this courage of the individual soldier, this splendid and dazzling heroism, surely we must recognise that there is some great weakness to off-set these great qualities, a weakness which leaves the Allied nations of which this should be one of the predominant partners in time of War, in such a plight as they are at present. Let us look at matters steadily in the face, and let us dispose of all mere assumptions of official optimism. Optimism is a good quality in itself, but if optimism was all that was necessary to win wars we would not send soldiers to the front, but poets and flute players and professional politicians. Optimism is a weapon of the Government. With a sort of nickel-plated optimism they parry every grave situation. One of the most disquieting features of the campaign in which we are engaged at present is this: whereas there has been no great plan of action conceived or sketched out by the Cabinet, yet the Cabinet is continually interfering even in the strategy of the War. When, for instance, we read accounts given by eyewitnesses of the campaign of Mesopotamia we are reminded of this, that at one time, when the situation was grave and serious in this House, and when the Prime Minister found it necessary to come down for one of his periodical demands for a renewed Vote of Credit, he dangled before our eyes the glittering bauble of Bagdad, and used this marvellous campaign of Mesopotamia as an off-set against the dilatory methods, or even the disasters, which had overtaken our arms in France. We have seen the results of the Mesopotamia campaign and we have seen the outcome of those brilliant feats of Government strategy; the most distressing feature of the whole of this War from the very beginning is that many of these expeditions and many of these attacks have not been military expeditions or military attacks at all, but they have been Parliamentary attacks and political manoeuvres to mask from the country the real nature of a disastrous campaign.

A great deal of the fault rests not merely with the Front Bench as a whole, but, in order, as I say, to lay my hand on the very Ark of the Covenant, with the Prime Minister himself. There was a time when I admired the Prime Minister, when I set before my eyes that type as representative of the British nation, and gave myself the task earnestly to strive to believe in its great and superior virtues, and even by comparison to acknowledge our own Celtic deficiencies. That has been an uphill task, and it has been continually defeated by the conduct of that great exemplar. Time and time again we have seen him come down to this House the very embodiment of British law, giving himself one of those poses of the strong man who has taken his stand against wrongdoing and incidentally the man who was afterwards his right hon. colleague when he destroyed the Cabinet on whose shoulders he had climbed. But after admiring him as the strong man, the man who, having given his word, would at all costs carry it into reality, the very embodiment of those splendid British virtues, celebrated in song and story and history, yet, if the truth must be told, three weeks afterwards we have seen this man, the embodiment of British law, the very type of the nation's leonine qualities, turning tail and running away from the very shadows which his own timidity had created. I see a smile on the face of the right hon. Gentleman to whom allusion was made. While bearing no personal ill will, I would, had I been in the Prime Minister's place, have put him in a stone jug till the troubles he had created had been allayed.

It being a quarter past eight of the clock, and leave having been given to move the Adjournment of the House, under Standing Order No. 10, further Proceeding was postponed, without Question put.