§ Order for Second Reading read.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of FOOD (Mr. Clynes)
I beg to move, "That the Bill be now read a second time."
I desire to invite the House to give statutory effect to certain Orders of the Food Controller which have been challenged in the Courts, and which cannot be used as the instrument for carrying out the intentions of the Ministry of Food unless this Bill be passed into law. On the 1st May, 1917, Lord Devonport made an Order taking over from the original consignee all Burmah beans which should thereafter come into the United Kingdom, at a price to the original consignee, which was agreed to, of £37 per ton, and all contracts for sale made by them or contracts made under such contracts were cancelled. On 16th May, 1917, a similar Order affecting all other kinds of beans, peas, and pulse was made, the only difference between the two Orders being that the price in the latter case was left for future settlement. Under the first Order about 58,000 tons were affected, and under the second Order about 120,000 tons. These two lots of beans have been taken over by the Ministry as a result of the Order, and over 80 per cent. of the goods in question have already been dealt with. The persons and the dealers who were interested in the purchases and in the Orders of the Food Ministry acted under the Orders for three months, and the Orders proved quite workable in practice, and at any rate from the moral standpoint did not mean the slightest injustice to any person whatever. When the articles arrived possession was taken of them, the original consignees were paid, and the goods were placed upon the market at a price which enabled them to be sold retail in shops at a figure which the then Food Controller, Lord Devon-port, had fixed. In no instance has the original consignee been made in any degree responsible for the goods coming into this country, and in no instance has any such consignee complained of the treatment meted out as a result of the Order.
1900 4.0 P.M.
The persons who have complained combined, and, at their instance, legal proceedings were taken against the Attorney-General as the nominal defendant. The case was heard on the 30th July last year by Lord Justice Rowlatt, and it was decided that the Food Controller's powers did not enable him to take over from the original consignees articles which they had agreed to sell, and the property in which had passed on to other purchasers by virtue of the transaction which had taken place. In the circumstances the Food Ministry did not think it advisable to appeal against that decision, and the alternative course has been taken of coming to this House to report the circumstances, state the facts, and to ask the judgment of the House of Commons on whether legal effect should be given to the Order of the Food Ministry issued in May of last year. The decision of the Court nullifies the whole object of the Order, and, in effect, secures to the persons who had dealt in these articles profits which I do not think any Member of this House, in the course of the discussion, will seek to justify. The articles had been dealt in extensively, and prices have risen to an extraordinary level. In the main, these dealings have been indulged in by persons not ordinarily accustomed to buying peas and beans—new-comers, who took advantage of war conditions and of a shortage of cereals and foodstuffs, and who found that they could sell articles of food in a very short space of time without ever seeing them, and with the mere cost and trouble of passing on the goods to some other persons who was prepared to pay a very high price. These dealings were profiteering, pure profiteering, or impure profiteering, which I hope no Member of this House will be found to defend. Persons, with no previous connection with the trade, who engaged in buying and selling beans and peas, though they could in no sense be regarded as persons who dealt in these commodities, should not be allowed to reap or retain the enormous profits which prevailed at that time.
§ Mr. CLYNES
The market price for Burmah beans at the date the Order was made was £78 per ton. The pre-war price, the price prevailing not so very long before, was £22 per ton. I will give two examples—and there are a good many 1901 which I could cite, but two suffice—to prove the necessity of this Bill being passed into law. Three hundred and fifteen tons of Madagascar butter beans arrived here on the steamships "Sidon" and "Warrior," and they were bought by Amis, Swain and Company, on the 2nd January of last year, at £43 per ton. On 9th March they sold them for £70 per ton, plus half per cent. c.i.f., a profit on the transaction amounting to £407, or about 64 per cent. reached in that very short period. Five hundred and fifteen bags of Madagascar butter beans arrived here on the steamships "Sidon" and "Warrior," and they were bought by Amis, Swain and Company on the 17th November at £36 per ton, and sold to Gaskain, Barker and David, Limited, on the 13th December, at £44 per ton c.i.f. Those were resold on 30th March by Gaskain, Barker and David at £90 per ton. The total profit on these two transactions amounted to no less than £1,311 14s., or a percentage of profit of about £147 per cent. on the original purchase price of £36. If this Bill is not passed into law it will mean that persons who, as I have said, were not legitimately entitled to be engaged in this process of buying and selling, will retain these profits. They were content to recognise the reasonableness of the Order till they became organised and were stimulated by various forces acting upon them, and these persons, unless the Bill is passed, will be able to claim very large sums indeed from the Food Ministry or the Wheat Commission. In each of these cases the Wheat Commission as hitherto treated those sales as invalid, and they relied on the efficacy of the Order issued by the Food Minister, prior to its being challenged in the Court of Law.
§ Mr. SPEAKER
If the right hon. Gentleman would wait until the end of the hon. Gentleman's speech, he would understand, but really it is not fair to keep on making these running comments.
§ Mr. CLYNES
The Wheat Commission would have to pay each of these various bodies the profit made by them. My right hon. Friend on the other side asked how much. I could not say how much each of these claimants asks for, but I believe that the entire sum involved is very considerable. I have heard the figure put at £600,000, but I do not assert specifically that that is the sum. The order which was 1902 issued, whatever its other effects, had a very good moral effect not only on this particular trade but on a great many other trades in the country—the effect being, in the first instance, to considerably limit if not to stop much of the gambling which was then going on in the country in foodstuffs, and to considerably reassure the public mind, which was then in a very disturbed state, and which, as Members recollect, readily welcomed the action of the Food Controller at that time in taking measures to put an end to transactions of this character. I believe that objection is taken to such a Bill as this on the ground that it is an unprecedented interference with the sanctity of contracts. My answer to any such argument is that transactions of that kind at such a time cannot be regarded as contracts that should be observed and carried out as though we were living and trading under normal conditions. Possibly in peace time that might have been done, but under war conditions people are entitled to look to the action of the Food Ministry to prevent prices of foodstuffs being run up to an excessive and an unreasonable level, as was the case in this instance. These were not ordinary trading or contract transactions; they were speculations; they were indulged in without the slightest justification, and I hope, the House of Commons will not give them any legal warrant. I submit, having given these few brief reasons and facts, that the Bill will become law. Those persons who come under it cannot claim to have suffered any loss, on the ordinary trading of the year, of a commercial character on their transactions. The most they can claim is certain inordinate profits were withheld from them which, having regard to the circumstances in which the country was placed at the time, they were not entitled to' make. Claims of that character should not fall to the advantage or lot of any section of the community. I have already said that I have every reason to refrain from making any general charge, or indulge in any general complaint against the mass of traders and food producers in this country, but I feel on that account all the more justified, when cases of this kind are brought to our notice, in asking that the House shall take measures which will effectively prevent any such extraordinary profiteering as that which I have shown to the House, and for which this Bill ought to get a Second Reading, in. order to wholly prevent it in future.
§ Sir F. BANBURY
The hon. Gentleman has founded all his arguments in support of the Bill upon the statement that certain people have made indefinite profits, of which he gave two instances, in one of which, as far as I remember, the person made a profit of £400 and in another over £l,000. If those profits were inordinate the Excess Profits Tax would have applied, but, as a matter of fact, at the bottom of this Bill there is a very vital and very important principle. The hon. Gentleman has not merely got to meet a case in which he can rely only upon the statement that certain people were making profits out of food. That is not the matter which I desire to go into at the present moment. I want to deal with the real objection against this Bill. What are the facts? The Defence of the Realm Act gave great powers to Government Departments. I am not at all sure that if the majority of the House of Commons had known that the powers which they gave were going to be used in the way they have been used by various people appointed to different Committees, that they would have passed the Act as it was. If the liberty of the subject is to be preserved at all we must look to those people who, up to the present time, have been impartial, wise and sound, in their judgments, namely, the Courts of Law, for our protection. What is taking place? I believe a very great many illegal Orders have been issued under the Defence of the Realm Act. In this particular case, an illegal Order was issued, and the people aggrieved went to their only protectors, the Courts of Law, who decided that an illegal Order had been issued. What does the hon. Gentleman say? He says: "We prefer" (that is, the Food Controller) "not to appeal against the judgment, but to come to the House of Commons, that is to say, the Food Controller does not choose to be bound by the law of the land, and he comes to the House of Commons, when there are only a few Members present, the majority of Members not having read the Bill, but who may have heard that it is something about profiteering, and who say that they could not vote against any action in respect of profiteering, and will support the Government. If a King had done that, he might have lost his head.
§ Mr. SPEAKER
The right hon. Gentleman is not entitled to bring in the name and personality of His Majesty.
§ Sir F. BANBURY
No, Sir. I consider this Bill one of the most tyrannical at- tempts on the part of the Ministry of Food to get over a legal decision. And what I said was that if a king—I was not alluding, of course, to His Gracious Majesty—if a king had done that sort of thing he might have lost his head, and I repeat that a more tyrannical action was never done, and if the right hon. Gentleman comes down and says that he has so weak a case—
§ Sir F. BANBURY
Oh, yes! Why not go to the Court? If the right hon. Gentleman is right, why does he not go to the Court of Appeal?
§ Mr. CLYNES
It is because we are not so much concerned about law in this case as we are concerned about justice.
On a point of Order. It is extremely inconvenient that the Law Officers of the Crown are not here.
§ Sir F. BANBURY
I always thought justice was to be found in the Law Courts. I am not at all sure it is to be found in a Government Department. The Bill is retrospective. It seeks to annul contracts which were entered into more than a year ago. If the desire of the Food Controller were to enact that after a certain date any further contracts which were entered into should be subject to certain disabilities or liabilities, I do not think anyone would have had anything to say. It might have been perhaps a tyrannical exercise of his powers, but it would not have been unjust nor have broken a contract. The hon. Gentleman seems to attach very little importance to breaking contracts. The whole foundation of business is based on contracts, and if they are to be broken and any disadvantage that arises from it is to be met by coming down to ask for an act 1905 of indemnity for the Ministry that has done an illegal act, there is an end of all liberty of the subject and all business transactions. I have here a letter from the London Chamber of Commerce, who regard this matter with great seriousness. They put the matter very shortly and very clearly. They say:This Bill is presented by the Parliamentary Secretary to the Ministry of Food and seeks to retrospectively legalise certain Orders, issued nearly a year ago, which had been declared by the Courts to be in some respects ultra vires. My executive had adopted the following resolution: 'That this meeting of the executive of the London Chamber of Commerce having considered the Bill entitled Defence of the Realm (Beans, Peas, and Pulse Orders), presented to Parliament by the Parliamentary Secretary to the Ministry of Food Control, declares that its provisions are subversive of the principle of the sanctity of contracts and the foundations of commerce as carried on in this country. The Bill seeks to retrospectively legalise Orders made by the Food Controller which have been declared by the Courts to be ultra vires, and is devised to protect the Ministry of Food from being mulcted in damages in respect of contracts illegally interfered with by these Orders.'These are the simple facts, and I do not know that I can do better than leave the matter where it is. In these few words the whole charge against this Bill is gummed up. It adds, "That the passage of this Bill be opposed, and Members of Parliament for the City of London and Members of Parliament who are members of the London Chamber of Commerce be requested to oppose the Bill." I have also a letter from the London Cora Trade Association to the same effect. I really no not think I need say anything more, but I cannot conceive it possible that the House of Commons will pass a Bill to give an indemnity to a Ministry who have been found by the Courts of Law to have done an illegal action. If this sort of thing is to go on, in future, whenever any Minister chooses to see his wishes done regardless of whether it is legal, if he is permitted to do it, and the Courts of Law says he has done an illegal act, he can come down to this House for a Bill to indemnify him and allow him to repeat the illegal act. I have much pleasure in moving to leave out the word "now," and at the end of the Question to add the words "upon this day six months."
§ Mr. T. LOUGH
I would first like to apologise to you, Mr. Speaker, for an involuntary interruption of my hon. Friend who was explaining the Bill. I really only had a sincere desire to 1906 understand it, and I confess I do not understand the explanation that has been given us. The House is placed in an extraordinary position, and I hope my hon. Friend will not resent it if we ask for further information as to the extraordinary position in which we are placed by the Bill, and the speech he has made. I do not think at the present moment the House in the least understands the position. My right hon. Friend says in May last an Order was issued by the Ministry of Food Control in which peas from Burmah, beans and pulses, and all articles of that kind, were taken over. He then mentioned casually that 58,000 tons of one and 100,000 tons of the other, which are large quantities, have been dealt with, and the whole thing is working quite smoothly. I do not think the House quite realised that. The purpose of the Order, so far as it is an honest purpose, has been accomplished without friction. The goods have passed into the hands of the Food Controller. Everything he wishes has been done, and I may inform the House that a second Order was issued about a year ago greatly extending the first Order, taking over all productions such as tapioca, sago, potato flour, and cereals, and everything of that sort. That was issued in September, about a year ago. It was also accepted like the first Order. Every article which comes under the head of profits which the Government desires to take over will be voluntarily and pleasantly surrendered, and the Government can do as it pleases. I do not think the House realised that. I think the House is confused by the speech of the hon. Member in charge of the Bill. He has suggested that there has been some friction with regard to the working of the Order or a date which he did not clearly give. He used the word "recently." This is May, 1918, and I asked him what that word meant. It meant July, 1917. That is not recently in a transaction like this. From that word recently one would think there had been friction in regard to these Orders. I wish the House to understand there is nothing of the kind. There is no resistance to the Ministry. On the contrary, they are doing exactly as they please with this as with every other commodity.
The House may ask, What is the Bill about? It is very surprising, and it goes back behind the date on which the Order was issued and rakes up transactions of six or nine months previously, and the 1907 House is asked to go into these transactions on partial and incomplete evidence. He asks this House to arrive at the conclusion that mercantile trans actions through all that period should be opened up, and that the House should arrive at conclusions with regard to the morality of the people who carried through these transactions. I do not wonder at my right hon. Friend's in dignation about that. If this is to be done, there ought to be a fair trial to these people. If a charge is to be brought against them, it ought not to be brought up here eighteen months after the transactions take place. Everybody is entitled to a trial in this country, and the thing should be plainly slated. The charges must be stated, and it will be better to deal with it in a Court of Justice than to bring this moral question to be decided in a House of Commons with about twenty Members and the rest whipped in to carry the matter on a Division. It is an exceptional proceeding to take, and the House ought to understand that this is the point we are discussing here at this time. We are left entirely to a partial statement of my hon. Friend in regard to this matter. One case has been inquired into and that is the case of Hindhaugh. That was the case which was brought up in Court. The case was tried on 31st July. Does my hon. Friend allege there was any large profiteering in this case? None whatever. It only affected 15 lbs. of beans. So far as I can make out the price was almost the same as the old one except a small commission. The application of the Food Controller was heard before four judges, and there were present the Attorney-General (Sir Frederick Smith) and the right hon. Gentleman the Member for Walthamstow (Sir J. Simon). The judge who was in charge of the proceedings made certain remarks about the Ministry of Food which would have been very helpful to this House if my hon. Friend had read them out. I will read to the House one or two sentences. The judge said with reference to the Order—
§ Mr. LOUGH
No, Sir. The judge said:I have no authority to redraft Orders as they ought to be drafted. I judge that this Order was improperly drafted.That is the true position. This Order 1908 was badly drafted. It did not achieve any of the purposes which my hon. Friend has stated the Ministry desired it to achieve. When the judge was asked, he declared that the Order was ultra vires. The Attorney-General did not object to that, and accordingly there could be no defence in Court. The judge said:It seems to me unintelligible to requisition beans from a man who has parted with bills of lading. I do not know how it can be done.That is exactly what the judge found ought not to be done, and could not be done, and that is exactly what my hon. Friend asks us to do to-day. The judge says you cannot go into these back transactions, but in effect supported the Ministry to this extent, that you want to take over the beans, and from the moment you declared you wished to do this thing from the date of your Order you have done it. But to go back to the past is an illegal and impossible thing, as the judge declared, and as I ask the House of Commons to declare also. The Bill is for no other purpose than to rake up these old transactions. If we were going to do a thing like that this House would want to approach it most carefully, and rake up every transaction. The only case examined was a clean transaction. Why did the hon. Gentleman not mention the case of Hindhaugh? Because it did not suit him. Hindhaugh was a perfectly honest man and a bean importer, and had made no particular profit. Instead of his case being taken as a typical case, we have had a few other cases upon which no one can pronounce an opinion, because we have never heard of them before.
My hon. Friend said he approached the thing from the moral standpoint. So do I. If these people made a profit on these beans, there might be a dozen ways of explaining the profit. The question of importation is a very subtle one. There are often profits and losses, and often the profits got are caused by some action over which the people engaged in the business have no control whatever. For instance, at that period the chief thing which caused the extraordinary profits was the action of the Government in buying huge stocks for the Ministry, giving big prices for them and putting up the markets. Two or three small cases, not amounting to 1,000 bags altogether, are mentioned here, and we are asked to believe those were extraordinary profits. I am told that the 1909 Ministry took over beans at £37 10s. a ton and fixed the price at £59 a ton, and sold tons of beans at £20 profit. There is profiteering for you, if you like! It has been carried on on the most gigantic scale, and we must not take isolated examples of one or two things mentioned here by the Minister when we have not heard the people, but let us take the large transactions of the Ministry itself. There was a huge scheme of profiteering carried through by the Ministry in regard to these beans. The effect which would be produced by his Bill, my hon. Friend said, would be to check gambling. That is a very desirable object, but it ought to be aimed at exact transactions, and I think there ought to be a long inquiry before this House is asked to take action upon it.
This is a most peculiar Bill. It is a Government Bill, and no doubt the Government Whips will tell in support of it. There is only one name on the back of the Bill and it is that of my hon. Friend who has explained the measure to the House. It has these extraordinary provisions of a retrospective character to which my right hon. Friend has rightly called attention. This House is suspicious of retrospective legislation. It is generally unjust legislation, and on the last occasion we had a Bill from the Ministry before us, the moment I pointed out its retrospective character, my hon. Friend at once agreed, and said he would strike that out. That is what I ask the House to do to-day, as this Bill is retrospective, and as it is entirely unnecessary to enable the Government to do what they want to do, as everything is working quite smoothly. They have all these things in their hands, with the usual result, I regret to say, to the people—the usual result of high prices and large profiteering. But they have got it all in their hands. Let them be satisfied, and let them not ask this House to go back nearly two years into transactions, unless the particulars of those transactions are given. The hon. Gentleman said that the effect of the Orders was to check gambling. I do not know anything about the gambling or the trade in question, but more facts ought to be given to us before we pass a Bill of this character. Another effect of the Bill will be to check importation, and to create scarcity. It is part of the policy of the Food Controller, no doubt, as he thinks, for a moral purpose, and because he has got popular opinion behind him, 1910 but the effect is very hard on the people of this country. We cannot get any cheese now. For the same reason we cannot get these beans. We are now dependent upon the Ministry for these useful articles, with the result that the scarcity which exists in every other article and the high prices will be created in these articles also. The House has got the bulk of the facts before it—that the Bill is retrospective, and deals with certain transactions not explained to us or inquired into; secondly, the whole business of taking over these beans, peas, and pulse is working quite smoothly, and they have been taken over in gigantic quantities; and, thirdly, the Ministry comes here to appeal against the decision of a Court of Justice. It seems to me a most amazing thing that the Ministry should do that. Yet my hon. Friend said in so many words that that was his object.
§ Sir G. HEWART dissented.
§ Sir G. HEWART
I am not challenging the mere words which were said to have been employed. No doubt, if this Bill is carried, the effect will be to get rid of the decision, but nobody appealed from that decision, because it was recognised that in law the decision was right. The object of this Bill is to alter the law, which is quite a different thing from appealing from a decision of the Court.
§ Mr. LOUGH
Yes, and the Regulation is a year old now. It took over a year to summon up courage to come here. It is all right as regards the future, and from the day the Order was 1911 made, but the retrospective part of it the judge said was wrong, and I think this House ought to say it is wrong also, because retrospective legislation of this kind is very objectionable. I desire to put one point only, in conclusion, with regard to this matter. It has not been alleged by the Minister in charge of the Bill that the people who carried through these transactions acted illegally. They were within their legal rights. True, the hon. Gentleman said they were profiteering, but we cannot tell without a great many more facts. This House ought to be chary of pronouncing judgment on a few cases suddenly mentioned, without hearing the people charged, and I would ask the House to pay attention to this, that these people have exercised rights which have been supported in a Court of Justice. What is the reason why these men should be mulcted in damages and cases raked up against them? The appeals are heard, the money is paid, the transactions are over, and we are invited to tear everything up on this ex parte case which has been put before us. I say this is an unjust proposal to make to us. This House is the fountain of law in this country, and nothing is law except that which is approved by this House. These people committed no offence against this House; they broke no law. There may be a different side entirely to the judgment that is pronounced on their action by the hon. Member. I say they acted legally. They were also importing food which we wanted badly at that time, and this House will set a very evil precedent if it goes into these retrospective transactions without most carefully knowing what it does, or without giving those charged an opportunity of speaking.
On this matter of profiteering the hon. Member has a most extraordinary experience. Before he became a Minister he was a member of a Committee appointed by this House to examine into profiteering, and they called forty or fifty wit-necesses before them. The Report of the Committee did not make out any case about profiteering. Why? Because they had to get the facts out—to bring up the people. There is, therefore, no Report of the Committee to support the charges the hon. Member has made here. Under these circumstances, this is one of the most extraordinary proposals I ever remember hearing submitted to the House of Commons, and I think the 1912 House ought to go very carefully in regard to it. I have shown that there is no practical point whatever in the Bill. We do not know the extent of the transactions. My hon. Friend merely mentioned two or three cases—not 1,000 bags altogether—but he told us that the Ministry had dealt with 200,000 tons. Surely there is no necessity to go back to those little transactions to-day. I think the House ought to pay attention to the recommendation of the chambers of commerce. We have all got a memorandum, I believe, pointing out that the Bill would put an end to all commerce in a civilised country. It seems to me an example of the sort of action that has been going on in Russia lately. We are asked to assume that public opinion is behind it, just because the hon. Member says it, and because perhaps a number of hon. Gentlemen who have not listened to the Debate, but have read the Bill, will come in presently to vote for the Second Reading. I do ask those who have been good enough to give the matter some attention to consider what they are asked to assent to in this matter, and if they feel any doubt about it to support the Motion of my right hon. Friend.
Colonel Sir F. HALL
I am rather surprised, when a Bill is brought in by one member of the Government, to find that member of the Government conspicuous by his absence. Although I appreciate the fact that the right hon. and learned Gentleman the Solicitor-General is here, he is not backing the Bill. Therefore, I certainly think, out of courtesy to the House of Commons, the Minister in charge of the Bill should have made it his business to be here.
§ Sir G. HEWART
May I say my hon. friend was called away a minute ago, and will be back in the course of a few minutes?
Sir F. HALL
I will accept that, but I am sure the learned Solicitor-General realises that the House does expect, when a Bill is in charge of one member, that he should be here. I join hands with my right hon. Friend the Member for the City of London. I cannot understand how it is the Government should have brought in this Bill and expected the House of Commons, by a stroke of the pen, to turn round a decision which has been arrived at in the Courts of Law, and to say that, so far as we are concerned, we are going 1913 to upset what has been done there. The reply given by the right hon. and learned Solicitor-General was quite different from the reply given by the Parliamentary Secretary to the Food Ministry, when he was challenged why he did not go to the Court of Appeal. It is rather astounding that a member of His Majesty's Government should have said that, "Instead of going to the Court of Appeal, we came to this House, where we expect to get justice." Surely it is a bad—
§ Mr. SPEAKER
If the hon. Gentleman is professing to be quoting the words of the right hon. Gentleman, I can assure him that he is wrong, and that the right hon. Gentleman drew a special distinction between justice and what he said was a moral right.
Sir F. HALL
Of course. I bow to your decision, but I shall look carefully into the Official Report to-morrow. I would venture to suggest, with all due deference, that the House was led to understand that the reason why the Government did not go to the Court of Appeal was because they wanted to get justice. I think this House is always prepared to have regard to justice in any case, but it Should be very careful before it attempts to upset decisions which, after careful investigation, have been given by a learned judge. Take our position at the present moment. As the right hon. Gentleman the Member for Islington (Mr. Lough) stated, probably in the event of the Government deciding to press this Bill to the bitter end, there will be Members coming into this House who are engaged on other business at the present time, and who, thinking that this is a Government measure of the utmost importance, will give it their support unaware of the fact that they are thereby upsetting practically the whole legal machinery of this country. I am sure that the Solicitor-General has the greatest possible respect for decisions arrived at in the Courts, and I can understand the in-vidiousness of the position in which he finds himself at the present moment in being called upon to defend the policy of a Government which has stated that the decision of a Court of Law, although admittedly properly arrived at, does not suit them, and asks the House, therefore, to upset that decision.
We are told much with regard to the sanctity of contracts. This is a subject which should not be dealt with in a spirit of levity. I am one of those who believe 1914 in the sanctity of contracts. A contract having been made ought to be carried out. The Parliamentary Secretary to the Food Controller has stated that gigantic profits have been made by various persons who have never even seen the goods which produce those profits. Everybody who has anything to do with a merchant's business must know that it is not usual for a merchant to go down and look at the goods; he buys or sells them while they are on board ship or at the docks, and that is what has been done in this case. Certain people who sold the goods within two or three days of their arrival made, it may be, a profit of £2 or £3 per ton, and then because within a week or so certain circumstances happened which caused the prices of the commodity to go up by leaps and bounds the goods were passed on to another purchaser at a profit, say, of £4 per ton, and he in turn again sold them, making a profit of £20 per ton. That is not profiteering; it is the usual course of events; it is a contingency which arises in business contracts. The merchant takes the risk; in some cases the outcome is satisfactory, but these transactions are not always satisfactory, and the result to those who participate in them is not in every case what is anticipated.
The Government were asked to give us some figures, and the reply was that these transactions represented £1,000 or thereabouts, the Secretary to the Food Ministry adding in an undertone something about £600,000. But, as far as I am concerned, it is not a question of £l,000 or £600,000; the question is, is it right or wrong? I think it will be one of the greatest mistakes ever made if, as soon as the Government find themselves in a bit of a hole—and in these days of emergency, when they are seeking to control everything, for this House has always given them the necessary powers, mistakes can easily be imagined—it would be a great mistake to come down to the House of Commons and. say that because there was a mistake made eighteen months ago we must bring in a Bill the action of which shall be retrospective, so that transactions by all sorts of people in all sorts of commodities may be gone into by the Government or someone else—apparently it will not be the Courts of Law, for they are not to decide the matter—and someone is to be called upon to refund something. That is a vicious system which the House of Commons has always set itself against, and I 1915 hope it will continue to do so. We do not want to hear these charges of profiteering thrown across the floor of the House; we do not want to do anything to assist, facilitate, or increase profiteering in any way, but I do suggest to the Government that when they use that particular word they should be very careful indeed, because some of us happen to know the prices at which shipping is chartered at the present time, and the prices charged for the commodities delivered here by those ships. They are not always on the basis of 6s. or 7s. per ton dead-weight, but we find in many instances that the articles are charged for on the assumption that the market price is £12 or £15 per ton. I do not venture to say that that is profiteering, because it comes under Government handling, but I do think I have a right to say that a Government which has allowed itself to do that under other circumstances places itself in a very invidious position when it proposes to deal with people in the manner indicated in this Bill.
I hope the Government are not going to press this matter. I do not think I have voted against any Government measure since the outbreak of hostilities, and I shall feel very sorry to have to do so on this occasion. We are often reminded of the necessity for abiding by our contracts. I consider myself bound by my contracts, and I have entered into many, good, bad, and indifferent. Unfortunately many have belonged to the category of bad, but bad as they may have been one has had to recognise them. We want to maintain that spirit; we do not want in the City of London or in any commercial centres in the world to have it thought that while there are to be no concessions and no remedies given to the merchant, yet the Government, by a stroke of the pen, shall secure what remedy it likes. There cannot be a very large number of contracts to be gone into if this Bill passes. If the Solicitor-General considers it necessary to bring in a Bill in any shape or form to govern any of these prices, let him do so, and I will unhesitatingly give him my support, but I do desire to protest against this proposal. I want to maintain contracts, I want to uphold business integrity, and, if the Government persist in pushing a Bill through for which there is no real necessity, a Bill affecting transactions carried out many months ago, the books In connection with which ought now to be 1916 closed, I cannot see my way to support them. Let bygones be bygones. If somebody has made a profit, let him retain it. If the original purchaser has not made as large a profit as the person to whom he sold, he is not going to take action because of that. I do hope the Government will reconsider their decision and see the necessity for withdrawing this proposal. I am sure a large majority of the members of the Government are in accord with the view I am stating. Unless the Bill is withdrawn I cannot help feeling that a great majority of those who have had the opportunity of hearing the present Debate may deem it their duty to support the right hon. Baronet the Member for the City of London if he presses his Amendment to a Division.
§ 5.0 P.M.
§ Sir A. SPICER
Having been so long connected with the City of London, where I know feeling is very strong at the present time in regard to this subject, I wish to say a few words on this Bill. I have, of course, no sympathy whatever with profiteering, and I know nothing of this class of industry. It has, I believe, been stated by the Parliamentary Secretary to the Food Controller that 80 per cent. of these transactions were perfectly satisfactory, and, therefore, it is only a question of dealing with the remaining 20 per cent. of them. I am informed, too, that all the contracts contained a Clause with regard to arbitration and, if these matters were submitted to arbitration then if profiteering can be shown it can be dealt with in a proper way and the persons who made the undue profit will not get the gain which they anticipated. I am further informed that the Government did offer arbitration but were not prepared to pay the penalty if they lost. After all it is a very serious thing to interfere with the sanctity of contracts. Are we not at the present time conducting an awful war to uphold the sanctity of treaties? Surely then there ought to be a very strong case made out to justify any interference with the sanctity of contracts. If there has been any injustice cannot that injustice be remedied in some other way? If I am correctly informed that these contracts did contain an arbitration clause and that under them any gross cases of profiteering can be dealt with, it seems to me the Government are taking a wrong line. They have not made out a case to justify such extreme action, and, in view of the fact that the Parliamentary Secretary only 1917 cited two cases of profiteering as justification for a measure of this kind, it does seem to me that the Bill goes a little too far. As I say, I have no sympathy whatever with profiteering, but I do think the Government ought to hesitate before they, so to speak, bring in a new departure with regard to upsetting contracts without the gravest justification.
§ Sir G. HEWART
My hon. and gallant Friend the Member for Dulwich (Colonel Sir F. Hall) was good enough to say that he thought I was for the moment in an invidious position. Perhaps he will believe me if I say that until he suggested it I was not aware of it. He said that the task upon which we were engaged was nothing less than the task of upsetting the whole legal machinery of the country. If I may, for the sake of the argument, and only for the sake of the argument, assume that those words were seriously intended, I should like just to look at exactly what this Bill is doing, and what is the mischief which it is intended to remove. As the House is aware, among the Defence of the Realm Regulations there is a certain Regulation 2 F which gives the Food Controller very large powers in regard to the distribution and the price of food. Under that Regulation the Food Controller, on the 1st day of May last year, issued a Regulation, which is conveniently reprinted in the Schedule to this Bill, and "undoubtedly the intention of that Regulation was to enable the Food Controller to control the price of all future supplies of beans, peas, and pulse. One hears from time to time—I have heard many times, and always with sympathy, in this House during the last sixteen months—protests against what are called technical objections. The House is naturally so eager that one's mind should be directed to the substance of the matter and not to the mere letter of the law. The substance of that Regulation was to give the Food Controller control over all beans, peas, and pulse, but for some reason the drafting of it did not technically quite succeed in the object, and there followed, after an interval of a fortnight, a further Regulation, also printed in the Schedule, dated the 16th of May, and that Regulation it was thought did completely fulfil the object and satisfy all the technical requirements. That Regulation gave control over all beans, peas and pulse which had arrived, or would arrive, so long as they were within the 1918 hands of persons owning or having power to sell or dispose of them. Once more the intention was plain, but once more a technical objection might be raised, "Is the Regulation quite comprehensive in its terms?" For three months nothing happened except that the Order was loyally observed, and then on the 30th of July—the importance of the date was that it was precisely on the eve of the Long Vacation—there was a case tried before a learned judge in the King's Bench Division, in which it appeared upon the facts that the food in question was not in the hands of the original consignee, although it was in his hands that it was sought to be attached. The original consignee had agreed to sell the property, and the person who then had power to sell or dispose of the property was not before the Court. It was made clear that there was still left a gap that had to be filled, and that was the case where the original consignee had parted with the property by an agreement to sell. Therefore this Bill comes in. No doubt there has been some lapse of time since then.
§ Mr. LOUGH,Hear, hear!
§ Sir G. HEWART
No doubt there has, but the fact that a Bill of this kind was pending was, I should have thought, sufficiently well known in this trade. In any case, the point I am seeking to make is that so far from any attempt to upset what the hon. and gallant Member for Dulwich is so much concerned about, the legal machinery of this country, what the Government is now engaged upon is the task of filling up that little gap which the learned judge disclosed. If we had gone to the Court of Appeal and argued—and argued vainly—that the learned judge was wrong, we might then have been open, to that observation, but, as it is, what the Government is doing is to accept that position and proceed to fill up the gap.
Sir F. HALL
May I ask the right hon. Gentleman if that is all it is desired to do, why it is necessary to make this retrospective?
§ Sir G. HEWART
Because it must be retrospective; and for this reason—that the gap which you had to fill up is a gap which is filled by persons who have in fact—that is to say, in the past—parted with the property. That is what retrospective means. If my hon. and gallant Friend, who, I am sure, has no other interest in this matter except 1919 perfectly to understand it, will be good enough to look at Section 1 of the Bill he will see that that is made perfectly plain. The simple object is to provide that these Orders which are in the Schedule, the imperfection of which has been pointed out in a Court of Law, shall apply to the original consignees of the beans, peas, and pulse, not with standing that, at the date of the making of the Order affecting any beans, peas, or pulse, such consignees thereof had parted with the property. That is to say, they were the original consignees. They had ceased to hold the property, but, notwithstanding that, this Order shall apply. Whatever may be thought of that measure, I do respectfully submit that it cannot be said to amount to an upsetting of the whole legal machinery of the country. It is, on the contrary, a recognition of the fact that the learned judge has pointed out a flaw in the existing Regulations, and that in the absence of further legislation that flaw cannot be made good. My right hon. Friend the Member for Central Hackney (Sir A. Spicer) spoke of the sanctity of con tracts—
§ Sir G. HEWART
—a phrase which is never mentioned in this House without exciting cheers from at least one hon. Member. Nobody here is attacking the sanctity of contracts. What the Government is doing is simply to say that where the original Regulation, by a mere defect of terminology, failed to accomplish the purpose at which it obviously aimed it is not going to be deterred from giving effect to that intention because, in the meantime, certain contracts have been made. When one looks at the figures—I am not going to repeat the figures given by my hon. Friend (Mr. Clynes)—I suggest that never could the sanctity of contracts be invoked in a less exhilarating cause than that of the person who was the consignee of commodities of this kind, and who sold them six or seven times and made this enormous profit. My right hon. Friend went further and said there were only two cases. Of course, my hon. Friend is so fair a controversialist that he picks out two cases that are fair samples. Those are two typical cases, but if it were the fact that there were only two cases, might I ask my right hon. Friend to 1920 consider this? If there were only two cases of contracts that had to bet cancelled, or cancelled both in themselves and in the subsidiary contracts to which they had given rise, how small is the hardship caused by this Bill! The two things cannot be true, that on the one hand this Bill is going to tear up an enormous number of contracts to the great hardship of a large number of people, and that, on the other hand, it is going to relate only to two contracts. The fact is that these two contracts were typical contracts, and it may well be that a good many contracts may have to be cancelled under this Bill. I do venture to ask the House to support this Bill, because it is a measure obviously intended to give effect to the original intention of the Government, to fill up the lacuna which the judge has pointed out, and not, as is suggested, to override the decision of the Court.
§ Sir G. HEWART
The Arbitration Clause is not before me, but I cannot, in the absence of the document, conceive an Arbitration Clause so wide that it will be able to accomplish the purposes of this Bill in the absence of legislation.
§ Mr. WING
I do not wish to associate myself with any idea of defending what has been stated by the hon. Member who introduced the Bill to be profiteering, but I really feel that the hon. Member, in introducing the Bill this afternoon, has undertaken the task of defending a Department in which he was not interested at the time these transactions took place. The gravamen of the argument, from such information as was given to me at the time, arises not only from the fact that the Bill itself is to prevent profiteering, but that the Government did not reduce the prices to the public to anything like the amount at which they were taken over by the Government, and that the prices still remain. The hon. Member was able to say, in a general way, that the amount of money involved was somewhere about £600,000. May I ask, before we go to a vote, that we may have the amount given of the difference between the price realised by his Department and the price given to the consignees for the goods which are included in this, so that we may have some idea of both sides, because profiteering is just as bad on 1921 the part of the Government as it is on the part of the individual, with this exception—an hon. Member says: "No," because, I suppose, we all share in it, but to the individual the process is just as harmful as though it were obtained by individual sale? I have no desire to opposo the general object of the Bill, namely, to prevent profiteering in foodstuffs, but I want the hon. Gentleman to state what was the amount of money the Government have netted?
§ Mr. SPEAKER
That seems hardly relevant to anything in this Bill. It would seem to be a very suitable matter for discussion on the Vote for the Food Controller's Department.
§ Mr. WILES
I rather want to make an appeal to the Government that, owing to the great misunderstanding there must be about this Bill, they should either withdraw it or that the Parliamentary Secretary should give an undertaking that some settlement will become to with reference to the past transactions. Everybody in the House wants to stop profiteering as much as possible, but on considering what happened when these transactions took place—there was a great speculation which it is a matter of history did take place in beans—I do as a Member of Parliament and as a business man want to know how far these transactions were unwarranted. I might say that one of the reasons why I ask the hon. Gentleman to postpone the Bill or to make some statement as to what he proposes to do is that only last week a deputation came before the Commercial Committee of the House of Commons—a private group of commercial Members and that deputation assured us that the number of outside transactions which took place—that is the people who were not legitimately engaged in the trade—was very small. I do not know whether that is so or not, but they promised to bring evidence to put before the Committee of three members appointed to go into the transactions, so that the Commercial Committee might be told whether there was a large outside speculation or not.
I think if it could be proved that there was a large outside speculation—and what I mean by that is, not that the people usually engaged in the bean or pea trade, have, in the ups or downs of ordinary trading, gained or lost by it—but that persons engaged in the sugar or the tea trade have come into this business as 1922 speculators; and this is the point, as I understand, which is recognised by the Government as profiteering, that that outside speculation should be dealt with. If it is found when those contracts have been gone into that there has not been a great amount of profiteering, that the Government should consider the appeal which has been made by my right hon. Friend the Member for West Islington, and should reconsider their decision. I think there is a great deal in what has been said about the sanctity of contracts. The Solicitor-General, with his great legal ability, rather wiped that aspect of the case aside. I do, however, think that those persons who are in business—their legitimate business—which they are doing within the four corners of the law, though we know we live in somewhat unusual times—we quite admit that—and who were not informed that they must not trade in this way, should not be dealt with as suggested. It is an unwise course to adopt. I certainly must point out to the Parliamentary Secretary that the City of London feels very strongly on the matter. They feel that legislation may be brought up to go back on other transactions.
There is an Arbitration Clause in these contracts. I have not seen the contracts in this particular case, but I know the usual clause, which says that any dispute arising between a buyer and a seller shall be settled by arbitration in the usual way. Having regard to the fact that these contracts all have that arbitration Clause in, as I think is admitted by my hon. Friend opposite, would it not be wiser for the Government to hold its hand for a while? I am bound to point out to the Government that we do not want to hinder in this matter at all. We want to help the right hon. Gentleman and his chief. It, however, would seem to be desirable that he should agree that some commercial man of high standing should be appointed by the Government as sole arbitrator. It would be his function to go into these transactions. If they are found to be speculative transactions by people not usually engaged in the bean and pea trade action can be taken accordingly. There may be a small number with contracts of the sort. Their profits should be eliminated, and the differences which have arisen should be paid in the ordinary way. I think then that the Minister would feel quite justified in having his Bill to deal with the other transactions. I make that suggestion to him in good faith. 1923 Many of us want to help him. There has, however, evidently been a mistake made by the Department. If the right hon. Gentleman agrees with what I propose it will not be difficult for him to get a man to carry out this arbitration on behalf of the Government quite fairly, and subsequently the Government will have no difficulty in getting their Bill and, further, of preventing transactions of this kind, which, I agree, are most objectionable.
I rise to support the suggestions of the right hon. Gentleman the Member for Islington. This Bill contains a new and a dangerous principle, which is that a Government Department may issue an illegal Order, causing loss to a large number of bonâ fide commercial people, and then bring in a Bill to legalise that action without putting in the Bill any Clause to compensate the people who have suffered by their illegal action. That is, I say, a new and a dangerous principle. I wish my right hon. Friend the Solicitor-General had remained here. I asked him to come. He did so, but he has gone again. This question cannot really be absolutely decided without some knowledge of the law. I should have liked the right hon. and learned Gentleman present while I put to him a few simple questions. For instance, "Was this an illegal Order?" The right hon. and learned Gentleman has tried to lead the House to imagine that it was a mere drafting or technical slip. To my mind, it was nothing of the kind. The Defence of the Realm Regulations have no power to cancel contracts retrospectively. That being so, the Order was absolutely illegal. I have here a report of a case before Mr. Justice Rowlatt, who himself in his time, before he became a judge, was one of the Law Officers of the Crown. For many years, I think, he was junior counsel to the Treasury. He is thoroughly cognisant of the powers of the Law Officers of the Crown, of the various Government Departments, and of the duties of the Attorney-General. When the case was being argued he said:It seems to me unintelligible to requisition from a man who has parted with the bill of lading. I do not know how it can be done.That is to say, you cannot tear up a contract after the contract has been completed, the property and goods have passed, and the money has been paid. 1924To say to a man: Repay the money now. Go to the person to whom you sold the goods and get the goods back. I think the Government should repay.
I am glad of that interruption. He will have to go to a second or a third man, and you might find ultimately that the beans or peas had been dispersed: that they could not be got.
Meantime he would go to the other man and demand his money back, a state of things which upsets all commercial arrangements, and puts all matters of commerce into chaos and confusion.It has been an illegal Order, and not merely a slip in drafting. I wish the right hon. and learned Gentleman had been here to say whether I am right or wrong. I myself have been in the law for more than thirty years, and I say that a Government Department has no power to make this Order. I am confirmed in that opinion by the report of the case to which I have just referred. It proceeds—Sir John Simon said he wanted to find some word, the least offensives word he could, to describe the transaction, whereupon, the Attorney-General said: 'Oh, it is no question of offence.' Sir J. Simon: Very well. The most moderate word I can find is that the Order was ultra vires—that it is beyond the powers of the Department to make. The Attorney-General: I do not particularly care. I would rather not have any general statement.Therefore, not only Sir John Simon said, but the Attorney-General admitted, that this was an illegal Order, and not at all what the learned Solicitor-General wanted to lead the House to understand—a mere drafting or a technical slip. The Order being illegal, the Government are, in the words of my hon. Friend the Parliamentary Secretary to the Food Ministry, liable to damages—that is to say, the people that this Bill would bring in would be able to recover from the Food Minister, or the Wheat Commission, or the hon. Gentleman. The Parliamentary Secretary is neither a lawyer nor a millionaire. It is only due to him to say that, for I very much contest the proposition, and that is why I wanted the Solicitor-General to be here. There is no power over the part of the Food Minister in the direction indicated. There may be a series of actions between the people who sold some cargo to the Minister, and a great deal of injustice may be done. I 1925 very much doubt, however, whether any action at law can lie against the Food Minister for an illegal act, for that would be against the constitution of his office. It is a principle of law, and the thing cannot be done. I only know of one case in which something similar was done, and I myself was concerned in it. The Postmaster-General was sued under the Telegraphs Act, but that was held to be done, not in the course of his office, but under the special terms of an Act of Parliament. If, then, those to whom a very great injustice may have been done, and who have lost money, cannot recover from the Food Minister, their remedy would be against the actual person—his private estate, not out of Government funds—who made or who enforced the Order. I said that my hon. Friend beneath me, the Parliamentary Secretary, is not a millionaire. I do not suppose that if judgment were obtained against him for £600,000 that he would be able to pay it.
The Food Controller probably did not make the Order himself, or did not personally enforce it, and in this class of case it is only those who do the damage themselves who can be sued. I have no objection, Mr. Deputy-Speaker, to this Bill being passed. The Government are quite right in coming here and saying that something has been done by the Department. I believe in perfect good faith, for I do not suppose for a moment that the Ministry of Food knew they were doing wrong, for if they had known it, they would not have done it. I make no charges or insinuations of any sort or description against the Ministry, but they have found that they have done something which they had no power to do, and people have lost by it. The Department have a perfect right to come to this House and ask that that action should be legalised. This House, no doubt, will legalise it, and will not allow the Minister, or a subordinate official of any Minister, who has made or who has enforced an Order which has caused loss to people to be personally subject to any heavy damages. Therefore the House will pass a Bill of this kind, provided always that the Government, whose responsible servant the person is, will make up the loss to the individuals injured by the illegal Order. That is the whole case against the Bill, that it does not contain any Clause 1926 for the compensation of these people upon whom loss has been inflicted by the action of the Government. I am sorry that the Parliamentary Secretary to the Ministry of Food has imported a little prejudice into the case, because it has given rise to charges and counter-charges of profiteering—profiteering by individuals and profiteering by the Government. That is not at all relevant to the matter at issue, which is that these merchants—I have a list of 100 of them supplied to me by the London Chamber of Commerce who have lost money over these transactions—have been guilty of profiteering. Any Committee set up by the Parliamentary Secretary should be set up for the purpose of doing what is right in the matter, of seeing that the losses are reimbursed, and not allow any profits to these people which in any shape or form could be called profiteering. All that we ask the hon. Gentleman is that he shall say that all these transactions shall be gone into by some able and impartial authority with full power to award only what is just and fair to these people.
This Bill contains a new and a dangerous principle; it is a Bill to legalise acts which have caused great losses without giving any compensation to the people who have suffered. Let the Government put in a compensation Clause and everybody will be satisfied, and the Bill may go through possibly all three stages in one day. The mere fact that the Bill has been brought in proves that the Ministers admit they have been guilty of illegality. There has been a great deal of talk as to why the Government, instead of going to the Court of Appeal, came to this House. They did not go to the Court of Appeal because they knew they would do no good there, and they were obliged to come to this House. In the language of lawyers, the Parliamentary Secretary is in mercy. Suppose a person has committed an illegal practice at a General Election, he makes an application to the Court to whitewash his offence, and he is said to be in mercy. This Bill has been brought in because the Department has exceeded its powers, and they are in mercy. I agree that somebody should be appointed to thoroughly investigate these transactions, so that none of them shall lose by the illegal act which has been committed. The compensation should be quite fair and nothing in the nature of profiteering. This new and dangerous principle goes to the root of all commercial security and confidence. If in future 1927 the merchants and traders of this country are to have no compensation at all in cases where a Government Department issue an illegal Order causing enormous losses and cancelling past contracts and then come here and simply pass a Bill legalising those illegal transactions without compensation, then I think commercial confidence and security will be very much injured in this country.
§ Sir GEORGE REID
I am one of those, and I am sure there are a large number in this House and in the country, who has a very high esteem of the hon. Gentleman in charge of this Bill, and I congratulate him upon the very successful way in which he has discharged his duties. It is therefore with very great regret that I have to point out that this Bill is not quite so simple as it looks. No legislation of this kind can ever have a retrospective effect, and we have not got to such a stage that people, acting under Regulations, can alter the law of the land without Parliamentary authority. That would be an extraordinary position to get into, and when the learned Solicitor-General suggested that this Bill is of a general character, he could not have looked at it closely, because it is expressly confined to the two Orders in the Schedule, and it does not deal with the general law; if it did, it would be proposing to give to those who administer Regulations a power which no one else has, and which no one, I hope, ever will have, of attempting to regulate the rights of people without an Act of Parliament by retrospective legislation. Such a power the House would not look at. I think profiteering is a very good word on which to justify support of this Bill. We all have a strong opinion against profiteering, such a strong opinion that 80 per cent. of the War profits come back to the Treasury. Besides this 80 per cent. they have to pay Income Tax and other charges, which brings it down to something like 14 per cent. of the profits, to which I think they are honestly entitled under the law passed dealing with excessive profits.
Just consider what this Regulation proposes! It suggests that a man who has parted with property shall be held to still have that property, and that he should still be considered to possess those goods, which are to be valued at a certain rate per ton. The original consignee could not get back the original bill of lading; there- 1928 fore, under this Order, he has been asked to do a thing which is impossible. I suggest that, inasmuch as it comes down now to 14 per cent. of the legitimate profits, and inasmuch as we are rather bold in our legislation and our ways of carrying out Acts of Parliament, we should look with grave suspicion upon legislation which affects the rights of individuals and Regulations issued contrary to the law of the land without compensating the individual who suffers. I should be very sorry in a small case of this sort that the House of Commons should say that, inasmuch as the administrative power has passed a Regulation which assumes the right of retrospective legislation, and affects the rights of individuals, this House is to come in and make that bad Regulation a good one. I really think it is asking the House of Commons to do too much.
§ Mr. MACMASTER
The real interest I have in this Debate is to endeavour to see the facts in their true perspective. The Food Controller made certain Orders beyond his powers, and they were simply waste paper. Proceedings arose in the Courts with regard to them, and the Courts held that those Orders were waste paper. The Minister tells us, and the Solicitor-General also tells us, the reason why the judgment given is right is because the original Orders were wrong. That being a statement of the facts, this Bill proposes to make what was originally wrong right with the legislation of this country, and that is a very serious proposition. Of course an oversight occurred, but once the bills of lading passed into the hands of other trading parties the original consignee has no property in them. Orders were issued by the Food Controller extending to those who have now got control of the goods. This is not a case of profiteering at all, but it is a case of interfering with contracts. There may have been fairly large profits in connection with these transactions, but that is all in the usual course of trade. [An HON. MEMBER: "There might have been losses!"] Yes; there might have been losses, but there is nothing in this case to impeach anybody with anything in the nature of wrongdoing. Simply under the operation of the law these goods have passed into the hands of other parties, and you are now endeavouring to undo all these transactions, and to establish them as was originally intended by the Food Controller at certain prices. The 1929 Food Controller will subsequently communicate to these people the prices he will be prepared to pay for the same, but that seems to me to be a very extraordinary power. Of course we have no desire to embarrass the Government in this matter, but I think the best thing to do is to recognise the mistakes, face the actual situation, and bear the loss.
§ Mr. CLYNES
It is only by permission of the House that I can say a few words and address myself again to the subject of this Debate. I wish to take this opportunity mainly to respond to the suggestions that have been made to consider further the position of men who were not engaged in any speculations or were not outsiders, and men who have quite a legitimate case and station in the ordinary way of trade. The Bill is not designed to impose upon any section of the trading community the losses which have been referred to by one or two speakers. Even if we did everything possible to consider and to settle the claims of those who had quite legitimate dealings at the time in question, a Bill like this would be necessary. Therefore I ask that a Second Reading should be given to this Bill, and I am quite prepared between now and the Committee stage to go fully into the matter and consider what may be required to safeguard properly the rights and businesses of those who have claims on the lines which have been indicated by various speakers. I do not accept the view that this is merely a point of law. I make no claim to understand the technical points that are raised by the decision of the Courts. As I understand the matter, the whole question at issue is this, whether certain men at a time when there was severe food shortage had a right to engage in transactions which meant selling the same article six or seven times over, and at each sale considerably increasing the cost of that article to the consumer. In submitting this Bill to the House, I showed that in a very short time profits had been made in connection with these transactions amounting to 147 per cent. increase on the original sum that was paid. That is not legitimate business, and the defence of the Realm Acts and the Regulations made there under have involved so many millions of people in this Kingdom in personal loss and in property loss that I say, if such a Bill is necessary in order to repair the Regulations made under those Acts in connection 1930 with these contracts, then contracts must not be set up as the sole thing in this country which must stand above the Defence of the Realm Regulations. I do not mind doing even some damage to the understood sanctity of contracts if the damage amounts to no more than merely preventing men at such a time as I have indicated engaging in transactions which I do not think were creditable to them, and which I am certain at the time were strongly resented by public opinion.
§ Sir F. BANBURY
The question is not whether the profits were excessive or not. The hon. Member is endeavouring, not to stop excess profits on contracts in the future, but to go back on the past and to declare a contract which has been entered into to be null and void. That has never been done by anyone. The Food Controller does not intend to go back and say that the decision which was given by Mr. Justice Darling and two other justices in the tea hoarding case is to be reversed, and there is not going to be a Bill passed making the Order against tea hoarding retrospective. This is the first time that an Order has been made retrospective, and it is the retrospective nature of the Order to which we object.
§ Mr. CLYNES
I can assure my right hon. Friend that was just the point to which I was coming. I want candidly to say to the House that if this Bill were not made retrospective it would be valueless. It is intended to deal with transactions which cannot be adequately dealt with by the Regulations made by the Food Controller who preceded my Noble Friend who at present occupies that office. Candidly, this is a Bill to repair the defects of the Food Regulations that were made in May, 1917. We ask the House to pass it for the reasons which I have already given. I hope that a Second Reading may be unanimously accorded to it, but I say, in asking for that Second Reading, that we have no wish to cast any reflection whatever, or to impose any losses upon those who, in the ordinary course, were engaged in legitimate trade at the time.
§ Mr. CLYNES
It is not for me to answer at this moment, but if my right hon. Friend asks me, I should say, if any step is taken to adjudicate upon that matter, it ought to be a matter of mutual agreement, in order that we have confidence reposed in it. Whatever may be done, I think the House will agree that, in the main, those were transactions which the country could not tolerate in connection with that or any other trade, and this Bill is justified, even although it is retrospective, because we must go back in order to make matters right.
§ Mr. CLYNES
I have not, I think, referred either to a Committee or to any beard of arbitrators. I had in mind the statement of the right hon. Gentleman the Member for South Islington (Mr. Wiles), when he referred to the fact that
§ there was already in contracts an arbitration Clause. I said that I would be quite willing to look into the matter to see how legitimate trade could be brought within that provision.
Sir F. HALL
I venture to suggest that there are many experts in the City of London and in various parts of the Kingdom, and if some Committee is going to be set up to deal with this intricate question, one would have more confidence in it if the hon. Gentleman, for instance, would apply to one of the chambers of commerce and ask them to appoint the Committee.
§ Mr. CLYNES
I hope my hon. Friends will forgive me. They are rather trying to extract from me a promise which I do not feel at the moment qualified or ready to give, and I cannot go beyond the general assurance which I have given and which I hope they will accept.
§ Question put, "That the word 'now' stand part of the Question."
§ The House divided: Ayes, 134; Noes,23.1933
|Division No. 34.]||AYES.||[5.53 p.m.|
|Adamson, William||Cornwall, Sir Edwin A.||Hughes, Spencer Leigh|
|Adkins, Sir W. Ryland D.||Cowan, Sir W. H.||Hunter, Major Sir Charles Rodk.|
|Agg-Gardner, Sir James Tynte||Crooks, Rt. Hon. William||Illingworth, Rt. Hon. Albert H.|
|Allen, Arthur A. (Dumbartonshire)||Davies, M. Vaughan- (Cardiganshire)||Jacobsen, Thomas Owen|
|Anderson, William C.||Denman, Hon. Richard Douglas||Jones, Sir Edgar (Merthyr Tydvil)|
|Arnold, Sydney||Denniss, E. R. B.||Jones, J. Towyn (Carmarthen, East)|
|Baker, Rt. Hon. Harold T. (Accrington)||Dougherty, Rt. Hon. Sir J. B||Jones, W. Kennedy (Hornsey)|
|Baker, Maj. Sir Randolf L. (Dorset, N.)||Duncan, C. (Barrow-in-Furness)||Jones, William S. Glyn- (Stepney)|
|Baldwin, Stanley||Essex, Sir Richard Walter||Jowett, Frederick William|
|Barnett, Capt. R. W.||Faber, George Denison (Clapham)||King, Joseph|
|Barnston, Major Harry||Fell, Sir Arthur||Kinloch-Cooke, Sir Clement|
|Barran, Sir John N. (Hawick Burghs)||Ferens, Rt. Hon. Thomas Robinson||Lambert, Rt. Hon. G. (Devon, S. Molton|
|Bathurst, Col. Hon. A. B. (Glouc., E.)||Flannery, Sir J. Fortescue||Lambert, Richard (Wilts, Cricklade)|
|Bellairs, Commander C. W.||Foster, Philip Staveley||Law, Rt. Hon. A. Bonar (Bootle)|
|Benn, Arthur Shirley (Plymouth)||Galbraith, Samuel||Levy, Sir Maurice|
|Bentinck, Lord H. Cavendish.||Gibbs, Col. George Abraham||Lewis, Rt. Hon. John Herbert|
|Bethell, Sir J. H.||Gilbert, J. D.||Lloyd, George Butier (Shrewsbury)|
|Boscawen, Sir Arthur S. T. Griffith-||Gilmour, Lieut.-Col. John||Lowe, Sir F. W. (Birm., Edgbaston)|
|Bowerman, Rt. Hon. C. W.||Glanville, Harold James||Loyd, Archie Kirkman|
|Boyton, Sir James||Greenwood, Sir G. G. (Peterborough)||MacCaw, William J. MacGeagh|
|Brace, Rt. Hon. William||Greenwood, Sir Hamar (Sunderland)||McMicking, Major Gilbert|
|Bridgeman, William Clive||Gulland, Rt. Hon. John William||Maitland, Sir A. G. Steel-|
|Bryce, J. Annan||Hall, D. B. (Isle of Wight)||Marshall, Arthur Harold|
|Bull, Sir William James||Hanson, Charles Augustin||Mond, Rt. Hon. Sir Alfred|
|Burdett-Coutts, W.||Hardy, Rt. Hon. Laurence||Morgan, George Hay|
|Butcher, John George||Harvey, T. E. (Leeds, West)||Morison, Hector (Hackney, S.)|
|Buxton, Noel||Havelock-Allan, Sir Henry||Morison, Thomas B. (Inverness)|
|Carew, C. R. S.||Henry, Sir Charles||Morton, Sir Alpheus Cleophas|
|Carr-Gomm, H. W.||Hewart, Rt. Hon. Sir Gordon||Newman, Major John R. P.|
|Cecil, Rt. Hon. Evelyn (Aston Manor)||Hills, Major John Waller||Parker, James (Halifax)|
|Clynes, John R.||Hodge, Rt. Hon. John||Pease. Rt. Hon. H. Pike (Darlington)|
|Coates, Major Sir Edward Feetham||Holmes, Daniel Turner||Peel, Major Hon. G. (Spalding)|
|Collins, Sir W. (Derby)||Hope, James Fitzalan (Sheffield)||Pratt, J. W.|
|Colvin, Col. Richard Seals||Hudson, Walter||Price, Sir Robert J. (Norfolk, E.)|
|Raffan, Peter Wilson||Thorne, William (West Ham)||Wilson, W. T. (Westhoughton)|
|Randles, Sir John S.||Tickler, T. G.||Wilson-Fox, Henry (Tamworth)|
|Rea, Walter Russell (Scarborough)||Walsh, Stephen (Lancs., Ince)||Wolmer, Viscount|
|Rees, G. C. (Carnarvonshire, Arfon)||Waring, Major Walter||Wood, Hon. E. F. L. (Yorks, Ripon)|
|Richardson, Arthur (Rotherham)||Watson, J. B. (Stockton)||Wright, Henry Fitzherbert|
|Roberts, Sir J. H. (Denbighs)||Wedgwood, Lieut.-Commander Josiah C.||Yeo, Sir Alfred William|
|Roberts, Sir S. (Sheffield, Ecclesall)||Wheler, Major Granville C. H.||Younger, Sir George|
|Rowlands, James||White, J. Dundas (Glasgow, Tradeston)||Yoxall, Sir James Henry|
|Sanders, Col. Robert Arthur||Whiteley, Sir H. J.|
|Snowden, Philip||Williams, Aneurin (Durham, N.W.)||TELLERS FOR THE AYES.—Lord Edmund Talbot and Mr. Dudley Ward.|
|Stirling, Lieut.-Col. Archibald||Williams, Col. Sir Robert (Dorset, W.)|
|Strauss, Arthur (Paddington, North)||Wilson, Capt. A. Stanley (Yorks, E.R.|
|Archdale, Lieut. E.M.||Kiley, James Daniel||Pringle, William M. R.|
|Baker, Joseph Allen (Finsbury, E.)||Lindsay, William Arthur||Spicer, Rt. Hon. Sir Albert|
|Barlow, Sir John Emmott (Somerset)||Lonsdale, James R.||Sutherland, John E.|
|Booth, Frederick Handel||Lough, Rt. Hon. Thomas||Thomas, Sir A. G. (Monmouth, S.)|
|Burns, Rt. Hon. John||McCalmont, Brig.-Gen. Robert C. A.||Watt, Henry A.|
|Hamilton, Rt. Hon. Lord C. J.||McNeill, Ronald (Kent, St. Augustine's)|
|Haslam, Lewis||Meux, Adml. Hon. Sir Hedworth||TELLERS FOR THE NOES—Sir F. Banbury and Lt.-Col. Sir Fred Hall.|
|Henderson, John M. (Aberdeen, W.)||Pearce, Sir William (Limehouse)|
|Hogge, J. M.||Peto, Basil Edward|
Question put, and agreed to.
§ Bill accordingly read a second time, and committed to a Committee of the Whole House for to-morrow (Tuesday).—[Mr. James Hope.]