BOARD OF TRADE.

HC Deb 08 March 1920 vol 126 cc1039-63

Motion made, and Question proposed, That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1920, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade and Subordinate Departments, including certain Special Services arising out of the War.

9.0 P.M.

Colonel NEWMAN

I would like to ask the Minister in charge a few questions with regard to Item I., dealing with the British Dyes, Limited, and British Dye Stuffs Corporation, Limited. I take it that this Vote is something similar to the financial transaction entered into by the Government the other day with regard to the Cellulose Company. The original scheme as to dyes was practically a war measure. In July, 1918, there was an animated Debate on the aid which the Government proposed to give to two big firms. In that Debate the then President of the Board of Trade, now Lord Ashfield, stated emphatically that this was a war industry and that the War might last a very long time. Fortunately, it concluded a few months afterwards. Now that we are under peace conditions the average taxpayer wants to know something about this investment. Turning to the Estimates we see that this investment in British Dyes, Limited, and the British Dye Stuffs Corporation, Limited, amounts to £1,369,575, and then there are Appropriations in Aid, totalling £1,189,665. In that Debate in July, 1918, Lord Ashfield said that assistance was going to be given to the amount of £600,000, which is included in the total advance. If I were a member of the ordinary investing public I would turn at once to the Stock Exchange Year Book and look up British Dyes, Limited, There I would learn that this company was registered first under another name in March, 1915, and was reorganised in 1918 and the name changed, I would notice also this rather curious fact, that British Dyes, Limited, took over the very big business of Levinstein's, of which Lord Armaghdale, whom we knew here as Sir John Lonsdale, was chairman, and Mr. Levinstein was managing director with certain other gentlemen. We should notice with some surprise that not one of the directors of Levinstein, Ltd., appears on the Board of British Dyes, Ltd. We should find that the British Government bought out Levinstein on terms which certainly appear favourable to Levinstein, and we should want to know exactly how we stood in regard to this amalgamation. We should find in this Stock Exchange Year Book this rather sinister remark: The users of the dyes who were shareholders ill the company will have priority in the available supplies of the company. We should go on to find out that the capital authorised is £2,000,000, in shares of £1, of which £968,1574 have been subscribed. We should also find that the accounts for 1916–17 and 1917–18 have never been issued, pending a settlement with the Revenue Authorities in regard to the duties payable by the company, but a dividend of fifty per cent. has been paid to somebody. There is one rather curious statement in the Civil Service Estimates for 1918–19, appropriation account, Class 2, Vote 8, Vote on Account, which came before the House on the 10th of February of this year. This item appears: "Assistance to the dye industry, £1,000,000." Then apparently the Government did not want that money, because their scheme was not forward enough, and so the £1,000,000 was returned. I want to know if that £1,000,000 appears in this sum of £1,703,621, and why, if it was not wanted a short while ago, it is wanted now.

I can imagine that the Board of Trade made a good bargain for the British tax-payer, but I want to be assured of it. Certainly their deal in connection with the British Cellulose Company has been called in question, and that company and this have certain superficial resemblances. I admit that British Dyes, Ltd., is an old institution and that this particular idea of fostering the British dye industry started in 1915 when the then President of the Board of Trade (Mr. Runciman), at any rate a stern Free Trader, and against prohibiting the introduction of any manufactured goods from abroad, willingly assented to this scheme of setting up the British dye industry. The Government of that day, or at any rate some time before 1918, passed a resolution to the effect that no dyes should be brought into this country for ten years, and I should like to know if any other concern except British Dyes, Limited, has a chance of starting work in this country. I think that is a question which ought to be answered. We all agree that we must have the dye industry established here, but we want to get it done under the fairest conditions possible. We want to give every firm that wishes to start a dye industry here an opportunity of doing so, and we do not want to have a monopoly in connection with this great industry. We also want to know on what terms the Government have advanced this money to British Dyes, Limited. Originally, of course, as in the case of the Cellulose Company, this money was in the nature of debentures, bearing only four per cent. interest, but now it is in preference and ordinary shares. Speaking as an ordinary British taxpayer, I want to know the details of the deal, what security and what interest we shall have for our money, and what prospect this industry has of succeeding under Government supervision.

Major MACKENZIE WOOD

I am glad the hon. and gallant Gentleman has raised this question of the British Dye Stuffs Corporation, because I can assure the Government that there is a great feeling of anxiety throughout this trade about the finance of this company. I am not going to go into it very largely or to make any accusations, because I have not full and accurate information, but I am certain that the public will not be satisfied until something in the nature of a full public inquiry is made into the whole of this question. It was said by the last speaker, or it was implied, that the Government which started British Dyes, Limited, were responsible for what is going on at the present time, but a great change has taken place since then, and after Mr. Runciman left the Board of Trade that change took place. Until recently, it was a monopoly, in the full sense of the word, and it was a monopoly which was created largely by the fact that m this industry a system of protection was sot up. I am glad to think that that system of protection has been knocked on the head for the moment. We have not to thank the Government for that, however, but we have to thank the Courts, and if it were not for the Courts we would have had a complete monopoly, and the public would have been at its mercy to be victimised as the monopoly thought fit. I should like to know what reason the Government had for assenting, for instance, to the raising of the limitation of the maximum profits that could be made from 6 per cent. to 8 per cent. Under the terms upon which the Government advanced the money to British Dyes, Ltd., they were not to receive more than 6 per cent., but apparently in order to get the new scheme through it was necessary to raise that limit to 8 per cent. I should like to know exactly whether it was considered necessary to do that, and what good it was expected to get from raising the profits in that way.

What we want in this industry is efficient public control. The Government has put a large amount of money in the industry, and has got almost a monopoly, and, seeing that that is the case, the Government ought to have much more efficient control of the industry than it has, and if it has not that control this particular industry is bound to be worked in the interests of the men who have the immediate control of it. The hon. and gallant Gentleman (Colonel Newman) referred to that, and I think it is an aspect of the question which deserves the most careful examination by the Government. I am sure the Government will realise that it is necessary to go into this question much more deeply than was done before. A great deal would have been said about this question when the money was first invested in British Dyes, and later when the British Dyes Corporation was formed, if it had not been that a War was on and the people did not want a dye scandal in the middle of the War; therefore a great number of people who might have spoken out on that occasion did not do so simply because there was a War on. I hope, however, the Government will see that if there is going to be an enquiry, and if they are going to give the whole facts, it would come very much better from them if it comes voluntarily and without any pressure.

Another question is that referred to in Item C (s) and (t) We have there two headings, one a Vote of £18,000 for Clearing Office (Enemy Debts) and another of £6,000 for the Reparation Claims Department, I should like to know exactly to what that refers. Does it refer to private claims? I raise this question because I doubt the wisdom of going into many of these questions at all. It is quite obvious we are not going to get from Germany nearly as much money by way of indemnity as we expected, and it seems to me that it is only a waste of money if we are going to investigate a large number of claims which we know perfectly well will never be paid.

Mr. MYERS

When the British Dye Company was inaugurated it absorbed an old-established undertaking, and the public were led to believe that that industry was absorbed for the purpose of providing this country with dye-wares, such as are required in order to enable us to be independent of other sources of supply. Shortly after the transaction was effected, new buildings were erected, and I believe new buildings are in course of erection now. In any case large and extensive buildings have been erected, and the whole countryside in the Huddersfield area has been covered with building and chimney stacks, and to an outside observer it would appear that the place is exceedingly well equipped for turning out the products which it was set up to produce. My hon. Friend behind me spoke about it being a monopoly. Is it true that in the neighbourhood of the British Dyes, Ltd., there is at present in course of erection, almost completed, another concern, equally extensive in area and building, carrying on under a name similar to the original one which was absorbed by the Government and engaged in a similar line of business? If that is so, it completely disposes of the statement that British Dyes, Ltd., have a monopoly. Also, we understand that about a month ago a deputation of half a dozen men left this country, if not at the request of the Board of Trade certainly with its knowledge and approval, to go to Germany entrusted with the responsibility of expending up to £2,000,000 on German dyes. That report appeared in the public Press, and in the Press to-day there is an intimation of large quantities of dyes coming from Holland. If these are facts, free trade in dyes at least is in operation. There is another aspect of this question. Is it true that some time back the products of British Dyes had to be boomed very extensively in order to persuade people in the textile trade to purchase the commodities of the British Dyes? I would like also to know if at the present time the products of the British Dyes are finding a ready sale in the home market, and if the people of the country who require these products are extending their patronage to the British Dyes, Ltd., and, having regard to all circumstances of the case, if it has been found satisfactory from these points of view to the Department concerned.

Major BARNES

This Vote opens up a phase of a fairly big question, but a phase which I think has never been debated in this House before. The question, of course, is a question of giving a State Aid to private enterprise. With regard to the dyeing industry, that matter has been well discussed in this House. I think during the past three or four years on more than one occasion the House has sanctioned assistance to the dyeing industry out of State Funds. I suppose there will be a general agreement that there was good reason for doing so. As far as I have been able to make out, the best reason is not because it was formerly in German hands or carried on very largely in other countries, but because there is some close relationship between the dyeing industry and the manufacture of explosives, and also of the gases which now form such a large feature in modern warfare. One was told that almost at the outbreak of War the large dye-producing plants in Germany were taken over to make explosives and poison gases, and we were placed at a great disadvantage for that reason. I think that was the principal reason—although it was not the one most prominently put forward—why not only this Government but the Government that preceded it saw fit to give very considerable help to this industry. There are a great many Members here who believe in private enterprise, and not so many who believe in State enterprise; but whatever our opinion I think there would be common agreement on this, that where the State does come in and help private enterprise, that help should be given impartially, that there should be no special selection of particular firms, but that the industry should be helped all round. I think there would be also a general agreement that as long as the State is a partner in any private enterprise there should be a limitation of the profits there.

I propose to examine very briefly the action of the Government in making this transaction with the British Dye Stuffs Corporation, because I think in making this transaction they infringe both these principles. There is a good deal of interest in this particular transaction, because it has been followed quite recently by another transaction, referred to by the hon. and gallant Member who spoke before, in which the Government has taken up share capital in the British Cellulose Company. That has followed on the precedent which they established when taking share capital in the British Dye Stuffs Corporation. One thing has led to another, and it is interesting to note that some directors of the British Cellulose Company are also directors of the British Dye Stuffs Corporation. What the House is faced with is this: If it agrees to this Vote, what it is consenting to is not only that the State shall help a certain industry, not only that it shall give that industry a loan or grant, but that it shall actually take up share capital in particular businesses. It seems to me that is going to carry us very far, and I shall be surprised to learn if there is not very considerable opposition in this House to the adoption of that as a general policy by the Government.

What have been the facts in connection with the development of the dye industry? In 1914, very shortly after the beginning of the War, the Government made a loan of £200,000 to a firm in Huddersfield—Read, Holliday and Company. In 1915, British Dyes, Limited, was formed for the purpose of taking over the business of Read, Holliday and Company, and the House then sanctioned an arrangement by which to British Dyes, Limited, was advanced a sum which might not exceed in all £1,500,000. To this was added the loan to Read, Holliday and Company, making a total of £1,700,000, but the terms laid down were that this money was to be advanced pound for every pound raised. The Government put down £1,000,000, and the British Dyes, Limited raised £1,000,000. After that the Government was prepared to put down £1 for every £4 raised by British Dyes, and the money advanced by the Government was to be secured by debenture. That was discussed in this House, and adopted. The position with which we are faced on this Vote to-night is this, that there has been a company started—the British Dye Stuffs Corporation, Ltd.—who have secured the shares in British Dyes, Ltd., and also a firm called Levinstein, Ltd., and the Government in the first place consented to transfer their interest in British Dyes to the Corporation on the same terms. The now company was to get a loan on debenture of £1,500,000, on the same terms as the British Dyes, Ltd., had, and that arrangement was put through, and an agreement was entered into by which it was to be enforced. That agreement was made on the 16th May of last year, and on the 26th May, 10 days later, the British Dye Stuffs Corporation was incorporated. On the 16th June, a month later, the British Dye Stuffs Corporation ratified the agreement with the Board of Trade by which they were to get this loan of £1,700,000 on a debenture. Then something appeared to have happened. So far as I am able to ascertain the facts, the British Dye Stuffs Corporation found that they were not able to raise the capital that they wanted in the source from which they expected to get it. They came back to the Government and said, "We cannot raise this capital, because you have got this debenture. What we want you to do is to give up this debenture, and take the money in shares." Apparently this was agreed to. The British Dye Stuffs Corporation then increased its capital by £4,000,000 in order to provide part of the shares which the Government was to take up. On the 17th July, the Board of Trade took up these shaves, and the very next day the British Dye Stuffs Corporation issued a prospectus which stated that the Government had invested £1,700,000 in the shares of this Company.

Those are the facts. The House knew nothing of it, and did not sanction it, but what the State had sanctioned was a loan to this particular company on a debenture. It had the authority of the House to put £1,700,000 into this particular company, as a loan on a debenture, and that was quite consistent with the policy which the House had adopted towards the dye industry as a whole, because in addition to this money put in this special company, the House had sanctioned a further loan of £2,000,000 to the whole dye industry. Any firm in this country engaged in the dye industry might come and ask for a grant from this loan. When this general loan was going through the House, particular enquiries were addressed to the Minister in charge then, the President of the Board of Trade, as to whether British Dyes, Limited, or this new amalgamated company was to have any special advantage at all over any other company in the dye industry, and, of course, if it had been said that it was to have that advantage, the scheme would not have been sanctioned, because I can never believe this House would have sanctioned any proposal which would have given a particular firm or industry an advantage over its competitors. The President of the Board of Trade, speaking on the 15th May, 1918, said: It Was intended to amalgamate British Dyes and Messrs. Levinstein, Limited, It is not proposed that the new company shall have any monopoly or privileged position in respect of Government assistance which is to apply to all approved undertakings in the country alike. A little later in the month, he said: It is not proposed that the amalgamation of British Dyes, Limited, and Messrs. Levinstein, Limited, shall have any privileged position in respect of the new scheme of Government assistance to the dye-making industry, which will be given to all British undertakings able to make effective use of it. In June of the same year the hon. Member for Stockport (Mr. Wardle), replying to a question, said: It is not proposed to give any financial assistance to British Dyes, Limited, and Levinstein, Limited, in connection with the proposed amalgamation, beyond that already given to British Dyes, and that the additional financial assistance which the Government propose to give to the dye-making industry will not be confined to the companies named in any amalgamation which they may form. That was a definite pledge that the assistance to be given to this company was not to be different from or better than the assistance given to any other company. At that time the only assistance was a loan secured on debentures. Now the Government is taking over pact of the capital, and I want to know what the exact policy is. Are they going to give the same assistance to our other dye makers? Are they going to give it in the form of taking share capital I It is not necessary to explain to so many business men the difference between assistance in a company in one form and in the other. In Huddersfield there is a large concern for manufacturing purposes and the company is there. Are the Government prepared to take share capital in that or in any other concern? If they are, I am sure there will be many applications that assistance should be granted on the same terms. I therefore ask the Government this question: Are they going to extend that principle of taking up share capital to other firms in the dye industry? As to this particular transaction, I turned up the quotations for those shares in Friday's "Times," and I saw that the £I shares were in one case 16s. 9d. and the other 15s. 9d., and on the Government investment of £1,700,000, that would mean a depreciation of £160,000. Taking all the circumstances into account that depreciation is thoroughly well justified.

In this amalgamation of the share capital of the two companies, £1,000,000 was represented by goodwill. Now what were the conditions under which that amalgamation took place? It depended upon the maintenance of the restriction of imports. It depends still upon that restriction of imports. That is part of the goodwill. No doubt it has the good will of the Government, but what other goodwill it has it is difficult to see. Then, again, there was no independent valuation. The two parties agreed between themselves what the value was. There was no independent valuation shown in the prospectus. The Articles of Association provides against any complaint being made against the absence of that' independent valuation. The Government are investing nearly £2,000,000 in this company, and there has been no independent valuation while there is a depreciation in the shares. I want to know whether this policy is one which the Government proposes to extend, whether in fairness and justice the Government proposes to take up other share capital. If they do not, I think it can only lead to great injustice and inequity.

Mr. JESSON

I am very much interested in the principle of Government participation in commercial enterprise, and I hope that the Minister responsible will give all the information asked for. This is no new principle. Very many years ago the Government of the day acquired shares in the Suez Canal Company. At first that was looked upon as a risky experiment, but these shares were acquired by a wise statesman, and they turned out to be a very good investment. Their value now is about ten times what it was when they were acquired. These shares were acquired in the interests of this country generally, not only from a commercial point of view. If the Government are taking share as it is stated, that should also be in the country's interests. I do not want to go into the question of Tariff Reform or Free Trade, but before the war, for all practical purposes, the dye industry had become a German monopoly. When the War broke out we were practically at the mercy of the Germans so far as dyes and things connected with the industry were concerned. The Government had no alternative but to adopt some methods of getting these goods which had formerly been obtained by us from Germany. I think the Government could not have done other than they did in assisting this dye industry here. I am interested in this matter from another point of view. I want to see this industry established because it is going to find employment for British labour. If we can establish this industry it is going to add to the resources of the country. Last year I was interested in an exhibition held at the Central Hall over the way for industries, the majority of which had become German monopolies and which our own people are now endeavouring to establish. I think that the assistance the Government is giving there is Very good work. It is a right and proper policy. All this talk about Free Trade and Tariff Reform leaves me cold. I am interested in re-establishing as many industries as possible which were uprooted on account of Free Trade in the past.

The tendency of our industries is in the direction of monopolies. Soap is for all practical purposes a monopoly in the hands of one combine with about £100,000,000 of capital. The Government has got to adopt, sooner or later, some way of dealing with that and with other industries in a similar position. Will the Government nationalise that industry, or take some steps to control it in the interests of the consumer? I hope the Government will consider that in view of the large number of industries which are steadily tending in the direction of monopolies, and will tend further as the Whitley Industrial Councils increase in number. It will be a question of nationalisation or of some other form of control. Personally, I hope that the Government will follow the policy they are pursuing in this case. I do not want to see these industries nationalised, because experience has shown that the nationalisation of an industry is not for the benefit of the nation.

The CHAIRMAN

That is wide of the question coming under this Supplementary Estimate. We must only consider on this Supplementary Estimate the change which has taken place since the House previously decided to take a portion of the debentures or shares of this industry. There has been, I agree, a substantial change since the first money was voted by the House, but it is only the ox-tent of that change that we can discuss on this Supplementary Vote.

Mr. JESSON

I appreciate that, Mr. Whitley. I was led to say what I did by the fact that we were discussing the principle involved in the Government investing the taxpayers' money in commercial enterprises. That is the matter under discussion.

The CHAIRMAN

No, no That is the matter which was decided on the Main Estimate. We are not now discussing that broad principle. We are only discussing the changes which have arisen and which have led to this Supplementary Vote.

Mr. JESSON

Well, that is all I wish to say, except, in conclusion, this: that I very much approve of the principle of the Government doing what they have done in regard to this particular industry. I hope they will follow out the same principle in regard to other industries.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Bridgeman)

Perhaps I had better deal first of all with two small points raised by the hon. Member for Central Aberdeen (Major M. Wood). The questions related to the collection of debts "due to British subjects by Germans and, similarly, debts due to Germany by British subjects. I can assure him that the office is a most important one. There is a corresponding clearing house, or office, set up by the German Reparation Claims Committee to recover, if it is possible to do so, reparation for damage done to British subjects during their residence in alien countries. I am quite sure it is most essential that we should have a well-equipped department for these purposes. I come now to the subject which has occupied most of the attention of the Committee, British Dyes, Limited. I should like first of all very strongly to repudiate the expression which fell from the hon. and gallant Member opposite, who spoke about the dye "scandal." The word should not be lightly bandied about without some proof of the statement made. Several hon. Members spoke as if there was some mystery about the arrangements with the British Dyes Corporation. The hon. and gallant Member for Newcastle gave a very complete and accurate history of the whole undertaking. He told the Committee that the prospectus of this company was issued last year, stating that the Government had taken these shares. Everybody knew it. If the House had been very anxious to have the matter discussed they could have had it discussed. There was no mystery about it. I trust that we shall not hear the word "scandal" used again without some little more substance in the way of proof of such a statement. There have been a good many questions put. First of all, this British Dyes is certainly not a monopoly. There are several dye-making firms in existence. It is also true, as the hon. and gallant Member for Newcastle said, that there are other firms getting assistance, and getting it, we think, on equally fair terms with British Dyes, and getting it in a way that seems to the Government the best in the each particular case or set of circumstances.

Colonel NEWMAN

Is that on this Vote?

Mr. BRIDGEMAN

No, I was merely answering the question because it was raised by the hon. and gallant Member (Major Barnes). He made a complaint that there was no limitation of profits under this arrangement.

Major BARNES

I did not go into that, although I intended to.

Mr. BRIDGEMAN

I am very much obliged to the hon. and gallant Gentleman for being released from the necessity of answering that question. [An HON. MEMBER: "The hon. Member for Spen Valley raised it!"] I thought it was raised by somebody. The fact that the Government is a large shareholder is, I think, a very efficient guarantee that the profits are not likely to be allowed to be excessive. [HON. Members: "Why?"] Because the Government has to stand here, and can always be brought to account.

Mr. MYERS

I did not refer at all to any question of profits. But a question I should like to ask the hon. Gentleman is whether any Government financial assistance is being given to any of the firms that are springing up very extensively in close proximity to British Dyes, Ltd.?

Mr. BRIDGEMAN

I cannot answer that question offhand, but if the hon. Gentleman will put a question down I will find out. But someone talked about the question of profits, and the hon. and gallant Gentleman next to the hon. Member accused him. As I said, the fact that the Government has shares gives the public a very good opportunity to find out what are the exact profits. Then the hon. and gallant Member for Newcastle said there had been—at least I understood him to say—no proper valuation when Levinsteins had been bought out by the British Dyes Corporation.

Major BARNES

I said there has been no independent valuation, but that British Dyes, Ltd., and Levinsteins had agreed together as to the valuation.

Mr. BRIDGEMAN

My information is quite to the opposite effect. I am informed that an independent accountant, in order to satisfy the Board of Trade, settled the price to be paid to Levinsteins. In regard to the general position of affairs it is as the hon. and gallant Gentleman described it. The original commitment of the Government was to Read, Holliday, and Company. Then there was £1,600,000 debentures in British Dyes, making altogether £1,700,000 Government liability. When British Dyes took over Hollidays, of course, they took over the Government liability for the £200,000 as well. Then, when the British Dye Stuffs Corporation amalgamated with Levinsteins, the Government still had the same liability of £1,700,000, but it was divided into 850,000 preference shares and a similar number of ordinary shares. That is the history of the thing, and it has been very truthfully described by the hon. and gallant Member.

I will now endeavour to answer some of the questions asked by my hon. and gallant Friend the Member for Finchley (Colonel Newman). He said that Levinsteins had no representative on the board of directors, but I think he must have been misinformed, because Dr. Levinstein himself is one of the joint managing directors. He also asked a question about the appropriations in aid. The appropriations in aid which are shown under G.G. on page 24 are the old debentures of the British Dye Stuffs Corporation, which were paid off when they were amalgamated. It also includes interest on the instalment paid in advance on the shares taken by the Government in the British Dye Stuffs Corporation. One other point was made by the hon. and gallant Member, namely, that this-was a War industry, and that, although this sort of action might be all very well in time of war, it was inappropriate now. He said it was necessary when the War was going on, but he did not say it would be equally necessary even after that. This has been the policy of four successive Governments, and perhaps the most impassioned speech in favour of it was made at an early stage by Mr. Robertson, who was then, I think, occupying the office which I now have the honour to occupy.

Captain W. BENN

That was in War time.

Mr. BRIDGEMAN

Yes, but there might be another war time, although we hope there will not. The experience borne in upon everybody's mind at that time was that one of the greatest drawbacks we suffered from at the beginning of the War, and all through the War, was the fact that we had allowed Germany to monopolise the dye industry. It affected our clothes, our chemicals, our explosives, and hundreds of other things, and everyone said then that, no matter what party we belonged to, we must never allow ourselves to be put in such a position again. The policy of trying to improve the British dye industry was taken up, and Government money was spent, and is being spent, on it. Improvements are being made. They are not yet by any means perfect, and it may be a good while before they are perfect, but I am certain that those who embarked on this policy, when we saw the mistake we had made, are not going to leave it off now until we are quite sure that we have perfected this industry, and put ourselves in a very different position from that in which we found ourselves at the beginning of the War. It is for that reason that this policy is being continued, and we are perfectly ready to answer any questions that may be raised about it. There is nothing mysterious about it. It may be right or it may be wrong, as a matter of investment, but there is no doubt about the policy, and it is really upon that that I think the House must decide.

Major BARNES

Before the hon. Gentleman sits down, may I ask, is it proposed to go on taking share capital in all the other concerns?

Mr. BRIDGEMAN

I should like, before I answer that—in fact, I do not think I can answer it to-night—to look more closely into those matters. They do not arise on this Vote, and I have not looked into that point, but I shall be very glad, if the hon. and gallant Member will either write to me or put down a question, to give him an answer. We certainly intend to help, and have helped, one or two other companies, but in what particular way I am not quite certain. Our object has been to give them the help that seemed most useful and most likely to improve their position.

Captain BOWYER

I should like to say a word or two on the Clearing Office (Enemy Debts)—sub-head (s) of Item C on page 24; and I should like to thank the hon. Gentleman who represents the Board of Trade for what he said on that matter. I know that what I shall say will be in direct contradiction to what was said by an hon. Member opposite earlier in the Debate. These debts divide themselves roughly into debts from Germans, debts from Austrians, and debts from Czecho-Slovakians, and it is on the question of the last that I should like to speak, because there the situation has materially altered from what it was when the War came to an end. Czechoslovakia and Austria, when the war started, were roughly part of the same Empire, and were against us; but now that Czocho-Slovakia is, and very rightly, held to be an Ally, and has fought gallantly with us, the question of the settlement of debts due from Czechoslovakia to British nationals is one of extraordinary difficulty. Only a couple of days ago the case was brought to my personal knowledge of a firm, in which I have not one penny interest, in this country, which is owed no less than seven million kroner by Czecho-Slovakians, some of whom are no doubt Austrian in origin, and were Austrian until they managed to prove themselves Czecho-Slovakians. Others, of course, are Czecho-Slovakians through and through. The difficulty is rendered all the greater by the impossibility, owing to the exchange, of bringing the money, if collected, to this country, and firms in this country who have a great export trade with these enemy countries and Czechoslovakia, are crippled for want of running capital, because they have so much money sunk in these debts, which, although they may be able to recover it in the near future, they will not be able to bring it to this country without great loss under the present rate of exchange. So far from the £18,000 which is shown here being excessive, I want to submit that the question of the payment and clearing of these debts is one which should come under the notice of the Board of Trade very largely in the future. When such firms ask what the Government can do to help them, they get the answer that the only help they can expect is advice, that they must by mutual arrangement solve their own problem, because they are dealing with Czecho-Slovakia, which is an Ally. That is all very well, but when you get, as I can vouch is the fact, one firm whose debts amount to seven million kroner, I say that the problem is urgent, and the export trade of this country is likely to be hit so hard that I think the Government should consider whether, by any means in their power, they can do something to help these firms who, both now and in the future, will be very seriously affected by the shortage in running capital.

10.0 P.M.

Colonel PENRY WILLIAMS

I only rise to call attention to two or three points, but before I do so I want to make one remark on the question of the investment in British Dyes. I followed the Debate on this closely, and it seemed to me to prove that the Government could not perform its function as encourager of industry and at the same time make a profitable investment, because in the one case its interest is to make a profit and to do that it must discourage competition, and in the other case its duty is to encourage competition. That was clearly brought out in the speech made by the Member for Spen Valley, who asked whether the Government was aware that one of the firms originally bought out by the undertaking had already started new works close to those which they had sold. If the Government had taken the ordinary proper steps to protect their investment of this large sum of nearly £2,000,000, they surely would have entered into some agreement with the people they bought out that they should not re-start business within a reasonable distance of their original venture. I do not think this money can be looked upon as an investment at all, and the sooner it is written off as a loss the better. It would be more honest to tell the people it was a sum of money given for the purpose of establishing this industry in War time, and if they expect to get any return for it they are very much mistaken. Besides that, the whole character of the investment has changed. Originally it was a debenture investment, which gave the Government the right to take the whole of the proceeds in case the venture was unsuccessful. But it has now been changed, and the Government simply rank pari passu with all the other ordinary and preference shareholders, and are only entitled to their proportion of the sale of the pro-coeds in case of the winding-up of the company, instead of taking the whole lot as debenture holders.

But I really rose to draw attention to four items under the heading "C. Special Services Arising Out of the War," namely, (A) Coal Mines Department, (E) Exports Credit Department, (S) Clearing Off Enemy Debts, and (T) Re-paration Claims Department. It seems to me that none of these charges should fall on the public. The first item is one of £75,000 for the advinistrative expenses of the Coal Mines Department. That, surely, is not a fair charge on the public. It might be fairly charged against the coal, or against the profits of the industry; it might be a fair charge on the price of the coal supplies; but it is certainly not fair to charge it against the general taxpayer. Then I come to the item of £18,000 for the collection of enemy debts. If I had debts I wanted collecting, I should pay the debt collector myself. I really do not see that the general taxpayer ought to be called upon to pay anything for collecting 7,000,000 kronen which is owed to an English firm. If they get their 7,000,000 kronen they should be very well satisfied to pay for the collection of it. It ought not to fall against the public. With regard to the Reparation Commission, ought the £6,000 there to fall against the public? As to the Coal Department, the £75,000 is only half the cost. It means that £150,000 has been charged to the public for the administration of the Department, and it is not well spent money.

Mr. BRIDGEMAN

The hon. and gallant Gentleman is correct in his figures, but this expense will be paid back to the Treasury when the Coal Controller is in possession of the balance, which he expects to be at the end of this year. When the owners have been paid their profits and the miners their wages, the surplus will go to refunding the cost of coal control, which has only been advanced by the Treasury, so it is not a charge on the public.

Colonel WILLIAMS

That is all very well, but I believe the coalowners have told the Board of Trade that it is bound to fall on the public, and that there will not be sufficient assets in the pool to meet these expenses, and I am very much afraid if we vote this money it will be found that there is not sufficient money in the coal pool to bear this charge of £150,000. I would suggest first of all that the Government try to get it out of the pool before it is voted from the public funds. There is nearly £200,000 voted to-night and I do not think the taxpayer ought to be called upon to pay a single penny of it.

Sir R. ADKINS

With regard to using public money in regard to cases like this of Czecho-Slovakia, surely that is on a different footing from the payment of an individual collector of debt. If English nationals have suffered during the War it is part of the duty of the Government to make arrangements with any country with which we have been at war to see that part of the final settlement includes machinery for facilitating our nationals getting their rights. The difficulty is that Czecho-Slovakians were at one time enemies and to-day are not enemies. I still think it is to be regretted that the Government have not gone a step further than they have and provided the same or equivalent machinery to that which was provided when dealing with Germany.

Another point we want to emphasise before passing from this Vote is the very great difference with regard to the Dye-stuffs Committee between debentures and shares. My hon. Friend who represents the Department, while he accepted the statement of the hon. and gallant Gentleman (Colonel Wedgwood), after he had recited his agreement with the narrative did not in any way comment on this point. There are not a few Members of the House who thoroughly appreciate the need for helping the dye industry in view of warlike contingencies which may arise, but yet draw a very marked distinction between the line of getting money in the-form of debenture", which may bear a low or a high rate of interest, according as on grounds of high policy may be necessary, and the Government taking shares in the undertaking, with no priority of claim and subject to all the risks of the undertaking, and not knowing from year to year what interest, if any, is coming and being involved for more than would otherwise be-necessary in the details of the policy carried out by that firm. I desire, to make the protest along with other hon. Members, and to assure my hon. Friend that the change from debentures to shares has never been adequately defended and justified, and that it is a great pity that any doubtful methods should be used in regard to matters on which all of us are agreed, namely, that of trying experiments to meet great emergencies, but which may mean great risks in future.

Captain W. BENN

I beg to move that "Item I ["Investment in British Dyes, Limited, and British Dye Stuffs Corporation, Limited, £1,369,575"] be reduced by the sum of £100."

I was glad to hear the conclusion of the speech of the hon. Member (Sir R. Adkins), and I hope that I shall have his support in the Lobby, I should like to put a few questions to the Parliamentary Secretary to the Board of Trade. In regard to the item referring to the Coal Mines Department, I am not quite sure whether I am right in my doubts. If I am wrong, perhaps he will tell me. I am not dealing with the question whether the public ought to bear this charge. My hon. and learned Friend who speaks on this subject with some authority, told us that it is proposed that the industry should bear the charge. I do not know, but perhaps the Parliamentary Secretary to the Board of Trade will tell me. The Department is going to cost £150,000 a year. At any rate, there is £75,000 for six months, so that it is at the rate of £150,000 a year. I thought the hon. Gentleman said in Committee that the cost was to be £750,000. He said that for the whole financial year the charge would be £750,000. Perhaps I am wrong. The next question is in regard to the Export Credits Department. We are entitled to know a little more about the policy that will actuate the head and the staff of this Department. I saw a circular issued by the Board of Trade last year, in which they seemed to suggest that in this Department—which, I imagine, is the Department which provides credits for Eastern Europe, and for reconstruction in Eastern Europe—some attempt was to be made, not to supply what the people really want, but something which it was conceived by the Board of Trade it would" be good for this country to export. If that is so, it is a short-sighted policy, because, obviously, you ought to supply to these people what they can use, even if it be raw material, which some people imagine it is not good for this country to export. As regards Item "T," we are asked to vote £6,000. This is to be a Department to deal with claims for reparation in Germany. It is exciting hopes in the bosoms of persons who have claims which cannot possibly be satisfied. It is, also voting £6,000 of public money which is not required. In the first place, we have to pay about £6,000 for the administrative charges of the Department, but before the Department can become operative, the Germans have to find first the money to repay the reconstruction loan which we understand from the newspapers is about to be issued with the authority of the Allies. After that, they have to find money to support the Armies of Occupation. After they have found that money, they have to find money for the reparation of Belgium, which has priority over reparation in regard to other nationals. Next, they have to find reparation for France, and not until these sums have been paid is there going to be any fund with which the Reparation Claims Department can possibly have to deal.

Is it not premature to vote £6,000 to set up a department whose hopes of securing payment of claims are so contingent and remote? The dyers are supported by the hon. Member for Middleton on the ground that we must control the dye industry in order to be ready for the next war. The Secretary to the Board of Trade told us that though we are at peace at the moment we might be at war again at some period.

Mr. BRIDGEMAN

I said I hope that we never should be at war.

Captain BENN

But we were to make preparations and the dye industry was to be ready for the next war. He also defended it passionately as a most effective piece of Tariff Reform. I did admire the singular fidelity to principle with which the hon. Gentleman supported Tariff Reform. It is a cruel thing for anyone to get up and defend the principles of Tariff Reform in the House of Commons at this time. [HON. MEMBERS: "No!"] But what we are complaining of is not the principle but the way in which it is done. If you wish to subsidise an industry because you think it must be subsidised to be ready for the next war you are provoking the next war by getting ready. If you think it is necessary we agree, being a helpless minority, but we say that it should be done in the best way. We do not think that the distribution of largess to favoured dye manufacturers is the best way to go to work, or that if you are investing public money it is a wise thing to change debentures for shares, which already have diminished in value and may only have some very hypothetical and contingent value. In order to bring the point to an issue I move this reduction.

Dr. MURRAY

Am I in order in speaking on the expenses of the School Administration Department?

The CHAIRMAN

Not until we dispose of this question.

Question put, "That Item I be reduced by £100."

The Committee divided: Ayes, 32; Noes, 164.

Division No. 36.]	AYES.	[10.20 p.m.
Acland, Rt. Hon. F. D.	Entwistle, Major C. F.	Newbould, Alfred Ernest
Barnes, Major H. (Newcastle)	Hayward, Major Evan	O'Grady, Captain James
Bell, James (Lancaster, Ormskirk)	Holmes, J. Stanley	Rose, Frank H.
Benn, Captain Wedgwood (Leith)	Hopkinson, A. (Lancaster, Mossley)	Thomson, T. (Middlesbrough, West)
Billing, Noel Pemberton.	Jones, Henry Haydn (Merioneth)	Walsh, Stephen (Lancaster, Ince)
Bowerman, Rt. Hon. Charles W.	Kenworthy, Lieut.-Commander J.' M.	Wedgwood, Colonel J. C.
Briant, Frank	Kenyon, Barnet	Williams, Aneurin (Durham, Consett)
Davison, J. E. (Smethwick)	Maclean, Rt. Hn. Sir D. (Midlothian)	Williams, Col. P. (Middlesbrough, E.)
Devlin, Joseph	MacVeagh, Jeremiah	Wood, Major M. M. (Aberdeen, C.)
Donnelly, P.	Morgan, Major D. Watts
Edwards, C. (Monmouth, Bedwellty)	Murray, Dr. D. (Inverness & Ross)	TELLERS FOR THE AYES.—
		Mr. G. Thorne and Mr. Hogge.

NOES.
Ainsworth, Captain Charles	Gilmour, Lieut.-Colonel John	Newman, Sir R. H. S. D. L. (Exeter)
Amery, Lieut.-Col. Leopold C. M. S.	Glyn, Major Ralph	Norman, Major Rt. Hon. Sir Henry
Astbury, Lieut.-Commander F. W.	Gray, Major Ernest (Accrington)	Ormsby-Gore, Captain Hon. W.
Atkey, A. R.	Green, Joseph F. (Leicester, W.)	Parry, Lieut.-Colonel Thomas Henry
Austin, Sir Herbert	Greenwood, Colonel Sir Hamar	Ferring, William George
Bagley, Captain E. Ashton	Gregory, Holman	Pollock, Sir Ernest M.
Baldwin, Stanley	Gretton, Colonel John	Pownall, Lieut.-Colonel Assheton
Balfour, George (Hampstead)	Griffiths, T. (Monmouth, Pontypool)	Pretyman, Rt. Hon. Ernest G.
Barnett, Major R. W.	Griggs, Sir Peter	Raw, Lieutenant-Colonel.
Barnston, Major Harry	Grundy, T. W.	Richardson, R. (Houghton-le-Spring)
Bell, Lieut.-Col. W. C. H. (Devizes)	Guest, Major O. (Leic, Loughboro')	Roberts, Rt. Hon. G. H. (Norwich)
Bellairs, Commander Carlyon W.	Guinness, Lieut.-Col. Hon. W. E.	Robinson, S. (Brecon and Radnor)
Benn, Com. Ian H. (Greenwich)	Hacking, Captain Douglas H.	Rodger, A. K.
Betterton, Henry B.	Hartshorn, Vernon	Roundell, Colonel R. F.
Blake, Sir Francis Douglas	Haydey, Arthur	Royce, William, Stapleton
Borwick, Major G. O.	Hennessy, Major J. R. G.	Sanders, Colonel Sir Robert A.
Bowyer, Captain G. E. W.	Herbert, Dennis (Hertford, Watford)	Sassoon, Sir Philip Albert Gustave D.
Brace, Rt. Hon. William	Hewart, Bt. Hon. Sir Gordon	Scott, Leslie (Liverpool Exchange)
Breese, Major Charles E.	Hilder, Lieut.-Colonel Frank	Sexton, James
Bridgeman, William Clive	Hinds, John	Shaw, William T. (Forfar)
Brittain, Sir Harry	Hohler, Gerald Fitzroy	Smith, Sir Allan M. (Croydon, South)
Brown, Captain D. C.	Hope, James F. (Sheffield, Central)	Smith, W. R. (Wellingborough)
Bruton, Sir James	Hope, J. D. (Berwick & Haddington)	Sprot, Colonel Sir Alexander
Buchanan, Lieut.-Colonel A. L. H.	Hopkins, John W. W.	Stanler, Captain Sir Beville
Buckley, Lieut.-Colonel A.	James Lieut.-Colonel Hon. Cuthbert	Stanley, Lieut.-Colonel Hon. G. F.
Burn, Col. C. R. (Devon, Torquay)	Jephcott, A. R.	Steel, Major S. Strang
Cairns, John	Jesson, C.	Stephenson, Colonel H. K.
Campion, Lieut.-Colonel W. R.	Jodrell, Neville Paul	Strauss, Edward Anthony
Carr, W. Theodore	Johnon, L. S.	Sugden, W. H.
Carter, W. (Nottingham, Mansfield)	Jones, G. W. H. (Stoke Newington)	Swan, J. E. C.
Casey, T. W.	Jones, J. T. (Carmarthen, Llanelly)	Sykes, Sir Charles (Huddersfield)
Chamberlain, N. (Birm., Ladywood)	Jones, William Kennedy (Horpsey)	Talbot, G. A. (Hemel Hempstead)
Child, Brigadier-General Sir Hill	Kellaway, Frederick George	Taylor, J.
Coats, Sir Stuart	Kelly, Major Fred (Rotherham)	Thomson, F. C. (Aberdeen, South)
Cobb, Sir Cyril	King, Commander Henry Douglas	Thomson, Sir W. Mitchell- (Maryhill)
Conway, Sir W. Martin	Lane-Fox, G. R.	Turton, E. R.
Coote, Colin Reith (Isle of Ely)	Law, Alfred J. (Rochdale)	Waddington, R.
Courthope, Major George L.	Law, Rt. Hon. A. B. (Glasgow, C.)	Wallace, J.
Cowan, D. M. (Scottish Universities)	Lawson, John J.	Ward, Col. L. (Kingston-upon-Hull)
Craik, Rt. Hon. Sir Henry	Lewis, Rt. Hon. J. H. (Univ., Wales)	Ward, William Dudley (Southampton)
Dalziel, Rt. Hon. Sir J. H. (Kirk'dy)	Lewis, T. A. (Glam., Pontypridd)	Whitla, Sir William
Davidson, Major-General Sir J. H.	Lister, Sir R. Ashton	Wild, Sir Ernest Edward
Doyle, N. Grattan	Lloyd, George Butler	Williams, Lt.-Com. C. (Tavistock)
Edwards, Major J. (Aberavon)	Lunn, William	Williams, Col. Sir R. (Dorset, W.)
Eyres-Monseli, Commander B. M.	Lyle-Samuel, Alexander	Wilson, Colonel Leslie O. (Reading)
Falcon, Captain Michael	Mackinder, Sir H. J. (Camlachie)	Wilson, W. Tyson (Westhoughton)
Fell, Sir Arthur	Macmaster, Donald	Wood, Hon. Edward F. L. (Ripon)
FitzRoy, Captain Hon. E. A.	Macpherson, Rt. Hon. James I.	Worsfold, Dr. T. Cato
Flannery, Sir James Fortescue	Marriott, John Arthur Ransome	Worthington-Evans, Rt. Hon. Sir L.
Forestier Walker, L.	Matthews, David	Yeo, Sir Alfred William
Forrest, Walter	Mond, Rt. Hon. Sir Alfred M.	Young, Sir Frederick W. (Swindon)
Foxcroft, Captain Charles Talbot	Moreing, Captain Algernon H.	Young, Robert (Lancaster, Newton)
Fraser, Major Sir Keith	Munro, Rt. Hon. Robert
Fremantle, Lieut.-Colonel Francis E	Murray, Lt.-Col. Hon. A. (Aberdeen)	TELLERS FOR THE NOES.—
Gardiner, James	Murray, Major William (Dumfries)	Lord E. Talbot and Capt. Guest.
Gibbs, Colonel George Abraham	Neal, Arthur

Mr. HOGGE

May I draw attention to the fact that the hon. Member for St. Helens (Mr. Sexton) voted in both Lobbies?

The CHAIRMAN

I understand that the hon. Member voted in error the first time, and accordingly, following Mr. Speaker's ruling, that is cancelled.

Original Question put, and agreed to.