HC Deb 10 February 1920 vol 125 cc9-64
Colonel SIDNEY PEEL (in the uniform of Colonel Commanding the Bedfordshire Yeomanry)

I beg to move:

"That a humble Address be presented to His Majesty as followeth:

Most Gracious Sovereign,

We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland, in Parliament assembled, beg leave to offer our bumble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."

It is customary for a Member addressing this House on an occasion like the present, especially when he is addressing the House for the first time, to ask for the indulgence of the House. I certainly am conscious that I need that indulgence as much as any man. I hope I shall receive it, first, on account of the constituency which I have the honour to represent, a constituency of great and growing importance, and one which did good service in the War. It had, further, the sad distinction of losing its representative by death in action in the War. If I may make an even more personal claim for the indulgence of the House, it is on account of my name, which has been borne now by four generations in this House, and is not, I think, unknown. There is, at any rate, one part of my task as Mover of the Address which presents no difficulty, and that is to express our warm sympathy with that passage in the Gracious Speech from the Throne which announces the visit of His Royal Highness the Prince of Wales to the Dominions of Australia and Now Zealand and to the West Indies. His Royal Highness had an unqualified success in his visit to the Dominion of Canada, to Newfoundland, and to the United States. It is not too much to say that the whole nation has watched with affectionate interest his progress, lie has the gift of impressing upon many different minds, and not least in his recent journeys, the fact that he can be a Prince and at the same time a simple and unaffected English gentleman. It must, indeed, be a source of deep satisfaction to his father's heart to see how well his son has profited by the training he has had and not least by the example of his own home.

The numerous questions to which allusion is made in the Gracious Speech from the Throne naturally reflect the conditions of the time. That time is beyond question a time of difficulty. The problems which confront us in these islands, though not so great as in many of the European countries, are numerous and complex. The Continental outlook is dubious and there are dark and mysterious clouds on the Eastern horizon. The professional pessimist, if he takes the chessboard of the world, can find a good deal of material for the making of a black picture. But what are all these problems and dangers compared with those through which we have gone during the last five years? A man rescued from drowning, if he be wise, will keep a cheerful and grateful heart and will not go about complaining that the suit he had on when he fell into the water will never be the same again. There is, of course, a nervous exhaustion which always arises after great efforts like those of the recent War. If my observation is worth anything, that nervous exhaustion is now passing away. In most human affairs, as in medicine, the two great doctors are Faith and Time. I am far from recommending a blind optimism, but if we face our problems fairly and trust in the sound sense and the steadfast courage of our race, we shall, I am confident, emerge successfully from all our trials. You can make war in a day or even in a minute; you cannot make peace in the same shortness of time. We have at least gone far on the road to the establishment of peace in the world. Peace has already been made with Germany and the treaties with Aus tria and Bulgaria are well on the way There remain Hungary and the extremely difficult arrangements to be made with the Turkish Empire. We hope that these negotiations may be carried to a satisfactory conclusion.

That is a great series of treaties. They have been criticised, of course. Some have gone so far as to say that they contained the seeds of future war. I cannot foresee the future and I do not know how that may be, but I would prefer to say that they contain the seeds of future peace. Few will dispute that it is a great achievement to have embodied in these treaties that great Charter of Peace, the Covenant of the League of Nations. With the ratification of the treaty with Germany the League is now actually in being, and there is every hope that the young plant, still rather green and tender, will grow and develop into a great and powerful instrument of peace. It would be, of course, a grievous disappointment to us all if the United States of America were unable to join us in the great work of reconstruction. Far be it from any of us to resent or even to criticise her attitude. She is master in her own house as we are masters in ours. Let us be content with the certainty that the great mass of her people are closely akin to us, not indeed by ties of blood, but by the far stronger ties of common ideals and common ideas of right and wrong. I am confident that we can leave the issue safely in their hands. But whatever decision they may eventually come to, I hope that we shall not turn aside ourselves from the endeavour to bring into active operation the principles which underly the League.

Closely connected with foreign affairs are some of the questions of finance that occupy so prominent a place in the Gracious Speech from the Throne. I am glad to infer that the Government are alive to the difficulties of the foreign exchanges. I suppose that this is probably the first time that questions of exchange have been alluded to in the Speech from the Throne. Usually if anybody even mentioned the exchanges everybody fled from him like the plague. To-day everybody is aware that the pound is greatly depreciated in some countries, especially in the United States of America and very greatly appreciated in others. The worst feature is that these movements are still going on, so that no one can foretell exactly what his assets or his liabilities in a foreign country may be a short time hence. Great fluctuations in exchange are indeed worse obstacles to trade than a high or low exchange. It is like making a contract with the price left out. Between some countries the machinery of exchange has almost broken down altogether and I have noticed instances where international trade is being conducted in terms of goods; that is to say, they are reverting to a primitive state of barter. No doubt the Government will thoroughly explore all the possibilities of the situation. Some people dream of producing a scheme for a universal and unchanging medium of exchange. Personally, I shall not expect it until I see it. It seems to me that the present state of the exchanges is merely an effect of the widespread disorganisation and economic changes produced by the war. It will be useless to plan alterations in the machinery of exchange unless you can alter the root facts of the situation. The reason why the pound is depreciated in America is because we owe her at the present time large sums, because we are continually purchasing from her quantities of goods, both food, raw materials and manufactures, in far greater quantities than we can pay for by the export to her of goods or gold, or those services which are known as invisible exports. As between ourselves and the United States of America the remedy is, I fear, extremely commonpiace. We must use every effort to sell more to, and buy less from, America. But there will be no short cut to success. The process of recovery may be long and may be painful, but I strongly believe that any temporary expedient like Government control of the exchanges will only produce worse disaster in the end We shall never get the position round until we can give free play to the natural forces and start from a basis of fact and not of fiction. With regard to the European countries the main facts are of course the same, but they are complicated by the dangerous financial expedients to which some of the countries have had recourse during the war. Some of those countries do stand in need of assistance, and if we do give them that assistance I hope that, in examining the nature of the help which may be given them, their essential situation, apart from the machinery of exchange, will to taken into account.

Financial questions are difficult perhaps, but they can be understood if not answered by the ordinary Englishman by applying the ordinary rules of thought I do not know that the same can be said of the question of the government of Ireland. We had the advantage of hearing from the Prime Minister at the end of last Session an outline of the Government's proposal with regard to Ireland. The Gracious Speech assures us that this measure will be pressed on. We all join in hoping that it may bring peace to Ireland. If I said that we all expected it to do so I might be using words of ill-omen because I know that things do not fall out in Ireland as you expect. I wish that all Irishmen would realise how great the desire has been in England for generations passed to do her justice. If we have at times opposed her wishes it has not been from a desire to oppress Ireland or from any party or private interest but from the will to promote the greater good of the whole Empire, from which we cannot agree that Ireland should be excluded. We Englishmen have often been accused by Irishmen of stupidity and lack of sympathy. I wish that some of the gifted and eloquent sons of Ireland would spend some time in explaining to their own countrymen the difficulties under which we Englishmen labour in understanding these Irish questions.


I have been trying to do that for forty years.

Colonel PEEL

It used to be the grievance that Ireland was poor. I believe she is prosperous now. Then her grievance was the landlord question, but the landlord has been practically expropriated. There is Home Rule, and when Home Rule is within her grasp we are puzzled by a section of the Irish people who say that they do not want Home Rule but that they want an Irish Republic. But is there not some lack of sympathy in Ireland if they fail to understand the bewilderment of the ordinary Englishman? To-day the situation is made worse by one of those epidemics of crime which seem to seize Ireland from time to time like a quartan fever. Crime is crime and must be dealt with, but I hope that we shall not allow it to deflect us from our course in dealing with reforms. If we can act with justice, and, I will add, generosity, there must be an Ireland which will respond and join us in building up a bright future for that country

Not less in importance than Ireland is that group of measures to which our attention is drawn in the Gracious Speech from the Throne relating to the conditions of labour, and I may particularly mention the regulation of hours and insurance against unemployment. It may be too sanguine a view to take that restriction of hours will at first have no restrictive effect on output. It is not very easy for a workman to change the habits of a lifetime, but if that reduction does take place we must not cry out too soon. We are trying to lay our plans for the coming generation more than for the present one. There is every hope that before long the increased physical and mental benefits which will be produced by the shortening of hours will react in increased output. As for insurance against unemployment we are all aware of the intense importance of this question. The risk of unemployment and its consequences is the nightmare that haunts the mind of almost every working man, and it is the cause of much social unrest. If we can pass into law a measure calculated to remove the worst consequences of unemployment we shall make this year a memorable and blessed one in many an English home. There are many other subjects to which attention is drawn in the Gracious Speech from the Throne which are of great interest and importance. We in this House are only too familiar with questions like coal and drink. I will not enumerate all the subjects, but it is clear we have a great programme before us, and whatever rules; we lay down for workers elsewhere I cannot foresee a shortening of Parliamentary hours. It is a programme which can only be carried through by a strong determination to work out the reconstruction of our country and to make fruitful the sacrifices of the War and of the present time. I believe we have that determination. We were not sent to this House by the constituencies to work for any sectional or Party interests, and still less for any personal or private interest. I am sure that I can say with truth of the Members of this House, to whatever party they belong, that they have come here with no other object than to lay broad and deep and strong the foundations of the future. I can safely say we in this House shall not fail to respond to the appeal for energy and patience which is made in the Gracious Speech from the Throne.

Mr. WOOLCOCK (In Court dress)

I beg to second the Address in reply to the Gracious Speech from the Throne which has been proposed in such felicitous terms, if he will allow me to say so, by my hon. and gallant Friend at my side (Colonel Peel). I, like him, ask the indulgence of the House, and all the more so because I have to follow him in the brilliant contribution which he has just made. I am fully conscious that the honour of seconding the Address is in no sense a personal one. It is a compliment to the borough which I, in common with my hon Friend opposite, the Member for South Hackney (Mr. Bottomley), and my hon. Friend on this side (Lieutenant-Colonel Greene) have the honour to represent in this House. The Gracious Speech to which we listened this morning is indicative I think of the very full appreciation of the difficulties which face us at this particular time. I commend it to the House as much for the spirit which can be discerned in every line as for the remedial measures which are foreshadowed in it. We are proverbially slow in waging war and we are equally slow, I think, in realising the altered conditions in which peace is bound to find us. Once as a nation we realise the seriousness of the problem confronting us we proceed to deal with it in a truly British way. If I interpret the spirit of the Gracious Speech aright we have at last realised that reconstruction is more difficult than destruction, and, the nation having realised that, will, I feel sure, set itself, in the words of the Speech, "with goodwill for others with energy and with patience," to ensure that lasting progress and social peace which we all desire. This House, and indeed, I am sure, the whole country, will be glad to see the reference to the price of foodstuffs and other necessary commodities, and whilst sharing in the pleasure that prices are appreciably lower in this country than elsewhere, will welcome the promise of legislation for large and far-reaching measures of reform. I am equally sure that the House will welcome the reference to the condition of trade in the outside world, and I think every hon. Member can from his own personal experience see evidences of a steadily increasing flow of trade, a state of affairs which is absolutely essential to the recovery of the financial condition which we formerly held.

My hon. and gallant Friend has referred to many of the measures foreshadowed in the Speech, and I will therefore only detain the House in commenting on one or two. I would like, with the permission of the House, to say one word which is perhaps rather outside the Gracious Speech, and to refer to the Bill which is foreshadowed for fixing the hours of employment for adults. That Bill, I am sure, will to welcomed in this House very cordially by Members of all Parties. May I express the hope that we shall not only do something in the way of legislating for the hours which adults work, but that the House, with its large heart, will also be prepared to do something for those wage-earning children who, in addition to having to attend school, are too frequently now working unconscionably. This is not an opportune time for me to press that, but I ask the House to accord me their thoughts and their sympathy in that when the proper time does come. Custom has decreed that neither mover nor seconder of the Address shall say anything which shall be regarded as controversial in any way. My hon. and gallant Friend has certainly not said anything which could be regarded as controversial, and I desire to follow him in that particular, but I feel impelled also to say, just as he did, a word with regard to the reference to Ireland in the Speech. We are witnessing a tragedy, a tragedy the consequences of which, both immediate and remote, who of us would attempt to define or set a limit to, a tragedy which one and all of us will have to take our share of responsibility in. The degree may vary, but nevertheless there is no Member of this House who will be able to escape responsibility for some share in the measures which are proposed. I therefore think that in these circumstances the House will readily seize the promised opportunity of considering anew the problem of Ireland In this way alone can we satisfy our individual consciences, and in this way alone can we put ourselves as a nation right with the world. It seems to me that the whole of the Gracious Speech breathes the true spirit of reconstruction, and I believe there has been no time since the Armistice when the nation as a whole has been so ready to undertake the work. The part which Britain has played in the world in the past is no mean one, and if we will unitedly accept our heavy responsibilities and will seize our present opportunities, it will be equally great in the future. Our deeds still travel with us from afar, And what we have been makes us what we are.


I desire to offer my congratulations to the mover and seconder for the excellent speeches in which they have moved and seconded the Address to His Majesty The conditions under which the House meets are of a very critical character, conditions which, in my opinion, demand the careful attention of all thoughtful men. The mover of the Address pointed out that they were largely the aftermath of war, but while they provided food for careful consideration and reflection, I was glad to note that he struck a very optimistic vein, and thought we would be able to overcome these difficulties in the manner in which we have been able to overcome the difficulties of the past. I think every Member of the House will join with His Majesty in congratulating ourselves upon the fact that at last we have had the final ratification of the Peace Treaty with Germany. At the same time, I am of the opinion that some of the terms contained in that Treaty of Peace with Germany are of such an onerous character that there is little hope of them being carried out We sec signs that the German people are looking to the Allies for some modification of the terms that have been imposed, and I would like just to suggest to the Prime Minister and to the Members of his Cabinet that before the treaties of peace with Austria, Bulgaria, Turkey, and Hungary are completed, the whole situation might be carefully reviewed and closely examined with a view of having a lasting and enduring peace established before these treaties are finally ratified. I note the suggestion in the Gracious Speech from the Throne that in order to ensure the full blessings of peace and prosperity in Europe, it is essential that not only peace but normal conditions of economic life should be restored in Eastern Europe and in Russia. With a view to carrying out that excellent suggestion will the Prime Minister tell us what he proposes to do so far as Russia and Eastern Europe are concerned? For example, will he tell us, in the course of his reply, if all our forces have been cleared out of Russia; are we still sending supplies of money and munitions of war to any of the belligerent forces in that country; are we making arrangements for the opening of trade; is it the intention of the Government to come to an arrangement with the Russian Government that will open the ports and that will remove the blockade for trade purposes? Because if we are to improve the economic condition that is absolutely essential.

I note also with interest what is said in the Speech from the Throne with regard to the prices of foodstuffs and other necessary commodities, and especially the statement that the costs of living in these islands are appreciably lower than they are elsewhere. Even if this be true, it is very little consolation to our people when they see the cost of living going up and profiteering going on. It is this aspect of the question which is responsible to a very large extent for the present inflated prices. The inability of the Government to deal drastically with this question is giving the people great anxiety and is one of the chief causes of unrest which has retarded the re-establishment of normal conditions in this country. A determined attempt should be made to deal with this evil. The Government ought to do everything that they can to throw the people into the work of reconstruction which is so desirable. How can this Government expect that there will be progress, prosperity, and social peace so long as the working classes are the victims of profiteering and so long as the working classes continue to see huge dividends paid? Not only do they see from time to time in the newspapers the report of huge dividends being earned in various industries in the country, but they see considerable sums set aside for depreciation and reserve, and in many cases these reserves are being used for the purpose of giving bonus shares to shareholders of these concerns. The creation of these bonus shares steadily loads the dice against the workman so far as his future wages and future conditions are concerned. There is no part of the reserves which are being built up in the various parts of the industrial system of this country which is being used for guaranteeing the position of the workman in any shape or form; there is no part of these reserves which is being used for the purpose of compensating the workman when unemployment comes his way and he is idle for a day, or a week, or a month; there is no part of the reserves that are being built up by his energy as well as the energy of those who are associated with him in the industry for compensating him for these and other contingencies. Is it the intention of the Government to deal with this aspect of the question? Is it their intention to bring in a drastic measure to deal with profiteering? The present Act has utterly failed to accomplish its object. No mention is made in the speech from the Throne as to whether the Government are prepared to bring in an amending Bill, and unless an amending Bill is brought in of a drastic character, there is just the possibility that things will grow worse and worse until you may have the people absolutely revolting against this steady increase that is taking place in the cost of living. I note also that it is the intention of the Government to proceed with a Bill for the better Government of Ireland; they are to proceed with a Bill along the lines indicated by the Prime Minister in the closing days of last Session. I have just come back from a short tour in that country—[Laughter.]

Lieutenant-Commander KENWORTHY

Why not?


Better than golfing.

5.0 P.M.


—in the course of which I had opportunities of meeting many people and of discussing the Irish situation. I can assure the House that I have the strongest evidence of the dangerous possibilities of the situation. There is not a shadow of doubt that the majority of the Irish people have lost faith in British statesmanship. They tell you quite frankly they can no longer depend upon our promises, nor upon our honour to redeem those promises. A considerable number have reached a stage when all that they say to us is, "We do not want to have anything further to do with you. All that we ask is, leave us to ourselves; leave us the privilege of governing our own country." In the course of the tour we did not meet a single person who looked with favour upon the proposed Bill of the Prime Minister. It has no friends in Ireland. That being so, it is very difficult to see how it will make for the better government of Ireland. I am strongly of opinion that nothing short of a generous measure of self-government without any division between one part of Ireland and another, will satisfy the aspirations of the Irish people; but, as a preliminary, I would suggest to the very serious consideration of the Prime Minister and his Government the changing as rapidly as possible of the present method of government in Ireland.


That would facilitate murder.


You organised murder first.


That is a lie.


It is the truth. You were the first to start it


That is a lie.


The hon. Member is not entitled to interrupt.


Why did he interrupt? He interrupted first.


The hon. Member can say what he wishes to say in debate, if he will rise presently and say it.


Why did he not rise?


He did not wish to rise. If the hon. Gentleman wishes to rise at a later stage I shall be very glad to call upon him, but what I object to is these disorderly interruptions.


He was the first to interrupt.


I was just saying, as a preliminary to the introduction of a Bill providing for a generous measure of self-government for Ireland, there ought to be a change in the present method of government. Large areas of Ireland are at present under military rule. There is no freedom, so far as the people living in these particular areas are concerned. Local fairs are prohibited, meetings of trade unions are prohibited, all social functions are prohibited. Everything that counts in the life of a community in the particular areas to which I am referring is prohibited. Consequently the people are thrown back upon themselves. Can one wonder, when you have conditions such as these imposed on any people, that you have a spirit of revolt taking possession of them, and things being done which everyone of us, I am certain, deplores? If we are to do anything that will help the present situation in Ireland, we will have to exercise a greater measure of trust in the Irish people themselves. We ought to withdraw our present system of military rule. We ought to place more confidence in the Irish people themselves. If we do that at the earliest possible moment, we ought to place on the Statute Book the most generous form of self-government that we possibly can, and I believe these are the only conditions on which we can hope to re-establish peace, concord and goodwill between ourselves and the Irish people.

Another point raised in the Speech from the Throne is the present position of the coal-mining industry The proposals which are outlined are expected to provide an enduring settlement so far as this question is concerned. But I put this to the Prime Minister: how can he expect that this will be the case when he knows well that the present proposals of the Government do not meet with the approval of the great majority of those who are engaged in the industry, and, therefore, how is it possible to expect that these proposals will form the basis of an enduring settlement? Nationalisation of the industry is the claim of the miner. Not only is it the claim of the miner, but it is the claim of the Labour Party, and of the united labour movement of this country. Nothing short of this will settle this question, and I believe that the struggle will go on until nationalisation has been secured. This is one of the questions further that we intend to discuss in the form of an Amendment to the Address, and I am not going to enter into it to-day further than the passing reference which I have already made. I am glad also to observe that in the Speech from the Throne the importance of agriculture to this country is emphasised. I strongly hold the view that this is one of the vital questions for the whole of the people of the country. It is one of the questions to which this, or any other Government, cannot give too much attention. It is a wise policy to encourage the production of much foodstuffs within our own country as we possibly can. At the same time, I would remind the Prime Minister that the situation is of such an abnormal character that the greatest care will require to be taken in dealing with the question. Beyond emphasising the importance of agriculture, very little light is thrown in the King's Speech on what the Government intend to do. Perhaps the Prime Minister, when he comes to reply, will let us know a little more precisely what the Government's intentions are. Do they intend to provide for security of tenure to the farmer, and, if so, is security of tenure for the workman's position also to be provided for? Is it the intention of the Government to make provision for the workman as well as for the farmer and the landowner? If it is the intention of the Prime Minister simply to provide security for one of the parties engaged in agriculture, then the measure cannot be expected to give satisfaction or to be supported whole-heartedly by members of the Labour Party.

There is one other point on this question I would like to put to the Prime Minister. Is the special arrangement for transporting agricultural produce of which we have heard so much, going to materialise. Is anything to be done by the Government with a view of providing the transport which I think is vital for encouraging the agricultural industry in this country? In the Gracious Speech from the Throne there are a number of questions to which no reference has been made. Nothing is said about the general question of transport. Nothing is said about the many disabilities under which the discharged and demobilised soldiers and sailors still live. There are a considerable number of other matters of which a lot has been made in the last two years, to which we have not even a passing reference in the Gracious Speech from the Throne. I think we are entitled to ask the Prime Minister, when he comes to reply, what are his intentions and the intentions of his Government with regard to these matters that are so vitally important to a large number of the people of this country. Up till now, I fear that the Government has been a Government of good intentions. We all know where good intentions land us. Our people have had a number of promises which are never redeemed, and I would ask the Prime Minister, in conclusion, whether It is his intention to go ahead even with the legislation mentioned in the King's Speech, and have it fully discussed and placed upon the Statute Book, or are we this Session simply to have a repetition of last Session, namely, that whenever a Bill proves unpopular with a section of the House it will be withdrawn? The Prime Minister has had some indications recently from the bye-elections that the country is tiring of that sort of thing. He might let the House know, when he comes to reply, whether he really intends to take a firm line, and to carry out the programme which is included in the Gracious Speech from the Throne!


I join in what my right hon. Friend has said in regard to the speeches which were made by the mover and seconder of the Address. My hon. and gallant Friend (Col. Peel) and myself are very old friends. I am certain that his fear, which he so modestly expressed, that the lustre of the great name which he bears might to some extent suffer from his effort was entirely dispelled by the exceedingly able, modest, and lucid speech which he made. Ho has shown us that heredity is in full evidence, so far as he is concerned, and I have every confidence that he will bear a part in the deliberations of this House worthy of the great name he bears. In regard to my hon. Friend the Seconder, he has only, I think, been a year in this House, but he has already got right down to the method of previous speeches here, and has shown already that he is likely to prove a worthy and most efficient member of this great assembly.

There is a very considerable change in the feeling of the country, and in this House, to that of a year ago. I would like to comment for a moment or two upon that. I think it is a quite familiar method of opening one's comments, and in approaching the programme of the Government. It is perfectly true that all Governments when they come into power very soon begin to spend their majority. Someone, I think, said it is no use belonging to a Government unless you can spend your majority like a gentleman. I think that was the phrase. But there has been no parallel to such an expressed lack of confidence, as shown by bye-elections, as has been the case during the past twelve months. [HON. MEMBERS: "No, no."] I think that is so.

Viscountess ASTOR

Hear, Hear! Plymouth!


There has been another very remarkable state of affairs. As Governments have proceeded there have been, from time to time, withdrawals from their ranks. So far, however, as I have been able to ascertain there never has been a case where one of the most prominent members of the Government put on the black cap and delivered sentence of death on his own Government while remaining a member of it. I do not know what the Prime Minister thinks of the articles which have appeared in the Press and they were, of course, considered opinions written by the Lord Chancellor. What did he say?


What did the ex-Lord Chancellor of the Liberal party say?


That comment would have had force if a Liberal Government were in office. What does the Lord Chancellor say: But they [certain considerations] cannot, in my judgment, be successfully urged by an invertebrate and undefined body such as the present Coalition. After consideration a fortnight later he delivered his further opinion. He repeats the word "invertebrate," and proceeds: It is ineffective in attack; it is unconvincing for the purposes of defence. It lets every ease go by default. I think there has been no parallel to such a statement as that made by a Minister who also remained a member of the Government. That opinion obviously must be shared by some of the Lord Chancellor's colleagues. The reason for this remarkable development on the part of the electorate, this significant statement by a Minister is that the time for the Coalition to end has come. [HON. MEMBERS: "No, no!"] I am expressing my opinion. The time, for Coalition has come to an end, and the time has arrived when its place should be taken by a newly-elected body, fresh from the electorate, who have expressed their opinion under fair conditions. Whatever the result of that election, when it comes, may be, I am certain it would carry an immensely greater body of moral authority, of whomever it might be composed, than the present Government has for dealing with the extraordinarily difficult problems we have to combat. Before I pass on to deal, as briefly as I can, with one or two points in the Gracious Speech, and to come to matters which are not mentioned, may I ask the Prime Minister, or the Leader of the House, if he takes part in the Debate, whether he can say, indeed I think it Is necessary that he should, something as to an early opportunity of dealing with a matter which is of immense importance to us, although it does not excite much interest outside. I refer to our rules of procedure and to a discussion on the experience which we gained during last session in respect to the rules adopted about a year ago.

I do not hesitate to affirm that the large expectations formed have been to a very great extent disappointed. The Committee work upstairs on great Bills has operated most unfairly on minorities. I agree it is a splendid machine which was set up last session for turning out Bills by the force of a great majority. Great majorities almost staffed the Committees, and the minorities were hopelessly out-weighted. But the majorities, as we know, have broken down. The whole of that machinery requires most careful revision. Legislation was turned out under these conditions, and had to be dealt with on the Report stage by men who either knew nothing at all about the subject, or were thoroughly tired out. I am certain of one thing, and I think the Leader of the House will agree, that in regard to the question of Supply upstairs the system has been an admitted failure: we must get back to our old procedure. Revision might take place as far as possible in accordance with the experience gathered, and such alterations as are desirable and necessary should be speedily made.

I should like first of all to deal with one of the gravest omissions from the Gracious Speech. On looking through it I find there is not a single reference made to the overmastering necessity for national and individual economy. I should have thought it would have been useful that the Speech from the Throne should contain an urgent appeal to the people of this country on this most important topic. I have read and listened to very interesting speeches on inflation and deflation of credit from wise and learned men who are masters of finance, and who have informed us of their views as to remedies. After all it comes down to perfect, simple, ordinary rules of individual honesty you can never get anywhere, or nearly right, till you see that you do not spend more than you get. I hope and believe that the Chancellor of the Exchequer this year will be able to show that his Budget balances. My right hon. Friend opposite indicates some agreement with that hope. It will be a very fine achievement for the Chancellor of the Exchequer to toll us this. It may be necessary to balance by raising large sums of money by taxation, and the more direct taxation the better. I hope that the realisation of war assets will not play a large part, for they ought to be undoubtedly devoted to a reduction of debt. Can anyone, however, who has been in this House during the last twelve months and listened to the debates, the speeches and appeals from time to time, doubt this fact; that the executive was grossly remiss in failing to grapple at the very beginning with the matter, after the Armistice, and damming up at once the extraordinary ruinous flow of public expenditure on unnecessary things? I should have thought that some reference might have been made to this matter. We all deplore individual extravagance. But wherever you go you find the statement made in reply to any remonstrance: let the Government begin. It is not a good reason, but it is the excuse for not cutting down individual extravagance. I will only say one sentence on this point; whatever may be the demerits, and I think they are great, of the Government, it is the duty of every individual in the State realising, as we all ought to do, the serious, nay, the dangerous position in which this country is, ruthlessly to cut down every item of unnecessary expenditure. In every corner of the country, in our great cities and small towns, this tide of thriftless extravagance has rolled along, bearing on its surface evidence of a decline of our national moral in this matter, which sooner or later, unless it is checked, must bring us to a position which even the greatest financiers will utterly fail to grapple with or deal with effectively. Reference has been made very naturally to the Peace Treaties, and very widely the opinion has been held that those treaties have broken down. The main purpose of the War, thank God, we achieved, that is, the breaking up of the militarist power of Germany, the restoration to France of her provinces, and many other less important positions were won, and I hope finally won for freedom and justice; but what we all hoped and longed for was that it should be a clean and just peace. There is rapidly accumulating evidence that in many most material respects those treaties fall short of that. I do not propose to deal with this question at any length, because an Amendment will be moved which I hope you, Mr. Speaker, will see fit to call on, in which we shall deal with that question in much greater detail. I will only add that the tripartite treaty is one which must be revised afresh and the whole ground opened for discussion, because one of the essentials of that treaty was the fact that when we agreed to it—

The PRIME MINISTER (Mr. Lloyd George)

The guarantee.


Yes, the guarantee was that the signature of the President of the United States would be appended to it, and that does not look as if it was going to be honoured—[HON. MEMBERS: "Yes"]—I hope I am wrong, but if it is not the case then this is the claim I make, that the whole of that question must be left absolutely open and as far as we are concerned we shall feel bound to treat it with a frank and open mind on the whole question. Passing on to one or two other points I should have thought that the Gracious Speech would have made some reference to the question of the lack of houses. As far as my own experience goes, and I have addressed a number of meetings, I say that the two factors of high prices and lack of houses are elements in the attack upon the Government by the electors, the force of which no man can really calculate, and this is more especially true in regard to housing. The revolt of the people of the country on this question may at any time be irritated by some comparatively minor thing. These big things often are the occasion for the starting of smaller things, and any other irritation which we do not at the moment anticipate may cause a blaze and produce a conflagration in this country. It is largely in consequence of this most serious state of affairs that I urge the Government with all my power, and with no party feeling, to take whatever steps they can as speedily as possible to deal with this question—[HON. MEMBERS: "Speak up!"]—I do not know what social conditions of unrest may arise, and I feel very doubtful as to whether the Executive, however composed, would be sufficiently strong to adeuately handle the situation.

On the question of Russia I will say this. I suppose if an amendment is introduced we might have a discussion about it. I only repeat that this subject dominates the whole Eastern position, and there is no part of the world so deeply interested in the condition of Russia as we are. We are a great Eastern Power and no other Power has such an interest in her commerce. The Russian position also overshadows Western Europe and the whole of the East. What is the use of hon. Members in this House or speakers and writers outside telling the Government that any attempt to deal with the Russian people, or whoever may represent them, is an immoral act fraught with a combination of all the excesses of Bolshevism? History teaches us that the Government are bound to act, as we did during the French Revolution, in accordance with the facts of the situation, no matter how disagreeable they may be. No nation can ever make war successfully upon opinion. It cannot be done. I hope the Prime Minister will be true to the position he took up many months ago, and, in spite of all the difficulties of the situation, see to it that the policy of the country is directed as speedily as possible to getting into touch with what authorities there may be in Russia or elsewhere. Wherever you can get hold of something tangible and responsive to any kind of reasonable treatment, such an opportunity should be taken to endeavour to bring this terrible position of affairs in Russia to an end.

Then there is the question of Home Rule for Ireland. I notice for the first time that the words "Home Rule Bill" appear in the Gracious Speech No man can dogmatise on the question. The sad annals of the past are without a parallel in their gravity and seriousness. I am clear at any rate about one thing. Never has it been demonstrated as it has been to-day so forcibly that force is no remedy. The present condition of things cannot continue. We have an army in Ireland which would even satisfy the Secretary of State for War on its professional side. I am sure he regrets its purpose, but on its professional side it is a machine which is competent to deal with armed forces in the field running into a couple of hundred thousand. How long is this to go on? Even my right hon. Friend the Member for Belfast (Sir E. Carson) agrees that it cannot go on. At what point does resolution cease and government begin? Ireland has to be governed sooner or later according to the principles of democracy.

I will say this about the position. A Bill has been foreshadowed in a speech made by the Prime Minister. The right hon. Gentleman who preceded me says that his fears are that in Ireland nobody will look at that measure I have not been to Ireland even on a short tour, but I will say that the only chance of making a start towards a better condition of things is to be so generous and broad-minded in the application of your remedy, no matter what it is, that you must and in the end will carry with you the opinion of reasonable men and women. That can cure it and nothing else. Accompanying that the Government must take risks by the withdrawal of their military forces. You must trust the people sooner or later. That is the only way, but we shall have another opportunity of dealing with this subject.

With regard to the passage of the Speech referring to the coal-mining industry, in reference to the acquisition of coal royalties, I do not see why the proposal of the Government should be limited to coal, and it should include all minerals. Perhaps this cannot be done in the same Bill but the whole question of minerals should be taken up by the State. On that question of course the whole community places first the safety of the men, and then their wages, hours, and general conditions should be of a character against which there could be no reason able challenge which could be maintained. After that I say that no matter what the interest may be, whether it is that of the coalowners or the miners, or whatever vast commercial interests are involved, the overmastering duty of this House in dealing with this and any similar question is to see that, given these conditions which I have endeavoured to lay down the interests of the community as a whole are dominant. I do not suppose that my right hon. Friend (Mr. Adamson) would dissent from that.

It has been left to me to deal with a very interesting paragraph in the gracious Speech referring to the question of drink. I am very glad to see that paragraph, because most of the references made in this House in the past 12 months to this tremendously important question have been far less in earnest than I should have liked them to be. America, they say, has gone dry. That is an economic factor of the most tremendous importance to this country. What have we been doing? I have here some figures which stagger me so much that I could not believe them if I did not know the source from which they come. [HON. MEMBERS: "Speak up!"] I am delighted to know that hon. Members are interested in this subject. In 1914 the public expenditure on drink was £164,500,000; in 1915 it rose to £182,000,000; in 1916 to £304,000,000; in 1917 to £259,000,000; and in 1918 it was again £259,000,000. The estimated figure for the year ending March 31st, 1920—I really feel that it cannot be correct, but it is given to me by the same authority—is nearly £400,000,000.


What is the duty?


I do not know what the public revenue was for 1920, but I can give it for the years 1915 to 1918. In 1915 it was £60,700,000; in 1916 £53,900,000—nearly £54,000,000; in 1917 it dropped to £34,500,000; and in 1918 it was £48,500,000. I suppose that the higher figure will produce a much higher result. Has any Chancellor of the Exchequer, in introducing his Budget and dealing with the revenue derived from intoxicating liquor, ever taken up any other position than that if he dared, or if he could, he would be glad to do without it? Mr. Gladstone, Sir Stafford Northcote, Sir William Harcourt, Sir Michael Hick-Beach, they all said the same thing—that it was revenue which they were glad to get, but which they would be much more pleased if they could do without. This expenditure on drink by the nation is of the deepest importance, and is no question for laughter or for light treatment. I am talking as an ordinary public man on a matter of grave and great importance, and I only hope that the measures—I do not know what they may be—to be introduced by the Government will make a serious attempt to grapple with this very grave position.

One word, in conclusion, on the question of the reform of the House of Lords. I do not know whether it is an indication that in the view of the Government they will not last longer than this Session, but, whatever it may be, I unhesitatingly ex press my conviction that a Second Chamber is a necessary part of good government in this country, and any proposals which will give another place greater moral authority in dealing with Bills far too hastily conceived and much too scantily discussed in this House, certainly would have my own personal support. I only lay down this point. So far as I am concerned, at any rate, I am not prepared in any degree to allow any change, so far as I can prevent it, which would take away from this House its control over Finance.

I was thankful to see in the gracious Speech, where it speaks of the work of reconstruction, a word about "goodwill for others." We cannot repair a broken world on the foundation of hate. We simply cannot do it, and, while I do not for one moment regret the weight of punishment which has fallen upon Germany for her deeds and for her preparations for those foul deeds, yet the only hope for a better world in the future is that we shall be better than our enemies. It is the only chance, and already I see signs of a better day breaking. The only way in which it can be accomplished is by a lofty spirit which will enable this country now and in the future, as, thank God, many a time in the past it has done, to rise superior to hate, bitterness, and enmity and to be true to its traditions of the past. I am certain, in spite of all that has been said against us, that we still hold a second claim to the moral leadership of the world. Let us not lose it.


I join with the two right hon. Gentlemen who have just addressed the House in felicitating my hon. Friends upon the admirable way in which they have discharged their function to-day. They have done it with tact, with discretion, and with ability. It is always a difficult task. My hon. Friend who opened the proceedings (Col. Peel) had an exceptionally difficult task, because he had great traditions to maintain, some of the greatest Parliamentary traditions that this House has ever witnessed, and I think we can say that in the Way in which he has discharged his duty to-day he has been worthy of the great name that he bears. They have both done their duty under the very trying conditions which are always imposed upon those who have that duty to perform, with very great judgment, discretion and skill.

On those occasions it is the duty of the Leader or the Leaders of the Opposition to ask questions and to suggest doubts. It is the duty of the spokesman of the Government to answer the questions and to dispel the doubts. That falls to my lot at the present moment. The questions have ranged over an infinite variety of topics, each one adequate to supply any speaker with sufficient material for a speech. Some of them I can dispose of, because they are the subjects of Amendments which are to be moved in the course of the next few days, and it would be folly for me to anticipate the observations which the spokesmen of the Government will make upon those topics. With regard to the Peace Treaty, to the nationalisation of mines, and to some other topic which was alluded to by one or other of my right hon. Friends, each of them, I think, is covered by an Amendment on the Notice Paper.

There is a second class of criticism which deals with matters to be covered by Bills to be introduced by Members of the Government. Questions have been addressed to me with regard to the character of those Bills, their scope, and, in some respects, their details. It would be very inadvisable for me to answer them; in fact, it would be contrary to precedent for me to do so until the Bills are introduced into this House. That is the moment when all these questions will be completely answered, and I have no doubt very satisfactorily answered. That applies to the questions put to me about agriculture by my right hon. Friend (Mr. Adamson), about drink put to me by my right hon. Friend who has just sat down (Sir D. Maclean), and about two or three other matters. I forgot what they were, but they all had reference to matters to be incorporated in Bills to be laid before the House. There are other questions which have been raised not included in either of those two categories. I am not quite sure that some of them are relevant. My right hon. Friend (Sir D. Maclean) entered into a disquisition upon by-elections. I should have thought, having regard to the by-elections of the last year or two, that he might have left that to his right hon. Friend (Mr. Adamson), the rival and more triumphant Leader of the Opposition.

Lieut.-Commander KENWORTHY

Like the Lord Chancellor.


I am coming to the Lord Chancellor. I could say a good deal upon this subject, and upon the proper occasion I shall do so. I am very tempted to point out to my right hon. Friend what they mean. They do not mean anything of which he and the section to which he belongs have much reason to be proud. They mean, as far as his section is concerned, that it has been forced into the third place.




Wherever there has been a conflict—

Lieut.-Commander KENWORTHY

Spen Valley.


But there are many others. I did not raise this subject. It has been raised in the sense of a challenge to the Government, but I should have thought that it was not for my right hon. Friend to raise it. There are divisions where my right hon. Friend's section could not even find an organisation to choose a candidate. That is the first time that has happened to the organisation—


Thanks to you.

6.0 P.M.


I am answering very fairly the challenge which has been thrown out to me. I am afraid that I can hardly expect courtesy from the hon. Gentleman, because he does not extend it even to his own leaders. But let me say a word upon that topic. I have heard speeches of that kind made with regard to many Governments. I have made them on appropriate occasions myself.


And will again.


And I daresay I shall be doing it again in the vicissitudes of a political life. No one expected that, after the excitement and the exaltation of a great war, there would be anything but a period of reaction, of discontent, of unrest and even of a certain measure of disaffection. Everyone know that prices would be high, that there would be difficulties about demobilisation and about employment, and everyone knew also that all those difficulties would be laid at the door of the Government, and that any Government that took charge of the situation after a great war had to get the time which the constitution allows it to work through its programme because of those difficulties.

The housing difficulty is not a difficulty created by the Government. Housing is a difficulty which cannot altogether be overcome by Governments. My right hon. Friend the Leader of the Labour Party asked what we were doing about demobilised soldiers, what we were doing about training, and what we were doing about land. I can tell him. We have already purchased 200,000 acres in England for the purpose of settling soldiers, but at the present moment he and those associated with him can do even more than Governments. There are hundreds of thousands of demobilised soldiers out of work at the present moment. That is not through lack of work. Has he read the reports of the difficulties of municipalities about housing? It is not because the houses are not needed; it is not because these municipalities are not prepared to build them; it is because they cannot get workmen, and, after an appeal made, it has been decided that trade union regulations cannot be suspended. What is the result? Although there are 350,000 soldiers anxious to work, willing to work, skilled enough to work, needed by the nation, needed by the workmen who help to build, these regulations are standing in the way. When regulations are suspended when the national need comes first, and when Governments and municipalities then fail, he can ask questions. But, meanwhile, I ask that question of the Leader of the Labour Party. I do not care what Government came in. Any Labour Government, or even my right hon. Friend (Sir D. Maclean) if he had been in, would have found all these difficulties awaiting him, and he would have found in the country unrest which always tells against the Government.

My right hon. Friend (Sir D. Maclean) quoted something which was said by the Lord Chancellor. I did not have the advantage of reading that, as I happened to be away at the time, but all I can say is that I think the quotation was simply pointing out the inevitable difficulties of working Coalitions. My right hon. Friend says, "Does not all this mean that the time has come for Coalitions to come to an end"? Those are not the symptoms. The symptoms, as far as I can see, are that there is a rival Coalition. In fact, so far from his getting rid of Coalitions, he had better prepare for the coming one. Does he really imagine that the most sanguine supporter of the section or party to which he belongs can ever hope to have sufficient strength in this House to govern except as part of a Coalition? I suggest to him that he should not prematurely denounce Coalitions. These things get in the OFFICIAL REPORT. One day somebody will get up to ask questions of him with quotations of what he once said across the floor of the House. These things are very inconvenient, and, as an old hand, I warn him not to denounce Coalitions. I know the difficulties as well as anybody. Most of us have been absorbed. The ordinary conflict of parties—that is what the Lord Chancellor referred to in one of his quotations—hardly exists. The party to which my right hon. Friend the leader of the Labour party belongs is organising well, efficiently, and with great skill throughout the country. There is no doubt about that. I believe the organisation of the party to which my right hon. Friend (Sir D. Maclean) belongs is also efficient. But the Members of the Government have been more absorbed in the ordinary tasks of administration and in the difficulties connected with making Peace than any Administration in my time. In the old days Ministers, as well as Leaders of the Opposition, took part in party conflicts and in organising party conflicts. We can do so no longer. There is no doubt at all that the Government are suffering from that, but, let my right hon. Friend believe me, that is temporary. Our time is coming, and I am longing for it.

My right hon. Friend asked, "Are we going to Lave a Session like the last one?" I hope so. You would imagine from what he said that it was a Session which consisted of a King's Speech with a glorious schedule of promises and no performances. If my right hon. Friend had been a Member of the House as long as some of us, he would have remembered the days of the "massacre of the innocents," when there was a long list of Bills at the beginning, and in the month of July, the Leader of the House got up, and solemnly sacrificed on the altar ninetenths of those poor children. It was an ordinary pagan ceremony in which everybody took part. There were very few last year. Never in the experience of any living Member, never in the records of any historian, have so many Bills of first-class importance and far-reaching character been carried through the House of Commons—not even under the Palmerston Administration. Let the right hon. Gentleman read the history of the Palmerston Administration. The Queen's Speeches always promised three Bills—one for the Representation of the People, the second for the Reform of the Bankruptcy Laws, and the third a Bill for improving the Registration of Titles to Land. They were promised every year regularly as long as Lord Palmerston was Prime Minister, but they were never carried. Some of them were not carried for thirty years after his death. Let my right hon. Friend read the King's Speech of last year, and let him candidly and honestly, as I know he will, read the list of Bills that were carried. It is one of the most marvellous achievements of any House of Commons.


May I suggest to the Prime Minister that he might think of the support those Bills are obtaining in the country.


I know. If the people who go down to the constituencies, and say that nothing has boon done, only took the trouble to attend the House of Commons they would know different. Then we should know what the country thinks about it. Is not this a justification? Here is the right hon. Gentleman the Leader of a Party, who never heard of these Bills until now. This is the first time he has ever been informed of them. We start instructing him, and through him the Labour Party throughout the country.

There is a very great programme of legislation this year. I hope the House will apply itself with the same industry, with the same courage and the same breadth as it showed last year. Its reward will come. I have no fear of the justice of the British jury when it judges upon the facts. First of all, let us get from this House the equipment and the power to do things. That is why we are trying to crowd these Bills into the first two years, so as to have the time to administer, to build, to construct, to develop. When the time comes we shall have achieved, not Bills, but something which the Bills have achieved. Then we will talk about by-elections; aye, and a General Election too!

I am afraid I am getting controversial, but it is no fault of my own, as my right hon. Friend started on that line, which is a dangerous thing. I started really in a very peaceful spirit. I come to the next topic—Ireland. My right hon. Friend (Mr. Adamson), who had a pleasant week or fortnight in Ireland, comes to us and tells us what he thinks about the Irish question. He says, "Your Bill is no good, nobody wants it." Does anybody want his Bill? He, and those who went there, came back and said that what you wanted was a Bill for the whole of Ireland. Was there a single Sinn Feiner who told him that they would accept his proposal? Not one! What is the use of talking about self-determination either here or outside if you do not mean it? By self-determination, do you mean that the moment the majority of the Irish people demand a Republic you are to grant it? You do not, and it is dishonest to suggest it. My right hon. Friends know as well as I do that you can propose nothing which, for the moment, will be acceptable to the majority in Ireland. It is purely a question, therefore, whether their proposals or ours are right and just. Take my right hon. Friend's proposals; he would force Ulster in. [Mr. Adamson dissented.] Yes, I take it that is so; but whether he would or would not, he spoke of a Parliament for the whole of Ireland. Does that mean that Ulster is to be forced against its will to go into a Parliament for the whole of Ireland? If so, the only difference between my right hon. Friend's proposal and mine is this: mine is repudiated by the Sinn Fein part of Ireland, while his will be repudiated by the whole of Ireland. That is what he calls "self-determination."

Then let us take the question of the condition of Ireland. What have you there? There are murders in Ireland, there are assassinations of a most cowardly and despicable character of men who are guilty of nothing but obeying orders. There could not be more contemptible crimes than the crimes perpetrated there. Are we to withdraw our troops? Are we to withdraw our protection? Are we to leave the assassins in charge? What is the proposal? For the moment, we are responsible for the government of Ireland. Is it suggested that we should, without setting up any alternative machinery, withdraw, and offer no protection to Ireland?

Lieut. - Commander KENWORTHY



That is the solitary answer, and it is worthy of the quarter from which it has come. I think I can fairly leave that there.

Take the subject of profiteering—another very important matter about which questions have been addressed to me. The right hon. Gentleman suggests that the high prices are due to the extortionate profits which have been made by wholesalers and retailers. But it is not even approximately that. I am not going to say there are no unfair profits. That is a matter which is being investigated very closely at the present moment, and my right hon. Friend (Sir A. Geddes) will be in a position to say something on that in the course of a few days. The real explanation of the high cost of living is the devaluation of money. You may put a percentage on to cost for profit, but it is only a percentage and not a considerable one. The real inflation of prices is due to the fact that money has not got the value which it had before the War. That is the fact not merely in this country, but in every country in the world, and it is right that the working classes of this country should know it. Anybody who says that high prices are due to profiteering either does not know the facts or is misleading the people. There is a good deal, no doubt, that can be done, but there is only one way in which prices can be reduced, and that is by increased production. There is no other way. We are paying in America, 5s. in the pound more for every article which we buy there,—that is apart from the markets in America itself.


Six shillings.


Yes, it comes to 6s. in the pound and more. That enormously enhances the price of every commodity. It is not due to profiteering. It is due to something much more fundamental, and you will never be able to put that right until you redress the balance between the markets. You can only do that by redressing the balance of trade, and you cannot do that without increased production. These are the things that, when time is given to us, will be explained to the working people of the country. Then they will assist us in getting at the real remedy, instead of seeking remedies which are delusive, and which, I venture to say, will lead to disappointment as far as they are concerned.

Then there is the question of economy. My right hon. Friend (Sir D. Maclean) advanced exactly the same arguments as he did some months ago. I do not think they profitted him very much then, and I should have thought the time he has had for reflection would have induced him to find some fresh arguments. But I can reassure him on one point. He wanted to know whether the Budget will balance? I am very pleased to tell him it will more than balance. That, I think, is the only question he put to me on that subject. We are all as alive as he is to the absolute need for economy in all the services. We have devoted a good deal of time and pressure in order to achieve that end. It is very difficult, after the enormous expenditure of a great war, in a very short time to compress a highly developed and inflated organisation which is essential for war, and to do it without some loss and some damage here and there. I have no doubt much more might have been done in the way of cutting down, but it is much more difficult than my right hon. Friend seems to imagine. We are achieving now the object we had in view. We are effecting the strictest and most relentless economy in every department of the State, and when our estimates come before the House, my right hon. Friends will find that the pressure which will come to us from that side will be not to cut down but to spend more.

I now come to another topic, and a very difficult one, one with which I have dealt in this House repeatedly. Questions have been put to me by both right hon. Gentlemen as to our policy in Russia. My right hon. Friend the leader of the Labour party wanted to know what we proposed to do in Russia—whether we proposed to open the ports, whether we proposed to remove the blockade, whether we proposed to make Peace, and whether all our forces are out of Russia. With regard to the last point, all our forces are out of Russia, except Batoum, and from there they are being rapidly withdrawn. There has been great pressure, not from General Denikin, but from the Independent Republics of Georgia and Azerbaigan, but we have come to the conclusion that we cannot continue the expense of maintaining several battalions there. They have therefore been withdrawn to Constantinople, where they are needed.

With regard to the whole question of our Russian policy I should like to say a few words to the House. When you come to decide a policy it is essential that you should recognise facts, whether they are palatable or not. Most failures, political or business, are due to the failure to recognise facts in time. What are the facts in regard to Russia? The first is one on which I am in complete agreement with both my right hon. Friends, as is, I have no doubt, everyone in this House, and that is that you cannot restore Europe without putting into circulation the resources of Russia, the strength of Russia, the wealth of Russia—everything in Russia, East and West, and if that could have been accomplished under some regime other than the Bolshevik, it would have been the view of America and it would have been the view of every democracy in the world.

The horrors of Bolshevism have revolted the consciences of mankind. The rapine and plunder which are essential parts of their policy are condemned by everyone in every civilised land. There was deep resentment in the Allied countries at the betrayal of Brest-Litosvk. There is the fact that Bolshevism is not democracy. It may be efficient, but it is not democracy. It is rule by a privileged minority. My right hon. Friend the last speaker said "you cannot make war on opinion" The first war on opinion was made by the Bolsheviks when they dissolved the National Assembly. There is no democracy in the world which would not have preferred, if Russia is to be restored, that it should have been restored under an anti-Bolshevist regime. That is the first point. Let me take another point. It is perfectly clear now to every unprejudiced observer that you cannot crush Bolshevism by force of arms. I was of that opinion, quite frankly, a year ago, and I never hesitated to express it. I then tendered advice based on that assumption to the warring factions in Russia. Unfortunately that advice was declined, I think by all sections. I think Bolshevik and anti-Bolshevik alike refused it. We were bound to give the anti-Bolsheviks their chance to recover Russia. That is my view. I am prepared to defend that if it be challenged. We were bound by considerations of honour because we called them into being for the purpose of arresting the German advance into the grain area, but they failed in their great attempt to recover Russia. There are still very large tracts of territory which are commanded by them, and I do not wish to say a word about those. There was no failure—I want everyone to realise this—from any lack of equipment. The failure was due to other causes more fundamental. I do not wish to enter into those, though I will if necessary.

What is the course now? Let the House of Commons examine the possible courses, and do it fearlessly. It is really no use playing with facts in a situation like this. The first is that you can re-start the blood and horror of civil war on its course right through the Cossack land and right through the Ukraine. But what is the chance of success? The Bolshevik armies are more formidable, they are more numerous, they are better equipped, they are better led, and they are better disciplined.


All from Germany.


That does not matter for my argument. That is the first fact. The second is this There is no doubt at all that for reasons into which I cannot enter now the Volunteer army, during its occupation of large tracts of Southern Russia, managed to alienate the populations. The third-and this is a very important fact—is that there is no doubt again that the Bolsheviks in their re-advance have learned a good deal from the blunders they committed the first time, and they are not repeating them to the same extent and alienating the populations. We could relight the fires of civil war. We could devastate Russia. We could leave Russia a blackened waste. There is plenty of material there, and there are plenty of conflicting forces to set civil war going there for a generation, but who benefits by it? You can convert Bolshevism into militarism. Is that what Europe wants? That would be inevitable. The military caste would get stronger and stronger, and get a firmer hold and secure supreme control of the country. Then you would indeed have a very formidable situation in Europe to deal with, as you had after the Jacobin revolution in France.

Take another suggestion which has been put forward—that you should organise an advancing ring of fire—Finland, the Baltic States, Poland, Rumania, Denikin's Forces and the Japanese—encircle Soviet Russia, and march right into it and scorch Bolshevism out. The first question I put there is this. Is there anyone here or anywhere else who will do it? Will Finland do it? General Mannerheim may be a very influential man, but he is not Finland. The Baltic States are making peace. Rumania has as much as she can do to watch her Hungarian frontier. The Japanese certainly will not advance. Therefore, when there is a suggestion that you should have a great combination marching into Russia, no man can say that any of these States are prepared to do it. What is the second answer I make to that? I cannot conceive any method which would more thoroughly arouse the patriotism of the Russian people, and range it so much on the side of authority as the advance of a number of foreign armies into Russia. The third answer I make is this. If you get gigantic armies—Fins, Esthonians, Letts, Lithuanians, Poles, Rumanians and Cossacks—waging war on Russia, who is to pay? Who will equip them? Who will maintain them? France will not. America will not. Italy will not. Is there any statesman who will accept the responsibility of putting the burden upon the taxpayers of this country?

There is a suggestion made from another quarter—"Make peace with the Bolsheviks."

Lieutenant-Commander KENWORTHY

Hear, hear.


At any rate, there is one supporter. The first objection to that is this. Until you receive assurances—I do not mean verbal assurances, but assurances from observation and experience—that the Government which is in control in Russia has dropped its methods of barbarism, and that it is governing by civilised means, there is no civilised community in the world which will be prepared to make direct peace. There is a second objection. There is no Government in Russia which can speak for any defined area. It is perfectly true that the Bolsheviks have overrun the Ukraine and parts of the Cossack land, but they have only been there a few weeks, and they have been there before. I do not say that General Denikin will drive them out, but no one can toll whether the Ukranians will tolerate them. No one can say whether the Cossacks will tolerate them in their country. They have not established the right to speak even for the whole of European Russia. Therefore, there is no Government that is entitled to speak for Russia as a whole at present. What is the only course left? We have failed to restore Russia to sanity by force. I believe we can save her by trade. Commerce has a sobering influence in its operations. The simple sums in addition and subtraction which it inculcates soon dispose of wild theories. The Russian with his head in the clouds finds he is cold, and discovers that he is not clad and that he is hungry. He has no machinery for his land, and although it has been given to him, he realises that he cannot plough his land with title deeds, even if they are written by the Soviet Government. He is short of locomotives, wagons and lorries for his business, and the whole of Europe is short of what he can give in return.

It may be said, "Unless you crush Bolshevism, Bolshevism will invade Poland and Central Europe and trample them down." Let us look at the facts. Russia has had five-and-half years of a terrible war. It has lost millions—probably as many millions in civil war as it did in the greater European War. Can Russia wage war outside its own territory? It has no transport. It has no adequate equipment. It has an adequate equipment to defeat the kind of armies against which it fights at the end of long lines of communication, but there is very little ammunition expended. There is very little heavy artillery used. There is nothing of the tremendous equipment and machinery which were necessary to force even a kilometre in the old conflicts in France. Russia could not, with the equipment at its disposal, organise an army which would be formidable in Western Europe. What is the other reason why I am not apprehensive of military invasion by the Bolsheviks? There is no adequate motive. What do I mean by that? What leads people to invade, in conditions like those in Russia, is, to put it quite frankly, plunder, that is, supplying themselves with something of which they stand in need. Where are the contiguous countries which can supply her with anything? Poland is short of all the things that Russia wants. Central Europe is starving. It is no use her breaking into Rumania. They have more in Russia than they have in the countries that adjoin it.


What about the Middle East?


I do not know what the hon. Gentleman means.


What about the Bolshevik activities in the Middle East?


I can deal with that. Even in regard to the Middle East there is at the present moment no force there that would be a formidable military force for invasion, and even if they invaded it there is nothing they would get. What would they get from the mountains of Armenia? They are starving there. Baku—they might get oil there, I agree, but that is another matter. That they could get by trade. They could get nothing in the mountains of Kurdistan. If they came to Mesopotamia, what could they get that the British do not take there? The same thing applies to Persia, and to all these places to which my hon. Friend refers. Let us look at the facts. It is no use preparing for dangers that are not imminent when there are so many dangers all around us that have to be prepared for. There will be no invasion unless—and I want to put this deliberately to the House—conditions were restored in Central Europe, and you had a prosperous Central Europe and the blockade were? continued for several years in Europe, and invasion were the only alternative to starvation. Then you would have invasion, but not until then.

Trade, in my opinion, will bring an end to the ferocity, the rapine, and the crudities of Bolshevism surer than any other method. Europe needs what Russia can give. I wonder whether hon. Members have supplied themselves with the figures of what Russia gave to the rest of Europe before the War. If so, the House will realise how the withdrawal of Russia from the supplying markets is contributing to high prices, high cost of living, and to scarcity and hunger. Russia supplied before the War one-fourth of the whole export wheat of the world—4,000,000 tons. Four-fifths of the flax—it is almost incredible—grown in the world was produced in Russia. About one-third of the total supply of imported butter to Great Britain came directly or indirectly from Russian sources. The grain and flour of Russia of all kinds, maize, barley, oats, &c. came to nearly 9,000,000 tons. The figures are prodigious in every direction. The world needs this supply. There are high prices in Britain, high prices in France, high prices in Italy, and there is stark hunger in Central Europe. The corn bins of Russia are bulging with grain. That is our report. You never can get all the facts. My right hon. Friend (Mr. Acland) seems to have other information, but that is my information.


Will you give the source of the report?


No. I am just taking the information given to us by the Russian co-operative societies upon the subject. If my right hon. Friend has other information, perhaps he will give it to the House or to me. We should be glad of it. I do not say that there is all this grain in Russia. Nobody quite knows what are the facts. All I can say is that our reports are that there is grain available in Russia if you can get the necessary transport organised to bring it out. Europe needs it. But you will not get it so long as contending armies roll across the borders. It is not a question of recognising the Government; it is a question of dealing with the people who have got commodities to sell and to exchange for what we can give them. When people are hungry, you cannot refuse to buy corn in Egypt because there is a Pharoah on the throne. The conditions in Europe are serious Hon. Members can see what use has been made of high prices. They have been used to stir up strife, suspicion and jealously of existing institutions throughout the land. The dangers are not in Russia, they are here at home. I speak with knowledge, with apprehension, and with responsibility, and I warn the House, in the face of things that may happen, that we must take every legitimate weapon to contend against these things. There is but one way—we must fight anarchy with abundance


Most of those who have viewed with great anxiety the events in Russia will have heard with relief and agreement the main outlines of the policy which my right hon. Friend has set forth. I earnestly hope that the Government, having adopted this policy, evidently after a very lucid review of the whole situation, will consistently and strictly adhere to it. A criticism that has sometimes made against the Government's Russian policy is that they have sometimes followed one policy and sometimes another, and that, therefore, they have failed to reap the advantage which they might have got if they had pursued one policy with consistency. I am in hopes that we shall avoid any further differences with regard to Russia for reasons so eloquently stated by the Prime Minister, and also because of the supreme importance of maintaining economy in this country. I was rather surprised and disappointed that in the gracious Speech from the Throne there was not a definite allusion to the importance of economy, and I was not reassured on this subject by the speeches of my light hon. Friends opposite or the speech of the Prime Minister in reference to the Bills that have to be passed this session. I do not much like to measure legislation by the cubic foot. That is not the standard of efficiency; but on both sides of the House it seems rather to be the standard. In my early experience—I de not know whether the Prime Minister will agree with me—I have noticed that a large number of Bills generally means a large amount of public expenditure. If you want to economise, generally speaking, the fewer Bills that are passed the better. If you are to deal with the great question of prices, there is nothing more important that the Government can do than to effect national economy. There is nothing so likely to end the great inflation of prices. As the Prime Minister has said, the greatest cause is the devaluation of money. I should like this question to be dealt with by the Government more drastically than hitherto, but it cannot be done without great financial embarrassment, unless you accompany it by a rigid system of national economy. Can you expect out of any of the Bills for social reconstruction of social reform, anything so valuable to the country as the deflation of prices, or the other fruits of national economy which might be obtained. It is not only this country that is affected. The Prime Minister spoke of the frightful distress that exists in other parts of Europe, and the suffering there.

7.0 P.M.

We have learned now, if never before, that the whole civilised world is one commercial community, and you cannot have extravagance in one place without the whole world suffering. It is an act of national selfishness, only to think of the conditions in out own country, where happily, we are comparatively prosperous. We ought to pursue a strict course of economy, because it is necessary for us, and also because without rigorous economy we cannot hope to give that assistance to the suffering parts of Europe that is needed How are we to achieve that? The Leader of the Liberal Party spoke of the waste which has taken place after the Armistice. We often hear talk of that kind and there is no doubt a great deal of truth in it, but do not let us suppose that we shall be able to carry on economy on a scale which will render the inflation of prices unless we cut down not only waste but reasonable useful expenditure which in itself is both reasonable and useful. It is a delusion to suppose that the administration of this country is wasteful on a scale that would enable you to make economies sufficient to affect the general prosperity of the country. It is not. If you believe, as I do, that there is nothing you can do better for the working classes of this country, and nothing that you can do better for the suffering multitudes abroad than by practising economy you will have to practice it on a scale which is sufficient for its purpose, and you must cut down even useful expenditure. When countries are in great difficulty, they have a moratorium for the payment of debt. I do not suggest anything so drastic as that, but might not you have a moratorium in regard to the expenditure of the country on civil affairs? There are many branches of social reform which are constantly developed. Education is one of the most valuable reforms. Might you not say that for five years we will have a moratorium and have no increased expenditure in any direction whatever, however useful, on schemes in the direction of social reform? You would do more to relieve the economic difficulties of the country and of Europe by that policy than by any other. Is that the policy which the Government propose? I view with a great deal of alarm the long list of Bills that has been announced, and which the Prime Minister flourishes in the face of his critics on the front opposition bench. The Secretary of State for War is putting forward a scheme for the territorial army. It is an excellent scheme but I am sure that it will cost money: such schemes invariably do. Could we not do without a territorial army for five or six years? I should have thought that we very well could.


It would cost us far more.


If the territorial army were to correspond with great reductions in the military expenditure that would be a good reason. I would like to take a standard year, whatever year you please of a considerable time past, and pass it under review, and I would like to go through the figures, item by item. I do not mean that it should be done by this House but that it should be done by the Treasury, and that we should take every item of expenditure which is now proposed and contrast it with the expenditure of the standard year, and show any expansion that has taken place over the standard year.

The SECRETARY of STATE for WAR (Mr. Churchill)

Making allowance for increase of prices.


Allowing for increased prices and higher wages in the Army and Navy and other departments, and any other increases that are due to a difference in the value of money. I am sure that you must do something drastic of the kind. The Chancellor of the Exchequer in discussing this last year said that it is foolish to suppose that there is any very great extravagance of expenditure on staff and he gave us some figures. I do not carry these figures in my head, but I do not think that that is an answer, because for every economy which you make by cutting down a staff directly other savings arise. If you hare a large number of active-minded public servants they will be always spending money one way or another. If you want to economise you will find that cutting down the number of public servants tells in two ways, directly by saving salary, and indirectly by preventing a large amount of expenditure which an able man is trying to make and will always want to incur. If you have an able man in the public service he always wants to spend money. His whole interest lies in more expenditure. The right hon. Member for Duncairn (Sir E. Carson) who has large experience of public service says that you would to considered no good if you did not spend.

I do urge that we ought to take up the question of economy as the first and greatest of social reforms and I hope that my right hon. Friends on both benches will not spend their time taunting one another about the number and complexities of the Government Bills. Let us realise that the first thing we have got to do is to economise, and that the second thing is to carry out any improvement that may be possible in the direction of social reform. I put on the paper last year a Draft Standing Order by which it was to be provided that no Bill should be read a second time until there had been laid before the House an estimate framed by the Treasury of the probable expenditure and probable additional taxation involved both immediately and ultimately. I believe that if such a Standing Order were passed it would be a very useful engine in producing economy. We have experience already of a very valuable rule of this House, that only the Government can propose expenditure. Everyone in the House knows how enormously that rule has operated in the direction of economy. I should like to take a further step in a similar direction and make the House aware before it gave its assent to any measure of the vital question of how much it was going to cost and make the House consider—can we justify this proposal not only on its merits but also in relation to the whole existing financial situation,

Before I sit down I would like to say one word about the Irish proposals of the Prime Minister. I quite agree with the Prime Minister that it, would be premature, and I believe that it would be out of order to discuss the actual proposals, but I do wish to impress upon the Government that it would be madness to impose upon Ireland a Bill against the wish of a majority of the Irish people. You cannot drench a population with self-government as you would drench a pig with medicine. The very idea of self-government—I think myself that it is a very bad phrase as I think Ireland has already self-governments—does not, suggest compulsion. You cannot oblige people to govern themselves. It is the very last thing you can do. Now it does seem to me that the criticism may fairly be made on the whole Irish policy of the Government that the two parts will not fit together. I quite agree with everything the Prime Minister said about it being an essential duty to suppress murder. The criticism is not that they are taking drastic measures to suppress murder but that they do not seem to be able to do it with the measures they take. If they were successful in punishing murder I should not be at all severe in inquiring by what methods they achieved that most essential need in any civilised community. But does the Prime Minister or anyone really suppose that, if they set up this system of local autonomy, you will make it easier to suppress the crime which you complain of in Ireland, or will make it easier to suppress the movement for an Irish Republic which is supposed to lie in some degree at any rate behind the murders? You can only I believe do that if the Irish people are consenting parties to the arrangement.

If it were true that the measure enjoys such a large measure of Irish support that it would be welcomed as a solution of the Irish problem it would be a very plausible argument that, Irish opinion being converted to support of the law, you would be able to put down murder and other crimes. But of course, unless there is such consent behind your scheme, you gain nothing. You merely set up a new form of government and then you are faced with exactly the same problems. Therefore I earnestly hope that whatever the precise proposals may be, they will be proposals which will be founded on some form of Irish consent. I should hope that they would not come into force unless they were accepted by the Irish people. I think that that would be very reasonable. But first of all I should like to throw on the Irish people the task of finding a solution of the Irish problem. I believe that that would be a better plan, because it is a delusion to think that all political problems are really soluble at all. It may be that there is no solution at all of the Irish problem. You cannot show whether there is or not. Above all you cannot convince great bodies of public opinion whether it is really accepted unless you have given the Irish people the opportunity of trying their hand at solving the problem. Therefore, personally, I think that the course should be adopted of convoking a public convention and allowing them to produce a Bill.


We tried that, and we discovered that the only people who mattered as far as public opinion in Ireland was concerned would not attend. The Sinn Feiners would not attend—and there were two or three other sections—and they will not do it now.


The convention I had in my mind was not the same sort of Convention as was convoked in 1917. The Convention which was then convoked was a Convention of nominees. I do not say it offensively. I think that the Government probably were quite right, in the conditions at the moment, so to limit it. It was not an elected body, elected by the consent of the people concerned.


It was by party.


It was not a Convention in the sense of a constituent assembly. What I would have would be a body elected by the parliamentary electors of the country under a system of proportional representation, which would be perhaps twice as numerous as the Irish representation of this House, and would then publicly debate the whole question, and the only limitation which I would put on their solution is this, that it should be a Bill, that it should not be merely a number of resolutions, sketching in outline, which always avoid all the really difficult points, but that it should be a Bill taking point by point and clause by clause, and propounding their solution. It may be, I daresay it would be, that they would propose an Irish republic. I think that the British people probably would not consent to an Irish republic. If so let us know where we stand. Moreover, the world would see what was the real temper of the Irish people, how far they were reasonable, and how far they were not, and, if the matter were so debated, nobody would blame the British Government for taking whatever course was necessary as far as possible to bring into proper condition the system of government in Ireland.

It is well known, of course, that the Northern States of the United States of America refused self-determination as we should now call it to the Southern States. It succeeded, but it succeeded because they were entirely and unitedly in earnest. It is not by any means impossible to insist on a negative resistance to particular demands and to impose it, but you can only do it when you are quite sure that you are right, and you have a unanimous consent. If an Irish Convention such as I have suggested failed, you would have that unanimous consent. If on the other hand you succeeded and a reasonable proposal were put forward so much the better. You would have solved the problem. Do not let us try to impose on Ireland something which the Irish people would not consent to. Mr. Gladstone made it a primary condition of his Home Rule Bills that they would satisfy the majority of the Irish people. If anyone looks into the debates on the Bills of 1886 or 1893, it will become clear that if Mr. Parnell's men, as they were then, had rejected the Home Rule Bill, the Bill would have been dropped within a month. It was an essential condition of Mr. Gladstone's Bill that they were accepted by the Irish people. It is not a policy I am in love with or believe in, but we have got the Home Rule Bill on the Statute Book, and with the great divisions of opinion in England, and with the opinions prevailing both in the Dominions of the Crown and the United States, it is necessary to face the difficulty of the Irish question and propose something that will satisfy the all-important bodies of opinion that are concerned. We can only do that by proceeding on the basis of Irish consent. We must not attempt to force on them a form of local autonomy which they denounce and reject.

The Prime Minister has made great play of the various inconsistencies of his opponents. What surprises all those who contemplate the Government is the equanimity with which its members look upon one another's weaknesses. My right hon. Friend tells us that he was always opposed to the policy of settling the Russian difficulty by force. He viewed it as an eccentricity of the Secretary of State for War, and so when the Lord Chancellor describes the Coalition, of which the right hon. Gentleman is the head, as invertebrate, the right hon. Gentleman is not surprised. He is not perturbed. He only wonders why the Lord Chancellor did say that all his supporters are so like earthworms. This throws ample light on the relations of Ministers one with another. But from the public point of view I think the country desires that the Government, whether in Russia or in Ireland or in respect of economy, should act on a principle of action and should rigorously adhere to it, that they should not yield an opportunist assent to pressure of this or that, but that having chosen their path they should rigorously pursue it, not varying their way once it has been chosen.


I notice in the Gracious Speech from the Throne mention of the adverse rate of exchange and its effect. I suppose it must refer to the American exchange in return for sterling value, and that being so I would like to offer a few observations as to how the matter appears to me. I expressed my view about a year ago, when making my first speech in this House. I then advocated that what is called the "peg" be taken out of the American exchange; in other words, that all artificial support should be taken from the American exchange, an artificial support which this Government was paying large sums to maintain. I could foresee that which has happened namely, that by taking out that peg a condition of affairs would result which would make the people of this country realise what the adverse total of trade between Britain and America would reach unless we removed the artificial stimulus to the export of American goods to Britain. I scarcely think that hon. Members realise that during the year 1919 the imports from the United States to Britain were worth £540,000,000, and that the United States bought from Britain only £33,000,000 worth. Had we left that peg in the exchange, the disparity between the imports from the States to this country and the exports from this country to the States would have been even larger than it is shown to be in those stupendous figures. I am very glad that I advocated taking out the peg, because otherwise the difficulty we would, have had to face now of paying the United States would have been greater than it actually is. People ask, Why have we this trouble with the States, and why has the value of the pound in the States so fallen? The answer is self-evident. We bought goods to the extent of £540,000,000 from the States, and sold to the States goods worth only £33,000,000. By taking the peg out and letting the exchange go down to the level justified by the real conditions, we are helping to remedy the trouble, and instead of having an artificial state of affairs of stimulated exports from the United States to Britain, and an artificial rate of exchange, we are now approaching, although with some economic pangs, a condition of honest and honourable equilibrium

It is true that the fall in the price of the sterling as expressed in dollars does burden the working man in this country, because it puts up the price of food, but on the other hand if the sterling exchange were worth more dollars it would stimulate imports from America to the disadvantage of the working man, and it would reduce his employment in this country. The position which now exists is this, that he has to pay larger sums for his food, but at the same time he has a larger British export trade which he is able to obtain, because this clog of the exchange is acting as a clog on imports from America, not only to the United Kingdom, but out into the export markets of the world. And we get that trade instead of the United States. A great number of the exports from America which come here are really not purchased by us at all; they are purchases made by Continental nations which, having obtained credit or by the sale of goods here, instead of buying goods here use those credits to purchase goods in America. By so doing they further deteriorate the value of the pound as expressed in dollars. I therefore put my formula in this way: that the bad exchange of sterling into dollars does not, per se, hurt Britain, except to some extent with regard to food (which is neutralised but by the increase of employment for the working man), but that it does hurt Europe. For the moment I do not propose to address myself in any way to the conditions into which the bad European and American exchanges bring the European nations, because I know that the high value of dollars and of sterling as against the Continental exchanges does push Europe further towards starvation and ruin; but that condition of affairs cannot be put right by an exchange credit or long credit. The only way to put it right in Europe is this: I am totally against giving Europe, whether it be France, Belgium, Montenegro, Serbia, Hungary or Germany—I am totally against giving them long credit. The only way to help these nations in their trouble, to get them working again with raw materials, is to send them large supplies of raw materials, allow them to manufacture that material into goods which the Allied signatory Powers can take and sell abroad, the Allies and America giving in payment to the starving European nations, not credit, but further raw materials and food in payment for the labour worked up into the raw materials we have sent them to earn money upon.

I pass from that. There are other matters which are operating in a similar way to injure the value of the pound sterling in America. I will give an instance of how sterling has to bear the burden from all quarters. For a great number of years it has been the habit of the Chinese traders in Southern Manchuria to use rouble notes for their transactions. The Bolsheviks have shaken the faith of the Chinese in Russian paper and they now refuse to take any of these rouble notes. What is the result? A great Chinese demand for silver as currency, and that demand made by a hundred million Chinese has necessarily put up the price of silver. There is also a growing demand for silver in India for rupees. Where do we get the silver? From America. We borrow money from America and take silver from the United States Treasury. Therefore, by a zig-zagging of cause and effect, running from Manchuria through London to New York, the exchange is affected in this country, and that in turn affects the price of every loaf of bread bought in this country. We meet other very curious things in regard to our exchanges. Last Session we had some very troublous debates about coal. We know that coal is short, that every ounce of it is of very great value at home and that bunkers can be charged for at the rate of £7 a ton, yet I noticed the other day that this country allowed consignments of coal to be sent to Bordeaux and that the ships which took out that coal brought back to this country, not commodities which we could sell, but champagne. I think the conduct of our export trade through the Board of Trade is coming to a very curious pitch when we are willing to allow coal to go out of this country and to be paid for with champagne instead of in French credits which we could use in payment to France or Italy or Roumania for maize, wheat, or raw silk, or olive oil or other re-saleable commodities. When I think about the trouble that we have in meeting our obligations to the United States in paying 5 per cent. interest on £800,000,000, I think that action is an example of this country doing what is foolish. I am not a teetotaller, neither am I talking of trade policy, but I am looking at the question only from the point of view of exchange. We bought last year from the various Western countries of Europe, £26,000,000 sterling worth of wines, champagne, port, sherry and brandy. That is, £26,000,000 worth of luxuries. If we had left undrawn in the form of wines those credits representing our sales amounts to £26,000,000 to the Western nations, such as Portugal or Spain, or France, we would at any rate have had something towards paying the £50,000,000 which we owe as interest to America on our £800,000,000 debt. It may be said that France could not have paid us for our coal had she not given us champagne. I should say, "Do not pay us now at all; leave the amount to stand to our credit." We could then buy wheat and maize in Roumania. Roumania wants silk and wearing apparel and machinery. We could take the maize from Roumania and could tell her that we had credits at the Rank of France, and we could tell her to take the money from the Bank of France, not necessarily in the form of champagne, but in the form of silk and wearing apparel, or other goods desired by Roumania. That would have avoided by so much our buying grain in America, and so it would have helped the exchange.


What has France to do with her champagne?


With every kind thought to France, that is not our affair. We say to France, "We will not take your champagne, but we will take your good word; we will accept the credit; your word is good enough for us." The argument which the hon. Member for Oldham (Mr. Denniss) uses reminds me that we used to read of boys who went to borrow money. They wanted, say, £100. They gave a bill for £200 and took £50 in money and the rest in bad champagne and cigars. Is that what we are to do in our National economics? If this country only realised it, it is by a triangular exchange that we could help to put matters right, and in this instance by as much corn as we took from Roumania we could reduce our purchases of corn in the United States, and by that much relieve the all-one-way pull on the American exchange. Although our exchange with America is very bad, although, as I see this month, our imports are £180,000,000, and our exports £130,000,000, the total may be said to be balanced by the value of our invisible exports, which I now believe are £50,000,000 a month. So that the first appearance of an equilibrium in our National balance sheet should make us take stock of our position full of hope and confidence But unfortunately we are not getting that 50 millions because we are giving long credits for our exports and are not yet receiving payments in goods or specie from abroad. Why do we want the exchange of sterling into dollars changed? Do we want it higher? If so the result will be that we will have American goods pouring into this country, and that will do a great deal of harm, and affect employment adversely. Do we wish it lower? If it were lower, that at any rate would injure our imports of corn and meat and such American food products as we buy, but it would keep out the American manufactured goods to which I have just drawn attention. There is a great deal of talk about the difficulties of the exchange, and people seem to meander about the question without making up their minds as to what figure they wish it to stand at. There is talk, for instance, of "stabilising" the exchange. Do you want to "stabilise" it at 3 dollars 60 or not? What people really mean is to raise the exchange to such a price that the pound will be worth the old sterling value of 4 dollars 86, and they propose various methods to achieve this. Why they wish it I fail to see. I do not care whether the pound is worth two dollars or five dollars, once we have paid off the £800 millions which we owe on behalf of the British Government. In the meantime, we hear men like Mr. Keynes talking about cancelling the debt of Britain to America and so on. On moral grounds I express no opinion beyond saying this, that many men in this country, and I believe in the United States, feel that since Britain rushed in at once on the outbreak of war to hold the outer trenches of civilisation, not only for Britain and her Allies, but eventually for America, and Britain lent large sums for the benefit directly or indirectly of America to her Allies before America came in, it is a questionable point whether America, in order to bear her fair share of the burden, should not, as a matter of honour, feel that she should lend her share of money to our Allies, and therefore should take the indebtedness which we hold from those Allies off our shoulders, and collect the money in due course from our Allies. If she does so, then by so much she will relieve the position because we shall not then be called on to pay interest on several hundreds of millions of debt to America which we incurred to help our Allies and from which America has benefited—and at our expense.

There are other proposals such as those which have been put round by Sir George Paish in which he talks about borrowing several thousands of millions. I think that is extremely mischievous, and I hope that the Government will take the earliest possible opportunity of disavowing this officious Sir George Paish and all his works. We hear also various expressions of opinion that we will never get the exchange right until we have got more gold, and get more gold out of America. America has now four or five hundred million pounds of gold, as against fifty or sixty millions before the war. You cannot obtain that gold from America by bludgeoning America; that is, of course, out of the question. The only way you can try to obtain it is honourably to get America to buy goods from you, and the only way is by having the exchange as it is now, so that a man in America can buy a ten-pound article in this country now for 36 dollars, instead of having to pay for a ten-pound article 48 dollars. If he can do that, because of the difference in the exchange, we may eventually get some of the United States' gold. I therefore say, if you want gold, the best thing to do is to let down the price of sterling in America, take away all artificial support, and let the exchange take its own course, as it is now doing. While I am thinking about the exchange question, I always keep in mind what I may call the leit motif of getting back the obligations of debt from America which we have deposited there, and once we get them back, it does not matter what the exchange is, as the merchants of this country will buy as it suits them, whether the exchange is two or five. The total purchases from America last year by Britain totalled 543 millious, of which 250 millions worth came from the United States in the form of foods, drink, and tobacco. We could, if we liked, dispense with those purchases. As the Prime Minister told us, we can get butter and wheat from Russia and wheat and meat from Australia and New Zealand, while there is an increasing amount of tobacco grown in the British Dominions. The result will be that after a certain period you will be able to say to America, "We do not need to pay those 250 millions," and by reducing the purchase of those foods and tobacco from America we shall by so much reduce the depression on the pound sterling. The curious effect of the depression of the value of the pound sterling is that the more you buy from America the worse the price you have to pay. It seems an absurd thing that while you pay so much each for 10 articles you pay more for 20 articles. For that reason, if America wishes to sell us an increasing amount of goods, it is her business to put the exchange right, and not ours.

Let me talk about raw material. There is, for instance, cotton, and the purchases from America are worth annually about 150 million pounds. When cotton gets too high, owing to exchange, it docs not pay our Manchester merchants and manufacturers to buy and they therefore ship the cotton back or refuse to pay the higher prices. The United States has got to sell the cotton somewhere, so she will have to pull down the price to meet the difficulty of sterling exchange reductions or keep the cotton. As the hon. Member for Oldham puts it the exchange has caused Americans to be unable to sell cotton to us, or it has the other effect that we have to send it back. We who look on these matters from the point of view of economists, have seen this same thing happening 500 years ago. Cotton is the basis of our most prosperous trade in this country. If that trade is prosperous we know that the rest of England is prosperous, and everything that injures the Manchester trade, injures the rest of England. This dearness of cotton will have this effect. Our exports of manufactured cotton goods help to pay for food which we get from abroad, and as it becomes so difficult to buy that food from America on account of raw cotton being so dear, Manchester men are looking around to sec where they can buy cheaper cotton in other parts of the world. The same thing happened in the middle ages. In the 14th and 15th centuries when an excessive price was being charged by Venice merchants to Bruges merchants for pepper which was then the medium of exchange and which was necessary for meat salted over the winter to make it palatable for use, the great traders in wool represented by the Fuggers of Augsberg and the Hanseatic League, and merchants of the Low Countries were faced with this question of dear pepper from Venice. So they sent men round the Cape of Good Hope to find other ways of obtaining pepper in order to supplant the Venetians. What was the result? Venice lost her commerce and the position of commercial supremacy which she had held for over 300 years. It was thus Vasco di Gama and Prince Henry the Navigator founded the Portuguese Colonial Empire.

The extra high price of American cotton is having the same effect. During the last two years, the cost of cotton has so exasperated the British buyers of raw cotton that they have set themselves to work in Egypt and in India to stimulate the growth of cotton, and during this year in India there is a production of 5½ million bales of cotton as against 2 millions before the war and 3 millions last year The same thing is happening in Egypt, where there are now a million extra acres ready to be planted with cotton. Cotton is not a profitable crop to grow as a rule, but the high prices at present are causing a great stimulus to production in the British Empire in places where we produced crops of a hitherto relatively higher value. Moreover this process of increasing British-grown cotton will render us less dependent on United States for raw cotton. A blessing in disguise. We have been too long dependent on United States for cotton. The growing domestic consumption of cotton in United States in any case demands that Lancashire should set about to find supplies elsewhere and the bad exchange is stimulating our search for these fresh sources of supply. When we hear a great deal said about helping this exchange because it is putting up the price of food in this country, I think we should remember that the Government is prepared to let corn come in from Russia and Roumania that would have the effect of reducing the cost of food exports from the United States and our indebtedness. To show how the present bad exchange in the United States is helping Britain, may I say that this very day, on account of this violent fall in the American exchange, so that 3 dollars 60 will buy what used to cost 4 dollars 80, I have had sent to me letters from three great American buying firms asking a firm with whom I am connected to quote for goods. This particular British industry is short of work; but, owing to the exchange being in favour of Britain, is having orders offered to it in this country for goods for the United States. I would not move hand or foot to raise the level of the American ex change. If it is put right, it will be for the benefit of the Americans and not for us. I think this country should realise that this outcry about the American exchange is not an outcry on the part of British manufacturers, exporters or merchants, but that it is an outcry of dismay on the part of American exporters. As we go along towards the rehabilitation of our trade foreign balances the Government should use our credits abroad skilfully. If a man wants a collection of prints or beautiful works of art he does not buy a collection all at once in a lump. He must use his judgment in picking up things. Speaking broadly, the British Government must be able in the course of the next two or three years to use the annual profit of two or three hundred millions sterling which we are making—and I believe this country will soon again make not less than two and perhaps four hundred millions a year sterling profit on its trade. A good portion of those profits in ordinary ways would be invested abroad. I know nothing about finance and speak only from the point of view of a manufacturer. Trade bills which from abroad give us rights to use credits in various parts of the world should be collected by the agents of the Government, our bankers and so on, and gradually shipped out to America, We may have to use Treasury Bills to pay for those credits. But on balance it will not add to our debt. Britain will use bills which represent credits outside Britain to take up in America the debt which we owe to America, and having transferred the debt to this country it will thus change the future holding of debt in Britain for one now held in the United States, and when that happens this country will have no need in any way to remit money from the British taxpayer to the United States in order to pay interest on British debt in the United States. When that happens, we shall henceforth have no concern with the American exchange, because if it does not pay a merchant or manufacturer to buy in America on account of the high or low exchange, he will not buy there. Therefore, I say the object of my addressing myself to this very dull subject tonight is to put forward this view, that the bad exchange of the sterling in America at the present time is on balance of no great concern to us except, as I say, that it does put up the price of food against the British working man but, on the other hand, it increases our export trade and wages, and the sooner that is realised the quicker we shall address ourselves to finding means of substituting British produced raw materials for foods and materials produced in the United States and at the same time realise that it is an utter waste of time to talk about putting the exchange right, because to bring it up from what it now is to 4.86 dollars would only cause a further increase of Britain's debt to America and would injure the production of manufactured goods in this country for the benefit of American workmen. An Argentine dollar will only buy a dollar's worth of goods in New York, but with the exchange of £1 equalling 14s. an Argentine dollar buys 6s. worth of British goods. And so the world over where the United States seeks to export. This low exchange, in a word, shuts America out of the export markets of the world, and is a bounty on British exports to the whole world, America included.

Motion made, and Question, "That the debate be now adjourned," put, and agreed to.—[Mr. T. Griffiths.]

Debate to be resumed To-morrow.

ADJOURNMENT.—Resolved. "That this House do now adjourn"—[Lord E. Talbot.]

Adjourned accordingly, at Eleven minutes before Eight o'clock.