§ Order for Second Reading read.
§ Mr. BALDWIN (Joint Financial Secretary to the Treasury)
I beg to move,That the Bill be now read a second time."I explained the purpose of this Bill in introducing the Financial Resolution to the 1790 House, but at that time I gave an undertaking that I would tell the House how we stood with regard to certain of the obligations existing at the present time. The largest financial obligations entered into at the beginning of the War were guarantees given to the Bank of England in connection with the discounting of bills of exchange, advances to acceptors of bills of exchange, and certain loans to members of the Stock Exchange. Those steps which were taken to avert a terrible financial calamity in this country were taken on the outbreak of war, and no new obligations of that nature have been entered into since the year 1915, nor will have to be entered into again under these bills. It will be of interest to the House to know, with regard to the first item of advances on account of the discounting of bills of exchange, that the obligation originally amounted to no less a sum than £120,000,000. All of it has now been repaid, except an amount between £40,000 and £.50,000. The advances to acceptors of bills of exchange amounted to something over £70,000,000, and of that £50,000,000 has been repaid. There is still £20,000,000 outstanding, but naturally the liquidation of that class of business is a very slow process, and I am not apprehensive that the ultimate obligation will be of a serious nature. To members of the Stock Exchange £500,000 was advanced by way of loan, and every penny of that has been repaid. There were sundry payments guaranteed on account of insurance, both of ships and of seamen's effects, and various other things of that kind, very full details of which have been presented to the House quite recently and will be found in Command Paper 98 of the current year. It is a very exhaustive and interesting document.
With regard to the obligations in the previous Bills, covering payments for food supplies and things of that kind, I do not believe that any ultimate obligation will rest upon the Exchequer. In all those cases whatever is purchased is resold in the country, and the price at which the articles are resold is calculated, if practicable, to cover the cost of import. The only ultimate obligation will be in the event of any of those transactions showing a loss. With regard to the two new obligations—those, of course, which have arisen since the passing of the last War Obligations Act, of 8th August, last year—one has reference to the agreement with Messrs. Pearson for boring for petroleum, that agree- 1791 ment being contained in Command Paper 9188 of last year, which was before this House and which, if I remember rightly, was also debated in this House. The other is one in connection with the flax crop of this year. It is covered by Sub-section (3) of the operative Clause of the Bill and will amount, so far as can be foreseen, to a sum not exceeding £200,000. That, of course, is in the nature of a guarantee, and it does not necessarily mean that there will be an ultimate charge. I hope, with those few words of explanation, that the purport of the Bill and what it embraces has been made clear to the House.
§ Captain W. BENN
The right hon. Gentleman did not deal with Clause 1 (3) which speaks ofany obligation incurred in respect of the maintenance or assistance of flax production.Perhaps he would explain it?
§ Mr. BALDWIN
I only alluded to it in giving the figures. My hon. Friend who represents the Board of Trade (Mr. Bridgeman) will be pleased to explain the purpose of it
§ The PARLIAMENTARY SECRETARY to the BOARD or TRADE (Mr. Bridgeman)
There are two purposes for which these guarantees are required. One is for the promotion of seed supplies in Canada and the other is for the development of the flaxing-growing industry in Ireland. As the hon. and gallant Gentleman knows, owing to the breakdown of Russia, this country was put into a very difficult position with regard to the future of the flax industry, and an arrangement was made with certain farmers in Western Canada, that they should grow, for the purposes of seed, flax on an area, I think, of 30,000 acres in 1918. A guaranteed price was promised them. That arrangement was carried out, and I understand that no loss was incurred. At present there is no prospect of immediate recovery of the position in Russia, and it has been thought fit to ask the Canadian farmers to do the same again in 1919, but on a smaller area of 20,000 acres. With regard to the position in Ireland, the guarantee was £600,000, against a similar guarantee given by the Flax Society in Ireland of £200,000. The object is to carry out what is thought to be likely to prove a most valuable experiment in what is called the "Central retting of flax" in Ireland, which means collecting the flax for retting 1792 at convenient centres instead of allowing it to bed one by the small growers in small quantities about the country and adopting improved methods. Flax retting could be carried on for a great deal longer-period in the year in these central places, because the local people can only ret their flax for a certain time on account of the temperature in the water. The work, however, can be carried on for a much longer period at these central places. It was thought that this was a most hopeful prospect for the Irish industry, and, according to the advice that I have received, there is no probability of a loss, whereas if this guarantee were not given for another year a great deal of valuable experimental work would have to be scrapped altogether, and that which has already been spent would be entirely lost. The Government guarantee will, however, only be up to £200,000, against a corresponding guarantee by the trade interests. The Government, therefore, have thought it most desirable to continue this guarantee for this year in order that the experiment may be further carried out, and they very much hope that it may do a great deal to revive the flax industry in Ireland.
§ Question put, and agreed to.
§ Bill accordingly read a second time, and committed to a Standing Committee.