Commons Sitting of 5 July 1920

Preamble
The House met at a quarter before Three of the Clock.
The CLERK AT THE TABLE (Sir Courtenay Ilbert) informed the House of the unavoidable absence of Mr. SPEAKER from this day's Sitting.
Whereupon Mr. WHITLEY, the Chairman of Ways and Means, proceeded to the Table, and, after Prayers, took the Chair as Deputy-Speaker, pursuant to the Standing Order.

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),—Mr. DEPUTY-SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, and which are applicable thereto, have been complied with, namely:
Port of London Authority (Consolidation) Bill [Lords].
Exmouth Urban District Council Bill [Lords].
Ordered, That the Bills be read a Second time.
Croydon Corporation Bill [Lords],
As amended, considered; to be read the Third time.
Gelligaer Urban District Council Bill [Lords],
As amended, considered; Amendments made; Bill to be read the Third time.
Newport Corporation Bill [Lords],
As amended, considered; to be read the Third time.
Londonderry Bridge Commissioners Bill [Lords],
Read a Second time, and committed.
Manchester Ship Canal Bill [Lords],
To be read a Second time To-morrow.
Merthyr Tydfil Corporation Bill [Lords],
Salford Corporation Bill [Lords],
Read a Second time, and committed.
Bootle Corporation Bill [Lords] (by Order),
Consideration, as amended, deferred till Thursday.
Ministry of Health Provisional Orders (No. 6) Bill,
Ministry of Health Provisional Orders (No. 7) Bill,
Read the Third time, and passed.

ORAL ANSWERS TO QUESTIONS.
  COAL PRODUCTION.

    EXPORTS.
    1. Lieut. - Commander KENWORTHYasked the President of the Board of Trade whether he can make any statement with regard to the export of coal from the Humber district; whether he is aware of the distress caused by the continued embargo; and is he can state when some share of the coal for export will be allotted to the Humber ports.
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Bridge-man): The Committee referred to in the answer given by the Prime Minister to the hon. and gallant Member for the S.W. Division of Hull on the 8th June sat at Hull on Wednesday and Thursday, the 23rd and 24th June, and received deputations during those two days from all the interests affected. The Committee are now considering the question in the light of the statements made by the various deputations; and they will report as soon as practicable. I am unable to anticipate the contents of their Report.
    Lieut. - Commander KENWORTHY: Can the hon. Gentleman say when the Committee expects to report, and when he expects to come to some decision of this urgent matter?
    Mr. BRIDGEMAN: I am afraid I do not know.
    14. Captain TUDOR-REESasked the President of the Board of Trade whether he is aware that the Joint Committee of the Cardiff branches of the National Union of Railwaymen, representing 6,000 railwaymen, have passed a resolution protesting against the Order restricting the export of coal, and putting on record that in their opinion the restrictions will prove disastrous to trade and cause widespread unemployment; whether he is aware that in consequence of the Order hundreds of ships are lying idle in the Bristol Channel for lack of cargoes; that thousands of trucks are standing full of coal in the South Wales area and elsewhere; and that the Order is most seriously affecting the export trade; and whether he can now consider the revocation of it?
    Mr. BRIDGEMAN: My attention has been called to the resolution mentioned. As I informed the hon. and gallant Member on the 16th June, the Government policy concerning the export of coal was adopted after careful consideration of all the circumstances, and no alteration in that policy can be agreed to at present. I am informed that in the last three weeks the number of shifts per week lost in the South Wales coalfield from all causes is very considerably less than the average number of shifts lost per week during recent months when exports were much higher. This goes to show the present arrangement has worked satisfactorily.
    Captain TUDOR-REES: What results are intended to be secured by curtailing the export of coal to foreign countries?
    Mr. BRIDGEMAN: The result intended to he secured is that the home market will be supplied with all the coal we want before we allow any more to be exported.
    Captain TUDOR-REES: Is the hon. Gentleman aware that there is a glut in coal already?
    The PRESIDENT of the BOARD of TRADE (Sir Robert Horne): I am not aware of that.
    Major MORGAN: Is the right hon. Gentleman aware that in the Swansea district and Cardiff they have refused to handle this coal because their storage is more than full and wagons to the extent of 20,000 tons have been waiting since last Friday for cartage in the Cardiff district?
    Mr. BRIDGEMAN: I am not aware whether those statements are correct, but we are watching the whole position.
    Major MORGAN: Has the hon. Gentleman made any inquiries with regard to Swansea?
    Mr. BRIDGEMAN: Yes, and it is owing to those inquiries that I have been able to say that there are less men out of work than usual.

  PEACE TREATIES.

    DEBTOR CLEARING HOUSE.
    2. Sir ROBERT NEWMANasked the President of the Board of Trade what steps have been taken to hasten the activities of the Clearing House for Enemy Debts at Cornwall House now that the German clearing house has been at work for a number of weeks past; and whether he can name an approximate date upon which the British clearing house will begin to disburse to British creditors that which is due to them by German debtors, in accordance with the terms of the Peace Treaty?
    Sir R. HORNE: Under the provisions of the Treaty the debtor clearing office is allowed three months within which to deal with a claim from the date of notification to it. British claims to the number of 34,806 were lodged with the German clearing office in Berlin on the 15th May, within a few days of its establishment, and a further batch of over 10,000 will be despatched next week. Debts will be paid by the British clearing office upon the receipt of notification of their admission by the German office. I am satisfied that there will be no avoidable delay at the British clearing office in making payment of debts owing to British creditors, as soon as the necessary notification has been received.

    SPA CONFERENCE.
    42. Lord ROBERT CECILasked the Prime Minister whether the Polish Government have been invited, or are going to be invited, to attend the Spa Conference; and, if so, what are the subjects which they are to be asked to discuss, and will the Lithuanian and other Baltic Governments be also asked to attend?
    Mr. BONAR LAW (Leader of the House): The issue of invitations to the Spa

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    Conference rests with the Belgian Government, subject to the expressed desire of the Allies. I understand that if any question affecting Poland arises, it is probable that the Polish and other Governments concerned will be asked to send representatives, but this depends on the agenda, which will be decided by the Conference itself.
    Lord R. CECIL: Can the right hon. Gentleman say whether in point of fact the Polish Government have been invited, and, if so, whether he will suggest to our representatives that it would be very unfair for the Polish Government to be there unless the Lithuanian Government were there also?
    Lieut. - Commander KENWORTHY: And the Russian Government?
    Mr. BONAR LAW: I asked that question, and was told that they had not been specially invited.

    TESCHEN.
    43. Lord R. CECILasked the Prime Minister what is the position of the negotiations between Poland and CzechoSlovakia as to Teschen; and what is the policy of the Government on the subject?
    Mr. BONAR LAW: I understand that such conversations as have taken place between the Czechs and the Poles on this matter have not led to any satisfactory solution. The Conference of Ambassadors have meanwhile addressed to the two Governments a formal invitation to submit the matter to arbitration. The subsequent attitude of His Majesty's Government must of necessity depend on the nature of the replies returned to their invitation.
    Lord R. CECIL: As no replies have been returned, can the right hon. Gentleman say when the invitation was sent by the Ambassadors?
    Mr. BONAR LAW: Within the last week or ten days. I cannot say more than that.
    Sir H. BRITTAIN: Has the idea of a plebiscite been definitely abandoned?

    EX-KAISER (TRIAL).
    48. Captain TUDOR-REESasked the Prime Minister whether, in view of the fact that the Dutch Government refuse to surrender the ex-Kaiser for trial, he
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    will, in concert with our Allies, endeavour to have an Allied Court set up in Holland for the purpose of such trial?
    Mr. BONAR LAW: My hon. and gallant Friend's suggestion is, I fear, impracticable.

    CHINESE ASTRONOMICAL INSTRUMENTS.
    75. Mr. STEWARTasked the Under-Secretary for Foreign Affairs whether one of the stipulations of the Treaty of Peace was that the bronze astronomical instruments taken by the Germans from Peking after the Boxer rebellion should be restored to China; if so, whether this restoration has been carried out; and, if the restoration has not been effected, will the British Government use its influence to ensure the due carrying out of this provision of the Treaty, which would be much valued by our Chinese ally?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth): The restoration of these instruments is provided for by Article 131 of the Treaty of Versailles. I have no information that the restoration has been carried out, and as China has not signed the Treaty it is difficult to see how His Majesty's Government can take any action in the sense indicated in the last part of this question.
    Mr. STEWART: Is it possible for us to use our influence to get these instruments removed to some neutral country, so that they can be in safe keeping?
    Mr. HARMSWORTH: That is being considered.
    Sir J. D. REES: Is is not a fact that these instruments are of great beauty and historic interest, and could they not be restored to the walls of Peking where they had been for centuries?
    Mr. HARMSWORTH: That is so, but it is very difficult for His Majesty's Government to interfere in this particular instance.

    BELL SPINNING COMPANY.
    3. Mr. WATERSONasked the President of the Board of Trade whether any investigation has taken place into the profits made by the Bell Spinning Company, as promised on 10th May last; and, if so, can he now state the decision?
    Sir R. HORNE: I would refer the hon. Member to the reply given to the hon. Member for Brighton on the 21st June. The investigation to which I then referred is not yet completed.
    Mr. WATERSON: When may we expect the completion of this Report?
    Sir R. HORNE: I have been doing what I can to get it as soon as possible, but I cannot say definitely.
    Mr. WATERSON: Will the right hon. Gentleman accelerate it?
    Sir R. HORNE: I am willing to do anything in my power towards that end.

    COMBUSTION ENGINES (FUEL).
    4. Commander Viscount CURZONasked the President of the Board of Trade what is the present position with regard to the import of fuel for internal combustion engines from all sources; and if there is reason to fear a very serious shortage of such fuel in the near future?
    Sir R. HORNE: Imports of petrol appear to be substantially maintained, and I see no reason to anticipate a shortage in the immediate future.
    Sir H. BRITTAIN: Is the right hon. Gentleman aware that out of 145 oil concerns in America, no fewer than 125 are unable to obtain any oil whatsoever?
    Sir R. HORNE: I am not aware of those facts.

  TRADE AND COMMERCE.

    PIG-IRON (SCOTLAND).
    6. Mr. MURRAY MACDONALDasked the President of the Board of Trade whether he is aware that the crisis due to the shortage of foundry pig-iron in Scotland still continues, and in an aggravated form; that, notwithstanding the steps now being taken, the quantity of English pig-iron available for Scotland has since been materially reduced, instead of being increased; that the Scottish iron founders are being forced to place contracts for American pig-iron at a cost almost 50 per cent. more than that of English pig-iron; and, if so, whether he can indicate what further steps will be taken to secure an increase in the output
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    of foundry pig-iron from the English blast furnaces?
    Sir R. HORNE: I am aware of the general conditions indicated in the question, which are causing me serious concern. I have met the iron founders and the ironmasters in conference, and am satisfied that the latter are doing all in their power, by restriction on export and by increased production, to meet domestic requirements, but they are encountering serious difficulties, which can only be overcome gradually.
    Mr. G. TERRELL: Will the right hon. Gentleman state what were the difficulties?
    Sir R. HORNE: They arose out of a number of causes.

    OVERSEAS TRADE (EXCESS PROFITS DUTY).
    7. Mr. ALFRED T. DAVIESasked the President of the Board of Trade whether he has definite information to the effect that the Excess Profits Duty is preventing the quotation of prices by British manufacturers and traders to overseas customers and is preventing the stability and progress of British trade?
    Sir R. HORNE: The answer is in the negative.
    Captain TERRELL: Is it true that the increase in Excess Profits Duty has caused a general slump in trade throughout the whole of the country?
    Sir R. HORNE: I have no doubt that is the hon. Member's opinion.

    FARRIERS AND IRON MERCHANTS' COMBINE.
    11. Mr. PRESTONasked the President of the Board of Trade if he is aware that the Combine of Farriers and Iron Merchants, whose activities were reported on by the Farriery Sub-Committee, are now refusing to supply iron and nails to farriers who will not join their association; that as a consequence farriers, who must have their raw material, are being forced to join the association and, on joining, are ordered to at once advance their price 25 per cent. to the standard pool price; and what action he proposes to take to protect the consumer?
    Sir H. HORNE: I was not aware of the matters alleged in the question, except in so far as they appear in the report referred to by my hon. Friend. I

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    am advised that in the present state of the law it is not possible for the Board of Trade to take any action, but the question will not be lost sight of when legislation of a permanent nature dealing with monopolies and combinations is under consideration.
    Mr. PRESTON: Has the Board of Trade not pledged itself to do what they can to stop profiteering, and is there not here a primâ facie case of profiteering?
    Sir R. HORNE: The question of profiteering is dealt with by the Central Profiteering Committee, but this raises a much larger question.
    Mr. PRESTON: If I furnish the right hon. Gentleman with the particulars of this case will he take action in regard to it?
    Sir R. HORNE: I will promise to consider it.
    Colonel WEDGWOOD: Is the free importation of nails allowed or is it still under licence?
    Sir R. HORNE: I do not think, speaking from memory, that there are any restrictions on the importation of nails.

    SILK AND CRÊPE GOODS (FRENCH EMBARGO).
    13. Captain MARTINasked the President of the Board of Trade if he has received any reply to his representations regarding the decree of the French Government prohibiting the importation of British silk goods into France; whether he is aware that serious hardship is being inflicted on over 1,300 workpeople in Great Yarmouth, Norwich, Braintree, Halstead, Frome, and Bocking, including ex-soldiers; and if he is aware that, unless concessions are made promptly, the old British industry of the manufacture of mourning crépe, which can scarcely be called a luxury, and which is practically the only silk fabric imported into France, is not only threatened with a temporary stoppage, but with permanent extinction?
    12. Sir FORTESCUE FLANNERYasked the President of the Board of Trade if he can yet state the progress made with the negotiations between the British and French Governments as to reciprocity in duties on the import and export of silk crépe, with a view to prevent
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    further damage to the crépe manufacture in Braintree and other British towns?
    Sir R. HORNE: No official reply has yet been received from the French Government to the representations which have been made to them in favour of the withdrawal of the import prohibition in respect of silk mourning crépe, but as I stated in reply to a question put by the hon. Member for Frome on the 28th June, I have been given reason to hope that silk mourning crépe will not be included in the revised list of prohibited goods which the French Government are about to issue. I am fully alive to the very serious effect which the maintenance of the prohibition would have on this important branch of the British silk manufacturing industry.
    Sir J. D. REES: Would it not be possible to have a little deal as between silk and champagne?

    ASIA MINOR (EXPORTS).
    38. Mr. AUBREY HERBERTasked the Prime Minister whether it is owing to the decisions of the Supreme Council that there is war in Asia Minor and that, consequently, hardly any corn or foodstuffs have been exported during 1919 for consumption in this country and that exports have ceased in 1920; and if this has added to the cost of living in Great Britain?
    Mr. BRIDGEMAN: In the last calendar year before the War, 1913, the imports into this country from Turkey in Asia (including Asia Minor) in the class of food, drink and tobacco were, by weight, 1·1 per cent. of our total imports of foodstuffs. In 1919 our imports of foodstuffs from Turkey in Asia were 0·5 per cent. of our total imports of foodstuffs. A prohibition of the exportation of foodstuffs from Smyrna has been put into force, and there have been no imports of these commodities during the present year. My right hon. Friend does not consider that the cessation of these imports from Turkey in Asia has had any appreciable effect on the cost of living in the United Kingdom. It cannot be assumed that there would have been a normal export in the absence of disturbance. My right hon. Friend does not agree with the suggestion of my hon. Friend as to the cause of the war in Asia Minor.

    BRITISH MERCHANTS' STOCKS (RHINELAND).
    84. Mr. RAPERasked whether it is proposed to take any steps for the protection of British merchants' stocks which are being confiscated in the Rhineland by the German authorities without recompense for payment?
    Mr. BRIDGEMAN: No reply has yet been received to the representations of the British Government upon this subject.
    Mr. RAPER: How long ago were these representations made?
    Mr. BRIDGEMAN: I cannot say direct, but I will find out.

  TRANSPORT.

    TRAMWAY FARES (INCREASE).
    15. Major PRESCOTTasked the Minister of Transport whether he is aware that the Metropolitan Electric Tramways Company, Limited, recently approached the Middlesex county council to approve the company's application to the Ministry for the issue of an interim order authorising an increase in tramway fares by 50 per cent. under the provisions of the Tramways (Temporary Increase of Charges) Act, 1920; that the details of the increased fares have not been agreed between the company and the county council; that the revised charges on some of the stages between Finsbury Park and Edmonton represent an increase of 100 per cent.; and if he will state what action he proposes to take in the matter, and give some explanation as to why the Ministry sanctioned a 50 per cent. increase without the concurrence of the Middlesex county council?
    The MINISTER of TRANSPORT (Sir Eric Geddes): I would refer the hon. Member to the reply given to the hon. and gallant Member for Finchley on the 1st instant. The Interim Order has been referred to the Tramways Charges Advisory Committee set up under the terms of the Tramways (Temporary Increase of Charges) Act, 1920, and the representations made by local authorities have also been referred to the Committee.

    LONDON TRAFFIC (COMMITTEE).
    16. Viscount CURZONasked the Minister of Transport what has so far been done by the Ministry to carry out the recommendations of the Committee on London Traffic?
    Sir E. GEDDES: I would refer my Noble Friend to the reply which was given to the hon. Member for Hornsey on the 24th June.
    Viscount CURZON: Has the right hon. Gentleman nothing to add to that?
    Sir E. GEDDES: Nothing.

    TAXI-CABS.
    17. Viscount CURZONasked the Minister of Transport whether anything can be done to lessen the number of taxicabs crawling for hire along the principal streets and through the points of greatest traffic congestion during certain hours, in view of the danger thereby caused and the obstruction to traffic created.
    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Sir John Baird): My right hon. Friend has asked me to reply to this Question. With regard to the general subject of crawling cabs, I would refer the noble Lord to the Report of the Select Committee of 1906. Legislation would be necessary to deal with the subject, and the Committee declined to recommend legislation. The Commissioner reports that he has no information before him to suggest that the nuisance is now of serious dimensions or indeed amounts to anything like what it did in the days of the horse cabs.
    Viscount CURZON: Did the Committee on London traffic make any recommendation on the point?
    Sir J. BAIRD: I cannot say without notice.

    SEASON TICKETS.
    18. Mr. HURDasked the Minister of Transport whether it is intended to raise the passenger fares of season-ticket holders on the railways and, if so, when and by how much; and whether, in making any change, account will be taken of the fact that season-tickets available for distances in excess of 12 miles have already been increased in price by 20 per cent.?
    Sir E. GEDDES: The question of the fares chargeable to season-ticket holders on the railways has been referred, according to Statute, to the Rates Advisory Committee, and, until their report is received, I am not in a position to give a definite reply to the first part of this question; as regards the second part, the Committee will no doubt take into account the increases which have already been made.
    Mr. HURD: Will the right hon. Gentleman call the special attention of the Committee to the specific point raised in the second part of my question?
    Sir E. GEDDES: Certainly.

    BRITISH REPRESENTATIVES, BRUSSELS (SPECIAL FACILITIES).
    20. Lieut.-Colonel GUINNESSasked the Minister of Transport what was the cost of the special train and steamer which were provided to take the Prime Minister and other British representatives to the Continent for the Conference at Brussels?
    Sir E. GEDDES: The railway company report that a special train was provided at the ordinary charge of 10s. per mile (£38), plus fares for passengers travelling between Victoria and Dover. The steamer, I understand, was provided by the Belgian Government.
    Lieut.-Colonel GUINNESS: Will any charge be made for the steamers?
    Sir E. GEDDES: I have no knowledge of that.
    Lieut.-Colonel GUINNESS: In view of the excellent double daily service which runs to Ostend, does the right hon. Gentleman consider it economic for a party of 50 persons to have a steamer to themselves?
    Sir E. GEDDES: I have nothing to do with that.

    TRAIN SERVICE, NEWMARKET.
    21. Lieut.-Colonel GUINNESSasked the Minister of Transport whether he is aware of the great inconvenience caused to the inhabitants of Newmarket by the lack of any train running from London later than 7.2 p.m.; and whether he will arrange to run a local train to Newmarket in connection with the 8.22 p.m. train from Liverpool Street to Cambridge?
    Sir E. GEDDES: I am informed by the Great Eastern Railway Company that, commencing on Monday, the 12th July, a local train will leave Cambridge for Newmarket at 10.30 p.m. running in connection with the 8.22 p.m. train from Liverpool Street.

    BRANCH LINES.
    23 & 24. Sir H. BRITTAINasked the Minister of Transport, (1) whether he is able to inform the House as to the various branch lines in England and Wales which have been worked at a loss for the first three months of the current year, giving the locality of such branch lines, together with their respective deficits;
    (2) whether during the forthcoming winter months he can see his way to closing Sunday traffic, from the point of view of saving expenses, on the minor branch lines which are being worked at a deficit?
    Sir E. GEDDES: The railway companies do not maintain separate record of the results of working each section of their line, and the information for which the hon. Member asks is not available. In regard to his suggestion for a curtailment of facilities for travelling on Sundays, it is the general policy of the railways not to keep lines open on Sundays unnecessarily, but they must consider the convenience of the public.
    Sir H. BRITTAIN: Is it not rather difficult to know which branch lines can be kept open if no statistics of their working are available? Further, if the Ministry is to co-ordinate road and railway transport, instead of running half-empty trains, would not one or two motors run between particular points be equally convenient and save considerable expense?
    Sir E. GEDDES: The amount of statistics which it is possible to keep is limited by the amount of money we feel we can spend on that work, and also by the carrying capacity of the railways.

    CHEAP FARE FACILITIES.
    65. Mr. GILBERTasked the Minister of Transport whether his attention has been drawn to the proposal that the railway companies should grant special cheap fare facilities during the slack hours and days of traffic during each week; whether this proposal has been considered by all

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    or any of the companies, or by his Department; and, if not, will he ask the companies to do so in view of the great demand for cheaper tickets for families and children during the holiday season?
    Sir ERIC GEDDES: I would refer the hon. Member to the reply to the hon. Member for Wood Green on the 7th June. The matter is under consideration in conjunction with the railway companies.

    PILFERING ON RAILWAYS.
    66. Mr. GILBERTasked the Minister of Transport whether pilferage on goods in transit on railway companies has increased during the last year; whether this is largely due to want of a proper police force; whether the railway companies have not yet adopted the pay and conditions recommended for the police by the Des-borough Committee; and, considering that some dock authorities have adopted this Report, if he will urge on railway companies the desirability of doing the same as soon as possible?
    Sir E. GEDDES: I have no direct evidence that there has been an actual increase in pilferage during the last year. The rates of pay and conditions of service of the railway police are under consideration, and will be the subject of further negotiation between the general managers and the representatives of the men.

    RAILWAY TICKETS IN ADVANCE.
    67. Mr. GILBERTasked the Minister of Transport whether he is aware that the Lancashire and Yorkshire Railway Company has arranged that during the high-pressure holiday traffic from Manchester to Blackpool and Southport tickets are issued in advance for certain trains, which trains are limited to a number of passengers; and, as this has saved overcrowding, guaranteed each passenger a seat, and equalised the load on each train, he will ask the London companies to adopt the same scheme for some of the popular holiday places near London for which there are large crowds of traffic during the holiday season?
    Sir E. GEDDES: The system adopted by the Lancashire and Yorkshire Railway is specially suitable for passenger traffic between two terminals, without intermediate stops. it has also been adopted by at least one London company
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    for its long-distance holiday traffic with success. The question of its adoption by other London companies is one for their own consideration, but I would point out that there must be, of necessity, greater difficulty in operating this system in London than in smaller cities, in view of the hardships which would be inflicted on passengers who are only passing through London from remote parts, and the inability of Londoners themselves who live at distances from the termini concerned to effect their bookings without considerable inconvenience.

    FREE RAILWAY PASSES.
    68. Lieut.-Colonel Sir F. HALLasked the Minister of Transport if any persons on the staff of, or connected with, the Ministry of Transport have been granted the privilege of free railway travelling facilities; and, if so, will he state the number of such persons, their names, and the positions they occupy in the Ministry?.
    Sir E. GEDDES: After railways were taken over by the State the President of the Board of Trade held passes over all railways, and a certain number of passes were held by officials. Inasmuch as I regarded this as desirable, I arranged that passes over the principal railways should be held by ten senior officials. Passes have also been provided for the Minister and Parliamentary Secretary, who decided that under existing conditions they would not use them, but pay their fares in the ordinary way. The passes have, therefore, not been issued to them.
    Sir F. HALL: Can the right hon. Gentleman say whether it is in consequence of this question that neither the right hon. Gentleman nor the Parliamentary Secretary are going to use passes for which they had previously asked?
    Sir E. GEDDES: No, Sir. The decision was taken some months ago that the Minister and the Parliamentary Secretary would not use the passes. In fact, I was arrested at Sheffield Station barrier on Friday because I had mislaid my ticket and at that time had not heard of the hon. and gallant Member's question.
    Mr. BILLING: Will this inroad on the right hon. Gentleman's pocket for these travelling expenses prevent him from going to various parts of the country to see the chaotic condition of his Ministry?
    Lieut.-Colonel GUINNESS: If it has been decided not to use these tickets why were they applied for?
    Sir E. GEDDES: Because originally, when the railways were controlled, the President of the Board of Trade had a pass, and it was thought quite proper and in order that when the Government controlled the railways these passes should be provided.
    Sir F. HALL: Will the right hon. Gentleman give the names for which I asked?
    Sir E. GEDDES: I should be glad to send the names to the hon. Member.
    Mr. PALMER: Why does not the right hon. Gentleman order a special train, as he did when he was First Lord of the Admiralty?
    Sir E. GEDDES: No, Sir. I never ordered a special train.
    73. Sir WILLIAM DAVISONasked the Minister of Transport if he will state why railway workers, who have just had a further advance in their recently-increased wages, are still allowed free railway passes for themselves and their families when on holiday, in view of his statement that the losses being incurred on the working of the railways would not allow the resumption of cheap holiday tickets for the general public?
    Sir E. GEDDES: Certain privileges in regard to cheap travel have long been recognised as part of the conditions of service of railway workers, and in view of the temporary relationship existing between the railways and the Government, the matter could not conveniently now be brought under review.
    Mr. MILLS: Have they still to get up on foggy mornings at 5 o'clock?
    Mr. BILLING: Are we to understand that directors and workmen and their families are allowed to use the railways free of charge?
    Sir E. GEDDES: The conditions as regards free passes for railway employés and directors have not been altered so far as I know.
    Mr. WATERSON: Are not these facilities part of the conditions of service, and
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    can the right hon. Gentleman say what difference there is between the ordinary individual in the service having a pass and a director having one enabling him to travel anywhere and on any company's lines?

    RAILWAY COMPANIES, DIVIDENDS.
    69. Colonel NEWMANasked the Minister of Transport whether the proposals outlined in Command Paper No. 787 mean that the dividend of the shareholder will be equivalent to that paid at a pre-War date to be decided by Parliament; that the salaries of employés will be paid on a post-War scale irrespective of any return to a pre-War basis in the cost of living; and that the State shall have the control of any surplus revenue that should normally be the property of the shareholder; and, if so, will he say what are the chances of the owner of stock which at the determined pre-War date was earning an insignificant or no dividend getting a fair return on an investment which he genuinely made on the prospects of his property developing and becoming more remunerative in the future?
    Sir E. GEDDES: The hon. and gallant Member raises points which it is not possible to discuss conveniently by way of question and answer. I would, however, remind him that the financial proposals outlined in Command Paper 787 relate, not to dividends, but to net revenue on some pre-War basis, and they indicate the ground on which the State may claim to share in surplus revenue. The wages of railway employees at present vary on a sliding scale in relation to the cost of living, and the general nature of the proposed machinery for dealing with questions of wages in future is also indicated in the White Paper.

    LONDON UNDERGROUND RAILWAYS(SUBSIDY).
    71. Sir F. HALLasked the Minister of Transport if his attention has been called to the statement made by Lord Ashfield on 30th June, before the Select Committee considering the London County Council Tramways Bill, to the effect that if the increased fares the Traffic Combine are seeking power this Session to charge on the London railways are brought in, and from that source an income

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    is obtained which will pay the expenses of the undertakings, then to that extent the subsidy decreases; and if, in view of the variation between this account of the arrangement and his own statement on the subject, he will state what is the correct interpretation of the understanding arrived at.
    Sir E. GEDDES: I have nothing to add to the full statements made in the recent Debate.
    Sir F. HALL: How is it that the statement made before the Select Committee on Private Bills on 20th June differs from the statement made in the House?
    Sir E. GEDDES: I did not give any evidence before the Select Committee.

    AREA TRANSPORT COMMISSIONER, WALES AND MONMOUTH.
    72. Lieut.-Colonel PARRYasked the Minister of Transport whether an appointment of Commissioner of Transport for Wales and Monmouth has been made; if so, who has been appointed; what his duties are; what is the amount of his remuneration; and what qualifications he possesses for the position?
    Sir E. GEDDES: Mr. E. H. Swain was appointed Area Transport Commissioner for Wales and Monmouth in January last at a salary of £800 a year, plus the usual Civil Service War Bonus. As regards the remainder of the question, I beg to refer the hon. and gallant Member to the answer to the question of the hon. Member for Cardiff Central on the 19th February last.

  LEAGUE OF NATIONS.

    MANDATES COMMISSION.
    25. Mr. ORMSBY-GOREasked the Prime Minister whether the permanent Mandates Commission, to be constituted under Article 22 of the Covenant of the League of Nations to receive the annual reports regarding the carrying out of the provisions of the various mandates and of other representations in regard to mandated territories, has been set up; and, if not, when will steps be taken to create it?
    Mr. BONAR LAW: I gave an answer on this subject on Thursday last to a question
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    by the hon. Member for Chesterfield, to which I would refer my hon. Friend.

    ARMAMENTS (PERMAMENT COMMISSION).
    83. Mr. MYERSasked the Under-Secretary of State for Foreign Affairs whether a Commission has been set up by Council of the League of Nations to investigate the question of armaments; and who are the British representatives on this Commission?
    Mr. HARMSWORTH: The Council of the League of Nations resolved during its recent session in Rome, to set up a permanent Advisory Commission for military, naval and air questions, in accordance with Article IX. of the Covenant. The following British representatives have been appointed to the Commission:
    Naval Representative.—Admiral the Hon. Sir Somerset A. GoughCalthorpe.
    Military Representative.—Brigadier-General G. S. Clive.
    Air Representative.—Group Captain P. R. C. Groves.
    Sir W. JOYNSON-HICKS: Are these representatives of Great Britain provided with full information as to our naval and military plans, and at liberty to communicate it to other members of the League of Nations?
    Mr. HARMSWORTH: I require notice of that question?
    Captain W. BENN: Is it not part of the Covenant of the League of Nations that there should be an interchange of information?
    Sir W. JOYNSON-HICKS: Would my hon. Friend be prepared to make a full statement as to the powers of the Commission?
    Mr. HARMSWORTH: Certainly, if opportunity be provided.
    Sir W. JOYNSON-HICKS: I will put down a question.
    Mr. BILLING: May I ask the Leader of the House whether, having regard to the gravity of the question just raised, he will give this House an opportunity of debating this question, as to whether the

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    representatives of this country are at liberty to give to the League of Nations information as to our naval and military policy?
    Mr. BONAR LAW: I am sorry that I was not listening to the discussion.

  TURKEY.

    GREEK OPERATIONS.
    26. Mr. WATERSONasked the Prime Minister whether the Greeks were allowed to occupy Smyrna before the presentation of the peace terms to Turkey; and, if so, whether such action is a breach of the spirit of the Armistice?
    Mr. BONAR LAW: The Greek Government were permitted by the Supreme Council to land troops at Smyrna in May, 1919, for the protection of their nationals. The peace terms were presented to Turkey in May, 1920. The answer to the last part of the question is in the negative.
    Mr. A. HERBERT: Are the massacres perpetrated by the Greeks in harmony with the spirit of the Conference?
    Mr. BONAR LAW: I cannot accept the statement of my hon. Friend as to facts.
    Mr. HERBERT: Will the right hon. Gentleman see that the Report, when received, is published?
    Mr. DEPUTY-SPEAKER (Mr.Whitley): That does not arise out of the question on the Paper.
    55. Mr. MALONEasked the Prime Minister what are the terms of the Allied guarantees of assistance to Greece in her attacks on Turkey?
    28. Major GLYNasked the Prime Minister whether the Allied Powers have promised any military or naval support to the Greek Forces operating in Asia Minor; and whether the reinforcements being despatched to Constantinople and that area are not solely intended to be adequate to resist any attacks by Turkish Nationalists rather than to co-operate with the Greeks in any offensive operations?
    Mr. BONAR LAW: The naval and military support afforded by the British
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    is to be confined to that which is necessary to ensure the freedom of the Straits and the fulfilment of the Peace Terms. The reinforcements despatched to Constantinople are intended solely for that purpose.
    Mr. BILLING: Can the right hon. Gentleman say whether the Allies are assisting in this matter, and whether it is with the idea of eventually arriving at Peace Terms with Turkey that it is being carried out?
    Mr. BONAR LAW: The Allies are, of course, assisting in resisting an attack.
    Lord R. CECIL: Will the right hon. Gentleman say what "fulfilment of the Peace Terms" means?
    Mr. BONAR LAW: It means what it says.
    Lieut.-Colonel GUINNESS: Will a Supplementary Estimate shortly be presented for this new War?
    Mr. BONAR LAW: I do not admit the new War. The other question has already been answered.
    Colonel WEDGWOOD: Are we sure these troops have not been sent in order to facilitate the withdrawal of those who, are there at present?
    Mr. BONAR LAW: I wish it were possible to have that object immediately in view.
    Sir J. D. REES: Did I understand the right hon. Gentleman to say "protection of the States"? What States?
    HON. MEMBERS: "Straits."
    Mr. MALONE: Have the Greeks and Allies informed the Turks what they are fighting for in view of the fact that the Turks have not yet signed the Treaty?
    Mr. BONAR LAW: I do not think it is necessary. If someone attacks you, you do not need to explain to him why you hit him back.

    PRISONERS (MALTA).
    59. Sir H. NORMANasked the Lord Privy Seal how many Turkish prisoners are detained at Malta charged with crimes against the laws of war; will he state before what court; and when it is-proposed to bring these men to trial?
    Mr. BONAR LAW: I understand that 24 Turks are detained at Malta in connection with alleged complicity in crimes against the laws of war. I am not yet in a position to reply to the rest of the question.
    Sir J. BUTCHER: Does not the Turkish Treaty provide for the surrender of these Turkish war criminals?
    Mr. BONAR LAW: Yes, it does.

    SEAMEN (48-HOUR WEEK).
    27. Mr. WATERSONasked the Prime Minister if he can state the Government's policy as to the advisability of granting seamen the 48-hours week.
    The MINISTER of LABOUR (Dr. Macnamara): I have been asked to reply. This question is now under discussion by an International Conference at Genoa, at which the Government is represented. Until this Conference has made its Report, I am not in a position to make a statement.
    Lieut. - Commander KENWORTHY: What instructions have been given to the British Government representatives at this Conference on this matter?
    Dr. MACNAMARA: I cannot say.
    Mr. WATERSON: Have any instructions been given?

  IRELAND.

    EDUCATION BILL.
    29. Mr. DONALDasked the Prime Minister whether his attention has been drawn to a resolution passed by the secondary school teachers in Ireland regarding the critical position of teachers in Ireland and the urgent need for passing the Education (Ireland) Bill; whether he is aware that unless something is done very soon many of the schools will be compelled to close down for want of competent teachers, many of whom are going to England and Scotland; and whether, regarding education, it is the intention of the Government to treat Ireland as well as it has treated England and Scotland?
    Mr. BONAR LAW: I can add nothing to what has already been said in reply to questions on this subect.
    Mr. DONALD: When will the Government be in a position to answer my ques-
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    tion? Has it yet come to any decision with regard to giving financial assistance to these teachers, many of whom are on pre-War salaries?
    Mr. BONAR LAW: We have stated that we intend to deal with the matter, but much depends on the state of the business. I should like notice of the second part of the question.

    LAND PURCHASE BILL.
    54. Mr. JELLETTasked the Prime Minister when the Government intend to proceed with the Irish Land Purchase Bill; and whether its passing is in any way dependent on the fate of the Government of Ireland Bill?
    Mr. BONAR LAW: The answer to the first part of the question is that I cannot name a definite date, and to the second part in the affirmative.

  MUNITIONS.

    DISPOSAL BOARD.
    31. Lieut.-Colonel CROFTasked the Prime Minister if Colonel Spurrier is still employed as a controller under the Disposal Board?
    The PARLIAMENTARY SECRETARY to the MINISTRY of MUNITIONS (Mr. James Hope): I have been asked to reply. Colonel Spurrier's connection with the Ministry ceased when his work was finished by the sale of all surplus mechanical transport vehicles.
    32. Lieut.-Colonel CROFTasked the Prime Minister whether any steps have yet been taken to ensure that officials in various Departments are forbidden to take part in negotiations in which their private interests might clash with their public duties?
    Mr. BONAR LAW: I cannot add anything to previous replies on this subject.
    Lieut.-Colonel CROFT: In view of the facts which were given to the effect that the state of affairs was continued owing to the needs of the War, will the right hon. Gentleman consider whether it is not now advisable to make some statement on the subject?
    Mr BONAR LAW: I do not think any statement is necessary. It goes without saying that people will not be employed unless in exceptional circumstances where by any possibility it can be avoided.

  RUSSIA.

    TRADE NEGOTIATIONS.
    33. Lieut.-Commander KENWORTHYasked the Prime Minister whether the negotiations between His Majesty's Government and the representatives of the Soviet Republic of Russia have broken down; if so, what is the cause; and when does he propose to make a statement on the subject in this House?
    Mr. BONAR LAW: There is no change in the situation since my reply on Thursday last to the question by my hon. and gallant Friend the Member for Burton, to which I have nothing to add.
    Viscount CURZON: Has M. Krassin's staff accompanied him back to Russia, or are they still here?
    Mr. BONAR LAW: I must ask for notice of that question.

    TRADE UNION LEADERS, BATUM.
    34. Colonel WEDGWOODasked the Prime Minister whether he is aware that Russian trades union leaders are alleged to have been arrested at Batum by the British Forces and deported to Constantinople; whether he is aware that great indignation has been aroused in Russia by this alleged arrest; whether the allegation is correct; and, if so, on what grounds were the arrests made and was approval given by His Majesty's Government before the step was taken?
    Mr. BONAR LAW: I would refer the hon. and gallant Member to the answer which I gave on Thursday last to this question.
    Colonel WEDGWOOD: Is the right hon. Gentleman aware that the answer last Thursday was that he had telegraphed to find out? Has no information yet arrived?
    Mr. BONAR LAW: Yes, we did telegraph, but there has not been time to get a reply. At any rate, we have received none.
    Colonel WEDGWOOD: May we take it that His Majesty's Government were not asked for their approval before the arrests were made?
    Mr. BONAR LAW: Certainly not.
    Sir H. BRITTAIN: Are there any real trade union leaders in Russia?
    Mr. BONAR LAW: There are leaders of some kind.

    GENERAL GOLOVIN (INTERVIEWS).
    56. Mr. L'ESTRANGE MALONEasked the Prime Minister whether his attention has been called to the negotiations and communications which have taken place between the Secretary of State for War and certain persons who have taken part in the campaign against Soviet Russia; and if the policy outlined therein received the consideration and approval of His Majesty's Government, or whether the policy of the Secretary of State for War was carried out without the approval or knowledge of the Cabinet?
    62. Captain W. BENNasked the Lord Privy Seal whether his attention has been drawn to the report made by General Golovin of his interviews last year with the Secretary of State for War; and whether the Cabinet was at any time aware of these negotiations or approved them?
    Mr. BONAR LAW: I have seen the statements which appear to have been published in several newspapers. They refer to a conversation which is said to have taken place between my right hon. Friend the Secretary of State for War and a Russian general in May of last year. My right hon. Friend informs me that the report gives a very inaccurate account of the conversation, especially as regards the actual words and expressions employed. The statements, for instance, that my right hon. Friend said that he was carrying out Admiral Koltchak's orders and that the sending of reinforcements for the purpose of withdrawal was a pretext are obviously absurd, and my right hon. Friend informs me quite untrue. On the other hand, the policy which the Government pursued throughout last year of aiding the anti-Bolshevik forces is well known and has often been debated in Parliament. Very full statements were made by my right hon. Friend, the Secretary of State for War, in regard to the whole of these operations on the 29th July and also on the 5th November of last year. Anyone who cares to read the reports of those speeches in the OFFICIAL REPORT will see that the policy then being pursued by His Majesty's Government was stated quite clearly.
    Captain BENN: Were the negotiations between the Secretary of State for War and General Golovin carried on with the assent of the Cabinet?
    Mr. BONAR LAW: That is a surprising question to me. The general policy of the Government was well known and was carried out. Of course, my right hon. Friend saw many generals connected with the anti-Bolshevik forces, and I should have been very sorry if he had to inform the Cabinet of every conversation.
    Captain BENN: Are we to understand that the Cabinet gave the Secretary of State for War carte blanche to carry on negotiations or were the decisions and pledges that he may have given to those generals referred to the Cabinet for approval.
    Mr. BONAR LAW: There is no question of pledges. This, as I understand, was a general connected with one of the anti-Bolshevik forces. At that time we were openly assisting those forces. Of course, my right hon. Friend would speak to any of them who came to give him information.
    Captain BENN: Will the right hon. Gentleman kindly answer the question I put. Were the pledges given by the Secretary of State for War on his own responsibility or were they given on the responsibility of the Cabinet?
    Mr. BONAR LAW: If the hon. and gallant Gentleman wants to put a question of that kind he had better define what pledges he refers to. I have heard no definition of such pledges up to now.
    Lieut.-Colonel Sir S. HOARE: Is the right hon. Gentleman aware that the general referred to was the military representative of Admiral Koltchak accredited to this country, that there was no secrecy whatever about the interviews that he had with either the generals or the War Office, that the policy that he proposed was a policy totally in harmony with the policy of the Government, and that the report as published in the Press is full of inaccuracies from beginning to end?
    Colonel WEDGWOOD: Will the Leader of the House or the Secretary of State for War tell us that there is a distinct
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    denial of the assertion in that interview that the troops that were sent to Archangel in May and June were not sent t assist in the withdrawal, but were to be used in assisting Koltchak's expedition against the Bolsheviks?
    Mr. BONAR LAW: The hon. and gallant Gentleman did not hear my answer. I said quite distinctly in regard to that, "the statements for instance that the sending of reinforcements for the purpose of withdrawal was a pretext are obviously absurd, and my right hon. Friend informs me quite untrue."
    Colonel WEDGWOOD: Was it not admitted by the Secretary of State for War himself that these troops were used not for withdrawal but to hold out a left hand to Koltchak coming from Siberia?
    Mr. BONAR LAW: Where is the mystery and where is the secrecy? That statement was made in the House of Commons itself.
    Colonel WEDGWOOD: It was made afterwards.
    Mr. SHORT: Will the right hon. Gentleman afford the House an opportunity of debating the matter?
    Mr. BONAR LAW: It seems to me this whole catechism to-day is due to the feeling of hon. Members that we were in the same state of policy last year as we are this year. It would not be easy to give time, but I am sure my right hon. Friend would like nothing better than to deal with a case so easy as this.

    M. STROUVE.
    82. Lieut.-Commander KENWORTHYasked the Under-Secretary of State for Foreign Affairs whether he is aware that a M. Strouve, styling himself Foreign Minister to General Wrangel, is coming to London; why this gentleman is to be admitted to this country; and whether official relations will be entered into, or have been entered into, between this gentleman and the Foreign Office?
    Mr. HARMSWORTH: The answer to the first part of the question is in the affirmative, and to the last part in the negative. As regards the second part of the question, there is no reason, so far as His Majesty's Government are aware, for refusing this gentleman admission to this country.
    Lieut.-Commander KENWORTHY: Is the hon. Gentleman aware that this M. Strouve must be coming up here to stir up further trouble, and as the Government do not recognise General Wrangel, why is this gentleman allowed to come here?
    Mr. HARMSWORTH: How could this gentleman be refused admission?
    Colonel WEDGWOOD: Will he have an interview with the head of the War Office, and will he get a promise of assistance?

    SAMOA.
    35. Captain W. BENNasked the Prime Minister whether the total number of indentured Chinese labourers in Samoa is 1,500; whether all these are to be re-indentured for two years before the issue of the mandate; whether the rate of pay under the re-indenture is to be less than 15s. per week; and whether the planters have made representations with the object of securing a reduction of the wages paid to these Chinese labourers?
    The UNDER-SECRETARY of STATE for the COLONIES (Lieut.-Colonel Amery): I have not recent figures, but last November the number of indentured Chinese labourers in Samoa seems to have been about 500. I have no information as to the proportion electing to re-indenture or on the other points referred to.
    Captain BENN: Has not the Govern-men consented to the renewal of the two-years indenture system, pending the issue of the mandate?
    Lieut.-Colonel AMERY: The Government of New Zealand may have done so. It is not a matter for His Majesty's Government at all.
    Captain BENN: Was His Majesty's Government not consulted?
    Lieut.-Colonel AMERY: So far as I am aware, the matter is entirely for the control and decision of the New Zealand Government.
    Captain BENN: But meantime the two-year indenture has been renewed, pending the issue of the mandate?
    36. Mr. KILEYasked the Prime Minister whether the Imperial Government, without waiting for the issue of a mandate for the late German colonies in the South Seas, has recently given permission for the re-indenture of Chinese labourers for two years' indenture; whether the Samoan chiefs have taken the strongest exception to Chinese indentured labour; whether one political party in New Zealand is opposing what it affirms to be Chinese slavery; and whether the question of forbidding Chinese indentured labour in the mandated areas will be submitted to the Council of the League of Nations?
    Lieut.-Colonel AMERY: His Majesty's Government have never at any time been responsible for the administration of Samoa, and the extension to two years was made by the New Zealand Government, as responsible for the administration of the country. Any representations made by the Samoan chiefs will doubtless receive the fullest consideration by that Government. I can say nothing as to the views of political parties in New Zealand. The answer to the last part of the question is in the negative.

    WASHINGTON LABOUR CONFERENCE.
    37. Viscountess ASTORasked the Prime Minister whether it is proposed to introduce legislation embodying the several conventions agreed to at the Washington Labour Conference; and if he can give any indication as to how soon this will be done?
    Mr. BONAR LAW: I would refer my hon. Friend to the answer which I gave to my right hon. Friend the Member for the Gorbals Division of Glasgow on the 17th May. The principles of the draft convention limiting the hours of work in industrial undertakings will be embodied in the Hours of Employment Bill, which will be introduced shortly.

  PERSIA.

    ANGLO-PERSIAN AGREEMENT.
    39. Mr. ORMSBY-GOREasked the Prime Minister whether the Persian Government which signed the Anglo-Persian agreement has resigned; whether

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    a new Government has been formed at Teheran; if so, whether the new Government wishes to be bound by the agreement; whether the British Government have intimated that they are willing to abandon the agreement should the Persian government desire its abandonment; whether the Persian Mejliss is to be summoned; and, if so, whether it will be asked to review the agreement?
    Mr. HARMSWORTH: The answer to the first part of the question is in the affirmative: that to the second part in the negative. Points 3 and 4 have not therefore arisen. As regards points 5 and 6, the late Government were repeatedly urged by His Majesty's Government to submit the Agreement to the Mejliss: and it is still held by His Majesty's Government that this course should be followed.
    Mr. ORMSBY-GORE: Is there any prospect of the Mejliss meeting in the near future?
    Mr. HARMSWORTH: I should have to inquire, and should like notice of that question.
    Lord R. CECIL: Was the fall of the late Persian Government due to the fact that they signed the Anglo-Persian Agreement?
    Mr. HARMSWORTH: I do not think so.

    THE MEJLISS.
    79. Sir J. D. REESasked the Under-Secretary for Foreign Affairs whether His Majesty's Government, so far as and if it is concerned, is in favour of the participation of the Mejliss in the government of Persia; and, if the answer be in the affirmative, whether the Secretary of State will take any opportunity which may offer indicating that such is the case?
    Mr. HARMSWORTH: I would refer the hon. Baronet to the reply I have today returned to the hon. Member for Stafford on this subject.
    Sir J. D. REES: Can the hon. Gentleman say whether the British Government is in favour of the Mejliss being summoned? Has anything authoritative on the subject been announced?
    Mr. HARMSWORTH: I referred to the matter in my reply to-day to the hon. Member for Stafford.

    KUCHIK KHAN.
    80. Sir J. D. REESasked the Under-Secretary of State for Foreign Affairs whether he can give the House any information regarding the advance of Kuchik Khan towards Teheran?
    Mr. HARMSWORTH: No reliable information on this subject is at present available.

  MESOPOTAMIA.

    TURKISH PETROLEUM COMPANY.
    40. Mr. ORMSBY-GOREasked the Prime Minister whether the concession granted by the Turkish Government to the Turkish Petroleum Company before the War was for rights to take all oil discovered, or to be discovered, in the provinces of Mosul and Baghdad in return for the payment of a lump sum down and a royalty on all oil taken or other financial payment; what were the financial terms of the concession, arid what payments will be made by the Turkish Petroleum Company to the Arab State of Mesopotamia for oil by way of royalty; whether the concession was for a limited number of years, and, if so, when is it renewable and on what terms; whether the British Government have appointed any directors on the board of the Turkish Petroleum Company to represent their interest in the concern; and whether they propose to buy out the remaining shares of the Turkish Petroleum Company on terms similar to those embodied in the agreement regarding the purchase of the Pacific Phosphate Company's rights in Nauru Island?
    Mr. BONAR LAW: The rights granted to the Turkish Petroleum Company were as described by the hon. Member, but no financial terms and no period to the concession had been fixed when War broke out. There are two directors on the board of the company nominated by His Majesty's Government, in view of the ex-enemy interest acquired during the War. As already stated, a decision as to the future working of these fields has not yet been reached.
    Mr. ORMSBY-GORE: Are we to understand that the concession was granted in perpetuity, and that there is no time limit whatsoever when the concession comes to an end?
    Mr. BONAR LAW: I do not know. Perhaps the hon. Member would put that specific question on the Paper.
    Lieut. - Commander KENWORTHY: Will the terms of this concession be communicated to the House, as I asked last week?
    Mr. BONAR LAW: I do not know. I was not aware of that question.

    PARLIAMENT (SITTINGS).
    41. Colonel NEWMANasked the Prime Minister whether he is aware of the disadvantage to considered legislation and possible friction caused by requiring the revising Chamber to deal with a mass of legislation during the closing days before the Adjournment of Parliament; and whether the Government have considered the possibility of adjourning Parliament when the business before the House is concluded, and asking the revising Chamber to resume a fortnight before this House, when any measures sent up before the Adjournment and not considered could be adequately discussed?
    Mr. BONAR LAW: I am afraid that my hon. and gallant Friend's suggestion is impracticable.
    50. Colonel NEWMANasked the Prime Minister whether the convenience of Members of either House of Parliament and better legislation would be secured if Parliament rose in July and resumed for a longer period in the autumn and winter than is now the custom; whether he is aware of the demand by a large section of the community, caused by the recent growth of and assumption of power by the bureaucracy in Government Departments, that too long a period should not elapse between the adjournments of Parliament; and will the Government take steps to carry out the reform mentioned?
    Mr. BONAR LAW: I do not agree with my hon. Friend that it would be an advantage for Parliament to sit for a longer period than is now the custom.
    Colonel NEWMAN: Is the right hon. Gentleman aware that in another place a Resolution was passed to this very effect against the Government?
    Mr. BONAR LAW: That may be, but it does not alter my attitude.
    Mr. BILLING: Does the right hon. Gentleman agree with that part of the question which suggests that the Government has become a bureaucratic one?
    Mr. BONAR LAW: Naturally not.

    CIVIL SERVICE (WOMEN).
    45. Major HILLSasked the Prime Minister whether women temporary Civil Servants are being admitted to sit for the examinations now open to men temporary Civil Servants; and, if not, for what reason, in view of Section 1 of the Sex Disqualification (Removal) Act, 1919.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): Examinations for the new clerical class will be held at the end of this year. Women and men temporary Civil Servants will alike be eligible to compete.
    46. Major HILLSasked the Prime Minister what posts in the Civil Service women are being admitted to and by what process?
    Mr. BALDWIN: Examinations have been held or will be held by the Civil Service Commissioners for admission to the new clerical class, to the writing assistant class and for employment as typist and shorthand typist. For all these posts women are eligible to compete. With regard to the higher executive and administrative posts, I am at present unable to add anything to the reply I gave to the hon. and gallant Member on the 20th May last.
    47. Major HILLSasked the Prime Minister whether regulations are in existence or intended governing the admission of women to the Civil Service otherwise than by Orders in Council under Section 1 (a) of the Sex Disqualification (Removal) Act, 1919; and, if so, under what authority are such regulations being made or intended?
    Mr. BALDWIN: I will send the hon. and gallant Member a copy of the Regu-

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    lations now governing the admission of women to the Civil Service. Under these Regulations effect is being given to the provisions of the Reports of the National Whitley Council for the Civil Service. An Order in Council, pursuant to Section 1 (a) of the Sex Disqualification (Removal) Act, 1919, will be made in due course.

    HAGUE CONVENTION.
    49. Captain TUDOR-REESasked the Prime Minister whether the provisions of the Hague Convention are still operative?
    Mr. HARMSWORTH: I am not aware to which of the thirteen Conventions signed at the Hague in 1907 the question particularly refers, but, speaking generally, it was the intention that these Conventions should remain in force for the States which have ratified them until denounced or replaced by further Conventions. It is, however, the fact that experience has shown that the Conventions dealing with the conduct of hostilities are liable to be disregarded by an unscrupulous belligerent, and that some of them are no longer adapted to the conditions of modern warfare. This fact must obviously be taken into consideration when the attitude of His Majesty's Government to these Conventions has to be reviewed.

    CANADIAN MINISTER, WASHINGTON.
    51. Mr. HURDasked the Prime Minister what steps have been taken to carry out the decision of the British and Canadian Governments to appoint a Canadian Minister at Washington with ambassadorial powers?
    Lieut.-Colonel AMERY: I understand that the Canadian Parliament has voted the Minister's salary, but I am not aware that any further steps have as yet been taken.

    BRITISH LEGATION, HELSINGFORS.
    The following Question stood on the Order Paper in the name of Mr. RAPER:
    52. To ask the Prime Minister whether he has now had an opportunity of
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    reading the copies of letters implicating Lieut.-Colonel Sir Hubert Gough, head of the late Inter-Allied Military Mission in Finland, Commander Harold Grenfell, late Naval Attaché, and Professor Cotter, late Press Attaché, at the British Legation, Helsingfors, as being associated with a notorious Bolshevik agent in Helsingfors; and what action the Government purposes taking in this matter?
    Mr. MALONE: On a point of order May I ask whether it is right or usual to make attacks on distinguished officers who have no opportunities for defending themselves in this House?
    Mr. DEPUTY-SPEAKER: My attention had not been called to this question. It seems to be a question legitimately asking for information. If there is any covert attack in it, it did not attract my notice.
    Mr. BILLING: Is this officer still living?
    Mr. BONAR LAW: In any case I sent a note to my hon. Friend asking him to postpone this question.
    Mr. RAPER: I did not have that note.
    Lieut.-Commander KENWORTHY: Is the right hon. Gentleman aware that the hon. Member for East Islington accepted the hospitality of this alleged Bolshevik agent?
    Mr. DEPUTY-SPEAKER: The question is postponed.

    CANADA AND WEST INDIES.
    53. Mr. HURDasked the Prime Minister if the House can be informed of the results of the recent conference at Ottawa on Canadian-West Indian relations?
    Lieut.-Colonel AMERY: The Conference arrived at an agreement which I trust will prove completely satisfactory to all parties concerned. It has, however, been arranged that, in order to allow time to the various West Indian Governments to consider the report of their delegates, no public announcement shall be made before 4th August. I regret, therefore, that I am not in a position to disclose any further particulars at present.

    WAR SCIENTIFIC INVENTIONS.
    58. Sir H. NORMANasked the Lord Privy Seal if his attention has been called to the differences of official attitude adopted in the case of officers who made scientific inventions during the War; if he is aware that in some cases these inventions have been, or are about to be, published by the Department concerned for general use, whereas in other cases scientific methods developed by officers during their service with official assistance and at the public cost are now being exploited as privately owned patents by commercial companies, some of them being possibly master-patents of great value; and will he cause inquiry to be made into this matter and a consistent policy to be adopted?
    Mr. BONAR LAW: The answer to the question is in the affirmative. The question has been under consideration by the different Government Departments concerned and two inter-departmental conferences have been held for its discussion. The Lord President of the Privy Council is about to appoint an inter-departmental Committee with the following terms of reference:—
    1. To consider the methods of dealing with inventions made by workers aided or maintained from public funds, whether such workers be engaged (a) as research workers, or (b) in some other technical capacity, so as to give a fair reward to the inventor and thus encourage further effort, to secure the utilisation in industry of suitable inventions and to protect the national interest, and
    2. To outline a course of procedure in respect of inventions arising out of State-aided or supported work, which shall further these aims and be suitable for adoption by all Government Departments concerned.

    BRITISH SOUTH AFRICA COMPANY.
    61. Captain W. BENNasked the Lord Privy Seal whether on 16th April, 1919, in reply to the Member for West Fife, he stated that the claim of the British South Africa Company for a sum of approximately £8,000,000 demanded the closest scrutiny and that the Government would not commit themselves to any payment without the sanction of the House of Commons; whether His Majesty's Government has under consideration a
    1018
    proposal for adjusting this claim; and whether he will give an assurance that no agreement will be made which restricts the full liberty of this House in accordance with the reply of the right hon. Gentleman on 16th April, 1919?
    Mr. BONAR LAW: The answer to the first and third parts of the question is in the affirmative, and to the second part in the negative.
    Captain BENN: Did not the right hon. Gentleman promise that no payment would be made without the House being consulted?
    Mr. BONAR LAW: I have already definitely promised that we were not absolutely committed to any payment until the House had an opportunity of considering it.
    Sir D. MACLEAN: Will the right hon. gentleman more clearly define what he means by absolutely committed? Am I right in assuming he does not mean that he will only come down and announce a thing done, but will give the House an opportunity of fair discussion?
    Mr. BILLING: Does the right hon. Gentleman make any distinction between "absolutely committed" and "honourably committed"?
    Mr. BONAR LAW: No, I do not. I do not think that difficulty arises. It is not like a Treaty. Even if the Government proposes something, the House will still be perfectly free to give any decision it likes.
    Captain BENN: Has the right hon. Gentleman observed the statement made at the inquiry last week that a decision would be arrived at in a few days?
    Mr. BONAR LAW: No, I did not specially notice that. The question is whether or not the decision will be given without consulting the House. Of course not, but the three gentlemen appointed will, I think, be the best judges.
    Colonel WEDGWOOD: Can we be assured before the Debate at any rate takes place that we shall not be committed as to who is to pay this £8,000,000, whether the British taxpayer or the Colonists?
    Mr. BONAR LAW: I think the hon. and gallant Gentleman may assume that. In any case, I hope, whoever else pays, the British taxpayer will not.
    64. Mr. CHARLES WHITEasked the Lord Privy Seal whether it has been suggested to His Majesty's Government that Lord Cave's Commission of Inquiry into the necessary and proper administrative deficits of the British South Africa Company should report without completing its examination of the accounts; whether he is aware that at the adjournment of the Inquiry in March Lord Cave had only reached the period of the Jameson raid; and whether the right hon. Gentleman will give an assurance that His Majesty's Government will refrain from agreeing to the course proposed?
    Mr. BONAR LAW: As regards the first part of the question, I am not aware that anyone has suggested that Lord Cave's Commission should report without completing its examination of the company's accounts. As regards the second part, it is a mistake to suppose that the inquiries of the Commission have been limited to the period preceding the Jameson raid. The last part of the question, therefore, does not arise.

    PRE-WAR PENSIONS (SOLDIERS AND SAILORS).
    63. Colonel Sir A. SPROTasked the Lord Privy Seal when, and on what Votes, will the House be able to discuss the increase of pre-War pensions to soldiers and sailors announced by him on 10th May, but which were omitted from the Financial Resolution dealing with the pre-War pensions to Civil Servants and others recently pased by the House?
    Mr. BONAR LAW: The Navy and Army Votes respectively.

    PASSPORTS.
    74. Mr. RAPERasked the Under-Secretary of State for Foreign Affairs whether arrangements can be made to issue passports, without payment, to fallen soldiers' relatives proceeding to France to visit the graves?
    Mr. HARMSWORTH: Passports are granted without fee in cases where the applicant is being assisted financially by a society approved by the War Graves Registration Department.
    Mr. RAPER: Is it done in any other cases?
    Mr. HARMSWORTH: There are other cases on compassionate grounds.
    78. Sir H. BRITTAINasked the Under-Secretary for Foreign Affairs whether he is able to fix an approximate date when the visé system in the opinion of His Majesty's Government will have ceased to serve a useful purpose?
    Mr. HARMSWORTH: It is impossible to state when conditions will justify the abolition of the passport visé system which is, in the opinion of His Majesty's Government, serving a useful purpose at the present time.
    Sir H. BRITTAIN: Have our representatives abroad taken up this question with the Continental Powers?
    Mr. HARMSWORTH: There have been conversations.

    HUNGARY.
    76. Colonel WEDGWOODasked the Under-Secretary for Foreign Affairs whether anything can be done to urge the Hungarian Government to postpone the trials of the people's commissaries of the late commune for a few months until public feeling in Hungary is quieter, so that a just trial may be secured?
    Mr HARMSWORTH: Although His Majesty's Government have no responsibility for, or power to interfere in, the internal government of Hungary, they have from time to time made friendly and unofficial representations through His Majesty's High Commissioner at Budapest to the Hungarian Government in favour of moderation in regard to any further trials of former commissaries.
    Colonel WEDGWOOD: Will the hon. Gentleman reply to that part of my question where I ask whether the Government would press for a postponement of these trials for a few months, as I have had representations from these people in Hungary begging to have their trials postponed until conditions are better in Hungary?
    Mr. HARMSWORTH: His Majesty's Government have, through their High Commissioner, made many representations, but there are limits to interference in the internal affairs of another country.
    Colonel WEDGWOOD: Seeing that some of these people have safe conducts from British generals, does not that give us some right to interfere in the matter?
    Mr. HARMSWORTH: The Government are quite prepared within certain limits to make friendly representations, but they cannot go beyond that.
    77. Colonel WEDGWOODasked the Under-Secretary for Foreign Affairs whether a group of Hungarian reactionaries calling themselves Rising Hungarians has initiated an appeal to the peasants and country workers all over the world to organise the stoppage of supplies to industrial centres as an answer to the international boycott of Hungary; and whether these activities of the Rising Hungarians have the approval of His Majesty's representative in Hungary?
    Mr. HARMSWORTH: I am aware that a political party known as the Rising Hungarians, of an anti-Semitic character, has issued certain proclamations, but I do not know that it has initiated any appeal to peasants all over the world. It is not perhaps unnatural that there should be a tendency on the part of the Hungarians to speak of instituting a boycott of such countries as have, at the orders of a conference of transport workers, proclaimed a boycott of Hungary. His Majesty's High Commissioners at Budapest and Vienna are using their good offices to allay the general irritation and confusion resulting from these unfortunate measures and threats as far as is in their power, and His Majesty's Government can only hope that their efforts will meet with success.
    Colonel WEDGWOOD: Is there any sign of an end to this boycott, of which we strongly disapprove?
    Mr. HARMSWORTH: As at present advised, I think not.

    ITALY (POLITICAL SITUATION).
    81. Mr. W. SMITHasked the Under-Secretary of State for Foreign Affairs
    1022
    whether he can make a statement as to the political situation in Italy?
    Mr. HARMSWORTH: Anarchist forces have certainly been at work in Italy trying to provoke a general revolutionary movement. They have, however, failed at Ancona, the only place where they had persuaded a small number of troops to join them. Order has been restored there with the assistance of the same regiment. The moderate Socialists in Italy are opposed to these violent methods, and the Government appears to have the country behind it in its firm but conciliatory attitude.
    Mr. BILLING: When was the latest bulletin received from Italy? Was there anything fresh to-day or yesterday?
    Mr. HARMSWORTH: I do not think there has been anything definite showing any change since the answer to this question was drafted.
    Mr. BILLING: Is there any information which tends to support the answer which has just been read to the House?
    Lieut.-Colonel GUINNESS: On a point of Order. Is it desirable that these questions concerning foreign Governments, over which we have no control, should be asked?
    Mr. DEPUTY-SPEAKER: That is for Members to judge. The question on the Paper is a proper one as to the information in the hands of the Government.
    Lieut.-Colonel GUINNESS: Are you aware that Mr. Speaker was not willing to allow a discussion—[HON. MEMBERS: "Order!"]—as to whether the League of Nations was going to take action in regard to Poland—[HON. MEMBERS: "Order!"]—which obviously was—[HON. MEMBERS: "Order!"]
    Mr. DEPUTY-SPEAKER: That was a different matter from a question of mere information. That was a question in which Mr. Speaker intervened as a criticism of the internal matters of another country. This is a question here of whether there is any information in the Foreign Office.
    Mr. BILLING: Is it not a fact that if this question were disallowed it would be impossible for any hon. Member of this House to raise any other matter except something regarding Surbiton or Tooting?
    Mr. DEPUTY-SPEAKER: I have not disallowed the question.

    APPLE TREES.
    86. Colonel YATEasked the Parliamentary Secretary to the Ministry of Agriculture whether, with a view to stimulating apple growing in this country, the Board will now circularise railway companies asking them to consider the question of utilising spare ground along their lines by planting apple trees upon it?
    The PARLIAMENTARY SECRETARY to the MINISTRY of AGRICULTURE (Sir A. Boscawen): The position is still as outlined in the answer I gave to my hon. and gallant Friend on 30th October last year. Supplies of apple trees are not likely to be sufficient for the purpose indicated for at least three years, but the Ministry will bear the suggestion in mind and act upon it as soon as that course is practicable.

    PRESS MESSAGES (ADMIRALTY INTERCEPTION).
    Major Sir B. FALLE (by Private Notice)asked the First Lord of the Admiralty whether his attention has been drawn to the statement which has been widely circulated that the naval authorities have been intercepting and forwarding by wireless direct to the Admiralty messages intended for publication in the Press; if so, whether he can make any statement on the subject?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Colonel Sir J. Craig): I understand that the question relates to a statement that Press messages from Tangier have been intercepted by the naval authorities at Gibraltar. While the censorship was in force all messages were, of course, intercepted and investigated. Since then no such messages have been intercepted and forwarded by wireless direct to the Admiralty.

  INDIA.

    PUNJAB DISTURBANCES (CORRESPONDENCE).
    Mr. PALMER (by Private Notice)asked the Secretary of State for India whether, in view of the forthcoming de-
    1024
    bate on the shooting at Amritsar, ha would be willing to include on a White Paper the letter of Sir Michael O'Dwyer dated Delhi, December 30th, 1919, and his letter marked "Private and confidential" which was sent in reply.
    The SECRETARY of STATE for INDIA (Mr. Montagu): I do not think I propose, however, to circulate in the OFFICIAL REPORT the letter of the 30th December, 1919, and the reply which I caused to be sent by telegram through the Viceroy on the 2nd February, 1920. As the name of Sir T. Helderness has also been mentioned in this controversy, I propose to add with his permission a letter which he addressed to me on the 30th June last.
    Mr. PALMER: Will the document include the letter marked "private and confidential"?
    Mr. MONTAGU: I think that the hon. Member is under a misapprehension. There was no letter. It was a telegram addressed to the Viceroy marked "private and personal."
    Sir W. JOYNSON-HICKS: Will the right hon. Gentleman add to these papers the report of the brigade-major, which has been referred to all through the Hunter Commission, but has not been published in the papers so far as I can gather?
    Mr. MONTAGU: I do not think that I can promise to publish any special papers in answer to a question asked without notice, but if a question be put down to-morrow, I will answer it.
    The following are the documents referred to:
    [COPY.]
    Army in India Committee, Delhi,
    30–31 December, 1919.
    DEAR MR. MONTAGU,
    Since I wrote last week, Reuter has been cabling summaries of the discussion in Parliament of the Punjab disturbances. I enclose one of these dated London, 16th December, which reports the Secretary of State as saying, inter alia, "he did not know the details (of the Amritsar occurrences) until he saw (the) reports in the newspapers." That telegram has led many people here to ask me if, when I reached England at the end of June, I took any action to inform the India Office of the position at Amritsar and elsewhere. The Press here, too, has been asking whether Meston

    1025
    and I, when we got home, did anything to explain the situation in India.
    At the time I got home I probably knew as much about the Punjab situation as anyone in India or England, and I would not like you or anyone else to think that I kept anything back. You will remember that you were good enough to give me two long interviews on 30th June (two days after I arrived), and on 24th July (those dates I get from my diary), a few days before I left town. On one or both of those occasions we went over all the main facts of Dyer's action at Amritsar, and the impression I then formed was that the India Office knew as much about all the material facts as I did.
    I have a distinct recollection (though my diary is silent on this point) that at our conversation of 30th June I brought out the fact that Dyer, on 13th April, having already formally warned people that he would disperse any gathering by force, did not think it necessary to give any further warning to the gathering which assembled an hour or two later in defiance of his proclamation. I certainly explained then that two British police officers were with him when he fired, and that the District Magistrate, thinking a gathering in defiance of the proclamation impossible, had gone off to look after the 80 panic-stricken women and children who had been collected in the Fort for safety after the murder of Europeans on the 10th. I also said that Dyer's rough estimate of the death casualties was 200; but my memory was not clear as to whether he had fired 1,400 or 1,600 rounds.
    The question of Dyer's so-called 'crawling' order was not discussed. I said it was quite indefensible, that I had asked for its cancellation directly I saw it, and so had the Commander-in-Chief, and my recollection is that you told me you had gathered this from copies of my letters to the Viceroy which he had sent on to you. After leaving you on the 30th June I went on to see Sir T. Holderness, and a few days later I saw Lord Sinha. I endeavoured to explain to them, as clearly as I could, the whole situation in the Punjab, and especially in Amritsar. I gathered from them also that the India Office was already in possession of all the main facts, though in some respects I was able to offer further explanations, e.g., as to the necessity of sending aeroplanes to Gujranwala, the exclusion of legal practitioners, and the treatment in jail of the Editor of the Tribune, regarding which Lord Sinha had received many letters and telegrams. Possibly Reuter's summary, as quoted above, may be giving to us here an incorrect impression. But, in any case, you will, I am sure, forgive me for trying—perhaps needlessly—to make it clear, that I endeavoured to put the Secretary of State and the India Office in possession of such knowledge as I had. You may remember too, that I stated to you on the 30th June, a fact which was not perhaps mentioned in the telegrams from India and may not have been reported at the time, that the aviator at Gujranwala, on the 14th April, seeing the English Church in
    1026
    flames had, very wrongly, dropped a bomb close to a mosque in the town, but, fortunately, it did not explode. In writing all this I am less concerned with my own responsibility in the matter than with how others may be affected by any misunderstanding or obscurity.
    Dyer, at the first interview I had with him (on the 16th April), told me everything about Amritsar events on 13th April as frankly and as fully as the limited time I could spare him—when there was rebellion all round—allowed. I did my best to repeat his version, with my own comments to you and others of the India Office on the very first opportunity. If I did not do so fully or clearly enough then the fault is certainly not his, but rests either with me or with those who were questioning me. But, as I have said above, there was even as far back as 30th June, little room for doubt as to the substantial facts, namely, the circumstances in which he opened and maintained fire on the prohibited assembly on the 13th April, covering death casualties which, at the time, he estimated roughly at 200, but which up to date inquiries put at 379.
    Yours sincerely,
    (Sd.) M. F. O'DWYER.
    Telegram from the Secretary of State for India to the Viceroy, dated 2nd February, 1920.
    Private and personal. Following for O'Dwyer. I have received your letter of the 31st December. Of course, I need hardly say that in the House of Commons I was not referring to conversations of which no record is kept and which cannot be a substitute for official information, nor did I make any complaint; indeed, I explained, and have explained frequently since, that I thought it was quite natural that I should have received no detailed information. Let me say that I certainly do not hold you in any way responsible. I have no recollection of, and such notes as I took do not contain, any statement about the two British police officers. But in any case the details I was referring to were these: That Dyer is reported to have stated in his evidence that the crowd might have dispersed without his firing on them, that he fired without warning, and that he stopped firing because his ammunition was exhausted. I do not remember that you ever dealt with these things.
    30th June, 1920.
    DEAR MR. MONTAGU,
    As I am mentioned in Sir M. O'Dwyer's letter of 8th June, which appeared in the "Morning Post" of 9th June, as one of the officials of the India Office who were fully informed by him during the summer of 1919 of the disorders which had occurred in the Punjab in April of that year, and in particular of the circumstances of the action taken by General Dyer to disperse the crowd assembled in the Jallianwala Bagh, I think it right, in justice to myself, to submit to you a few remarks on so much of his letter as concerns myself.

    1027
    Sir M. O'Dwyer writes, "I put all my information at the disposal of the Secretary of State, and also of Lord Sinha, Sir T. Holderness and others at the India Office. The impression I then formed (in June and July last) was that as regards all the main facts the India Office was quite as fully informed as I was; though I was naturally able to explain certain points, e.g., the reasons for using aeroplanes at Gujranwala, for the exclusion of legal practitioners from other provinces by the Martial Law authorities, etc." … "Indeed, all that time, my endeavour was to impress upon the authorities at the India Office the gravity of the situation in the Punjab, which to my mind they had not sufficiently realised."
    Lower down he quotes from a letter dated 30th December, 1919, which he wrote from India to the Secretary of State, in which the following passage occurs: "Dyer, at the first interview I had with him on the 16th April, told me everything as frankly and fully as the limited time I could spare him (when there was a rebellion all around) would allow. I did my best to repeat his version, with my own views and comments, to you and to others at the India Office on the very first opportunity. If I did not do so fully enough, then the fault is certainly not his, but rests either with me or with those who were questioning me. But, as I have already said, there was, even as far back as 30th June, little room for doubt as to the substantial facts, viz., the circumstances in which he opened and maintained fire on the prohibited assembly on 13th April, causing death casualties which, at the time, he roughly put at about 200, but which the complete up-to-date enquiries put at 379."
    I gather that the interview which Sir M. O'Dwyer had with General Dyer was limited to a quarter of an hour, and that when Sir M. O'Dwyer left India in May the Punjab Government was still awaiting General Dyer's Report. (See Hunter Committee's Report, page 117). General Dyer's Report was not made till August, 1919. It is this Report that contains the passage which gives the key to General Dyer's action and which is the centre of the controversy to which his action has given rise. "It was no longer a question of merely dispersing the crowd, but one of producing a sufficient moral effect, from a military point of view, not only on those who were present, but more especially throughout the Punjab. There could be no question of undue severity." (Hunter Committee's Report, page 30.) Up to the time I remained in the India Office, General Dyer's Report had not reached it.
    I had the privilege of frequent conversations with Sir M. O'Dwyer during the summer of 1919, and learnt from him many particulars regarding the disorders in the Punjab that bore out his view that the situation had been one of extreme gravity. As regards General Dyer's handling of the Amritsar riots, I have a clear recollection that Sir M.
    1028
    O'Dwyer justified the casualties (then thought to be about 200 killed) by the necessity for dispersing a hostile and dangerous mob, inflamed by the license and savagery which for several days had prevailed in the city, and for regaining control over the populace. But I have no recollection that he considered the force employed to have been in excess of the immediate necessities of the case, and deliberately exercised in excess with the distinct object of producing a moral effect throughout the province. My recollection is fortified by the astonishment which I felt on reading the Report of General Dyer's evidence which appeared in the "Times" of 15th December. I was by that time aware that a bitter controversy had arisen in India over the circumstances of the Jallianwala Bagh affair, and that the exact incidents were in dispute between the National Congress party and the Government. But the details given by General Dyer to the Commission came to me as a great surprise and were entirely unexpected.
    In conclusion, I would like to say, that if I had been called upon during the summer or autumn of 1919 to prepare a statement for publication regarding the Jallianwala Bagh incident, and had framed it on the information verbally received from Sir M. O'Dwyer and on the scanty information transmitted by the Government of India, the narrative would have been of a different complexion from the account of the facts given by General Dyer. It would not and could not have included the critical features OD which discussion has since centred. On the publication of General Dyer's evidence, the India Office would assuredly have been taken to task if it had forestalled the Committee's inquiries by publishing an imperfectly, and as some persons would have considered, misleading account of what actually had happened. The Government of India in their despatch forwarding the Committee's Report say that in view of the fact that a Committee was about to make a formal investigation, they had deliberately refrained from instituting preliminary inquiries. The India Office took the same view, and I venture to think that its reticence has been justified by the event.
    It is perhaps superfluous to say that I kept you fully informed of my conversations with Sir M. O'Dwyer. My recollection is that while recognising the great value of the information placed by him at your disposal, you were as impressed as I was with the inadequacy of our knowledge of what really happened at Amritsar and elsewhere, with the conflicting character of the rumours and assertions appearing in the Indian and Anglo-Indian press, and with the necessity for awaiting a full inquiry on the spot by a strong Committee.
    Yours sincerely,
    (Sd.) T. W. HOLDERNESS.

BUSINESS OF THE HOUSE.
Motion made, and Question put, "That the Proceedings of the Committee on Ministry of Mines [Salaries and Expenses]
be exempted at this day's Sitting from the provisions of the Standing Order (Sittings of the House)."—[Mr. Bonar Law.]
The House divided: Ayes, 210; Noes, 45.

Division No. 178.]

AYES.

[3.50 p.m.

Adair, Rear-Admiral Thomas B. S.

Gibbs, Colonel George Abraham

Murray, C. D. (Edinburgh)

Addison, Rt. Hon. Dr. C.

Gilbert, James Daniel

Murray, Major William (Dumfries)

Adkins, Sir W. Ryland D.

Gilmour, Lieut.-Colonel John

Neal, Arthur

Agg-Gardner, Sir James Tynte

Glyn, Major Ralph

Newman, Colonel J. R. P. (Finchley)

Amery, Lieut.-Col. Leopold C. M. S.

Grant, James A.

Newman, Sir R. H. S. D. L. (Exeter)

Astor, Viscountess

Green, Joseph F. (Leicester, W.)

Nicholson, William G. (Petersfield)

Baird, John Lawrence

Greene, Lt.-Col. Sir W. (Hack'y, N.)

Norton-Griffiths, Lieut.-Col. Sir John

Baldwin, Rt. Hon. Stanley

Greig, Colonel James William

O'Neill, Major Hon. Robert W. H.

Barnston, Major Harry

Gretton, Colonel John

Ormsby-Gore, Captain Hon. W.

Barrand, A. R.

Guinness, Lieut.-Col. Hon. W. E.

Palmer, Major Godfrey Mark

Bell, Lieut.-Col. W. C. H. (Devizes)

Hacking, Captain Douglas H.

Parker, James

Benn, Sir A. S. (Plymouth, Drake)

Hall, Lieut.-Col. Sir F. (Dulwich)

Parry, Lieut.-Colonel Thomas Henry

Betterton, Henry B.

Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)

Pearce, Sir William

Birchall, Major J. Dearman

Hambro, Captain Angus Valdemar

Pease, Rt. Hon. Herbert Pike

Bird, Sir A. (Wolverhampton, West)

Hanna, George Boyle

Perkins, Walter Frank

Blair, Reginald

Harmsworth, C. B. (Bedford, Luton)

Pilditch, Sir Philip

Blake, Sir Francis Douglas

Haslam, Lewis

Pownall, Lieut.-Colonel Assheton

Borwick, Major G. O.

Henderson, Major V. L. (Tradeston)

Preston, W. R.

Boscawen, Rt. Hon. Sir A. Griffith-

Henry, Denis S. (Londonderry, S.)

Prescott, Major W. H.

Bowyer, Captain G. E. W.

Herbert, Hon. A. (Somerset, Yeovil)

Pulley, Charles Thornton

Breese, Major Charles E.

Herbert, Denis (Hertford, Walford)

Purchase, H. G.

Bridgeman, William Clive

Hills, Major John Waller

Rae, H. Norman

Briggs, Harold

Hinds, John

Randles, Sir John S.

Brittain, Sir Harry

Hoare, Lieut.-Colonel Sir S. J. G.

Raper, A. Baldwin

Bruton, Sir James

Hood, Joseph

Rees, Sir J. D. (Nottingham, East)

Buchanan, Lieut-Colonel A. L. H.

Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)

Rees, Capt. J. Tudor (Barnstaple)

Bull, Rt. Hon. Sir William James

Hope, James F. (Sheffield, Central)

Remnant, Sir James

Burdon, Colonel Rowland

Hopkins, John W. W.

Roberts, Sir S. (Sheffield, Ecclesall)

Burn, Col. C. R. (Devon, Torquay)

Hopkinson, A. (Lancaster, Mossley)

Robinson, Sir T. (Lancs., Stretford)

Burn, T. H. (Belfast, St. Anne's)

Horne, Sir R. S. (Glasgow, Hillhead)

Roundell, Colonel R. F.

Butcher, Sir John George

Hunter, General Sir A. (Lancaster)

Samuel, A. M. (Surrey, Farnham)

Campion, Lieut.-Colonel W. R.

Hurd, Percy A.

Samuel, Rt. Hon. Sir H. (Norwood)

Casey, T. W.

Hurst, Lieut.-Colonel Gerald B.

Sanders, Colonel Sir Robert A.

Cautley, Henry S.

Jackson, Lieut.-Colonel Hon. F. S.

Scott, A. M. (Glasgow, Bridgeton)

Cecil, Rt. Hon. Evelyn (Birm., Aston)

James, Lieut.-Colonel Hon. Cuthbert

Shortt, Rt. Hon. E. (N'castle-on-T.)

Chamberlain, Rt. Hn. J. A. (Birm.,W.)

Jellett, William Morgan

Simm, M. T.

Chamberlain, N. (Birm., Ladywood)

Jesson, C.

Sprot, Colonel Sir Alexander

Child, Brigadier-General Sir Hill

Jones, J. T. (Carmarthen, Llanelly)

Stanley, Lieut.-Colonel Hon. G. F.

Churchill, Rt. Hon. Winston S.

Jones, William Kennedy (Hornsey)

Stevens, Marshall

Clough, Robert

Joynson-Hicks, Sir William

Stewart, Gershom

Coates, Major Sir Edward F.

Kellaway, Rt. Hon. Fredk. George

Sturrock, J. Leng

Cockerill, Brigadier-General G. K.

Kinloch-Cooke, Sir Clement

Surtees, Brigadier-General H. C.

Cohen, Major J. Brunel

Knight, Major E. A. (Kidderminster)

Sutherland, Sir William

Colvin, Brig.-General Richard Beale

Knights, Capt. H. N. (C'berwell, N.)

Talbot, G. A. (Hemel Hempstead)

Conway, Sir W. Martin

Law, Rt. Hon. A. B. (Glasgow, C.)

Taylor, J.

Coote, Colin Reith (Isle of Ely)

Lewis, Rt. Hon. J. H. (Univ., Wales)

Terrell, George (Wilts, Chippenham)

Coote, William (Tyrone, South)

Lewis, T. A. (Glam., Pontypridd)

Terrell, Captain R. (Oxford, Henley)

Cowan, D. M. (Scottish Universities)

Lister, Sir R. Ashton

Thomas-Stanford, Charles

Craig, Colonel Sir J. (Down, Mid)

Lloyd, George Butler

Tryon, Major George C.

Craik, Rt. Hon. Sir Henry

Locker-Lampson, Com. O. (H'tingd'n)

Wallace, J.

Croft, Brigadier-General Henry Page

Loseby, Captain C. E.

Ward, Col. L. (Kingston-upon-Hull)

Curzon, Commander Viscount

Lyle, C. E. Leonard

Warner, Sir T. Courtenay T.

Davies, Alfred Thomas (Lincoln)

Lyle-Samuel, Alexander

Warren, Lieut.-Col. Sir Alfred H.

Davison, Sir W. H. (Kensington, S.)

Macdonald, Rt. Hon. John Murray

Wason, John Cathcart

Dawes, Commander

M'Guffin, Samuel

Wheler, Lieut.-Colonel C. H.

Dennis, J. W. (Birmingham, Deritend)

Mackinder, Sir H. J. (Camlachie)

White, Lieut.-Col. G. D. (Southport)

Dewhurst, Lieut.-Commander Harry

M'Lean, Lieut.-Col. Charles W. W.

Williams, Lt.-Com. C. (Tavistock)

Dockrell, Sir Maurice

Macnamara, Rt. Hon. Dr. T. J.

Williamson, Rt. Hon. Sir Archibald

Donald, Thompson

McNeill, Ronald (Kent, Canterbury)

Wilson, Colonel Leslie O. (Reading)

Doyle, N. Grattan

Macquisten, F. A.

Wilson, Lieut.-Col. M. J. (Richmond)

Edge, Captain William

Mallalieu, F. W.

Wilson-Fox, Henry

Edwards, Allen C. (East Ham, S.)

Malone, Major P. B. (Tottenham, S.)

Winterton, Major Earl

Elliot, Capt. Walter E. (Lanark)

Marriott, John Arthur Ransome

Wood, Sir H. K. (Woolwich, West)

Eyres-Monsell, Commander B. M.

Martin, Captain A. E.

Wood, Major S. Hill- (High Peak)

Falle, Major Sir Bertram G.

Mond, Rt. Hon. Sir Alfred M.

Yate, Colonel Charles Edward

Fell, Sir Arthur

Montagu, Rt. Hon. E. S.

Young, Lieut.-Com. E. H. (Norwich)

FitzRoy, Captain Hon. E. A.

Moore-Brabazon, Lieut.-Col. J. T. C.

Young, W. (Perth & Kinross, Perth)

Flannery, Sir James Fortescue

Moreing, Captain Algernon H.

Younger, Sir George

Ganzonl, Captain Francis John C.

Morrison-Bell, Major A. C.

Gardiner, James

Mosley, Oswald

TELLERS FOR THE AYES.

Geddes, Rt. Hon. Sir E. (Camb'dge)

Murchison, C. K.

Lord E. Talbot and Mr. Dudley Ward.

NOES.

Acland, Rt. Hon. F. D.

Barnes, Major H. (Newcastle, E.)

Billing, Noel Pemberton-

Asquith, Rt. Hon. Herbert Henry

Benn, Captain Wedgwood (Leith)

Briant, Frank

Brown, James (Ayr and Bute)

Lowther, Rt. Hn. J. W. (Cumberland)

Sitch, Charles H.

Cecil, Rt. Hon. Lord R. (Hitchin)

Lunn, William

Smith, W. R. (Wellingborough)

Clynes, Rt. Hon. J. R.

Maclean, Rt. Hn. Sir D. (Midlothian)

Spoor, B. C.

Glanville, Harold James

Malone, C. L. (Leyton, E.)

Swan, J. E.

Graham, W. (Edinburgh, Central)

Mills, John Edmund

Thomas, Brig.-Gen. Sir O. (Anglesey)

Griffiths, T. (Monmouth, Pontypool)

Myers, Thomas

Thorne, G. R. (Wolverhampton, E.)

Grundy, T. W.

Newbould, Alfred Ernest

Waterson, A. E.

Hirst, G. H.

Norris, Colonel Sir Henry G.

Wedgwood, Colonel J. C.

Hodge, Rt. Hon. John

O'Connor, Thomas P.

White, Charles F. (Derby, Western)

Holmes, J. Stanley

Palmer, Charles Frederick (Wrekin)

Wignall, James

Kenworthy, Lieut.-Commander J. M.

Raffan, Peter Wilson

Williams, Aneurin (Durham, Consett)

Kenyon, Barnet

Richardson, R. (Houghton-le-Spring)

Wood, Major M. M. (Aberdeen, C.)

Lambert, Rt. Hon. George

Robertson, John

Locker-Lampson, G. (Wood Green)

Short, Alfred (Wednesbury)

TELLERS FOR THE NOES.—

Mr. Hogge and Mr. F. Hall.

NATIONAL EXPENDITURE.
Third Report from the Select Committee brought up, and read; Report to lie upon the Table, and to be printed. [No. 138.]
Sir FREDERICK BANBURY reported from the Select Committee on National Expenditure, That Mr. E. Cairns, whose attendance is necessary for the purpose of the inquiry, had been served with a summons to attend the Committee on 30th June, and had failed to attend; he had therefore been instructed by the Committee to report the circumstances to the House, in order that the House may take such steps as seem to the House to be proper and necessary.
Ordered, That the said Mr. Cairns do attend the Committee on Wednesday, 14th July, at Half-past Eleven of the Clock.

ORDERS OF THE DAY.

  FINANCE BILL.
  Considered in Committee.
  [Mr. WHITLEY in the Chair.]

  FINANCE BILL.

    CLAUSE 1.—(Continuation of customs duties imposed under 5 & 6 Geo. 5, c. 89, 9 & 10 Geo. 5, c. 32.)
    The following duties of customs, imposed by Part I. of the Finance (No. 2) Act, 1915, shall, subject to the provisions of Section eight of the Finance Act, 1919 (which relates to imperial preferential rates), continue to be charged, levied, and paid, in the case of the duty on motor spirit until the thirty-first day of December, nineteen hundred and twenty, in the case of the new import duties until the first day of May, nineteen hundred and twenty-one, and in the case of the other duties until the first day of August, nineteen hundred and twenty-one, that is to say:—

    Duty.

    Section of Act.

    Increased duty on tea

    1

    Additional duties on dried fruit

    8

    Additional duty on motor spirit

    10 (1)

    New import duties

    12

    The CHAIRMAN: The first Amendment on the Paper in the name of the hon. Member for Leith (Captain Wedgwood Benn) refers, I think, to the same subject as a new Clause which stands in his name and deals with the question of Imperial Preference. It appears to me that it would be much more convenient to take the discussion on the new Clause rather than on the words of this first Amendment, which is merely introductory.
    Captain W. BENN: Certainly, Sir. In that case the omission of the words "subject to the provisions of Section eight of the Finance Act, 1919 (which relates to Imperial Preference rates)" would be a consequential Amendment to be moved on Report?
    The CHAIRMAN: That is so. With regard to the second Amendment on the in the name of the same hon. Member. for Whitechapel (Mr. Kiley), there again it seems to me that the Amendment leads up to one standing fourth on the Paper,
    1060
    with the name of the same hon. Member. The first of these two Amendments deals merely with dates, and, I presume, was placed in that way to lead up to the Amendment dealing with import duties.
    Major BARNES: That is so.
    Mr. HOLMES: I beg to move, to leave out the words
    "Increased duty on tea…. 1."
    4.0 P.M.
    I want to take the opportunity of calling attention to the whole incidence of indirect taxation at the present time. There have been a number of people who have always been opposed to indirect taxation of any kind, but the majority of people have felt that there were two very good reasons for imposing indirect taxes. First, an indirect tax raises a large amount of revenue without the taxpayer really being conscious that he is paying it. Secondly, a number of people would not be taxed at all if we had only direct taxation. It is considered that everyone should pay something, at any rate, for the protection which they receive, and the privileges which they gain from the State. That applies particularly to foreigners, who visit this country and do not contribute to our direct taxation, but who do contribute something in indirect taxation, according to the commodities which they consume or purchase, and which are subject to Customs duties. While indirect taxation may be good from both those two points of view, taxes of any kind should not merely raise revenue, but should also confer a benefit, or, at any rate, should not impose any disability upon the country generally in other ways. I want to show the relationship at the present time between wages and indirect taxation. In the past, the wages of any trade have been fixed according to the labour supply and demand in that trade. As a rule, in each trade there has been a minimum arrived at either by legislation or trade union pressure, but wages have always risen according to how the skill of the workman results in the supply of labour in that trade being more or less below or above the demand, as the case may be.
    Wages, therefore, went up and down according to the labour supply and demand, but since the War we have changed all that. Wages have risen with the cost of living, and, not merely has that been done from time to time by Government

    1061
    or private action, but actually agreements have been entered into in many trades with the employés that their wages shall always be on a sliding scale, going up or down as the cost of living rises or falls. The Minister of Labour on the 17th May gave an answer in which he set out a long list of trades where the employés have their wages fixed upon a sliding scale, and he added that while the number affected might be estimated at not more than 1,000,000, the index figures of the Board of Trade which fixed these wages were watched very carefully by employers and workpeople in all trades, and were practically always quoted in wage negotiations, so that in practice the workpeople of all trades, even where there were not these agreements, were affected by the cost of living. We have been given one specific case with regard to a rise in wages under a sliding scale. There are 400,000 railway workers who receive 2s. per week increase for every increase of 10 points in the index figures of the Board of Trade. We were told by the Minister of Food that one penny per lb. increase on sugar meant in rises in wages throughout the country £39,000,000. Unfortunately, I have not been able to ascertain what one shilling per lb. on tea would mean so far as wages are concerned, but it would not be unreasonable to argue that it could not be less than one penny per lb. on sugar. This sliding scale by which wages are regulated according to the cost of living is downwards as well as upwards, and I want to ask the House to examine the extent to which the wages bill of the country would fall if one shilling per lb. were taken off tea. The effect, first, would be that the price of tea itself would fall by one shilling per lb. That would mean that the index figures of the Board of Trade would correspondingly fall, and that, in turn, would mean that the wages of all employés under these sliding scale agreements would automatically fall, and, since the Minister of Labour has said that the wages of all workpeople of the country go up if those under sliding scale agreements go up, then, correspondingly, the wages of all employés would fall immediately the wages of those under sliding scale agreements fell.
    Let us see how the workers themselves would be affected. They would have a reduction in their nominal wages but not
    1062
    in their real wages. They would be better off, though receiving less wages than at the present time. The effect of reducing wages in all trades would be to bring prices of all commodities down at the same time. A working class family under the sliding scale would have less wages correspondingly to the drop in the price of tea, but it would gain by a drop in the prices of every other commodity that it bought, and that was not included in the official list of articles which go to make up the Board of Trade index figure of the cost of living. Therefore, every working class family would be a gainer to that extent by the reduction in the price of all commodities outside the official list making up the cost of living. The Chancellor of the Exchequer probably will say that it is his first business to look after revenue, that he is getting £17,000,000 per year from the Tea Duty, and that he is being asked to give it up. I am going to show that probably he will lose nothing in revenue if he abolishes the Tea Duty, but, if my argument be correct that the abolition of the Tea Duty, acting through sliding scale agreements, would reduce wages throughout the country, then every firm in the country would make greater profits. They would not make greater profits on the goods sold in the home markets, but we are an exporting nation, and the price of the goods we export is not fixed according to the cost of production, but according to the price that we can get for them abroad. We could still get the same prices for those goods, but they would cost our manufacturers less in the making. Therefore, there would be a larger amount of profit on all exported manufactured articles. This would mean that all business firms, whether companies or private firms, would have larger profits, and the Chancellor, therefore, would collect additional Excess Profits Duty. Corporation Profits Tax, Income Tax, and, to a certain extent, Super-tax. I venture to believe that a great deal of the £17,000,000 which he would give up by the repeal of the Tea Duty would come back to him in this direct taxation.
    The abolition of this Tea Duty would have a great psychological effect throughout the country. There is nothing which gives rise to a greater anxiety than soaring prices, and this abolition of the Tea Duty would not merely bring down the price of tea, but of all other commodities used in the household. At present people think that they have much more

    1063
    money than they had before the War, but really they have less. Their purchasing power is less because the cost of goods is so much more. One of the ways in which we are going to bring down prices is by economy all round, not merely Government economy, but economy of all individuals purchasing less. The more people exercise their purchasing power, the longer will the demand for goods exceed supply. If you reduce nominal wages—not real wages—in this way, then people will be better off, though they will think that they are worse off because they get less money. The whole effect of this Tea Duty on wages, cost of living, and everything would be towards sound deflation. The Chancellor of the Exchequer has been persuading the banks to withdraw credit facilities, to call in loans, and to refuse loans, and to a certain extent it has had effect, because it has caused speculators to throw goods on the markets and in some respects it has brought down prices; but, on the other hand, it has caused serious unrest throughout the business world. It has stopped enterprise and initiative, and it has caused a feeling of dismay which one would not have believed three months ago could have come about. Everyone wants to bring about deflation, but there is a great deal of danger in deflating too quickly. Inflation took place gradually during five years, and you cannot deflate in two or three months. This would be a sound method of deflation, as it would be very gradual and effective. I believe if the Tea Duty were abolished it would have the psychological effect of satisfying the public that prices were reducing instead of rising, and would make them feel that they had less money to spend when really they had more, making them withdraw their purchasing power to its fullest extent. It would reduce wages in all trades, that is nominal wages not real wages, and would tend towards sound deflation. Both psychologically, and from a business point of view it would bring us nearer to the possibility of resuming our pre-war position so far as the cost of living is concerned. The Chancellor would lose very little in revenue, because he would get it back by means of direct taxation.
    Sir J. D. REES: The speech of the hon. Member reminds me of an occasion when one poet said to another, "My hurt is great, although it is so small," and the
    1064
    other poet replied, "Then 'twould be greater if 'twere none at all." The hon. Gentleman proved to his own satisfaction that the Chancellor of the Exchequer would absolutely profit by giving up a tea duty which now brings in £17,000,000. Speaking as one practically connected with tea, and having some knowledge of it all my life, I may say that nobody connected with tea really expects the Chancellor of the Exchequer this year to give up the Tea Duty, in spite of the immeasurable irrelevancies which are always indulged in on this occasion and in spite of the inevitable disquisitions upon direct and indirect taxation. I do not think any single person in or out of the House expects the Chancellor to do what the hon. Member has ingenuously and ingeniously suggested he ought to do. If the Chancellor were so simple as to accept the argument of the hon. Gentleman, the reduction of the Tea Duty might not result in wages falling. If the hon. Gentleman can show how in the future wages are to be reduced with the complete concurrence of and with advantage to those concerned, then he would indeed be a benefactor to the House, and to the country, and to the human race. While those who are practically interested in tea do not expect the duty to be abolished or even to be reduced at a time like this, nevertheless, I think it is desirable that somebody with a closer acquaintance with tea than the hon. Member should point out that the lower grades of tea just now are probably actually costing more to produce than what they fetch in the market. The producers of the tea, who are a loyal body, always ready to bear their share of taxation without a murmur, would be glad to be credited with that practical patriotism which they display in regard to the Tea Duty. It is no part of my business to object to the abolition of the Tea Duty, but I really regard this proposal as a waste of time. It has happened, I think, every year in the fifteen years I have been here, that some hon. Member has got up and proposed the abolition of the Tea Duty and told us how much better everybody would be if the proposition were adopted. I would venture to remind the hon. Gentleman that the direct taxpayer also pays indirect taxation, and that very simple fact seems to be totally forgotten when this issue of direct and indirect taxation is raised. Half of

    1065
    everything the direct taxpayer possesses is seized, because it is easy to be seen, and he also pays a larger share than others of indirect taxation, and then his ears are affronted by absolutely irresponsible and impossible suggestions like this.
    Lieut.-Commander KENWORTHY: In spite of the allegations made against the Mover by the hon. Baronet who has just spoken, I feel bound to support the Amendment. It is true that both poor and rich and direct and indirect taxpayer contribute to this duty, but it is a tax which is particularly hard on the very poorest of the population. It is 1s. on the pound of tea, and that means that half of the cost of the tea which the very poor look upon, rightly or wrongly, and I think rightly, as a necessity, goes in taxation, and I think that is iniquitous. If and when we are responsible for the finances of the country, we are going to get rid of this tax on tea, and I think that time may be sooner than hon. Members opposite think. The great cry in the country to-day is about the terrible cost of living. The Chancellor of the Exchequer is being assailed from two quarters. First he is being assailed by certain sections of the rich for the way he is taxing them, and then by a certain section of the poor, not because of the way he is taxing them, because most of the poor creatures do not realise it, but because of the high cost of living which they place on Government extravagance and taxation. This cry is very bitter and very genuine, and comes particularly from the people living on small pensions and small fixed incomes. The Government say that they will do what they can to bring down the cost of living. Here is a direct and simple opportunity to do so. It may be said that we cannot afford to drop this £17,000,000. Of course we can, and it can be made up in many ways. We can do it by taxing great incomes and by a levy on War fortunes, and, above all, by economy. We are spending from £35,000,000 to £45,000,000 per year on an undefined policy in Mesopotamia to enable an Arab Government to be set up, or so we are told, and that alone is double the amount raised by this perfectly iniquitous tax. If the Government are in earnest, and wish to relieve the burdens of the poor, let them drop this Tea Duty. It is useless to say that
    1066
    tea is a luxury; it is not. It is a real necessity. It is part of their daily menu, and they cannot give it up. To expect them to pay a duty of this kind is quite i defensible, and it ought to be dropped We feel very strongly about this, and we are going to drop this duty directly we are in a position to do so. Perhaps if the Chancellor cannot alter the duty now, he may be in a position to hold out a hope of a reduction later on.
    Sir D. MACLEAN: I understand my hon. and gallant Friend (Lieut.-Commander Kenworthy) has indicated the first duty he will undertake when he becomes Chancellor of Exchequer. At any rate, it does credit to his heart and I hope will also do credit to his head when the occasion arises. I wish to bring to the notice of the Chancellor a matter on which I hope to secure his agreement. As this Clause is drafted, it leaves the Committee no option but to vote for or against the whole of the duty as it at present stands. When the War broke out, the tea duty was 8d. on the lb., and Mr. McKenna was Chancellor at the time when an addition of 4d. was added, making it 1s. on the lb. Reference is made in this Clause to the Finance Act in which that figure is given. Hon. Members, I think, appreciate the difficulties of legislation by reference, and this is another instance. As the Clause is now drafted, there is no opportunity, I am afraid, of moving a reduction to 10d., or say, to 8d., as it originally stood. If the Clause were differently drafted, it would be possible to do so. I hope, therefore, that next year, if the Government is still in power, that my right hon. Friend will be in a position to meet my request that the Clause should be so drafted as to leave it open to the Committee to move a reduction of 2d. or 4d. or whatever figure any Member of the Committe might think fit to move.
    At present it unfairly limits the Committee in the operation of its desires in dealing with the proposition of the Government. In the old practice it was open to the Committee to move either the abolition of the tax or a reduction in the tax, but we are now bound by a war practice, which I think next year should be altered so as to leave the Committee its old freedom in dealing with the tax. I am myself in favour of a reduction of the tea duty, but my only way of

    1067
    enforcing that desire is to vote for the Amendment.
    Mr. RONALD McNEILL: What is there to prevent my right hon. Friend from moving the insertion of the words "half of" before the word "increased"?
    Sir D. MACLEAN: I do not think the Chair would be able to accept that. May I put it to you, Sir, as to whether that could be done?
    The CHAIRMAN: I have already put to the Committee the question that the line stand part of the Clause. What was the suggestion?
    Mr. McNEILL: I asked whether it would not be open to move to insert, before the word "increased," the words "half of," or "two-thirds of," or any other proportion.
    The CHAIRMAN: I think that would make it inconsistent with the other lines of the Clause.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): The point raised by my hon. Friend is one which I have not considered, but he can hardly expect me without consideration to promise that for the future there shall be even larger opportunities of moving Amendments and raising discussions on the Finance Bill than are afforded at the present time. As a general rule, I find that every subject can be discussed on this Bill and that most subjects can be discussed several times over, and I should be a little reluctant to extend the scope of our already very large Debate. The principal interest to me of my right hon. Friend's interposition in the Debate is that it seems to indicate that the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) did not speak for a united party. I was very much interested when the hon. and gallant Member said, "When we arrive in power, which may be much sooner than scoffers anticipate, our first task will be to abolish the tea duty.' I confess I was surprised at the apparent air of authority with which he delivered this sentiment, for I did not myself think that so experienced and so cautious a gentleman as the right hon. Member for Paisley (Mr. Asquith) would have committed himself in anticipation to any such drastic step, and I gather from my right hon. Friend the Member for Peebles (Sir D. Maclean) that the official
    1068
    Liberal Opposition have not committed themselves, and that the people who are committed by this "We" are the hon. and gallant Member for Hull and the whole of the Liberal party, excluding the majority of the Liberal party, which support the present Government, and the minority, which follow the right hon. Member for Paisley. I should not myself, if I were one of these poor people for whom the hon. and gallant Member professes to speak, bank upon the early repeal of the tea duty.
    The hon. Member who moved the Amendment (Mr. Holmes) moved it for quite different reasons. He wished to introduce a discussion of a very interesting topic, but still of a kind which I rather deprecate in Committee on the Finance Bill, for if we follow his example and spread ourselves over these wide areas of economic theory and practice, how long we shall sit I do not know, but that our holidays will be greatly curtailed it is not rash to prophesy. I will content myself, in referenece to the argument of the hon. Gentleman who moved the Amendment, by saying that if his argument is well founded, or if the different arguments by which he supports this proposal are well founded, it is not the tea duty only that he desires to repeal or the repeal of which his argument would support. His arguments were equally directed to the whole of indirect taxation, and especially of all that part which sensibly affects the index figure of the cost of living. I think most of our indirect taxation does affect that figure more or less.
    Mr. HOLMES: Not beer and tobacco.
    Mr. CHAMBERLAIN: I thought they did, but I do not know. This Amendment is not merely a hardy annual, but it is a perennial of the sturdiest growth. Whoever is in office and whoever is out of office, this question returns in one form or another every year, and every year the Gentleman at this Box resists the Amendment. Chancellors of both parties have raised the tea duty and lowered the tea duty. I have done both myself. On this occasion I am doing neither, but Chancellors have raised or lowered the tea duty as the financial condition of the country permitted a lowering or enforced a raising of the taxation of the country, and I have no doubt that that will continue to be the case in the future; but to

    1069
    suggest that 1in times like the present, when I am obliged to ask the House to increase the taxes, I should forego the tea duty for the sake of an economic theory the results of which in practice might, I think, lag far behind the expectations of the hon. Member, is, I venture to say, to make a proposition which the hon. Member would not make if he were standing in my place, nor would any hon. Gentleman who may support him in the lobby to-day. I observe that the hon. Member is taking a great interest in the Finance Bill and has put a good many Amendments on the Paper. I am glad to think that not all of them are of the same character as the one he is now moving, and if I am obliged to offer him an unqualified resistance to this first Amendment, I hope I shall be able to meet him on some of his later Amendments.
    Mr. HOGGE: The Chancellor of the Exchequer has not attempted to meet the arguments of my hon. Friend who moved the Amendment, and all that he has said can be summed up in about a couple of words. He has pointed out that the effort to reduce the tea duty is in this House a hardy annual, and that because it is a hardy annual all that he requires to do is to resist it, because circumstances are not fortuitous. I would respectfully point out that apart altogether from the effort being made year by year to get rid of indirect taxation, the case which has been put forward by my hon. Friend to-day is entirely new. There are a new set of circumstances which have arisen as a result of the action of His Majesty's Government, and my right hon. Friend, the Chancellor of the Exchequer, has not done himself his usual justice by meeting the arguments which have been brought forward and attempting to show us why in the new circumstances he cannot agree to the suggestions of my hon. Friend. I suppose my right hon. Friend would agree that the best method of all in taxation is the method of direct taxation.
    Mr. CHAMBERLAIN: No, I do not agree. I agree with Mr. Gladstone when he said that direct and indirect taxes were twin sisters, to both of whose charms we should pay homage.
    Mr. HOGGE: I am glad to know my right hon. Friend goes to such a good source for his views, but I differ en-
    1070
    tirely both from him and from Mr. Gladstone.
    Captain STANLEY WILSON: Also from Asquith.
    Mr. HOGGE: I hold this view, and I hold it strongly, that if ever you are going to interest the people of this country either in national or municipal expenditure, the only way to interest them actively and really is to make them understand that when they pay they are paying for government. If you allow people to run on in indirect taxation, and, therefore, not to appreciate what the Government is doing, the bulk of the people lose their sense of responsibility, and, if I had my personal way, I would get rid of all indirect taxation, and make all taxation direct, so as to bring home to the ratepayer and the taxpayer their responsibility of government.
    Mr. MARRIOTT: Without any exception of income?
    Mr. HOGGE: Without any exception. What are the new circumstances? Indirect taxation is levied in order that those people who are not touched by Income Tax should contribute to the revenue of the State. That was all very well when wages were determined in a different way from what they are to-day. My hon. Friend the Member for North-East Derbyshire (Mr. Holmes) pointed out quite accurately that wages were originally determined by supply and demand, but since the War—and I do not make this a personal charge against my right hon. Friend or his predecessor—wages have not been determined by supply and demand, but they have been determined by the cost of living, and we have now in active daily and weekly operation a system of index figures drawn up by the Board of Trade, which govern the wages of a large mass of the working people of this country. I think my hon. Friend read a quotation from a speech dealing with sugar, which showed that when the last increase was put on a pound of sugar, it meant an increase of 6d. in the wages of a large mass of the workmen of this country. That is to say, the moment the price of sugar went up, the wages of these people went up under the scheme which now operates, and, therefore, they were provided by the State—that is, the other direct and indirect taxpayers in the community—with the money to meet this new indirect taxation.

    1071
    Take that large class of the community, with whom we are always sympathising, but for who we are never doing anything, and who we describe as the fixed-income class, and I think no one in the Committee will disagree with me when I say that, of all the classes in the community who have been hardest hit during the War and subsequently, it is that class who have a small fixed income. If that is so, look what is happening to those people. They pay their direct taxation as well as their indirect taxation. The moment you increase, by the rise in the index figures of the Board of Trade, the wages of the working classes who are affected by that increase, you increase the price of the commodity which they sell to the rest of the community. Take the simple example of railway fares, which have gone up very high, and, I understand, are to go up higher still, because of, among other causes, the increased wage which is being paid to the railway worker. Now the railway worker is an indirect taxpayer, but, on account of the rise of wages, he is enabled to meet this. But those with fixed incomes, and the working classes who are not governed by the Board of Trade index figures, and do not share in this increase, have got to pay more for the commodity—in this case, railway fares—than they had to before. So that they are not only paying indirect taxation every time they buy a quarter of a pound of tea, but paying the other man's taxation every time. They are buying the commodity which he sells at a higher price, because he has got an increased wage owing to the cost of living.
    That was the argument my right hon. Friend did not meet, and I submit the present moment is a very proper time to overhaul the whole system of indirect taxation. My right hon. Friend made merry about the differences between some of us on this side. My position is quite clear. The Liberal party has always been in favour of a free breakfast table. The Liberal party has always been in favour of the abolition of all taxes on food on the domestic table of the working classes of this country. My attitude has always been to vote against all indirect taxes on the food of the people, and that is the Liberal position without any doubt. I am not affected by the chaff of my right hon. Friend. If he will meet the point I have now emphasised, which, I think,
    1072
    he will agree he did not meet in his original speech, I can see some force in his argument, but, until he does, I am unconvinced by his reply, and am strongly in favour of the Motion of the hon. Member for North-East Derbyshire, who raised a point of which I feel sure the country will take note, because it is a real point we have got to meet.
    Mr. W. GRAHAM: I am quite sure my right hon. Friend opposite will not for one moment suggest that a large issue of this kind is to be dismissed by ascertaining the differences which may exist among Liberal Members on this side of the House. I can claim to speak for a party which is solid and united on at least this matter, and which yields to none in the desire to see indirect taxation very largely reduced, if not entirely swept away. I was also disappointed to hear the Chancellor of the Exchequer indicate that, as far as possible, we should avoid the discussion of principles in this analysis of the Finance Bill, and come down, as I take it, to the concrete facts before us. I venture to suggest, in reply, that we are compelled—briefly and relevantly, I hope—to look at the principles, and to have regard to this Finance Bill from the point of view of the solution of the social problems of our time. I think that is a relevant consideration in any discussion of a Finance Bill, and it is from that standpoint that, only for a moment or two, I intervene to-day.
    There are three points in this discussion which are of importance now. In the first place, the actual amount involved is negligible. I do not suppose that any hon. Member will dispute that we can easily raise £17,000,000 from other sources, without appreciable hardship to any class. No Member who has studied, for example, the enormous amount of wealth which has been built up during the War, who has looked at any proposal for a Capital Levy, who has read the Report of the Select Committee which stated what had been done during war conditions in the way of increased wealth, would hesitate to suggest that, by a very slight adjustment of Income Tax or Super-tax, we could quite easily raise this sum. That is one point of the case which need not detain us. The second, and, to me, much more important point, is that beyond all

    1073
    doubt, tea is quite different from other classes of commodities which the great body of the community consume. In no sense nowadays can tea be regarded as a luxury. It has become even to the orthodox economist, one of the so-called conventional necessaries of life, and there is no doubt it has entered into the diet of all sections of our people. More particularly it has entered into the diet of the very poor, and it is from their standpoint that I wish to press this Amendment upon the right hon. Gentleman. All economists, and nearly all public men, are agreed that the very poor, who buy in very limited quantities, pay an amount of taxation which is really out of all proportion either to their ability or their share. The very fact that they purchase in such restricted Quantities carries its own penalty with it, and a very large section of that class of the population have not been able to increase their income during the War.
    The third point is this, and it is one of principle, which I would press. I belong entirely to the school which feels it is wrong and mischievous to believe that we are going to achieve any social salvation by this endless pursuit of advancing prices by increase of wages. No doubt, so long as prices are advancing throughout the world, and in this country, we must do whatever we can to increase remuneration to meet it. But we are all perfectly satisfied that that offers only temporary relief, and what we are really looking for is such a reduction in world prices and in prices in this country as will afford a real, and not a nominal, gain to the people. Can the Government—can this House at the present time—make any contribution to that end? Mr. Smillie, in one of his recent speeches, was perfectly correct when he indicated that the real contest in which we should engage was a contest to keep prices down, and here, I think, by removing or alleviating the amount of indirect taxation, we should give to a very large body of the people—in effect, to nearly all the people—a real, as opposed to a nominal, benefit. I venture to suggest that that would be a real and constructive contribution to the solution of our social difficulties. We have just passed a measure involving a considerable sum of money to ease the lot of people dependent upon fixed incomes. We have spent further millions of money in easing the
    1074
    lot of old age pensioners, and you cannot suggest that to any real extent we have met either of the difficulties to which I have just referred. Here is a scheme by which you can easily find the money from other sources which it involves, which gives us an opportunity of making this a real contribution, which will probably ease the social difficulties of our time, and, from that standpoint, I venture to think we have promoted an Amendment full of constructive statesmanship in the consideration of the Bill in which we are now engaged.
    5.0 P.M.
    Captain W. BENN: The Chancellor of the Exchequer quoted Mr. Gladstone as having said that direct and indirect taxation were twin sisters. I would ask the right hon. Gentleman in other respects he is endeavouring, or will endeavour, to found himself on the model of Mr. Gladstone? As I understand it, twins are born at the same time. They are of about the same weight. [HON. MEMBERS: "No!"] Well, I do not know, but I would like to ask the Chancellor of the Exchequer does he think that these twins of direct and indirect taxation should be of the same weight and size; that is rather an important question?
    Sir J. NORTON-GRIFFITHS: Twins are always the same size.
    Captain BENN: Did not Mr. Gladstone feel, and was it not felt in his time that direct and indirect taxation should bear a certain relation to each other. Does the Chancellor still hold that that relationship should be aimed at, because, if so, he will slice away a good deal of his Budget. We, on the contrary, think that in these days indirect taxation should be reduced and the burden placed on direct taxation, and this for reasons which have been repeatedly given by hon. Members in Debate. The hon. Gentleman who opened the Debate said that the tendency of these indirect food taxes is for them to be concentrated on the shoulders of those least able to bear them. That is the reason we object and shall continue strongly to object. This House is constantly passing Bills to give aid to certain people owing to the cost of living. The hon. Gentleman who has just spoken has pointed out that there was a sliding scale in existence by which certain classes got increased wages as the cost of living

    1075
    rose. The result is that these taxes are put upon shoulders that were never intended to bear them, and are restricted to a body of people who are the least able in the community to bear the heavy burden. Very often here quotations have been made from the speech of the present Prime Minister on this subject in the year he became Chancellor of the Exchequer. He was enlarging on the benefit of old age pensions. He quoted the words of various officers—words that are quite familiar in these Debates—which showed how this burden of the tea and sugar duties bore upon the poorest families. This is a poll tax. It is heavy in proportion to the income of those who will bear it. It is very heavy in proportion to their family. It is a tax that certainly in the national interest should be reduced to very small proportions.
    It has been shown that the form in which this Bill is introduced is very objectionable from this point of view, because it does not permit a clear issue to be raised as to whether or not we should abolish the whole tax or reduce the tax. So far as I am concerned, I have not the least hesitation in saying here and now, and I am prepared to vote for a very substantial reduction of this tax. I should like to see it, and I hope to see it, totally abolished. We are not able to move an Amendment which raises this issue in a practical form. If they wish to get anywhere near their desire, hon. Members will have to go into the Lobby with us and support this Amendment to omit these words with a view later to substituting the rate of duty which they think better. I want to make that quite plain. I myself am going to vote for the Amendment, and I should then, assuming it is carried, vote for a further Amendment and support a lower rate of duty, and this is the only way in which the form of the Bill permits this to be done. Hon. Members who wish to see a reduced duty, and are not prepared to support the total abolition, will be compelled to vote in favour of the Amendment.
    The argument put forward by the Chancellor of the Exchequer was that he must have the money. But that is an argument put forward for all taxes. T do not think there would be any real difficulty about his getting the millions
    1076
    required from other quarters if this duty were reduced. I will not make any reference to our foreign adventures or to expenditure incurred by the Secretary of State for War which would cover the whole of the Tea Duty, and make no difficulty about it. The Chancellor has it in his own hands. In an answer which he gave a few days ago in the House he gave us figures of the amount raised by the preferential rate, and the full rate, and, of course, I understand the former to be by far the greater amount of duty, £13,400,000. That is to say that the people who import certain tea get a reduction. I think, of 2d. in the pound—in respect of that duty. We contend that this preference is not going into the pockets of the people whom we might desire. Personally I do not care. It is the usual argument that this duty is being paid by the importers. We say the consumer here is not getting any benefit. The labourer in the Indian plantations is not getting any benefit. It is going into the pockets of the tea importers in this country. If, therefore, the Chancellor of the Exchequer really wishes to reduce the tea duty by 2d. he could easily find the money to replace the deficit by abolishing the preference given by the Finance Act of last year to certain importers of tea.
    Mr. CHAMBERLAIN: The result of that would not be to reduce the tax paid by the consumer. The abolition of the preference would cause 2d. more to be charged on all Indian teas, the main portion of the tea brought into this country.
    Captain BENN: No, no. I think I am right in saying that all that would happen would be that the importers of Indian tea would pay the full duty.
    Mr. CHAMBERLAIN: Then they would charge it to the consumer. Of course they would. As a matter of fact, over 90 per cent. of tea is imported at the preference rate, and the consumer is getting the benefit of that 2d.
    Captain BENN: That is a point of fact, and I say it is not so. But, of course, the Chancellor has got much better sources of information than we have. But I am informed that this preference is not going to the consumers in this country. I may be wrong. The hon. Gentleman opposite, if he thinks that, can intervene in the Debate and say so.
    Mr. R. McNEILL: All I wanted was your authority for that statement.
    Captain BENN: I have it from those who have looked into the retail price of tea, the importers of tea, and not the consumers of it. Therefore, I contend that it is in the power of the Chancellor to do so, if he wishes to alter the preference, or to abolish this preference duty on tea, which is of no benefit to the self-governing Dominions, but only to certain tea importers in this country; and he would give, in following our proposal, substantial and much-needed relief to the budget of the very poorest class.
    Lieut.-Commander WILLIAMS: I have always been rather interested in the speeches of the hon. Member for East Edinburgh. We know now, from what he has said this afternoon, that he is entirely a pre-Gladstonian in his ideas. Perhaps he would say that he is more post-Gladstonian. I rather doubt whether the House is taken with the argument on the particular point to which he addressed himself. The hon. and gallant Gentleman who has just sat down has endeavoured to put forward the old argument, that if you are giving a preference on one particular article or portion of an article, as in the case of tea, that then, if you remit the whole of that duty, the benefit will flow into the pockets of the importer. If you carry that argument to its correct and logical conclusion, you will take a very large sum out of the pockets of the Chancellor, and put an enormous sum into the pocket of the tea importer. I cannot see why the hon. and gallant Member has argued on the lines that he has in regard to the preference duty on tea, or that he can really logically come to this House and support a Motion which will give the tea importer an enormous benefit, and which will involve the Exchequer and the general community in a very great deficit, which will have to be made up in another way.
    Sir D. MACLEAN: I will admit that my hon. and gallant Friend the Member for Leith did not claim to have meticulous accuracy. I am very glad, however, to be able to put up a very good defence of my hon. Friend the Member for East Edinburgh in regard to Mr. Gladstone. I find that there is no necessity for him to differ from Mr. Gladstone, and that, I am certain, will be a matter of very great congratulation to himself, as naturally it
    1078
    is to me. I have taken the opportunity of the interval since the Chancellor spoke to look at Morley's "Life of Gladstone." I find in the second volume, page 62, that in a letter written in 1859 to a correspondent Mr. Gladstone says:
    "Economy is the first and greatest article in my financial creed. The controversy between direct and indirect taxation holds a minor though important place."
    Further on, Mr. Gladstone says:
    "I agree with you that if you had only direct taxes you would have economical government."
    I am sorry, on account of my hon. Friend the Member for East Edinburgh, being compelled to quote the next sentence:
    "In my opinion indirect taxes will last as long as the monarch."
    A great many things have happened since 1859, but so far as Mr. Gladstone was concerned the whole tendency of his financial policy was to get rid of indirect taxes.
    Mr. CHAMBERLAIN: No, no. The right hon. Gentleman will forgive me; Mr. Gladstone never went to the country with a proposal to abolish indirect taxation, but only to abolish the Income Tax.
    Sir D. MACLEAN: I am referring to 1859.
    Mr. CHAMBERLAIN: And I to 1874.
    Sir D. MACLEAN: Mr. Gladstone went to the country in 1874, or some time in the sixties, to abolish Income Tax.
    Mr. CHAMBERLAIN: He twice held the expectation of bringing the Income Tax to an end. The first occasion that Mr. Gladstone went to the country was before the Crimean War, when he introduced an Income Tax on a descending scale. Later he was wishful for the abolition of certain indirect duties and the establishment of full Free Trade as he then knew it. Later, I think I am right in saying it was in 1874—
    Sir H. CRAIK: Yes, it was.
    Mr. CHAMBERLAIN: He went to the country with a proposal to abolish Income Tax.
    The DEPUTY-CHAIRMAN (Sir E. Cornwall): I am afraid the Debate is getting on to general principles.
    Sir D. MACLEAN: This is the only opportunity the Committee will have of

    1079
    discussing this matter, though I agree we may be going a little too far on the question of general principle. But the point is a very important one, that of the relationship between direct and indirect taxation. So long as we keep it to the question of the tea, perhaps you will allow the discussion to continue on the lines it commenced.
    The DEPUTY-CHAIRMAN: I do not object to some diversion, but it is getting rather too wide.
    Sir D. MACLEAN: I agree entirely. My point is that this Amendment raises a very important question as to whether or not the Chancellor will, in connection with this Tea Duty, give further relief and raise the necessary money to meet the deficiency by an increase of direct taxation. So far as I am concerned, I recognise quite frankly I do not think it is a practical proposal to ask the Government here and now to remit the £15,000,000 that is involved. I should not be honest if I did not say that. I think, however, that it may be reduced and the loss involved by a further reduction could be found by an increase of the Income Tax. I believe firmly in direct taxation and in freeing the food of the people, and tea comes under that heading. That is a policy which I am prepared to pursue and support
    Mr. LYLE-SAMUEL: The hon. Member for East Edinburgh (Mr. Hogge) could hardly have been speaking with accuracy when he said that historically the Liberal party had always been in favour of abolishing the Tea Duty, because in ten Liberal Budgets at no time have they ever suggested the total abolition of that duty. At no time has a Liberal Government ever cancelled such a sum as this duty will bring in. I have always defended this duty because it was free from the taint of protective tariffs and because every penny of it went to the Exchequer without any leakage or waste. It is one of the forms of taxation which Liberals have always found it easy to defend. There is, however, a very grave charge to be urged against the Chancellor of the Exchequer, and it is that the amount raised by this tax is, by the right hon. Gentleman's own deliberate and wanton act, less than it ought to be. No single portion of the British Empire asked that
    1080
    the tax should be reduced in a preferential manner depriving the revenue of so large an amount.
    In answer to a question we have been told that the loss of revenue to this country by this preference would be substantially £3,650,000, and that the loss of revenue next year in a full year will be £4,400,000, or a loss of £8,050,000 at a time when the Chancellor is asking us to show him how he can save £500,000. From the time of the Budget in 1919 to the end of this year, if you add the cost of officials who will have to deal with the revenue, there will be a loss of £10,000,000 in this direction. The Chancellor of the Exchequer has ridden his favourite hobby and has sacrificed this revenue. It is true that, from a party point of view, it is popular, and he will continue it, and yet he tells us that he will be grateful if we can tell him how to save £500,000. Here is a chance. The charge of the Liberal party is that the right hon. Gentleman has deliberately diverted from the Exchequer a vast sum which would have flown naturally into its coffers had he not interfered in order to pay tribute to a fiscal god which if it is not already dead ought to be dead
    By his policy the growers or the merchants have not been benefited, the community is not getting cheaper tea, and nobody has thanked him for it. A preference has been given on tea when we had 92 per cent. of our supply grown within the Empire in order to put up a tariff against 8 per cent. grown outside the Empire, and even according to the old fiscal argument of the right hon. Gentleman that is not sound finance. I want the Liberal party to be clear about this. I do not see how any Liberal can vote for this Amendment. It is not proper that this large taxation should be sacrificed, and it is not inconsistent with Liberal views or with the great Liberal traditions which the hon. Member for East Edinburgh so bravely advocates that we should vote against this revenue. Our complaint is that the revenue is not as great as it should be because of the policy which the right hon. Gentleman has adopted.
    Mr. MYERS: There are a large number of people who live from week to week upon the income of that particular period, who have no margin of income to utilise in any other direction after they have provided the bare necessities of life. The

    1081
    principle of taxation should be to levy it upon those who have a margin to drop on, and not upon the section of the community who have nothing left when they have met their dues and demands. A large section of the industrial population live purely in the hand-to-mouth fashion from week to week. There is another section of the community below the working-class standard, and I refer to those people we had under consideration a week ago. We put a measure through this House on the Second Reading, and we passed a Financial Resolution dealing with blind people. We shall make a call upon these poor people through this tax. The old age pensioners also come into this category, and we ought not to forget that there are a few scores of thousands of discharged soldiers without the means of livelihood, unable to get a job, who are living upon the pension or allowance which they get from the State. We ought not to pay pensions to old people and discharged soldiers and hold our hand out afterwards to take back a portion of that small pittance which is given to them in this direction.
    We have heard the suggestion made that the Liberal party has always been in favour of a free breakfast table. To-day if we take tea, coffee, cocoa and sugar we find that those articles have never been as heavily taxed as they are now. The hon. Member opposite has also pointed out that ten Liberal Budgets have been introduced in a given period, and after all those Budgets have been discussed the taxes are heavier than they have ever been before in regard to this particular duty. The question of securing the £17,000,000 which the Tea Tax produces is quite a simple matter. I go back to the point that the taxes ought to be levied upon those who have a margin left after paying their taxation. We can look round in many directions and find agencies that would produce an additional £17,000,000, and they would not even know that they had made that contribution if they were not told—I refer to a tax on War wealth.
    Mr. HOLMES: There is just one point which has been made, and it is that if this proposal is carried and the one shilling duty on tea is abolished that another £17,000,000 will have to be raised to replace the revenue which will be lost. The right hon. Gentleman the Member for Peebles (Sir D. Maclean)
    1082
    said he did not mind raising an additional sum by the income tax to that extent. I made a point to which the Chancellor of the Exchequer did not reply. The effect of a reduction of one shilling in the tea tax will be to increase direct taxation in four separate directions, and while the revenue may lose £17,000,000 by indirect taxation, it will probably get nearly as much direct taxation. Let me just briefly state how that will occur. The shilling duty taken off will reduce the price of tea. That will reduce the index number of the Board of Trade in regard to the cost of living, and this will automatically reduce the wages of every worker on the sliding scale. The effect will be to reduce the wages of other workers throughout the country because, as the sliding scale goes up it increases wages, and as it comes down it reduces wages. This will also increase the profits of a great number of business firms, and automatically there will be a larger assessment of profits under the Excess Profits Duty, the Corporation Profits Tax, the Income Tax and the Super Tax, and although we have to give up £17,000,000 of indirect taxation we shall get a larger amount by direct taxation.
    Colonel WEDGWOOD: The argument of the hon. Member who has just sat down is indeed admirable, and it should be well understood on these benches. Wages are governed by the cost of subsistence, and the more the Chancellor of the Exchequer reduces the cost of subsistence the lower wages will go. That is a lesson which cannot be laid too closely to heart. Under the present industrial system the wages of labour are not governed so much by the work done as by the cost of subsistence and nothing else. That is an admirable argument to come from the Liberal Benches and from the Liberal Free Trade Benches where sound economics are always preached, and the sooner we lay it to heart the quicker the chance will be of upsetting that particular law of wages which is keeping wages in their present position. What I was particularly interested in was the argument used by the hon. Member for the Eye Division (Mr. Lyle-Samuel), who denounced the idea that it was part of the policy of the Liberal party to reduce indirect taxation. He instanced, perfectly justifiably, the attitude towards indirect taxation of successive Liberal

    1083
    Chancellors of the Exchequer. He pointed out how they had been responsible for ten Budgets between 1906 and 1916, and yet instead of a reduction of indirect taxation, it had gone up and up.
    It has been pointed out, rightly, that we must draw a quite clear distinction between the policy of the Liberal Government and the policy of the Liberal party. The policy of the Liberal party has always been to reduce indirect taxation. At one National Liberal Conference after another resolutions have been carried in favour of a reduction of indirect taxation, and in each subsequent Budget indirect taxation has inevitably gone up instead of down. It would ill become me to draw attention to these facts, for I was long a Member of the Liberal party; but it is because of this vast hiatus between the policy of the Liberal party and that of the Liberal Government that I, and so many others, find that we have to go somewhere else. I should like to point out quite clearly to my colleagues on these benches that if we wish to avoid the sad and evil fate of the Liberal party in this country, we really must, when we get into power, implement the words used by the hon. Member for Edinburgh (Mr. Hogge) and see that the Labour party and the Labour Government are both in favour of a reduction of indirect taxation—of the abolition of this form of taxation altogether. We have had many quotations from Mr. Gladstone. We quite understand that what that right hon. Gentleman said in 1880 he did not say in 1874, or in 1868, or in 1854. That is all very well. It is part of the policy of the old parties in this House, Conservative as well as Liberal, constantly to refer to the authority of other people; to point out, for instance, what Mr. Gladstone said and to proceed to assume that Mr. Gladstone got his wisdom from on High and nobody should venture to differ from him. That, however, is not the policy upon which we ought to go. It is no good talking of authorities and of accepting everybody as an authority who happens to get into the Dictionary of National Biography, and then to assume that that finishes the matter. The policy of our party is not to accept any authority, but to try to prove to the individual whether a thing is right or wrong. To my mind indirect taxation is wrong. I do not care whether Mr. Gladstone was for it, or Sir Robert Peel,
    1084
    or William the Conqueror, or anybody else. The important thing is that indirect taxation falls with crushing effect on the people least able to bear it, and, because of that, the Labour party and a Labour Government will be against it.
    Lieut.-Commander KENWORTHY: As the Chancellor of the Exchequer refused to give way to me when I intervened on the occasion of his making a most unfair charge against me, I want now to say a few words in defence of myself and of my hon. Friend who proposed this Amendment. The right hon. Gentleman suggested that we spoke only with the authority of a party of two on this subject. Twice since I entered this House have we had Divisions on this question of keeping on the Tea Duty. I admit that the party to which I belong is a small one in this House—the Independent Liberal party I mean—but it represents a not inconsiderable body of opinion outside. Like the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), I have attended many conferences of the Liberal party, where we have unanimously declared for a free breakfast table. We still believe in that, and whenever we form a Government, and I hope it may be soon that we shall do so, we shall give our support to that policy. The country are getting pretty sick, at any rate, of the present Government, and there would be no difficulty in finding men to form another Government. Anyone almost would be a welcome change to the present muddlers. I believe I am speaking for the bulk of people outside who believe in Liberal principles, and who wish to do away with this tax on tea; we, at any rate, mean to get rid of it.
    Sir W. JOYNSON-HICKS: I rather look forward to the time when the hon. Member who last addressed this Committee becomes Chancellor of the Exchequer, for then he will be able to show us how what he advocates can be carried out in practice. It is interesting to find hon. Members around him giving different reasons for doing away with this tax. One set offer as a most conclusive reason that it ought to be done away with because it presses hardly on the lower class of wage-earners, while the academic Liberals are prepared to do away with it because it will reduce wages, and, presumably, the wages of the

    1085
    lower wage-earners. What the hon. Member for Newcastle-under-Lyme meant I am not quite sure. He was a Liberal, now he tells us he is a Member of the Labour party and he is not in favour of any authority whatever. He is not going to be guided by Sir Robert Peel or even by William the Conqueror. I can only suggest that if my Labour friends want to get on well with the hon. Member they will have to bow to one authority, and that will be the authority of the Pope of Newcastle-under-Lyme, because I am sure he will not work with anybody who does not agree with him. The reason why we ought to support the Government in regard to this duty is that everybody in this country must, if we are to keep our heads above water, bear some share of the taxation of the country; I do not care how small it may be. Of course it is much easier as an electioneering move to go down to one's constituents, and suggest doing away with all duties on tea, sugar, and so on, but the honest thing for Members of Parliament to do is to tell their constituents that there has been a war, that it has been for the benefit of the wage-earning class as well as of other classes. [HON. MEMBERS: "No, no!"] I wonder what would have happened to hon. Members on the Labour Benches, and particularly to the hon. Member for Hull (Lieut.-Commander Kenworthy) if the Germans had won this War and had come over here. I am sure of one thing, and that is that there would not have been quite so much free speech as there is in this House.
    Lieut. - Commander KENWORTHY: There is not much free speech now.
    Sir W. JOYNSON-HICKS: I do not know how much more free speech the hon. and gallant Member wants. It seems to me he gets a fair share.
    Colonel WEDGWOOD: We take it.
    Sir W. JOYNSON-HICKS: I want to protest against the action of these Members of the House, whose speeches will undoubtedly be reported in the columns of the Labour newspapers. They are speeches which constitute a bribe definitely and deliberately offered in order to get into power. I say quite advisedly I am prepared to go down and tell my own constituents that the right and proper thing for any man, however poor he may be, is to pay his share of the
    1086
    expenditure on this War. That, I submit, is a conclusive reason for supporting this tax.
    Mr. HOGGE: The speech we have listened to just now proves that some hon. Members have not been paying attention to the arguemnts which have been advanced against this duty. It has been suggested that we as academic Liberals are in favour of reducing wages. As a supporter of the Amendment I want to say that I am not in favour of anything of the kind. My hon. Friend who spoke last (Sir W. Joynson-Hicks) certainly could not have heard the speech of the hon. Member who moved the Amendment.
    Sir W. JOYNSON-HICKS: I heard his last speech, in which he distinctly raised the point referred to.
    Mr. HOGGE: Our proposal is not to reduce wages. We are facing an industrial situation about which every Member is conplaining from day to day in this House, namely, that you have a vicious circle of wages attempting to catch up prices. We have pointed out that these wages depend upon the index numbers of the Board of Trade, and that while certain classes of the community are getting an artificial wage, the rest of the community are being called upon to bear indirect taxation a second time. If a railway worker gets an increased wage because the cost of living has gone up, he does not get a second increase because the railway fares go up, and, therefore, it can be said he is paying indirect taxation a second time. I wish hon. Members would attempt to realise the new state of affairs which exists. At the time indirect taxation was originally levied it was levied when wages were governed by the laws of supply and demand, but to-day wages are governed by the cost of living, and that means that the community generally pays indirect taxation twice over. We say that that is not fair, and the only reply we have had from the Government Bench to-day is that this is a hardy annual, and that we cannot have our desire. I do not mind the Government beating us down in the Division Lobby, but I should like them to give us intelligent and substantial reasons why they cannot see their way to depart from the position they have taken up. The Financial Secretary of the Treasury is

    1087
    usually very good to us, and perhaps he, on behalf of the Treasury, refuses to meet the new situation in which wages are being governed by the cost of living instead of by supply and demand. For my part I am in favour of the total abolition of indirect taxation.
    Mr. SWAN: I want to support the Amendment, not as an academic advocate of any branch of the labour movement at all, nor with any burning desire to see wages reduced, but in order that we may increase the value of the wage of the ordinary wage-earner and help to maintain the value of the pension of the old soldier and of the income of the poor person. This tax presses on the poorest of the poor in the community. It has been suggested by the hon. Member (Sir W. Joynson-Hicks) that the poor ought to pay their fair share of taxation. We believe that the working classes of the
    country pay all the taxation of the country, either direct or indirect, as it can only come out of the wealth which is being produced by labour.
    Viscountess ASTOR: What about brains?
    Mr. SWAN: Yes, we include the brains, and we say that the poor of all classes, in paying this 1s. per lb. on tea, are paying for the War, while others are enjoying colossal incomes earned at their expense. I hope the Chancellor of the Exchequer will see his way clear to assist the poor of the community and to relieve them of this unjust tax which is of such importance in reducing their standard of living.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 242; Noes, 45.

    Division No. 179.]

    AYES.

    [5.45 p.m.

    Adair, Rear-Admiral Thomas B. S.

    Colvin, Brig.-General Richard Beale

    Hennessy, Major J. R. G.

    Addison, Rt. Hon. Dr. C.

    Cooper, Sir Richard Ashmole

    Herbert, Hon. A. (Somerset, Yeovil)

    Agg-Gardner, Sir James Tynte

    Coote, Colin Reith (Isle of Ely)

    Hickman, Brig.-General Thomas E.

    Allen, Lieut.-Colonel William James

    Coote, William (Tyrone, South)

    Hills, Major John Waller

    Astor, Viscountess

    Cowan, D. M. (Scottish Universities)

    Hinds, John

    Baird, John Lawrence

    Craig, Colonel Sir J. (Down, Mid)

    Hoare, Lieut.-Colonel Sir S. J. G.

    Baldwin, Rt. Hon. Stanley

    Craik, Rt. Hon. Sir Henry

    Hohler, Gerald Fitzroy

    Balfour, George (Hampstead)

    Croft, Brigadier-General Henry Page

    Hood, Joseph

    Banbury, Rt. Hon. Sir Frederick G.

    Curzon, Commander Viscount

    Hope, Sir H. (Stirling &Cl'ckm'nn'n,W.)

    Banner, Sir John S. Harmood-

    Davidson, Major-General Sir J. H.

    Hope, James F. (Sheffield, Central)

    Barnston, Major Harry

    Davies, Sir William H. (Bristol, S.)

    Hopkins, John W. W.

    Barrand, A. R.

    Davison, Sir W. H. (Kensington, S.)

    Hopkinson, A. (Lancaster, Mossley)

    Bell, Lieut.-Col. W. C. H. (Devizes)

    Dawes, Commander

    Horne, Sir R. S. (Glasgow, Hillhead)

    Benn, Capt. Sir I. H., Bart. (Gr'nw'h)

    Dennis, J. W. (Birmingham, Deritend)

    Hunter, General Sir A. (Lancaster)

    Betterton, Henry B.

    Dockrell, Sir Maurice

    Hurd, Percy A.

    Birchall, Major J. Dearman

    Duncannon, Viscount

    Hurst, Lieut.-Colonel Gerald B.

    Bird, Sir A. (Wolverhampton, West)

    Edgar, Clifford B.

    Jackson, Lieut.-Colonel Hon. F. S.

    Blades, Capt. Sir George Rowland

    Edge, Captain William

    James, Lieut.- Colonel Hon. Cuthbert

    Blair, Reginald

    Elliot, Capt. Walter E. (Lanark)

    Jephcott, A. R.

    Blake, Sir Francis Douglas

    Elveden, Viscount

    Jellett, William Morgan

    Blane, T. A.

    Eyres-Monsell, Commander B. M.

    Jesson, C.

    Boles, Lieut.-Colonel D. F.

    Falle, Major Sir Bertram G.

    Jodrell, Neville Paul

    Borwick, Major G. O.

    Farquharson, Major A. C.

    Jones, Sir Edgar R. (Merthyr Tydvll)

    Boscawen, Rt. Hon. Sir A. Griffith-

    Fell, Sir Arthur

    Jones, J. T. (Carmarthen, Llanelly)

    Bowyer, Captain G. E. W.

    FitzRoy, Captain Hon. E. A.

    Jones, William Kennedy (Hornsey)

    Breese, Major Charles E.

    Foxcroft, Captain Charles Talbot

    Joynson-Hicks, Sir William

    Bridgeman, William Clive

    Frece, Sir Walter de

    Kellaway, Rt. Hon. Fredk. George

    Briggs, Harold

    Ganzoni, Captain Francis John C.

    Kelley, Major Fred (Rotherham)

    Brittain, Sir Harry

    Gardiner, James

    Kinloch-Cooke, Sir Clement

    Brown, Captain D. C.

    Geddes, Rt. Hon. Sir E. (Camb'dge)

    Knight, Major E. A. (Kidderminster)

    Bruton, Sir James

    Gibbs, Colonel George Abraham

    Knights, Capt. H. N. (C'berwell, N.)

    Buchanan, Lieut.-Colonel A. L. H.

    Gilmour, Lieut.-Colonel John

    Lambert, Rt. Hon. George

    Buckley, Lieut.-Colonel A.

    Goff, Sir R. Park

    Lane-Fox, G. R.

    Bull, Rt. Hon. Sir William James

    Grant, James A.

    Law, Rt. Hon. A. Bonar (Glasgow)

    Burdon, Colonel Rowland

    Green, Joseph F. (Leicester, W.)

    Lewis, Rt. Hon. J. H. (Univ., Wales)

    Burn, Col. C. R. (Devon, Torquay)

    Greenwood, William (Stockport)

    Lister, Sir R. Ashton

    Butcher, Sir John George

    Gretton, Colonel John

    Lloyd-Greame, Major Sir P.

    Casey, T. W.

    Gritten, W. G. Howard

    Locker-Lampson, G. (Wood Green)

    Cautley, Henry S.

    Guinness, Lieut.-Col. Hon. W. E.

    Locker-Lampson, Com. O. (H'tingd'n)

    Chamberlain, Rt. Hn. J. A.(Blrm.,W.)

    Gwynne, Rupert S.

    Lonsdale, James Rolston

    Chamberlain, N. (Birm., Ladywood)

    Hacking, Captain Douglas H.

    Lorden, John William

    Child, Brigadier-General Sir Hill

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Lyle, C. E. Leonard

    Clay, Lieut.-Colonel H. H. Spender

    Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)

    Lyle-Samuel, Alexander

    Clough, Robert

    Hambro, Captain Angus Valdemar

    Mackinder, Sir H. J. (Camlachie)

    Coates, Major Sir Edward F.

    Hanna, George Boyle

    M'Micking, Major Gilbert

    Coats, Sir Stuart

    Hanson, Sir Charles Augustin

    Macnamara, Rt. Hon. Dr. T. J.

    Cockerill, Brigadier-General G. K.

    Harris, Sir Henry Percy

    McNeill, Ronald (Kent, Canterbury)

    Cohen, Major J. Brunel

    Haslam, Lewis

    Macquisten, F. A.

    Collins, Col. Sir G. P. (Greenock)

    Henderson, Major V. L. (Tradeston)

    Mallalieu, F. W.

    Malone, Major P. B. (Tottenham, S)

    Pratt, John William

    Sutherland, Sir William

    Marriott, John Arthur Ransome

    Preston, W. R.

    Talbot, G. A. (Hemel Hempstead)

    Martin, Captain A. E.

    Prescott, Major W. H.

    Taylor, J.

    Mildmay, Colonel Rt. Hon. F. B.

    Pretyman, Rt. Hon. Ernest G.

    Terrell, George (Wilts, Chippenham)

    Mitchell, William Lane

    Pulley, Charles Thornton

    Thomas-Stanford, Charles

    Molson, Major John Elsdale

    Purchase, H. G.

    Tickler, Thomas George

    Mond, Rt. Hon. Sir Alfred M.

    Rae, H. Norman

    Tryon, Major George Clement

    Moore, Major-General Sir Newton J.

    Randles, Sir John S.

    Turton, E. R.

    Moreing, Captain Algernon H.

    Raper, A. Baldwin

    Waddington, R.

    Morris, Richard

    Raw, Lieutenant-Colonel N.

    Wallace, J.

    Morrison, Hugh

    Rees, Sir J. D. (Nottingham, East)

    Ward-Jackson, Major C. L.

    Mount, William Arthur

    Rees, Capt. J. Tudor- (Barnstaple)

    Ward, Col. L. (Kingston-upon-Hull)

    Murchison, C. K.

    Reid, D. D.

    Warren, Lieut.-Col. Sir Alfred H

    Murray, C. D. (Edinburgh)

    Roberts, Sir S. (Sheffield, Ecclesall)

    White, Lieut.-Col. G. D. (Southport)

    Murray, Major William (Dumfries)

    Robinson, Sir T. (Lancs., Stretford)

    Williams, Lt.-Com. C. (Tavistock)

    Newman, Sir R. H. S. D. L. (Exeter)

    Roundell, Colonel R. F.

    Willoughby, Lieut.-Col. Hon. Claud

    Nicholson, William G. (Petersfield)

    Rutherford, Colonel Sir J. (Darwen)

    Wills, Lieut.-Colonel Sir Gilbert

    Nield, Sir Herbert

    Rutherford, Sir W. W. (Edge Hill)

    Wilson, Capt. A. S. (Holderness)

    Norris, Colonel Sir Henry G.

    Samuel, A. M. (Surrey, Farnham)

    Wilson, Daniel M. (Down, West)

    Norton-Griffiths, Lieut.-Col. Sir John

    Samuel, Rt. Hon. Sir H. (Norwood)

    Wilson-Fox, Henry

    O'Neill, Major Hon. Robert W. H.

    Samuel, Samuel (W'dsworth, Putney)

    Wood, Hon. Edward F. L. (Ripon)

    Ormsby-Gore, Captain Hon. W.

    Sanders, Colonel Sir Robert A.

    Wood, Sir H. K. (Woolwich, West)

    Palmer, Major Godfrey Mark

    Scott, Sir Samuel (St. Marylebone)

    Wood, Sir J. (Stalybridge & Hyde)

    Palmer, Brigadier-General G. L.

    Shaw, William T. (Forfar)

    Wood, Major S. Hill- (High Peak)

    Parker, James

    Shortt, Rt. Hon. E. (N'castle-on-T.)

    Yate, Colonel Charles Edward

    Parry, Lieut.-Colonel Thomas Henry

    Simm, M. T.

    Young, Lieut.-Com. E. H. (Norwich)

    Pearce, Sir William

    Sprot, Colonel Sir Alexander

    Young, Sir Frederick W. (Swindon)

    Pease, Rt. Hon. Herbert Pike

    Stanley, Major H. G. (Preston)

    Young, W. (Perth & Kinross, Perth)

    Peel, Col. Hn. S. (Uxbridge, Mddx.)

    Starkey, Captain John R.

    Younger, Sir George

    Perkins, Walter Frank

    Stewart, Gershom

    Perring, William George

    Strauss, Edward Anthony

    TELLERS FOR THE AYES.—

    Pilditch, Sir Philip

    Sturrock, J. Leng

    Lord Edmund Talbot and Mr. Dudley Ward.

    Pownall, Lieut.-Colonel Assheton

    Surtees, Brigadier-General H. C.

    NOES.

    Benn, Captain Wedgwood (Leith)

    Kenworthy, Lieut.-Commander J. M.

    Seddon, J. A.

    Brown, James (Ayr and Bute)

    Kenyon, Barnet

    Short, Alfred (Wednesbury)

    Clynes, Rt. Hon. J. R.

    Klley, James D.

    Sitch, Charles H.

    Finney, Samuel

    Lunn, William

    Smith, W. R. (Wellingborough)

    Galbraith, Samuel

    Malone, C. L. (Leyton, E.)

    Spoor, B. C.

    Glanville, Harold James

    Mills, John Edmund

    Swan, J. E.

    Graham, W. (Edinburgh, Central)

    Murray, Dr. D. (Inverness & Ross)

    Thorne, G. R. (Wolverhampton, E.)

    Griffiths, T. (Monmouth, Pontypool)

    Myers, Thomas

    Tootill, Robert

    Grundy, T. W.

    Newbould, Alfred Ernest

    Waterson, A. E.

    Guest, J. (York, W. R., Hemsworth)

    O'Connor, Thomas P.

    Wedgwood, Colonel J. C.

    Hall, F. (York, W. R., Normanton)

    O'Grady, Captain James

    White, Charles F. (Derby, Western)

    Hallas, Eldred

    Raffan, Peter Wilson

    Wood, Major M. M. (Aberdeen, C.)

    Hayward, Major Evan

    Richardson, R. (Houghton-le-Spring)

    Young, Robert (Lancaster, Newton)

    Hirst, G. H.

    Robertson, John

    Hodge, Rt. Hon. John

    Rose, Frank H.

    TELLERS FOR THE NOES.—

    Irving, Dan

    Royce, William Stapleton

    Mr. Holmes and Mr. Hogge.

    Mr. KILEY: I beg to move, to leave out the words,
    "New import duties … 12."
    This Amendment, if the Committee accept it, means the deletion of that part of the Clause which refers to the duties levied on manuafctured and semi-manufactured articles. Before inviting the Committee to accept this proposal, may I refer to the reasons which the then Chancellor of the Exchequer gave when, in 1915, the duties in question were imposed. I will read from the OFFICIAL REPORT of that period what Mr. M'Kenna, the then Chancellor of the Exchequer, said:
    "I put forward therefore a list of articles, the importation of which may properly be restricted by means of duties in time of war on both grounds, namely, that of foreign exchange and luxury. So far as the duties do not put an end to importation they may be a source of revenue not to be neglected."
    1090
    6.0 P.M.
    Last year, in the discussion which took place, the present Chancellor of the Exchequer, when pressed to remove the duties, asked the Committee to allow them to continue for another year, because the reasons which existed at the time when they were imposed still held good, and were, as a matter of fact, complicated to an even greater degree by the rate of exchange prevailing at that period. I regret that we are not favoured with the presence of the First Commissioner of Works, because, when these proposals were brought forward in 1915, they had no more strenuous opponent that the right hon. Gentleman. In 1915 he gave very powerful reasons against their imposition, and stated, in addition, that they were of a pettifogging nature and would be a source of irritation and annoyance, as well as a serious detriment to the trade of this

    1091
    country. It may not be without interest to hon. Members of the Committee to try and realise what was the volume of business affected by the duties in 1913. I take that year because it was a boom year, and a year not affected by any war influence. The total volume of the imports of these articles—clocks, watches, musical instruments, and motor-cars—at that period was £10,500,000 sterling. The idea of these taxes was to put a stop to the bulk of that trade. I find, however, that in the year 1919, which has just closed, that total was reduced from £10,500,000 to something like £9,000,000. To be quite fair, there is a considerable difference in the value of the commodities, and it is interesting to note that, as far as the volume of trade is concerned, there was no substantial decrease. I think that is a very significant fact in conjunction with these figures, which will not be without interest to the Committee. Both the Chancellor of the Exchequer of 1915 and the present Chancellor of the Exchequer regarded these commodities as being articles of pure luxury, and yet, in a statement published in the OFFICIAL REPORT for the 1st June, which gives some analysis of the figures relating to these articles, it is shown that the revenue derived from the duty on motor-cars was £1,021,000, while the duty derived from accessories and component parts—that is to say, parts used by our manufacturers for building up machines—was £975,000; so that practically half of the total consisted of semi-manufactured goods. In the case of musical instruments, the revenue derived from completed instruments was £72,000, while that derived from component parts was more than double that amount, namely, no less than £165,000. I think I shall be quite safe in assuming that at least one-half of the revenue received is revenue which is put upon manufactured or semi-manufactured articles which affect the trade of our manufacturers. There was a difference of something like £1,500,000 between the imports of these goods in 1919 and in the year preceding the War. It is very interesting to find, on examining the figures, that in 1913 we re-exported of these commodities a little over £1,500,000. In the year 1919, due, I suggest to the imposition of these duties, it was some-
    1092
    thing less than £250,000. We have managed to lose during that period, without any chance of recovering it, a very substantial amount of re-export trade, because 50 per cent. of it at least applies to material or component parts, and the imposition of the duty has had a serious effect, because it has prevented the re-sale of a very considerable part of these goods. There is an interesting point in connection with the interpretation of their duties by the Customs officers. I was told the other day about a glass importer who imported mirror glass. He was asked by the Customs authorities whether any of it was used by lamp manufacturers, and he explained that it was, for instance, by motor-car manufacturers, who would use it in making motor lamps, and it would also be used in making lamps for ships and railways. "Very well," said the Customs, "you must pay the duty." He naturally rather demurred, and said he could not keep a record of where every sheet of glass went and how it was used. But he was told that if he did not pay the duty he could not get his glass, so he wisely paid the tax and passed it on to the consumer. He was not going to bother to go round at the end of the year and inquire of each person to whom he had sold the material as to what proportion was sold for this, that or the other trade.
    That leads one up to another illustration of what effect the tax has had in increasing prices. Let me take it now on completely manufactured articles. You could buy clocks in pre-War days for three or four shillings. On account of enhanced cost of production, and having to have to go to other markets to purchase, you found yourself in the midst of the War unable to obtain these clocks for anything under 30s. The 33½ per cent. was put on such things as transport charges, and the price of the article increased to something like 50 per cent. before the importer obtained it. The result was that he locked up a considerable amount of capital and, having to provide a substantial amount of money, he necessarily wanted a larger return. Then as each successive shipment arrived the freights increased on each fresh batch, and the tax increased on the batch, and so the circle went on until such an article as a cheap clock, which is a necessity in every workman's family, went up from 3s. or 4s. till is reached 30s. There is a similar

    1093
    state of affairs in regard to watches, the bulk of which are of a cheap metal kind, and some millions of them were imported. It is essential, as they are not made in this country, that they should be imported, and owing to the duties the prices were regulated accordingly and were increasing all the time. Another class of goods which will show the injurious effect the tax has had is musical instruments—pianos, for instance. In pre-War days the piano industry in this country was a very important one. Thanks to our facilities for being able to import mahogany and walnut wood, and being able to obtain component parts, we assembled them in this country and were able to produce at a lower price than any competitive country, and we did an enormous business in cheap pianos.
    The War has a good deal to answer for in the way of increased difficulties, but, apart from that, the taxes have caused irritation, and there is delay which could be avoided in gettng the goods, and it would not be without interest if I quoted the transport charges on a consignment to the London Docks: Taping and sealing, 9s.; opening for Customs examination, 6s.; taking into bonded warehouse for Customs examination, 3s.; bonding charges, 4s. 6d.; warehousing, 2s. 3d. Another item is Customs entry and clearing formalities, 7s. 6d. This is a very interesting document of the charges of a transport carrier, showing the formality which has to be gone through in order to obtain a consignment of goods on which 33⅓ per cent. is levied. These details show the injurious effect upon trade of retaining these irritating duties, which are a source of annoyance, and are no substantial gain to the community. It is true that the revenue received during the past year amounted to £2,700,000, but if you remove the shipping charges and other expenses, I suggest that the total revenue derived from the importation of the article could not be put down at anything more than £1,000,000. I know the Chancellor of the Exchequer will very likely say these are articles of luxury, and he cannot do without this £1,000,000 or £2,700,000. He complains that we do not show him any practical way of raising revenue, although I, as a Free Trader, object to revenue derived in this fashion altogether. If he wants a suggestion I will invite him to turn his mind to such articles as diamonds, pearls and precious
    1094
    stones, which could not have amounted before the War to anything less than £3,000,000. There will be very little difference of opinion as to these being articles of luxury, and I think all the lot would go in a decent-sized trunk, and the right hon. Gentleman would not need a gigantic staff. He would not cause irritation, and importers would be saved the list of charges I have read out.
    It will be aruged that motor cars are articles of luxury. What you import in way of motors cars are those of a low-grade standard which, since the War, we have not been able to produce. In my judgment it would be unwise for us to place any obstacles in the way of enabling cheap and quick transport to be effected, and we ought to encourage the import of articles of this character. All the industries which I have mentioned are feeling the effects of the tax. The greater the restrictions placed upon these commodities the higher the prices. It is a mistake to have described these as articles of luxury. They are a sheer necessity. In the year 1915 these were some of the first articles in which increased prices played a part. You have only to start in one or two directions and plenty of other articles follow. I confidently suggest that the time has arrived when, without any serious disadvantage, these duties could be removed, and the result would be, in my judgment, to give a flillip to our trade in these directions, and also to our overseas trade, to retain which we are anxious to do all we can. This country has an enormous business in supplying articles to different parts of the British Empire. If you take a country like India you may have a small trader who requires a miscellaneous collection of goods, and he wants consignments of them. He cannot have a separate consignment, say, of clocks and of some other class of goods, but they must be combined, but on account of the very high prices you have put up a serious obstacle in the way of developing that branch of commerce, and, as a result, you lose the sale of other commodities. The Chancellor of the Exchequer says he has set up an arrangement for the purpose of giving drawbacks for this overseas trade, but if he knew all the paraphernalia that is necessary before you can get such a scheme into operation he would realise the extent of the delay. I am told that if you want to get something out of

    1095
    the stores it would take anything from seven to ten days before you could get the goods removed. If you had sent a consignment of watches and you wanted to take ten out you would have to take your full consignment away. In view of the insignificance of the revenue, I submit that the Chancellor of the Exchequer would be well advised in abolishing these duties and, if he wants more revenue, he should look in other directions.
    Lieut.-Commander KENWORTHY: I am not going to follow closely the arguments of my hon. Friend who has just spoken, but I entirely agree with every word he said. This tax, by reducing imports from abroad, reduces our export trade. My hon. Friend has dealt with the matter as one who has had close experience. I want to draw attention to one or two other matters in connection with these new import duties. I would draw attention to the tax on cinema films. The Finance Act of 1915 lays it down that the tax on the blank film on which no picture has been impressed should be one-third of a penny per lineal foot. That is a tax on the raw material of the cinema industry, which is an industry of tremendous and growing importance. We wish to see the British cinema trade encouraged in every way, and here is a direct tax on the raw material of that trade. The positive film, that is, the film containing pictures ready for exhibitions, is taxed at the rate of one penny per lineal foot. That is the finished article. The next tax in the scale is extremely interesting. The negative, that is, a film containing photographs from which positives can be printed, is charged 5d. per lineal foot. The negative will need a certain amount of British labour expended upon it, and you charge five times as much per lineal foot as you do for the positive film ready for exhibition. I understand that the plea of the high priests of Tariff Reform is that, by preventing goods from coming into this country or by preventing finished goods from coming into this country, you give more employment to British men and women. Here is a case in which, apparently, the incidence of the tax works in exactly the opposite direction. The finished article is only taxed at the rate of 1d. per foot, but the negative, which will require a good deal
    1096
    of work expended upon it by the skilled artisans of the cinema trade, is taxed at the rate of 5d. This tax works out to a very considerable sum on every film shown. On a thousand feet film, which only lasts twenty minutes, the tax on the positive finished article is £4 3s. 4d., while the tax on the negative is £20 16s. 8d. The total estimated yield of the tax, according to the financial statement, is £250,000.
    That is a very serious tax to put upon the amusements of the people, in addition to the ordinary Entertainments Tax. You are doubly taxing the cinema industry. I admit that a small proportion of the films shown are not conducive to education, and do not tend to raise the standard of the morals of the people, but the great majority are of distinctly educative value to the community and especially to young people, and it is very questionable whether it is good policy taxing them in this way. There is no corresponding tax on newspapers. There was a tax on newspapers in the Sixties, but it was taken off, and bitterly was it assailed at the time by the Conservatives of that day. No one has suggested re-imposing the tax on newspapers. Why should this special industry of the cinema, which is very closely allied to the newspaper industry, be taxed in this way? Its other close ally is the theatre, which is only taxed by the ordinary Entertainments Tax which the cinema has to pay as well. Mr. Charlie Chaplin is taxed £20 for every 1,000 feet, and the same applies to the world's sweetheart, Mary Pickford. Are cinematographs such a luxury that they have to be taxed in this way. They are the amusement of the poor, and the very poor. People who cannot afford to go to an ordinary entertainment or music hall manage to scrape together a few pence in the poor districts of our great towns and see a cinematograph entertainment, and, undoubtedly, their minds are diverted and often improved. Why should there be a special tax on the importation of films? I should have thought the most valuable films were those manufactured in foreign countries. We want the people of this country to have knowledge of other countries, and I should have thought the Chancellor of the Exchequer would have particularly welcomed films showing scenes in foreign lands, for he and his school would like

    1097
    to paint the whole map red. With few exception they would like the inhabited globe to be included in the British Empire. Therefore, I should have thought he would have been reluctant to impose a special tax on films manufactured abroad. From the educational point of view it is a mistake.
    The other taxes are just as objectionable. I entirely agree with the hon Member (Mr. Kiley) in regard to the taxes on clocks, watches and motor cars, and I certainly cannot understand why there should be a special tax on musical instruments. Surely we want a little music nowadays. Why should we want to put an ad valorem tax of 33 per cent. on cheap musical instruments from abroad? Do we not all remember the cry in the dark days when all the soldiers were telling us to send out mouth-organs and musical instruments; anything that would make a cheerful noise. After all the suffering and darkness of the War we want a little music in the homes of the people, and I object most strongly to the artificial raising of prices. It is impossible at the present time to buy cheap musical instruments. I tried the other day to buy some cheap mouth-organs for my children. I could not get a decent mouth-organ anywhere. The cheap and nasty ones I could get were five or six times the pre-War price, the explanation being that these things were made abroad and we have not been able to make them at home. This is not a trade suitable for this country, and we have to pay heavily for inferior articles. I have the greatest objection to these import duties, because the artificial embargoes on trade are the curse of Europe to-day. We ought to set an example in sweeping them away. The one thing above all others that is impeding the recovery of Europe is in setting up all these small States which are blockading each other and putting artificial obstacles in the way of trade. They ought to be swept away and we ought to set an example in sweeping away the obstacles. It is because these import duties are an hindrance to trade and put up prices on things that are not luxuries, but are necessities, that I shall vote against them.
    Major HAYWARD: I rise to support the Amendment, and if I do not follow the arguments of my hon. Friend (Lieut.-Commander Kenworthy), I hope I shall not be considered to be against cheap
    1098
    music in the homes of the people. These import duties were first imposed, not as War taxation, but as War legislation. The object of these duties was not so much to raise revenue as to prohibit they import of the articles altogether. That was the primary object of the original duties. To make it more sure that that should be effective during the War, the articles themselves were prohibited entirely from coming into this country, so that, after the prohibition was removed, a new situation entirely arose which bears no relation whatever to the circumstances which existed when the duties were imposed. I think I am right in saying that when we opposed the retention of these duties, during the discussion on the Finance Bill last year, we did so on the grounds that the War was now over, that the circumstances had changed, and that these duties should now go. My recollection is that the Chancellor of the Exchequer supported their retention because he said he found the duties there and that the War position had not entirely changed, and that, moreover, he was not altogether unmindful of the revenue that was derived from them. The arguments that were used last year on this question apply with even greater force to-day. Another year has passed, and to that extent the War conditions have further receded. I do hope that the Chancellor of the Exchequer will see his way not to impose these duties any further. There is also the question of the cost of their collection. I do not think we know yet exactly what that cost is, but I recollect seeing in a White Paper some months ago, in a list of addition and and reduction of staff in various Governments Departments, a very large increase in the Customs and Excise Departments. I venture to suggest that that was largely due, not only to the import duties, but to the preference which was imposed. I shall be greatly obliged if the Chancellor of the Exchequer, when he replies, will tell the Committee exactly how many new Customs officers have been appointed in order to do the extra work imposed on that Department through these import duties and preference duties. This question does really raise the whole problem of preference and protection. It is impossible to get away from that fact. You have first of all the full duties against the foreigner, then you have the reduced

    1099
    duty against the Dominions and the Colonies, and then again you have no corresponding excise on the home manufacturer. I do hope the Chancellor of the Exchequer will tell us that the time has come—perhaps he will give us some date—when we can anticipate the end of these duties and that he is not going to use the adventitious aid of these duties, which he found imposed, in order to drive in the thin end of the wedge of a widespread and permanent system of protection.
    Mr. CHAMBERLAIN: I do not know whether it is possible for the Committee to consider a question of this kind without reference to old controversies or whether the hon. Gentleman opposite will give me full credit for what I say when I tell them that in making the proposals that are now under discussion I made them on pure grounds of revenue, and not as a part of any larger trade policy, or from any particular preference for Customs Duties over any other form of taxation. I found these duties in existence; I found that the conditions which had given rise to their existence continued to a greater or lesser extent. The revenue which I could command was no more than was necessary for the purposes which I had in view, and I did not consider the taking off of a tax which was efficient as a revenue raiser, but, on the contrary, I was engaged on the more difficult problem of finding taxes which I could increase so as to produce further revenue. It was therefore purely as a revenue matter, and for the purposes of the revenue, that it was decided—not by myself alone, but by the Cabinet—to continue these taxes this year. I say frankly to the hon. Gentleman that I do not think that this is a time when we ought to reduce or repeal them. I am not quite sure whether, if some of my hon. Friends opposite who have criticised these proposals were to find themselves in office at the present time, they would decide to repeal these taxes rather than repeal some other taxes. The hon. Gentleman who moved the Amendment (Mr. Kiley) was concerned with the effect of these duties upon our re-export trade. I think we are attributing to one cause what is really the result of another cause. The hon. Gentleman made no allowance for the fact that drawbacks are placed on
    1100
    the re-export of articles. I venture to say that the real reason why our export trade was affected was because the home demand has been so great.
    Mr. KILEY: We could have imported more.
    Mr. CHAMBERLAIN: Could the hon. Gentleman have imported more last year? I doubt it. An hon. Friend has said that, with reference to the manufacture of motor cars in Italy, that it had been suggested that these duties were hampering their export trade there. But it was admitted in Italy that they were sending all the cars they could send, and that they had orders for more cars than they could make. It has been the great demand for these articles in home markets which has prevented their re-export. The hon. Gentleman also dwelt at some length on the inconvenienced caused to importers. I think there has been no inconvenience or trouble. The duties are working very smoothly, with very little friction, and there have been no substantial disputes. The hon. Member who spoke last (Major Hayward) asked me to give him the number of Customs officials who had been added for the purpose of the collection of these duties. I have asked the Chairman of the Board of Customs, and I am informed by him that no additional officials were required for this purpose.
    Mr. KILEY: Is that why it takes from 7 to 14 days to get consignments down?
    Mr. CHAMBERLAIN: No, that is due to quite different reasons. If the hon. Member has knowledge of any particular case where delay has occurred, perhaps he will call the attention of the Board of Customs to it, or else, perhaps, he will draw my attention to it by private letter and I shall be glad to go into it. But I do not think that I should find that there has been any unreasonable delay on the part of the Customs officials.
    Mr. LYLE-SAMUEL: Do I understand the right hon. Gentleman to say that no additional officials have been appointed primarily with regard to the duties arising out of Imperial preference?
    Mr. CHAMBERLAIN: The question was how many additional officials had been appointed in order to carry out and collect these new duties which were imposed by Mr. McKenna, and to carry out

    1101
    the grant of preference imposed last year, and the answer is "none." The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) ranged over most of the articles dealt with, but he spoke with particular feeling about musical instruments, and with deep regret of the obstacles which the duties placed in the way of his incurring the charms of music in his own home. He told us pathetically how he had been out to buy mouth-organs for his children, and how, owing to the operation of these taxes, he could find none for sale at a reasonable rate, but only bad ones at a high cost. I dwell on this pathetic story because it shows how dangerous it is to jump to hasty conclusions or to accept the first answer a tradesman gives you when he is unable to supply you with the article you desire at the price you are prepared to give. There is no duty on mouth-organs.
    Lieut.-Commander KENWORTHY: Does the mouth-organ come under the same head as toys?
    Mr. CHAMBERLAIN: Mouth-organs are classed as toys, and not as musical instruments. I got my information from the Board of Customs who administer the tax, and the information is that mouth-organs are treated as toys and are not taxable.
    Mr. KILEY: But toys are taxable.
    Mr. CHAMBERLAIN: I must ask the hon. Gentlemen to accept what I say. I really cannot carry the matter further. I think I have covered most of the points raised. There is one plea of a very technical kind which was raised by the hon. and gallant Member for Central Hull with regard to cinema films He said that the negative films were charged at a higher rate than the positive. He appeared to think that that was contrary to all the teachings which have gone before. If that be so, it ought to commend itself to him, because we have been said to have been wrong in the past, and therefore it may be assumed that we are now doing what is right. The reason for it is that the negative film is, so to speak, the parent of an unlimited number of positives. I found these duties in existence, and we still assume that it is not the moment for encouraging the import of things which we can do without. Our financial position is not so flourishing that there is any reason
    1102
    to encourage people to spend money on things that they can do without. These goods are coming in—indeed, it was one of the complaints that, instead of the tax being effective in keeping the goods out, they were coming in—in almost equal quantities, or in almost equal value, to what they were in 1913, before the War. It is not that I desire to encourage further importation of things we can do without, in view of the general financial position and of the exchanges, but if they do come in I think we get our revenue from this source with as little hardship and difficulty as would be involved in picking up a similar revenue anywhere else, and £3,750,000 is a revenue I cannot afford to throw away.
    Mr. LAMBERT: The Chancellor of the Exchequer makes it very difficult for men who, like myself, want to support the Government. I candidly confess I am disappointed with him. I am an unrepentant Free Trader, and I see nothing whatever to alter my view. I say quite emphatically that in my judgment this tax is a protectionist tax. I regret that the Chancellor of the Exchequer is keeping it on. When it was put on it was put on as a War tax to exclude motor-cars, musical instruments, watches and the like from America; we did not want to import these articles of luxury. Whether it was the best method or not I cannot say. For my own part, I should have preferred another and far more drastic method. I would have said, "Prohibit all these imports that the country can do without in time of war." The Chancellor of the Exchequer says now that it is a port of the revenue and that even if he were to take off the tax this is not the first tax that he would take off. He, therefore, proposes to keep on a protectionist tax as a part of the normal revenue of the year. I say frankly that that offends my Free Trade principles, and I am sorry that he has done it. He has colleagues, or he has one colleague who spoke very strongly against these duties from a Free Trade point of view—one of his colleagues who has recently been taken into the Government. I tell the Chancellor of the Exchequer that he is here throwing the discord of the fiscal controversy into his Budget. If he wants to keep out motor-cars and says we cannot afford them, or that we cannot afford musical instruments or films, let him prohibit their importation. That is one

    1103
    way. But do not let him endeavour to bring in Protection by this side wind. That is one reason why my right hon. Friend had so little success in his electoral campaign. He was bringing a revolution into the fiscal system under which this country has enjoyed so much prosperity since the days of Sir Robert Peel.
    This is the commencement of revolution—you put on a protective duty for the sake of revenue. Of course, one has heard these arguments over and over again in this House. The Government is straining the allegiance of many of its supporters by the enormous number of officials and the bureaucratic tendency that it exhibits in every piece of legislation it introduces. This, again, is only another sample of the endeavour, by Government action, to stimulate trade. I presume my right hon. Friend is keeping on this tax in order that he may stimulate the motor-car manufacturers and that he might give more employment to them. I feel that the country is in a very grave financial crisis. There is no man listening to me who has a greater anxiety as to the next two or three years from the point of view of employment and—I will not say financial stability, but I do feel that we are coming up against a great industrial crash. I ask him, as one who desires to support a Government that will guide the country in these difficult times, not to throw this apple of discord of the Protectionist controversy into these Budget Debates. I feel strongly on the subject. I know it does not appeal to the Chancellor of the Exchequer, because he has followed his ,distinguished father as a Protectionist for a good many years, but I tell him frankly that I am sorry he is continuing these duties, because they make it far more difficult for a Free Trader like myself to support a Budget which, when he introduced it, I thought was a courageous Budget designed to overcome the financial difficulties with which we were confronted.
    Mr. RAFFAN: I have listened to the Chancellor of the Exchequer with a great deal of disappointment. I gather that not only will he adhere to the tax this year, but that he gives us clearly to understand that he has no hope of being able next year to dispense with it, and as far
    1104
    as I can see it is likely to remain a part of our financial system. When the right hon. Gentleman says that he does not approach the question from the point of view of the old controversy, it appears to me that he forgets the circumstances under which this tax was imposed. When Mr. McKenna imposed this duty, he made it quite clear that he did not aim primarily at revenue. Indeed, subsequent action was taken which resulted in no revenue at all being secured from this source. What was desired then was to conserve shipping accommodation, and in the special circumstances of the War that was no doubt abundantly necessary. The right hon. Gentleman says that the circumstances under which the taxes were imposed have not yet altered completely. The main circumstance has altered completely. The right hon. Gentleman will not now argue that it is necessary to impose any fiscal instruments for the purpose of securing that shipping accommodation will be used for one purpose rather than another. With regard to that matter, there is a complete change. My recollection is that when this tax was proposed by Mr. McKenna and when it was attacked on Free Trade grounds, the right hon. Gentleman said that he did not regard these taxes as taxes which he would impose if he was endeavouring to begin imposing a system of Tariff Reform on the country. While I am strongly opposed to these taxes because they are protective, I think they ought to be opposed by all sections of the House, because they have not the merit even of being good protective taxes. If we were to endeavour to set up a system of protection in this country, I do not think anyone would select these particular articles and exclude all others. Therefore this proposal has the demerit that it violates Free Trade principles, that it creates considerable antagonism in many quarters, and that it is bound to revive old controversies, while on the other hand it does not conform to the canons of those who desire to set up a protective system.
    It is a tax of 33⅓ per cent. The result of the tax is to add at least 50 per cent. to the cost which the consumer has to pay for motor cars, musical instruments, watches, and all the other things to which it applies. That really is the vice of any protective tariff. Can anyone suggest that it is desirable now to make it diffi-

    1105
    cult for people to purchase motor cars? In the United States the motor car is in general use, not only among the lower middle class but among working people. I am told that in several of the American States there is a motor car for every two families, and that it is quite usual for a working man to use a motor car for the purpose of going to his employment. In this country the motor car is a luxury. The right hon. Gentleman states that the tax did not prevent re-export because there was a large home demand for the article. If there is a large home demand for the article, why should the right hon. Gentleman intervene this obstacle which prevents that demand being satisfied? It is perfectly obvious to every business man that if you add 50 per cent. to the price of an article you thereby limit the sale of that article. There can be no doubt that these taxes are fully protective in their character. While I would not for a moment impugn the right hon. Gentleman's statement that he is endeavouring to approach this question apart from old controversies, I suggest that because of the fact that the old controversies are there and that, whatever the composition of this Parliament may be, there is every indication that the majority of the people still adhere to the principles of Free Trade, he would have been well advised, even if it had gone against his own views, to endeavour to sacrifice his duty. The right hon. Gentleman is always able to say to us, "Here is so much money which I am raising. How do you propose to raise it?" I would not, of course, be in order in answering in detail, but I suggest to the right hon. Gentleman that if he desires to be impartial with regard to old controversies. he is taking a very curious way of showing it, when he retains this tax for the purpose of revenue and throws away another instrument for raising revenue, the Land Values Duties, which would enable him, if they were properly developed, not only to provide all the sum which would be sacrificed if these duties were abolished, but would provide him with a considerable additional sum. If the ideal of the Chancellor is to steer clear of questions which have divided the people of this country in the past he should reconsider his decision in regard to these two matters, and if he does so I think his Budget is likely to have a
    1106
    much easier passage than will otherwise be the case.
    7.0 P.M.
    Mr. WALLACE: A supporter of a Coalition Government generally finds that a certain amount of compromise is necessary, but there are subjects on which no compromise is possible. I consider that these two import restrictions come under that category. I regard the reply of the Chancellor as wholly inadequate to meet the criticisms levelled against these duties. The object of their original imposition was two-fold, namely, for the purpose of restricting sales and conserving shipping. It is not correct for the Chancellor to say that the same conditions still obtain as those which obtained when these duties were imposed in 1915. Last year there was very strong opposition to the continuance of these duties, and in July the Chancellor said, recognising how strong the opposition was, that he would only continue the duties provisionally for another year. In response to very strong representations from some Coalition Liberals, he altered the date to which the duties were to run from August, 1920, to the 1st of May, 1920. He seems now to regard them as a permanent part of our fiscal system. Like my right hon. Friend (Mr. Lambert), I am an unrepentant Free Trader. I do not wish to give a silent vote, and I shall certainly vote against the Government so far as these duties are concerned. Whatever position the Chancellor takes up, he will always be suspect to Free Traders. Although he considers these duties innocuous, I regard them as another example of that tinkering with the foundations of Free Trade which has been the basis of that great commercial structure we have built up. I do not think we ought to countenance the continuance of these duties for another year. I consider that those who professed Free Trade principles in the past, and who do so to-day, should show their opinions in a decisive manner in the Division Lobby.
    Captain W. BENN: The revenue derived from some of these duties is really trifling, and I think we are likely to arrive at the position which existed many years ago, when many duties yielded such a trifling amount that it was hardly worth while to continue to collect them. When the Chancellor said that no special staff was appointed to collect these duties, are

    1107
    we to understand that the staff of the Customs and Excise is exactly the same, and the accommodation the same as before these duties were imposed in 1915?
    Mr. CHAMBERLAIN: There has been a very considerable increase in the staff of the Customs and Excise, but that is not in connection with these duties.
    Captain BENN: That is where I think we must be allowed to judge for ourselves. I think we are entitled to say that in our judgment the collection of preferential rates and customs duties on these articles does involve additional duties and additional staff. I think we have discovered through this Debate that there is a large administrative charge which falls to be borne on account of these duties which under those circumstances are not justifiable on the grounds of revenue at all. The Leader of the House, when these duties were imposed, said that duties of this kind would never under any circumstances be continued after the War was over. That was a very definite statement. I am quite aware circumstances alter, and that a Government may be forced to do things it had not intended to do at an earlier stage. When we are asked to sanction these duties it is that kind of thing which shakes our belief in the permanence of Ministerial pledges. I come now to what is really the most important point in the whole discussion, and that is, what are the Members of the Coalition Liberal party going to do on this Amendment? That is what we want to know. The Chancellor, when he was discussing this matter last year, said that there was plenty of time to come to a decision, but that for the time being War conditions existed, and they had not decided. That day of decision is always being postponed. We are anxious to know when the decision is going to be arrived at. The Chancellor said, when they had decided that future policy, that these duties would be re-enacted or altered or, with qualifications, be made to conform to the policy decided upon. We are asked to re-enact them, and the inference is that the Government has decided in a Protectionist sense. What are the Free Traders among the Coalition Liberals going to do? On the last occasion we moved an Amendment definitely limiting the imposition of these taxes. The hon. Mem-
    1108
    ber for Middleton (Sir R. Adkins), who is a senior Member of this House, came down and said that they would make terms, and an arrangement was made by which these duties were limited to the 1st of May, and we were then asked to look at their temporary character. Now it is proposed to enact them for another year, and to incorporate them bodily in our fiscal system. Where is the hon. Member for Middleton to-day. My right hon. Friend the Chairman of the Coalition Liberal party stated that he intends to vote against these taxes this year. On the last occasion 13 Members of the Coalition Liberal party voted against the Government, and three of them have since accepted the onerous duties of office. I think it is too much to ask that they should pay the penalty which would follow if they were to exercise independent judgment on this occasion, but what about the other ten and about some outside ten? Might not what happened to the three out of the 13 be an encouragement to them? The day of decision on this cannot be indefinitely postponed. We have got to make up our minds whether it is to be Protection or Free Trade. We cannot go on year after year saying that the conditions are such that it is not time to decide. Now is the day, now is the accepted time.
    Colonel CREIG: My hon. Friend asks what are the Coalition Liberals who are Free Traders going to do? If they have any sense they will support the Government. Bon. Members opposite have been angling for our vote. This is the offspring of a Liberal Government. These taxes were imposed under a Liberal Administration, and we find them in operation. As the Chancellor said, they keep out a certain number of things which we are not absolutely in want of. In the programme before the General Election, and which Liberals have taken note of and accepted, it was laid down that no new policy had been contemplated or is being contemplated, and while that is adhered to we shall support the Government, notwithstanding all the angling of the other side for our votes.
    Mr. LYLE-SAMUEL: No man who is a Free Trader can fail to support this Amendment, and any Member of the Committee who, for whatsoever reason, supports the Government in this matter, has ceased to be a Free Trader. The

    1109
    Chancellor said that he found that the duties here. We are quite aware of that, but our case is that the time has come for the duties to be abolished, and that they are of a Protectionist character. They are not serious from the point of view of revenue, and are bringing discredit upon Protection, if Protection ever could be credited. If the Chancellor is seeking revenue, and if he wants to stabilise the exchange, there are all sorts of luxuries he might attack. Why not select diamonds and pearls instead of picking out motors and musical boxes and mouth organs? How these things were selected I do not know, but they bring in a negligible and contemptible amount of revenue, and they are retained, as we know, because the Chancellor, by maintaining them, has been able to introduce Imperial preference as a permanent part of our fiscal policy. I am very glad that these particular proposals are now before the Committee for examination. We, Free Traders, have always held that you will not advantage the commercial life of this country, but ultimately destroy it by introducing Imperial preference, and these import duties have proved our case up to the hilt. The Chancellor of the Exchequer says he cannot afford to do without the £3,750,000 that they bring in, but he has more than sacrificed that sum in order to give the preference on tea. At this moment the Exchequer is impoverished, despite the import duties, by the loss he has made in granting preference. Of course, there is no Free Trade defence of these duties, and any
    hon. Member who will support the Government on this Amendment has abandoned his Free Trade convictions, and ought to have the honesty to admit to himself that he has abandoned them. I am glad to say I have not abandoned them, and I shall follow the right hon. Member for South Molton (Mr.Lambert) in this matter in support of the Amendment.
    Mr. D. M. COWAN: I am not quite sure that my parliamentary memory carries me back to the occasion when the thirteen free trade Liberals voted against the Government, but I think I must have been among them. At any rate, if I did not vote against the Government then, I feel myself compelled to do so now. I am a free trader, and I do not think the Chancellor of the Exchequer or the Government have been very generous towards those of us who support them but are free traders. They have had a long run for these special duties, and I think a little timely consideration for those who have sometimes supported them under very considerable difficulties might have led them to take these duties off at the present time. We were willing to admit the necessity for the duties during the period of the War, but now that comparative peace has come I think all duties of a protective character should be dropped.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 240; Noes, 65.
    Clause ordered to stand part of the Bill.

    CLAUSE 1.—(Continuation of customs duties imposed under 5 & 6 Geo. 5, c. 89, 9 & 10 Geo. 5, c. 32.)

      CLAUSE 3.—(Increased duties on spirits).
      "(1) In lieu of the duties of customs payable on spirits imported into Great Britain or Ireland, there shall, as from the twentieth day of April, nineteen hundred and twenty, be charged, levied and paid, in the case of spirits entitled to preferential rates under Section eight of the Finance Act, 1919, the duties specified in the second column of Part I. of the First Schedule to this Act, and in the case of all other spirits the duties specified in the third column of Part I. of the said Schedule, together in either case with the additional duties specified in Part II. of that Schedule.
      (2) In lieu of the excise duty payable on spirits distilled in Great Britain or Ireland there shall, as from the twentieth day of April, nineteen hundred and twenty, be charged, levied and paid for every gallon computed at proof of spirits distilled or manufactured by any other process whatsoever in Great Britain or Ireland an excise duty of three pounds twelve shillings and sixpence, together with the additional duties specified in Part III. of the First Schedule to this Act.
      And so in proportion for any less quantity."
      Motion made, and Question proposed, "That the Clause stand part of the Bill."
      Sir D. MACLEAN: Have we passed Clause1?
      The CHAIRMAN: Yes; when the right hon. Gentleman rose I was putting Clause3. There being no Amendments on the Paper, I did not look round.
      Sir G. YOUNGER: On this Clause, I understand there is some difficulty with regard to price. Has any arrangement been made about it?
      Mr. CHAMBERLAIN: The arrangements about prices are being negotiated by the Ministry of Food, and I am not competent to deal with the question, but I understand that sufficient margin is allowed between the selling price and the cost of production to give a reasonable return to all sections of the trade.

    CLAUSE 4.—(Spirits used in medical preparations or for scientific purposes.)
    "Section 4 of the Finance Act, 1918 (which provides for the reduction and allowance of duty in respect of spirits used in medical preparations or for scientific purposes),shall apply to the duties on spirits
    1114
    imposed by this Act as it applies to duties on spirits imposed by that Act as though it were herein set out and expressly made applicable thereto, with the substitution for the sums specified in that Section as the amount of reduction of duty or repayment of duty, of such sums as will reduce the amount of duty payable under this Act to the amount of duty which was payable immediately before the increase of duties on spirits provided for by the Finance Act. 1918."
    Mr. LEONARD LYLE: I beg to move, after the word "shall," to insert the words "after making similar provision in respect of spirits used in hospitals on prescription."
    In moving this Amendment, in contrast with certain hon. Members who have spoken previously, I will try and make my remarks as short as possible instead of making them as long as possible. The object of the Amendment is to save the voluntary hospitals from having to pay this very big duty on spirits which are used purely as medicines in hospitals. During the War the military hospitals were allowed to get spirits free of duty, and all we ask for here is merely that the voluntary hospitals be allowed to continue that principle.
    Colonel BURN: I beg to support the Amendment. I think everybody here knows the position of the hospitals at the present time, and this is a very small concession to the hospitals.
    Mr. KILEY: I desire to support the proposal on the ground that any assistance we can give to the hospitals, especially those in London which are passing through trying times, it is only our duty to do. I should like to call the attention of the Chancellor of the Exchequer to what exists at the present time. If the spirit is mixed with drugs and is bought from a drug dealer, then the duty is partially remitted, but if the spirit is mixed with water instead of with drugs, then the present duty has to be paid. I am sure it is not the intention of the right hon. Gentleman to penalise the hospitals, or to induce them to mix the spirit with other substances to evade the duty During the War these hospitals received military patients, and therefore all the spirits necessary for the patients were supplied duty free. So that we are not asking for some new principle to be established, but only for a continuance of the practice of the past. I do

    1115
    think in this very small matter the right hon. Gentleman might make a small concession which would be much appreciated by the hospitals.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): I am not surprised that this Amendment has been moved, and it is quite true that, in some ways, it is a small matter; but in cases of duties, such as the duty on spirits and the duty on wine, where they have now got to so high a point, we have to take the greatest possible care in not leaving open any holes by which evasion of the duty is possible. I would remind the Committee that we have met the case of the hospitals to a considerable degree in past Finance Bills, and we continue the relief in this by allowing them spirits at the pre-War rate where spirits are used in medicinal preparations; but when you come to allow the enormous difference there is between the pre-War duties on potable spirits which, I take it, is what is meant by this Amendment, you are opening a door that might be difficult to close. I would remind the Committee that statutory grants are given by the Ministry of Health to certain hospitals in relief of the duty on alcohol used in connection with certain medicinal preparations, but it Us always been ruled administratively that this relief is not to be given in the case of potable spirits. If such a concession were made, the Board of Customs would be entirely in the hands of the staffs of hospitals throughout the Kingdom, and it would be a very great responsibility to throw on them that spirit was only administered in cases where a prescription was made for it. I say nothing of the possibility of that prescription being made more frequently. But the spirits would be administered in small quantities. A bottle would be bought relieved from the major part of the tax. It would be opened for the purpose of use, and there is very great difficulty, as hon. Members know, in preserving the contents of a bottle that has once been opened.
    Sir J. NORTON-GRIFFITHS: I have had a bottle open for months, and it is in the same condition.
    Mr. BALDWIN: A similar concession is being asked for with regard to wine at a later stage of this Bill, and there you
    1116
    have exactly the same administrative difficulty. A bottle of champagne, for example, might be bought at a very much reduced duty, and opened, and it would be impossible to maintain any satisfactory check from the revenue point of view in cases of this kind. For these reasons, I regret that we cannot possibly accept these Amendments, and I hope very much that my hon. Friend, having ventilated this subject, and being assured, much to our regret, that we are not able to meet it, will not press the matter further.
    Dr. MURRAY: I am sorry to hear the decision to which the Secretary to the Treasury has come, because I think the Amendment is one which has the support of this Committee, and ought to have been accepted by the Government. I do not think there is much in the suggestions of the right hon. Gentleman. In all well-regulated hospitals the quantity of spirits which a patient gets is registered in a book, and I do not think it would add much to the expense of the Excise Department if these books were occasionally examined, and, if a leakage such as the right hon. Gentleman has suggested has taken place, it could be easily detected, and the hospital found guilty could be punished. When the right hon. Gentleman remembers that it is only doctors and nurses who have access to the spirits, I think he might feel quite sure that the days of Sairey Gamp are over. I think brandy is looked after more carefully nowadays, and I think the suggestion that it would he open to abuse is not sufficient. In view of the difficulties in which hospitals find themselves, and that the account for stimulants is now a very serious item in hospitals, the Government would be doing a very great service to the cause of the hospitals, and not losing much revenue, if they accepted this Amendment.
    Mr. PRESTON: I have the honour to represent a constituency in which is situated the largest hospital in London. It is going through very hard times, and I rise to support the Amendment, and very much regret that the Government is not able to meet it.
    Question put, "That those words be t here inserted."
    The Committee divided: Ayes, 61; Noes, 195.

    Division No. 180.]

    AYES

    [7.20 p.m.

    Adair, Rear-Admiral Thomas B. S.

    Breese, Major Charles E.

    Cooper, Sir Richard Ashmole

    Agg-Gardner, Sir James Tynte

    Bridgeman, William Clive

    Coote, William (Tyrone, South)

    Allen, Lieut.-Colonel William James

    Briggs, Harold

    Courthope, Major George L.

    Bagley, Captain E. Ashton

    Brown, Captain D. C.

    Craig, Colonel Sir J. (Down, Mid)

    Baird, John Lawrence

    Bruton, Sir James

    Craik, Rt. Hon. Sir Henry

    Baldwin, Rt. Hon. Stanley

    Buchanan, Lieut.-Colonel A. L. H.

    Croft, Brigadier-General Henry Page

    Balfour, Sir R. (Glasgow, Partick)

    Buckley, Lieut.-Colonel A.

    Davison, Sir W. H. (Kensington, S.)

    Banbury, Rt. Hon. Sir Frederick G.

    Bull, Rt. Hon. Sir William James

    Dawes, Commander

    Banner, Sir John S. Harmood-

    Burn, Col. C. R. (Devon, Torquay)

    Dennis, J. W. (Birmingham, Deritend)

    Barnes Rt. Hon. G. (Glas., Gorbals)

    Butcher, Sir John George

    Denniss, Edmund R. B. (Oldham)

    Barnston, Major Harry

    Campion, Lieut.-Colonel W. R.

    Dockrell, Sir Maurice

    Beauchamp, Sir Edward

    Carter, R. A. D. (Man., Withington)

    Doyle, N. Grattan

    Bell, Lieut.-Col. W. C. H. (Devizes)

    Casey, T. W.

    Edge, Captain William

    Benn, Capt. Sir I. H., Bart. (Gr'nw'h)

    Cecil, Rt. Hon. Evelyn (Birm., Aston)

    Edwards, Major J. (Aberavon)

    Bennett, Thomas Jewell

    Cecil, Rt. Hon. Lord R. (Hitchin)

    Elveden, Viscount

    Betterton, Henry B.

    Chadwick, Sir Robert

    Eyres-Monsell, Commander B. M.

    Bigland, Alfred

    Chamberlain, Rt. Hn. J. A. (Birm., W.)

    Falcon, Captain Michael

    Birchall, Major J. Dearman

    Chamberlain, N. (Birm., Ladywood)

    Falle, Major Sir Bertram G.

    Bird, Sir A. (Wolverhampton, West)

    Child, Brigadier-General Sir Hill

    Farquharson, Major A. C.

    Blades, Capt. Sir George Rowland

    Churchill, Rt. Hon. Winston S.

    Fell, Sir Arthur

    Blair, Reginald

    Clay, Lieut.-Colonel H. H. Spender

    Fisher, Rt. Hon. Herbert A. L.

    Blane, T. A.

    Clough, Robert

    FitzRoy, Captain Hon. E. A.

    Boles, Lieut.-Colonel D. F.

    Coats, Sir Stuart

    Flannery, Sir James Fortescue

    Borwick, Major G. O.

    Cobb, Sir Cyril

    Foreman, Henry

    Boscawen, Rt. Hon. Sir A. Griffith

    Cohen, Major J. Brunel

    Foxcroft, Captain Charles Talbot

    Bowles, Colonel H. F.

    Colvin, Brig.-General Richard Beale

    Fraser, Major Sir Keith

    Fremantle, Lieut.-Colonel Francis E.

    Knight, Major E. A. (Kidderminster)

    Roundell, Colonel R. F.

    Ganzoni, Captain Francis John C.

    Knights, Capt. H. N. (C'berwell, N.)

    Royds, Lieut.-Colonel Edmund

    Gardiner, James

    Lane-Fox, G. R.

    Rutherford, Colonel Sir J. (Darwen)

    Geddes, Rt. Hon. Sir E. (Camb'dge)

    Law, Alfred J. (Rochdale)

    Rutherford, Sir W. W. (Edge Hill)

    Gilmour, Lieut.-Colonel John

    Law, Rt. Hon. A. B. (Glasgow, C.)

    Samuel, A. M. (Surrey, Farnham)

    Goff, Sir R. Park

    Lewis, Rt. Hon. J. H. (Univ., Wales)

    Samuel, Rt. Hon. Sir H. (Norwood)

    Gould, James C.

    Lloyd-Greame, Major Sir P.

    Sanders, Colonel Sir Robert A.

    Grant, James A.

    Locker-Lampson, G. (Wood Green)

    Scott, Sir Samuel (St. Marylebone)

    Green, Joseph F. (Leicester, W.)

    Locker-Lampoon, Com. O. (H'tingd'n)

    Shaw, William T. (Forfar)

    Greene, Lt.-Col. Sir W. (Hack'y, N.)

    Lonsdale, James Rolston

    Shortt, Rt. Hon. E. (N'castle-on-T.)

    Greenwood, William (Stockport)

    Lorden, John William

    Simm, M. T.

    Greer, Harry

    Lyle, C. E. Leonard

    Smith, Sir Allan M. (Croydon, South)

    Gregory, Holman

    Mackinder, Sir H. J. (Camlachie)

    Smith, Harold (Warrington)

    Greig, Colonel James William

    McLaren, Hon. H. D. (Leicester)

    Sprot, Colonel Sir Alexander

    Gretton, Colonel John

    M'Lean, Lieut.-Col. Charles W. W.

    Stanley, Major H. G. (Preston)

    Gritten, W. G. Howard

    McNeill, Ronald (Kent, Canterbury)

    Starkey, Captain John R.

    Guest, Major O. (Leic., Loughboro')

    Macquisten, F. A.

    Stewart, Gershom

    Guinness, Lieut.-Col. Hon. W. E.

    Marriott, John Arthur Ransome

    Strauss, Edward Anthony

    Gwynne, Rupert S.

    Martin, Captain A. E.

    Sturrock, J. Lang

    Hacking, Captain Douglas H.

    Mildmay, Colonel Rt. Hon. F. B.

    Sugden, W. H.

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Mitchell, William Lane

    Sutherland, Sir William

    Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)

    Molson, Major John Elsdale

    Sykes, Sir Charles (Huddersfield)

    Hambro, Captain Angus Valdemar

    Montagu, Rt. Hon. E. S.

    Talbot, G. A. (Hemel Hempstead)

    Hanna, George Boyle

    Moore, Major-General Sir Newton J.

    Terrell, George, (Wilts, Chippenham)

    Hanson, Sir Charles Augustin

    Moreing, Captain Algernon H.

    Terrell, Captain R. (Oxford, Henley)

    Harris, Sir Henry Percy

    Morrison, Hugh

    Thomas-Stanford, Charles

    Haslam, Lewis

    Mosley, Oswald

    Tickler, Thomas George

    Henderson, Major V. L. (Tradeston)

    Mount, William Arthur

    Tryon, Major George Clement

    Henry, Denis S. (Londonderry, S.)

    Murchison, C. K.

    Turton, E. R.

    Herbert, Hon. A. (Somerset, Yeovil)

    Murray, C. D. (Edinburgh)

    Vickers, Douglas

    Herbert, Dennis (Hertford, Watford)

    Murray, Major William (Dumfries)

    Waddington, R.

    Hickman, Brig.-General Thomas E.

    Neal, Arthur

    Ward-Jackson, Major C. L.

    Hinds, John

    Newman, Colonel J. R. P. (Finchley)

    Ward, Col. L. (Kingston-upon-Hull)

    Hoare, Lieut.-Colonel Sir S. J. G.

    Newman, Sir R. H. S. D. L. (Exeter)

    Wheler, Lieut.-Colonel C. H.

    Hohier, Gerald Fitzroy

    Nicholson, William G. (Petersfield)

    White, Lieut.-Col. G. D. (Southport)

    Holbrook, Sir Arthur Richard

    Nield, Sir Herbert

    Whitla, Sir William

    Hood, Joseph

    Norton-Griffiths, Lieut.-Col. Sir John

    Wild, Sir Ernest Edward

    Hope, Sir H. Stirling&Cl'ckm'nn'n,W.)

    Palmer, Brigadier-General G. L.

    Williams, Lt.-Com. C. (Tavistock)

    Hope, James F. (Sheffield, Central)

    Parker, James

    Willoughby, Lieut.-Col. Hon. Claud

    Hopkins, John W. W.

    Pearce, Sir William

    Wills, Lieut.-Colonel Sir Gilbert

    Horne, Sir R. S. (Glasgow, Hillhead)

    Pease, Rt. Hon. Herbert Pike

    Wilson, Capt. A. S. (Holderness)

    Hunter, General Sir A. (Lancaster)

    Peel, Col. Hon. S. (Uxbridge, Mddx.)

    Wilson, Daniel M. (Down, West)

    Jackson, Lieut.-Colonel Hon. F. S.

    Perkins, Walter Frank

    Wilson, Colonel Leslie O. (Reading)

    James, Lieut.-Colonel Hon. Cuthbert

    Perring, William George

    Wilson, Lt.-Col. Sir M. (Bethnal Gn.)

    Jephcott, A. R.

    Pownall, Lieut.-Colonel Assheton

    Wilson-Fox, Henry

    Jesson, C.

    Pratt, John William

    Wood, Hon. Edward F. L. (Ripon)

    Jodrell, Neville Paul

    Prescott, Major W. H.

    Wood, Sir H. K. (Woolwich, West)

    Jones, Sir Edgar R. (Merthyr Tydvil)

    Pretyman, Rt. Hon. Ernest G.

    Wood, Sir J. (Stalybridge & Hyde)

    Jones, G. W. H. (Stoke Newington)

    Pulley, Charles Thornton

    Wood, Major S. Hill. (High Peak)

    Jones, J. T. (Carmarthen, Llanelly)

    Randles, Sir John S.

    Worsfold, Dr. T. Cato

    Jones, William Kennedy (Hornsey)

    Raper, A. Baldwin

    Young, Sir Frederick W. (Swindon)

    Joynson-Hicks, Sir William

    Raw, Lieutenant-Colonel N.

    Younger, Sir George

    Kellaway, Rt. Hon. Fredk. George

    Rawlinson, John Frederick Peel

    Kelley, Major Fred (Rotherham)

    Reid, D. D.

    TELLERS FOR THE AYES.—

    Kinloch-Cooke, Sir Clement

    Remnant, Sir James

    Lord E. Talbot and Mr. Dudley Ward.

    NOES.

    Benn, Captain Wedgwood (Leith)

    Jones, Sir Evan (Pembroke)

    Robertson, John

    Blake, Sir Francis Douglas

    Jones, Henry Haydn (Merioneth)

    Rose, Frank H.

    Bramsdon, Sir Thomas

    Kenworthy, Lieut.-Commander J. M.

    Royce, William Stapleton

    Bromfield, William

    Kenyon, Barnet

    Sexton, James

    Brown, James (Ayr and Bute)

    Kiley, James D.

    Short, Alfred (Wednesbury)

    Clynes, Rt. Hon. J. R.

    Lambert, Rt. Hon. George

    Sitch, Charles H.

    Cowan, D. M. (Scottish Universities)

    Lister, Sir R. Ashton

    Smith, W. R. (Wellingborough)

    Entwistle, Major C. F.

    Lunn, William

    Swan, J. E.

    Finney, Samuel

    Lyle-Samuel, Alexander

    Thomas, Brig.-Gen. Sir O. (Anglesey)

    Galbraith, Samuel

    Macdonald, Rt. Hon. John Murray

    Tootill, Robert

    Glanville, Harold James

    Maclean, Rt. Hn. Sir D. (Midlothian)

    Wallace, J.

    Graham, W. (Edinburgh, Central)

    Mallalieu, F. W.

    Waterson, A. E.

    Griffiths, T. (Monmouth, Pontypool)

    Mills, John Edmund

    Wedgwood, Colonel J. C.

    Grundy, T. W.

    Murray, Dr. D. (Inverness & Ross)

    White, Charles F. (Derby, Western)

    Guest, J. (York, W. R., Hemsworth)

    Myers, Thomas

    Wignall, James

    Hall, F. (York, W. R., Normanton)

    Newbould, Alfred Ernest

    Williams, Aneurin (Durham, Consett)

    Hallas, Eldred

    O'Connor, Thomas P.

    Wood, Major M. M. (Aberdeen, C.)

    Hayday, Arthur

    O'Grady, Captain James

    Young, Lieut.-Com. E. H. (Norwich)

    Hayward, Major Evan

    Parry, Lieut.-Colonel Thomas Henry

    Young, Robert (Lancaster, Newton)

    Hirst, G. H.

    Rae, H. Norman

    Hodge, Rt. Hon. John

    Raffan, Peter Wilson

    TELLERS FOR THE NOES.—

    Holmes, J. Stanley

    Rees, Capt. J. Tudor- (Barnstaple)

    Mr. G. Thorne and Mr. Hogge.

    Irving, Dan

    Richardson, R. (Houghton-le-Spring)

    Question put, and agreed to.

    Division No. 181.]

    AYES.

    [7.42 p.m.

    Bell, Lieut.-Col. W. C. H. (Devizes)

    Hayward, Major Evan

    Rcse, Frank H.

    Bigland, Alfred

    Hirst, G. H.

    Rutherford, Colonel Sir J. (Darwen)

    Blair, Reginald

    Hodge, Rt. Hon. John

    Sexton, James

    Bramsdon, Sir Thomas

    Hogge, James Myles

    Short, Alfred (Wednesbury)

    Bromfield, William

    Holmes, J. Stanley

    Sitch, Charles H.

    Brown, James (Ayr and Bute)

    Hood, Joseph

    Smith, W. R. (Wellingborough)

    Clynes, Rt. Hon. J. R.

    Irving, Dan

    Swan, J. E.

    Cowan, D. M. (Scottish Universities)

    Jones, G. W. H. (Stoke Newington)

    Thomas, Brig.-Gen. Sir O. (Anglesey)

    Davies, A. (Lancaster, Clitheroe)

    Kenworthy, Lieut.-Commander J. M.

    Thomson, T. (Middlesbrough, West)

    Entwistle, Major C. F.

    Kenyon, Barnet

    Thorne, G. R. (Wolverhampton, E.)

    Finney, Samuel

    Kiley, James D.

    Tootill, Robert

    Fremantle, Lieut.-Colonel Francis E.

    Lunn, William

    Waterson, A. E.

    Galbraith, Samuel

    Mosley, Oswald

    Wedgwood, Colonel J. C.

    Ganzoni, Captain Francis John C.

    Murray, Dr. D. (Inverness & Ross)

    White, Charles F. (Derby, Western)

    Graham, W. (Edinburgh, Central)

    Myers, Thomas

    Wignall, James

    Griffiths, T. (Monmouth, Pontypool)

    Newbould, Alfred Ernest

    Wild, Sir Ernest Edward

    Grundy, T. W.

    Preston, W. R.

    Williams, Aneurin (Durham, Consett)

    Guest, J. (York, W. R., Hemsworth)

    Raffan, Peter Wilson

    Wood, Major M. M. (Aberdeen, C.)

    Hall, F. (York, W. R., Normanton)

    Remnant, Sir James

    Young, Robert (Lancaster, Newton)

    Hallas, Eldred

    Richardson, R. (Houghton-le-Spring)

    Hayday, Arthur

    Robertson, John

    TELLERS FOR THE AYES.—

    Mr. Lyle and Col. Burn.

    NOES.

    Adair, Rear-Admiral Thomas B. S.

    Eyres-Monsell, Commander B. M.

    Kellaway, Rt. Hon. Fredk. George

    Agg-Gardner, Sir James Tynte

    Farquharson, Major A. C.

    Kelley, Major Fred (Rotherham)

    Allen, Lieut.-Colonel William James

    Fell, Sir Arthur

    Knight, Major E. A. (Kidderminster)

    Atkey, A. R.

    Fisher, Rt. Hon. Herbert A. L.

    Knights, Capt. H. N. (C'berwell, N.)

    Bagley, Captain E. Ashton

    Flannery, Sir James Fortescue

    Law, Alfred J. (Rochdale)

    Baird, John Lawrence

    Foreman, Henry

    Lewis, Rt. Hon. J. H. (Univ., Wales)

    Baldwin, Rt. Hon. Stanley

    Fraser, Major Sir Keith

    Lewis, T. A. (Glam., Pontypridd)

    Balfour, George (Hampstead)

    Gardiner, James

    Lister, Sir R. Ashton

    Banner, Sir John S. Harmood-

    Geddes, Rt. Hon. Sir E. (Camb'dge)

    Lloyd-Greame, Major Sir P.

    Barnes Rt. Hon. G. (Glas., Gorbals)

    Gibbs, Colonel George Abraham

    Locker-Lampson, Com. O. (H'tingd'n)

    Barnston, Major Harry

    Gilbert, James Daniel

    Lorden, John William

    Beauchamp, Sir Edward

    Gilmour, Lieut.-Colonel John

    Lyle-Samuel, Alexander

    Benn, Capt. Sir I. H., Bart. (Gr'nw'h)

    Glanville, Harold James

    Macdonald, Rt. Hon. John Murray

    Betterton, Henry B.

    Goff, Sir R. Park

    M'Lean, Lieut.-Col. Charles W. W.

    Birchall, Major J. Dearman

    Gould, James C.

    M'Micking, Major Gilbert

    Bird, Sir A. (Wolverhampton, West)

    Gray, Major Ernest (Accrington)

    McNeill, Ronald (Kent, Canterbury)

    Blake, Sir Francis Douglas

    Green, Joseph F. (Leicester, W.)

    Mallalieu, F. W.

    Blane, T. A.

    Greene, Lt.-Col. Sir W. (Hack'y, N.)

    Martin, Captain A. E.

    Boles, Lieut.-Colonel D. F.

    Greenwood, William (Stockport)

    Mitchell, William Lane

    Bowles, Colonel H. F.

    Gregory, Holman

    Morrison, Hugh

    Bowyer, Captain G. E. W.

    Greig, Colonel James William

    Morrison-Bell, Major A. C.

    Breese, Major Charles E.

    Gritten, W. G. Howard

    Mount, William Arthur

    Bridgeman, William Clive

    Guest, Major O. (Leic., Loughboro')

    Murchison, C. K.

    Briggs, Harold

    Gwynne, Rupert S.

    Murray, C. D. (Edinburgh)

    Brittain, Sir Harry

    Hacking, Captain Douglas H.

    Neal, Arthur

    Brown, Captain D. C.

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Newman, Colonel J. R. P. (Finchley)

    Bruton, Sir James

    Hall, Rr-Adml Sir W. Liv'p'l,W.D'by)

    Newman, Sir R. H. S. D. L. (Exeter)

    Buchanan, Lieut.-Colonel A. L. H.

    Hambro, Captain Angus Valdemar

    Nicholson, William G. (Petersfield)

    Buckley, Lieut.-Colonel A.

    Hanson, Sir Charles Augustin

    Norton-Griffiths, Lieut.-Col. Sir John

    Bull, Rt. Hon. Sir William James

    Harmsworth, C. B. (Bedford, Luton)

    Parker, James

    Butcher, Sir John George

    Harris, Sir Henry Percy

    Parry, Lieut.-Colonel Thomas Henry

    Campion, Lieut.-Colonel W. R.

    Haslam, Lewis

    Peel, Col. Hn. S. (Uxbridge. Mddx.)

    Carter, R. A. D. (Man., Withington)

    Henderson, Major V. L. (Tradeston)

    Perkins, Walter Frank

    Casey, T. W.

    Henry, Denis S. (Londonderry, S.)

    Perring, William George

    Cecil, Rt. Hon. Lord R. (Hitchin)

    Herbert, Hon. A. (Somerset, Yeovil)

    Pownall, Lieut.-Colonel Assheton

    Chadwick, Sir Robert

    Herbert, Dennis (Hertford, Watford)

    Pratt, John William

    Chamberlain, Rt. Hn. J. A. (Birm.,W.)

    Hickman, Brig.-General Thomas E.

    Preston, W. R.

    Clay, Lieut.-Colonel H. H. Spender

    Hinds, John

    Prescott, Major W. H.

    Clough, Robert

    Hoare, Lieut.-Colonel Sir S. J. G.

    Pretyman, Rt. Hon. Ernest G.

    Cobb, Sir Cyril

    Hohler, Gerald Fitzroy

    Pulley, Charles Thornton

    Cohen, Major J. Brunel

    Hope, Sir H. (Stirling & Cl'ckm'nn'n,W.)

    Purchase, H. G.

    Collins, Col. Sir G. P. (Greenock)

    Hope, James F. (Sheffield, Central)

    Rae, H. Norman

    Colvin, Lieut.-Colonel Richard Beale

    Hopkins, John W. W.

    Randles, Sir John S.

    Cooper, Sir Richard Ashmole

    Hopkinson, A. (Lancaster, Mossley)

    Raper, A. Baldwin

    Coote, Colin Reith (Isle of Ely)

    Horne, Sir R. S. (Glasgow, Hillhead)

    Remer, J. R.

    Coote, William (Tyrone, South)

    Hume-Williams, Sir W. Ellis

    Robinson, Sir T. (Lancs., Stretford)

    Courthope, Major George L.

    Hunter, General Sir A. (Lancaster)

    Rutherford, Sir W. W. (Edge Hill)

    Craig, Colonel Sir J. (Down, Mid)

    Illingworth, Rt. Hon. A. H.

    Samuel, Rt. Hon. Sir H. (Norwood)

    Croft, Brigadier-General Henry Page

    Jackson, Lieut.-Colonel Hon. F. S.

    Sanders, Colonel Sir Robert A.

    Davies, Sir William H. (Bristol, S.)

    Jephcott, A. R.

    Scott, A. M. (Glasgow, Bridgeton)

    Davison, Sir W. H. (Kensington, S.)

    Jesson, C.

    Shaw, William T. (Forfar)

    Dawes, Commander

    Johnson, Sir Stanley

    Simm, M. T.

    Dennis, J. W. (Birmingham, Deritend)

    Jones, Sir Edgar R. (Merthyr Tydvll)

    Smith, Harold (Warrington)

    Dockrell, Sir Maurice

    Jones, Sir Evan (Pembroke)

    Stanley, Major H. G. (Preston)

    Doyle, N. Grattan

    Jones, Henry Haydn (Merioneth)

    Starkey, Captain John R.

    Edgar, Clifford B.

    Jones, J. T. (Carmarthen, Llanelly)

    Strauss, Edward Antheny

    Edwards, Major J. (Aberavon)

    Jones, William Kennedy (Hornsey)

    Sugden, W. H.

    Elveden, Viscount

    Joynson-Hicks, Sir William

    Sutherland, Sir William

    Taylor, J.

    Waddington, R.

    Wilson-Fox, Henry

    Terrell, George, (Wilts, Chippenham)

    Ward-Jackson, Major C. L.

    Worsfold, Dr. T. Cato

    Terrell, George (Wilts, Chippenham)

    White, Lieut.-Col. G. D. (Southport)

    Young, Lieut.-Com. E. H. (Norwich)

    Thomas-Stanford, Charles

    Williams, Lt.-Com. C. (Tavistock)

    Young, Sir Frederick W. (Swindon)

    Tickler, Thomas George

    Wills, Lieut.-Colonel Sir Gilbert

    Younger, Sir George

    Tryon, Major George Clement

    Wilson, Daniel M. (Down, West)

    Turton, E. R.

    Wilson, Colonel Leslie O. (Reading)

    TELLERS FOR THE NOES.—

    Vickers, Douglas

    Wilson, Lt.-Col. Sir M. (Bethnal Gn.)

    Lord E. Talbot and Mr. Dudley Ward.

    The following Amendment stood on the Paper in the name of Mr. KILEY: At the end of the Clause to add the words
    "Except that a similar reduction and allowance of duty shall apply in the case spirits used in the manufacture of perfumery, essences and fine chemicals, subject also to such Regulations as the Commissioner of Customs and Excise may prescribe."
    The CHAIRMAN: In regard to the Amendment of the hon. Gentleman (Mr. Kiley) the Clause which we are discussing now relates to spirits used in medicinal preparations or for scientific purposes. Does the hon. Gentleman contend that cosmetics are either medicinal or scientific?
    Mr. KILEY: I refer to fine chemicals in the Amendment.
    The CHAIRMAN: Does the hon. Gentleman say, too, that eau de cologne is a medicine?
    Mr. KILEY: I beg to move at the end of the Clause to add the words
    "Except that a similar reduction and allowance of duty shall apply in the case of spirits used in the manufacture of perfumery, essences and fine chemicals, subject also to such regulations as the Commissioner of Customs and Excise may prescribe."
    I will explain my case. This is the third time this afternoon I have intervened in order to obtain some concessions from the Chancellor of the Exchequer. The object I have in view in this proposal is to enable the people who manufacture these commodities to carry on their business, and to make profits from which the Chancellor of the Exchequer will derive an advantage. If, as I am informed, the duty is levied in the way now proposed it will have the effect, to give one instance, of sending up a bottle of eau de cologne, which in pre-War days sold, say, at half-a-crown up to something like 8s. 6d. In consequence it will tremendously affect the demand and make it only obtainable by people who are very well-to-do.
    1120
    Those who have had experience of the sick-room know the value of eau de cologne there, and its necessity. But the principal object I have in view is to ask the Chancellor to make such concession as will enable the businesses for which I at the moment speak to be carried on at something like their normal turnover. If the present proposals are allowed to go, it will bring down the output of such firms by a half or two-thirds.
    Mr. CHAMBERLAIN: I could not possibly accept this Amendment. What are the articles for which the hon. Member seeks exemption? Perfumery! But that clearly is a luxury. Essences? Which are used in the manufacture of beverages, and in flavouring confections. I really do not think these are cases at all comparable to those to which we were referring a little while ago, the use of spirits in the manufacture of drugs. I have not directed my consideration to anything in the nature of alternative proposals; none have been brought forward. I could not in regard to these articles hold out any expectation that I am unable to fulfil. As regards the general burden on the businesses, that is common to all businesses nowadays.
    Captain W. BENN: I do not agree with the Amendment of my hon. Friend. I do not see what claim these articles have over others to be considered as suggested, and I think the Chancellor has made out a complete case. But he has already given preferential treatment to certain trades—and that is the difficulty. I cannot, of course, go into this except by way of Illustration, but the man who makes motor cars and men of certain other trades are receiving preferential treatment—musical box makers, film manufacturers, and others. Once you start, representatives of one trade or the other immediately get up and put forward requests for similar treatment, and you cannot maintain any real equity in deciding between the one and the other. I am against both.
    Mr. KILEY: I desire to withdraw the Amendment. Perhaps I did not make my position quite clear, but I wanted to

    1121
    emphasise the fact of a bottle of eau de cologne rising from 2s. 6d. to 8s. 6d., and also the fact of the diminished output due to the present proposals, and the consequent less employment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.

    CLAUSE 6.—(Increased Excise Duty on Beer.)
    In lieu of the duty of excise payable in respect of beer brewed in Great Britain or Ireland there shall, as from the twentieth day of April nineteen hundred and twenty, be charged, levied and paid, the following duty (that is to say):—

    £

    s.

    d.

    For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees … … … …

    5

    0

    0

    and in lieu of the drawback of excise payable in respect of beer exported from Great Britain or Ireland, as merchandise or for use as ship's stores, there shall be allowed and paid in respect of beer on which it is shown that the increased excise duty charged by this Act has been paid a drawback calculated according to the original gravity thereof (that is to say):—

    £

    s.

    d.

    For every thirty-six gallons of beer of an original gravity of one thousand and fifty-five degrees the drawback of …

    5

    0

    3

    and so, as to both duty and drawback, in proportion for any difference in quantity or gravity.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    8.0 P.M.
    Colonel GRETTON: This Clause proposes an increase of the beer duty amounting to 30s. per standard barrel. I do not think the Committee, or even the Chancellor, realises the vast increase which has already taken place in the taxation of beer. Before the War the taxation of the standard barrel of beer was 7s. 9d. In 1914 this amount was increased to 23s.; in 1916, to 24s.; in 1917, to 25s.—all except the first comparatively small increases. In 1918 the duty was doubled, and the 25s. made 50s. In the Budget of last year a further increase was put on of 20s. making 70s. per standard barrel. The Chancellor of the Exchequer now proposes to add a still further 30s., making the total duty on a
    1122
    standard barrel of beer under this Clause 100s., which, in addition to the Brewers' License duty of 6d. per barrel, will make a total beer duty per standard barrel of £5 Os. 6d. No one can do otherwise than admit that this is an enormous tax on an article which is very largely used and has been part of the customary diet of more than half the population for centuries past. I am not complaining at the present moment on the part of the manufacturer. This is chiefly a consumer's case. The Committee will remember the prices of beer sold by retailers are fixed under a scale issued by the Ministry of Food, beginning at 7d. per pint and increasing by pennies to 9d. per pint sold across the counter, and that beer is a gravity far less than the pre-War standard barrel. The new tax is calculated on the basis that the consumer shall pay ld. per pint more for that beer which is to be taxed. One penny per pint on a standard barrel of 36 gallons amounts to 24s. The scale has had to be raised in order to make the consumer pay it, and that means 6s. per barrel to be found by the manufacturer and the retailer. In ordinary time the tax in itself is a very serious matter. I believe the Chancellor of the Exchequer stated when he introduced the Budget that the licensed trade and the retailers were in a position to pay this tax because there had been a fall in the price of material.
    On that point the right hon. Gentleman was wrongly advised, because the prices of materials have increased far beyond the knowledge of most people in this-country and the members of this Committee. The malt which is used in brewing beer has increased from 24s. per quarter to 135s. per quarter. Sugar used in brewing which cost 14s. a cwt. before the War now costs 70s., and hops have increased in price from £6 to £20. It is true that when all the suitable homegrown barley had been purchased there was afterwards a slight fall in the price of 10s. or 15s. Barley had risen to 130s., and it fell to about 115s., but the small quantity sold at that price had really no effect upon the price of the material, and it is so inconsiderable that it cannot affect the price of the stocks for next season. The manufacturers of beer and the growers are faced with the extraordinary high price of materials, and there is no prospect of any reduction.

    1123
    I will now turn to the consumers' side. The consumers now require to pay about 7d. a pint for beer, which they were able to buy at 2½. or 3d. before the War, and this Budget will raise the price to 8d. Before the War taxation was less than ½d. per pint, and now it is at the rate of ½d. per pint, and the Chancellor of the Exchequer has added ld. per pint to that. This has become a burden so great that it is pressing with undue severity upon the consumers of beer, and the tax levied at this high rate is calculated to defeat the Chancellor's own aims. We are considering the question of raising money for Exchequer. Already under these taxes, which have been collected in many districts, the consumption of beer has sensibly and definitely declined. I am told that the revenue returns for the first quarter are less than have been estimated. If that is so, the tax proposed is already diminishing the consumption of beer, and therefore the amount of revenue which should be collected. In the case of every tax there is a point where it defeats its own ends and ceases to be productive. I contend that the tax has overtopped the point where it will yield the amount which the Chancellor of the Exchequer expects to collect, and this proposal is going seriously to diminish the consumption of beer, and the tax will not yield the amount which has been estimated. No doubt the right hon. Gentleman has made some allowance for this.
    We who are connected with the brewing trade are bound to protest against this tax, because it has become so oppressive to our customers, and it is one which will fail to raise the sum which the Exchequer requires from it. It would have been better to have left the tax upon the basis of its previous level. I know there are some people in this country who think that a tax which diminishes the consumption of beer, or of any alcoholic drink, is an excellent tax, but we are not considering taxation either from political or philanthropic motives, but for the purpose of raising revenue without being unduly oppressive to any large class of people in this country, and from that point of view this tax is not justified. It has become unduly oppressive upon a large class of people, and it is a proposal which I venture to think will not yield that increase of revenue which the
    1124
    Chancellor of the Exchequer expects from it.
    Mr. CHAMBERLAIN: I note that my hon. and gallant Friend does not suggest that the duty is unfair to the trade itself, but that it is to the distributor of the article.
    Colonel GRETTON: I am afraid I conveyed a wrong impression. What I said was that at the present moment the trade would not complain of the tax if it were not that they are faced with the very high cost of materials, and therefore the tax in the next season will become oppressive, even if it is not oppressive at the time it is put on.
    Mr. CHAMBERLAIN: In the region of prophecy any of us may be mistaken. I rather think my hon. and gallant Friend misunderstood me when he quoted me as having said that the cost of the articles employed in brewing had already fallen. What I intended to convey that a fall in the price of barley, for instance, would be an advantage in the future. My hon. and gallant Friend seems to be more concerned as regards the consumer. The consumer is a taxpayer, and if he does not contribute in this form he must contribute in some other form, or other people must contribute it for him. One has to take the Budget as a whole. There is so much revenue to be raised, and, so far, I see no reason for the gloomy anticipations as to consumption which my hon. and gallant Friend indulges in. On the contrary, the returns for May exceeded our estimates. I think the consumption will depend much more on employment and wages than on the additional duty we have found it necessary to impose.
    Sir G. YOUNGER: While the intention of my right hon. Friend is no doubt quite good, the results are not likely to be at all satisfactory from this almost savage taxation on an article very inferior in itself. If the beer were of the old quality which we had before the War people might drink it and be willing to pay the additional charge. But I do not think they are going to drink the beer produced under existing conditions. Therefore, I say the tax is likely to be unproductive. It certainly will not yield what the right hon. Gentleman expects. I have received many surprises in my life, but the biggest surprise of all has been this addition to the duty on beer. It is a case of

    1125
    over-taxation, and I believe that in Scotland already the trade has been knocked down by 20 per cent.
    It being a Quarter past Eight of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed without Question put.

PRIVATE BUSINESS.

  LONDON ELECTRIC RAILWAY COMPANIES (FARES, ETC.) BILL [By Order].
  Order for Third Reading read.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  Mr. GILBERT: I beg to move to leave out the words "now read the Third time," and to add instead thereof the word "re-committed."
  I do this on behalf of the London Members who are acting together in this matter. Perhaps if I am allowed briefly to explain to Members of the House what this Bill means to London it may enable them to understand exactly what the position of London Members is in this matter. The original Bill was a private Bill introduced by the Underground Railway Company, which included the Tubes and the Metropolitan District Railway, and it proposed that the fares in the future should be 4d. per mile first class, and 2d. per mile for third class, with a Clause which would give a right to make the minimum fare 4d. In addition to that it proposed the entire abolition of workmen's fares and of the Clause in the old Acts of Parliament which gave workmen special fares on these particular railways. When this Bill was introduced, naturally the London Members of all shades of opinion and representing different parts of the Metropolis were very much alarmed at the proposed increase of fares, and, as a result of meetings which were held by the Unionist and Liberal parties in London, a series of conferences took place with the Chairman of the Underground combine, who was formerly President of the Board of Trade and a Member of this House. As a result of four long confer-
  1126
  ences with Lord Ashfield and the officers of the Underground combine, it was agreed that when the Bill came forward for Second Reading an instruction should be moved. The form of words of the instruction was agreed to by Lord Ashfield on behalf of the Underground Railway Companies and by the London Members, and when it came before the House it was agreed to by the Government and accepted by the House. The form of words of the instructions, which was moved when the Second Reading of the Bill took place on the 25th March by my right hon. Friend the Member for Hammersmith (Sir W. Bull) was as follows:
  "That it be an Instruction to the Committee to which the Bill may be committed, after inquiry into the financial position of the various companies named in the Bill, to amend the Bill as follows:—
  (a) So as to provide that the maximum powers of charge in excess of the fares which the companies are now authorised to charge shall not be more than are required to provide from time to time for working expenses, efficiently maintaining and renewing the undertakings, and a reasonable return on capital;
  (b) That workmen's return fares between any two stations shall not exceed the single ordinary fare for a journey between those stations, with a minimum fare of threepence."
  When the Second Reading Debate took place in this House the Minister of Transport participated in it. The Minister of Transport, towards the end of his speech in the Second Reading Debate, said:
  "The Report of the Committee on London Traffic gives the figures, and I would like to quote something from that Report. It is this:
  'To what extent fares or any of them should be raised so as to become economic is a matter for close investigation and we are of opinion that the most suitable method of reaching a definite conclusion is through the medium of the Private Bill Committee of the House of Commons, which from the detailed statement furnished by the Minister of Transport, should be able to settle—
  (1) The present value of the share capital on which a reasonable rate of remuneration should be paid;
  (2) The rate of remuneration which can be considered reasonable;
  (3) The percentage of increase in fares necessary to place the undertaking on a sound working basis.'
  That expresses very clearly the attitude of the Government on this Bill. It appears to us absolutely beyond dispute that, if these undertakings are to go on serving the public

  1127
  at the present-day cost, they are entitled to an inquiry as to whether they can go on financially as a healthy concern. I have been asked why we did not deal with it under the Ministry of Transport Act. It would have been possible to have taken possesion of these railway undertakings and to have authorised an increase in the fares. I will tell the House quite frankly. It involves considering these questions which have been put down by the Committee on London Traffic: what is a reasonable return on capital? That is a very difficult thing to ask any one Minister to lay down in putting up the fares for the whole of London. What is the present share value of the capital? Frankly, I did not want to act in an arbitrary way in this matter. I wanted to get help and consideration, and where can I get better consideration than from a Committee of the House of Commons? That is why we did not act under the Ministry of Transport Act, and, I submit, with very good reason. That is the reason that I am asking the House to-night to grant a Second Reading to this Bill. I do not commit the Government to any single figure in the Bill; only to this, that the promoters of the Bill are entitled to consideration of their position, and I ask the House to give it."—[OFFICIAL REPORT, 25th March, 1920, Cols. 741 and 742,Vol.127.]
  Having heard that speech from the right hon. Genteman, and after the Division on the Second Reading, which was carried by 131 votes to 25, the Instruction which I I have already read was accepted by the Government; and those of us who had acted in good faith with the promoters of the Bill in drawing that Instruction thought, after the Minister's speech, that that Instruction was going to the Committee in order that the information might be obtained which the Minister mentioned, and which we London Members had so often discussed with Lord Ashfield, the Chairman of the Underground Railway Company. The Committee meet on 11th May, and Counsel for the promoters of the Bill immediately asked that the Committee should adjourn, for the reason that a Memorandum had been received from the Ministry of Transport suggesting certain proposals to the Committee for dealing with this matter, and practically telling them to ignore the Instruction which had been passed by this House. Evidently the Committee were amazed by this form of procedure. They adjourned from 11th May until 8th Tune, and, when they met again on 8th June, the promoters of the Bill produced a Clause which carried out the proposals of the Ministry of Transport, as set forth in the Memorandum which had been sent to
  1128
  the Committee. When the Committee had finished hearing the evidence, and the Chairman had decided that the Preamble of the Bill was proved, he said, on Thursday, 10th June:
  "The Committee find the preamble proved as it now stands. We desire, however, to express some surprise at the action of the Minister in suggesting to us in a memorandum considerable alterations in the Bill as passed by the House of Commons on Second Reading, and apparently at that time accepted by him. It would have been, in the opinion of the Committee, more suitable if the Minister could have communicated to the House at the time of the Second Reading the views he ultimately put before us."
  In the printed Report which the Committee has circulated to the House, the Chairman states that the Bill does not authorise the construction of any new railway; that the principal objects of the Bill are to increase the statutory maximum fares for passengers carried on the respective railways of the London Electric, Metropolitan District, and Central London companies, the statutory workmen's fares in respect of workmen carried on such railways, and on the City and South London Railway, and the statutory rates and charges in respect of the conveyance of small parcels on the same railways in excess of fares, rates and charges usually authorised in previous years for like undertakings; that the Committee, in accordance with the Instruction of the House of the 25th of March last, have inquired into the financial position of the companies named in the Bill, and have amended the Bill so as to give effect to the Instruction. That particular Clause is the Clause where the London Members join issue with the Report of the Committee. In view of the many statements that have been made with regard to the finance of the Underground companies, and as to the way in which that finance is managed, we do not think, from the Report of the Committee to the House, that they have inquired at all into the financial position of these companies. One thing about which the London Members felt very keenly, and which I mentioned during the Second Reading Debate, was that we had very strong objections and criticisms to make as to the pooling of the profits of the railways in the Underground combine. We thought, in perfect good faith, that, when this Instruction was passed by this House and sent to a Committee upstairs, that Committee would inquire into the

  1129
  finance of those undertakings, and that we should have a Report from the Committee stating their opinion as to the way in which that finance was managed, the reason why the four statutory railway. companies were asking for increased fares for passengers, and the method by which, when they made those profits in conjunction with the Government subsidy, the money represented by that subsidy was used partly for the benefit of the railway companies and partly to subsidise a non-statutory company which was losing a

  —

  First Class.

  Third Class

  If such fraction does not exceed one-third of a mile.

  One penny.

  One halfpenny.

  If such fraction exceeds one-third but does not exceed two-thirds of a mile.

  Twopence.

  One penny.

  If such fraction exceeds two-thirds of a mile …

  Threepence.

  Three halfpence

  If these revised fares are carried out on these lines, it is going to mean a very great increase in fares to the travelling public of London. Speaking on behalf of the London Members, may I say at once that none of us wish in any way to prevent the railwaymen, or any men working on the railways, from obtaining proper and legitimate wages for the work which they do. Secondly, we do not wish that the shareholders should not receive a fair remuneration for the money invested, provided that all the material facts are taken into consideration; but we think the railway passengers, of whom some millions are carried every year by these companies, should not be charged fares which will allow a profit to the railway companies which, owing to their pooling arrangements, can be handed over to another branch of traffic in order to make up their loss, and that is one of the strong reasons why, on behalf of London Members, I am moving for the re-committal of the Bill. We may be told that the Committee, although they did not carry out the Instructions of the House, have done the next best thing, or probably what they think is a better, because in Clause 6 they have put in the following Sub-section:
  "Before any of the companies under the powers conferred by this Act increase the fares charged to passengers travelling on the railways of such company beyond the maximum amount which prior to the passing of this Act they were authorised by Statute to demand, such company shall submit to the
  1130
  great deal of money, namely, the omnibus company. The Bill now before the House is quite a different Bill from that which was dealt with on Second Reading. Instead of the fares which I have just mentioned, and which were in the original Bill, it is proposed that first-class passengers should pay 3d. per mile, with a minimum of 4d., and that third-class passengers should pay l½d. per mile, with a minimum of 2d. In addition to that, Clause 3 provides the following fares for fractions of miles:
  Minister of Transport a schedule of fares as intended to be increased, and no such increased fares shall be charged until the same have been approved by him. Before approving any such increased fares, the Minister of Transport shall refer the matters to the Rates Advisory Committee constituted under the Ministry of Transport Act, 1919, for their advice, and shall report thereon to him."
  If this Sub-section is to be carried out properly, and if the Select Committee wishes to carry out the Instructions of the House they should put in that Clause words similar to those in the Instruction. In addition to that, the Bill abolishes all workmen's fares in the existing Act. Certainly it carries out the Instruction of the House in this matter that they set up a double journey for a single fare for workmen. It does not state whether this is for all time or whether it is only a temporary Measure during the continuance of this Bill, because this in only a temporary Bill. It is proposed that it shall be in force for two years beyond the eighteen months of the Ministry of Transport. But we think if that is the case there is no need to rescind the Schedule or the Clauses dealing with workmen's fares in the existing Act of Parliament. If it is only a temporary Bill, a Clause should have been put in which would have suspended those Clauses instead of rescinding them altogether.
  We think that, after an Instruction such as was passed by this House, we ought to

  1131
  have had a report from the Committee on the capital, the rate of interest to which they suggest their holders are entitled, and particularly on the question of the pooling of profits. I may be told the Committee did inquire into this matter. I have looked through the evidence which has been before the Committee, and I cannot find that any of the evidence before them was evidence such as after the Instruction they ought to have carried out. There were three witnesses heard y the Committee, two of them on behalf of the company, namely, the Chairman, Lord Ashfield, Sir William Plender, who is auditor to the company, and the right hon. Gentleman (Mr. J. H. Thomas), who gave evidence on behalf of the Bill. Certain tables were produced to the Committee. There were five kinds of tables —Table A, giving the rise in price standardised on the year 1906; Table B, giving passenger receipts and expenses and the capital; Table C, giving the fares charged and the rates per mile now charged by the company; Table D, being an estimate for future years and not less than five years from 1920. Then there was Table E, nominal capital and net amount received. It is true those tables were presented, but except for a few leading questions and for some cross-examination by some of the counsel opposing the Bill. I do not think anyone who has read the evidence will attempt to say there was anything like a financial inquiry into the finances of the company whose Bill they were considering. It may be said it was not easy for them to obtain such evidence, but there is the report of the Advisory Committee on London traffic, which is a very full report on the finances of the company. I propose to read one paragraph of that which says:
  "The four railway companies in question are seeking Parliamentary sanction to an increase in their charging powers. They are parties, together with the London General Omnibus Company, to the London Electric Railway Companies' Facilities Act Agreement of 1915. This Act authorised, though it did not require, the institution of a common fund. The setting up of that fund makes it necessary to review the position of the companies as a group, as well as individually, and to include in the survey not only the railway companies, but also the omnibus company. The latter, however, is not statutory company, and is consequently not in need of Parliamentary sanction for any increase in its charging powers. Nor is
  1132
  it subject to any provisions of the Ministry of Transport Act, 1919, in this respect."
  It goes on to deal with a lot more figures, with which the hon. Member (Mr. K. Jones), who was Chairman of the Committee, will be much more competent than I am to deal with. There is an analysis of them by the Finance Director of the Advisory Committee on London Traffic which goes very fully into them, and if this Committee were keen on carrying out the Instruction they could quite easily have called for that paper and had it before them and examined witnesses upon it, or the Ministry of Transport, knowing the Instruction, and knowing that the Report was in existence, should have placed the figures before the Committee.
  We in London feel very keenly on this traffic problem. We hold no brief for any tube railway or for buses or for trams, but the traffic problem in London to-day is a very critical one. Everyone who travels on the tube or on buses or trams knows the great extent of the overcrowding and the terrible difficulty of people getting to and from their work, and in view of the development of housing in London it will mean a far greater problem in a few years' time unless something is done. We have no grievance against the Underground combine. In many ways they have managed their traffic very well; but we do not think, and I think when the House knows all the facts it will agree, that the statutory companies should be allowed to charge their passengers a bigger rate of fares than will allow for a fair return on their capital, for fair working expenses and for proper labour charges, and then if there is any surplus it should be used for the improvement of the companies and should not be used for the purpose of paying the deficit on another transit which is outside the immediate railway. That is a point that we feel very strongly on. That is a matter upon which London Members have worked unitedly together. We did our best in the early days of this Session to come to an agreement with the underground companies. The promoters of this Bill met us most fairly and candidly and spent hours in consultation with us, and we really thought, having agreed on an Instruction such as was passed on the Second Reading, we had come to a very fair decision, and that this Bill would go to an absolutely independent Committee

  1133
  upstairs, who were not biassed by having London views and representing any part of London, and that we should get a fair and just decision. I think I am expressing the views of all London Members, that when the Amended Bill is produced, and we find that there is nothing whatever in it, or in the Report of the Committee, dealing with this complicated financial problem we certainly think we have a grievance, and at a meeting last week, attended by both Unionists and Liberal Members, we agreed to put down this Motion to recommit the Bill.
  Mr. CLEMENT EDWARDS: I beg to second the Motion.
  I should like to say that one of the grounds upon which I second the Motion is, in my opinion, sufficient to justify the House in rejecting this Bill altogether. If it had not been that I personally take the view that was expressed by the Minister of Transport in the Second Reading Debate, and the view that was expressed by the Report of the London Committee on the question of traffic, and the Advisory Committee which sat on the question of London traffic, over which my hon. Friend (Mr. Kennedy Jones) presided, namely, that the right machinery for inquiring into the finances of these companies was a Private Bill Committee, I should have moved the rejection of the Bill. As I am not doing so, I hope to secure its committal to a Committee as the proper machinery, if it does its duty and carries out its instructions from this House, to inquire into the question of finance. The three grounds on which I propose this Bill are, first of all, that the Committee to which this Bill was committed did not carry out the express mandatory instructions of this House to inquire into the finances of the various companies mentioned in the Bill. The second ground is that the Committee did not carry out the express mandatory instructions of this House to fix such a maximum fare as should only give a fair return on the capital of the companies. Neither of these instructions has been carried out. The third ground is that the Bill to which we are now asked to give a Third Reading is not the Bill which went from this House. This House has never given this Bill a First or a Second Reading. It is an entirely different Bill from the one which was committed to the Committee upstairs.
  1134
  Take the first point as to inquiring into the financial position. As soon as this Bill went on the 11th May to the Committee, the Ministry of Transport, either inadvertently, because the right hon or hon. Gentlemen who are the heads of that Department have not had experience of the methods of procedure in this House, or for some other reason, went behind the back of the House, and turned topsy turvey from their own attitude as expressed in the Second Reading Debate, and in a Memorandum advised the Committee not to carry out the instructions of this House to inquire into the finances of the various companies. The reason they cited for this action in respect to a very vital matter affecting the supremacy of this honourable House is given in these words:
  "The Committee will observe that while in terms the instruction relates to maximum fares and charges, the limitations appear to involve a consideration of the actual fares which the companies concerned are to charge in order to provide a revenue not more than sufficient to meet the prescribed conditions, including a reasonable return for capital. This consideration cannot be given without inquiry of a lengthy and most intricate character, and would raise questions of great complexity and difficulty, such, for instance, as the amount and composition of the capital, the right of return to be allowed on present and future capital, and whether or not any particular scale of charges would in practice produce more or less than the necessary revenue."
  That is precisely the thing that this Committee were instructed by this House to carry out. That is precisely the task which the right hon. Gentleman in his Second Reading speech, in the passage quoted by my hon. Friend (Mr. Gilbert) said could be more properly performed by a Committee upstairs, and from which task a single Minister would naturally shrink. This is how his Ministry, with or without his cognisance, advised the Committee upstairs. The suggestion is made that the Committee have gone into the question of finance, but that is not the view of anybody who was there, because immediately on this passage of the Report being read before the Committee upstairs, by Mr. Honoratious Lloyd, who appeared for the promoters, he said:
  "Apparently the Minister is anxious to relieve you of the burden of going into these matters."
  For the benefit of those hon. and right hon. Members who have not had the opportunity of examining the evidence, I

  1135
  might explain the position. About a fortnight ago, I raised a point before Mr. Speaker in regard to the evidence. The result was that 1 was referred to the authorities of the House, and, in the end, they found that the view I had expressed, that this House was entitled to get the evidence if it was taken in the ordinary way by the promoters of the Bill, was right, it was put to me by the Chairman of Ways and Means, whether I thought the House ought to go to the expense of printing a copy for every Member or whether I would be satisfied if it could be arranged to get a certain limited number of copies of the evidence from the promoters. I was not anxious that this thing should be hung up, but that it should be thrashed out on its merits, and the London Members have had copies. On this question we shall be in conflict, in view of the Report from the Chairman of the Committee, that the Committee have carried out the instructions of the House in regard to finance. We have, therefore, to look rather closely at the matter, and it was for that purpose that I asked that the evidence should be produced. We must, therefore, look at the matter as one of substance, and ask whether this instruction of the House of Commons with regard to inquiry into finance has, according to the evidence, been carried out. There is no doubt whatever in the minds of those Members who have had an opportunity of studying the evidence upstairs that there was no semblance of an observance on the part of the Committee.
  Reference has been made to a certain semblance of financial evidence that was put in. There were five small tables handed in by Lord Ashfield. The first is nothing more than an extract from the Labour Gazette showing the rise in prices as standardised in the year 1906. It has no more to do with the finance of these companies than with the wages bill of a Billingsgate porter or the financial position of a wholesale grocer. The next item is a statement, statement B, which is described as a statement in illustration of the position of the four railway companies in 1913 and in the three months to 31st March, 1920. What has that to do with the financial position of these four companies? The third is simply what is described as a short comparison of the margin which will obtain under
  1136
  the increased statutory charging powers as against the margin which the railway companies had in 1913 under the then statutory charging powers. It has nothing at all to do with the financial position of the companies. The next item is one which on the first glance looked the most promising. I looked and saw "gross railway receipts," "working expenses," and "net railway receipts." Then I looked at the heading and I could scarcely believe my eyes. All it is is an estimate for a future year not less than five years from 1920. The only other item that was handed in is a brief statement in eight lines, purporting to show the nominal capital and the net amount received in respect of each company. That is the sole documentary evidence that was submitted or taken before this Committee, relating to the finances of these companies.
  My hon. Friend said there were three witnesses called, Lord Ashfield, Sir William Plender, the accountant, and the right hon. Gentleman the Member for Derby (Mr. Thomas). As to what Sir William Plender's view was with regard to this financial evidence, I will read the last question that was asked him on these figures and his reply. It is question 455:
  "And really that summarises the financial position of the companies? Well it deals with it certainly."
  The broad facts of the subject-matter of the negotiations—lasting over four extensive conferences—between the London Members and the promoters of this Bill. have been indicated, and were indicated after many, many days of examination and cross-examination by the financial experts of this combine before the London Traffic Committee upstairs. We got a certain amount of information. We had to report that there was still a great deal behind that had not come out. Finally, upon that Report the Government set up an Advisory Committee on London Traffic, which most industriously went into this question of finance, and they got among other experts to assist them the Director-General of Finance of the Ministry of Transport. He reports, to begin with, on a figure of £2,900,000 submitted to him by Lord Ash-field on behalf of these companies, that this is really a mistake of £1,500,000 made up of six items. The Director-General of Finance of the Ministry goes on to say that there is need for investigation, and close investigation. Acting on this, the

  1137
  Committee, over which the hon. Member for Hornsey (Mr. Kennedy Jones) presided, said that you must, before you attempt to deal with fares in London, have an exhaustive inquiry into the finances of these concerns, and that in this Private Bill Committee there was appropriate machinery, and it was for that reason that the London Members accepted the compromise on the Second Reading of this measure. That has not been inquired into.
  I come to the next point, and if hon. Members will look at the Bill as it comes before the House, they will see that there is no attempt to fix the fares as thy were instructed at such a figure as to be a fair return on the capital. Frankly, they accepted the advice of the Ministry of Transport that they should hand over to the Ministry the duty of fixing the fares. They have on the advice of the Ministry handed over to the Ministry the duty of investigating, and they have not attempted to fix those fares which they were instructed to fix which were to give a fair return and only a fair return when they had ascertained it. Why did the Ministry come to this House after Second Reading and recommend the House to pass this Bill at all? I challenged the right hon. Gentleman at that time. I took the view which I take to-day, that under Section 3, Sub-section (a) of the Ministry of Transport Act, he is fully authorised to raise whatever fares he likes, and under Sub-section (b) of the same Section he is authorised on giving a month's notice to take over any other railways and raise their fares. Why was that machinery not adopted here? Why should he help to get this Bill before a Committee and then get the matter referred back to the Ministry?
  I will tell him frankly what my view is. First it is this, that if he had raised the fares of these companies the Metropolitan and District which he controls, if he had given notice and taken over the other companies which he has power to do and had raised their fares, what would have happened at the end of his control period?
  9.0. P.M.
  By the provisions of Section 8 of the Act of last year the whole of the increase in the revenue-earning capacity of these railways would have eventuated for the benefit of the State, that is, if it had been his sole act. But by making it the Act, and assisting to make it the Act of
  1138
  Parliament, independently of his act as a Minister, the whole of this increase in the revenue-earning capacity proposed by this measure will simply eventuate, according to the provisions of the Act of last year, for the benefit of the companies. That, I suggest, is one reason why this Bill was ever brought before the House, and why it received the blessing of the right hon. Gentleman. The second reason is much nearer home. The right hon. Gentleman has no power whatever, without the sanction of this House, thanks to the provisions of the Act of last year, to continue the subsidy which he denounced as having been given to the Metropolitan District Underground. What does he suggest? He actually suggests to the Committee upstairs, without a word to this House, that they are to increase fares as a quid pro quo for cancelling this very agreement, this very subsidy which he denounced. What is it in terms of finance? It is this: The right hon. Gentleman, brought here at the head of a great Ministry and supposed to have a wonderful grasp of finance, actually proposes seriously to Parliament that they shall compound for a debt of £1,000,000 from the Treasury by imposing on the poor travelling in London £4,500,000 in perpetuity. That is the proposal. I am perfectly certain that if the House will examine this for themselves they will get this Bill recommitted, and they will see that there is no attempt to buy off this £1,000,000 subsidy, which the right hon. Gentleman has denounced, by imposing a burden five times the size on the poor working girls from East London and the workers from other parts of London.
  I come to the third point and the point upon which I say there is sufficient justification for me to move the rejection of this Bill, if it had not been for my view that we want inquiry into the finances of the company through the Private Bill Committee. It is that the Bill now before the House is, except for two formal Clauses, an entirely new Bill. Even the preamble has been amended by the Ministry of Transport. To show that there is no question about this, let me prove what was done. On 11th May the Committee adjourned on receiving the memorandum from the Minister of Transport During the five weeks of the Adjournment the Minister of Transport sent for the promoters. It was not a question of asking the Committee to consider new Clauses

  1139
  or of asking the promoters to draw up new Clauses. The Minister actually redrafted the whole thing. When the Committee reassembled there happened what has not happened before in the history of procedure in this House. The promoters handed to all the opponents there what they themselves called a substituted Bill. Mr. Honoratus Lloyd, as shown on page 8 of the Report, explained what had happened to the Bill. He said:
  "In order to make it perhaps more intelligible it would be advisable if I first of all call attention to the manner in which the Bill should now be read, because, having regard to the various alterations, it is a little confusing. You have the manuscript Clauses in front and you have them numbered in an inconvenient way, and it is a little difficult, Without something in the nature of a catalogue, to follow it. Therefore, if you will allow me, in half a dozen words, I will try to put it in order. I need not trouble about the introductory Clauses, I think. The first is merely the short title, and the second is the interpretation, where you see the definition of 'railway' has been struck out, and that is merely because it is placed in another part. When 1 come to Clause 3 which, of course, was an important Clause concerning the rates and charges, that is struck out entirely, and instead of that you will find a new Clause 3, which is at the very front of the manuscript Clauses so-called, and marked 'Paper A.' That, I think, is the first material one. Then follows new Clause 4, which is 'Paper B,' following Paper A'; then comes new Clause 5, which is 'Paper C,' and refers to special trains. Then comes new Clause 6, which is a Clause embodying what I have just been telling you about the requirements of the Minister of Transport; then Clause 7 of the Bill as it stands provides for the repeal of the various provisions relating to workmen's fares; new Clause 8 is 'Paper E ' in the manuscript Clauses, and that makes the substituted provisions with reference to workmen's fares. Then we get back to Clause 9, which provides for variation of the Cheap Trains Act; and the rest are formal matters."
  So that you have every single operative Clause in the Bill, embodying the principle of which this House approved on Second Reading, thrown over and substituted by the new Bill from the Ministry of Transport. I know I shall be told by some of the authorities of the House who have not followed precisely what happened upstairs, that it is not an uncommon thing for a Private Bill Committee to consider new Clauses. That is perfectly true, but as far as I can gather there is no single precedent of which there is record in this House where an entirely new Bill, or practically a new
  1140
  Bill, has been considered by a Committee. The whole of the evidence went upon this substituted Bill. It was only after the evidence had been considered that they got to the question of Clauses. I submit that on that there is sufficient justification for this House even to reject the Bill. I have no kind of feeling or antagonism against the Combine; 1 have a great admiration for the very great skill they have shown in their work. I am prepared that they shall have not only a fair return on their actual capital, but even something by way of a small bonus on the enterprise they have shown. But if, after the investigation we had upstairs we found that there was a volume of watered capital, and found what that really was in fixing fares which would give a proportionate return, I think we should be doing wrong to the traditions of this House which have grown up during so many generations, and the great trust we owe to posterity, if we had allowed the Committee at the instance of a Ministry, or a Minister however big, to ignore the express mandate of this House.
  Mr. J. A. GRANT: As Chairman of the Private Bill Committee which dealt with the Bill now before the House, I welcome the opportunity of making a statement as to what led to the findings that we came to. I am happy to say that I am speaking for the whole of the Committee. We were unanimous in our findings. We have had to-night hon. Members speaking for those others who desire to recommit the Bill. I cannot help thinking that among these hon. Members—and I am fortified in that belief by what has fallen just now from the hon. Member for East Ham—there exists considerable misapprehension as to what occurred in that Committee. It is my duty to endeavour to convince the House, and I hope to do so, that the recommittal of this Bill is unnecessary, and would be a contradiction of the action of the House on the Second Reading. I hope to be able to show that the Instruction of the House has been carried out fully and in detail, and, further, that the Amendments that have been put into the Bill carry out the evident desire and intentions of the House of Commons as expressed on the Second Reading. These Amendments introduced into the Bill are in no way favourable to the companies. On the con-

  1141
  trary, they put the companies into a worse position. If we take the result of these Amendments, we will find that the members of the travelling public whom the hon. Member has just referred to in such sympathetic terms will be in a greatly better position because of these Amendments than they would have been under the Bill as it left the House on its Second Reading. With regard to the terms of the statement I have to make, which, as I have said, is a unanimous one, I have consulted my colleagues on the Committee, and I have their assent in saying that we carried out the instructions of the House. As I shall have to follow that statement pretty closely, I shall have to refer to my manuscript.
  In the first place, I shall deal with the first paragraph of the Instruction, whereby we were instructed that we were to inquire into the financial position of the various companies named in the Bill. At the outset of our proceedings the Committee did enquire into the financial positions of the four companies as required by the instruction. Lord Ashfield, who represented the Petitioners, submitted tables of audited figures showing the present-day gross earnings, working expenses and net earnings of the four railway companies. These figures wholly excluded the London General Omnibus Company, and were on a decontrolled basis for the District Railway; that is to say, the Government subsidy was entirely eliminated. The exact position of the four companies was therefore ascertained on a normal fair earning basis. These tables were criticised in detail by Counsel for the London County Council and other local authorities, but were in no way shaken. They showed that for the three months ending 31st March, 1920, the actual balance of the net revenue after payment of interest on the four companies' debenture rent charge, guaranteed and preference stock was only £7,439, which was the total sum available for dividends on ordinary capital amounting to £17,000,000. Lord Ashfield also proved, and his evidence was unshaken in cross-examination, that since 31st March last the working expenses of the four companies are increasing at the rate of £600,000 per annum.
  Mr. C. PALMER: May I ask who was cross-examined—how many witnesses were examined on the question of the capital?
  Mr. GRANT: On this question there were two witnesses. Hon. Members will recognise that a Private Bill Committee does not call witnesses. It is for the opponents to bring their evidence and their witnesses, and we had to deal with the evidence which was brought before us. As I have just said, it was proved that an increased charge at the rate of £600,000 per annum had been brought upon the companies since the 31st March. That was owing to the increase in the cost of coal, material, wages, and such like. It was further proved that the four companies were faced with, and in great part already committed to, an immediate capital expenditure of £6,203,000, for new rolling stock, widening of tunnels on the City and South London Railway, additions to the power station, carriage sheds, and other urgently needed improvements. The annual interest charge in respect of £6,203,000 on an 8 per cent. basis, a moderate estimate having regard to the money market to-day, is £496,000. Lord Ashfield proved to the satisfaction of the Committee that the companies were subject to further additional annual charges in respect of the renewal of rolling stock and making good deficiencies and depreciation and renewal funds amounting to £434,367 per annum, in all £1,430,642—
  Mr. KENNEDY JONES: I am sorry to interrupt, but I should like to ask who proved this which we are told was proved?
  Mr. GRANT: It was the evidence which was brought before us. It was also proved to the satisfaction of the Committee, and, consequently, we found that, estimating the position of the four companies for the year 1920 on the basis of the operating results of the first three months of 1920 and bringing into account the additional charges accruing since, there will be an actual deficit of £435,834 on the year's working. The position of the four companies, accordingly, is that they would default and pay nothing on their debenture rent charge guaranteed or preference stock, and, of course, nothing on their ordinary stock. The Committee, at the same time, prosecuted an inquiry into the terms on which the capital of the four companies has been issued, going as far back as 1869 in the case of the District Company. The Companies Clauses Act expressly authorises Parliamentary companies like

  1143
  railway companies to issue their capital at a discount; and the average rate of discount at which the capital of the four companies was issued was 16 per cent. In other words, out of the total nominal share and loan capital of the four companies of £39,000,000, they have actually invested £33,000,000 in solid sovereigns in their undertaking. After hearing expert evidence, the Committee was satisfied that, having regard to the speculative character of the enterprise, this was no more than a reasonable discount, without which the capital could not have been raised. Further, this question of discount on the capital of the four companies formed the subject of a lengthy and expert inquiry by the Royal Commission on London Traffic, which came to the same conclusion. The Committee therefore had no hesitation whatever in determining that the whole of the com-panics' nominal capital should rank for dividend to the full amount. In regard to the question of raising the new capital on an 8 per cent. basis and discount on the old capital, the Committee had the advantage of hearing the expert evidence of Sir William Plender. The House will agree with me that no man has had wider experience or is more competent to give evidence than Sir William Plender. The Committee had also the advantage of reading and having discussed before them the report as to the financial position of the four companies made by the Director-General of the Financial Departments of the Ministry of Transport.
  Mr. CLEMENT EDWARDS: Can the hon. Gentleman kindly give me the reference to that report in the proceedings?
  Mr. GRANT: It is in Question 215. With regard to the remarks made by the Mover as to the Minister's remarks in the House of Commons, that the Committee had not included in the Bill a Clause cancelling the Government subsidy to the District Railway Company—in the view of the Committee on evidence given it did not seem expedient to have done so. The four companies have no power to put into operation the increased charges except by the approval of the Minister of Transport. If when the Minister approves of the companies charging the whole or part of the fares fixed by the Committee he can, and pre-
  1144
  sumably will, deal with the question of the subsidy to the District Railway Company, in the same way as he will deal with subsidies paid to main line companies on those companies receiving power and directions to increase their rates and fares. The Committee felt that on such evidence as I have referred to, evidence given by men of such knowledge, ability, integrity and expert knowledge of such subjects as Lord Ashfield and Sir William Plender, and evidence unshaken by cross-examination of distinguished counsel on behalf of those who opposed the Bill, that it was sufficient to instruct us as to the financial position of those companies. I trust what I have said will satisfy the House that the Instruction to inquire into the financial position of the company was duly com-plied with by your Committee. I will now deal with the second point. The Instruction of the House was:
  "To provide that the maximum powers of charge in excess of the fares which the companies are now authorised to charge shall not be more than are required to provide from time to time for working expenses, efficiently maintaining and renewing the undertakings, and a reasonable return on capital."
  It will be seen that under that Instruction the Committee were to fix such increased fares, so that the difference between them and the company's existing fares should not be more than what was required to provide from time to time for working expenses and efficiently maintaining and renewing the undertaking and for a reasonable return on capital. The Committee submit that those words "from time to time" made it incumbent upon us to look at the future as well as the present, and to give the companies such increased charging powers as would be sufficient, if not more than enough, to provide for the three items which I have just mentioned, not merely at present but for the future. The governing words are "from time to time." The Minister of Transport appears to have stated his view before the Railway Rates Advisory Committee in reference to main line companies that charging powers sufficiently high to meet the future needs under working expenses and maintenance and renewals and return on capital might be too high to meet the present needs, and that if the companies were left free to charge up to the full amount of the charging powers, that is, up to the maxi-

  1145
  mum, immediate injustice to the public might result. In the case of the main line companies he has taken the position that any increased rates to be introduced and any future increases should not be left wholly to the railway companies to determine, but should be subject from time to time to the decision of an appropriate tribunal. I venture to say that that is very wise in the interests of the public. Applying the same policy to the London Underground Railways, the Minister of Transport asked that before the companies proceed to charge any part of the increased charging powers which might be fixed by the Committee on the Bill he would be entitled to satisfy himself that that increase was not more than reasonably required for the items referred to in the Instruction. It was not part of the duty of the Committee under the Instruction, nor, indeed, a practical proposition for the Committee, to fix the actual fares, but we laid down a maximum, as we were instructed to do, and that the actual fares at any time necessary to make working expenses reasonable, maintenance and renewal expenses and return on capital should be fixed by the Ministry of Transport. I think the House will agree that it is his duty to do so. A Clause is therefore inserted into the Bill to restrict the company from charging fares which, under the Instruction they would have been entitled to charge, that is, the maximum. The question we had to decide was, what increased charging power was sufficient, but not more than necessary, to enable the four companies to provide from time to time, in the words of the Instruction, for working expenses and maintenance and renewal of the undertaking and a reasonable return on the capital. The Committee was satisfied beyond question that the increased charging powers in the Bill were not more than were required for that purpose.
  Major BARNES: Did the Committee decide what was a reasonable return on existing capital? The hon. Gentleman has told us that 8 per cent. on new capital was decided on.
  Mr. GRANT: The Committee laid down no figure as a reasonable return. The view the Committee took, and had to take, was that the companies should not get what they considered unreasonable. I think it is beyond the ability of the most
  1146
  competent of my hon. Friends to lay down at present what may be called a reasonable return or to fix any figure. I think the Committee was more justified in protecting the public against the companies receiving an unreasonable return, and that is the principle we acted upon. The fares for passengers of 1½d. per mile third or ordinary class, and 3d. first class are the actual fares being charged by main lines and suburban companies, fares which it is proposed by the Minister of Transport almost immediately to increase. Those are the maximum fares which were laid down for these London companies. It was also proved to our satisfaction that it would be impracticable to increase long distance fares to the same amount as short distance fares, and I think the London County Council agreed that it would be inexpedient to do so. Lord Ashfield satisfied us that at the outside no greater average increase than 40 per cent. on existing fares could be put into operation. Lord Ashfield submitted to the Committee a Table which the Committee, I claim, were fully justified in accepting. It showed the results to the four companies of the increase of fares for a future year not earlier than 1925—a normal year in the future when arrears had not to be made up. This Table assumed no increase of working expenses between 1920 and 1925 and showed that on this improbable assumption the result in 1925 of such an increase in long distance and short distance fares as would be represented by an over-all average increase of 40 per cent. would produce a net revenue, under the most hopeful conditions, which would not be more than sufficient after meeting working expenses and reasonable maintenance and renewal expenses, to pay a dividend at the rate of 4.9 per cent. on ordinary capital. Any increase of wages or other item of working expenses between 1920 and 1925 would, of course, more or less seriously reduce this narrow margin. The House will, I trust, consider that on such evidence we as a Committee did well in accepting these Amendments, and that instead of violating the instructions of the House we even more fully carried out what the House desired. The distinguished counsel engaged to oppose the Bill did not in their cross-examination shake the evidence, and if a case was to be made, the time to make that case was upstairs in Committee.
  Mr. EDWARDS: Is it not a fact that all the counsel acted on the suggestion that as the Minister would fix the fares, it would be a waste of time to go into the question of fares there?
  Mr. GRANT: There was no restriction on the Committee to limit any evidence brought before them, and I think my hon. Friend does an injustice to the eminent counsel engaged in suggesting that they were intimidated by any action by even the Minister of Transport.
  Mr. EDWARDS: I do not suggest that, but I suggest that the Chairman, by allowing the promoters to proceed with reading the new preamble drafted by the Minister of Transport, put everybody in the position of considering the new Bill on the basis that the Minister was to fix fares and that the Committee should not fix them.
  Mr. GRANT: The Committee had to carry out what they considered to be the desire of the House, and I submit that they did so. There was one more Instruction from the House, and that had to do with workmen's fares. If hon. Members will read Sub-section (1) of Clause 8 of the Bill, I think they will see that the instruction of the House was literally carried out with regard to workmen's fares. Thus, 1 think, the House should be satisfied that the Committee complied with the whole of the Instructions of the House and that on the evidence supplied the Committee were well advised in amending the Bill. I must express some astonishment at the action of my hon. Friends who desire to re-commit the Bill. and I again say that I do not think they can have fully appreciated the exact position. I think I may say quite frankly that all the Amendments, so far as they stand at the present moment, are in the interests of the travelling public, and that is surely what the House desires. We delegated to the Ministry powers to control from time to time actual fares, and it is suggested that in that way the House has lost its hold in regard to fares. In the first place, we were not instructed to lay down actual fares, but only maxima, which we did; and secondly, the Minister, who will control the actual fares, is in a sense a servant of the House. His actions can be questioned and controlled, and in that way the House holds a more stringent control over fares than it did when the Bill was in Committee.
  1148
  We have laid down our maxima fares, and we still have a representative who can control actual fares, and so I say the Bill is stronger in the sense the House desired it to be than it was on Second Reading.
  There is another point on which I desire to say a word or two, namely, the intervention of my right hon. Friend the Minister of Transport. His suggestions were of such a substantial character as to be unusual, if not unprecedented, in such circumstances and at such a stage of the Bill, and the Committee, as representing this House, rightly or wrongly, felt it their duty to comment on this action of the Minister, but their comment was on the matter of procedure, and not on the substance of the Minister's proposals. We were satisfied that his proposals did not violate the instructions of the House, or the desire of the House in regard to the Bill. On the contrary, we did not question that he acted so far as he could to assist the Committee, and that he acted wholly in the interests of the travelling public. We merely stated our opinion that the Minister should have put his concrete proposals before the House on Second Reading, rather than in Committee; it was purely a matter of procedure. A great deal of notice has been taken of this incident. I hold no brief for my right hon. Friend, but I must say that I think he has in this matter been somewhat unfairly dealt with. My right hon. Friend has recently been an object of criticism, and the House well knows that when a man is under criticism, a mere mole-hill of alleged indiscretion may very often be turned into a mountain of iniquity. I repeat that the action of the right hon. Gentleman has been made too much of, and I think it would be a grave injustice if this incident should in any way prejudice the just claim of these public utility companies, who are carrying on their shoulders this vast burden of passenger traffic in our metropolis. The House has before it two alternatives. At present we are subsidising these companies, and we have a Bill to do away with these subsidies by increasing the fares. I think that as soon as we can, we ought to do away with subsidies, and I hope in the first place that the Amendment will not be pressed to a Division, but, if it is, I hope the House will see to it that this Bill goes through its Third Reading. By so doing, they will not only

  1149
  benefit the travelling public, but carry out the wishes of the House expressed on Second Reading.
  The CHAIRMAN of WAYS and MEANS (Mr. Whitley): As the House will probably expect me to say a few words in connection with this Bill, what I have to say will be entirely confined to the question of Procedure, and will not deal with the merits of the Bill. The House is entitled to review the decisions of its Committees on matters of this kind, but I heard as Chairman of Ways and Means, some little time ago, that questions had been raised as to the correctness of the procedure in the Committee upstairs. I think it is, therefore, incumbent upon me to say that, having followed the proceedings of the Committee while they were going on, and again examined the Report of their proceedings, I am clearly of opinion that the Committee and its Chairman acted in every way in accordance with our proper Procedure. I do not think any suggestion of favour on their part can be maintained. The only other point on which I shall say a few sentences is with regard to the action of the Ministry in presenting a Report to the Committee at so late a time, I think on the day—was it not?— when the Committee met to consider the Bill. That may have been unfortunate, but it clearly was the duty of the Minister to present at any stage a Report which conveyed his representations to the Committee. But let it be always understood that this Committee and all other Committees of our House have an independent duty. It is their duty, it is true, to consider—and consider carefully—any recommendation made by a Minister from his Department, but it is their duty to use their independent judgment on that recommendation, and to accept it if they think it is the right one, and, if they fail to accept it, to make a proper Report to the House of their reasons why they have not done so. In both those respects I think the procedure in this matter has not been one of which complaint may be made. As to the merits of the Bill, as amended, I do not express an opinion.
  Sir HERBERT NIELD: We have just listened to some weighty words from the Chairman of Ways and Means, but, although I think he may be accurate in
  1150
  the way in which he has described the functions of a Committee upstairs in relation to the Ministries who have to present their reports on Private Bill legislation, he has not done justice to the particular circumstances of this case, because this House, by a most determined Instruction, accepted by the Minister at the time, did undertake that these specific matters should be dealt with by the Committee. It is an extraordinary thing that not only was this Instruction imposed upon this Bill, but it was moved by myself, and accepted by the Minister, in relation to the London United Tramways Bill and the Metropolitan Electric Tramways Bill. Now both those Bills have disappeared, and for the reason that the Ministry, exercising the powers given under the Temporary Powers Act to increase fares, have sufficiently satisfied those companies, that their Bill has been withdrawn. And yet we are told—and we find it upon the Notes—that when the Committee met for the first time, the Promoters were aghast at the Report which was presented by the Ministry, and were at a loss to know what to do, and asked for an adjournment for a considerable time in order to consider their position. When the Bill was opened, the leading counsel for the promoters was bound to admit that the proposals which were then before them, which he read in detail, were totally new proposals, which I gather from the evidence, he said he was bound to accept. Then you come to deal with the explanation which was given by the right hon. Member for Derby, whose name on the back of these Bills certainly arouses a feeling of curiosity, which he amply dispelled, when he said frankly that he regarded the consumer as being the proper person to pay his share in the raising of the railway-men's wages, and we find the right hon. Gentleman is asked in cross-examination,
  "May I ask you, when you say you are supporting the Bill, whether you mean the Bill in its present form or the original Bill?"
  And the answer was:
  "On that, I think it is only fair for me to state that I do not quite follow the action of the Ministry of Transport in this matter. I read carefully the Bill prior to Second Reading, and I knew of the negotiations which were taking place with the London Members, and ultimately agreed with a Clause which was put in with a view to protecting workmen's fares. I also knew what happened on the Second Reading and the statement of the Minister, and I can-

  1151
  not quite understand the reversed policy of the Ministry of Transport."
  So that we get the right hon. Gentleman for Derby and the other two Gentlemen, one being Lord Ashfield, not only the representative but the mainspring for the promoters, and we have, of course, Sir Wm. Plender supporting his evidence. When you come to the third witness, he expressed amazement that the Bill had been turned inside out by the action of the Minister. Representing as I do a large London constituency, which may not be affected by the Bill, because they are what is termed the long-distance traffic, but representing a London constituency of a very considerable magnitude, I do think it is a most unsatisfactory thing to have happened that at this particular moment of all others, when the Government is being constantly held up as being disposed to support capital against labour, and all sorts of misrepresentations are now being uttered outside, the bulk of which are without foundation, with regard to the attitude of the Government as to these matters. I venture to think that it was the duty of the Chairman of the Committee to refuse to proceed with that Bill without taking the instructions of the House first upon it. Undoubtedly the action of the Ministry has turned the Bill inside out. I am not saying for a moment there is any suggestion as to collusion between the promoters and the Minister. It is perfectly plain upon the evidence that the promoters were taken by surprise when the Committee met for the first time, and were very seriously concerned about the fortunes of their Bill if the Report of the Ministry was to have full effect given to it. I think that there is one way to try to cure this unfortunate condition of things. It is necessary to recommit the Bill for the purpose of inserting in the New Clause 6, second paragraph, the same direction which was included in the instruction, so that before the Ministry of Transport approves of and makes any Order increasing the amount of fares up to the maximum which are authorised, the Rates Advisory Committee, to which the matter has been referred, shall be compelled to take into consideration those special matters which are dealt with in the Instruction of this House. That is the only way to try to put right what I regard as a most unfortunate blunder
  1152
  which has left the House open, in connection with the Committee, to the suggestion that the Committee had been overawed by the Minister.
  These are days where we are suffering very keenly from bureaucracy. The House is, I believe, in a temper to resist any further inroads on its privileges by the Minister. I do not say the Ministry have done this intentionally. It is a new broom. Probably it has over-estimated its powers. Probably it does not realise that in dealing with this House it must have regard to the constitutional usages of this House, seeing that this House is the guardian of the liberties of the people. I venture to hope that the Minister will see his way to allow the Bill to be re-committed for the purpose of including those words: that the scale of fares be fixed so as to provide for working expenses, efficient maintenance, and reasonable return on capital." I am not prepared to say whether the 8 per cent. on the new capital or the 4·9 per cent. on the old capital is right or wrong. As I understand the hon. Member for East Ham makes a definite statement, which he has made before in this House on the Second reading, that the capital is not really live capital, but capital upon which dividend ought not to be paid, because it has long since ceased to exist, and the circumstances make it improper that the undertaking should be burdened with that, which, in point of view, is not living capital. That is the allegation which is made, I understand, and I think we owe it to the constituents we represent to take care that matters of this sort—whatever the thing is—are looked into. For they are carefully scrutinised by the public outside. I assure the House that the public are already very bitterly complaining, and there is the rumble of thunder in the distance about the increase of the family fares. Tram undertakings which have been able to raise their fares are already beginning to feel that the fares have gone to breaking point, and so are producing a reduction in the passengers carried. In the end the concern is little better off, if better off at all. This House ought carefully, and I trust with the goodwill of the Minister, to do everything we can to remove the impression that is abroad that there is any attempt or desire to take from the public more than is absolutely necessary owing to the exigencies of the

  1153
  moment. Unless something of this sort is done in the re-commital of the Bill for the purpose of effectively carrying out what we think is desirable in this matter, I am afraid the situation, bad as it is, will rapidly become worse.
  Mr. KENNEDY JONES: I agree with my hon. and learned Friend, the Member for Ealing (Sir H. Nield), despite the statement of the Chairman of Ways and Means, and despite the very elaborate apology of the Chairman of the Committee. I agree that they have not carried out the Instruction which this House gave, based on a recommendation contained in the Report of the Advisory Committee over which I presided. By the way, it must interest the House to know that there were two prominent members of the Ministry of Transport members of that Committee. We discussed these questions: What was the capital of the companies promoting this Bill? What rate of remuneration should be considered as reasonable? What was the percentage of fares necessary to place these undertakings on a sound working basis? In discussing the question as to where these very important points were to be settled, we came unanimously to the conclusion that the best authority, and the most impartial, to decide these points would be a Private Bill Committee of this House. We did that for this reason: The Transport Ministry said,
  "We may be prejudiced, and we may be fighting like cat and dog, the owners of these properties; we had better, therefore, have impartial people who will hear both sides, and impartial people to whom we can lend the whole of our Accountancy Department to inquire into the figures of the concern; we will then be able to arrive at what we agree is a very necessary decision, and arrive at it, possibly, in complete harmony."
  That was why this instruction to the Private Bill Committee came to be drawn up on the Second Reading of the Bill.
  I venture to say that there would have been no Second Reading of this—not this Bill, but the other Bill—if it had not been that there was unanimously an agreement between the promoters and the London Members that these matters would be gone into by a Committee, and that that Committee would answer such questions as: How much watered capital is there in these undertakings? What is the actual market value of all stocks and shares as against the face value? What is a reasonable return on the capital? And so on. I
  1154
  have read the whole of the evidence given before the Committee. There were only three witnesses called. There was Lord Ashfield, and Sir Wm. Plender, who both represented the same interests, and the right hon. Gentleman the Member for Derby who merely came to say that he was surprised at the change of front on the part of the Minister of Transport. This was the searching inquiry in which Lord Ashfield and his accountant were witnesses! The Committee has failed the House, in my judgment, on all these points. Let the Committee remember that Lord Ashfield and the members of what is colloquially called the Combine, have always maintained that they are entitled to a reasonable return on the whole of their investments at their face value which, they say, represents the most favourable terms on which the capital could have been raised. At one time during the proceedings of the Advisory Committee that view was not held by the Ministry of Transport, because this opinion was given by the head of the Finance Department to my right hon. Friend, and it is set forth in his report, which is attached to the Advisory Committee's Report on London Traffic. He says this: "The nominal value of the stocks include large amounts not represented by money payments to the companies, but if stock is issued at a discount for stock or exchanged for work done on a basis of the then market value, it may be questioned whether such stocks are entitled to rank to the same extent as stocks issued at par for cash."
  10.0 P.M.
  I wonder whether my right hon. Friend thinks so now, and, if so, why he supports this Bill. I am going to inform the House what Lord Ashfield and his friends get under this Bill. At the present moment in connection with those promoting this Bill the rate of fares per mile is ·74d., and under the arrangement of the Bill the company propose to add 40 per cent. They have permission to do that, and this brings it up to 1·04d. against ·55d. in 1913. Under this arrangement, by this Bill they have, as against the 1913 fares, which were a halfpenny per mile, the right to raise the fares to 1·04d. per mile. The result of the 40 per cent. increase fares and 20 per cent. increase on the traffic, which Lord Ashfield admits is likely this year to yield £6,629,000 in connection with these railways. It is esti-

  1155
  mated that when you have deducted all, the increased costs and allowances you will leave a net balance of £2,639,000, which, after deducting charges for rentals, reserves, and renewals, will leave £840,000 for the ordinary stocks and shares for dividends, or 4·9 per cent. on the ordinary stocks at their face value.
  I looked up to-day the price on the market of the Metropolitan District Railway Ordinary stock, and I found that you could buy it between 14¼ and 15. if you are going to create a revenue under this Bill, which is going to provide nearly 5 per cent. on a £100 stock for which you pay about 14½, you are going to create a very nice speculative condition of affairs on the Stock Exchange. Sir William Plender said that he did not care what amount the value was, as he only took the face value of stock. In the present condition of railway finance, this will create a most grave precedent, because if you are going to pay at a rate of 5 per cent. on the face value of all the Ordinary stocks of these railway companies, how can you refuse it in the case of the smaller non-paying railways which, under the scheme of my right hon. Friend the Minister of Transport, are going to be amalgamated with the other main lines?
  There is one other point in connection with this matter, and it is that this Bill, which is supposed to be promoted by four companies, really represents a combine which embraces 17 companies. When you come to the companies promoting this Bill you find that the London Electric Railway Company include the Metropolitan District Railway, and you find that includes 10 other companies which have all been amalgamated between 1910 and 1912, and by an Act of Parliament passed in 1915 the London Electric Railway Companies' Facilities Act provides for a common pool. So that you are really considering a measure which is a combine Bill, and the increase of fares under this Bill is going into a fund which is distributed in such proportions as the directors of the controlling company direct, because there is in all these great financial amalgamations a holding company, and that in this case is the Underground Electric Railway Company. It can distribute the pool in such proportions as the directors agree, and agreement as between the operating and controlling companies is very easy,
  1156
  because the directors of the controlling company are in nearly every case directors of the operating company. There are four of these gentlemen: Lord Ashfield himself is not only a director of the controlling company, but he is a director of six other companies. A gentleman named Mr. W. A. Burton is a director of nine companies, Mr. W. M. Acworth is a director of five companies, and Mr. H. A. Vernet, the Paper Controller during the War, is also a director of five companies. This pool is under the control of the holding company, which is associated by reason of the 1915 Act with the omnibus companies, and when you get the fares under this Bill, which will give a return of 5 per cent. upon ordinary stock, some of which to-day is not even quoted on the market, you will find that these men in the controlling company, who pull the strings, will sympathetically raise the omnibus and tram-ways fares and will gather in extra profits for the Pool. I have gone into this question on two successive Committees. A Select Committee of this House, after hearing extensive evidence on the matter of the finances of the Combine, a Committee composed of Unionist, Liberal, and Labour Members, unanimously agreed that, before this Combine was allowed to fasten its tentacles on London, there would have to be the strictest and closest investigation into its finances. That was repeated by the Advisory Committee appointed by my right hon. Friend, a Committee over which I presided, and on that Committee were two of his prominent directors. They agreed that this House, through a Private Bill Committee, should closely investigate the whole question of capital, should decide upon its value and upon what was a reasonable return upon it, and should also decide upon the fares. I associate myself with those who wish to see this Bill re-committed, because I claim that the Committee to which it was sent has failed in its duty to this House.
  Sir WILLIAM BULL: It will be within the recollection of the House that it was I who moved the Instruction in this matter, and Lord Ashfield called upon me yesterday, and asked me whether I would put before the House his view of the case. He explained to me that, of course, the Combine had no representative in this House, and their side of the story had not been told. He therefore appealed to me, as the Mover of this Instruction, to

  1157
  say a few words on his behalf, and I consented to do so, in the interest of fair play; and I thought, of course, that the House would like to hear his side of the story.
  Mr. A. SHORT: On a point of Order. Is it competent for a Member of this House to speak on behalf of one individual, rather than on behalf of his constituency?
  Mr. DEPUTY-SPEAKER (Sir E. Cornwall): The right hon. Gentleman is quite in Order.
  Sir W. BULL: Lord Ashfield is very anxious to put himself right with the London Members, of whom I happen to be one of the secretaries, and therefore he asked me to make a short statement in regard to him, and I, in my discretion, thought that I was justified in doing so. At the interviews between Lord Ashfield and the London Members he agreed to accept the instruction which was afterwards adopted by the House of Commons, and also intimated his intention of reducing the proposed powers of charge to per mile on third or ordinary class, and 3d. per mile on first-class. When the Bill was submitted to the Select Committee, presided over by the hon. Member for Whitehaven (Mr. Grant), the proposed charging powers were reduced as promised by Lord Ash-field. Workmen's fares were also reduced, in accordance with the Instruction, to the amount for the single ordinary fare for the return journey, with a minimum of 3d. I may tell the House that four meetings of the London Members were held prior to the meeting of the Committee. Lord Ashfield also wishes me to make it clear that the Report of the Minister of Transport was, of course, made by the Minister without any prior consultation with the four companies, and, coming, as it did, only a day or two before the date announced for the meeting of the Committee, the leading counsel for the promoters was instructed to ask for an adjournment, in order that they might see whether giving effect to the Report involved any departure from the agreement come to with the London Members and the undertaking given by Lord Ashfield, so that, in that event, Lord Ashfield might have an opportunity of meeting the London Members, if he were so advised. He did not want to consent to anything sprung
  1158
  upon him by the Minister of Transport without first consulting the London Members, if he thought fit.
  The adjourned hearing commenced on the 8th June. Shortly before that date the Minister of Transport made another report, and annexed to it Clauses which he asked should be inserted in the Bill. to give effect to the general terms of his former report. The four companies accordingly amended their Bill by introducing into it the Clauses of the Minister, and in that form it was resubmitted to the Committee. Lord Ashfield would like it to be made clear that the Bill in its amended form made all increases of fares subject to the limitations contained in the Instruction of the House of Commons, namely, that the excess of the new charging powers over the existing charging powers should not be more than was required to meet the working expenses, reasonable expenses of maintenance and renewals, and a reasonable return on capital. The effect of the Minister's Clauses was to ensure that the companies did not benefit from the increased charging powers beyond what the Instruction of the House of Commons provided. If by any chance the companies' expenses should be less than is now expected, the Minister will be authorised to interfere and demand that the fares shall be reduced, if the revenue of the companies is in excess of what the Instruction requires. As the Bill, when amended by the insertion of the Minister's Clauses, in no way exceeded the limitations contained in the Instruction agreed to between Lord Ash-field and the London Members, Lord Ashfield did not think it necessary again to consult the London Members. He recognises the great interest which the London Members attach to this important matter, and intends to adhere to his undertaking to consult the London Members when the increased fares are put into operation. He promised that in the Committee room, and he now repeats it here, so that they may be apprised of the exact result of any increase in fares. They will thus be kept in close touch with the situation as it develops, and this will again ensure that excessive fares are not being charged. It is important to emphasise the fact that the four companies have maintained as a standard to apply to any increased fares, that which was fixed by the London members and Lord Ashfield, namely, that the revenue to be derived therefrom

  1159
  should not be more than sufficient to pay working expenses, reasonable expenses of maintenance and renewals, and a reasonable return on capital. This standard has been definitely inserted in the Bill as the governing condition, and is in no way whatever affected or enlarged by the Clauses inserted at the instance of the Minister of Transport. In anticipation of obtaining the increased charging powers provided for in the Bill, the four companies have already increased the wages of their railwaymen, in accordance with the national settlements, for the purpose of avoiding serious railway trouble throughout the country, and partly as a result of so doing, they are not now earning their actual expenses.
  That is practically the statement of Lord Ashfield in explanation of his part in the matter. What he was very anxious to have made clear is that he has not broken faith with the London Members in any way and has strictly kept to the terms of the agreement. Our private Bill legislation has grown up, of course, through many centuries, and it would be very serious indeed if it was thought by any section of the House that that legislation had been interfered with in any way. When you think that 150 or 200 Bills practically go through the House every year and the House itself has very little to do with them from start to finish because they have such great faith and trust in these Committees, it would be a serious interference and would also break down the rules and regulations if by any chance we thought these Committees had been interfered with. I think they thought the Minister of Transport —I am speaking frankly in his presence—had acted unwarrantably and unfairly in going to the Committee and in a jackbooted manner insisted on certain Clauses being inserted in the Bill. We London Members—and I think I speak on behalf of the majority of them—felt it very keenly. We felt that he, a somewhat new Member, had interfered with an age-long legislation, had cut across our usual Procedure and made a serious inroad with the rights and privileges of Committees. That is the reason why the London Members took it up so strongly. You heard the explanation of the Chairman of the Committee and also one or two Members who have spoken, and, of course, it is for the House to judge as to whether the
  1160
  Minister of Transport did or did not exceed his duty in the way he put the case before the Committee. I cannot help thinking the hon. Member (Mr. Grant) in his report did not quite make clear the point. Having heard the Debate and having listened impartially to the statements on one side and the other, I think the Committee honestly and fairly did its best to carry out the instructions which the House passed. The Minutes of Evidence, a thick book, shows that they went very closely into the matter. It was not for the Chairman to call evidence. Evidence was to be called either on one side or on the other. The only evidence was that called by the very active and pertinacious railway combine, and they called their Chairman, their accountant, and the right hon. Gentleman representing Labour; but to my surprise no one tendered evidence from the other side or came forward to support evidence given by those three.
  That is the whole story of the case. The House will have to judge whether they are satisfied with the Report of the Chairman of the Committee or not. I thought it only fair and right that I should read the statement of Lord Ash-field showing that, at any rate, he had not broken faith with the London Members, and I am sure the House will appreciate that. It was the action of the Minister of Transport in charging into the Committee upstairs that has caused all the trouble. But for that the whole thing would have gone through Committee, and the House would have accepted their Report without any question. It was the suspicion that the Minister of Transport had rather tried to bully the Committee that has caused the trouble. We have had a statement which I think would satisfy the House that the Committee did its duty. I should be sorry to think that our Private Bill Procedure, which is the admiration of the other legislatures of the world, should be thought for one moment to be susceptible to domination or terrorism even by so formidable a Minister as the Minister of Transport.
  Lieut.-Colonel Sir F. HALL: I am in rather a peculiar position, because I am not accustomed to make personal explanations; but it is incumbent on me as one of those responsible for sending out whips to the London Members. The London Members meet regularly to con-

  1161
  sider matters applicable to London, and we thought that the Bill as it was sent to the Committee had been dealt with in a rather extraordinary manner. I feel greatly indebted to my hon. Friend (Mr. Gilbert) for bringing this matter forward, but, after having heard the explanations that have been given, and particularly the statement of the Chairman of Ways and Means, that the whole procedure had been carried out in accordance with the usage and practice of this House, it is hardly advisable for us to continue further opposition. At any rate, so far as I am concerned, I shall vote for the Bill. I have the pluck to come to this House and say I was under a misapprehension. It is only fair that I should do so. We London Members had Lord Ashfield down to see us on several occasions, and we discussed the matter very fully and very freely, and we were unanimously of opinion that the investors should be paid a reasonable return on their money, otherwise it would be impossible to get money to carry out these gigantic undertakings, and if the money is not forthcoming the people of London will suffer.
  The MINISTER of TRANSPORT (Sir E. Geddes): I have intervened at this stage because a good deal has been said—I do not quite understand the reason for some of it—about the action of the Ministry of Transport. I will avoid, as far as possible, covering the ground dealt with by the hon. Member for Cumberland (Mr. Grant) and the hon. Member for Hammersmith (Sir W. Bull), but I will ask the House to bear with me while I explain the action of the Minister of Transport in this matter. The report that was put in in accordance with the usual practice, I am told, was rather less formal and more detailed than is usual, and that as Members of the Committee have told me was better appreciated. Throughout its terms it bears upon it the fact that the Instructions of the House to the Committee were present to the minds of the draughtsmen, and over and over again the words are repeated, if certain fares could be effected
  "consistently with securing the limitation imposed by the Instruction"
  or
  "if the Committee consider that an actual increase in conformity with the Instruction"
  or
  "to enable an actual increase to be laid down in accordance with the Instructions".
  1162
  Throughout the whole report that one principle is outstanding. The words of the report are merely suggestions, but it is repeated over and over again that they are suggestions for the Committee to carry out in accordance with the Instructions received from the House.
  The hon. Member for Whitehaven (Mr. Grant) referred to the difficulty which confronted the Committee and the Ministry of Transport when after the Second Reading of the Bill they had an opportunity of considering the instruction. It has been said that the Ministry of Transport should have raised these points on the Second Reading. The instruction which the House passed was agreed with out in any way the intervention of or consultation with the Ministry of Transport between, I believe, the London Members and the promoters on the day before the Second Reading, and neither the Minister of Transport nor the officials of the Ministry ever saw that Report until the day of the Second Reading. That was hardly the time to have come to a decision on a carefully prepared Report. It would have been unreasonable to expect it. What we found when we came to consider carefully the instruction which the House gave was that it was almost impossible to carry it out. The instruction is
  "so as to provide that the maximum powers of charging in excess of fares which the Companies are now authorised to charge shall not be more than are required to provide from time to time for working expenses."
  That implies the use of maximum powers as an actuality.
  I ask the House to consider what the Ministry of Transport did report. In no case did the Ministry of Transport recommend the Committee to do anything out of keeping with the instructions of the House. What it did was this. It said, There are two points. The first is that the future policy of railways is under consideration. Therefore it would be, in the opinion of the Ministry, and it is suggested to the Committee for their consideration, inadvisable, having regard to the position of all the other railways in the combine, to fix permanent maxima. Therefore it was recommended that there should be temporary maxima. The House will agree that it would be imprudent at present to set a standard, with prices as high as they are, of maxima

  1163
  which might have been put on, and would have been put on, for the whole country, if passed. The suggestion to the Committee was for one purpose, and that was to safeguard the travelling public and prevent a high standard being set. The second point was this: We put it to the Committee that there was this difficulty about fixing maxima when you had the word "from time to time" attached to the instructions. As has been pointed out, first by the Chairman of the Committee, and, secondly, by the Chairman of Ways and Means in his observation to the House on points of order raised, the Committee is master in its own house.
  If any hon. Member desires it, I should be glad to supply him with a file of my Report. He will see that throughout, the two principles, the two points of view I have mentioned, are adhered to, and that they were by no means domineering instructions. The other point was that everything they did must be in conformity with the Instructions of the House. What I said to the Committee was this: To fix maxima from time to time is a task which you cannot really undertake. Fix maxima in accordance with the instructions given by the House, and if those maxima are higher than at the present time, give me an opportunity, with the Rates Advisory Committee—that again is an independent body created by Statute, with a King's Counsel of very great eminence sitting in the Chair and with independent members appointed, not by me, but from outside—give the Committee the right, within the maxima which you fix in conformity with the Instructions of the House, to consider any fares, any schedules which the management of these undertakings desire, and then these maxima shall be fixed upon the recommendation of the Committee. Again, it was purely with the object of safeguarding the users of the railway, not in order to get any higher rates, but to ensure that when the maxima were fixed, which it was believed would bring the return desired by the House, there should be the additional safeguard, that in the changed conditions during the five years when they have these temporary powers—made temporary on my suggestion—even then it had to go to the Advisory Committee to say whether from time to time, in conformity with the Instructions of the House, those fares were sufficiently high or not. Those were the two points I put before
  1164
  the Private Bill Committee. Upon those points they acted, and I submit to the House that my action was safeguarding those who used the undertaking and was in conformity with the best practice and with the wishes of the House. When my report went to the Committee who objected? The promoters. They said: "This is a very serious thing. Give us time to think it over." There was an adjournment. They said, quite rightly, that they would have to consult the London Members with whom they had negotiated before, and when they realised what the Report was, that the recommendations were in each case taking something from them and not giving them anything, they came back to the Committee, and Counsel for them said: "Beggars cannot be choosers. This is more than we thought, but we have to take it." What did the Opposition do? I have gone through the evidence. There is not one single case in which they objected to what was recommended. Indeed, they went further.
  Sir H. NIELD: The representative of the London County Council did more than once object to the thing being, as he termed it, "turned inside out."
  Sir E. GEDDES: My hon. and learned Friend says that is so. I say there was no objection taken to the recommendations I made. He may have objected to the way it was done or to the time when it was done, but in no case did the opponents say, "We object to this because it is giving too much to the promoters."
  Mr. C. EDWARDS: The Committee had already accepted the preamble you had dictated to the promoters, and, therefore, the Committee were dealing, not with the Bill sent from here, upon which objection might have been raised, but with an entirely new Bill.
  Sir E. GEDDES: I was not present at the proceedings of the Committee and the Chairman must be left to speak for himself. I believe that I am right in saying that in no single case was there any objection taken to the recommendations that I made and were in favour and in protection of the users of the railways. Therefore, I think that the Ministry was justified in the action which it took. In no case did it try to force conditions on

  1165
  the Committee, and the suggestions put forward were in conformity with the wishes of this House and in both cases were against the promoters and in favour of the users of the railways.
  Sir ERNEST WILD: I am one of the few who voted against the Second Reading of this Bill, and, if necessary, I shall vote against the Third Reading or in favour of the re-committal. I do want, however, to be fair to the Minister of Transport, and, having read with some care most of the proceedings before the Committee and having read the Bill which is now down for Third Reading, I do think that the Minister of Transport has succeeded in getting the Committee upstairs to pass a better Bill than the entirely different Bill that was given the Second Reading in this House. Clause 6, which subjects the new fares other than the workmen's fares which are dealt with in accordance with the instruction of the House, is a distinct improvement on any of the Clauses that occurred in the Bill as it left the House on the Second Reading. Quite clearly, as my right hon. Friend has said, the promoters of the Bill were entirely dissatisfied with the Report of the Minister of Transport, because Mr. Honoratus Lloyd, when the Bill was before the Committee on 11th May for the first time, said that the Report left him absolutely astounded, and that he did not know where he was. I know my learned Friend pretty well, and I know that a Report which left him absolutely astounded and not knowing where he was, must have been of a very potent character. The consequence was, that there was a considerable period of time from 11th May to 8th June for the promoters to make up their minds what they would do. They then came before the Committee presided over by my hon. Friend the Member for Whitehaven (Mr. Grant). I do not think anybody in the course of this Debate has sought to cast the slightest aspersion upon the way in which he and his colleagues conducted the affairs of the Committee, nor has anyone sought to do so upon Lord Ashfield, for whom my right hon. Friend the Member for Hammersmith (Sir W. Bull) has acted as spokesman in this House. When the promoters came before the Committee on the second occasion, they read this Report from the Minister of Transport. There is one phrase which is really at
  1166
  the root of this proposition. The Minister said:
  "The Committee will observe that, while in terms the Instruction relates to maximum fares and charges, the limitations appear to involve a consideration of the actual fares which the companies concerned may charge in order to provide a revenue not more than sufficient to meet the prescribed conditions, including a reasonable return upon capital."
  The Report then goes on to say:
  "That would involve a lengthy and most intricate inquiry, which would raise questions such as the amount of composition of the capital, the rate of return to be allowed on present and future capital, and so on."
  My recollection, which has been fortified by reading the OFFICIAL REPORT of the Debate upon the Second Reading, is that that was the very thing that this House decided should be gone into by the Committee. I am not at all certain that the Minister of Transport is not much more competent to do this from time to time than the Committee, but if you read the Report of the Second Reading Debate it is perfectly clear that that was the proposition that the Committee should consider the allegation that there was some sort of watered capital, or, to use an unparliamentary expression, some sort of hanky panky, behind the whole thing. I do not believe those allegations. I think even if there was a certain element of reality in them that they are grossly exaggerated.
  Sir E. GEDDES: The paragraph which my hon. and learned Friend has quoted from the Report of the Minister in no single word suggests that that inquiry, which on the Second Reading of the Bill I said I desired, should not take place. That paragraph was understood by those who read it as merely intended to point out, possibly superfluously, to the Committee that the matters involved were of great difficulty, but it was not suggested that the Committee should not go into them.
  Sir E. WILD: I cannot agree, because the right hon. Gentleman said:
  "The Committee will observe that, while in terms the Instruction relates to maximum fares and charges, the limitations appear to involve the consideration of actual fares which the companies are to charge."
  The Report then proceeds to argue the question, and says that that consideration could not be given without an inquiry of a lengthy and most intricate

  1167
  character, which would raise questions of great complexity. That is, that the consideration which the House instructed the Committee to give was one of difficulty and involved questions of great complexty, "such as, for instance, the amount and composition of the capital." Really, it is difficult to understand how that could raise any very great question of difficulty. Then there is the return to be allowed on capital, which is also elementary. And there was also the question: "Whether or not any particular scale of charges would, in practice, produce more or less than the necessary revenue."
  Mr. GRANT: Does the hon. and learned Gentleman suggest that the Committee did not inquire?
  Sir E. WILD: I suggest that the inquiry was not the inquiry which would have taken place had it not been for the intervention of the Minister of Transport. Nobody can read this Report without seeing that the whole trend of the inquiry was deflected by the intervention of the Minister. May I remind the House that this has been a mutual admiration society, even joined in by the hon. Member for Dulwich (Sir F. Hall), who came to curse and remained to bless. May I remind the Chairman of the Committee of his own words? The House imagined that this exhaustive inquiry would take days, and perhaps weeks, but the whole thing was over in three or four days, and the exhaustive inquiry consisted of the not unprejudiced evidence of Lord Ashfield, the Chairman of the promoters, of a very admirable expert on behalf of the promoters, and of their temporary ally, the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas). If the House had imagined that that would constitute the exhaustive inquiry, the Bill would never have got a Second Reading. When the hon. Member for Whitehaven announced the decision of the Committee with regard to the preamble, he said:
  "The Committee find the preamble proved as it now stands. We desire, however, to express some surprise at the action of the Minister in suggesting to us in a memorandum considerable alterations in the Bill as passed by the House of Commons on Second Reading and apparently at the time accepted by him. It would have been, in the opinion of the Committee, more suitable
  1168
  if the Minister could have indicated to the House at the time of the Second Reading the views he ultimately put before us."
  To my, perhaps untutored, mind that weighs a great deal more than any technical decision about Procedure, that the Minister, by the admission of the Chairman of the Committee, had put forward in this Memorandum alterations in the Bill as passed by the House of Commons. Those were the words of my hon. Friend—and very proper words too—spoken on the 10th June, and they were different words, because it was suggested in the course of the Debate on the Second Reading that the Minister of Transport might look into this matter himself, and this is what he said:
  "Frankly, I did not want to act in an arbitrary way in this matter. I wanted to get help and consideration, and where can I get better consideration than from a Committee of the House of Commons."—[OFFICIAL REPORT, 25th March, 1920, Col. 742, Vol. 127.]
  Then, having got that consideration, he, possibly rightly—that is not the point before the House—came to the conclusion that it was much more appropriate that this matter should be considered by the Ministry from time to time. I think he is right, but I think he did the right thing in the wrong way, and the question is, Is this House going to be treated like this? I have tried to state that if I were making a mere advocate's speech I should not admit that I think that in all probability my right hon. Friend would be able to decide this matter better than a Committee, but surely there is a very grave question of constitutional practice involved in the action of the Ministry in the matter. It does not matter whether technically the Bill is properly before us or not; we did decide that these matters were to be exhaustively considered by the Committee, and they have not been. The Committee had before them the attitude of the Minister of Transport, they had his Report; the promoters had that Report put at their heads, and they went away and sat upon it for a month, and then the promoters came and ate the leek. They said, "Beggars must not be choosers, and in these circumstances we will accept, because we cannot help ourselves." I think my right hon. Friend has really rendered a service to the country if this Bill is to be passed, but I contend that he has done it altogether in the wrong way.

  1169
  That is the whole position. I do not mean to argue the general question tonight, but there is no doubt that there is a very strong feeling in London with regard to this matter. Nobody wants to deny to this undertaking, or to any other undertaking, a proper return on capital. No one wants to say the shareholders are not entitled to reasonable dividends, and I do not think whether it very much matters whether they get their capital at a 16 per cent. discount; but we do want the whole matter seriously considered. We do want to convince the public that there is nothing behind this matter, and I do respectfully suggest that perhaps my right hon. Friend, whose ability nobody doubts, is a little bit too much accustomed to dealing with shareholders, and it is a matter of importance, after the House has given a Second Reading on one condition, and that is not complied with in spirit, although it may have been in letter, that this House should refuse a Third Reading until the Bill has been re-committed. This is a matter for which London Members are responsible to their constituents, and I think it is most incredible that the Government should put on Whips in regard to a matter which is entirely one of Private Bill legislation. Whether the Government put on Whips or not, I feel that the Minister of Transport has done the right thing in the wrong way, and I think it is time that he and every other bureaucratic Minister should be taught that the House of Commons is master of its own house. Therefore, if there is a Division, Whips or no Whips, I shall vote against the Third Reading.
  Mr. KILEY: I must confess to a little regret that the name of Lord Ashfield has been drawn into the discussion at all. There has been no breach of faith so far as Lord Ashfield is concerned. He has met the London Members and fully and frankly explained his position. The trouble, as I understand, has arisen through the Committee not carrying out the Instruction to ascertain what increase of fares was necessary in order to enable the underground companies to carry on their business consistently with giving a return to the shareholders. Has that been done or not? is the question at issue, and that, I confess, I still find myself in considerable doubt
  1170
  about. I am not satisfied that has been done, although, no doubt, the intervention of the Minister of Transport has been done in perfect good faith and with the object of protecting the railway passenger. But it is to be regretted that the Committee did not carry out Instructions which were given them, and therefore if this matter goes to a Division, I feel bound to express my regret in a practical way that the Committee did not adhere to their Instruction. Had they done so, we should have been spared this Debate to-night.
  Mr. PALMER: The Debate we have had should convince the right hon. Gentleman the Minister of Transport that, after all, the House of Commons is a place that even a superman must respect. The Instruction was sent from this House to the Committee upstairs, and the right hon. Gentleman tried to ride roughshod over it. I find a complacent Committee, with a very complacent Chairman who has come here to-night with the sole object of defending himself and the Ministry of Transport. The hon. Gentleman the Member for Hammersmith made a great deal of the amount of evidence that was taken. I have some knowledge of Committees and more perfunctory sittings I cannot imagine than are shown in the Report which I have before me. Two of the witnesses were associated with the company, and the third, the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) actually came before that Committee not caring two pence about the poor of London—[Hon. MEMBERS: "No, No!"]—and those unfortunate people the middle classes, who have to pay these extra rates, so long as he could get money for the railway workers—
  Mr. DEPUTY - SPEAKER (Mr. Whitley): The hon. Gentleman must not impute motives to an hon. Member of this House.
  Mr. PALMER: I beg your pardon if I have transgressed the rules. The Bill has not been properly considered. The Instruction of the House was wholly ignored by the late Committee, and if the House allows that sort of thing to happen we will never know whether or not an Instruction of the House will be carried out. [HON. MEMBERS: "Divide,

  1171
  divide!"] I have come down here tonight to speak at the invitation of the hon. Gentlemen who are now shouting "Divide!" I propose to say what I came to say. I would like to support the suggestion of the hon. and learned Member for Ealing, that is that this Instruction, which has been ignored by the one
  Committee, should be sent before the Standing Committee on Rates. I think that would meet very largely the view of the House.
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 184; Noes, 92.

  Division No. 182.]

  AYES.

  [11.0 p.m.

  Adair, Rear-Admiral Thomas B. S.

  Flannery, Sir James Fortescue

  Ormsby-Gore, Captain Hon. W.

  Addison, Rt. Hon. Dr. C.

  Forrest, Walter

  Palmer, Brigadier-General G. L.

  Agg-Gardner, Sir James Tynte

  Foxcroft, Captain Charles Talbot

  Parker, James

  Astor, Viscountess

  Fraser, Major Sir Keith

  Pownall, Lieut.-Colonel Assheton

  Atkey, A. R.

  Fremantle, Lieut.-Colonel Francis E.

  Pratt, John William

  Baird, John Lawrence

  Ganzoni, Captain Francis John C.

  Pretyman, Rt. Hon. Ernest G.

  Baldwin, Rt. Hon. Stanley

  Gardiner, James

  Pulley, Charles Thornton

  Balfour, George (Hampstead)

  Geddes, Rt. Hon. Sir E. (Camb'dge)

  Rae, H. Norman

  Banbury, Rt. Hon. Sir Frederick G.

  Gibbs, Colonel George Abraham

  Randles, Sir John S.

  Banner, Sir John S. Harmood-

  Gilmour, Lieut.-Colonel John

  Raw, Lieutenant-Colonel N.

  Barnston, Major Harry

  Glyn, Major Ralph

  Roberts, Sir S. (Sheffield, Ecclesall)

  Bellairs, Commander Carlyon W.

  Gould, James C.

  Robinson, Sir T. (Lancs., Stretford)

  Benn, Sir A. S. (Plymouth, Drake)

  Grant, James A.

  Roundell, Colonel R. F.

  Benn, Capt. Sir I. H., Bart. (Gr'nw'h)

  Greenwood, William (Stockport)

  Royden, Sir Thomas

  Bennett, Thomas Jewell

  Greig, Colonel James William

  Royds, Lieut.-Colonel Edmund

  Betterton, Henry B.

  Hacking, Captain Douglas H.

  Sanders, Colonel Sir Robert A.

  Bird, Sir A. (Wolverhampton, West)

  Hall, Lieut.-Col. Sir F. (Dulwich)

  Scott, A. M. (Glasgow, Bridgeton)

  Blades, Capt. Sir George Rowland

  Haslam, Lewis

  Shaw, William T. (Forfar)

  Blake, Sir Francis Douglas

  Hennessy, Major J. R. G.

  Shortt, Rt. Hon. E. (N'castle-on-T.)

  Blane, T. A.

  Henry, Denis S. (Londonderry, S.)

  Simm, M. T.

  Boles, Lieut.-Colonel D. F.

  Herbert, Hon. A. (Somerset, Yeovil)

  Smith, Sir Allan M. (Croydon, South)

  Bowles, Colonel H. F.

  Hinds, John

  Smith, Harold (Warrington)

  Bowyer, Captain G. E. W.

  Hohler, Gerald Fitzroy

  Sprot, Colonel Sir Alexander

  Bridgeman, William Clive

  Holbrook, Sir Arthur Richard

  Stanley, Major H. G. (Preston)

  Briggs, Harold

  Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.)

  Starkey, Captain John R.

  Brown, Captain D. C.

  Hope, James F. (Sheffield, Central)

  Steel, Major S. Strang

  Bruton, Sir James

  Hopkinson, A. (Lancaster, Mossley)

  Stevens, Marshall

  Buchanan, Lieut.-Colonel A. L. H.

  Horne, Sir R. S. (Glasgow, Hillhead)

  Stewart, Gershom

  Buckley, Lieut.-Colonel A.

  Hotchkin, Captain Stafford Vere

  Sturrock, J. Leng

  Bull, Rt. Hon. Sir William James

  Hunter, General Sir A. (Lancaster)

  Sutherland, Sir William

  Burdon, Colonel Rowland

  James, Lieut.-Colonel Hon. Cuthbert

  Talbot, G. A. (Hemel Hempstead)

  Burn, Col. C. R. (Devon, Torquay)

  Jephcott, A. R.

  Terrell, Captain R. (Oxford, Henley)

  Butcher, Sir John George

  Jodrell, Neville Paul

  Townley, Maximilian G.

  Campion, Lieut.-Colonel W. R.

  Johnson, Sir Stanley

  Turton, E. R.

  Carter, R. A. D. Man., Withington)

  Jones, Sir Edgar R. (Merthyr Tydvil)

  Vickers, Douglas

  Casey, T. W.

  Jones, Sir Evan (Pembroke)

  Waddington, R.

  Chamberlain, N. (Birm., Ladywood)

  Jones, J. T. (Carmarthen, Llanelly)

  Wallace, J.

  Clay, Lieut.-Colonel H. H. Spender

  Joynson-Hicks, Sir William

  Walters, Sir John Tudor

  Clough, Robert

  Kinloch-Cooke, Sir Clement

  Ward-Jackson, Major C. L.

  Coates, Major Sir Edward F.

  Lambert, Rt. Hon. George

  Ward, Col. L. (Kingston-upon-Hull)

  Coats, Sir Stuart

  Lane-Fox, G. R.

  Warren, Lieut.-Col. Sir Alfred H.

  Cobb, Sir Cyril

  Law, Alfred J. (Rochdale)

  Wheler, Lieut.-Colonel C. H.

  Colvin, Lieut.-Colonel Richard Beale

  Law, Rt. Hon. A. B. (Glasgow, C.)

  White, Lieut.-Col. G. D. (Southport)

  Coote, Colin Reith (Isle of Ely)

  Lewis, Rt. Hon. J. H. (Univ., Wales)

  Whitla, Sir William

  Courthope, Major George L.

  Lewis, T. A. (Glam., Pontypridd)

  Williams, Lt.-Com. C. (Tavistock)

  Craig, Colonel Sir J. (Down, Mid)

  Lister, Sir R. Ashton

  Williams, Col. Sir R. (Dorset, W.)

  Dalziel, Sir D. (Lambeth, Brixton)

  McLaren, Hon. H. D. (Leicester)

  Wills, Lieut.-Colonel Sir Gilbert

  Davies, Alfred Thomas (Lincoln)

  M'Lean, Lieut.-Col. Charles W. W.

  Wilson, Daniel M. (Down, West)

  Davies, Sir Joseph (Chester, Crewe)

  Mallalieu, F. W.

  Wilson, Colonel Leslie O. (Reading)

  Davison, Sir W. H. (Kensington, S.)

  Malone, Major P. B. (Tottenham, S.)

  Wilson, Lieut.-Col. M. J. (Richmond)

  Doyle, N. Grattan

  Marriott, John Arthur Ransome

  Wilson-Fox, Henry

  Du Pre, Colonel William Baring

  Middlebrook, Sir William

  Winterton, Major Earl

  Edgar, Clifford B.

  Mildmay, Colonel Rt. Hon. F. B.

  Wood, Hon. Edward F. L. (Ripon)

  Edge, Captain William

  Montagu, Rt. Hon. E. S.

  Wood, Sir H. K. (Woolwich, West)

  Edwards, Major J. (Aberavon)

  Moore-Brabazon, Lieut.-Col. J. T. C.

  Wood, Major S. Hill- (High Peak)

  Elliot, Capt. Walter E. (Lanark)

  Moreing, Captain Algernon H.

  Worsfold, Dr. T. Cato

  Elveden, Viscount

  Morrison, Hugh

  Young, Sir Frederick W. (Swindon)

  Eyres-Monsell, Commander B. M.

  Morrison-Bell, Major A. C.

  Younger, Sir George

  Falcon, Captain Michael

  Mount, William Arthur

  Farquharson, Major A. C.

  Murray, C. D. (Edinburgh)

  TELLERS FOR THE AYES.—

  Fell, Sir Arthur

  Neal, Arthur

  Lord E. Talbot and Mr. Dudley Ward.

  Finney, Samuel

  Newman, Sir R. H. S. D. L. (Exeter)

  FitzRoy, Captain Hon. E. A.

  Nicholson, William G. (Petersfield)

  NOES.

  Acland, Rt. Hon. F. D.

  Borwick, Major G. O.

  Cooper, Sir Richard Ashmole

  Barnes, Major H. (Newcastle, E.)

  Breese, Major Charles E.

  Curzon, Commander Viscount

  Bell, Lieut.-Col. W. C. H. (Devizes)

  Brittain, Sir Harry

  Davies, A. (Lancaster, Clitheroe)

  Benn, Captain Wedgwood (Leith)

  Bromfield, William

  Dawes, Commander

  Bethell, Sir John Henry

  Brown, James (Ayr and Bute)

  Dewhurst, Lieut.-Commander Harry

  Entwistle, Major C. F.

  Locker-Lampson, G. (Wood Green)

  Raper, A. Baldwin

  Foreman, Henry

  Lorden, John William

  Remer, J. B.

  Galbraith, Samuel

  Lunn, William

  Remnant, Sir James

  Green, Joseph F. (Leicester, W.)

  Lyle, C. E. Leonard

  Richardson, R. (Houghton-le-Spring)

  Gretton, Colonel John

  Lyle-Samuel, Alexander

  Robertson, John

  Griffiths, T. (Monmouth, Pontypool)

  Mallaby-Deeley, Harry

  Samuel, Samuel (W'dsworth, Putney)

  Gritten, W. G. Howard

  Malone, C. L. (Leyton, E.)

  Sexton, James

  Grundy, T. W.

  Mitchell, William Lane

  Short, Alfred (Wednesbury)

  Guest, J. (York, W. R., Hemsworth)

  Moore, Major-General Sir Newton J.

  Sitch, Charles H.

  Gwynne, Rupert S.

  Morris, Richard

  Smith, W. R. (Wellingborough)

  Hall, F. (York, W. R., Normanton)

  Mosley, Oswald

  Strauss, Edward Anthony

  Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)

  Murchison, C. K.

  Sugden, W. H.

  Harris, Sir Henry Percy

  Murray, Dr. D. (Inverness & Ross)

  Swan, J. E.

  Hirst, G. H.

  Murray, Major William (Dumfries)

  Thomas, Brig.-Gen. Sir O. (Anglesey)

  Hogge, James Myles

  Myers, Thomas

  Thomson, T. (Middlesbrough, West)

  Holmes, J. Stanley

  Newman, Colonel J. R. P. (Finchley)

  Thorne, G. R. (Wolverhampton, E.)

  Hood, Joseph

  Nield, Sir Herbert

  Tillett, Benjamin

  Hopkins, John W. W.

  Norris, Colonel Sir Henry G.

  Waterson, A. E.

  Irving, Dan

  O'Grady, Captain James

  Wedgwood, Colonel J. C.

  Jones, G. W. H. (Stoke Newington)

  Palmer, Charles Frederick (Wrekin)

  While, Charles F. (Derby, Western)

  Jones, Henry Haydn (Merioneth)

  Peel, Col. Hn. S. (Uxbridge, Mddx.)

  Wild, Sir Ernest Edward

  Jones, William Kennedy (Hornsey)

  Perring, William George

  Young, Lieut.-Com. E. H. (Norwich)

  Kenworthy, Lieut.-Commander J. M.

  Preston, W. R.

  Young, Robert (Lancaster, Newton)

  Kiley, James D.

  Prescott, Major W. H.

  Knights, Capt. H. N. (C'berwell, N.)

  Purchase, H. G.

  TELLERS FOR THE NOES.—

  Lawson, John J.

  Raffan, Peter Wilson

  Mr. Gilbert and Mr. Clement Edwards.

  Lloyd-Greame, Major Sir P.

  Rankin, Captain James S.

  Bill read the Third time, and passed.

  FINANCE BILL.
  Again considered in Committee.
  [Mr. WHITLEY in the Chair.]

  CLAUSE 6.—(Increased Excise Duty On Beer.)
  Postponed Proceeding resumed on Question, "That the Clause stand part of the Bill."
  Question again proposed.
  Motion made, and Question, "That the Chairman do report Progress and ask leave to sit again," put, and agreed to.—[Mr. Baldwin.]
  Committee report Progress; to sit again To-morrow.

  MINISTRY OF MINES [SALARIES AND EXPENSES].
  Considered in Committee.
  [Mr. WHITLEY in the Chair.]
  Motion made, and Question proposed, "That it is expedient to authorise the payment, out of moneys to be provided by Parliament, of an annual salary not exceeding two thousand pounds to the Minister of Mines, and of such other salaries, remuneration, and expenses of the Ministry as may become payable under any Act of the present Session for establishing a Ministry of Mines, and for regulating the coal industry and for other purposes connected with the mining industry and the persons employed
  1174
  therein, and of any sums that may become payable by the Treasury by way of temporary advances by reason of the extension by such Act of the continuance of The Coal Mines (Emergency) Act, 1920.
  Provided that fees or expenses of any pit or district committee or area or national board or any members thereof which may be constituted under the said Act will not be payable as expenses of the said Ministry."—(Sir R. Horne.)
  The PRESIDENT of the BOARD of TRADE (Sir R. Horne): In moving this Resolution, I desire to apologise to the Committee that it should be taken at this time of night, but, as I have no doubt the Committee will realise, it is only being taken now in order that it might not be taken at a time which would have been still more inconvenient to the Committee last week. It will be within the recollection of the Committee that an explanation was given upon that matter by the Leader of the House, and I think it was accepted by all hon. Members who were present. It will only require a very few words of explanation to make plain the object of this Resolution. The setting up of the mechanism under the Coal Mines Bill requires a Minister, and it is proposed to pay him a salary of £2,000 a year. That will be practically, so far as one can see at the moment, the only expense which will be added to the costs which are now incurred in connection with the operation of the various Statutes dealing with the regulation of coal mines. The staff which will come under the charge of the Minister of

  1175
  Mines will be taken from other Departments which are already dealing with the matters with which they are connected. For example, the inspection staff will be taken from the Home Office; the staff at the Board of Trade, which is at present under the charge of the Coal Controller, will be made available to the Minister of Mines; and those who are at present, in the Board of Education, dealing with the geological survey, will now, if the Coal Mines Bill passes, come under the jurisdiction of the Minister of Mines. The only added expense which one can anticipate, accordingly, is that which is involved in the salary of the Minister of Mines, and in the staff with which he must immediately surround himself, that is to say, his headquarters staff. At the outset it cannot, in my estimation, amount to more than a very few thousands of pounds.
  I would ask the Committee to recollect that this is an alternative to a very much larger expenditure. What is proposed in this Bill is the alternative to very much larger proposals which have been made from other quarters, and accordingly I hope the Committee will look at these proposals, so far as the expense is concerned, in the light of what it would cost the country to adopt some other scheme. It is perfectly certain, in view of the Report of the Sankey Commission, that we cannot leave the coal-mining industry of this country where it was before the War. If that is so, then undoubtedly we have to provide the mechanism by which we may improve the conditions under which the industry is carried on. I cannot imagine a less costly scheme than that which we have proposed, and accordingly I venture with every confidence to recommend this Resolution to the Committee.
  Mr. G. LOCKER-LAMPSON: I beg to move, after "1920" ["continuance of the Coat Mines (Emergency) Act, 1920"], to insert the words
  "Provided that the total amount so paid shall not in any one year exceed the existing yearly cost of the services transferred to the Ministry of Mines from any other Government Department."
  Clause 2 transfers various powers now exercised by the Departments to the new Ministry which is going to be set up. It transfers all the powers and duties of the Board of Trade with respect to the mining
  1176
  industry. It transfers all the powers of the Secretary of State; I presume that is the Home Office; under enactments relating to coal mines, metalliferous mines and quarries, and in Sub-section 2 it says that if in future any other powers from other Departments require to be transferred, they also shall be transferred to this new Department to be set up. When we were discussing the Bill the other day there was a White Paper circulated which explained very shortly, too briefly to my my mind, the finance of the Bill, and in this memorandum it was explained that practically there was going to be no increase of expenditure by this Department over and above what was already spent in respect of the whole of these subjects by other branches and other Departments and my Amendment is merely moved in order to ensure that there shall not be expended by this new Department a sum of money every year over and above the existing cost of the services of various branches of the Department in connection with mines. I should like to quote one or two lines of the memoran-dum—
  "Beyond the salary of £2,000 made payable by the Bill to the Minister of Mines, the establishment of the new Ministry is not likely to involve any substantial increase in expenditure."
  It goes on to point out each of the services that have been transferred. I do not see why there should be any increase in expenditure. I do not think there ought to be any increase. There ought to be a decrease rather than an increase because, when you centralise powers exercised by various Departments in one Department and bring them all together under one head, surely it is much less expensive to work than when you dissipate the various powers among many Departments. I should have thought it would mean fewer persons belonging to the staff rather than more, and on the whole far less expense in running the concern.
  I should also like to remind the Committee of what the Minister said the other day. He was talking about the expense of this Department, and he said:
  "The question of expense, I gather, is the one which chiefly disturbs various people both inside the House and outside on this question."

  1177
  That is quite right. That is the question that disturbs a great many people inside and outside.
  "The only additional cost that I can see this Ministry can involve is that of the Minister's salary, £2,000 a year, and the immediate headquarters staff that he requires. I believe this will be more than compensated for by the saving that you would make by bringing all the Departments which are dealing with this matter together."
  Therefore, as far as I can see, this £2,000 a year, which is supposed to be over and above the existing cost, will, in his own words, be saved by reducing the expenditure in other quarters. There was an answer the other day to a question by the hon. and gallant Gentleman (Captain Tudor-Rees), who asked whether any estimate had been made of the annual cost of the proposed Ministry of Mines, and if so, what was the amount of it. The answer was:
  "The provisional estimate places the cost of the new Department, including the staff taken over from other Departments, at about £250,000 per annum. Except for a very small proportion of the amount this represents the cost of the existing organisations which will be transferred to the Ministry."
  Therefore it seems to me that this really is a reasonable Amendment. It simply asks that no further sum shall be disbursed from the Treasury to this new Department than the existing expenses incurred in regard to mines. I have handed in a manuscript Amendment which I shall be prepared to move if the Government cannot accept the Amendment on the Paper. The manuscript Amendment takes the Government's own figures, and says:
  "Provided that the total amount so paid shall not in any one year exceed the sum of £250,000."
  We have an opportunity to-night of limiting expenditure. I do not move my Amendment in a hostile spirit. If the Government find that their estimate is too small and they want more than £250,000 they can very easily come down to the House, and if they make out a good case the House will at once give them the money. I hope the right hon. Gentleman will not accuse the House of wanting him to spend extra money. The accusation is often made that Ministers are not responsible, but that this House is responsible for leading the Government into extravagance. We have
  1178
  not asked for this Bill. The Labour party have not asked for the Bill, and I know of no hon. Member on the back benches who wants the Bill. Certainly we are not responsible for the proposed expenditure. Therefore, I hope the Government will show their bona fides in what they have said about economy, and will take this opportunity of cutting down expenditure as much as possible.
  Mr. FREDERICK HALL: I agree with the right hon. Gentleman in regretting that this matter has to be taken at such a late hour; but my regret goes a step further. When the Bill was before the House last week the party to which I belong asked for time in view of the Conference which is being held this week in connection with the industry to which the Bill applies. It was put back a little, but the Financial Resolution comes tonight, and I understand that the Committee has been fixed for this week, while at the same time the people who asked for time to consider it are discussing the matter in conference. It is unfair to the House that a Bill of such magnitude should be submitted when those who will be affected by the Bill have not had an opportunity of discussing it.
  We may be told that the miners have always been in favour of the establishment of a Ministry of Mines, but this Bill does not establish a Ministry, as the miners have always requested. It establishes a Minister who is an additional secretary to an existing Department. He has certain powers, but these powers can be interfered with, because the Bill tells us distinctly that he can exercise these powers, subject to the Board of Trade. We do not know what powers the Board of Trade may refuse to let him exercise, and while we are not disposed to debate the matter at this hour of the evening, we shall record our protest by voting in favour of the Amendment.
  Mr. HOLMES: The President of the Board of Trade in the White Paper tells us that the only additional expense, so far as the State is concerned, is the £2,000 salary of the Minister of Mines. The rest of the staff will be transferred from other Government Departments. Everyone must assume that the existing staff of the Coal Control Department will be transferred to the Ministry of Mines, but the staff of the Coal Control Department is not paid for at present by

  1179
  the State. It is a charge on the industry. The Coal Mines (Emergency) Act, which the House passed recently, creates the pool to which all colliery companies pay in their profits, which are distributed in a certain manner, but the Act says also
  "debit to said account such amount as may be necessary to meet the administrative expenses of the Board of Trade, constituted for the purpose of control of the coal industry incurred during the period of the operation of this Act."
  "So, at the present time, the whole of the expenses of the Coal Control Department are paid for by the coal industry and not by the Exchequer. If you are going to transfer the Coal Control Department to the Ministry of Mines, it is going to be a fresh charge on the Exchequer beyond the £2,000 mentioned by the President of the Board of Trade, and I would ask him to explain that.
  Lieut.-Commander KENWORTHY: I would like to enforce what has been said by my hon. Friend (Mr. Holmes). If you are going to follow the practice in existence since the War emergency coal mine control began, the cost of the Department ought to go on to the industry. The profits of the industry ought to be pooled as heretofore, and from that pool the cost of this Department should be borne. We are led to believe by the President of the Board of Trade that this Ministry of Mines is primarily for the benefit of the mining industry and the workers in the mines. Therefore we consider that the cost should not go on the Exchequer, but the industry, which is a principle to which some of us are beginning to attach great importance with regard to mining and many other industries. We want to make these industries self-supporting, and not have them all looking to the State for doles or subsidies.
  Sir R. HORNE: Hear, hear!
  Lieut.-Commander KENWORTHY: I am glad that the right hon. Gentleman agrees with me. I hope that he will explain this matter satisfactorily. I cannot allow this to pass without making an emphatic protest against the way it has been worked so far, and particularly from the point of view of my own constituency. As regards the coal trade, the port of Hull—
  The CHAIRMAN: That does not arise on this Financial Resolution.
  Lieut.-Commander KENWORTHY: I thought I could raise a protest against the paying of money to ruin my own constituency. There remains this fact: You can govern only by the consent of the governed. You can control the coal industry and run the Ministry of Mines effectively, only by the consent of the mineowners and the miners, and as far as I can gather, the majority of the mine-owners and of the miners—that will be settled shortly—are wholly opposed to this Bill. It does not leave the industry to work out its own salvation by its own efforts and its own nationalisation. We are—
  The CHAIRMAN: It is not the merits of the Bill we are discussing. We are dealing now simply with the finance, limiting the Committee in considering the Bill to a certain expenditure.
  Lieut.-Commander KENWORTHY: I did not attempt to address the Committee on the Bill; there were many experts to do that. I want to protest against the expenditure, because I think it perfectly useless, and certainly I am going to support the hon. Member for Wood Green (Mr. G. Locker-Lampson), who seeks to set some limit to the expenditure. Our knowledge of new Government Departments tells us that some such limit is urgently required.
  Sir R. H0RNE: I seldom find myself in agreement with my hon. and gallant Friend (Lieut.-Commander Kenworthy), and l am very glad on this occasion to be able to endorse one of the sentiments which he avowed. I am able to support him on this occasion only because he has disavowed everything he has said in the past. I entirely agree that the trades in this country should be dependent on themselves and should not look for any help from the State, but that is not the question we are discussing. This proposal concerns a Government Department which is to look after the interests of the mining industry, apart altogether from operating the mining industry—which we do not propose to do at all—to look after the better safety and welfare of the men in the trade, as the State has always done. The Amendment is one which I could have accepted with alacrity, but I should be lacking in candour to the

  1181
  Mover if I did not explain that this proposal would mean a great deal more money than I require. If I were to accept his initial Amendment, based upon the expenditure of the current year, I should be obtaining far more money than I estimate will be necessary to operate this Department.
  Mr. LOCKER-LAMPSON: I said, "will not exceed."
  Sir R. HORNE: Both the Amendments contain the wording "not exceeding" a certain sum. If I were allowed to spend up to the sum of the original Amendment, I should have far more money than I require. The reason is that within recent weeks we have performed an operation which will decrease the expenditure of the Coal Control Department by about £400,000. I am prepared to accept the second Amendment of my hon. Friend. I estimated the expenditure at £250,000, and, as I understand his Amendment, it will allow me to spend money up to that limit. I think that sometimes a mistake is made in suspecting that a Minister is desirous of spending more money than he need spend—[Horn. MEMBERS: "Officials"]. I think the Committee may make a great mistake in adopting this form of economy too frequently. Every Minister who is compelled to estimate under these circumstances will estimate so as to give himself an ample margin, and, as soon as you have a fixed limit, which gives you an ample margin, the tendency of the officials may be to spend up to that limit. Therefore, the Committee may under such circumstances defeat its own object. I made my estimate of £250,000, however, quite honestly, and I am prepared to stand by it and accept that sum, but the Committee will realise that it is not possible for any man to be infallible, and, if something unexpected occurs, and I have to come back to the Committee, I hope that they will recollect the circumstances under which I have accepted my hon. Friend's Amendment.
  Captain W. BENN: I am sure it is a matter of great gratification to the Committee that the right hon. Gentleman should have met so fairly the suggestion of my hon. Friend, but I am not quite clear where we stand. We are discussing how much money ought to be allowed for the setting up of the new Ministry, and we are trying to ascertain how much it is
  1182
  intended to spend. I understand that this Department is to be set up very shortly and is to take over the duties, as at present performed, by the Home Office and the Board of Trade in connection with mines. I find in the Estimate for the Home Office that there is a sum of £52,000 for the Mines Department, and in the Board of Trade Estimates there is a sum of £500,000 for the Coal Mines Department. Do I understand that those two sums are to be put together and reduced to a sum that will not exceed £250,000 annually? If that be so, I presume that the revised Estimates will be introduced cutting down the Estimates of the Home Office and the Board of Trade by an amount representing the saving effected by the new Department. If that be so, it is a very satisfactory state of things, and we would like to know more particulars.
  Sir R. HORNE: If my hon. and gallant Friend had listened to the speech I made, he would recollect that I have already announced that I have effected a considerable saving in the last few weeks on the £500,000.
  Captain BENN: I am not complaining.
  Sir R. HORNE: No; I am only explaining that you do not listen.
  Captain BENN: On the contrary, I always listen with the greatest pleasure to what the right hon. Gentleman says, as I am sure does every Member of the Committee. Are we to have revised Estimates representing this diminished sum? Clearly, it would not be right for us to vote a large sum if the Government do not intend to spend it. I am very glad that this saving has been effected, but is it intended to present us with revised Estimates which will give us an accurate account of what the Government intend to spend?
  Mr. HOLMES: I want to press the point to which the right hon. Gentleman did not reply. He says in the White Paper:
  "Beyond the salary of £2,000 made payable by the Bill to the Minister of Mines, the establishment of the new Ministry is not likely to involve any substantial increase in expenditure; inasmuch as the majority of the powers of the new Ministry will he derived from the transfer of existing powers from other Government Departments, the concentration of which in a single Department is one of the chief objects

  1183
  of the Bill. With the powers will be transferred the staffs of the other Departments now engaged on the administration of the services to be transferred, e.g., the staff of the Mining Department of the Home Office, and of the Coal Controller's Department."
  Anyone would assume that in the future the cost under the Bill will be £2,000 for the Minister, plus the cost of the present Coal Department, plus the cost of the present officials at the Home Office dealing with the coal trade. I submit that at the present time the Exchequer is not bearing the cost of the Coal Department, because it is borne by the industry under the Coal Mines (Emergency) Act. Therefore, the additional cost to the Exchequer would be £2,000, the salary of the Minister of Mines, plus the whole cost of the Coal Control Department. This White Paper is misleading in leading the Committee to assume that the additional cost is going to be £2,000.
  Earl WINTERTON: I think the Committee should be grateful to my hon. Friend who moved this Amendment for the satisfactory reply which has been made by the Government. What I understand was strongly objected to on this, as on similar Resolutions, was that it proposed entirely new expenditure at a time when this country is not in a position to bear new expenditure, and to the original Estimate involved in a Resolution of this kind or some other form of Estimate being greatly exceeded. The announcement of the Minister seems to me to be most important and unprecedented, and I hope it will be followed in the future. As I understand, the right hon. Gentleman the President of the Board of Trade has given an assurance which I regard as a pledge of honour that under no circumstances will this new Department cost more than the existing Department. He said he would have accepted the first Amendment, but that it would give him more money than he required, and therefore I regard that as a pledge that this particular work is not going to cost more than the existing Department. In the second place, I understand, and I speak subject to correction, that he has definitely promised that he cannot exceed the sum mentioned in the Resolution without coming to the House for permission. That will not permit the most reprehensible practice
  1184
  of Departments of spending money and then coming to the Committee of Ways and Means to get permission for that spending. I understand that we have the definite promise in this particular matter that that will not be done, and that if the estimate of £250,000 is exceeded that before expenditure is incurred the Government will come to Parliament for sanction. I think all parties in the Committee have reason to congratulate the Mover. I hope it is not frivolous to say that many of us hope to follow his example and to seek on other Resolutions to bind the Government down, as it should be bound down, to a definite sum named in the Resolution.
  Major BARNES: The Coal Mines (Emergency) Act is to be in operation to 31st August next, and the administrative expenses up to that time come on the industry and not on the Exchequer. When the Coal Control Department is transferred to the Ministry of Mines how are the expenses of the Department to be met after 31st August? Do they then come on the Exchequer? The point is that, with the staff, is being transferred the cost of the staff. Up to 31st August, 1920, the cost of the Controller's staff is not on the Exchequer, but on the industry. Will the right hon. Gentleman tell us what is going to happen with regard to the cost of the staff after 31st August, 1920?
  Sir R. HORNE: I am sorry if I have not succeeded in making the situation plain to the Committee up to now, but I do not think there is any serious difficulty about it. I recognise the cogency of the point put to me by the hon. Member for North-East Derbyshire (Mr. Holmes) and reiterated by the hon. and gallant Member for Newcastle (Major Barnes), and I think the explanation is not a difficult one to follow. It is perfectly true that the coal industry has borne the expense of the Coal Control Department for the reasons my hon. and gallant Friend the Member for Newcastle states, but what has got to be realised is that these expenses come upon the Vote for the Board of Trade. The Board of Trade is responsible for the expenses of the Coal Control Department, just as the Home Office is responsible for the expenses of the Inspection Department. The figure for the Inspection Department of the Home Office is something very much larger, according to the

  1185
  figures given to me, than my hon. and gallant Friend stated. But that is by the way. The Home Office is responsible for that, and there is no other way of getting that sum out of the Exchquer; but with regard to the Coal Department of the Board of Trade, while all these costs fall upon the Estimates of the Board of Trade, if there is a surplus at the end of the year, the money is taken out of the surplus, and paid back to the Exchequer. That is what has been happening while coal control has been lasting, and, so long as coal control lasts, that will still happen. If there is a surplus in the coal trade, as I explained to the House when we were discussing the question of the increases in the price of coal, so long as the coal control lasts, all the surplus which comes to the Coal Control Department will go to the Exchequer, and therefore the Exchequer gets it either in one way or the other. What-ever surplus arises from the profits of the coal trade will go entirely to the Exchequer, so that it does not matter whether the expenditure of the Coal Trade Department is taken off initially and the balance paid to the Exchequer, or whether it is paid out of the Estimates of the Board of Trade, and the Exchequer gets all the surplus. Whichever way you do it, the result is entirely the same, and accordingly I hope I have satisfied my two hon. Friends upon the matter.
  Sir F. YOUNG: Could the right hon. Gentleman indicate to the Committee how the Coal Control Section, when cut down, would compare in size and cost with the Coal Section of the Board of Trade previous to the War?
  Sir R. HORNE: As far as the Coal Department of the Board of Trade was concerned prior to the War, it was a very small thing indeed. It was only concerned with the fixing of minimum wages, the appointment of District Boards, and the expenses of Departments which control that matter, but you are now in an entirely new region. What you propose to do is to apply by regulation to the coal industry a series of arrangements whereby the coal trade may be carried on, not in the haphazard system which has been described by the Commission, but in some new way which will be worthy not only of the industry, but of
  1186
  the country which owns it. I do not imagine that any Member of the Committee expects that in future we shall be able to carry on the coal industry as it was done before the War. We shall be carrying it on at very much less cost than during the War. The Coal controller's Department now, on the Estimates, is proposed to cost something over £500,000, but what it will cost, as we anticipate under the new arrangements, will be something like £75,000, which is a very considerable saving. The £75,000 which the Coal Control Department will cost, together with the Home Office Inspection Department and the other Departments which we take over from other Ministries, will, we estimate, come to something like £250,000, which is the figure which my hon. Friend has adopted in moving his Amendment.
  Captain W. BENN: The point that I raised has not been answered. In a few days' time we shall be called upon to vote, without any Debate, the remainder of these Estimates. These Estimates are based on the original intention of the Government as regards coal control, and the Minister has told us he will save very largely on these Estimates. Therefore, we are consciously going to vote in a few weeks' time a sum of money which we know, on the statement of the right hon. Gentleman, is largely in excess of the sum required, and that sum has to be paid by taxpayers who are already overburdened.
  Sir R. HORNE: I cannot allow my hon. and gallant Friend the last word upon this matter. He is under an entire misapprehension. Although a few weeks ago I was able to make an arrangement by which to effect a saving of £400,000, it does not all operate at once, in one year, and therefore it would be impossible to say the precise amount by which the original estimate should now be cut down. You have got to wind up Departments, and you cannot disband everybody at once, but that is the eventual saving. Whatever is saved under this arrangement necessarily will go to the Exchequer, because the whole of the surplus goes to the Exchequer. My hon. and gallant Friend seems to imagine that if it be in the Estimate it is therefore spent, but every hon. Member knows that that is an entire fallacy.
  Mr. HOLMES: In my opinion the White Paper which the right hon. Gentleman has circulated is grossly misleading. He told us in his speech on the Second Reading that the only additional cost to the Exchequer would be £2,000.
  Sir R. HORNE: That is accurate.
  Mr. HOLMES: But it is going to be £2,000, plus the cost of such portion of the Coal Controller's Department as is transferred to the Ministry of Mines, which he estimates at £75,000 a year. Therefore, at least, the Exchequer is going to bear £77,000, compared with nothing at the present time.
  Sir R. HORNE: That is quite inaccurate.
  Mr. HOLMES: The Coal Mines (Emergency) Act charges the whole of the Coal Controller's Department on the industry at the present time, but in future such portion of the Coal Controller's Department as is transferred to the Ministry of Mines is going to be paid for by the Exchequer. At the present time it is estimated to be £500,000, and the right hon. Gentleman says he can cut it down to £75,000.
  Colonel GRETTON: The present position is not satisfactory. We set up, following a temporary expenditure, what is likely to be permanent. Some limit should be placed on the expenditure. This is a very serious charge to impose on the industry; and I, for one, am not satisfied. The whole policy of these Votes is wrong. We ought not to saddle the country with a new permanent secretarial and new officials; the explanation is by no means satisfactory. When my hon. Friend opposite presses the Minister to put into the Estimate the full expenditure, no doubt he is perfectly right. It is not a right, nor a proper constitutional practice, to ask the House in the Estimates now before us to vote money which is not required. This is a serious matter, and I must express my objection to the procedure adopted, and ask the Minister to put the Vote in order and according to constitutional practice. I am far from satisfied at the present condition of things, but I suppose it is little or no use to make continued protest. Still, one can continue to urge these matters upon the Government, and urge the Minister to put his Vote in order, and to submit a
  1188
  Supplementary Estimate for the reduced amount required during the current year.
  Sir W. JOYNSON-HICKS: We are going to give the right hon. Gentleman power to spend up to £250,000. At least, what he is going to spend ought to be put down. He has told us he is going to spend £2,000. But he must know how many secretaries, inspectors, clerks, and office staff he is going to employ; to take over from the Board of Trade, the Coal Control Department and the Home Office? Let us know. The Minister of Transport made exactly the same, or a similar, statement to that of the right hon. Gentleman. He said that in the taking over of staff there would be little or no additional expense. Then we had a Vote for a million and three-quarters put forward by the Minister who was not going to spend any additional money! We have the lesson there. I want to assure the Minister—and I am glad to see the right hon. Gentleman the Leader of the House present—that this House and the country is getting increasingly serious and determined over the question of economy. We can no longer pursue the policy of the War, when we were quite willing to give Ministers what they asked for, and were prepared to admit that the middle of the War was not the time to enter deeply into questions of economy. Now we are determined to see that Ministers do not spend a single unnecessary sovereign, or engage one unnecessary clerk. If clerks are necessary the House would not be niggardly; but the House is just as responsible as the right hon. Gentleman for the expenditure. We as hon. Members are as much entitled to take part in discussions on expenditure, and as responsible for the engagement and management of officials as any Minister on the front Bench. And is the sole power left at present to the House of Commons—the power of controlling the officials of the country? I do not say the hon. Gentleman the Member for North-East Derbyshire is right or wrong in his contention, but he raised a perfectly plain issue; and all the answer he got was that he was totally inaccurate. The right hon. Gentleman said a few months ago that he would have the last word. I give him that opportunity now to explain to the House as clearly as, with his well-known ability, he can explain, the points put to

  1189
  him—as to the coal control. Let him tell us now or in a subsequent While Paper—when the Bill is next before us—what he proposes to spend of this £;250,000; what clerks, and so on, he is going to transfer; and what are his movements in these various matters.
  12 M.
  Lieut.-Commander KENWORTHY: I have listened very carefully to what the right hon. Gentleman has said, and before he rises to give further explanations I wish to call attention to one or two points as to which I am in doubt, and which I desire him to clear up with that lucidity which he possesses. In the first place, the right hon. Gentleman said he was cutting clown the expenditure from £550,000 to £75,000 a year. I see the estimate for the Coal Mines Department is £550,522, as against £517,000 odd the year before. Of course, if he is now going to cut that item down to £75,000 it will be a most creditable performance. He warned us it would not come into operation at once, as the winding up of the Department would take a considerable amount of time. We have watched that sort of thing in other Government Departments at Whitehall, and at both the War Office and the Admiralty the winding-up process has proved a scandal and a disgrace. It has simply aroused the ire of the impoverished taxpayer more than anything else I know of. We have been told that officials and assistant secretaries have been kept on because otherwise they would be thrown on the unemployed market. That is not what the country wants. We want these overcrowded Ministries wound up immediately. We want the officials, I will not say sacked, but paid off at once, so that they may devote themselves to some useful work as soon as possible. We want them to be employed on productive work. This winding-up process fills me with alarm, and I ask for an assurance from the right hon. Gentleman that there is not going to be the least delay from considerations of humanity or anything else in getting rid of these superabundant officials. Here is a long list of officials in this Department. There arc 21 railway officials in the Coal Control Department, with an average salary of £400 a year. There is a Director at £1,000 a year; a chief clerk at £550, rising by £20 increments to £700 a year, and so on. We have already
  1190
  voted these salaries for the year, so that the officials are safe for another twelve months; but in the interests of economy I hope the right hon. Gentleman will not hesitate to give these gentlemen their congé, or turn them over to some other Department. This expression "winding-up" has filled me with alarm. The right hon. Gentleman spoke in a most flam-buoyant tone of having a Ministry worthy of the country. That is not the spirit or attitude we like in these matters. We do not want tremendous marble palaces, with hosts of beautifully dressed typists and immaculately attired bureaucrats. We do not want to feel pride of that nature in our Ministries. It is all very well to talk of setting up Ministries worthy of the Empire, but these are things which are going to drive the Empire into bankruptcy. Finally, may I ask who the new Minister is to be? That would be a very interesting piece of information.
  Mr. LOCKER-LAMPSON: I propose to withdraw my first Amendment. [HON. MEMBERS: "No, no!"]
  Sir W. JOYNSON-HICKS: Before the Question be put from the Chair, may I invite the right hon. Gentleman to have the last word, as he seems to be very fond of doing. Certain questions have been asked of him, and if he has nothing to say, of course, the Committee will draw its own conclusions.
  Mr. BETTERTON: I sincerely hope that the Committee will accept the offer made by the President of the Board of Trade. As the right hon. Gentleman has pointed out, this new Ministry has to take over certain duties hitherto discharged by the Board of Trade. May I remind the Committee it is not merely a case of taking over certain duties; the Ministry also assumes responsibility for certain obligations. There must be borne in mind, for instance, the Report of the Royal Commission dealing with Metalliferous Mines, which sat seven years ago, and which made definite recommendations, largely dealing with the health and welfare of those engaged in the industry. When my right hon. Friend tells us he is going to limit the expenditure to £250,000, I assume he has not forgotten these obligations.
  Mr. LOCKER-LAMPSON: As I understand, my first Amendment is before the

  1191
  Committee. I am willing, with the consent of the Committee, to withdraw it, and then move my second Amendment with regard to the limit of £250,000, which has been accepted by the Government.
  The CHAIRMAN: I understand leave to withdraw the first Amendment was refused, and it must therefore be negatived before the second Amendment can be submitted.
  Question, "That those words be there inserted," put, and negatived.
  Mr. LOCKER-LAMPSON: I beg to move, after "1920" ["continuance of the Coal Mines (Emergency) Act, 1920"], to insert the words
  "Provided that the total amount so paid shall not in any one year exceed the sum of two hundred and fifty thousand pounds."
  Lieut.-Commander KENWORTHY: On a point of Order. If we accept this Amendment, can we vote against the Resolution?
  The CHAIRMAN: Yes; I should then put the Question, as amended.
  Mr. HOLMES: Can an Amendment to it be moved to reduce the sum? I want to move a reduction.
  The CHAIRMAN: I should point out that this does not involve the expenditure of £250,000. The amount within that limit will have to appear on the annual Estimates each year.
  Mr. HOLMES: I want to move that it shall not exceed £175,000.
  Captain W. BENN: Would not my hon. Friend be right in moving, as an amendment to the proposed Amendment, to leave out £250,000 and to insert £175,000?
  Mr. HOLMES: I beg to move, as an amendment to the proposed Amendment, to leave out the words "two hundred and fifty" and to insert instead thereof the words "one hundred and seventy-five."
  I have not had any reply from the President of the Board of Trade with regard to the point which I put, although I have repeated it three times. He says that the Coal Controller's Department is now going to cost £75,000. I say that that £75,000 is a new charge on the Exchequer, which it has never borne before. The right hon Gentleman's White
  1192
  Paper implied that the additional charge on the Exchequer was going to be £2,000.
  Sir R. HORNE: My hon. Friend says that he has reiterated his point three times and has not yet had any reply I, however, have reiterated my reply three times, but evidently I have not succeeded in convincing my hon. Friend. I have no doubt that that is my fault, but I should like to say that, in spite of what the hon. Baronet (Sir W. Joynson-Hicks) remarked, I meant no discourtesy at all, as I am sure the Committee will agree, when I said I considered a certain remark to be inaccurate. It is entirely erroneous to regard my interjection as the only reply that I made. It may have been the only one that was audible to the hon. Baronet, but I have attempted several times to make a reply which I hoped would be satisfactory. I will tell the Committee, quite frankly, what the position is. My hon. Friend the Member for North-East Derbyshire (Mr. Holmes) has been comparing the circumstances in which we now are with those in which we have been during the last year or two. In each case we are dealing with a period during which the coal trade has been under control, and whilst it is under control a certain surplus is being realised. So long as it remains under control I do not doubt that there will be a certain surplus, though it may not be a large one. What has happened during the previous period of control—during the War—has been that the Estimates for the cost of the Coal Control Department have appeared upon the Board of Trade Schedule. The House in Committee have dealt with that from time to time. If there had been no surplus to pay for these expenses the Board of Trade was liable, or the Exchequer, as representing the Board of Trade, was liable.
  Mr. LUNN: There was a surplus.
  Sir R. HORNE: In the first place, the Exchequer was liable to pay the costs. My hon. Friend shakes his head, but that is my information, the Exchequer was liable to pay the costs, but the money which the Exchequer paid was repaid to the Exchequer in respect of money which was in the Coal Controller's hands, arising out of the profits of the coal industry. That is my information. What will happen still under the period of control, undoubtedly, will be that when you have

  1193
  a surplus from the profits of the coal trade it will go into the pockets of the Exchequer.
  Mr. HOLMES indicated dissent.
  Sir R. HORNE: My hon. Friend shakes his head again. How will he prevent it going into the pockets of the Exchequer? So far as the Exchequer is concerned, so long as the period of control lasts, precisely the same result will happen so far as the money is concerned as has been happening during the previous period of control. It is perfectly right to say that when we have emerged from the period of control—[An HON. MEMBER: "At the end of August!"] One hon. Member is very optimistic if he thinks that the period of control will terminate at the end of August. My hon. Friend must recollect that the Mines Bill provides for an extension of that period of control for another year, and thereafter year after year according to Resolution passed by both Houses of Parliament. Nobody in his senses anticipates that we can leave aside at the present moment, or for a considerable time to come, control in respect of the coal trade of this country. Accordingly, we have to look forward to a period of control for some time as necessary for the purposes of regulating the ,coal trade, and the profits, such as they are, from the coal trade will go into the pockets of the Exchequer. The expenses of the Coal Control Department will be paid, no doubt, by the Exchequer, and will be recouped from whatever profits there are. There is no difference between the present period of control and what is immediately to be anticipated from what has happened in the past. My hon. Friend (Mr. Holmes) is inaccurate, because he stated that immediately we were going to have this extra charge put upon the Exchequer. That is not so, in the sense of making any difference from what has been our previous practice. Ultimately, I have no doubt, there will be a charge upon the Exchequer when all this profit ceases, but the hon. Member has been referring to a period of control which was erroneous, in the sense that immediately we were to have a new charge saddled upon the Exchequer.
  Mr. HOLMES: The right hon. Gentleman has quoted the information which he has received. The unfortunate thing is that he does not know his own Act.
  1194
  He told us that with regard to expense if there has been no profits on the coal industry paid into the pool, the Exchequer would have to bear the charge. The Coal Mines (Emergency) Act says, in Clause 7, Sub-section (5):
  "If at any time the sums standing to the credit of the account are insufficient to meet the payments to be made thereout, the Treasury may, out of moneys provided by Parliament, pay into the account such sums as may be required for the purpose; but any sums so paid shall be treated as temporary advances, and shall be repaid to the Exchequer with interest as soon as there are funds in the account available for the purpose."
  That is the first point. The second point which the right hon. Gentleman makes is that any surplus of profit will go into the Exchequer. Has he any ground for saying that? There is no legislative right to the Exchequer to take this money. Under the Coal Mines (Emergency) Act, which was piloted through this House by Lord Ashfield, then Sir Albert Stanley, there is no right given to the Exchequer to take any surplus which may be in the fund.
  Sir R. HORNE: Surely my hon. Friend realises that the Act gives the coalowner the right to get only a certain amount of money. What remains falls to be disposed of by Parliament.
  Mr. HOLMES: No.
  Sir R. HORNE: Undoubtedly it does. I made an anouncement when this matter was previously debated that the intention was that any surplus should go to the Exchequer.
  Mr. HOLMES: The right hon. Gentleman must not mislead the Committee. All the profits of the coal companies go into the pool. The coalowners take the pre-War average and one-tenth of the balance. Then a certain amount of war wage is paid, and the expenses of the Coal Controller's Department are paid. After these payments have been made, there may or may not be a surplus. If there be a surplus, the right hon. Gentleman has no right whatever to touch it. It can only be dealt with by a new Act of Parliament.
  Sir R. HORNE: No.
  Mr. HOLMES: Certainly. The matter is one of absolute certainty. We may be quite sure that if there be a surplus

  1195
  which has to be dealt with, the coal-owners will say, and probably the miners will say, "This came out of the industry and it has to go back to the industry and be divided amongst the coalowners and the miners, and not taken by the Exchequer." The right hon. Gentleman has no right to touch the surplus. There is nothing in the old Act or the present Act to allow him to touch the surplus in any way. This White Paper is absolutely misleading because it
  Proposed words there inserted.
  Main Question put (as amended).
  tells the House that the only additional expense of the new Ministry will be £2,000, whereas it will be £2,000, plus the expense of such proportion of the Coal Controller's Department as is transferred, which expense at the present time is met by the coal industry itself.
  Question put, "That the words two hundred and fifty' stand part of the proposed Amendment."
  The Committee divided: Ayes, 133; Noes, 34.

  Division No. 183.]

  AYES.

  [12.22 a.m.

  Adair, Rear-Admiral Thomas B. S.

  Farquharson, Major A. C.

  Purchase, H. G.

  Agg-Gardner, Sir James Tynte

  Foreman, Henry

  Raper, A. Baldwin

  Atkey, A. R.

  Fremantle, Lieut.-Colonel Francis E.

  Raw, Lieutenant-Colonel N.

  Baird, Sir John Lawrence

  Ganzoni, Captain Francis John C.

  Remnant, Sir James

  Baldwin, Rt. Hon. Stanley

  Gibbs, Colonel George Abraham

  Robinson, Sir T. (Lancs., Stretford)

  Balfour, George (Hampstead)

  Gilbert, James Daniel

  Roundell, Colonel R. F.

  Barnston, Major Harry

  Gilmour, Lieut.-Colonel John

  Royden, Sir Thomas

  Bell, Lieut.-Col. W. C. H. (Devizes)

  Glyn, Major Ralph

  Samuel, Samuel (W'dsworth, Putney)

  Bellairs, Commander Carlyon W.

  Gould, James C.

  Sanders, Colonel Sir Robert A.

  Bennett, Thomas Jewell

  Green, Joseph F. (Leicester, W.)

  Scott, A. M. (Glasgow, Bridgeton)

  Betterton, Henry B.

  Greenwood, William (Stockport)

  Shaw, William T. (Forfar)

  Blades, Capt. Sir George Rowland

  Gretton, Colonel John

  Simm, M. T.

  Blane, T. A.

  Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)

  Smith, Sir Allan M. (Croydon, South)

  Boles, Lieut.-Colonel D. F.

  Haslam, Lewis

  Smith, Harold (Warrington)

  Borwick, Major G. O.

  Hennessy, Major J. R. G.

  Sprot, Colonel Sir Alexander

  Bowyer, Captain G. E. W.

  Henry, Denis S. (Londonderry, S.)

  Stanley, Lieut.-Colonel Hon. G. F.

  Bridgeman, William Clive

  Holbrook, Sir Arthur Richard

  Steel, Major S. Strang

  Briggs, Harold

  Hope, James F. (Sheffield, Central)

  Stewart, Gershom

  Brittain, Sir Harry

  Horne, Sir R. S. (Glasgow, Hillhead)

  Strauss, Edward Anthony

  Brown, Captain D. C.

  Hotchkin, Captain Stafford Vere

  Sturrock, J. Leng

  Bruton, Sir James

  James, Lieut.-Colonel Hon. Cuthbert

  Sutherland, Sir William

  Buchanan, Lieut.-Colonel A. L. H.

  Jephcott, A. R.

  Talbot, G. A. (Hemel Hempstead)

  Buckley, Lieut.-Colonel A.

  Jodrell, Neville Paul

  Townley, Maximilian G.

  Burdon, Colonel Rowland

  Jones, Sir Edgar R. (Merthyr Tydvil)

  Vickers, Douglas

  Campion, Lieut.-Colonel W. R.

  Jones, J. T. (Carmarthen, Llanelly)

  Waddington, R.

  Casey, T. W.

  Law, Rt. Hon. A. B. (Glasgow, C.)

  Walters, Rt. Hon. Sir John Tudor

  Chamberlain, N. (Birm., Ladywood)

  McLaren, Hon. H. D. (Leicester)

  Ward-Jackson, Major C. L.

  Clough, Robert

  M'Lean, Lieut.-Col. Charles W. W.

  Wheler, Lieut.-Colonel C. H.

  Coates, Major Sir Edward F.

  Molson, Major John Elsdale

  White, Lieut.-Col. G. D. (Southport)

  Coats, Sir Stuart

  Montagu, Rt. Hon. E. S.

  Whitla, Sir William

  Cobb, Sir Cyril

  Moore, Major-General Sir Newton J.

  Wild, Sir Ernest Edward

  Colvin, Brig.-General Richard Beale

  Moore-Brabazon, Lieut.-Col. J. T. C.

  Williams, Lt.-Com. C. (Tavistock)

  Courthope, Major George L.

  Morrison, Hugh

  Williams, Col. Sir R. (Dorset, W.)

  Craig, Colonel Sir J. (Down, Mid)

  Mount, William Arthur

  Wills, Lieut.-Colonel Sir Gilbert

  Davidson, Major-General Sir J. H.

  Murray, C. D. (Edinburgh)

  Wilson, Daniel M. (Down, West)

  Davies, Alfred Thomas (Lincoln)

  Murray, Major William (Dumfries)

  Wilson, Colonel Leslie O. (Reading)

  Davies, Sir Joseph (Chester, Crewe)

  Neal, Arthur

  Wilson, Lieut.-Col. M. J. (Richmond)

  Dewhurst, Lieut.-Commander Harry

  Newman, Sir R. H. S. D. L. (Exeter)

  Wood, Major S. Hill- (High Peak)

  Doyle, N. Grattan

  Norris, Colonel Sir Henry G.

  Young, Lieut.-Com. E. H. (Norwich)

  Du Pre, Colonel William Baring

  Palmer, Brigadier-General G. L.

  Young, Sir Frederick W. (Swindon)

  Edgar, Clifford B.

  Parker, James

  Younger, Sir George

  Edge, Captain William

  Parry, Lieut.-Colonel Thomas Henry

  Edwards, Major J. (Aberavon)

  Peel, Col. Hn. S. (Uxbridge, Mddx.)

  TELLERS FOR THE AYES.—

  Elliot, Capt. Walter E. (Lanark)

  Perring, William George

  Lord E. Talbot and Mr. Dudley

  Eyres-Monsell, Commander B. M.

  Pownall, Lieut.-Colonel Assheton

  Ward.

  Falcon, Captain Michael

  Pulley, Charles Thornton

  NOES.

  Acland, Rt. Hon. F. D.

  Hirst, G. H.

  Rose, Frank H.

  Barnes, Major H. (Newcastle, E.)

  Jones, Henry Haydn (Marioneth)

  Royce, William Stapleton

  Benn, Captain Wedgwood (Leith)

  Kenworthy, Lieut.-Commander J. M.

  Sexton, James

  Breese, Major Charles E.

  Lawson, John J.

  Smith, W. R. (Wellingborough)

  Cooper, Sir Richard Ashmole

  Lunn, William

  Sugden, W. H.

  Coote, Colin Reith (Isle of Ely)

  Murray, Dr. D. (Inverness & Ross)

  Swan, J. E.

  Entwistle, Major C. F.

  Palmer, Charles Fraderick (Wrekin)

  Thomas, Brig.-Gen. Sir O. (Anglesey)

  Grundy, T. W.

  Raffan, Peter Wilson

  Thomas, T. (Middlesbrough, West)

  Guest, J. (York, W. R., Hemsworth)

  Rankin, Captain James S.

  Waterson, A. E.

  Hall, F. (York, W. R., Normanton)

  Remer, J. R.

  Young, Robert (Lancaster, Newton)

  Hayday, Arthur

  Richardson, R. (Houghton-le-Spring)

  Hinds, John

  Robertson, John

  TELLERS FOR THE NOES.—

  Mr. Holmes and Mr. Griffiths.

  The Committee divided: Ayes, 130; Noes, 33.

  Division No. 184.]

  AYES.

  [12.30 a.m.

  Adair, Rear-Admiral Thomas B. S.

  Eyres-Monsell, Commander B. M.

  Purchase, H. G.

  Agg-Gardner, Sir James Tynte

  Falcon, Captain Michael

  Raper, A. Baldwin

  Atkey, A. R.

  Farquharson, Major A. C.

  Raw, Lieutenant-Colonel N.

  Baird, Sir John Lawrence

  Foreman, Henry

  Remnant, Sir James

  Baldwin, Rt. Hon. Stanley

  Frece, Sir Walter de

  Robinson, Sir T. (Lancs., Stretford)

  Balfour, George (Hampstead)

  Ganzoni, Captain Francis John C.

  Roundell, Colonel R. F.

  Barnston, Major Harry

  Gibbs, Colonel George Abraham

  Royden, Sir Thomas

  Bell, Lieut.-Col. W. C. H. (Devizes)

  Gilbert, James Daniel

  Samuel, Samuel (W'dsworth, Putney)

  Bellairs, Commander Carlyon W.

  Gilmour, Lieut.-Colonel John

  Sanders, Colonel Sir Robert A.

  Bennett, Thomas Jewell

  Glyn, Major Ralph

  Scott, A. M. (Glasgow, Bridgeton)

  Betterton, Henry B.

  Gould, James C.

  Shaw, William T. (Forfar)

  Blades, Capt. Sir George Rowland

  Green, Joseph F. (Leicester, W.)

  Simm, M. T.

  Blane, T. A.

  Greenwood, William (Stockport)

  Smith, Sir Allan M. (Croydon, South)

  Boles, Lieut.-Colonel D. F.

  Hall, Rr-Adml Sir W. (Liv'p'l,W.D'by)

  Smith, Harold (Warrington)

  Borwick, Major G. O.

  Haslam, Lewis

  Sprot, Colonel Sir Alexander

  Bowyer, Captain G. E. W.

  Hennessy, Major J. R. G.

  Stanley, Lieut.-Colonel Hon. G. F.

  Breese, Major Charles E.

  Henry, Denis S. (Londonderry, S.)

  Steel, Major S. Strang

  Bridgeman, William Clive

  Holbrook, Sir Arthur Richard

  Stewart, Gershom

  Briggs, Harold

  Hope, James F. (Sheffield, Central)

  Strauss, Edward Anthony

  Brittain, Sir Harry

  Horne, Sir R. S. (Glasgow, Hillhead)

  Sturrock, J. Leng

  Brown, Captain D. C.

  Hotchkin, Captain Stafford Vere

  Sutherland, Sir William

  Bruton, Sir James

  James, Lieut.-Colonel Hon. Cuthbert

  Talbot, G. A. (Hemel Hempstead)

  Buchanan, Lieut.-Colonel A. L. H.

  Jodrell, Neville Paul

  Townley, Maximilian G.

  Buckley, Lieut.-Colonel A.

  Jones, Sir Edgar R. (Merthyr Tydvil)

  Vickers, Douglas

  Burdon, Colonel Rowland

  Jones, J. T. (Carmarthen, Llanelly)

  Waddington, R.

  Campion, Lieut.-Colonel W. R.

  Law, Rt. Hon. A. B. (Glasgow, C.)

  Walters, Rt. Hon. Sir John Tudor

  Casey, T. W.

  McLaren, Hon. H. D. (Leicester)

  Ward-Jackson, Major C. L.

  Chamberlain, N. (Birm., Ladywood)

  M'Lean, Lieut.-Col. Charles W. W.

  Wheler, Lieut.-Colonel C. H.

  Clough, Robert

  Molson, Major John Elsdale

  White, Lieut.-Col. G. D. (Southport)

  Coates, Major Sir Edward F.

  Mond, Rt. Hon. Sir Alfred M.

  Whitla, Sir William

  Coats, Sir Stuart

  Montagu, Rt. Hon. E. S.

  Wild, Sir Ernest Edward

  Cobb, Sir Cyril

  Moore-Brabazon, Lieut.-Col. J. T. C.

  Williams, Lt.-Com. C. (Tavistock)

  Colvin, Brig.-General Richard Beale

  Morrison, Hugh

  Williams, Col. Sir R. (Dorset, W.)

  Courthope, Major George L.

  Mount, William Arthur

  Wills, Lieut.-Colonel Sir Gilbert

  Craig, Colonel Sir J. (Down, Mid)

  Murray, C. D. (Edinburgh)

  Wilson, Daniel M. (Down, West)

  Davidson, Major-General Sir J. H.

  Murray, Major William (Dumfries)

  Wilson, Colonel Leslie O. (Reading)

  Davies, Alfred Thomas (Lincoln)

  Neal, Arthur

  Wilson, Lieut.-Col. M. J. (Richmond)

  Davies, Sir Joseph (Chester, Crewe)

  Newman, Sir R. H. S. D. L. (Exeter)

  Wood, Major S. Hill- (High Peak)

  Dewhurst, Lieut.-Commander Harry

  Norris, Colonel Sir Henry G.

  Young, Lieut.-Com. E. H. (Norwich)

  Doyle, N. Grattan

  Palmer, Brigadier-General G. L.

  Young, Sir Frederick W. (Swindon)

  Du Pre, Colonel William Baring

  Parker, James

  Younger, Sir George

  Edgar, Clifford B.

  Parry, Lieut.-Colonel Thomas Henry

  Edge, Captain William

  Peel, Col. Hn. S. (Uxbridge, Mddx.)

  TELLERS FOR THE AYES.—

  Edwards, Major J. (Aberavon)

  Pownall, Lieut.-Colonel Assheton

  Lord E. Talbot and Mr. Dudley

  Elliot, Capt. Walter E. (Lanark)

  Pulley, Charles Thornton

  Ward.

  NOES.

  Acland, Rt. Hon. F. D.

  Jones, Henry Haydn (Merioneth)

  Royce, William Stapleton

  Barnes, Major H. (Newcastle, E.)

  Kenworthy, Lieut.-Commander J. M.

  Sexton, James

  Benn, Captain Wedgwood (Leith)

  Lawson, John J.

  Smith, W. R. (Wellingborough)

  Cooper, Sir Richard Ashmole

  Lunn, William

  Sugden, W. H.

  Coote, Colin Reith (Isle of Ely)

  Murray, Dr. D. (Inverness & Ross)

  Swan, J. E.

  Entwistle, Major C. F.

  Nicholson, William G. (Petersfield)

  Thomas, Brig.-Gen. Sir O. (Anglesey)

  Foxcroft, Captain Charles Talbot

  Palmer, Charles Frederick (Wrekin)

  Thomson, T. (Middlesbrough, West)

  Guest, J. (York, W. R., Hemsworth)

  Raffan, Peter Wilson

  Waterson, A. E.

  Hall, F. (York, W. R., Normanton)

  Rankin, Captain James S.

  Young, Robert (Lancaster, Newton)

  Hayday, Arthur

  Remer, J. R.

  Hinds, John

  Robertson, John

  TELLERS FOR THE NOES.—

  Hirst, G. H.

  Rose, Frank H.

  Mr. Griffiths and Mr. Holmes.

  Resolved,
  "That it is expedient to authorise the payment, out of moneys to be provided by Parliament, of an annual salary not exceeding two thousand pounds to the Minister of Mines, and of such other salaries, remuneration, and expenses of the Ministry as may become payable under any Act of the present Session for establishing a Ministry of Mines, and for regulating the coal industry and for other purposes connected with the mining industry and the persons employed therein, and of any sums that may become payable by the Treasury by way of temporary advances by reason of the extension by such Act of the continuance of the Coal Mines (Emergency) Act, 1920.
  Provided that the total amount so paid shall not in any one year exceed the sum of two hundred and fifty thousand pounds.
  1198
  Provided that fees or expenses of any pit or district committee or area or national board or any members thereof which may be constituted under the said Act will not be payable as expenses of the said Ministry."
  Resolution to be reported To-morrow.
  The remaining Orders were read, and postponed.
  It being after half-past Eleven of the Clock upon Monday evening, Mr. Deputy-Speaker adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at Twenty minutes before One o'clock a.m.