DYESTUFFS (IMPORT REGULATION) BILL.

HC Deb 07 December 1920 vol 135 cc1947-2016

Order for Second Reading read.

The PRESIDENT of the BOARD of TRADE (Sir Robert Horne)

I beg to move "That the Bill be now read a Second time."

4.0 P.M.

The Bill to which I am about to ask this House to give a Second Reading is very simple in its terms. Its object is to prohibit, except under licence, the import of a certain class of commodities into this country. The class of commodities which is dealt with is that of dyestuffs, and they divide themselves into three species. There is, first, the synthetic organic dyes; secondly, colours and colouring matter; and, thirdly, the intermediates of organic dyes. Synthetic organic dyes is a general term representing in effect the dyes produced from coaltar. They are all compounds of carbon, and, they are synthetic in respect that they are built up in laboratories and factories, as contrasted with those natural dyes which are got by extraction. The House is very well aware that a very great industry has been built up in Germany by the extraction of dyes from coal-tar, and many natural dyes now are entirely out of the market, because of the competition of synthetic dyes, which have been produced by this system. This country has the credit of the original inventor of the system from which all this has sprung, but, unfortunately, we had before the War completely lost the industry to Germany, in which country it had been very greatly developed. Colours and colouring matter are not, very strictly speaking, dyes, but they are produced by the same processes, and the knowledge required for their production is the same as for the production of the ordinary dyes. They are also the result of the dye-making industries, and are covered by the prohibition intended. The intermediates represent what you get half-way between the raw material and the finished dyestuff. These three species of the genus to which I have made reference cover the whole ambit of the field over which this prohibition will operate. I said that the prohibition was only to be exercised under licence. The first the most material question was how this licence was to be granted. The House will see that provision is made for the setting up of a Licensing Committee. It is to be composed of five representatives of dye consumers, three representatives of dye producers, and three neutral members, of whom one shall be chairman. The House will accordingly see that the dye consumers have the largest representation of anybody on the Committee, and the composition of the Committee has been agreed by the great dye consuming interests of this country. The Colour Users' Association, which represents, roughly, 90 per cent. of the whole consumption of dyes in the country, have accepted this plan and is very willing and ready to work it. When I say that the Colour Users' Association has accepted it, I do not mean that every member of that Association has acquiesced in this plan, because the Calico Printers' Association, in point of fact, has never accepted any prohibition of dyestuffs coming into this country at all.

Sir DONALD MACLEAN

Does that include the merchants?

Sir R. HORNE

The merchants are not consumers. They are the people by whom the material is distributed, but they are not specifically provided for in this arrangement.

Sir WILLIAM BARTON

When the right hon. Gentleman says 90 per cent., does he mean 90 per cent, counting heads or 90 per cent. of the consumption?

Sir R. HORNE

My information is that 90 per cent. of the consumption is represented in the Colour Users' Association. I made special inquiry about that point, and that was the information given to me. I have mentioned the case of the Calico Printers' Association. I should like to say that the Calico Printers' Federation, to which the Calico Printers' Association belong, has declared itself in favour of this scheme, and, while the Calico Printers' Association are undoubtedly a very important firm or company, they, in point of fact, are out of touch, or certainly out of agreement, not only with the large body of consumers of dyes in the country, but also with those who are members of their own Federation. The next point upon which the House will probably like information is as to how this licensing system will work. I have had many interviews with the people who represent the dye consumers in this matter, and I think that I can assure the House that there will be no difficulty with regard to the operation and to the granting of licences. There will be neither delay nor, so far as I can perceive, difficulty in granting these licences. Let us say, for example, that a licence is required for a dye which is not made in this country. It is perfectly obvious that a licence will be granted quite readily for that dye. Supposing it is a dye made in this country, but not made in sufficient quantity, again, the operation of dealing with the licence is obvious and easy. Supposing it is a dye made in this country, but which the consumer complains is not made with the same efficiency as in another country. Then the matter falls to be determined by a Licensing Committee upon which the consumer has the largest representation. I look for two good results. I look for the education of the producer by this method and for a great stimulus being given to those who are making dyes to produce the best dyes that can be made anywhere in the world.

The next point to which I wish to refer is the question of having a fee in respect of the grant of the licence. After careful consideration we came to the conclusion that there should be no fee for the grant of the licence. That is to say that there will be no fee in the sense of a licence duty, but there will be a fee to pay the administrative expenses, and it is limited to £5 upon any licence. The reasons that have operated in inducing us to set up a system with no licence duty, while good in the case of dyes would not be good—and I wish to say this at once—in the case of almost any other key industry in the country. If you have a system of importation under licence, it is perfectly obvious that you might upon occasion, and upon many occasions, have two people, one in a position of advantage, and the other in a position of prejudice, because of the fact that one man had asked for his commodity at a time when there was sufficient production here, while the other man had made his demand at a time when the home product was at an end and when he had an opportunity of getting a cheaper dye from outside. In that way you would create inequality, and there is no other way of getting over that inequality than by charging an ad valorem duty. The dye industry is so well organised that we are in a position to ensure that there will be an equitable distribution of whatever dyes are imported. It seems to be the position of this industry that you can say for a considerable time in advance what the whole of the consumption will be. You can tell what your own production will be, and therefore you can decide what you are likely to require from overseas. You have an organisation representing practically the whole trade by which there can be rationed to the whole trade, upon principles of equitable distribution, the amount of dyes which you are compelled to import. For these reasons, we have been able in this Bill to operate the licensing system without any recourse to any form of licence duty.

I do not think that there are any other matters, so far as the Bill is concerned, which require explanation. I only repeat, because it is of the highest moment, that we have succeeded in getting the whole-hearted sympathy and acquiescence of the trade on both sides in the proposals of this measure, and, whatever criticisms may be offered, that is the big point which has to be kept steadily in mind. When I introduced this Bill this week, I thought that I was presenting to the House of Commons a measure upon which there could be no controversy. It seems that I was too sanguine. I had not taken into account the shortness of political memories, or the fragility of Parliamentary consistency, or perhaps even the lure of old battlegrounds and rallying cries.

Lieut. - Commander KENWORTHY

The consumers are the people who are objecting.

Sir R. HORNE

The hon. and gallant Gentleman has spoken a little too soon upon that matter. Perhaps one felt too much confidence in the recantations which were made in this House under stress of war. During the last few days, in watching the comments of newspapers and the speeches that have been made, I have been irresistibly reminded of an illustration which perhaps is not of sufficient dignity to be used in this House, but which at the same time is perfectly apposite to my point. It was an incident in the life of an American trapper who found himself unarmed and confronted by a bear upon a very narrow pathway. He had not been a religious man, but in the imminence of his end he was moved to prayer, in which he first of all confessed his sins and then said what he would do if only he were let off this time. To his great surprise the bear moved away, whereupon the trapper rapidly said, "Oh, Lord, I take back all I said; the bear has gone." Much of what is being said to-day is being uttered under a feeling very much akin to the feeling of that trapper. The War is over, or, at least, is partly over, and people are for getting the lessons of the War—

Colonel CLAUDE LOWTHER

Was he an American trapper?

Sir R. HORNE

—and in a position of perhaps greater security they are returning to the views which they had previously forsaken. I must say that I listened in a state of wonder the other night in the House to some observations which were made in a preliminary discussion upon this matter. Listening to that discussion, you would have supposed that you had here a Government which was determined to set up a trade which had no right to live in this country, and was forcing its produce upon a reluctant body of consumers in the shape of the textile industry. Nothing could be further from the truth than that suggested point of view. The reason we are here to-day discussing this matter at all is that when the War broke out the textile industries in this country were threatened with disaster owing to the fact that they were cut off from what were practically their only supply of dyes. It was the textile industry that came to the Government, and pleaded with the Government to meet their difficulty by setting up and helping this industry in this country. It was under pressure of that kind that the Government first lent money, afterwards assisted a company in which they took up shares, and later, gave a pledge to people who put their money into this industry. And everybody acquiesced at the time.

I am going to ask the indulgence of the House with regard to this matter. As I have said, people's memories are short, and I desire to give the history of this development and to tell the House, as I am perfectly certain many people have forgotten and some perhaps have never known, what exactly was the position with regard to the dye industry. When the War broke out, we imported into this country something like £2,000,000 worth of dyes per year, and upon that supply depended the textile industry, worth £200,000,000 per year. Of that £2,000,000 worth of dyes we got, roughly, nine-tenths from Germany. Our own supply was infinitesimal. The amount produced in this country was a mere bagatelle in relation to the amount that we required, and much of it was dependent upon the goodwill of the Germans. When the War broke out the position was desperate. You had this great textile industry, employ 1,500,000 people, faced with something like ruin unless these dyes could be got. They went to the Government. It was not a perverse Protectionist Government. It was a Government undiluted—there were no Coalition Members in it—presided over by the right hon. Gentleman the Member for Paisley (Mr. Asquith), and the then President of the Board of Trade was an impeccable economist, according to all Free Trade theory. What did he do and say when approached by this trade at that time? Already, in 1914, the right hon. Gentleman, in reply to a question in the House, said: The inquiries of the Government have led them to the conclusion that the excessive dependence of this country on a single foreign country for materials of such vital importance to industries in which millions of our workpeople are employed constitutes a permanent danger which can only be remedied by a combined national effort on a scale which requires and justifies an exceptional measure of State encouragement."— [OFFICIAL REPORT, 23rd November, 1914, col. 760, vol. 68.] There is the recognition of the fact that the country which comes to depend for a supply of vital commodities upon outside resources was not likely to be entirely secure. What did the right hon. Gentleman do? He entered into negotiations, and went to various branches of the trade, such as they were. He first of all induced the Government to lend to one particular firm, for the purpose of increasing its factories, the sum of £200,000. That was inadequate to meet the needs of the situation. Thereupon he made arrangements with the dye users of the country to set up a firm, British Dyes, Limited, into which the Government agreed to put £1,700,000, the whole capital of the company aiming at being something over £4,000,000. Arrangements were made by which prices were to a certain extent reviewed by the Board of Trade, and the method of distribution was always subject to the scrutiny of the Board of Trade. Two directors, representing the Government, were put upon the Board. This company did not turn out to be entirely satisfactory. One of the reasons was that it was engaged to a very large extent, at the behest of the Minister of Munitions, in turning out the material required for the manufacture of explosives. Therefore it never really had a chance of getting on to the higher branches of the dye-making trade. All through, our efforts to produce the higher and special grades of dyes were hampered by the necessity of providing for the needs of the country in the War. In the result, the consumers approached the Board of Trade once more, and asked for further help in this matter. A certain amount of dyeing material of a special character was at this time coming from Switzerland, and developments were made during that period and later in the production of British dyes; and but for these and what we were able to got from Switzerland the textile industry of this country could not have carried on.

Major BARNES

Part of the trade?

Sir R. HORNE

Certainly. At this stage in 1916 the consumers again approached the Government with this Resolution—and I would like the House, in view of the criticism which has been directed to our efforts in the case of this country to produce dyes, to note the beginning of this Resolution.

Sir D. MACLEAN

What is the date of that Resolution?

Sir R. HORNE

June, 1916. I am not perfectly certain as to the actual date of the Resolution, but it was about June, 1916, when this matter was taken notice of by the Board of Trade. I have the actual text of the Resolution.

Major BARNES

Will the right hon. Gentleman say from what he is reading?

Sir R. HORNE

The Memorandum pre pared at this time for the Cabinet. What it says is—

Mr. MacCALLUM SCOTT

If the right hon. Gentleman reads an extract from the document, is he liable to publish the whole of the document?

Sir R. HORNE

I will take very good care after this when I am asked what I am reading from to give the actual Resolution, but if the House desires to see the whole document, it can be produced. The way in which the matter was expressed by the Resolution is this: Resolved: That this Committee of Colour Users, while gratefully appreciating the efforts of the British colour-makers to meet their requirements, is of opinion that far greater progress would have been made had all the resources and knowledge in the United Kingdom been co-ordinated to that end. Accordingly they advised that that coordination should take place. The meaning of that was this: Certain outside firms made progress owing to the great demand for dyes, and in particular the firm of Levinstein, who are well known in this trade. They made great progress. The colour users suggested that the best thing to do in order to get increased production was to unite British Dyes with the firm of Levinstein. That ultimately was done.

Major BARNES

That is the point. [HON. MEMBERS: "Order, order!"] Does the right hon. Gentleman say that the use of the word "co-ordination" there means that a definite proposal was put forward, or that the amalgamation of these firms was adumbrated?

Sir R. HORNE

Yes, I do say so, and that the suggestion of amalgamation came from the colour users. I propose to give my hon. and gallant Friend evidence of that in a moment. It was out of this that there sprang the British Dyestuffs Corporation. When the proposal was put before the colour users of this country they sent a circular round to their trade, in which they said: We are convinced "— perhaps this will also convince my hon. and gallant Friend opposite (Major Barnes)— that the scheme for the amalgamation of British Dyes, Limited, and Levinstein. Limited, is the first but most important and difficult step towards.… Doing what? freeing this country within a reasonable time from dependence on Germany for synthetic dyestuffs, and we strongly urge shareholders to accept it. This circular was signed by, I think, every colour users' association in the country. It was signed by the Bradford Dyers' Association, the Bleachers' Association, the Cotton Piece Dyers' Price Association, the Yorkshire Dyers' Federation, the Wallpaper Manufacturers, the Midland Master Hosiery Bleachers', Dyers' and Finishers' Association, etc.

Major BARNES

Will you give me the date of that circular?

Sir R. HORNE

13th August, 1918. Accordingly, out of the event I have de scribed there arose the Bradford Dyers' Association, set up with £1,700,000 Government capital, and a large subscription from the public, the total capital being something between £9,000,000 and £10,000,000. I want to go back for a moment—

Major HAMILTON

Is the right hon. Gentleman not wrong in saying the Bradford Dyers' Association? Does he not mean the British Dyes Corporation?

Sir R. HORNE

I am obliged to my hon. and gallant Friend. I meant the British Dyes Corporation. I wish to go back for a moment to what had been done by the Government of the right hon. Gentleman opposite (Mr. Asquith) during the period to which I am referring. In the first Coalition Government, Mr. Runciman, President of the Board of Trade, in April, 1916, set up a Committee of the Textile Trades, a very large and important Committee, representing entirely colour users. They investigated this matter with great care. I would just like to remind the House of some of the conclusions at which they arrived. They said this, and it is worth while at this point of time to remember that when they found themselves in difficulties over this matter, instead of merely being content with the old position this large and important committee of colour users said: It will always be a matter for wonder that great and powerful trades like the British textile trades should have allowed themselves to sink into a state of complete dependence upon a foreign country in respect of the supply of materials vital to their industry. Is that dissented from to-day? [HON. MEMBERS: "No!"] If it is agreed to, then the whole case for the Bill is made out. [HON. MEMBERS: "No, no!"]

Mr. HOPKINSON

But may I put it to the right hon. Gentleman, does not the whole prosperity of the cotton trade depend upon the raw material which we do not grow?

Sir R. HORNE

You are compelled, no doubt, where you use raw material which you cannot produce to get it from others, but if you can produce the raw material which you require for a vital industry you ought to do so. Let me finish my quotation: It is a striking instance of the absence of foresight and of co-operation and taking counsel together in matters of common interest, which has bean too frequent in the past in many branches of British industry. At the present time all branches of the trade are fully alive to the necessity of freeing themselves from dependence upon Germany and of establishing and maintaining in this country a dye-making industry capable of supplying the whole of their requirements. They go on with their views as to how this is to be done, and this is in effect the Bill which I have introduced. They say this: We understand that it is proposed that the importation of foreign dyes should be prohibited for a term of years except under licences to be ' issued by a Commission or authority to be set up in connection with the whole group of 'key' or 'special' industries.

Major BARNES

What is that date?

Sir R. HORNE

The Committee was set up on 27th April, 1916. I am not perfectly certain of the date, of the Report, and I do not want to detain the House on this matter, but the Committee goes on: Without pledging ourselves in advance to the details of such a scheme, we consider it promising in its character and likely to work well. That is said by the colour users at the time and in the circumstances, and they urged the prohibition of foreign dyes imports, except under a licence. The alternative appeared to be an increase of duties. It is quite certain the German colour-producers will make a desperate effort after the War to recover their monopoly, and with that object will be prepared to adopt even more ruthless methods than in the past. They are doing it. It is known that they have brought about amongst themselves a complete fusion of interests during the War and that they now control a joint capital estimated at £40,000,000. We think it would be fatal "— Perhaps this will be interesting to some hon. Members opposite— to expose the nascent British colour industry, no matter what assistance it received from the State by subsidy or otherwise to the overwhelming competition of so powerful a group. In our opinion nothing short of a prohibition of imports except under licence would effectually protect it in the early stages of its development, while the issue of such licences by an independent authority should safeguard the interests of colour-users and of our export trade in general. That is a distinct pronouncement which goes on the very lines we have taken in this Bill. That is not all. The Government of the right hon. Gentleman opposite was in favour of the same principles being established and of the same process. Mr. Runciman had set up a Committee to consider this matter. He, and Mr. McKenna, and the present Minister of Health (Dr. Addison) were members, also the Lord Privy Seal and the Chancellor of the Exchequer. These were the five that formed the Committee. Here are their recommendations in October, 1916. They reported unanimously:—

1. (a) In favour of promoting a fusion of the chief dye manufacturing concerns in the United Kingdom; this measure having become more than ever necessary by reason of the fact that, since the outbreak of War, the German dye manufacturers have united in a single combination.
2. (b) In favour of prohibiting the importation of dycstuffs after the War except under licences granted by a Dyes Commission.
3. (c) In favour of encouraging the manufacturer of the more difficult dyes during the reconstruction period by special measures (e.g., subsidies, assistance to scientific research, etc.)

That is the considered judgment of all the people who applied their minds to this matter at a time when it was vital that a solution should be arrived at. It was under these circumstances and under these recommendations that certain speeches were made later in this House. After the Coalition Government was formed under the premiership of the present Prime Minister Sir Albert Stanley was at the Board of Trade, and on the 15th May, 1918, he informed the House what his proposals were, and he did so in this language: There is a further proposal, and that is that, in order to safeguard this particular industry against the efforts which the great German dye-making firms are certain to make after the War to destroy all we have accomplished through the War and to make this industry again subservient to Germany, we will adopt a course which, I believe I am right in saying, was carefully considered by a Cabinet Committee of the last Government, and recommended to and approved by the Government of that day, and which has since been approved by the present Government. It is that importation of all foreign dyestuffs shall be controlled by a system of licences for a period of not less than 10 years after the War. That proposal was put before the House. Mr. Runciman was present, and asked a question, but not on this subject. The proposal was acquiesced in by the whole House as the policy of the Government and of the House. It is too late now to say that we can go back upon all that you have done in this matter, and there is one good reason why you cannot go back, and it is that that pledge being given with the acquiescence of the Government, it was put into the prospectus on which people subscribed to the shares of the British Dyestuffs Corporation, and unless you are going to break faith with those who put their money into that concern you must keep that pledge. [An HON. MEMBER: "Pay them back!"] I wonder where is the economist who would tell us now to pay them back. Sir Albert Stanley went to Manchester, and addressed a meeting of the colour users of Manchester on the 14th of June, following the address he gave on the 15th of May in the House of Commons, and he explained the scheme in exactly similar language, with the result that the dye users passed a resolution declaring their full approval of that policy as likely to be the only way of securing the rapid development of the industry in such a manner as to make the United Kingdom sufficiently independent of German supply of dyestuffs after the War, and also declares its approval of an immediate amalgamation of the principal dye manufacturing companies as an essential means of facilitating that policy. I have put before the House the documents which make clear the position which the Government and the House of Commons took up and the manner in which they induced the subscribing public to put their money into the British Dye-stuffs Corporation. I put it to the House that we are morally bound by these pledges, and that to-day you have no option but to follow this scheme, unless indeed you are prepared to say that you are going to buy out all the people whose money was put into the British Dyestuffs Corporation, and that you are going to let this great industry go to pieces and allow this country to be once more dependent upon Germany. All through the War the dye consumers were crying aloud that never again would they allow themselves to be put into the position of being dependent upon an outside source for their dyes. I should like to remind the right hon. Gentleman the Member for Paisley (Mr. Asquith) of what happened in connection with this matter on 2nd August, 1916, in this House. The right hon. Gentleman was then presenting to the House the resolution of the Paris Conference, and I quote his language because it shows the real lesson we learned in the War. The right hon. Gentleman said: The War has opened our eyes to the full meaning and the manifold implications of the German system of economic penetration, and commercial and financial control of vitally important industries, and to the use to which vantage ground gained by this system can be put in war. Once our eyes are opened, I hope we are not going to shut them again as to the effect of German competition on our trade. The right hon. Gentleman further said: We never realised, any of us, until the War broke out how we have allowed ourselves to become dependent with regard to these essential ingredients for the prosecution of some of our most important industries on sources of supply that were not only not within our own control, but that could be absolutely controlled by the enemy. And he read the following resolution of the Paris Conference: The Allies decide to take the necessary steps without delay to render themselves independent of the enemy countries in so far as regards the raw materials and manufactured articles essential to the normal development of their economic activities. Then in a passage which is of very great imports, nee the right hon. Gentleman the Member for Paisley said: No one who has any imagination can possibly be blind to the fact that this War, with all the enormous upheaval of political, social and industrial conditions which it involves, must in many ways and ought to, if we are a rational and practical people, suggest to us new problems or possibly modifications in the solution of the old ones. I would regard it as deliberate blindness to the teachings of experience if you were to say we had forgotten nothing and had learned nothing from a War like this. Some people seem to have learned something, and then to have forgotten it again very rapidly. The right hon. Gentleman (Mr. Asquith) then said: I am not surrendering any convictions I have ever held. I commend those views to some of those who think that Free Trade doctrine is necessarily inconsistent with the principles of this Bill. The right hon. Gentleman (Mr. Asquith) proceeds: None of us who approaches the matter with a free mind and with the lessons which the War has taught us, everyone, it does not matter whether you are a protected or a Free Trade country for this purpose, all of us have been too dependent on the chances and risks which we did not adequately foresee and against which we certainly did not satisfactorily provide. It is not necessary to remind the House that there is nothing inconsistent between free trade and the policy which we now propose, or the policy which the right hon Gentleman, the Member for Paisley, and his Government proposed, because it is the same. You may quote from Adam Smith and John Stuart Mill passages which declare the necessity of protecting industry when it is necessary for the defence of the country or protecting any particular young industry which otherwise would not have a chance of growing. Surely if there is any industry vital to our commerce and which is necessary for our security it is this great dye industry with which we are dealing to-day.

I have kept to the last the most important consideration of all. The foundation upon which the setting up of the British Dyes Corporation was based was getting rid of our dependence on outside sources-of supply, but besides the great necessity of dyes for our own industries during the War we discovered something else. We discovered that the country which has the largest dye-making industry has got within its borders a very powerful agent in the waging of war.

Lieut.-Commander KENWORTHY

I thought the last war was a war to end war.

Sir R. HORNE

The German dye industry produced a very great amount of the materials necessary for the manufacture of explosives, and Britain was very severely handicapped, because it had no such industry on which it could call for that kind of production. All the fundamental processes involved in the making of dyes are just the same as those which are necessary for the making of explosives, and you can turn a dye-making factory at very short notice into a factory for the making of the ingredients of explosives. Even the very small dye-making factories we have in this country made large quantities of picric acid during the war. We have been told by a military commission which has in- vestigated this problem in Germany what an enormous agent these factories were to Germany in the waging of the War. More than that, it is not untrue to say that Germany succeeded in making war much longer than she otherwise would have done because of the dye industry, which enabled her to support a very large body of skilled chemists. There is no industry in which you can afford to support a large number of skilled chemists except the dye industry.

One of the results of our previous policy in regard to this industry is that we had very few skilled chemists at the outbreak of the War, while Germany had a large number. What was one of the results? It was through the dye-making industry of Germany that they discovered the process of extracting nitrates from the air, and but for the discovery of this means of producing nitric acid, Germany could not have continued to wage the War No doubt these are considerations which do not seem to affect our minds so much when you think that perhaps we have reached the end of War, but he would be a great optimist who would suppose we are never going again to be in that position of difficulty. Failing due provision, you may be attacked by your enemy with a power and force which you cannot repel simply because you failed to do your duty in fostering the industry here which you require. The United States have a system of prohibition now against German dyes. They exercise their prohibition under the arrangement which they made during the War, and there is now before the Legislature in America a Bill to establish a system of prohibition and licences. At present there is the ordinary tariff against imported dyes, as well as prohibition. The arrangement under the Bill is that licences shall only be granted on the terms of the existing tariff, which means a 30 per cent, ad valorem duty on finished dyestuffs and a further specific duty of five cents in the pound. Under these arrangements the United States of America, which, like ourselves, before the War, was dependent on Germany for dyestuffs to a large extent, is now building up a very great industry, and they have probably the biggest amalgamation of chemical concerns in America with a capital of something like £60,000,000. It is perfectly plain, therefore, that they are not going to allow America to be depen- dent on outside sources for a commodity which they realise, and which we also ought to realise, is vital, not merely to the industries of the country, but possibly also to its very existence. There have been some criticisms with regard to the British Dyestuffs Corporation to which I will refer in a moment. I do not think it justifiable to criticise the carrying on of that industry by its result in the Way I repeatedly notice, and I wish to say again that they were hampered during the War by the great amount of attention that they had to pay to the needs of the country in the way of explosives. Prior to the War the whole manufacture of British dyes amounted to something like 2,000 tons in a year, while about 20,000 tons were brought in from outside. In the year 1918 the English manufacturers produced 17,500 tons, and we took only 2,000 tons from outside. In 1919 we manufactured 20,000 tons and got 2,500 tons from outside. It is impossible to say, therefore, that the British Dyestuffs Corporation has not served the nation well.

Mr. A. HOPKINSON

Will the right hon. Gentleman give us the respective values of the 20,000 tons and the 2,000 tons?

Sir R. HORNE

I am sorry I have not got the respective values here. No doubt the smaller quantity we got from the outside consisted of the more special range of dyes. The point is, nevertheless, that whereas previous to the War we only supplied dye consumers with 2,000 tons of dyes, in 1919 we were supplying them with 20,000 tons.

Sir E. CARSON

What is the percentage of the dyestuffs mentioned in this Bill which we are able now to supply ourselves with?

Sir R. HORNE

I cannot give my right hon. Friend an accurate answer, but so far as I can gather the bulk of the dyes we require here are not of the highest ranges. These higher ranges are comparatively small in actual quantity, and, therefore, I think might not be very different from the figures I have given. What is happening to-day is that the Germans are sending dyes here of both classes—the higher as well as the lower ranges—and they are sending them at prices with which the British Dyestuffs Corporation at the moment cannot compete. They are aided, as the House will readily understand, in many ways: first, by the fact that they have been carrying on this industry for many years, and in the second place the difference in exchange makes it quite impossible to meet that particular form of competition. If this is allowed to go on, as is happening to-day, we may very soon clear out the dye industry from this country. People who make these criticisms of the British Dyestuffs Corporation are very ungrateful. What has been one of the chief features of our trade, since the Armistice? Has it not been the enormous success of our textile industry? That industry has made more money in i hat period than it ever before made in its existence. Its exports went up to an extent almost inconceivable, and it was all done with the aid of British dyes and a small quantity of Swiss dyes. During that period Germany was unable to supply us with any dyes. Surely then something is due to the British Dyestuffs Corporation for having managed its industry so well as to enable the textile industry to carry on during a period of booming trade and to sell products to the world of enormous value. But at present the situation is that that trade is disappearing. The importation of German dyes during this year has been steadily increasing in quantity. In the months of January and February the average amount was 500 tons per month. Now it baa risen to 1,430 tons per month, and what it will be later on one can only surmise.

Sir W. BARTON

Does that include the amount imported under the reparation Clauses?

Sir R. HORNE

I will give the amount under the reparation Clauses separately. For the first nine months of this year from Germany there came 3,000 tons, including 880 tons under the reparation Clauses. There were also 2,300 tons of Swiss dyes and 2,100 tons from America.

Mr. FRANCE

Can the right hon. Gentleman say what proportion Switzerland sent of the rarer and finer dyes during that period?

Sir R. HORNE

Switzerland sent 2,000 tons in 1918 and 2,500 tons in 1919, and the bulk of that was of the rarer and higher grade dyes. Of course, the object of the dye industry in this country is to attain a steadily increasing efficiency, and no doubt it will succeed in that, and finally attain the highest ranges of dyes that can be made. There is no reason why, from the very nature of the industry, we should not manufacture the highest form of dyes now made in Germany.

Mr. FRANCE

If there is no competition?

Sir R. HORNE

Under prohibition and licences there must be some competition. If hon. Members will remember what I said in the earlier part of my speech, under any licensing system dyes will certainly be imported from Germany, and the dyes produced here will consequently be subject to German competition. You will have the matter fully thrashed out on the Licensing Committee as between the consumer and the producer. The consumer will be there in larger numbers than the producer, and in the result it is inevitable that the producer will give the best dye he can. The inquiries and investigations continually being made by the Licensing Committee will always be a stimulus to the dye producer to increase the efficiency of his system, and that is one reason why a system of this kind is infinitely preferable to a system of subsidies, which really put a premium on incompetence. Under a subsidised system you have to discover what it costs the dye producer to produce and sell at a price at which he can compete with the German; you have to ascertain the difference between his cost and the German price, and give him a subsidy to the extent of the whole amount. Such a system involves a very meticulous investigation, and I venture to submit that any proposal with regard to a subsidy must inevitably break down.

Sir E. CARSON

Will the right hon. Gentleman say whether the question is at all affected by the number of patents the Germans have in this country for the manufacture of dyes? According to my recollection the Germans opposed the granting of every possible patent in this country.

5.0 P.M.

Sir R. HORNE

I believe the Germans proposed to set up works here in order to get inside the barrier of our Patents Act. So far as German patents are concerned, speaking from memory, my impression is that in all cases of manufacture in this country the German patents are no longer operative, and accordingly that obstruction no longer exists. I see there is an Amendment on the Paper in the name of the hon. Member opposite (Mr. G. Terrell), "That the Bill be read a Second time this day three months." I was rather surprised to see that Amendment, but I take it that the real desire of the hon. Gentleman is to protest against the dye industry being treated separately. If that is his point I think the answer is very obvious. I agree at once there are other industries, reference to which was made by the right hon. Gentleman the Member for Paisley, in the speech from which I have already quoted—there are other industries which deserve to be dealt with at the earliest possible moment. The only reason why they are not being dealt with now is because of the lack of time during this Session. But I will give my hon. Friend the assurance that they will be dealt with at the earliest possible moment next Session. The case of dyes is really a special case, as I think the hon. Gentleman will realise, not only because of the very great urgency of the condition of the dye industry at the moment, but because of the fact that special pledges were given by the Government of the day, with the consent and acquiescence of the House of Commons, to the shareholders who subscribed to the British Dyestuffs Corporation, and that makes an element of distinction which occurs in the case of no other key industry. If this Bill does not succeed for dyes no Bill for any other industry can ever succeed.

Mr. G. TERRELL

A very definite undertaking was given by my right hon. Friend that the Dye Bill, or a Key Industry Bill, by which he meant dye-stuffs, would be the first business of next Session. Will he continue that undertaking, that the Bill for key indutries will also be the first business of next Session? If we are to take a Bill for the other industries as the first business of next Session, I have no objection whatever to the present Bill going through. In fact, I will support my right hon. Friend.

Sir R. HORNE

My hon. Friend may take it that the intention of the Government is still to make the Bill dealing with the other key industries the first measure of next Session. There are two other Amendments on the Paper, be- tween which there is not much difference, except that the latter is perhaps a little more violent than the former. The first of them takes objection to the Bill because it does not provide the best means of safeguarding the dye-making industry. No better way has been found than the method which has been adopted by all of those who have investigated this problem. It was approved by the colour users themselves, and no other form of defence of the dye industry would be either so easy to work, or would be so perfect in its operation. Then it is said it is calculated to injure seriously the export trade in textiles. I do not follow that suggestion. It was because, the textile trade was in danger of disaster that the dye-making industry was pushed, and I cannot imagine that a Bill in which the textile trade now not only acquiesces, but to which it is giving hearty support could be in any way inimical to their interest. Then it is said to contravene fundamentally the existing trading system of the country by establishing Protection in its worst form. That, as it appears to me, is really a fantasy. To say that it is Protection in its worst form to deal with an industry which everyone agrees must be defended by a system which imposes no duty, which allows the importation, with no cost, of all that you require—it is perfectly ridiculous to describe that as, in any sense, Protection in its worst form. If you do not pass this Bill, what are you going to do? It is perfectly certain that without a measure of this kind the dye industry will be killed. The figures I have quoted already show what will happen. Already 2,000 men have been discharged from their employment, and the rest will follow. What is the position you would be in then? You would have broken your pledge to the people who put their money, their skill and their brains into this concern. You would disperse the bands of chemists of great merit that you collected with great difficulty, and you would practically advertise to the world that skilled chemists for that kind of commercial work are no longer to have any field in Great Britain. In addition, you will be, so far as peace-time is concerned, in the same position of dependence upon outside supplies for vital industries in which you found yourself at the beginning of the War, and which, all through the War, everyone connected with industry deplored and lamented. And in war your weakness in the chemical industry, which has now become the foundation of much of the mechanism of combat, will imperil the very national existence.

Major BARNES

I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words this House declines to give a Second Reading to a Bill which, under the pretext of providing for national defence, reintroduces the vicious protectionist system of prohibition and licences, which will inflict grave injury upon the textile industries of the country. When I contemplate the right hon. Gentleman surrounded by all the panoply of the OFFICIAL REPORT, Cabinet memoranda, circulars and reports, I feel rather like David approaching Goliath. I can only hope that I may have somewhat of the same good fortune. I think the right hon. Gentleman had not approached this subject quite with that philosophic calm that characterises him in most of his discussions in this House. He has imported a good deal of heat into the discussion, and I should like, if I could, to abstract some of that and reduce the temperature to one in which we may fitly and calmly discuss what is a matter of very grave national importance. The right hon. Gentleman showed particular surprise and some indignation at discovering what he conceives to be inconsistency on this side of the House. He lays down the doctrine that upon no account must you allow circumstances to modify your opinions. That seems to be a very daring doctrine to come from a Member of the Government of which the Prime Minister is the head. I do not know what my right hon. Friend (Mr. Asquith) is going to say. He will no doubt indicate whether he takes the same view in 1920 which apparently, from what has been put before us, he took in 1916. If it should be that he has modified his opinion, he will not be the first great Liberal Leader who has done it. Really it is daring, to say the least of it, for the right hon. Gentleman to approach us upon that line. I think he will agree that the opposition that comes to this Bill cannot in any sense of the word be looked upon as party opposition. It comes from all parts of the House. There are Amendments down against the Bill from every quarter. That can easily be understood.

Let us assume that it raises the question of Free Trade. That is not a party issue in this House. The Coalition, at least, at present, has not declared itself for Protection and there are Free Traders as ardent and convinced on the opposite Benches as there are on these. So that from that point of view the question that is raised is not a party issue. Then if the question that is raised is one of prohibition and licence, there is as much detestation of the control of trade by licence and by prohibition on the opposite side as there is in this quarter. We are all fed up with Government control and interference with trade. It is a striking thing that just at a moment when the country is crying out for the release from Government control of two such great industries as the mines and the railway's, the right hon. Gentleman should ask the House to place an even greater industry than either of those —the great textile industry—practically in a strait jacket, because that is what the Bill proposes to do. The right hon. Gentleman suggested that there are many of us who are quite indifferent to the question of national safety that is raised by this Bill. There is no such position taken up by any Member in the House. In so far as the dye industry is a means of securing the defence of this country we are all at one, and our feelings upon these Benches are no different respecting that point to-day from what they were in 1916. That is not the issue at all. The issue before the House at present is not the question as to whether you are going to have a dye industry. The only question is whether this Bill is the best method of protecting it, and the best thing for the country, and the best thing for the great textile industry, to whose interests no one can be indifferent, would be best consulted if we clear away from our minds altogether this talk about inconsistency and what happened in 1916, and what happened in 1920—if we clear away altogether the question what part the dye industry is going to play in national defence. There is no question of that at all. The sole issue before the House is as to whether the prohibition of the imports of dyes, except under licence is the best method for protecting the dye industry.

Let us visualise what the situation is. We have two industries before us. One is an industry which is employing something like 1,500,000 people; the other employs fewer than 10,000. The dye-using industries and the colour-using trade, that is to say the textile trade, the leather trade, the silk and paper trades are reponsible for an export of something like £350,000,000 a year, and that figure is arrived at after making a liberal calculation for all those textiles in which colour is not employed. The total production of the dye industry cannot be valued, at the outside, at more than £10,000,000. So there is the picture. We have to consider the interest of the smaller industry and its peculiar claims upon us. We admit that as freely as the right hon. Gentleman. On the other hand, we have to consider an industry employing 1,500,000 people with an export trade of £350,000,000, and I submit with confidence that we are bound to be as chary as we possibly can in taking any steps which are going to affect detrimentally so fundamental an industry, an industry upon which the prosperity of the country so largely rests. That is the position in which we find ourselves. It is all very well for the right hon. Gentleman to make play about political inconsistencies. That really is nothing at all. It is all very well for him to finish up on a very solemn note about moral duty and pledges. It is all very well for him to tell us the part that this industry plays with regard to war. We appreciate that quite as much as he does. We are just as much concerned as he is to maintain the dye industry. All we are asking him to do now, and all we are asking the House to do, is to consider what is the best means of doing it, and we submit that the way he proposes is not the best. Let us consider what the situation will be if this Bill is passed. We have been told that there is a difference of opinion amongst colour consumers. It is a significant fact—the right hon. Gentleman minimised it, but the House will give full value to it—that the Calico Printers' Association is utterly and entirely opposed to this Bill. I would remind the House that the export of cotton printed goods during the last 10 months amounted to something like £170,000,000, and this House cannot regard with indifference the protest made by a body of industry with a trade of this magnitude, which they believe is affected by this Bill.

Sir R. HORNE

That is not all the calico printers. Not all the calico printers' associations are opposing this measure. The Calico Printers' Federation, which, roughly speaking, has twice the machinery of the Calico Printers' Association, is in favour of the Bill. The Calico Printers' Association's consumption of dyestuffs is probably a little more than half that of the Calico Printers' Federation.

Major BARNES

As the right hon. Gentleman has raised this point about the question of agreement; I will deal with it. I have had some opportunity during the last 10 months of hearing opinion from every quarter of those engaged both in the manufacture and in the use of dyes, and my only excuse for intervening in this Debate is that I have had that opportunity. I have been sitting on a Committee which has been taking evidence in all parts of the country, and I have had the opportunity of acquainting myself with that evidence. The right hon. Gentleman has denied himself that opportunity, and has deprived this House of it. It would not be proper, and I shall not attempt, to quote extracts from that evidence, but I feel that I am at liberty to state the conclusions which I have reached after hearing it. If the right hon. Gentleman challenges those conclusions, then, I say, let him publish the evidence, and let the House decide between us.

This proposal is not a proposal from the colour consumers. It does not come from the Bradford Dyers' Association, or the Colour Users' Association, or any of the colour consumers. What has happened has been that the Board of Trade has said to the colour consumers of this country, "We have got to have protection for the dye industry, because it is essential for national defence," and they, being patriotic people, have said, "If that is so we must submit to it." But they have asked, through the right hon. Gentleman and the Board of Trade, that, if the dye industry must be protected, it should be done in a way that would not affect the interests of the colour consumers. They have been told, in reply, that the only way in which it can be done is the way which is now proposed, and that the reason why it is the only way is because of the pledge which was given by the Government, and which was incorporated in the prospectus of the British Dyestuffs Corporation. I take it that the Government are not going to leave this matter free to the House, but that we are committed to this way, which is only one of a number of ways in which the dye industry could be protected, and we are committed and tied up in this way because the Government has given a pledge, upon which a number of people have invested money in the British Dyestuffs Corporation.

That is not a position in which this House ought to find itself when it has before it a question of such grave importance to so many people. The right hon. Gentleman has received a letter from organisations representing 90 per cent, of the operatives—that is to say, the 1,500,000 who are engaged in this trade—protesting against the way in which this Bill is being rushed through the House without their being consulted at all. They feel, very naturally, that a measure of this kind may have the gravest results upon their employment, and they have protested; and when the right hon. Gentleman tells us that he has 90 per cent of the colour consumers with him, and does not say a word about this communication from 90 per cent, of the operatives, I say that he is not treating this House with fairness and candour. Let us think for a moment how this trade is carried on. We are sending textiles all over the world—to China, India, the Near East, South America; and in all those places the market for these textiles depends very largely upon the colour—the particular shade and the particular pattern. It is the women in those countries, very largely, who buy these goods. An hon. Member opposite expresses astonishment, but that opinion is not my opinion; it is the opinion expressed by the Calico Printers' Association. They say that very largely the question of selection in those countries depends upon the taste there, and they have studios all over the world with men preparing designs and studying the tastes of the people on the spot, and sending home to this country the ideas that are wanted. In the ordinary course of events, when the calico printer gets that information, he has the world's supply of dyes to draw upon. Under this Bill, if it be passed, he will be limited to the British supply—[HON. MEMBERS: "NO!"]—unless he can show to the Licensing Com- mittee that the dye which he wants cannot be obtained in this country. Think what that means.

It has been suggested that this is a very simple matter, and one would think, from what the right hon. Gentleman said, that there were only a small number of dyes, and that only a small number of differences of opinion could arise. As a matter of fact, the different shades of dyes run into thousands. We all know how difficult it is to agree with another person upon a shade; one shade may appear to be almost the same as another. What the calico printer has to do in the future is to come to a Committee and get this Committee to agree with him that some particular shade or other that he wants cannot be got in this country, and to give him a licence to get it from abroad. How can trade be carried on under those conditions? Is there any industry in this country, outside of this one, that would agree for a moment to having its chief product treated in this way? Everyone in this House who has carried on any kind of business when supplies were short, and has had to go to the Ministry of Munitions for priority orders, knows the delay and inconvenience that arose, and I ask hon. Members who are. engaged in other industries whether they would consent for a moment to their industry being placed under the conditions under which they are asked now to place the textile industry.

That is what we have really to settle. We have to be satisfied that there is no other way of protecting and establishing and maintaining the dye industry in this country than this particular way of prohibition and licensing of imports. That is the only issue. We say that there are other ways, and we say, particularly, that the policy of the Government in this respect is conditioned by circumstances which they themselves have brought about. The right hon. Gentleman gave us the history of the dye industry down to the 6th October, 1916, when a Committee of the Cabinet reported that this method of prohibition of imports was the best method. When I heard the composition of that Committee, I was not surprised at the report. The Lord Privy Seal was on that Committee, and I remember reading, in the Debate that took place in this House in 1914, when the scheme for British Dyes, Limited, was first put forward, that the Lord Privy Seal said on that occasion that the only method that could be pursued was the method of prohibition. That was his opinion from the very start, and it is his opinion to-day. He was on this Committee, and I am not surprised that any Committee on which he sits should have come to conclusions which are his.

The position with regard to the dye industry in this country now is that we have practically a dye trust formed by the action of the present Government. We have been told that, before this Government came into power, a fusion was contemplated in the dye industry. That, no doubt, is perfectly true, but I want the House to realise that, when British Dyes, Limited, was set up, it was a productive company of co-operative producers, and the people who were interested in it were the colour consumers. They were interested in it, not for the purpose of making profits or dividends, but for the purpose of getting dyes and carrying on research; and, in order to ensure that, under the terms of the loan made by the Government, the interest was limited to 6 per cent. That was the position with regard to British Dyes, Limited. On the other hand, we had the firm of Messrs. Levinstein, of Manchester, who ultimately became incorporated with them, forming together the British Dyestuffs Corporation. Messrs. Levinstein's business was carried on ordinary commercial lines, and its chief concern, like that of any other commercial firm, was, not the making of dyes, but the making of profits—and very handsome profits they did make during the War. There, is no reason to complain of that; they acted no differently from any other firm. The fact, however, remains that that was their position. On the one hand you had a body set up by the Government of the day for the sole purpose of developing the dye industry in this country, and limited as to profits. On the other hand, you had an ordinary commercial company carrying on in a period of great scarcity and making very considerable profits. When the question was taken in hand by the present Government, on its coming into power, they had to decide whether the fusion should go on the lines of a public body acting with public money and concerned simply with the development of the dye industry, or whether it should go on the lines of an ordinary commercial concern carried on for the ordinary commercial purpose of making dividends and profits. They decided in favour of the latter, and their decision was met by opposition from the directors of British Dyes, Limited, which opposition they carried to the point of resignation. They felt that the Government were taking a wrong course, and in that view they are supported by the whole of the colour users of this country. What the colour users of this country want is not a company carried on for the sake of dividends or profits, but a company the main purpose of which is to develop research into the great industry of dyes.

I have heard it said in all quarters that an initial mistake was made when the public was allowed to put its money into this concern, and was asked to do so. That is said, not only by the calico printers, but by the Bradford Dyers' Association and the Colour Users' Association. Public money ought never to have been invested in this industry in its present condition. Everybody who knew anything about it knew that before the dye industry could become a commercial success an enormous amount of money must be spent on research. That is how the German dye industry was built up. It was not built up by State grants, or by Import Duties, but by a considerable expenditure of time, money, and skill. The original policy of British Dyestuffs, Ltd., was to establish a company in this country that could develop the dye industry on lines of research, and not primarily for the sake of profit. That was abandoned by the present Government; they threw that overboard, and they have formed what is, to all intents and purposes, a great dye trust in this country. It is admitted that this trust controls 75 per cent, to 80 per cent, of the dye indusry, and the Committee on Trusts has laid it down that any firm which controls 75 per cent, or 80 per cent, of an industry is practically a monopoly. Therefore the House is in this position, that, having formed this monopoly, having formed a dye trust, having formed a body which does not exist in the main for the purpose of developing the dye industry, but which exists for the purpose of making profits and dividends, the Government now ask this House to convert that trust into a practical monopoly. There is all the difference in the world between imposing prohibition on imports when you have competing concerns inside the country who may be relied upon to stimulate research, to improve quality and to reduce prices, and imposing prohibitions on imports where you have a trust formed in the country whose interests are of no such kind.

Sir W. PEARCE

I am sure the hon. Member does not want to mislead the House, but I have in my hand a prospectus of the British Dyestuffs Corporation, and I find that on two classes of shares the dividend is limited to 7 per cent, in one case and to 8 per cent, in the other, and that, with the exception of that, the company exists for the benefit of the public.

Major BARNES

I am very glad that that point has been raised, because I have a prospectus of the company as well, and if the hon. Member will turn to that prospectus he will see that there is no limitation. The prospectus says: The profits of the company available for distribution will be applied in the following order of priority: First, in payment of 7 per cent, on the preference shares; secondly, in payment of 8 per cent, on the preferred ordinary shares; thirdly, in payment of 8 per cent, on the deferred ordinary shares; and, fourthly, in the payment of further dividends at equal rates to the preferred ordinary and deferred ordinary snares. There is no imitation. When British Dyes, Ltd., was set up, there was a limitation of 6 per cent., but when the British Dyestuffs Corporation was formed they approached the present Government with the request that the money that had been advanced to British Dyes, Ltd., should be handed over to them, and that the limitation of profits should be taken off. That is what has been done, and this Government, after removing the limitation on profits and having converted this public research company—for that is what it was—into an ordinary commercial trust, now comes this afternoon and asks the House to convert it into a monopoly, whilst prohibiting at the same time the import of dyes. That is the real ground for opposition to this Bll. Let the Government revert to the original position. Let them make this company what is should have been, namely, a co-operative company of colour users whose main object would be to produce the largest amount of dyes of the best quality at the lowest price, irrespective of dividend, and then they would secure some measure of support for this Bill. There are models for it in this country. We have a very striking instance of what can be done without State help of any kind, without restriction of imports and without duties, and that is the British Alizarine Company. The right hon. Gentleman told the House that dyes fall into different groups. Alizarine is a very important group of dyes. About 1881 the Germans had formed an Alizarine Convention, and they threatened either to cut off the dyestuffs TO this country or to push their prices up. The dyers in the right hon. Gentleman's country—and he might have taken a lesson from them rather than from the Southerners—the Scotch dyers got together and said, "We will not have this. We will form a company of our own and produce alizarine." They started a company, without State help, without any grants for research, and without any Bill for prohibiting imports. They formed a co-operative company and made their own dyes, and the result was that in a year or two the Germans were forced to take them into their Convention, and they have carried on ever since.

Sir R, HORNE

They are getting large grants from the Government now.

Major BARNES

The right hon. Gentleman says that they have come to the Government for grants.

Sir R. HORNE

They are getting them.

Major BARNES

I am aware of that, and I can tell the right hon. Gentleman that it is because dye and other companies have come for grants. The Board of Trade came to this House and got £1,000,000 in order to make grants and loans to those dye works which were carrying on a policy that was very successfully conducted by my right hon. Friend (Mr. Kellaway) at the Ministry of Munitions. During the War anybody could come and get a grant in order to extend their works, or a loan.

Mr. BRIGGS

I can tell the hon. Member that the British Alizarine Company have paid 12½ per cent, dividend for the last 20 years.

Major BARNES

Excellent! Could you have a better illustration of what can be done without State help?

Lieut.-Commander ASTBURY

That is not right. I am a dye user of 27 years' standing, and I can say that in 1914, before the War, this company was being seriously undercut in price by the Germans, and if it had not been for the War the company would have crumpled up before now.

Major BARNES

The House can put the statements made by the two hon. Gentlemen side by side. The products of the British Alizarine Company have increased less in price than those of any other dye industry, and particularly in comparison with those of the British Dyestuffs Corporation. That is a model that should have been encouraged. The model of the British Alizarine Company was followed by the British Dyes, Limited, and that was the policy which the Government should have encouraged. They should have assisted that policy either by grants or loans, if need be. The German dye industry was built up by the application of time and money and scientific re search for years, and that is the only way in which a successful industry can be built up. If hon. Members will take the trouble to read the Report of the Commission that was sent over a few years ago to examine into the German chemical industry, they will find it stated emphatically that the German industry has been built up without State aid, or financial assistance or import duties, but by the expenditure of large sums of money in scientific research. If the dye industry is wanted as a means of defence it becomes part of the general armament policy of the country, and should be openly borne as part of the general armament policy. Let it in that case be put upon the Votes. We know what we are paying for the Army, the Navy, and the Air Force, and if we are to have a chemical force let us know what we are paying for it. You have the precedent for that in regard to the Cunard liners. We did not pass a Bill to prohibit people from building liners. We said to the Cunard Company, "We want your boats in time of war, and we want them made in a certain way." The company said that the cost would be so much, and we paid it. That is one method of treating the dye industry. If you want their plant in time of war, you should be prepared to pay for it in the way that was done in regard to the Cunard steamers.

Commander Sir. E. NICHOLL

The Cunard Company had been subsidised for years before the War.

Major BARNES

I am advocating that we should treat the dye company as we treat the Cunard Company, and if we want it for war purposes we should use-it for that purpose.

Sir E. NICHOLL

The Cunard Company had been subsidised by this country for years in the event of their boats being required for war purposes.

Major BARNES

We realise that. That is my point. We want to be certain that the money granted to the dye industry is applied to scientific research. What guarantee have we that that will be done under this Bill? We are asked to pass this Bill, which will enable the British Dyestuffs Corporation to make fabulous profits. There is no limitation. What guarantee have we that that money will be expended on scientific research and not put into dividends? I can understand that they want the policy of scarcity that we had during the War to continue. Look at the history of Leven-steins. They started with a capital of £90,000. Before the War their £10 shares were quoted at £2 10s. They had not paid a dividend for 15 years before the War. During the War their shares went up to £190. They were converted at the time that the British Dyestuffs Corporation was formed at the rate of £133; so that for every £10 share quoted at £2 10s. before the War, they got £133 in the British Dyestuffs Corporation. No wonder they want that policy to continue. Dr. Levenstein, who has played a great and a very worthy part in establishing this chemical industry—and it must be a little galling to to some hon. Members that it is owing to a gentleman of alien extraction that the salvation of the chemical industry of this country has been brought about—says that we must not lose what we have gained during the War. One can very well understand that. The position we have to face is, that if we pass this Bill we are putting into the hands of a great dye trust in this country an opportunity of making a tremendous toll on the textile industry, and we have no guarantee under this Bill or under the Articles of Association that the money so obtained will be applied to scientific research. The only conditions under which we can develop the great dye industry in this country are conditions that will compel the money that flows into that industry to be expended on further research and development.

Sir W. BARTON

I beg to second the Amendment. I must congratulate my hon. Friend on his most thorough and effective speech. I have a little grudge against him, because many things I had intended to say he has said, and very well said. I was very much interested in the speech of the President of the Board of Trade. It was an extraordinary speech. In one portion of it he seemed to tell us that because of promises made and pledges given by the Government this House had really nothing left to do but to pass the Bill and to say nothing about it. Still he did not show us an example, because he made a speech of a length and seriousness which showed that he considered that it was necessary to have a considerable defence and explanation of the Bill. One of the things he referred to was political memories. I confess that I find myself hampered on the subject by these very political memories. I remember that the supporters of the Coalition, like those who opposed it, at the last election declared their opposition to what is called dumping. I confess myself a wholly impenitent free trader, but we all know that we were involved by our leaders in opposition to dumping. I was very troubled about it until the other day I found salvation complete and absolute in a definition by the Prime Minister of what dumping really is: A determined and systematic effort to damage British industry by exporting goods for sale below the cost of production in the country of origin. If that is what is to be prevented by the approaching anti-dumping Bill, I confess myself a hearty supporter. We also were committed to protect key industries. There, again, there is a difficulty about definition. I remember the Debate last Session, in which a then hon. Gentleman on the Front Opposition Bench, who is now a right hon. Gentleman sitting on this, defined a key industry as an industry which produces something necessary for the conduct of war, and the hon. Member for Chippenham (Mr. Terrell) defined it as an industry giving employment. What industry does not give employment I do not know. Between those two extremes I have not yet been able to arrive at a definition, but if there is a difficulty in finding a definition, I admit that there is no great difficulty in finding an example, and this dye industry I take to be typical of a key industry. I start by admitting that. If necessary, its plant can be used either for industrial purposes or for war, and its product is the essential raw material, in a comparatively small industry, for a very great industry, and if there is a key industry, I agree that that is a key industry. That being so, we are undoubtedly committed to doing something.

Here we are right up against those pledges if we are to take them literally given by a previous President of the Board of Trade. The matter is a settled matter now. This Bill is a literal fulfilment of these pledges. I can hardly think that it is said seriously that all pledges must be taken in that literal sense. If they were, what about hanging the Kaiser? On the other hand, I admit that it would be a serious matter for the House of Commons to turn its back on the pledge of a Minister. We must look at the Bill both in the circumstances of the time in which it originated and of the time in which it is brought before us. We are bound to consider whether it is the best way, in substance and in spirit, of carrying out the pledges which the right hon. Gentleman gave, though I admit that in this Bill we would not conform to the letter of those pledges.

I speak of this matter as it relates to the textile industry. I am sure that there has been a great deal of misunderstanding and misapprehension as to the relation of those industries to this Bill. Two or three times in the course of his speech the right hon. Gentleman used the phrase "textile manufacturers" when he was really referring to colour users. We were told that there was agreement regarding this Bill between two parties, one called dye producers and the other called dye users. We are entitled to ask who these bodies really are? The dye producers we know. There are not more than twelve of them altogether. What they want is protection. The dye users, as we know them—and we do know them—are men for the most part running works operating upon cloth which is sent to them mainly from Manchester, though also from other parts of the country. They operate simply on that cloth, return it to the merchant and he pays them for their work. In many cases they do not even know what market the goods are for. They are simply carrying out this purely technical operation. This is the body— I submit a body which is suited neither by training nor anything else to form an opinion on the subject—whose assurance is given us as a guarantee that this Bill has the support of the textile trade and is conformed to the interests of that trade. That is not so. The real cotton men are objecting to this Bill, and our serious objection to it is that it is going to commit us to the second best, and the second best did not build up the great world trade, which is represented by the cotton trade. It was built up on a constant choice of the best that could be found whether of brains or material, wherever it could be found. If anybody thinks that we are concerned simply with a narrow matter of money making he is making a vital blunder. We have as great a pride in our trade and industry and the perfection to which we have brought it as ancient families have had in the past in their lineage and their great estates.

I have tried to visualise myself or any other Manchester merchant going into the East to do business under this licensing scheme. Remember that, in these circumstances, a man does not go to sell goods which have already been produced. He goes to sell goods which have yet to be produced and to take the advice and guidance of those who are likely to buy these goods. The buyer of a commodity usually knows, or thinks he knows, better what he wants than the seller. This happens. A design is shown, and the buyer says, "I like that on the whole, but in this particular part I want you to make a certain alteration." He produces a little bit of a colour, and says, "I want that put in there." What is likely to happen in these circumstances? The salesman cannot cable home to Manchester, because he has got to send the colouring on by mail. When it arrives in Manchester, the merchant has to go to a dyer and printer and ask, "Have you this colour?" The dyer and printer says, "I do not know. I think that it is probably a foreign colour. I shall have to see the Licensing Committee." We will assume that he does see them, and they say, "It is a foreign colour, but our experts tell us that it can be produced quite well in this country "—a thing which appears to me to be likely to happen under this Bill. It is telegraphed to the seller in the East —and Heaven only knows what may have happened to his order in the meantime, as a couple of months have passed—that all they have got is the assurance that, though this is a foreign material, the producers in this country undertake to make it. I know what the wily Parsee would say, "I am quite willing to order, but you take the risk and guarantee that this colour will be the same as I put down before you." No Manchester merchant would take that risk. It would be impossible. So, altogether, I cannot see this Bill working.

6.0 P.M.

I cannot understand the frame of mind of the Government which introduces such a Bill at present when the whole country is crying out against bureaucracy, against licensing, against every alien influence that can be brought in to hinder the free flow of commerce. I quite agree that the right hon. Gentleman has a strong justification for the appeal—if not this, what? I am strongly of opinion that it is a greater misfortune to us that we have been committed to this. I am strongly of opinion that it will fail in operation and that it will be a cause of great financial loss. I try to remember the circumstances when Germany was confronted with a desire to set up an industrial system. I can well remember that she established great commissions to inquire in the various nations of the world whether there was an opening for her. A commission came to this country. They found there was an opening for the finer forms of chemicals and they started, not to make these things on any great scale, but they set up the most powerful and thorough research system that has ever been set up in the world. Then, by one of those strokes of fortune which come to nations as to individuals, they were able to avail themselves of discoveries of a very wonderful Manchester chemist, named Perkin. What they deserve credit for is that whilst chemical makers and capitalists in this country had the first offer of these wonderful products of the brain and rejected them, the Germans had the wisdom not only to avail themselves of them but to realise that they had hold of a good thing, and they followed it up until it formed the basis of the most wonderful trade organisation which has ever existed in the world.

People say, that is what we want. That is what I want, but I wish to go the right way to get it, and I am sure this Bill is the wrong way. I wish I could believe the splendid assurances which have bean given to us, I am sure with all sincerity, but I am getting rather old in business, and I realise that when you are going into a new problem you want very carefully to examine its foundations. One of the secrets of ultimate success in commerce is to find something which the world really wants and is short of. What is the position about dyes? In every country in the world plant has been greatly increased. Why do we bring colour from abroad? Reference has been made to exports from Germany, and those exports being called dangerous dumping. What is the essential fact? We are paying for these colours seven times more than we paid before the War and we are paying a bigger price than that at which we could buy the same colour here in England. Why? Because the quality is better. There is the bloom, the perfection, the satisfaction to our customers abroad, which we cannot get in this country. Research, research, and again research; subsidise, subsidise for all that is necessary to arrive at the initial stags of perfection. I do not know whether the right hon. Gentleman knows anything about the great colour factories in Germany. I have seen them in operation. When they send out a colour they send with it a finished piece of cloth, and they say, "There is your formula, there is the finished article. You can take it to any part of the world, and if our formula does not produce that we will stand behind you and make it good. "You will never establish a successful British industry until you arrive at a state of perfection at least equal to that. Even at this late hour I appeal to the House to consider the real needs of the nation, and, whilst honouring pledges, let us honour them in the spirit and substance as well as in the mere letter. It surely is a calamity that this thing should be rushed through in this way. Here we are, at the very end of a Session, discussing a matter on which there is deep controversy. Of all the exports of printed goods from this country this year, one company, the Calico Printers' Association, has produced more than half. They are the producers at the higher and more complex end of this business. I have noticed for many years that the tendency in the great cotton trade is that we are constantly losing at the bottom and gaining at the top end. I know of great developments projected in India to take over as far as possible the simpler and commoner forms of printed and dyed goods. I have seen the same thing happen before, but if we rise a step higher and get further in our development we invariably find that what we lose at the bottom end we gain at the top. It is because I want this country to be at the top end that I fear this Bill.

Sir W. PEARCE

I hope to be able to prove to the House, that this industry, in the widest national sense, ought to be protected in the way indicated, both for war reasons and for peace reasons. I want to persuade my textile friends that the fears they express are very largely safeguarded by the Bill. I do not think they attach proper importance to the constitution of the Licensing Board. It is a Board of 11 people, and is to consist of only three dye producers, 5 dye users, and three members of the general public. With a body so constituted, the dye producers will have to show cause why dyes should not be imported before importation is stopped. The interests of the calico printer and of the British public are safeguarded very much more than some hon. Members have given us reason to think is the case. I can understand the arguments of the textile industry. What was the position of that industry before the War? They had at their disposal a whole range of colours imported at the lowest prices at which such colours could be obtained in the world. They were sold to the British manufacturer more cheaply than to the German manufacturer. It can be understood that the textile industry wanted nothing better than such a state of things. They were in a most favourable position. Why? The German associations had a reason for doing what they did. If they did not do what they did there was danger of opposition business being started in this country. Are we quite sure that they had no ulterior motive besides?

German colour makers in those days were combined in two associations. Today there is only one. I have always felt that the achievement of this same group in fixing atmospheric nitrogen was one of the reasons why Germany entered into the War. In 1913 Germany was in a position to place on the European market 100,000 tons of sulphate of ammonia made from the air, and the plant could have been multiplied to any extent. Germany saw that if she went into the War, and the War lasted more than six months, there was no danger of her being cut off from supplies of nitrate of soda, without which the War could not have been continued. But for atmospheric nitrogen Germany could not have carried on the War. This was the work of the same organisation.

Mr. HOPKINSON

Is it not the case that ammonium sulphate was obtained in greater part from the bye-products and the nitrogen from that?

Sir W. PEARCE

The whole of that ammonium sulphate was converted into nitric acid to be used in the manufacture of high explosives. What I want the House to realise is that the large organisations which, perfected the dye industry and made it an enormous commercial success in that way helped the German war position enormously. What was our position at the beginning of the War? We soon found that many chemicals which had not been required in large quantities in this country before the War were absolutely necessary for us. The first thing the country discovered that we needed a very large supply of was sulphuric anhydride, known also as oleum. The total consumption in this country of that acid before the War was 400 or 500 tons per week, while the German production was 10,000 tons per week, or probably nearer to 20,000 tons per week. This acid was absolutely indispensable in the manufacture of gun cotton, T.N.T. and various explosives that were essential to the carrying on of the last stages of the War. Germany was in that position because it had this dye industry, and for two years this country was in great jeopardy because we had not that sulphuric anhydride supply. There was also the case of chlorine and hydrogen. There was not a big manufacture of either of those before the War in this country, while in Germany there were both made on an immense scale by the dye corporations. Chlorine was used for poison gas and hydrogen for the Zeppelins, and there were both in Germany in quan- tities which this country could not possibly undertake without months of waiting. There was also mustard gas for shells which was again produced by the German dye factories. I remember that this subject was so serious that we could not ventilate it in this House. A number of Members of the House of Commons went to the War Office and saw the Army Council. At this interview it was admitted by the Master-General of Ordnance, in reply to my questions, that "mustard gas shells were the most potent instrument of warfare at the moment," that "all the German field batteries were armed with these shells," that "none of our field batteries were so armed"; and I remember in 1918 mustard gas was a most potent instrument. I remember one gentleman throwing up his hands and saying, "This may lose us the War," and it might very well have done so. At any rate if our field artillery had possessed those mustard gas shells to a full degree when the push in March, 1918, happened the big advance which took place would not have been possible, and thousands and thousands of British lives would have been saved. I mention that to show to the House what an advantage Germany possessed from having this enormous dye industry.

Captain ELLIOT

Is it not the case that before the War by far the largest production of chlorine was in this country and not in Germany?

Sir W. PEARCE

The chlorine was converted into bleaching powder, and it would not have been possible to provide chlorine in the sense required for gas in the same way as you could in Germany. What these industries really mean and why they are necessary is this. They have large flexible plant which was turned over from peace operations to war operations, and they have an enormous number of trade personalities who are accustomed to work large plant, and they have engineers and practical chemists and a very large staff of research chemists who are able to follow out any problem. I have referred to our unfortunate position at the beginning of the War. We all hope that we may not again have such a war. But if another war does take place I do not think any scientific man qualified to speak will fail to say that chemistry will play a more and more important part in the warfare of the future than it has done in the past. Therefore unless the Govern- ment encourages this kind of manufacture we stand the greatest chance of being again in the same unfortunate position as we were at the start of the late War. With regard to the peace position this industry is probably the most important part of industrial chemistry, and unless we have an industry of a sort in this country research will not flourish to anything like the same degree as it does in those countries which possess such large plants. British chemists are equal in research to foreign chemists always, but the British chemist has had no opportunity of applying his research, and unless this sort of industry exists in the country that position will continue.

All the signs of the time are that chemical science is going to be more and more important, and unless you have those industries on a flourishing scale in the country you are going to be in a second or third-rate position as far as industrial science is concerned, and it is almost as bad to be C3 on the industrial side as it is to be C3 in matters of national health. For these reasons I think the case is established that an industry of this kind should be encouraged by the Government. As to the national necessity, I want to strengthen to a small extent what the President of the Board said. He did not mention that the Committee that was set up by my right hon. Friend the Member for Paisley (Mr. Asquith), in his Government, to consider industrial policy after the War, and which consisted of men of all parties, reported on the 16th March, 1917, that in the interests of national safety this industry should be maintained at all costs and risks; those are not the exact words but are the purport of the report. The Government, before they made themselves responsible for the prospectus which has been so much criticised, had that before them. It was pointed out at the time that this was not a Free Trade question, but a question of national safety, and this was not the time to bring out the old arguments. Even John Stuart Mill admits that under these circumstances such action is justifiable. After all, this is not prohibition. The object is to establish an industry, here which is absolutely necessary for the national safety. In the prospectus we find the following: His Majesty's Government having given their approval this company has been formed by arrangement with the Board of Trade. His Majesty's Government, in order to safeguard the dye industry from aggression by German undertakings and ensure a sufficient supply of dyes to meet the requirements of the textile and other trades of the United Kingdom and other parts of the British Empire, issued a Proclamation on 24th February, 1919, prohibiting except by licence the importation into the United Kingdom of all derivatives of coal tar capable of being used or adapted for use as dyestuffs and synthetic colours. This Proclamation was issued to give effect to the statement made by the President of the Board of Trade in the House of Commons on 15th May, 1918, namely, 'In order to safeguard this particular industry against the great efforts which these German dye firms are certain to make after the War to destroy all we have accomplished through the War, and to make this industry again subservient to Germany.…importation of all foreign dyestuffs shall be controlled by a system of licences for a period of not less than 10 years after the War.' I do not think anybody can blame the Government for having given this assistance. I had the opportunity yesterday of seeing some people who have knowledge as to the dye industry in this country. I was surprised to learn, and so I think will the House, that not only are we getting the reparation dyes ourselves, but Belgium and America are not taking theirs, and they are finding their way here. That is part of the reason why the importation of dyes throughout the country has grown so enormously during the last few months. The delay of the Government in making the Proclamation effective in the last six months has made all the difference in the position of the dye industry in this country. There is an enormous stock in this country now either from Germany or from Belgium and Holland, and that has made the position of the industry extremely difficult in this country. British dyes, I happen to know, are carrying enormous stocks of dyes, and they have large contracts for the supply of raw material, and unless these German dyes are dealt with their position will practically become hopeless. Therefore, I think the Government were right to bring in this Bill now, and I think they ought to have brought it in before this, and if they had done so, the dye industry in this country would not have to face the dangers which it now has to face.

Mr. G. TERRELL

I do not propose to follow my hon. Friend opposite in the line which he has taken in discussing this measure. I think the great majority of the Members are in complete agreement as to the necessity for supporting this industry, and that it is important has been said over and over again in the course of the Debate. It is also perfectly clear that the Government is liable, under the terms of the prospectus which was issued, to see that the shareholders' money is secured by a proper measure of protection, but I hope that this is not the measure of protection which is going to be extended to other industries. I feel that the system of licences is really a bad one. One might accept it for temporary purposes, but I should much prefer to see this Bill made a temporary Bill, so that it could be moulded into shape in the general measure which has been promised to-day for the protection of other key industries. An hon. Gentleman on the Benches above the Gangway says, "Tariff Reform. "This is not a question of Tariff Reform or Free Trade; it has nothing whatever to do with it. There are some hon. Members who think that anything in the nature of protection of industry is harking back to the old argument of Free Trade and Tariff Reform, but what we are face to face with here is the collapse of the German exchange, and we have to devise a method of compensating that collapse, otherwise the whole of our industries would most certainly be ruined and wiped out. We are told that you cannot do it by a Customs Duty, but I do not think there is any doubt about it, that you can do it by a Customs Duty, which, I venture to think, is a much more straightforward method of accomplishing your object than this system of licences. You know where you are, and there is equal opportunity to all, and, incidentally, the Revenue would benefit largely by a system of Customs Duty; but what I should like to know in connection with the system which is proposed in this Bill is, who is to get the benefit of that great profit which is to be obtained to-day by importing commodities from Germany. Is the State to take it, is the German exporter to take it, or is the British importer to take it?

Everyone knows there is a most profitable business being carried on at the present moment by importing goods from Germany to this country. If hon. Members want evidence of this, they have only to visit one of the Committee Rooms upstairs, where to-day there is an exhibition of goods which have been im- ported from Germany, and by the side of those goods there are goods of British manufacture, and the effect of the collapse of the exchange is that the German goods are, in the main, being imported at one-third of the cost of British goods. It is a very interesting object-lesson; I think all hon. Members have been invited to inspect these goods, and I am sure they would be interested if they went up to see them. This system of licences means simply this, that whoever imports these goods will be able to obtain a huge profit by it, and certainly, in times when the Treasury is so short of money, that should not be the object of the Government. Another fact that should be considered in connection with German trade is that Germany, by reason of the collapsed exchange, is in a better position to-day than she ever was before to pursue the old policy of peaceful penetration. The exchange helps her, for she can send her goods here, and it is not necessary to slightly undersell our home producers; she can knock our home industries to pieces. I quite admit that in some industries, where Germany is dependent on raw materials which have to be imported from abroad, she has to pay a very high price for those materials, and that restricts her capacity for export, but when you get to dyes, and to the thousand and one industries which are illustrated upstairs, Germany is self-contained. The question of raw materials from abroad does not enter into it at all, and that is what we have got to guard against.

I have no hesitation in saying that we can do it by a Customs duty, and by a very small Customs duty, if we base that Customs duty on the real value of the goods and not on the depreciated value, which is the value shown in the Board of Trade returns, and which accounts for the £17,000,000 of imports which my right hon. Friend has declared to be the imports of the first nine months of this year. If you value those goods at their real value instead of £17,000,000, you will probably find there are a hundred millions of imports. If you levy a Customs duty on £100,000,000 it will produce a very substantial revenue, and I think it can be designed so as to compensate entirely for the loss in the exchange. That is the only point which I wish to make in rising to-day. I am deeply grateful to my right hon. Friend for the undertaking which he has given that a measure to deal with the key industries will be the first measure of next Session, and I trust that he will not attempt a measure based on the lines of the present Bill, namely, prohibitions and licences, because English traders have had enough of licences. With licences you get Government interference and control. Licences open the door to all sorts of corruption, and we want to have trade restored to the position so that, whatever barriers are erected against German or Austrian goods, or any other goods, which may interfere with the employment of our people, everyone has equal opportunity, and it is not necessary for anyone to go to a Government Department if he wants to carry on his business. I admit that it is important that the dye people should have the security which is being provided, but I would much prefer if my right hon. Friend would simply make this a temporary measure, not a Bill for ten years, and then incorporate the whole of the provisions which he wants for the dyes in one great Trade Bill, which, as he has already promised, should be introduced next Session.

Mr. ASQUITH

The hon. Gentleman who has just resumed his seat has sought to enlarge the area of the discussion and has got into territory in which I should be glad on a proper occasion to follow him, but as the President of the Board of Trade has reminded us, those are questions which are not germane to this discussion to-day. Sufficient for the day are the Orders thereof, and I think we shall do wisely to confine ourselves to the provisions of the measure which is actually before us. I am not going to detain the House for more than two or three minutes, and I only rise for the purpose of stating my own position in the matter, which is unique. My right hon. Friend devoted a certain part of his speech, rather unprofitably, I thought, to quotations from past declarations of my own on this subject. I would only say in regard to the quotations which he made from a speech which, I think, I delivered here in August, 1916, that as I listened to his citations, they seemed to me to contain a very sound doctrine, and I do not recede from or qualify any one of them. Indeed, the only criticism which now, as a mild, dispassionate auditor of what I said so long ago, I have to offer is that they came perilously near platitude.

The other part of my right hon. Friend's speech, so far as I am concerned, was much more germane to the matter, namely, the action which was taken by the Government of which I was the Head in the year 1916. I said to the House in my opening sentences that I am speaking for myself, and for a very good reason, that of the Members of the Cabinet who were then responsible for the control of affairs, with the exception of one or two who have been absorbed in the present Government, the remainder, with the single exception of myself, are, I believe, for the time being certainly not Members of this House, but not active participants in public life. Therefore, I am speaking entirely for myself. It is perfectly true that we were impressed, and I think properly impressed—and I am as much impressed to-day as I was then—with the necessity for an industry of this kind, both from the point of view of times of peace and times of war, being an independent industry in this country. I think it is an element in our national security, and at once, at the Very earliest stages of the War, we came to the assistance, with a Government subsidy, of the dye-making trade. We then appointed, as my right hon. Friend has reminded us, a Committee of the Cabinet on which were represented, and very ably represented, what I might call both sides of fiscal opinion, and they came to the unanimous conclusion that the proper way of dealing with the matter was for a limited period after the War to safeguard the British industry by some system of regulated importation. I had no personal power in the matter, being immersed in other matters at the time, but I accepted full responsibility for that Report, which was, if my recollection is correct, adopted by the Cabinet of the day. At a later date, two years afterwards, it was referred to in this House by the then President of the Board of Trade, Sir Albert Stanley, as representing the considered opinion both of the late and of the existing Government. The prospectus was issued with the authority of the Government, I presume, because the Government were subscribing to the issue of the capital applied for. Two or three months later that declaration was referred to, and treated as part of the considered policy of the Government of the country, and I think there is strong reason for the statement that some, at any rate, of those who subscribe to the issue may reasonably have been influenced by that consideration.

I have taken some interest in the matter, and I say quite frankly—I am speaking only for myself—that I shall not feel justified in voting against the Second Reading of this Bill; but, as I say, that is a matter which concerns me, and me alone. I was very strongly impressed with the considerations which were put forward in the admirable speech made by my hon. and gallant Friend the Member for Newcastle (Major Barnes) in moving his Amendment, and I want, if I may, to impress upon the Government that there is really no question here of what I may call the abstract question of Free Trade and Protection. It does not arise. The question is what is the best—in other words, what is the least inconvenient and least injurious—method of safeguarding what we all agree to be an important national industry. I want to bring before the Government one or two considerations which were very ably presented as illustrations in the speech of my hon. Friend. I think myself that we have a right in this matter to proceed by way of subsidy. I believe there is no other course open to us. It is a far less objectionable course, in my opinion, in all cases of this kind than to proceed by the other method, of which my hon. Friend is such a consistent and able advocate. At any rate, we did proceed by subsidy, and our successors have done the same. But, having done so, and I think rightly done so, it is very important that when the Government devotes public money to an enterprise of this kind, and when it invites, as we invited, the co-operation not only of the makers of dyes, but of the users of dyes, it is of the highest importance that every possible security should be taken against what I may call unlimited private profits. I think I am right in saying—I shall be corrected by the President of the Board of Trade if I am not—that we limited the profits in the case of the original subsidy to the British Dyestuffs Corporation to 6 per cent.

Sir R. HORNE

There was a limitation, but I cannot be certain as to the figure.

Mr. ASQUITH

I think it was desirable, and it is desirable now, that some limitation of that kind should take place with regard to the profits of this Corporation or any corporation which receives a public subsidy. Shareholders ought to have an adequate return for what is undoubtedly, as events have proved, a more or less risky adventure, but when you have given them, as you ought to give them, an adequate security, the balance, if there be any, of surplus profits ought, in my judgment, in such cases always to be applied to the advancement of research and the improvement of the industry itself. If a man gets 6 per cent., 7 per cent., or 8 per cent., it ought to be enough in an undertaking of this kind where his co-operation is invited, not merely upon the ordinary ground of an expectation of profits, but as more or less of a patriotic duty to assist the State in the preservation of a vital industry. The history of the dye industry in this country is one of the most humiliating chapters in British trade. I do not know anything more discreditable. We had the whole trade in our hands, and at our feet, and if our men of business had shown intelligence and foresight, if they had not been wrapped in lethargy and apathy, there is no reason whatever why these inventions, which proceeded largely from British brains and British capital—[An HON. MEMBER: "Sir William Perkin!"] —Sir William Perkin will always be eminent in the annals of British chemistry —there is no reason, I say, why this should not have been from the very beginning, and continued throughout, a British and not a German industry. It is no use blaming the Germans or throwing stones at them. They had the foresight to see the potentialities of these discoveries, the energy to pursue them and the wisdom to enlist in their service the skill and zeal of the most eminent chemists of their own country. [An HON. MEMBER: "Plus protection!"] Protection has nothing whatever to do with it. The success of the Germans in ousting us was due to the causes which I have just enumerated.

Sir P. MAGNUS

May I say, it was due very largely to the enormous subsidies which the German Government gave for research?

Mr. ASQUITH

A very good thing, too. I have always maintained, with my hon. Friend, that there is no better investment for the public funds of this country than in the development of technical education. But the moral I want to point is this. When you have got an enterprise of this kind, the whole of the surplus profit, after reasonable terms have been made, should be given to research, and to the improvement of methods and the development of processes. I think the Government will be very well advised if, after consultation and co-operation with the various interests concerned, they take some security in that direction. There is one other point, and an equally practical one, which I should like to make. When you are setting up this machine, if you are going to set it up, for licensing, of course, the constitution of the Licensing Committee is a matter of the greatest importance, and it is a matter on which we shall all be free to express our judgment when we come to the Committee stage of the Bill. If I may express my own opinion, it is this. I doubt very much whether the seriousness of the competition to which the British industry is exposed lie so much in the greater cheapness of the competing article as in its superior quality and attractiveness. After all, the relative cost of the particular colouring ingredient in our textile exports is comparatively small. It is far more important you should secure for the British textile manufacturer and merchant that he should have the freest possible access to every variety and character of dye. It is a much more important element than the actual cost of the dye itself and a licensing authority of this kind ought, so far as I can form a judgment, to keep that steadily in view, and to impose no obstacle of an; sort or kind to the importation into this country for the use by our manufacturers, and sale by our merchants, of these superior and more attractive dyes. The Germans ought not to continue to have a monopoly of it, I agree; but, so long as they can produce and export it, we ought to let our manufacturers have the freest possible access to them. Those are practical points which I venture to commend to the President of the Board of Trade, and I hope the Government will bear them in view.

Mr. BRIGGS

In rising to criticise this Bill, I may say it is not because I have not the fullest sympathy with the object of its policy. With the object of its policy, the development of British dyes, I have the greatest sympathy on the main grounds of national security and trade security. But why I do criticise this Bill is because I am entirely opposed to its. methods. I think I am entitled to claim some right to address the House on this matter, seeing that the British Dyestuffs Corporation is in my division, and therefore, politically, I have been told I ought to support this measure. But my objection to the Bill is based on an instinctive dislike to bureaucratic interference with trade methods. We had licensing and prohibitive restrictions during the War, and it is now proposed to set up a new bureaucratic method to deal with it in the same way in peace time as in war time. We have not the same desire during peace time to put up with this interference that we did during war. With regard to the constitution of the Licensing Committee, I can hardly conceive any body of voluntary workers sitting down and prepared to work and to distribute these licences for a period of ten years. I might, perhaps, just refer to what Lord Emmott said in the Manchester Free Trade Hall on 12th December last year. He was Chairman of the Advisory Committee on restriction of imports, and he said he knew from experience that at the War Trade Department licensing could not be conducted fairly. I judge this Bill is being brought in to secure, in the first place, the dyemaking industry for national security, and, in the second place, to redeem a promise that was made to the British Dyestuffs Corporation. With regard to the promise made in the British Dyestuffs Corporation prospectus, I have no sympathy with the Government in any effort to redeem their promise, because I would say, What right had any Minister to commit this House to a promise of that character on a public prospectus?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir P. Lloyd-Greame)

The Minister did not permit the prospectus until he had already announced the policy in this House.

7.0 P.M.

Mr. BRIGGS

I must plead, as a young Member, that perhaps I did not express myself as I ought to have done. I would suggest it was somewhat of a breach of privilege of this House to have put this promise on a prospectus. It happens that because of that promise in that prospectus many Members of the House feel their hands politically tied and would be prepared to act differently but for a sense of moral responsibility for that promise on account of which the public put money into the concern. My main point, however, is as to what is the actual view taken by users of these dyestuffs. Some hon. Members believe that because of the agreement come to between the manufacturers and the users all, therefore, is well. No doubt the makers will accept with open hands this Bill or any other Bill which would give them a sense of security. But what about the users? I have a memorandum here issued by the Colour Users' Association in which they state that if the Bill is brought in to establish a system of prohibition and licensing the Licensing Committee should be so constituted as to give adequate representation to the consumers, who should have a preponderating voice on it. At the end of the same document they say that the Council unanimously recommend the constituents of the Association not to support any Government measure unless it offers proper safeguards to the dye consumer. That is the position taken up by the dye consumer. He says he must be able to control this Licensing Committee, and I believe that without such control no single consumer would touch this Bill with even a long stick.

My right hon. Friend the President of the Board of Trade told us he had been informed that 90 per cent, of the consumers accepted this Bill. I have come in contact with some of the larger consumers. The Parliamentary Secretary yesterday referred to the case of the Calico Printers' Federation, which represents 90 per cent, of the calico printing in this country. The Calico Printers' Association represents 60 per cent, of that 90 per cent., and they are absolutely opposed to this Bill. Sixty per cent, of the calico printers therefore are opposed, and the remaining 30 per cent, are by no means unanimously in favour. I happened to be present, by courtesy of the chairman, at the recent meeting of the Colour Users' Association, a body the members of which are, I am sure, as patriotic as any other class in this country. But they are afraid of this Bill, for when the chairman of the Association, at the opening of the meeting, brought forward a resolution supporting the protection of British dyestuffs for national security, the meeting only passed it after an hour's debate. It was to my mind evident that they feared there was some catch in it, and that if they committed hemselves to it it would be thrown in their teeth later on should they object to the Bill. Eventually an amendment was put, saying that it was not the right of the Committee to submit such a resolution. That Amendment was defeated by 40 to 15, but as altogether there were many more than this number present, there was no unanimity about that vote. Finally, a resolution was put to the meeting supporting the Bill, and the chairman declared it carried by an overwhelming majority; but he was compelled to withdraw the word "overwhelming," and, as the "Manchester Guardian" very rightly puts it, the majority was merely in the proportion of three to two. That represents then the united support which the colour users are said to be giving to this Bill.

I should like to read a few sentences from a speech made by the managing director of Bradford Dyers' Association, Limited. He said his association thought that procedure by subsidy was the proper method, but the cost was too great; still in licensing there was machinery whereby subsidies could be applied, and therefore he still sticks to subsidies. Evidently he and his colleagues do not accept this Bill as final. If he thought it was intended to be final he said he would not be supporting it. But he looked on it as only the first stage of the machinery. In this matter we are frequently hearing of textile users. There is, however, another body of consumers of dyestuffs—the lake and paint manufacturers. We must remember this, whereas the textile users' percentage of ultimate value in dyes is practically 1 to 5 per cent., the lake and paint manufacturers' value in dyes used in this product is 80 per cent., and therefore it is of the greatest importance to them to get their dyes as heaply as possible. They are not small consumers of dyes. They practically use one-sixth of the total dye production of this country. There was a member of the Colour Association representing the lake manufacturers at this meeting last Friday who got up and supported this Bill, and when he sat down I said, "How can you support this Bill, seeing that prices are such a material factor to you?" His reply was, "We are going to have subsidies." This is the "unanimous" support this meeting is said to have given to this Bill. They did not know, they do not realise, what this Bill is going to be. Then there are the dye merchants. There is a big business done in this country by middlemen who buy dyes and sell them again to the smaller users. Clause 3 says: Subject to compliance with such conditions as to security for the re-exportation of the goods as the Commissioners of Customs and Excise may impose, this Act shall not apply to goods imported for exportation after transit through the United Kingdom or by way of transhipment. I take it that these goods can be brought here from Germany and kept in bond and re-exported. The business of these merchants is the buying and exporting of dyes. This Bill will put up the price of British dyes; there is no doubt about that. In consequence, these merchants will only buy German dyes, and this Bill gives them a free hand to do that, so that the whole export trade of this country can readily be confined to German dyes. The President of the Board of Trade made a comparison with the United States of America. I think he must either have forgotten or have been misinformed. The export trade in dyed textile goods in this country represents 80 per cent, of the whole production of the dyed cotton manufacturers, whereas the consumption in the United States is 80 per cent, of the United States production. What does that mean? The United States consumes 80 per cent, at home, whereas we live on our export trade, and in order to carry on that trade we must be in a position to have the lowest prices in the market and not the dearest. Therefore, I submit that comparison with America is not a useful one. I have an absolutely instinctive dislike to Government meddling with trade. I am a trader, and I learnt my lesson during the War. While I entirely support the protection of dyes, and realise to the fullest extent that we must have such protection, I would ask, why shift the burden to the shoulders of one section of the community, as you are doing by this Bill. It is a national matter, and the nation should deal with it. The money will have to be found. There is no disguising that fact. It will have to be found whether by this Bill, or by a Tariff Bill, or by a Subsidy Bill. Let the Government take their courage into both hands and deal with the matter boldly, and then we need not have any of that harassing interference which caused so much irritation among traders during the War. I have tried to explain why I am opposed to this Bill, seeing that I realise that protection must be given to the dye industry. I cannot support the Bill as it stands. I propose to put down some Amendments on the Committee stage, and the object of one of them will be to limit the operation of the Bill to three years. I do not like the Bill, but I do not see any alternative to it suppose that the Government intend to force it on us. If they do so intend, let its operation be limited for three years, for in that time they may not absolutely kill our trade, but before the end of the period the people will be so jolly well sick of the measure that they will refuse to allow it to be re-enacted. If my Amendment should be accepted it will remove a great part of my objection to the Bill.

Mr. T. SHAW

I oppose this Bill on many grounds, and I will try and state my main objections as concisely as possible. Only two reasons are given as to the necessity for the Bill. The first is, that a promise given to certain shareholders should be kept, and the second is that it is vitally essential in the interests of the nation that this industry should be developed at home. Will this Bill secure the attainment of those two objects? In my opinion, it will not do so in the best possible way. There is, after all, a huge trade dependent on the production of dyes, and on the quality and price of those dyes depend, not only the sale of British textiles, but the prices of them to the very poorest members of the British Empire. The Indians have never been mentioned, although a very considerable proportion of our dyed cotton goods go to India and are sold to people who are the poorest in the world, so far as money is concerned. It is foolish to say, as has been said, that the extra price of dyed yarn means that cloth cost only so and so. Everybody knows that increase in the raw material actually increases the price sometimes three, four, and five-fold to the consumer of the finished article, and the story that 14 of a penny per yard in the cost of the dyes is little is away from the point, because it may become 1d. per yard at least before the actual cloth is sold to the consumer. That cloth, in many cases, is sold to a consumer whose weekly wages are in pence, not in shillings. The numbers of the British consumers, which are also the community, will, I hope, be taken into consideration by the President of the Board of Trade.

Much has been made of the Licensing Committee. I see no provision in the Bill to give this power to the Committee to issue licences. That power is given not to the Committee but to the President of the Board of Trade, or whoever he may appoint. And with the applications, with the extraordinary number of shades and qualities applied for, it is impossible for this Committee to deal with them unless the poor person who desires to use dye is prepared to wait, six, seven, or eight months before he gets the licence. As a matter of fact, it seems to me a foregone conclusion that so far as the number of licences issued is concerned, the matter will be simply in the hands of a permanent official in the Government Department, and the Committee will be called occasionally to give advice. The real licensing work will be done by a permanent official. That is, as I say, in the Bill. I hope the President will be able to remove any misapprehension I may have on this point.

Let me say a word about the whole question of dyestuffs. I am one of those who believes that key industries should be safeguarded. If any key industry is necessary for a nation in the time of emergency it is the business of the nation to see that that industry flourishes. So I start from common ground with the right hon. Gentleman who proposes the Bill The necessity for safeguarding an industry the absolute essentiality of keeping in being the industry necessary to national safety. Will the method of the President do it? I suggest that it is the worst possible method that could have been suggested. It makes no provision whatever for the development of the industry on scientific lines. Rather. I am afraid, by this licensing system and its cumberousness, does it make for inefficiency. If the proprietors have not the force of competition to face they will have no need to study to develop the industry. This Bill, in my opinion, makes for inefficiency rather than for efficiency.

What does it do with regard to research work—on that side of the question which principally concerns the national safety? Nothing at all. Nothing in the slightest degree in the terms of the Bill will aid in developing research and the application of science to the dye industry. One of the principal arguments for the Bill, we have been told, is that this industry is a new industry and can easily be turned to war purposes if the emergency arises; but this Bill does not help the industry in that respect. It rather makes those concerned feel themselves safe from any competition and protected against it by this cumberous system of licences. This will tend to make them slacken their efforts and not go ahead and engage in research work as an industry ought to do. I have listened this afternoon to one of the most humiliating Debates in this House. It has disclosed our utter failure as an industrial nation, and as a Government. Whatever else the German Government was from 1874–5 it always had the common sense to realise that scientific knowledge was necessary, and it devoted money to scientific study. The dye industry did not go to Germany, because German workmen were better than our own. Nor even because the Germans were more inventive than we were. It went to Germany because there was a larger number of students owing to their educational system. It went to Germany because science was fostered and helped. It went to Germany because the German chemist, the German manager, the German employer, and the German business man were superior to our own. In no way will this Bill help us to develop the qualities that made Germany the greatest dye-producing nation in the world. There is no word in the Bill from beginning to end which will help to that desirable consummation, where British science will be thoroughly helped and fostered, where employers will combine together to help each other, and where everything that can be done will be done to make the industry efficient—there is not a word to that effect in this Bill.

One of the first things said by the right hon. Gentleman was that the application for licences would fall to be decided by the Committee. I have already expressed my opinion on this to the effect that nothing in the Bill gives the Committee power to decide at all. The Committee is there to advise, and it is inherent in the circumstances that the Committee cannot possibly be the best of business men such as should form such a Committee, and be constantly sitting in London to issue licences. The whole thing will utterly break down if the Committee is supposed to be a deciding body in this matter of licences. If not, then I suggest that bureaucracy is what we are going to get instead of real administration and control by men who know the circumstances and know with whom they are dealing. We have a world-wide trade in goods that are dyed. Everybody knows that with a new shade and a new colour, a faster dye, those persons who can put the goods on the market at once secure trade. Where shall we be with these licences when the things which we cannot produce at all, that we do not know anything at all about producing, come to the front? We shall find them in India through other media than our own. We shall find that our big foreign trade-on which, incidentally, our exchange depends—grows less and less, whilst in London there is somebody who with conscientious and meticulous care arranges in such a way that the licences shall not be issued without proper consideration; so retarding the flow of business.

There is nothing in the Bill to prevent the fleecing of the customer by companies that will have a monopoly if licences are not really issued. The poor consumer, the person who buys and wears things, has no protection whatever. What pledge is being given to the public against the company that is going to get protection? None at all! I make a present to the President of the Board of Trade of the suggestion that when he is carrying out the pledge that the Government gave to the people who invested their money—I have nothing against that—that he should discover and make clear the general public does not suffer as a result of him keeping a bargain that his predecessors made. Think, then, what influence will be brought to bear on the issue of licences. Does anyone doubt that at this day big commercial concerns have an influence in Government Departments? Does anyone doubt that the time will come when certain houses, certain firms, and certain users will be all claiming a licence for certain dyes, and that some will get them and others not? We are asking in the Bill for a state of things which is bound to bring trouble into the industry, and which certainly offers temptation, if nothing more, to favouritism of the very worst kind. Because of that, I am opposed to the principle on which the Bill is based. We are told that the President of the Board of Trade has the whole-hearted sympathy and acquiescence of the textile industry. I wonder what he means by the textile industry? Does the right hon. Gentleman ever give a thought to the hundreds and thousands of workers in it? I claim he has not the support of any comparable proportion of the workers in the Lancashire textile industry. If his idea of the industry is that it simply has to deal with the person who buys and sells the goods, and not the persons who work with their hands, then I cannot accept his definition of the industry. I hope the President of the Board of Trade will give a little thought in future when he is talking about an industry to the people who are working in it, because he has absolutely no right to speak for them, and to say that they are in favour of it— no right whatever! I have heard about the shortness of the memories of Members of Parliament. On occasion they may be very short. Hon. Members forget the principles that they have preached for years, and in different circumstances get strangely different ideas from those, previously held.

I have already referred to the pledges which the Government gave to the shareholders. I think those pledges ought to be honoured. If the Government gave to certain people the assurance that by taking shares they would be guaranteed against loss, the Government should be responsible to the fullest extent for that guarantee. But the question is this: Where to give the guarantee! There is a better way than the Government have adopted. If this trade is vital, there are two points of view in it. First of all, it is a key industry on which vast national industries depend, and, secondly, it is necessary for the defence of the Empire. If so, is it not better that private interest should be eliminated entirely, and that the nation should by itself, of its own-initiative, and without the private prompting, manufacture its minimum requirements, and enter into research work in universities and other places, so that the nation may be safeguarded in the future? [An HON. MEMBER: "Is not that bureaucracy?"] No, I suggest that would be common sense. Bureaucracy is when you have your official interfering in your affairs; common sense when you are looking after your own affairs. May I turn for a moment to the question of the difficulty that will exist not only with regard to Germany, but with regard to Prance and Switzerland, under this Bill? I want to point out that we can easily do an enormous amount of harm to our own dye industry by a too stringent system of licences. Everyone acquainted with the Lancashire cotton trade knows that there was a time when the woven goods were sent out of the country to be finished, and you can get exactly the same state of things again if you make your system of licensing too rigid. You could still have your goods woven here and finished in some other country. This is an evident and a real danger, and too much interference and too rigid a licensing system may easily lead to your dyeing and finishing being done in other countries. In this way you might develop the industries of India and France, and cripple your own in the process you are adopting by this Bill.

I suggest the much better way of dealing with the problem would be the way I have already suggested. The control which Germany had in this matter at the beginning of the War is doomed now because we know the reason. If this Bill made provision for the thorough and efficient research work which is necessary for the development of scientific study in the question of dye production: if it made provision for accumulating the best knowledge that exists so far as the dye industry is concerned then I could vote for it; but all it does is to say to foreign countries, "We will keep your goods out," without making any, provision that the work shall be well done and research entered into; in fact the provision means that however inefficient the industry is carried on they will not be allowed to go under because the licences will keep everybody else out. That is one of the big dangers I see in this Bill. We were told that if we did not buy out the people in this industry who subscribed we should let the industry go to pieces. Personally I doubt whether this Bill will prevent the industry going to pieces. It will probably maintain the profits of the firms engaged in the industry, but there is no guarantee that they will not go to pieces. This measure gives no guarantee of efficiency from the first word to the last word.

Let me say a few words on the question of German competition. I have already stated what I consider to be the reason for the success of the Germans in this industry. We can do what we like in the shape of licences and set up all the barriers we like, but if the Germans are much more efficient than we are they will get the export trade, and so long as they have the run of the markets of the world we shall have to work in competition with them. I am not prepared to see the great textile industries run a risk which amounts, I am afraid, almost to extinction. I am not prepared quietly to see a danger of that kind which I believe exists in this Bill. It is because that I believe there is that danger that I hope the House will not accept this measure. We were told that 2,000 men were out of work in the dye industry and that this was due to the influx of German dyes. Is the President of the Board of Trade aware that at least 100,000 weavers are unemployed in Lancashire who ought to be weaving the goods which those dyers want to keep thorn employed.

I do not believe that the dismissal of those dyers has any more to do with the importation of German dyes than I have. The fact is that you have at least 100,000 weavers in Lancashire unemployed or partially unemployed, and the Lancashire cotton trade is one which has to be maintained almost wholly on exports. If you add to this unfortunate circumstance the difficulties of the dyeing trade, the difficulty is one which cannot be looked upon with calmness of equanimity. You have a state of unemployment in Lancashire which has never been known before. In Burnley out of 30,000 weavers only 10,000 are totally unemployed or on half or quarter wages, and that is in one small town. Can the President of the Board of Trade wonder that the people in Lancashire who know these things are rather suspicious about an academic discussion of this kind when they see the enormous difficulty at the present time of exporting their own goods.

Sir R. HORNE

A considerable amount of German dyes have been imported, and if British dyes had been used instead then the British dyers would still have been employed.

Mr. SHAW

That may be true, but the right hon. Gentleman spoke as if the importation of those dyes had caused this unemployment. The looms which ought to be turning out the cloth are not work- ing and therefore the cloth is not going to the dyers to find them employment.

Sir R. HORNE

The question remains where are the German dyes going?

Mr. SHAW

They may not be going to the North at all. All these looms are stopped, and if the production is not going into the dye works the dyers are not dyeing them, and to say that on account of the importation of German dyes 2,000 dyers had been discharged is simply camouflaging the position. This discussion has been the most humiliating one we have ever listened to. We have listened to the gloomiest picture of an industry that it has ever been my lot to listen to, and the cause of it is that this country does not realise the vast importance of science in industry. Even yet we are not making the efforts on those lines which we ought to make, and I appeal to the President of the Board of Trade, instead of trying clumsy, blundering schemes like this which will injure more than they will help, and which will hamper more than they will assist the stream of commerce, to devote his great abilities to teaching the country that only by real hard work, research, and science, can the industries of this country reach the position which they ought to occupy, and when we reach that position we need fear neither Germany nor any other country in the world.

Mr. DOYLE

I think the hon. Gentleman who has just sat down is to be congratulated for two reasons, first, because of his admission that key industries should be protected, and, secondly, because of the admission he has made with regard to the protection of the shareholders who have invested their money in this industry. I do not follow the hon. Member in the toils and principles of nationalisation which he referred to in connection with this Bill. With regard to the question of unemployment, I fail to see the connection between his argument and the fact that there are 2,000 men unemployed in the dye industry in consequence of the importation of German dyes. It is perfectly obvious that the more foreign goods in connection with a particular trade you import into this country, in proportion that will react on those employed in that industry and will cause unemployment. With regard to the speech of the hon. Member for Blackley (Mr. Briggs), who represents the place where these works are situated, I admire the originality of his speech, but I was looking all the time for some alternative solution of the difficulty. Here is this great industry situated in the hon. Member's constituency, and, while he gave a number of reasons why this Bill should not be passed, and why he did not intend to vote for it, I waited for what he was going to put in its place; but on that point he said nothing.

I cannot understand from the point of view of the hon. Member why he is willing to see the absolute destruction of this new industry in his constituency, which would mean the throwing out of employment of a large number of workpeople. Yet the hon. Member stands by helpless and says, "I do not and cannot agree with this Bill." That has been the attitude taken up by a certain number of speakers who preceded the hon. Member for Blackley. Reference has been made to a circular sent out by the president of the Dye-makers' Association recommending a method of prohibition and licensing as the best method of safeguarding the dye industry, and pointing out the danger of industries of enormous importance being dominated by a source of supply over which they have no control. I should also like to say a word in response to the speech of the hon. Member for Oldham (Sir W. Barton). He also asked, "Is this Bill the best way of dealing with the difficulty?" and he dealt with the question from a great number of points of view. There, again, however, there was the absence of a solution and of any alternative to this Bill. One point he made was that, if the measure were passed, it would commit the users to the second best. Why? On the Committee that is to be set up the users will be in a majority. Assuming that the British product is not up to the mark, and is inferior in quality or too high in price, they will be able to say, "Your stuff is not what it ought to be; this German or Swiss stuff, or whatever it is, is ready to come in, and is either of superior quality or cheaper price, and it will come in." Therefore I cannot see why. the consumer should necessarily be relegated to the second best. On the point of subsidies, I think the House, in certain legislation and certain experience, has had a sufficient knowledge of subsidies not to recommend them in a case of this kind. The moment you give subsidies in an industry, you never know where it will end. If the subsidy you give is insufficient to keep the industry going, and if the industry and those who work it are slack, you would have to go on increasing the subsidy—there would be no other alternative. I think the right hon. Gentleman the Member for Paisley (Mr. Asquith) is to be congratulated on his speech this afternoon. The two objections to this Bill were from the political and the trade point of view. The right hon. Gentleman has entirely removed the political objection. So far as those who were opposing the Bill from the political point of view are concerned, I suggest that the Division might as well be taken now, because there is nothing further to be said on that side. The right hon. Gentleman stood by his promise and by the promises of Mr. Runciman, who was President of the Board of Trade. There remains the trade side, and I know it is being questioned whether there is a majority in favour of this Bill, as there was stated to be. How are you to arrive at a decision as to whether there is a majority or not? Surely it must be by the various representatives who are in a position, through their associations, to give a decision one way or the other. If that is so, it is obvious that the President of the Board of Trade is perfectly right in his claim that it is about 90 per cent.

I want to say a word about the position of the hon. and gallant Gentleman the Member for East Newcastle (Major Barnes). The hon. and gallant Gentleman, if I may say so, has taken a rather characteristically aggressive attitude in regard to this Bill, both in the House at the time when it was mentioned, and particularly outside the House. He is one who was returned to support this Government. He was pledged particularly on the issue we are discussing to-day; he accepted the manifesto which appeared under the name of Mr. Lloyd George and Mr. Bonar Law. I will read the part which refers to this matter in that manifesto: One of the lessons which has been most clearly taught us by the War is the danger to the nation of being dependent upon other countries for the vital supplies upon which the life of a nation may depend. It is the intention of the Government, therefore, to preserve and sustain, where necessary, these key industries in the way in which experience and examination may prove to be the best adapted for the purpose. The hon. and gallant Gentleman subscribed to that manifesto. Not only so, but he stated in his election speeches and in making his appeal to the electors that when they voted for him they did not really vote for him at all, but for Mr. Lloyd George. He went further than that. Not only did he subscribe to this part of the manifesto that I have just read, but he put the question of key industries in a very prominent position in his election address. How he can come to the House, in view of those conditions and of the speeches he made, is a thing that he has never explained, at any rate, to his constituents. Of the organisations which combined to return the hon. and gallant Gentleman, one of the most powerful, and one of those which did the most for him, passed a resolution, after he had left the Government side, asking him to resign his seat. That invitation was not accepted. In view of that invitation, however, and of its being declined, I venture to say that the hon. and gallant Gentleman not only does not represent his constituency in this matter, but he does not represent it upon any matter. He has had rather a varied political career. He was a member of the Labour party; he left the Labour party and re-joined the Liberal party; he left the Liberal party and joined the Coalition; he left the Coalition and joined the Liberal party again, and I have no doubt he will find consolation in the fact that there are many new parties and that the possibilities of the situation are not quite exhausted.

What appealed to me forcibly in this Debate, and I have listened to every speech which has been made as yet, is that this Bill holds the field. Either on a question of urgency, and it is urgent, you are going to pass this Bill as it stands, in this House, and to get it through before Parliament rises at the end of the Session, or you are going to run the risk of the destruction of this mighty and necessary industry, and of the throwing out of employment of a great number of workpeople and of handing it over to Germany just as before the War. I look upon this industry as just as vital importance to this country as our Navy. In case of another war we should have to depend upon such agencies for chemical power, for explosives, and so on. If we allow this industry to be smashed and broken up, and if we become dependent once again on the Germans, we shall be in a great deal worse position than we were at the beginning of the present War, because we shall not have learnt by experience. For these reasons, therefore, although the Bill is belated and insufficient, and does not go quite far enough, I shall support it.

8.0 P.M.

Mr. WADDINGTON

I agree with the hon. Member who has just spoken, that the Government were to be congratulated on having introduced this Bill. The opinion of those who are actively connected with the dye users is that the sooner the question is settled the better it will be for the interests of the trade. Much has been said in criticisms of the Bill, but little pointing out a better way of doing it. We know there are many objections to any form of Government interference in trade, but after a great deal of consideration this scheme of prohibition and licence has been adopted by the great majority of colour users in the country as being the least harmful. It has been said that the Colour Users' Association does not really represent the position of those who are in the industry, and that at a meeting in Manchester last Friday, out of over 150 persons present only 40 voted. The, hon. Member for Blackley (Mr. Briggs), who made that statement to the House, forgot to tell the House that the representation of that association is limited. The right to vote is limited to certain members from the trade, and although there might have been that number of persons present yet the voting power was not so great. The hon. Gentleman also said there was a difference of opinion whether it was supported as a measure of security. The voting in favour of that was 40 votes to 4 against the amendment, so that that may be taken as fairly well representing the considered judgment, after fair discussion, of the Colour Users' Association. I happen to be in the position of being one of those whom the hon. and gallant Member for Newcastle wished hon. Members to save from having any injustice done to them. He asked that they should do nothing which would jeopardise the textile trade, and that they should treat the textile people in a manner in which they would like to be treated. I am a colour user, interested in cotton manufactures. We use colours in various processes in dyeing raw cotton, and the bulk of our other productions are either used in what is known as piece dyeing or calico printing. So that, if there is to be any injury to trade by this particular measure, then, in supporting it, I should be voting for something which would directly injure myself. But I have every confidence that, so far from injuring trade, this Bill will do a great deal of good. Anything which will be the means of establishing a dye industry of a satisfactory character will render great service to the textile trade. I should like to put before the House some suggestions which have been made as to the formation of this Committee and its constitution and working when established. The scheme which has been considered by the colour users and dye makers is that there should be a chemist representing the dye makers and a chemist representing the dye users, and that any application for a licence would first go before those two chemists, and if they agreed in favour of a licence it would almost automatically be issued. If their joint decision is against the issue of a licence, on the ground that the article is available in this country, then, of course, it will be refused. But if there is a difference of opinion the Licensing Committee would be called together, and that would be where their work would begin. So all the suggestions of the Licensing Committee having to spend much time in the duties of their office are quite beside the mark, and will be quite unnecessary in actual operation.

Another point which has been raised is as to getting the colours. The hon. Member (Mr. Shaw) spoke of the colour users not being able to get the particular dye which they needed, and of our trade in India, China, and South America being lost and the textile industry being ruined because of this difficulty of getting the colours. But what is happening to-day? A man prepares his particular design. He gets out the shades which he wants in that design. He will send his list of colours that he requires to the British Dyes Corporation, asking them if they can supply those colours. They send him the dyes which they are able to supply, and tell him that certain other colours can be got from either Switzerland or America or from Germany alone, so that the person who requires the colours is advised at the present time by the British Dyes Corporation as to where he can get them. That is intended to be carried on. The great misunderstanding which has existed throughout the country on this question is that there is to be prohibition of essential dyes. There is no suggestion of prohibiting any essential dyes. There is no suggestion of refusing admittance to this country of dyes which are necessary, and the very fact that this scheme has been adopted by those who represent the colour users of the country, and that they are satisfied with the safeguards which they have obtained, ought to be sufficient to commend the Bill to the House. We may be perfectly certain that those who are in the great textile trade of Lancashire are not going to lose their great predominance in skilled work and in beauty of design. They are going to have that safeguarded, and they consider that they have it safeguarded under this measure. But we have in Lancashire a great difficulty. Many of us remember the position in 1914. We remember how, when war broke out, we found ourselves in the most humiliating position that any great trade ever was in, when we found that we had no dyes and no dyeworks in the country that we could turn to, and we had practically to scour the world to find a pound or five pounds or a hundredweight of dyes to carry on our great textile industry. We do not want to go back to that position again. We want to feel sure, and we do feel sure, that, given the right amount of research, given the scientific application in industry, we are satisfied that our dycstuff industry and our chemical industry will not be the second best but will be equal to anything in the world.

The hon. Member for Blackley (Mr. Briggs) suggested that the experiment should be limited to a period of three years. But surely it is foolish to talk of three years for a great scheme of this sort. You could not get your chemists trained under five years. Therefore you are going to get hundreds of men entering upon university careers, studying chemistry to become competent in research work to bring the country up to its proper state, and you suggest that in three years they shall be thrown away from their work and that it shall be put down as useless. The only suggestion the hon. Member (Mr. Shaw) seemed to make was that of re search and scientific education. The Germans not merely gave scientific education but connected it with industry. You cannot fill your universities, you cannot open technical colleges and fill them with students for this particular class of chemistry and then, when they have finished their five years' course, tell them there is no work for them in this country and no industry to go to and they must go to America or Germany, as they have had to do in the years gone by. We heard this afternoon the example of the British Alizarine Company. I should like to give one or two more particulars about it. When Perkin discovered alizarine dye in 1868 it was discovered at the same time by the Germans. The two discoveries were registered within a day of each other in the two countries. But who developed the commercial position first? Perkin set to work, and in spite of the boasted supremacy of what the Germans can do, the British chemists and industrialists at that time produced the alizarine dye quicker than the Germans and had it on the market. We increased its production in this country for a few years, then the Germans went past us and stamped out Perkin's experiment. He had to give up his works. He was not supported as he ought to have been by the industrialists of this country. Then for seven years the Germans had the alizarine trade to themselves. In 1882 they lifted the price. They made £1,000,000 in one year and they put such an extortionate price on what they were willing to supply to Great Britain that they forced a rebellion amongst the dye users of this country and they re-established the Alizarine industry.

But that industry had several years of struggle. It had to fight German competition, and unfair competition at that, and the British dye user had to consider whether it was to his advantage to give up the trade and be at the mercy of the Germans, or to lose money as a dye user. He went on producing his dyes and subsidising the Alizarine Company out of his dye-using plant. Then when the Germans found they could not beat the British Alizarine Company they approached them by negotiations and got them to join a convention. The result of joining the convention was that the British Alizarine Company was tied down. It could only make a certain weight of dyes and had to sell at a price fixed by the Germans. Surely it is no credit to an industry in this country, it is not a thing which is desirable from any point of view, whatever section of opinion we may represent, that there should be any industry in this country which is limited as to what its development can be, which is limited as to what it can produce, and which is dominated by a German convention which dictates its terms. That was the position of the British Alizarine Company, and we surely canot put that up as something which is to be admired and encouraged in these times.

Another thing the Germans did before the War, which shows how they wore trying to destroy one trade and to prevent another. They had what is known with their big contractors as a falling-price Clause. They had a regular price at which they sold their goods, and the falling-price Clause was that if the British dye user could find an article which the British dyemaker could sell cheaper than they did, they automatically brought the price of the German dye down, and it was so objectionable in the use that was made of it, that a Huddersfield firm refused to quote to one of the largest firms in the country because they merely took advantage of the British dye-maker to get a cheaper price from the Germans. If a British merchant asked a price from a dyemaker, if it was less than the German price, they would give an order for five or ten cwt. and produce the invoice to the Germans, and the Germans reduced the price to that of the British dyemaker. How could you possibly expect any industry to withstand such unfair competition as that? I have great pleasure in supporting the Bill.

Mr. LYLE-SAMUEL

I think it is very important that the House should make up its mind whether it is going to support this Bill on grounds of national safety or on economical grounds. Both arguments have been very generally used. I am opposed to the Bill on three grounds. The first is, that it is not sufficient to secure our national safety. The second is that it perpetuates bueaucracy in British commerce, and the third is, as we have learnt from the Debate, that it interprets the phrase key industry as being a justification for Protection, which has not yet been in issue before the people.

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.