HIGH PRICES.

HC Deb 15 March 1920 vol 126 cc1869-983

4.0 P.M.

The PARLIAMENTARY SECRETARY to the MINISTRY OF FOOD (Mr. McCurdy)

It may seem an abrupt transition from the news to which we have just listened from the Prime Minister with regard to the state of affairs in Berlin, but I am by no means sure that the subject which this afternoon's Vote gives us an opportunity of discussing is not really intimately linked up with the state of disorder in all parts of Europe which has just found so tragical an exemplification in Germany. This is the first opportunity since the present Government came into power which has been afforded to the Ministry of Food of discussing those problems of high prices, practically in relation to food, to deal with which that Ministry was brought in existence. When I came to the Ministry of Food at the commencement of of last year the people of this country and of Europe, and indeed of the world, were suffering from one of those recurrent phases of alternate hope and depression which have marked the progress of the great war and the short period which has succeeded it, and which really might fairly be described as a condition of illusion. The people of this country, and the people of the world, at the commencement of 1919 were under a most complete illusion, the illusion that as soon as peace came, nay, as soon as even the Armistice was signed, the wastage and destruction of five years of war would be so far wiped out as to restore commerce to something like a normal condition, to reduce prices to something more approximating a prewar level, and to restore a condition of prosperity to all countries. I was talking only the other day to a member of a well-known firm of Bradford spinners, and he was describing to me how at the commencement of last year telegrams from all parts of the world came in to the Bradford spinners, not asking that wool and woollen goods should be sent, but cancelling orders for woollen goods, because traders in all parts from London to Singapore were under the amazing belief that in a few months supplies would be abundant and prices would be falling, and because they were anxious to relieve themselves of contracts for the supply of goods.

At the same time, I remember discussions in this country about the enormous industrial output that might be expected from the United States when the industrial machinery created for the purposes of War was turned to the production of commodities for a time of peace. Yes, and not only from the United States. Another great illusion of the time was that the factories and workshops of Germany were bursting with goods that had been stored up and that were to be dumped upon the markets of Europe to the great detriment of the goods of traders in Allied countries. Those were pure illusions, and unfortunately we did not then, and I doubt if we to-day, realise what a destruction of material wealth took place in those five years of War, and what a mortgage it is upon the wealth still to be created. If we had done, no one could have been so mad as to suppose that the destruction of five years was going to be made good in a few months of peace. At any rate, we all hoped that 1919 would be a year in which the productive activities of the whole world would be working at full pressure in order to make good the wastage of War, and to restore prosperity and plenty to a world in want. What was the reality? I have not the figures either for this country or for all European countries which would show what happened as regards production in 1919, but I have very detailed figures as to what happened in the United States of America, the great industrial country which had suffered least disturbance from the effects of the War, and which was in the best position immediately to turn its activities to the production of commodities required for the purposes of peace.

In August, 1919, the Council of National Defence, which consists of the Secretaries of State for War, Navy, Interior, Agriculture, Commerce, and Labour, issued a comprehensive report regarding what happened in the United States during the first six months after the Armistice. So far from there being any progress made to accelerate the supply of all the things of which the world stood most in need, the actual fall in production in raw materials and in standard commodities of every kind was of the most surprising character. Let me take clothing. There was a great reduction of woollen output immediately after the Armistice. The report says: The most obvious explanation of the high prices of wool is the glaring fact of the extreme reduction in output, which ensued after the signing of the Armistice. The total consumption of wool in manufacture during the first five months of 1919 amounted to little more than half the amount consumed during the corresponding months of the previous year. Many textile workers were condemned to idleness while the supplies of clothing were short enough for a rise up to 250 in the index figure for the price of clothing in the United States in June last year. Boots and Shoes: The production for the first quarter of 1919 was about 60 per cent. below the production for the last quarter of 1918. Plants were partially closed, and the census shows a general reduction of output. It is a reduction not to be explained by the fact that there was no longer the demand for military boots, because there was an actual fall of from 25 per cent. to 30 per cent. in the production of civilian boots for men and women, and a larger fall than that in the production of childrens' boots. The United States, like ourselves, found themselves 1,000,000 houses short at the end of the War, and, like ourselves, they found themselves unable to make good the deficiency, because there was a shortage in the supply of every kind of raw material necessary for building. The production of raw material necessary in building construction was far below normal. Many plants were operating part time, and some were closed down entirely. Glass production was reported to be on a 50 per cent. basis. The total amount of coal produced in the United States up to July was 261,000,000 long tons as compared with 364,000,000 long tons for the corresponding period of the previous year If we turn to this country, although, as I say, at present figures so complete are not available, and if we take the raw materials of all the industries, coal and iron, we find very much the same story. The average monthly production of coal in the United Kingdom fell from a pre-war figure of 23,900,000 tons in 1913 to 19,400,000 tons in 1919, and the production of pig-iron fell from 855,000 tons to 620,000 tons. What was our record during 1919, when if ever in the history of the people it was necessary that the workers of this country should be doing their utmost not merely in their own interests—we are prosperous and well-to-do compared with great portions of the rest of the world—but also in order to supply the necessities of which our Allies in the war were in such urgent need? I take the total from the "Labour Gazette" of January. The number of trade disputes involving a stoppage of work in 1919 was greater than in any previous year since 1913, and the total number of workpeople involved, including those thrown out of work at the establishments concerned, though not actual parties to the dispute, was greater than in any previous year throughout a period of more than 30 years for which statistics are available. The aggregate number of working days lost by those workpeople during the year was over 34,000,000. This number is greater than that recorded for any previous year except 1912, when the figure was exceptionally high owing to the coal strike of that year, which continued for seven weeks.

The first point which I want to lay before the Committee for consideration and discussion by those who are better qualified to speak than myself is that during the last 12 months we have never fully realised—I do not think that we yet fully realise—how preponderately above all other causes of high prices, whatever they may be, is the fundamental fact that we are living in a world in which supplies are not equal to demand, in which there has been an unexampled destruction of wealth extending over a period of years, and in which up to the present time there has been no corresponding or adequate effort on the part of the peoples of the world to make good the wastage of the past in order to provide for the necessities of the future. If you consider what has been the state of things in the United States of America and in this country, it is not necessary for me to ask you to consider what has been the state of things in Central Europe and Eastern Europe, where, if there has been a failure of production, it has, to a large extent, been brought about by factors with which we have not had to contend, factors which, of course, make it utterly impossible to hope that any great restoration in volume of commodities can at present proceed from the efforts of those people. Incidentally, I may say that among the illusions which we cherished at the commencement of 1919 was one which is connected with the subject now under discussion. This illusion was that any statesman or body of statesmen could by any possibility restore industrial prosperity and political peace at once in a Europe which was littered with broken empires and disrupted political systems, and these, in some cases, represented the animosities and feuds of centuries. How anyone could imagine that a stable peace could be applied in this state of affairs within a period of six months, I find it difficult to understand.

The fundamental cause of high prices is, undoubtedly, lack of commodities. I would say that if there had been no European war, no war loans, and no inflation of the currency, but if some catastrophe, such as an earthquake or pestilence, had killed one million able-bodied men, and factories and markets had been destroyed, and large amounts of wealth had also been destroyed, then high prices and high cost of living, which had been inevitable. But here another consideration arises. We had to anticipate an enormous production of wealth by currency and credit to meet war necessities. It must be remembered that in normal times commerce is an interchange of commodities. A man comes into the world's markets to buy clothes or other commodities, and he pays in money which represents some other commodity which he has first assisted to produce. That is a settled law. He must put into the market something to represent in some measure what he proposes to take out of it, and he must put that in by his labour or industry or by assisting in distribution, or by the provision of capital. In times of war the situation is entirely changed. Millions of men are withdrawn from productive labour, and behind these armies of men you must have a great number of people who are engaged in providing for the needs and necessities of these armies. They all come into the world's market and compete for materials, for food, clothing, houses and equipment, and when they obtain it they pay for it in a currency which is inflated for the purpose of the war, and docs not represent the commodities which the world usually needs and produces. You have, therefore, a constantly diminishing stock of these ordinary commodities, and an ever-rising volume of currency, and you have, as a result of this, an inevitable rise of prices.

I attach great importance to another point, when we come to consider the remedy for high prices. It may seem to be a small matter at the moment, but when we have to attach great importance to the scarcity of commodities in the world or in the country and to the great rise in prices it becomes a matter of some importance to ask which of two causes is the more important, when we come to consider the remedy to be applied. And my point is, that we have had from 1896 to 1914 a period of continual rise of prices The wholesale prices, by the index figures, rose 40 per cent. during that period, but there was this great difference between that time and the rise in prices since then, that that rise was in the main duo to an increase in the production of the commodities which are used as a measure of value, and the rise of prices therefore did not necessarily involve the same amount of hardship, suffering and resentment in the world that has been caused by the present shortage of goods which are necessary for the life and comfort of the people. There is a further cause which is perhaps quite as much a consequence of that situation as the first one, and that is the operations of the profiteer. The profiteer is not a new disease created by the general world rise of prices. There has always been a desire to make as much as you can. That is a trait of human nature which has not been seen now for the first time in the world. But at the same time in the present condition of the world and the loss of so many of our old economic landmarks and levels of prices the existence of the profiteer has become a cause of great dissatisfaction. If I were to try to estimate the proportionate effects of the different factors, such as the rise in the cost of commodities, the flow of currency, and the operations of the profiteer, I should say that quite a small percentage of the total is to be attributed to the operations of the profiteer. That is not to say that these operations may not be of the greatest possible concern to the honest citizen and of all those who are responsible for Government, because, though it may be that the profiteer is a parasitic growth, a parasite upon the body politic in consequence of the abnormal War conditions, it is to be remembered that the irritation which may be produced in a body by a parasite is by no means proportionate to its size; or, in other words, it is not the magnitude of a disaster which affects us so much; it is more the suffering which results. It is not when a hailstorm destroys our flower beds that we are so very much annoyed as when a neighbour runs across those flower beds and tramples our geraniums. So, therefore, the existence of the profiteer, as everyone knows, is a check upon production, it causes industrial unrest, it is a menace to the social stability of the country and of Europe at this moment.

It was not until the middle of 1917 that the Ministry of Food attempted to protect the consumer of this country, to see if it were possible, without injuring trade and commerce, to check the rising current prices which threatened to overwhelm the housewife and bring about something in the nature of food control. No one who acquaints himself with the actual rise in prices before and since July, 1917, will have any doubt that the control exercised by the Ministry of Food has not been without effect. Let me illustrate that by quoting some figures showing the rise in prices from the commencement of the War up till July, 1917, and then to the present time. I will first take wholesale foodstuffs; secondly, raw materials, such as textiles, and then retail prices. In July, 1917, the wholesale price of foodstuffs showed a rise from the commencement of the War of 128 per cent. At that date control was imposed. Up to February, 1920, the 128 had risen to 195. Then with regard to textiles and other uncontrolled materials. In July, 1917, prices had risen by 112. That was before the control of prices of foodstuffs, and while the wholesale prices of foodstuffs then rose from 128 to 195, the price of these raw materials rose from 112 to 237. Retail food prices in July, 1917, were at 104, at the Armistice 133, and at the latter figure they still remain. The methods adopted by the Ministry of Food, so far as they have been successful, have been too full. In the first place, as regards some commodities, take, for instance, sugar, we found that there was a clearly ascertained world shortage, and, therefore, we have exercised a strict economic control. That is the principle we have adopted in the cases where there is a definitely ascertained shortage in the world of a particular commodity. The result will show that the prices must have been increased if it had not been for the action of the Ministry and the results of this economic control and stability.

One of the results has been in the case of sugar, that if the people of this country have not had as much as they would have liked to have had, they have had more sugar than any other country except the United States which may be thought to need more sugar at the present time.

Similarly I might say the same with regard to the case of butter. We all know that until the political stability is restored in Siberia—and a large part of the world's supply of butter comes from Siberia— there is an actual world shortage of butter, and there is no means of making it good. In that case an inter-Allied Committee was appointed as soon as the Armistice came, and it has been doing good work. The result has been that by counsel and consultation among the buyers instead of competition against one another, they have been able to reduce the prices of such supplies of butter as are available in this market to the consumer in this country. Time would not permit, nor would that be proper, on a discussion which I understand the Committee desire to be a general discussion on high prices and their causes and remedies, to go into detail on the multifarious commodities which have been controlled by the Food Ministry. I will only say that when you come to exercise a control which is not to have an injurious effect on the one hand on the trader and on the consumer, and on the other you simply cannot approach the problem with any hard and fast rules of any kind. The circumstances which affect the price and the supply of every commodity differ so widely that all that can be said is that you must apply your common sense, and such sound business principles as you are able to bring to bear, on the problems of each individual case; but I may say this generally, that for the last year the policy of the Ministry of Food has been, so far as possible, to get rid of strict economic controls, to shed all the war-time controls, to bid good-bye to D.O.E.A. and all her works, and to substitute for that a policy of close investigation as to the supplies available, the costs of production, and the profits that have been made; and then, armed with these facts, in consultation with the trade interests themselves, to endeavour to bring pressure—having all the time compulsory powers behind you—to bring that pressure without the use of compulsory powers to arrive at a friendly arrangement as to what is a fair and reasonable price. I am bound to say, not merely from my experience at the Ministry of Food, but also from the experience I have had in connection with the administration of the Profiteering Act, that I found on all hands the utmost willingness on the part of the traders loyally and honestly to co-operate with us for that purpose.

I know that there are other remedies proposed. One frequent remedy, which, I suppose, is proposed every day of the week from one quarter or another, is to remove control of every kind, to get rid of all war-time restrictions. It is because that remedy can only be urged by people who have not yet grasped the essential facts that we are living in a world which is short of all essential commodities. [An HON. MEMBER: "What about meat?"] I will say a word about that with pleasure. It is because people could not put forward that remedy day by day if they really understood the economic condition of the world as regards supply and demand that I ventured to lay so much stress in my opening remarks on what I regard as the fundamental and essential feature. Someone asks, "What about meat?" Yes, what about meat and what about sugar? [An HON. MEMBER: "Ships!"] I am not dealing with ships. I saw a picture in one of the papers the other day, when we were told there was a glut of sugar, of a man up to his ankles apparently in sugar, the suggestion being that in a world which is full of sugar the British consumers were denied access to a food in which they stood most in need of by the hoarding tactics of the Ministry of Food. Here were the docks bulging with sugar. Well, I made some inquiries into it, and we found the gentleman whose portrait had been taken. It appeared that he was unloading a bag of rice, and these bags are liable to burst, and the bag of rice having burst while he was trying to patch up the bag, the photographer happened to go by. And so we see, not for the first and not for the dozenth time, a glut of sugar. There is always a glut of something. But supposing the man had been standing knee deep in sugar. How docs that affect the fact that the normal supply of sugar for the world is 18,000,000 tons, and that we are 3,000,000 tons down in this year of grace?

Take meat. I have not the latest figures with mo, but, at any rate, I can say this, that as regards the Continent of Europe the supplies are at least 1,000,000 tons down, 3,500,000 tons down when the least reliable estimates came through; at any rate, the meat production of the world is heavily down at the present moment. But if all that is being said about the matter is true, how does the question of 50,000 or 100,000 tons of meat at a particular dock at which cold-storage is not at the moment available touch the fact that the world's production, which is millions of tons a year, la not adequate for the needs of the world to? day? Then of course, there is another remedy, by those, again, who, I venture to think, are under-estimating the essential facts. It is a measure for deflating the volume of currency and credit. I am very glad to think that so far as His Majesty's Government is concerned we have already turned the corner as regards the inflation of credit to meet the liabilities arising out of the War. To me it is one of the most surprising and one of the most hopeful factors in the present situation as regards this country. I would like to say just one word of warning about those who have turned their attention too exclusively to the question of inflation. After all, perhaps, the greater part of the inflated credits throughout the world to-day are credits by commercial men for the purposes of their business. High, inflated prices make it impossible to conduct businesses on a pre-war standard of capital, and any undue deflation, any undue haste, in the withdrawal of credit would inevitably lead to a check in the process of production, which is the vital and final remedy for the economic conditions in which we find ourselves.

Before I sit down I would just like to say a few words about that other aspect of the Government's activities on behalf of the consumer, that other part of the campaign against high prices which is being carried out under the provisions of the Profiteering Act. The Profiteering Act, I am sorry to say, is not at present quite as popular in this country as it deserves to be. The reason is that, so far as the people of this country are concerned, and, I think, I may say as far as the Members of this House are concerned, I do not think that they yet know what is really being done under the powers which the Government took to themselves under that Act. It is quite true that in some trifling retail transaction, where a consumer who has brought six pennyworth of pins, and the matter is brought before the retail tribunal, there is a good deal of comment when the trader is ordered to refund a penny or three halfpence. That is only because they are dealing with very small transactions, but after all the Profiteering Act was not put upon the Statute Book either primarily or mainly for the purpose of dealing with the retail profiteer. It was the subject of a good deal of comment by Members of the Labour party, and before it left this House it contained provisions which enabled the most full and searching investigations to be made into the wholesale businesses, into the profits made by big trusts and companies, and it gave the Board of Trade very considerable powers for dealing with such facts as may be discovered. I want to tell the House in a word or two what is being and has been done during the last six months. In the first place we were not authorised by the House of Commons to set up a vast new administrative bureau involving large expenditure. We were given wide powers, but we were not given any elastic margin of expenditure. Under these circumstances we have availed ourselves to a very large extent indeed of the voluntary assistance of men of all classes of the community, whom we invited to form a central committee which could afterwards divide itself up into as many committees as it thought fit to tackle these problems and to which the Board of Trade assigns all the compulsory powers of investigation and research which were conferred on the Board by the Act. That Committee numbers to-day over 150 members, of whom I am happy to think 30 or 40 are representatives of the trade unions of this country. Thirty or forty are representatives of the great manufacturing associations, and the consumers and others are represented. During the last few months there have been no fewer than 200 meetings of committees appointed by the central committee which are engaged in investigating the present prices and profits in all the stable commodities. Every great trust which affects these commodities is now the subject of investigation. The Tobacco Trust, the Soap Trust, the Wallpapers Trust, the affairs of Messrs. Coats, the Metal Corporation—all have been subject to careful investigation by Committees not consisting of officials, but representative of every shade of political thought and every school of economic thought that is represented in this House. The Committee will realise that, if work of that kind is to be done thoroughly, impartially and satisfactorily, it cannot be hurried or scamped, and the fact that though the Act has only been in existence six or seven months, Reports have already begun to appear is, at any rate, evidence that there is no delay on our part.

In this matter we must rid ourselves altogether of the short-sighted views which were obtaining a year ago. We must give up all hope that, by any action on the part of the Government or the people or any effort which is in the power of man, we can make good the waste of wealth which has arisen out of five years of war in so short a time. There must be years of strenuous work in front of the people of Europe, and other parts of the world, before we can attain the prosperity which we all desire. So far as this country is concerned we shall have our special difficulties to contend with in the immediate years that lie ahead of us. Agriculture is passing through a transitional period, in which agricultural prices have gradually grown, and agricultural wages must be maintained it agricultural labour is to preserve the standard of life which it has secured during the War. The process, which has been marked during the last ten years by the industrial historian, of the grouping of industries in great associations and combines, having for their purpose the fixing and maintenance of prices in the interests of producers or distributors, is extending to-day to some of our essential food stuffs. That is a process which will have to be watched very carefully. The right hon. Gentleman the Loader of the Opposition (Mr. Asquith), in a speech in Paisley the other day, said that he considered that the country needed some protection against illegitimate trusts and combinations. I know no Member of this House who uses language with more precision, but I should be grateful if the right hon. Gentleman will define a little more closely what he means by illegitimate trusts and combinations. I do not know whether these words spoken in Paisley were intended to exclude or include such a combination as that which controls in every household the price which the consumer has to pay for sewing cotton. Perhaps the right hon. Gentleman will explain that point.

On the general question we must get rid of any short-sighted hopes. We must realise that the essential remedy is an increase of production, not merely as regards this country or any particular country, but as regards Europe and the world as a whole. I do not consider that we are necessarily at the top of the wave of high prices. We must remember that there are hundreds of millions of people in Central and Eastern Europe who are badly in need of the world's commodities, and are not yet effective competitors with ourselves in the world's markets for the restricted supply which is available. I conceive that the time may come when the peoples of Central Europe, having commenced the process of re-starting their industries, having obtained credit for that purpose, will make a greater demand upon the shorter supplies of the world. In those circumstances the policy of the Government must continue to be, so long as the necessity arises, to maintain control over essential foodstuffs, to continue the investigation of cost and profits and prices, and to take such measures as will tend to reduce the prices of commodities, whore, as the result of investigation, we find that stops of the kind are necessary.

Mr. ASQUITH

I would like, if I may, to congratulate my hon. Friend who has just sat down on the admirably lucid and temperate statement which he has just made on the main aspects of this case. He has offered a friendly challenge to me in regard to something which I said during a recent election about trusts and combines. On a fitting occasion I shall be quite prepared to develop what I mean by illegitimate combinations. The particular case which he has selected, I do not know whether as an illustration of a legitimate or an illegitimate combination, is one which is still sub judice in the Court of public opinion; I have no prejudice in the matter. I have read the report of the Committee and I have read the reply of Messrs. Coats, and I think, without pronouncing any opinion which I may have formed, that it is a matter which is hardly ripe for a conclusive judgment of this House. My hon. Friend has spoken with great force and great acuteness as to the cause of the rise in prices, and, if I may trespass for a moment on the attention of the Committee, I would like to survey that matter from perhaps a wider and more general point of view. I am able to do so without, what some people would have probably have thought would be the case, making that survey in any acutely polemical spirit. The situation is really too grave for us to spend time and trouble upon recrimination as to the past when we ought to be concentrating our attention upon the present and upon the immediate future.

Further, some criticism and some suggestions which I have developed in the course of the campaign to which my hon. Friend referred, and which a week ago I should have been disposed to press strongly upon the Committee, have been largely anticipated and met in the admirable Memorandum—for such I believe it to be—which has been circulated to the world in the course of the last few days on the economic aspects of Europe by the Supreme Council of the Allies, That is, in my judgment, an admirable document. It contains a full statement of many relevant facts, an excellent body of edifying and profitable doctrine and some practical proposals of great importance, which are none the less welcome because they have been, in my judgment, too long delayed. The Memorandum or Manifesto or whatever it is to be called—

Mr. BONAR LAW (Leader of the House)

Declaration.

Mr. ASQUITH

The Declaration wears a somewhat truncated air. One cannot help suspecting that it left England on its voyage across the Channel with a sting in its tail, and that tail, sting and all have been amputated by the expert political surgeons in Paris. At any rate, it seems to me—I will give my reasons in a few moments—with premises so excellent, and illustrations so apposite, that practical conclusions of a more extensive and more cogent character might well have been deduced, as perhaps they were deduced, by the original authors of the document. I am quite content to take what I conceive to be the fundamental facts of the situation from the statements made in the Declaration. They are simple and familiar, but they are almost appallingly significant. The essential thing, in my judgment, is that the rise in prices, which is the direct and inevitable consequence of the War, is a world-wide rise. It is not a domestic rise. It is an international rise. Look at the figures which are given in the Declaration of the Council. The increase has ranged from 120 per cent. in the united States to, I think, 170 per cent. here, and to something approaching or exceeding 300 per cent. in the case of all our Allies—France, Italy and Belgium. Nor is there any tendency, so far as we can discern at present, for those influences to abate or decrease in their effect.

The hon. Gentleman who has just spoken has defended with great cogency the system of control which has been adopted by the Government, first during the emergencies of the War and continued since in the unsettled and dislocated economic conditions which followed the signing of the Armistice. I am not going to say anything in the way of adverse criticism either upon the necessity, or the supposed necessity, for those controls or upon the manner in which they have been exercised, except this. The sooner we are able to get rid of them the better. I was rather apprehensive when I listened to some of the expressions of my hon. Friend that the Government whom he represented looked with a more favourable eye than I confess I do to the continuance of this artificial system. It is a palliative, it is a mitigating expedient for special circumstances, but it has this great defect, that it conceals or tends to conceal from the eyes and the minds of the people and consumers of this country that you are face to face, not with a domestic, but with a world-wide problem. Let me say the same thing in even stronger terms of the continuance of the system of subsidies. I confess I was somewhat surprised and a good deal alarmed to find that in the Estimates with regard to which this Vote arises there are proposals for the sanction of the House of Commons in the ensuing financial year of subsidies, £45,000,000 for bread, £33,000,000 for railways, £15,000,000 for coal.

Mr. BONAR LAW

It is not really coal.

5.0 P.M.

Mr. ASQUITH

I agree. Whatever it is, it has got to be spent. I am not dwelling so much upon the particular item as upon the fact that there is £83,000,000, or, if you like to leave out coal, £68,000,000, which is proposed to be voted for subsidies during the coming financial year. I am not, as the Chancellor of the Exchequer will, I am sure, realise, upon the question of amount, but much more upon the question of principle, and although it may be necessary, for the winding up of a system which was resorted to under conditions of emergency, to continue, in part, at any rate, the subsidies for another 12 months, I am strongly of opinion, and I trust it will be the opinion of this Committee and of the House, that the taxpayer's money, in the conditions under which we live, if it has to be taken from him, is much better expended in reducing the burden of our debt than in trying by this expedient or by that to shelter, even though it be for a time, the consumer and the country from the burden, the inevitable burden, the burden which ultimately he will have to bear, from world prices. Therefore I trust that this is the last we shall see of the system of subsidies.

I have spoken about the level of prices. I agree entirely with the hon. Gentleman who has just sat down—he put it, I think, as of the first importance—that among the primary and governing conditions which have led to this artificial inflation is the general shortage in the output of production. Some of the most material figures are set out in the declaration of the Supreme Council. None, I think, is more significant than in regard to wheat. I am told that even those might be supplemented, not in a mitigating, but in an emphasising sense, if the full facts were disclosed. I am told, for instance, on what I believe to be a reliable authority, that in the United States of America the area sown for winter wheat this year has been reduced from 52,000,000 to 38,000,000 acres, I am told—of course, it must be a mere estimate—that both in Franco and, so far as one can get information, in Germany the estimated production will be down 40 per cent. Wherever you go—Russia, of course, Rumania—wherever you go, you find that so far from there being a prospect of a recovery in the output of this, which is, perhaps, the most essential and indispensable of all the commodities we consume, the prospect, for the time being at least, is rather the other way.

I do not know that the figures are much less disquieting in regard to coal. We are not here upon controversial ground. These are illustrations, which might be multiplied, of the conditions of production of almost every one of the essential commodities of human life and consumption, of the effects of the War—devastation of the machinery of production, destruction of human life, the diversion, which, I am sorry to say—and I shall have to dwell on this point a little later—the diversion which is still going on, particularly in the eastern parts of Europe, to military service of the faculties and capacities of men who ought to be set to work to increase material production; the consequent insufficiency and, in a large number of cases—it is no use disguising the fact—the relative inefficiency of the labour which is now engaged in production, the wholly inadequate steps, such as they are—I am not seeking to cast blame for what is proposed, it is to a large extent inevitable—so far taken to restore the means of transport and of distribution; and last, but by no means least—here I think the element of policy does come in—the delay in re-starting international production and exchange by the provision of raw materials and the extension of facilities of credit to some of those countries which have been the peculiar and special victims of the belligerents' operations. Those are the circumstances which have led to the curtailment of the output of necessary commodities, to the consequent deficiency of supplies, and, as my hon. Friend has quite accurately pointed out, have been among the most important factors, if not the most important factors, in the rise in prices. You cannot get rid of their effects. The process of reinstatement, restoration, re-starting the machinery, must of necessity be slow and gradual and halting and dilatory in its effects, but our policy, and particularly our international policy, ought above all things to be directed to starting from recognition of these essential facts and of the economic inter-dependence of all the nations of the world—our international policy ought to be directed to promoting at the earliest possible moment and with every reasonable facility the Allies and those associated with them can give, the whole industrial machinery of civilisation. That is the first step, and the most essential step towards a restoration of normal prices.

Another factor—and this is one on which my hon. Friend did not dwell; it was not perhaps his province to dwell upon it with as much emphasis as I am disposed to give to it—is the effect upon prices of domestic and international indebtedness. I see that the Supreme Council estimates that the War Debt of the whole world is to be put at not less than £40,000,000,000. Remember—people do not bear this sufficiently in mind—that of that gigantic and indeed unthinkable sum by far the largest part, indeed nearly the whole, was borrowed not for productive nor for remunerative, but for destructive purposes. Provision has to be made and, as the Council rightly says, made out of taxation of the various nations concerned, for payment of interest and the ultimate repayment of principal upon that gigantic total, while upon the other side of the account not only are there no dividends, but there is nothing in the nature of a capital asset at all. I remember that nearly 15 years ago, when I was Chancellor of the Exchequer, I was asked, in regard to what we call our dead-weight national debt, which had then been increased by, I think, something like £200,000,000 by the Boer War, but which amount was not one-tenth or barely one-tenth of the total amount of the national debt at the present moment, "What assets have you to show for this gigantic and almost intolerable burden of debt?" I searched about for an answer. The only answer which, after the best investigation and consideration, I could give, was this: Apart from what we had accumulated for defensive and destructive purposes our only available and tangible assets were the Suez Canal shares and the British Empire. Are we not in very much the same position to-day?

Mind you, the British Empire is not a liquid asset. You cannot, as many great landowners are doing now with their estates, advertise it in parcels at auction to the highest bidder. I saw a question was put to my right hon. Friend a day or two ago about the West Indian Islands. No, it is an inalienable asset. From the point of view of commerce, from the point of view of a realisable asset for the repayment of debt, it has no substantial or material existence. When I gave that answer our debt was something like one-tenth of what it is to-day. What assets have we now? We have one, I agree, invaluable, not to be described in words. By means of our indebtedness we have saved the fortunes and liberties of humanity—a vast moral asset indeed, a splendid tradition and memory and example for ourselves and for our posterity. Never let us forget, when we are considering not merely this problem of the rise in prices but our future economic and financial policy, that we have raised by ten times the pecuniary obligation that we have undertaken, it is true in a righteous cause and for an adequate reason and with the highest possible motives, but at the same time having nothing more to rely upon than we have always had, namely the taxable wealth of the great masses of the people of this country.

There are one or two figures dealing with this aspect of the matter which I think are very material, and which were stated with great fulness and accuracy a few weeks ago by my right hon. Friend, whose absence from us I greatly regret, Mr. McKenna, in his address to the shareholders of the bank over which he now presides. The figure which I want especially to recall to the recollection of the Committee in that connection is this. He pointed out as between 1914 and the present year, 1920, if you add currency and circulation together and the deposits in the banks, which between them combine to make up the spending power of the country, comparatively the figures are, in 1914, 1,200,000,000, and in 1920, 2,700,000,000, in other words, an addition of 1,500,000,000 or 125 per cent. My hon. Friend the Parliamentary Secretary said very truly just now, that with the expansion which is going on in every direction of productive industry, and I may add, in the present range of prices, which shows the vicious circle in which we are living, the need for a larger amount of working capital than you ever had before is a most material ingredient in these large demands which we see every day. I am told that something like 1,700,000,000 is being asked for in the City of London this very week. The need for increased working capital is making a necessary and perfectly legitimate demand on the resources of the banks, and so far as the deposits at the banks are lent out for purposes of that kind, of course, the country gets, or ought to get, in the shape of increased productiveness a material and adequate return. But Mr. McKenna's calculation was that of this addition to the deposits at the banks in the six years which have elapsed since the beginning of the War, no less than 800,000,000 represents money lent to the State, in other words, by far the larger proportion of the whole. That, of course, is not represented by any corresponding increase in the wealth of the country. A very large part of it, if not the whole of it, has been spent not in reproductive but destructive expenditure, which was absolutely necessary in the interests of the community.

The figure which, to my mind, of all the figures of debt is the most alarming, and all this has a direct bearing on the range of prices, is the amount of our floating debt. The Chancellor of the Exchequer will correct me if I am wrong, but I believe that out of our total debt, which is now something like 7,900 millions, the floating debt is about 1,250 millions. I wish to congratulate the right hon. Gentleman on the fact that that has been reduced in the last month or two by, roughly speaking, something like 100 millions, but still it amounts to 1,200 millions. That, of course, is in addition to the 5,000 millions which has been lent by the public to the Government on long dated securities, and it is in addition, do not forget that, to our foreign indebtedness of at least 1,300 millions, appalling figures all. The thing which in my judgment is by far the most urgent—I do not think I need press it on the Chancellor of the Exchequer, but I press it on the Government and on the majority of the House of Commons—after increased output and production, if we are to bring back prices to a normal range is to get rid first of all, or at least to reduce by a very substantial amount, this millstone of the floating debt. How is that to be done? The first, most obvious and necessary way is, of course, by reducing our expenditure. We have had from the Government, and I am sure their professions have been sincere, although it is true that I am rather disappointed with the fruit that they have as yet produced, the most emphatic declarations and assurances that every step is being taken in that direction. We are dealing now with the Civil Service Estimates in this Vote on account for an expenditure during the coming financial year of 557 millions. The Chancellor of the Exchequer has, I think, tried more than once to give to the House his estimate of what he calls a Budget for a normal year, the year, that is to say, when the ground swell that follows the War will have subsided, and when we shall have come back to something like our habitual conditions.

I cannot help contrasting the proposed expenditure on the Civil Service estimates now presented to the House with those which, I think, as lately as last October, the Chancellor of the Exchequer presented as what he conceived to be proper and adequate figures for a normal year. The total proposed expenditure for the next financial year is, quite roughly, 1,200 millions, the actual figures being 1,187 millions. The Chancellor's estimate of expenditure in a Budget for a normal year was 800 millions, so that for this year you are 50 per cent. in excess of the normal year. If you come to this particular item which is now before the Committee in the Vote on Account for Civil Service Estimates, in which I agree you cannot make, I say that quite frankly, reductions upon the same scale owing to the character of a number of the items as you can in the Army and Navy and Air, this total of 557 millions compares with the right hon. Gentleman's normal Budget with an item of 300 millions. In other words, it is 250 millions in excess of his normal Budget for Civil Service Estimates.

Mr. CHAMBERLAIN

My right hon. Friend will bear in mind the assumptions on which the estimate for a normal year was framed.

Mr. ASQUITH

I am anxious to be scrupulously fair in this matter. I know I have got the Chancellor with me on every point of this argument, and I am not addressing my remarks to him at all. I agree that my right hon. Friend stated some "if's," "if you do not want more for old age pensions, and for A, B, C and D, and a number of new items of expenditure, then that is my normal Budget." I agree that in so far as those "if's' have not been realised he must take credit, and is entitled to take credit for his Estimate. I confess I have not examined those Estimates in detail, but I have seen enough of them to know that there is hardly one single Department, the old Departments as well as the new ones, with very few exceptions, which is not asking for more, no new charges, no "if's," no contingencies. I am speaking of the old Departments, Departments which existed a year ago, and I do not think I am wrong in saying that with one or two exceptions, and those not very important ones, there is hardly one of those which is not asking for substantially more for these Estimates than what has been spent during the whole of the current financial year. This is very serious. You will never achieve what I believe to be the first and most indispensable step in the reduction of this gigantic burden of indebtedness till by some process or other you curtail the exuberance of these departmental demands, and have them brought back, not only to the standard of last year, but, I hope, if possible, to a much lower standard still. There is not a single man I am addressing on these Benches on either side of the House, and I am sure not a single man on the Treasury Bench, but observed during the course of the War, under perhaps excusable and pardonable conditions, the multiplication of offices and salaries, which reacted upon the whole level of our Civil Service expenditure—an hon. Member says it is still going on—and that requires to be most vigilantly and effectively watched by the House of Commons.

I have said more perhaps than I had intended to say on that because I regard it as absoluely fundamental. You must stop borrowing, you must cut off the occasions and the needs for borrowing, you must drastically reduce in every conceivable and permissible direction your expenditure upon the service of the State. Till you do that it is no good floating campaigns of economy or preaching sermons on parsimony to the great bulk of the people of the country. I want if I may—because this is a very important question, and one upon which I do not think there is any substantial difference of opinion—to come back to the point at which I started and to impress upon the Committee that, just as when I spoke of the range of prices I said we must look not merely at domestic but world price, so I want now, when we are dealing both with output and indebtedness, to point out that there again it is not a domestic, but an international question. A great deal is said, and very properly said, in the memorandum of the Supreme Council, and most instructive figures are quoted, about the expansion of currency. There is no greater fallacy than to suppose that high prices are due to the multiplication of currency. It is the greatest nonsense, although it still finds favour in some uninstructed quarters, or perhaps I had better substitute imperfectly instructed quarters. They are both consequences of the same series of collocations and to think that you can, by the simple expedient of contracting your currency, bring down prices is equivalent to what—to use a favourite metaphor of Mr. Bright, which, I think, was borrowed from the old "Spectator"—it is like the man who sold pills against earthquakes. Nothing of the kind. You will not get rid of the difficulty by crude and ill-considered expedients like that; still less will you get rid of it, in fact, you will aggravate it, by anything in the nature of the continuance and expansion of international borrowing.

There are some people, I know, who think that the U.S.A. can be invoked as a kind of deus ex machinâ to cut this knot. The United States, I think, were not parties to the Declaration of the Supreme Council, and I suppose anybody who is acquainted with the facts will be as strongly of opinion as I am that there is no country in the world which can compare at this moment with the United States in its possession of a reserve force for general economic restoration. On the other hand, we have got to remember that it is idle to look, nor is it desirable that we should look, for anything in the nature of assistance in the shape of a Government loan from the United States, I do not think we should desire it ourselves, and I am perfectly certain that they do not desire it, and therefore let us leave that entirely out of the question. You must remember, further, what I believe to be the fact, the enormous expansion which is going on now in the United States for the investment at home of their domestic capital. There are great building operations, great road-making operations, great railroad extensions going on, and you must not assume that the large and growing surplus of wealth which is being produced every year in the United States is all of it, or even a large part of it, available for foreign uses. At the same time, there is a very substantial balance, and I would venture strongly to urge this. I believe, the Government have already agreed to it. I was a party myself, together with a number of bankers and business men in this country and in the United States, to a demand that the Government should set up, if need be through the agency of the League of Nations, a general economic conference which should be attended, of course, by the United States, and if possible by all the civilised countries in the world—the late Allies, the neutral Powers, and our late enemies—in order to bring into a common stock our needs, our requirements, our resources, and the possibility of their most fruitful and profitable interchange. I understand that is going to be done. I saw a letter from the Chancellor of the Exchequer agreeing to it in principle, and, if so, I would venture to urge upon my right hon. Friend—I do not know whether the matter is now in the hands of the League of Nations—

The PRIME MINISTER (Mr. Lloyd George)

It is.

Mr. ASQUITH

Then, of course, the Government have no longer any direct responsibility, but I would venture to suggest to them that they should urge the greatest possible promptitude in the assembling of this body and the largest possible latitude in the reference to it. That is all I will say upon that point, but I cannot pass from this international aspect of the question without asking the Committee to look once more at what is going on here in Europe. I am leaving Russia for the moment out of the question. What do you seen in Central and Eastern Europe? You see at least two millions of men—I believe that to be an under-estimate—who are still in arms, engaged in fighting or in threatening and preparing for fighting, equipped by a costly, daily expenditure on munitions of all kinds, diverted entirely from peaceful and fruitful industries You see something—because that may be temporary—which, I think, is more serious, and which, I am quite sure, from some expressions in the economic memorandum of the Supreme Council, I shall have the sympathy of the Prime Minister upon. We see there in Eastern Europe—I am not speaking of the Balkans—on the borders of Russia, you have set up a number of new, independent, free States; some of them have old traditions, like Poland; some of them have sprung for the first time into anything in the nature of independent life. You, we, the Allies, we have rescued them from the paralysing thraldom of old despotism. We have endowed them with the priceless gift of self-government, and we are entitled to say to them—and I hope the Allies, with the united voice of Europe, will say to them—that liberty has its duties as well as its fights, and it is their business, now that the fetters have been struck from their hands and from their feet and they have been given the power of free self-development—it is their business to set their own house in order, to live in peace and amity with one another, and not to establish, as some of them seem to be short-sighted enough to think of establishing, new barriers, economic and otherwise, between themselves and their neighbours. They ought to become one great economic unit, they ought to disband their forces and send them back to the work of productive labour, to rebuilding the shattered fabric of civilisation If you once had the great area of that part of the world honestly and wholeheartedly devoted to that great task, you would have contributed a not unimportant factor to the great problem which we are now considering.

I am not going to say anything about Germany for the moment—there will be other opportunities of saying that, and the situation there to-day is such as to make the fewest words the best—but let me add this in regard to Russia. I said at the beginning of my remarks that I thought the sting had been taken out of the tail, or perhaps the tail itself had altogether disappeared, from the economic memorandum of the Powers. They have recommended, unless we are misinformed, Poland, they have recommended Rumania, to have direct dealings in the way of negotiations with the Soviet Government of Russia. I hope the Allied Powers are going to take that advice themselves. They have most wisely, as I think, committed to the League of Nations the duty of making an economic inquiry into the conditions.

The PRIME MINISTER

The whole condition of Russia.

Mr. ASQUITH

The wider the scope of these inquiries the better, and I am very glad to hear that correction. That, I think, is a very wise step, and I wish it had been taken a year ago. It may be—I am not denying it—a necessary preliminary, or at any rate a desirable preliminary, to the establishment upon our part of direct relations, but, whatever road you approach, I will not quarrel about the particular route by which you are seeking your goal. There is nothing—not even the important change in the policy of these smaller States which I advocated a few moments ago—there is nothing more important to the economic restoration of civilisation than that we should pee, as regards this gigantic community in Russia, with its infinite plenitude of resources in men and in materials, a re-entry upon their part into the common household, industrial and political, of mankind, and a resumption of the freest possible interchange of commodities between them and us. It is upon those large lines that you will ultimately solve, or at least help to solve, the difficulties of which this rise in prices is only the symptom.

I have only one other remark to make. I am not, and never have been, either during the War or since the War, a pessimist, so far as we are concerned. I have never thought that we were on the road, or that we were even approaching a starting-point for the road, to national and Imperial bankruptcy and ruin. If we start upon that road we shall do it, not under the compulsion of circumstances, but from a suicidal impulse from which the commonsense of this nation will, I hope, always preserve us. I have no fear for our own industrial future. So long as we preserve our old capacity for, and habit of, hard and honest work, so long as we give and continue to give, as we always have given, the freest play to initiative and enterprise, so long as we maintain—and we have maintained now for the best part of a century—an open market, and if to these things, which are old possessions and old traditions, we add, as we ought to add, effective means of preventing wasteful and uneconomic management and conduct of the great capital industries, and, above all, rigid and sleepless economy in the expenditure of our public resources—so long as we pursue those lines, I have no fear whatever of the industrial and economic future of this country.

Mr. GEORGE ROBERTS

I think most of us will be in agreement with the main points touched in the speech of the right hon. Gentleman. We all feel that the first essential is to get peace in the world. I agree with the right hon. Gentleman that we must assist in that process. As lately a member of the Supreme Economic Council I have been brought into close contact with many of the facts to which he has directed attention, and I admit the urgency of the need, and have even had to tell supplicants for assistance that, whilst we are prepared to give some immediate aid, they must set their own house in order, because, after all, charity cannot be a lasting thing. After all, the right hon. Gentleman is expecting just a little too much of this country, like many others of large humanitarian spirit. It seems to be felt that this country is the country that has got to undertake the whole responsibility of re-habilitating the world. Nevertheless, it has to be borne in mind that Great Britain bore the major portion of the War; and I know that many demands have been preferred on this country since the War ended. I feel that we are entitled to say this much—at any rate, I can from my personal experience—that the Government has done as much as it has been possible to perform, and, whilst I appreciate the spirit, I think we also have to recognise that there are limitations, and just as in our own country we have to urge our own people to settle down and work, so have we to tell the people of all those other countries that they must do likewise. I recognise the necessity for every form of economy in Government Departments, and I hope the right hon. Gentleman the Member for Paisley (Mr. Asquith) will lead a body of opinion in this country to subject all those Votes to strict analysis, and point out to us possible forms of economy. I have often listened to speeches in this House charging the Government with extravagance, and enjoining upon them economy, but rarely have I found right hon. or hon. Gentlemen to be very helpful in directing attention to any particular point on which it might be effected. [HON. MEMBERS: "Russia!"] If my hon. Friends will only exercise a little patience, I presume they will have their chance. On the other hand, I have experienced throughout the time I have been in this House, a tendency on the part of all Members to increase national expenditure, especially if it is likely to increase their popularity in their respective constituencies. The right hon. Baronet the Member for the City of London (Sir F. Banbury) is, of course, the one exception, owing to the peculiar nature of his constituency.

I think we must all welcome this Debate, because, at least, it is helping us to face actualities. I believe the outcome of this Debate will allow us to understand that there is a difference between the dearness attributable to real shortage and that which is due to individual rapacity. I have had very strong views on this matter, and I realise that we may hold out false hopes to the people, and that if we promise them that the establishment of a Ministry of Food is certain to lower prices, and then we fail to achieve that purpose, we have got to explain why we have failed, otherwise extreme resentment is caused. Similarly, when we pass a Profiteering Act, if we lead the people into believing that thereby you are going to root out the main cause of high prices, and then experience proves that the Act has very little effect in that direction, disillusionment follows. For my own part, I have never been much in love with such expedients as the Profiteering Act, not because I want to do-fend the profiteer. I would deal with him as drastically as anybody in the community would deal with him. On the other hand, I have always been afraid that you will distract the attention of the community from the real facts of the case, and divert them to the consideration of what, after all, are minor factors in the case. I have wanted profiteering to be dealt with on something like more scientific lines than that formulated in the Profiteering Act. I want, first of all, to have in existence some State Department charged to ascertain costs, and thereby be able to guide any tribunal in the matter. Unless we are able to do this, not on one particular occasion, but over a series of years, then, in my humble opinion, we shall never be able to deal with the evil of profiteering in order to eliminate it from the country.

The right hon. Gentleman has done a signal service this afternoon in showing us that present high prices are attributable to national and international finances, and he is perfectly correct in informing us that, until we are able to make revenue and expenditure balance, until we are able to get production back to normal, this problem of high prices will remain with us. But I want to join issue, with great diffidence, with the right hon. Gentleman on one point. He seems to be apprehensive that it is the intention of the Government to keep in existence for some time longer the Ministry of Food. I want to say here outright that I have urged on the Government that that Ministry should be given a definite lease of life, and I am going to state my reasons for it. There is undoubtedly a real world shortage of the main essentials of life, and I am of the opinion that no Government with a due regard to the interests of its people can allow free play to profit making interests, having regard to that shortage. Therefore I feel that, whilst it may be, as Sir Robert Giffen once put it, that what is not economically sound may be politically expedient, I certainly feel that the Government will be well advised if they do keep the Ministry of Food in existence for some time longer. Other Members will have their own opinions upon that matter. I do not contemplate that we need preserve the rigid forms of control which prevailed during the war, but I do urge that it is very desirable that we should keep a Ministry in existence to exercise supervision over supplies and prices; otherwise there would be disaster in the land. We know how suspicious people are at the moment, how they have felt that profits are being made out of proportion, and it is necessary to enlighten them by the presentation of the real facts of the matter.

6.0. P.M.

Therefore, I urge that the Ministry should be kept in existence for, say, three or five years, that it should engage in the work of ascertaining the cost of commodities, that it should in the meantime, gradually set up organisations in the various trades of the country, and thereby be able to exercise a measure of control, which I feel would be in the interest of the consuming public. I belive the proposal to which I am directing attention would have the effect of safeguarding the interests of the consumer, and at the same time leaving perfectly free play for the initiative and enterprise which, I agree with the right hon. Gentleman, it would be disastrous to the State to stagnate. My hon. Friend feels that the Ministry of Food has failed in some purpose or other, but I do not think anyone will deny that the Ministry of Food, having regard to the world scarcity, has succeeded in supplying the people of this country with adequate supplies of food at a less price than that which has prevailed in any other country of the world, with the exception of the United States of America, and the United States of America do not afford such a comparison as a mere comparison of figures would appear to show. Whilst the average of prices has risen 170 per cent. in this country, and only 120 per cent. in the United States of America, it must be borne in mind that prices in the United States before the War were 50 per cent. higher than in this country. We have suffered a great deal at the Ministry of Food because of the fact that we have been too dependent upon the one market for a large amount of our supplies. What I hope to emerge from this Debate is some practical proposals as to how, in permanent fashion, we shall be able to exercise some effective control over supplies and prices. After all, it appears to mc that we have not yet got very far in that direction. We are told, of course, that until the countries lately at war have been restored they will not be able to furnish us with any supplies. For some time we must recognise them as out of the category of exporting nations—Russia for wheat, the Central Empires for sugar. But I am afraid if we are going to wait until they recover and have surpluses at their disposal that we are not proceeding along sound lines. I feel that we ought to be considering the possibilities of production in our own country and throughout the British Empire. One of our greatest causes of weakness throughout the War was an extreme dependence upon overseas supplies. Whatever may be our opinions personally in connection with these matters, I cannot understand anyone giving support to a policy which discourages home production. On the other hand, I think that we should be prepared to subordinate our own opinions to secure a larger measure of production here at home. It is true that something was done during the War.

The Corn Production Act was not altogether a very popular measure. I am glad, however, to have given it support, and to have been in at the fashioning of that measure, for certainly it has opened up to us new possibilities of cultivation in this country. If we continue to encourage that policy, naturally we diminish our dependence upon other countries, and the less our dependence is the stronger position we are in in making our purchases. If we go into the American market, the urgency of our needs is known as well as it is here, and, naturally, full advantage is taken of that fact. Therefore, I am one who wishes to see a larger measure of our supplies from sources over which we have some control I believe that is possible in this country. I am sure it is more possible to make arrangements with our Dominions than it is to make arrangements with foreign countries. We should proceed along the lines here indicated and ascertain to what extent we can increase production here at home. Before the War we had to import five-sixths of our wheat. It is true we increased wheat production somewhat during the War. I believe we increased the whole production from 7,500,000 to 11,500,000 quarters. If we were able to do that under the stress of war, what might we not accomplish if we were to lay down a regular policy of the development of home agriculture? Again, I am certain that we can enormously increase the amount of meat and dairy produce here at home. These are the lines along which we can progress, and I certainly feel this is one direction which will con tribute towards reduction of prices, for, after all, production at home is much more subject to public opinion and Governmental action than can possibly be the case in respect to ether countries.

As we found the Dominions to respond to our call during the War, I feel that we should give them encouragement to develop their resources after the War. I believe that the outstanding fact in the world to-day is: demand tends to outstrip production. This was becoming manifest even before the War. America was ceasing to export to us. With her increasing population I believe we must look to her for less than hitherto, rather than more. Similarly, this process is going on all over the world. Every nation and every people requires a higher standard of living, and rightly so. We may expect as certain as to-morrow follows to-day that the Eastern races will develop a higher standard of living and thus make a greater demand upon the world's production. This, in my opinion, will throw us more and more upon our own resources, and the cultivation of our own land. These are facts which were borne in upon me whilst at the Ministry of Food. They are worth consideration. We ought to consider how long it will be before Russia is able to send us large surpluses; how long before Germany will be able to enter the market as an exporter again. We cannot tell how long it will take for these countries to recover. Whilst we have other sources open to us for development, we ought not to continue to rely upon these other very uncertain elements. Siberia ceased to send us butter, and our people have had to go short of butter. We might enormously increase the butter production in this country. Similarly, by the adoption of an appropriate policy, we might increase butter production in various parts of the Empire. Whatever commodity we take, I think these facts equally apply. I respectfully submit that only by increasing the world's production and only by opening up new sources of supply will we be able to rid ourselves of that extreme dependence on one or two markets where we are entirely at the mercy of those who have surpluses to sell, who know we must purchase, and are therefore, able to extract the highest price from us.

Again, I believe that something might be done in another direction. We have done something at the Ministry of Food to open up this line of resources. We have been dependent upon America too much for bacon, and not very good bacon—some would say—at that Bacon had to be procured. That was the only supply open to us. Moreover, it was a country fairly easily reached, and tonnage had to be turned round in the shortest possible time. There was, therefore, every reason why we should make purchases in that market. We had the great Danish market open to us before the War. Danish production declined during the War, perhaps mainly because of the blockade, and inability to get feeding stuffs. But at the Ministry of Food we have given encouragement to the Danish producers, to stimulate them, we have encouraged the process of opening up new sources of supply, and so relieve us of dependence of a single source. I do not intend to give the House any detailed statement of the work at the Ministry of Food, but I will simply say this: that I believe it has deserved well of the country during the great crisis. I believe this is not the time to disband. I do not think it is safe. I do not contemplate that you should continue the rigid forms of control which prevailed during the War. I am prepared to argue that control has advantages during abnormal periods, such as that through which we are passing. I am also equally prepared to admit that control may have its disadvantages, because the operations of a State Department can never be sufficiently responsive to rapid changes, and thereby very often we have found the consumer deprived of the advantages of plenty because of the slow moving of the State machine. These are facts that my hon. Friends who believe in State control as a permanent principle will have to take into consideration. Control by all means, but not along any particularly rigid lines adapted to a particular commodity, but according to the circumstances of the case.

Still, I submit that you must retain control until world conditions become normal. The Department will exercise supervision over the food of the people and be able to show the people why prices are high and why supplies are short. Without such a Ministry during the last few years a great deal worse disturbances of the kind that have prevailed would have occurred. The Ministry has possibly saved the country from great disaster.

The only further point I want to emphasize is this: we cannot get rid of high prices simply by waving a magician's wand. The Government is not, as generally understood, responsible for high prices. No particular individual can be charged with the responsibility, whether you designate him profiteer or otherwise. High prices, as the right hon. Gentleman opposite (Mr. Asquith) has stated, is a world phenomenon ensuing from the destruction of war, which has occasioned a real shortage. When there is a real shortage, as Professor Keynes has put it, the profiteer is a consequence, and not a cause, of the high prices. The only way in which we will be able to deal adequately with this problem is by securing settled political and social conditions here at home. I believe that if we could have preserved that spirit of unity which characterised the nation during the War for, say, ten years after the War, we would have got through this period with much less difficulty. National disunity is a real cause of high prices. Certainly we have not been able to adjust labour matters without great upheaval. I rejoice in the fact that the working classes are at last coming to their own, and are securing better wages and humaner consideration. I have claimed this on their behalf. Whilst, however, doing so I have never failed to point out to them that when they are claiming their rights and privileges they must shoulder their duties and responsibilities. We cannot continue to take out unless we put in. It is because of the fact that production has not been keeping pace with competition that we have this problem in an accentuated form. The right hon. Gentleman the Member for Paisley is perfectly correct in proposing this problem, first of all as one requiring for its solution peace throughout the whole world, and, secondly, production here at home. In these lie the solution of this great problem.

Mr. CLYNES

I beg to move, "That Item Class 11. (Board of Trade.) be reduced by £100."

Like my right hon. Friend who has just addressed the House, I, as an ex-Food Controller, may be suspected of some indulgence in self-praise if I make a comment on the opening remarks of the speech of the Parliamentary Secretary with regard to the functions of the Ministry he represents in this House. The least I will claim for it is that it is within the knowledge of the country and of this House that, during the War at any rate, in the matters of Supplies, Rationing, the Fixing of Prices, and the Keeping Down of Prices, and in the direction of increasing and sustaining public confidence, the Ministry of Food was of the highest national service. But I venture to submit to my hon. Friend that since the beginning of last year, if not since a month or two following the Armistice, the work of the Ministry has provided the country with a great many disappointments, and it has failed, during this after-War period, effectively to deal with these things. During the War that Ministry, perhaps more than any other, was incapable of formulating a policy in a particular sense. It had to work under very great pressure, dealing with new tasks arising almost every day. Its work was very like makeshift, the handling of emergencies, and the rapid settlement of questions rapidly arising as bye-products of the War. We at that time had little opportunity to think out even main principles, and certainly not to master the great mass of detail incidental to complex and sometimes baffling questions. But, notwithstanding the conditions of pressure, the Ministry did give very valuable service to the needs of the nation and it has been during the time when it was possible to outline policy and to draw up schemes and plans in the calmer and less disturbed period of peace, that the Ministry of Food has failed to meet the national needs.

The Prime Minister, speaking some months ago, gave one of his seldom realised assurances as to what was soon to happen. I do not know how the Prime Minister is at times supplied with information, but on the strength of the information with which he was then dealing he gave the country an assurance that, within a very short time, we might expect a reduction of 4s. weekly in the cost of living. It is within the experience of all of us, and more so within the experience of the poorer people of the country, how completely the Government failed to realise that hope. Instead of there having been a reduction in the cost of living, there has, since the assurance was given, been a very lamentable and substantial increase. Therefore I do not accept the speech of my hon. Friend this afternoon as a defence of the Government. It was an explanation of his own administration, because, to a certain extent, he outlined what his policy was, but, as a defence of that policy, I feel sure the House will look upon his speech as totally inadequate, and as carrying with it no reassurances or promises whatever in reference to the handling of this pressing problem of prices.

It is true, as he said, that during the War there was a great destruction of wealth, but no sufficient effort, if indeed any effort at all, has been made that could succeed in repairing that wealth destruction or to give some effect to the united aspiration which we all entertain for greater production in days of peace, so as to catch up the awful arrears arising from the destruction of wealth during the War. It will not do merely to go on talking about the need for increased production. I have shared in that talk, but I have also said there are two things which seem to be necessary to be realised by those who speak for the Government. One is that you will not get any increased production by any increased exertion on the part of the manual toilers of this country until they are assured that their increased production is not going to be merely for the personal benefit of the private owners and controllers of wealth in this country; and the other is that they shall be assured that their increased work is not going to make them workless. Some time ago the Prime Minister described the conditions of unemployment as conditions which no civilised community should tolerate. I do not see how you are going to give the workman a real assurance that he will be safeguarded against unemployment unless you can do it by some legislative act that will prevent him being thrown out of work merely because he has worked harder. These appeals, after all, are addressed to a comparatively small section of the community—to manual employés. It is, after all, on them that any possibility or prospect of increased wealth must ultimately depend. I am not belittling those who work with the pen—the brain workers and the black-coated workers; they contribute to the sum total of the output of our wealth—but, in the main, these appeals with regard to increased production are addressed to the manual workers—the workers in the mines, in the factories, and in the fields.

What do they see? They see that before the war whenever there was an increase in the wealth of the country, as exhibited by expanding trade and increasing profits, and greatly increased in comes as proved by revenue returns, in spite of all these proofs of an increase in the national wealth they got no more than they could secure by their organised policy. We had better face the facts, and remind employers of labour that in the main they are largely responsible, because of the course which they pursued in the days of peace, for the course which working men are pursuing now that the war is over. No matter how great their prosperity, how enormous the profits in any particular trade or industry, we who had to lead and advise the men, the heads of the trade unions, found that invariably we had to fight by means of the strike weapon for the slightest advance in wages that had to be wrung from most employers. The folly of the employers in those days in not voluntarily sharing more of the wealth which largely manual labour had made has gone far to cm-bitter the relations between employers and employed, and we are reaping that harvest of distrust which was sown by the attitude of the employers in the days before the war. Manual workers, therefore, are not alone to blame with regard to this problem of under-production or diminished output from their labour.

I agree with what was said by my right hon. Friend, who has just spoken as to the advisability of increasing home production. When I was at the Ministry of Food I had my views strengthened as to the wisdom of producing within the limits of our capacity as an industrial community as much food as we could here at home, instead of going far overseas for it. But I cannot say that I altogether share the views possibly more held than expressed this afternoon as to the principles upon which we should go or the methods we should adopt. Even as it is there is a great part of pastoral Britain which might be more extensively used, not for merely commercial purposes but in order to secure incidentally the good that would accrue to the country from the pursuit of Adam's trade. I agree, therefore, it should be our business to encourage home production, and it might even be encouraged in legislative and administrative acts, such as has been tried in the past, for instance, in improving the status and remuneration of the farm worker, which must tend to retain in and attract to that industry more men than were possible in the days before the war.

The Parliamentary Secretary referred almost in terms of lamentation to the weakness and shortcomings of the Profiteering Act. He said that it gave the Minister but very limited powers in regard to the carrying out of that particular instrument of the law. May I remind the hon. Gentleman that when that Act was rushed through this House in August last year, we made appeals to the Government to make it far stronger than it was. Repeated Amendments were suggested from this side and rejected, in order that the instrument for locating and dealing with the profiteer should be made effective, and now six or seven months afterwards my hon. Friend is bemoaning the powerless-ness of the Ministry of Food so far as that particular Act of Parliament is concerned in regard to the conduct of the profiteer. I think the spokesman of the Government this afternoon might have turned to his colleagues and asked them why, when they had the opportunity to strengthen the Act, and when the House was almost unanimously in favour of making the Act more effective, they failed to respond to our appeals. The hon. Gentleman was a little remiss in not giving us some more information as to the actual working of the Act. The country, in its present state of anger and justifiable indignation, would have welcomed this afternoon some lists which would have shown the number of profiteers caught and imprisoned for the wrongs they had done. But we have heard nothing about that, and, what is more, the newspaper reports records have given us very little information. I suggest there is no greater wrong being done to the State, and to the general smooth working of the trade and industry of the country than is being caused by the conduct of profiteers. High prices are no doubt due to many influences and circumstances in addition to profiteering, but the one factor in connection with high prices which the ordinary man sees and understands is that factor for which the profiteer is responsible. Talk to a man about rates of exchange, about the high prices at which you have to purchase food abroad, about many other economic conditions which account for what he has to pay for his food and largely he fails to understand it. But when he sees the accounts of the enormous and improper profits made by those who are selling the food, and who have acted as mere distributors or buyers or sellers, it is then that he understands that someone is doing wrong. The Act at least might have been made adequate, dealing not tenderly, not unjustly, but justly with the man who has made exorbitant profits.

When the Government had an opportunity last August to acquire for itself absolutely adequate powers, they failed to meet the wishes of the House and to carry the Amendments which were suggested. My hon. Friend and the late Food Controller have been, during their term of office, working under limitations of the greatest discouragement and doubt, not knowing as to how long their Ministry was to exist, and so far as it would appear, almost understanding that the Government was eager to put an end to the life of that Ministry which, I think, above all others was a Ministry that ought to have been kept in full being, working overtime if need be, to carry on this necessary national work. There has been no food policy laid down or followed by the Government during the year 1919. It is only in response to repeated appeals from organised labour and from other quarters of the country, as the result of deputations, memorials and conferences, that the Ministry of Food has been kept together at all. It has been largely dismantled. Many of its abler chiefs, understanding that the Ministry was not to be kept together for long, naturally left it for other service. Handicapped and discouraged in that way it was scarcely possible that the chiefs of the Ministry could effectively do their work and serve the country in the way they ought to do.

There has been an absence of policy, as exhibited merely in the fact that the heads of the Ministry itself scarcely ever knew how long they were going to be tolerated as the representatives of the food plans laid down by the Government. This is not a matter on which the Government should have acted under compulsion. There ought to have been initiative, foresight and some of that sort of statesmanship and policy showing a natural grasp of certain inevitable and obvious consequences of the war. Everyone knew, and not least of all the Prime Minister, that, although the war was over, when we entered into peace arrangements the effects of war in this matter of food and material would remain with the world for years, and indeed we told the country that. With that knowledge of having to live for years in what I might term the realm of war consequences it was suicidal on the part of the Government to treat the Ministry of Food in the way they have done.

My right hon. Friend made a suggestion as to what ought to be the future conduct and policy of the Food Ministry. If we could get back to pre-war conditions with regard to food and materials for trade, we should all desire the restoration of our trade and personal liberty. D.O.R.A. was a very necessary friend during the period of the war. We should all be glad to get rid of the Regulations if we could return to pre-war conditions. But here again, so long as you have a state of shortage in any article of food, you cannot safely trust the public to have that article supplied by the ordinary trader. Therefore the trader must be watched, regulated and bound down by the law to do certain things in the public interest. It was that condition that brought the Ministry of Food into being. As soon as a state of shortage appeared in any article the price went up and up, as the article was bought and sold, to an intolerable degree until the price at which finally it reached the consumer became an absolutely intolerable price. You will have that state of things so long as you have shortage, and my view is that you can only afford to liberate an article, whether food or material, from the restraint of the law when that article has become as plentiful in its supply as before the war. Given shortage, you must have the restraining and protecting hand of the law. There are perhaps degrees inside which, that principle can be applied, but at least a fair, sound and just price is the least condition which must be retained if the consumer is to be protected. I know there are hon. Members who seem to get in a state of mind amounting to panic when they are asked to tolerate a continuance of conditions of food control. I should like to give some actual instances of what the difference has been when decontrol has been applied to articles which continue to be scarce, and therefore ought not to have been liberated. Let mc refer first to home-produced butter. The highest price reached by home-produced butter under the condition of control was 2s. 8d. per lb. The price since de-control has reached 5s. 6d. Linseed cake, a very important article of food for cattle, and therefore a substantial contribution in the food for man: the highest controlled price was £19 15s. per ton. The price at the end of January, since de-control, reached £25. The highest controlled price of cotton seed cake was £15. The price since it was de-controlled is £17 17s. I daresay it is within the personal know-lodge of hon. Members who have more experience than I have of these particular commodities that the price has gone up to an even higher figure than I have given.

Sir W. RUTHERFORD

You can get some now, though.

Mr. CLYNES

That strengthens my argument. The fact that there is an increased supply proves that there is no justification for increasing the price. It was while there was shortage that the excuse was raised.

Sir W. RUTHERFORD

Now that the price has gone to a proper figure, you can get it.

Mr. CLYNES

The highest controlled price of coffee was 1s. 6d. per lb. Since control was removed it has gone up to 2s. 2d. Take condensed milk, a most important article of food in thickly populated centres whore milk cannot be got in its natural state during the times when it is required by largo masses of the working population. The highest price reached under control was 1s. 10d., and 1s. 6d. is the price at present. I could go on giving similar figures showing the extension of prices since de-control of very many articles of food for both men and beasts. This applies to many forms of seeds, nuts, kernels, oils, and similar articles. To what is this very largely due? My hon. Friend has quite recently given us some explanation of the causes of many of these high prices in relation to food and other materials. Speaking a few nights ago at Northampton, he said: The Committee on Trusts, after eighteen months' investigation, found in every important industry in the United Kingdom a rapid and increasing growth in the formation of trade combines, formed to restrict and to control prices. In at least 80 per cent. of the great businesses of the United Kingdom control exists, and control his come to stay. Messrs. Coats are just as much the cotton controllers for the United Kingdom as Mr. Roberts was as the Food Controller. Indeed, their organisation is more perfect and their control more complete. He went on to show how their control descended to the smallest point of detail in connection with the supply of food and material. This is a serious national problem with which the Government has not yet dealt, and certainly there was nothing in my hon. Friend's speech this afternoon to show in what way any of this vicious business of profiteering by means of combines and trade arrangements is to be checked or prevented. The right hon. Gentleman (Mr. Asquith) expressed what is a very common desire. He suggested that we should get back to the conditions of that free state of trade, competition, enterprise and initiative in business which, with all its defects, is much to be preferred to this newly developed plan in the trade of our country. Competition has almost ceased amongst traders and the suppliers of food and materials generally. Business initiative and enterprise has been killed.

Sir W. RUTHERFORD

By your Department?

Mr. CLYNES

By the combines and trusts that have been established. You can hardly buy a box of tacks without having to pay a purchase price settled secretly by some ring of men who have made it a subject of combine. There is not a single article in connection, for instance, with the pressing demand for house reconstruction, which can now be secured or procured by any contractor or house builder unless it is got at a price fixed by a trust. We are entitled to ask the Government how they propose to deal with the problem as affected by the unjust fixing of price by these gentlemen who manage trusts, and who control 80 per cent. of the principal trades of our country. The right hon. Member for Norwich (Mr. G. Roberts) referred to the prospect of getting supplies of wheat from Russia. I might hero invite some explanation from the Prime Minister as to what it is that we are to understand from his recent statement and the statement of the Parliamentary Secretary to the Ministry of Food. On the opening of Parliament the Prime Minister, during the Debate on the Address, made a speech which was splendid—that is the least that may be said for it—in all respects except as to facts. Coming down to facts, we had this statement: The grain and flour of Russia of all kinds, maize, barley, oats, &c, came to nearly 9,000,000 tons. The figures are prodigious in every direction. The world needs it. There are high prices in Britain, high prices in France, high prices in Italy, and there is stark hunger in Central Europe. The corn bins of Russia are bulging with grain."—[OFFICIAL REPORT, February 10, 1920, Cols. 44–45, Vol. 125.] That is our Report.

The PRIME MINISTER

I said that was the report we had received, but I added that there was a doubt with regard to the facts about Russia. I said I could only give the report that had been presented to me. Then I went on to say that no one could tell what was happening in Russia. That report was received from a very important authority. On the other hand, there is a feeling that it is not a correct estimate, and I pointed that out. If the right hon. Gentleman will do me the justice of reading further on in that very speech, he will see that I said so. The first part is quoted very freely outside, but the second part is never quoted.

Mr. CLYNES

I have not quoted this; statement outside.

The PRIME MINISTER

I am not complaining of my right hon. Friend. I was referring to other people.

Mr. CLYNES

I quote it now, because it is so strikingly different from the statement recently made on the facts by my hon. Friend who speaks for the Ministry of Food. Speaking a few nights ago, this is what he said: The information reaching us in regard to the state of affairs in Soviet Russia and the territories of Southern Russia has been extremely varied and often unreliable. The latest information to which I have had access does not encourage me to suppose that the resumption of trade relations with Russia, which is the policy of the Government, is likely to open up any very large stores of wheat or grain in the near future."—[OFFICIAL REPORT, March 9, 1920, Col. 1190. Vol. 126.] I present the two statements in order that we may have some reply, so as to dispel the doubt and confusion which has been created in the public mind by these two conflicting statements.

The PRIME MINISTER

We have had an infinite variety of reports. For instance, one report from an authority who might be assumed to be a very reliable authority stated that the peasants were burying their grain and had done so for perhaps one or two harvests, and that they had considerable supplies. There are others who take a totally different view. It was quite impossible to get investigation. That is why we are getting an organisation now to ascertain the real position as to whether one statement is correct or the other is correct. You will not discover it until there is an investigation on the spot.

Mr. CLYNES

Perhaps the Prime Minister will in future take the opportunity of guarding himself against using reports until adequate investigation is made. I want to return to the question of the effect of the great profits that are being made by the trusts and combines on the public mind and on the prices which are being paid. We must not, as the Parliamentary Secretary did this afternoon, make too little of the operations of the profiteers, trusts and combines in relation to this matter of prices. I am certain that just as the British public, of all classes, bore the burdens of the War because they knew that they had to carry them as a patriotic duty, they would now bear any burden of high prices if they knew that they were not being robbed by-men who had the power to place these high places upon the commodities needed for reconstruction and for the daily food of the people. We can depend upon the patriotism of the public if we can dispel what are partly their suspicions and partly the proven facts in regard to the profiteers. Lord Colwyn, referring to the recent investigations and what had been discovered in regard to the profiteers, has referred to the subject of shipping which, like everything else, has its bearing upon prices. He said: Some of the shipping concerns have made fabulous sums of money, directly and indirectly, through the War. I have had three instances brought before my notice, which I cannot vouch for, but which were given to me on very high authority There is the case of a man who was worth a £1,000,000 in 1914 and who has multiplied that six times over by now. There is another case of a man who had £3,000,000, and he has also multiplied that five or six times. These instances in shipping as in other forms of transport and in the supply and distribution of raw material and food: these instances of intolerable profits have been brought to the notice of the Government and should have received more effective treatment than they have done so far. I have here a list with which I will not trouble the House of how in the smallest articles this same law of secret combines and trusts is operating and artificially raising the price to the public. There is the Bedstead Angle Association, the Bedstead Manufacturers' Association, the Braize Brass Tube Association, the Brass Tube Association, the Electric Welded Tube Association, the Flange Makers' Association, and so on—a dozen of them, which have their one secretary and their one arrangement for privately fixing what profits they shall make out of the public.

Mr. A. M. SAMUEL

Trade unions do that.

Mr. CLYNES

If the Committee can fall back upon no other answer than that trade unions do the same thing, my answer is this, that the men in the trade unions who by combination try to fix their wages, do, at any rate, earn them by work. They toil in the pit, in the shipyard, in the field, and in the factory; so that there is at least that justification for fixing their wages by certain action, though in itself that act may be deemed to be wrong. The further answer is, that the manual toiler never could get what everybody in this House would agree that he should have, namely, a living wage, until he formed himself into an association and used the power which alone combined effort gives. There is really no comparison between the two cases. It has always been understood in this country that trade should derive its profits from the ordinary, healthy free play of trade conditions and competition, and that the success of those engaged in trade should rest upon their own capacity in business and upon the general efficiency with which their trade is conducted For the first time in this country we have reached a stage where, admittedly, these associations are being formed artificially to raise prices to the public and thereby unduly procure profits for themselves. The inquiry to which I have referred has presented to the public and, therefore, to the disturbed mind of the working classes, figures which will go far to cause demands for increased wages, and further to keep us in this vicious circle of which we have so often spoken. These figures, which are given in a memorandum recently supplied by the Board of Inland Revenue, show that the additional profits during the years of the War enjoyed by a comparatively few people in this country exceeded £4,000,000,000, and we are further told that these profits were enjoyed by no more than 340,000 people. An additional wealth exceeding £4,000,000,000 is enjoyed by 340,000 people.

Sir W. PEARCE

I am sure the right hon Gentleman docs not want to mislead the House. The figures he has given are not quite accurate. The 340,000 people through increased war wealth only got £2,800,000,000. The £4,000,000,000 of which the Inland Revenue spoke, was divided amongst a very much larger number of persons, on whom they hesitated to impose a valuation.

Mr. A. M. SAMUEL

Is it not a fact as regards the £2,800,000,000 supposed to have been saved during the War five years, that in any case, had there been no war, £400,000,000 would have been saved annually by those people?

Mr. W. THORNE

That makes the case worse.

7.0 P.M.

Mr. CLYNES

I should like to have a modification of these figures. I should be glad to have it proved that they are not as they are given. Let the House observe the effect of such figures on the minds of the people. They are very disturbing, and they are the groundwork for demands for a share of the good things that are going in the form of increased wages. If the Prime Minister could deal, with these figures from the standpoint submitted in the questions which have been put to me, I should be very glad. Lot me give another figure, revealed in the statement made by the Inland Revenue Department. It shows that £200,000,000 of the increase was enjoyed by 280 people alone. That works out at an average of £700,000 each. Let us try to pry behind the meaning of these figures. They have an important bearing upon the question of prices. It is clear that the public is being overcharged, otherwise the enormous profit would not be made. We cannot wait for the development of the full effect of all those things which are promised in the world and that we are all eager to see; these things will have to come in time. Let us try to hasten their coming. But the immediate business of the Government is to govern, and in England its duty is to try immediately to bring about cheaper prices and to prevent profiteering. The House will be willing to give them the powers, as it was willing on the Profiteering Act to give them greater power than they asked for.

Captain THORPE

I rise for the first time in this House and therefore have to ask its indulgence for a few minutes. I would like to say first, that I listened with interest to the admirable speech of the right hon. Gentleman the Member for Paisley (Mr. Asquith). It was marked, if I may say so, by broadmindedness and high patriotism. Criticism was hardly to be seen in the speech, and it would be well if that spirit could be followed right through the Debate. We should all be glad to see the same spirit carried everywhere throughout the country when we are dealing with the question of high prices. It seemed as though the musicians had gone through the country with a fanfare of trumpets and sharms, but when they come here they give us a mild obligato. The object of this Debate has been to air the grievances expressed elsewhere, and to give the Government an opportunity, which is often denied to it in the public Press, of placing its point of view before the people. There are Members of this House who contribute articles and write diatribes to the press in which they take up the position that the Government is entirely responsible for the high prices, that they are all due to the misconduct and extravagance of the Government. These gentlemen are like ghouls who are waiting around what they believe to be the death-bed of the Government as expectant bénéficiaires. I think they will discover after a considerable time that this particular patient is baking an unconscionably long time to die. One of these publications is in the form of a protest to be taken out of a daily paper and to be sent to the Members of this House by the women of the country. It is particularly venomous because, it attributes the high prices to the Government and asks the women, who are the chief sufferers, to believe that. We are asked by a sort of blackmail to bring down prices immediately or else we shall lose our seats at the next election. I think that powder is blank. That vicious suggestion has been planted in bad soil by that particular newspaper among those who take their political economy from it, goodness knows why, though many of these people get no opportunity of learning elsewhere the true facts of the case.

Another form of propaganda is carried out by certain gentlemen on the other side of the House. I can speak with feeling upon this matter because I have recently been speaking to the electorate, and the form which that has taken has been to tell the electors that if you had a particular form of Government, prices would immediately come down. They say: "If you yote for a representative of the Labour party your food would cost you less." If I had not had a different bringing up I might have believed there was something in that, but I do not think that it will impress the electorate. I think it would be found that the manna would not drop so quickly from heaven as they think, and a hope that if the more substantial benefits which they promise, such as land and houses, do fall, they will not fall from the same quarter with the same precipitousness. It must be remembered, when we are asked what is the cause of these high prices, that prices have always soared in times of war. I have seen a chart which sets out that over a period of 123 years prices have varied with the battles and conflicts of the world. In the 20 years of the Napoleonic wars food went up 84.7. In the American Civil War they went up 74 to 105, and the Russo-Japanese and the South African Wars had the same effect on prices. It is not carrying economical laws very far when we try to realise that a war which has cost so many thousands of lives, and cost so much more than any other war, has only had the effect of raising the cost of commodities by 127 per cent. That is not an amazing figure. When one realises that, it ought to mitigate the sentence to be passed upon the Government.

The Member for Paisley pointed out that the prices of commodities in other countries are higher than in ours. In France and in Paris it is 164 per cent. increased; in other French towns, 193 per cent.; in Italy, 181 per cent., and even in Norway 195 per cent. All these countries of Europe have a higher rate of increase than we have in Great Britain. We are told that it is this unfortunate Government which is responsible for high prices: are they responsible for these high prices all over Europe? The only answer to a statement of that kind would be that it was absurd. Each Government is responsible for its own country and its own territory, and the corollary of that would be that our own Government is only responsible for our own country and is not responsible for prices in the other parts of Europe. I think that the note which should go out from this Debate should be one of rosy optimism. The Government is doing a good deal. Like individuals, Governments have their limitations, and they are doing their best Reductions are being made in the staffs of Government offices. The Army has been rapidly demobilised, and I hope it will not be shown that this demobilisation of the Army has not been too precipitate. The country is reducing the balance of its imports over exports; this has already decreased, and the Chancellor of the Exchequer is going to have no more borrowing All that should be a welcome sign, and then there is the Secretary of State for War (Mr. Churchill), who cannot be forgotten in a matter of this kind, and he may say with pride that of the nations of Europe there are only two which have not got conscription for the Army, and one of them is Great Britain. I think if everyone does his part as was done during the War and will only explain to the people of England what they are up against and the reason why, they will get from the country a ready sympathy and a ready response. I will conclude with quoting a passage written by the the late Lord Macaulay to a Mr. Southeys making suggestions for Government control and assistance of trade: Our rulers will best promote the improvement of the nation by strictly conforming themselves to their own legitimate duties,"— I would suggest that these legitimate duties do not include the running of municipal trams and nationalisation— by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, by defending properly, and by observing strict economy in every Department of the State. Lot the Government do this; the people will assuredly do the rest.

Mr. ALLEN PARKINSON

We may enter into a very long discussion as to international conditions throughout the whole world, but we cannot get away from the fact that at this moment there are a very large number of people who are bleeding the manual workers day by day. They are exploiting them to a degree that has never been known before. It has been said that the high prices at present obtaining are to a large extent due to the high cost of production. If that were true, we should at least, I think, not be able to say that the profits of employers had increased during that period, but we find that profits are increasing annually. According to a recent summary of important companies' balance sheets, which were issued in December, 1918, and December, 1919, we find that, in one set of companies the profits for 1919 are 25 per cent higher than they were in 1918. In the case of a second group of companies we find that the profits are 61 per cent. higher than they were in 1918, and in a third we find that they are 26 per cent. higher. It is, therefore, not quite fair to say that increased cost of production is the sole cause of increased prices. The point made is that the increased cost of wages is responsible for this to a very large extent.

Brigadier-General CROFT

Can the hon. Member say if those profits are higher than the difference in the value of of money, and are they any greater than the rise in charges due to the alteration in the value of money?

Mr. PARKINSON

I spoke of the percentage of increase in profits for 1919 as compared with 1918, and it is certainly higher than the increase in charges during that particular period. I do not think we need trouble very much about the value of money, because, after all, if anybody is suffering from increased prices or the lessened value of money, it is the manual worker. We find to-day that the increase in the cost of living, as stated in the "Labour Gazette," is 135 per cent., and we find that the increase in wages range from something like 100 per cent. to 120 per cent. in the various industries in the country, so that, on those figures, the manual workers to-day are relatively poorer than they were in the period preceding the War. We only need to look at one or two of the industries which have been investigated. First of all let mo mention the woollen industry. We find to-day, in the report of the committee which investigated the woollen industry, that it is stated that there are profits ranging from 13d. to 43d. per pound, and that it has been definitely proved that the pre-War profits were something like 1d. per pound. As a consequence we find that a great amount of money has been taken by the employers of labour, or by the managing producers, which ought not to have been taken. The manual worker is not participating in the profits in anything like the same proportion, and in the woollen industry alone we may say it is abundantly proved that immense profits are being made which ought not to be charged if it is intended that people should have the necessaries of life, as they ought to have. It has been stated that, in the case of 30 or 40 of the companies, the profits range from 13d. to 25d. per pound. It has also been admitted by the spinners that they themselves are making from 8d. to 35d. per pound profit. These are things which I think the Government ought to do something to prevent. They are some of the things which cause the present unrest in the country. The high cost of living which people have to meet day by day is more than they are able to bear, having regard to the wages which they are receiving.

On the other question which has been so much before the country recently, the question of housing, the condition of things in regard to the materials required for building is, owing to the action of the trusts and combines, compelling the people to live under insanitary conditions, and in very congested areas. I think it was Mr. Shearing, who at one time was Chairman of the Works Department of the St. Pancras Borough Council, who made a statement in February of this year that a saving of from £250 to £300 on a £900 house would be effected if the combines were broken and the supplies of materials were left to the free play of competitive tender. That is another thing which is having its effect upon social unrest in the country, when we find companies and combines making from 500 per cent. to 800 per cent. on what are really the essential needs of the community. So long as they are permitted to go on as they are, we need not, of course, look for any allaying of the unrest, but must expect it to become even more intense. We find, too, that the five leading banks in this country have this year made a profit of £12,500,000.

That all goes to show that not only are the conditions which are the aftermath of the War responsible for the present high cost of living, but that the high cost of living is accentuated to a large extent by the exploitation which is taking place in this country. The hon. and gallant Member who spoke last (Captain Thorpe) read a quotation to the effect that the people here, at least ought to attend to the business of the State. I would like to ask if that applies to the large number of directors and owners of great companies who are at the present moment Members of this House. I understand that we have something like 350 Members in this House to-day who are either owners of great producing firms, directors of such firms, or landlord farmers. If the quotation which my hon. and gallant Friend read applies, then, of course, it ought to apply to these people, and they have no right to be in this House and at the same time to be doing all they possibly can to exploit the community. The Government may possibly be somewhat timid in tackling this question, owing to the large number of those gentlemen who are present, but I think it is the duty of the Government, by a bold stroke, to tackle all these things, and to take in hand the whole of the producing concerns who are charging more than a reasonable rate of profit.

I think my right hon. Friend the Member for Platting (Mr. Clynes) stated that huge profits were being made by shipping concerns, and he quoted one or two statements by loading people. I think I may quote one or two instances which, although they may not surprise anyone in the House, because I think everyone knows them, will at any rate show that the shipping industry has made more profits than any other industry in the whole country. We find that the River Plate freights in 1914 were 11s. and to-day are 140s., and that might be multiplied ten times over. We find that, taking the whole of the shipping industries, they are making something like 1,000 per cent. as compared with 1914 prices. Although we admit that the working costs must have been increased very greatly, we cannot agree that the working costs of any industry have risen to the extent of 1,000 per cent.

Mr A. M. SAMUEL

Do they not pay Excess Profits Duty on that?

Mr. PARKINSON

My hon. Friend will have his opportunity later, and I will ask him to reserve what he has to say until then. During the first two years and five months of the war the shipping companies of this country made a profit of £300,000,000. I find that the Ministry of Shipping estimates issued in May last anticipated a deficit of £1,500,000, but in October the accounts showed an actual surplus of £55,000,000. These are some of the things which are increasing the cost of living; these are some of the things which are making the cost of food higher than it ought to be. In connection with shipping, there seems to be an unanswerable case for very stringent limitation of freight rates and profits, and these ought to be within the control of the Government. We are all aware that the Government have, at any rate, had charge of the shipping industry, and we are also aware that during the time they had shipping freights under their control huge fortunes were made. When they become free, we may expect that there will be greater fortunes made, and heavier increases of profit, than in the past.

I listened with very great attention to the speech of the right hon. Gentleman the Member for Paisley (Mr. Asquith), and when one heard him criticising the borrowings of the Government as one of the principal causes of the high cost of living it made one wonder what the Government were doing at the time when he himself was a responsible Minister. [An HON. MEMBER: "Carrying on the War."] He stated, during the Paisley election, that the inflation of the currency and the higher prices are not a cause, but a consequence, and a consequence of a single cause, namely, the enormous increase in the borrowings of the State. If that is so, and I take it that he knows better than I do, having been in the very high position which he occupied, and having had the destinies of the State under his control; and I take it that a statement like that ought to be in keeping with his past actions. But when we find that, during the financial year 1915–16, of every £1 spent for the purpose of promoting the war 17s. 6d. was borrowed money, I think there is not much warrant for a statement like that. Whatever may have been borrowed, and must have been borrowed—for it would have been impossible for our nation to have found the money required—it would not have been impossible to have had less loans and greater cans upon the riches of this country, and that would have made it easier for our people to continue to live in this country. We cannot agree, as members of the working class community, that the exploitation which is taking place in this country at the moment is something which is beyond the powers of the Government to control. The Profiteering Act that was passed was never seriously intended to interfere with the wholesale dealer, because we find, according to a statement made by the President of the Board of Trade, that only 83 prosecutions have taken place, and the whole of the fines which have been imposed have been on the average only about £10 per case. These people will not cease to do this for the sake of £10. There ought to be, at the end of all prosecutions where a person is proved guilty of profiteering, a more drastic punishment than a mere fine. If these people had been sent to prison, I am sure it would have done more to stop profiteering than anything which has been done yet.

We feel that the retail prices of the present time must come down, but instead of their coming down, we are threatened with a withdrawal of the bread subsidy, which will make the 135 per cent. probably nearer 100 per cent. This will impose an increased burden on all classes of the people, and particularly upon the poorer classes, and those are the people among whom social unrest is greatest. It has been stated in the "Labour Gazette" that the increase is 135 per cent., but most working-class people believe that the statement made by Mr. Bevin at the Dockers' Inquiry is nearer the truth, that is to say, that it is 212 per cent., taking into account everything that is necessary for life. We feel that the time has arrived for the Government to deal drastically with those who are profiteering on the needs of the people, because these great profits are made in either of two ways—either by unduly low wages to the workers or by enhanced prices to the consumer. These are the two points to which attention should be directed. I hope that the Government will take a stronger hand in this matter than they have in the past. If people are proved to be guilty of profiteering, the Government itself should take over the firms and work them in the interests of the State, and the firms should be deprived, as a punishment, of the profits until we get back to something like normal conditions. I hope that from this Debate we shall emerge stronger in the sense that those people who are unable to take care of or provide for themselves shall be protected, so as to put an end to this process of exploiting the people of the country, who are working to maintain themselves and their families, and who should be given an opportunity of living free from this great trouble and the thought that they are themselves the victims of something of this kind every day. We should try to create greater confidence, and this can only be done by the Government taking a strong hand with those who have been exploiting the needs of the country.

Sir HENRY CRAIK

I would like to congratulate the hon. Member for the Rusholme Division (Captain Thorpe) on the most interesting speech which he has contributed to this Debate. I should also like to congratulate the hon. Member for Wigan (Mr. Parkinson) on bringing back this Debate to something like the object for which we have met. We have had a very interesting, skilful and conscientious speech from my right hon. Friend the Member for Paisley (Mr. Asquith). There is very much in that speech with which everyone of us would have no difficulty whatever in agreeing, and I think that the Government has reason to congratulate itself on the fact that from beginning to end of that speech there was not the slightest attempt at unfriendly criticism of its policy. We want to criticise the Government, or rather, as I would put it, to see what is the just basis of the criticism which is directed against the Government in this matter. It is very interesting to listen to some of the things which were said by the two right hon. Gentlemen (Mr. Clynes and Mr. G. Roberts), who have successively been Ministers of Food. We all know the earnestness and spirit of common sense which they have shown, but I am afraid that they will not have a very large amount of sympathy, either from the House or from the country, in their proposal that this Ministry of Food should be continued for some three or four or five years longer. We doubt the efficiency of its past acts and we have some hesitation about its continuation.

I would venture, however, to speak on behalf of one class of citizens and taxpayers, of sufferers from the dire economic conditions now existing, who perhaps do not amount to a very large number, and whose grievances do not find much expression in this House. I refer to the professional classes. I represent a constituency of 30,000 which consists almost entirely of the professional middle-classes, and I say without fear of contradiction, whatever the hon. Member (Mr. Parkinson) says about his class, that there is no class in this country which has suffered more dire privation from the effects of heavy taxation and high prices than that middle-class. For all of us the privation has been great, but for the professional middle-class, who are crushed between the upper and nether millstones, between the vast increasing gigantic fortunes of those who, the hon. Member thinks, are the only profiteers, and another class of profiteers, and that is the class which the hon. Member represents. We are told of vast sums aggregating in the hands of trusts, combinations and great capitalists On the other hand, we know of the demands for increased wages which are by no means a feeble cause in producing the increased prices. What happens to the professional classes and those small annuitants who have saved with difficulty something to produce an income? How-are they dealt with and what sympathy would they get from hon. Members opposite?

Some of us who belong to that professional class have also certain administrative experience, and we are now told that we are to trust, not to the old rule, not to the tradition, not to the principle upon which we were accustomed to think that State administration must be carried on, not according to principles which may have been applicable in the past, but we are told that we are now to have administration entrusted to, and a new world opened to us by, supermen and business magnates. We are seekers after truth. I am quite prepared to learn of all the errors of which I have been guilty in any matters of administration in which I have taken part, how we have been imbued with old ideas, and unable to carry out work which should have been done; but I cannot help feeling when I look at the facts of the case and the results of the activities of these supermen, that there has been a certain amount of megalomania in some of the schemes which they have introduced into our administration, and that there has been introduced a system of speculation which may do very-well in a private business, but which is infinitely dangerous in the administration of public affairs; but we turn still and ask ill all our discomforts, in all natural irritation at what we suffer, whom we are to blame?

It is a natural human impulse to try to find a cause for our misfortunes, and to blame the Government. If we were to trust all the complaints that reach us, perhaps faulty, illogical, ill-informed, from some of our constituents—above all, if we were to trust the acrimonious, pertinacious, persistent and venomous attacks of a certain class of London newspaper, public patience with which is rapidly becoming exhausted, we would think that all the fault must necessarily lie with the Government. We know the difficulties which the War must cause. We know the difficulties that war, and above all, the settlement of peace, have caused in every age. We have tried political economy. Political economy may do very well occasionally to lay down certain maxims which may operate in times of peace, but when it comes to a crisis it always fails. Even in times of peace some of the professors of political economy differ fundamentally from one another. It reminds one of the phrase that occurs, I think, in Goldsmith's play, "The Good-natured Man," when he is speaking of philosophy, Philosophy," he says, "is a good horse for the stable but an arrant jade on a journey. So we may say of political economy. We have sought it and found little enlightenment.

At the beginning of the War I was asked, as a great many other Members were asked, to take part in the proceedings of a Committee which was to deal with a serious question of a certain lack of employment which then disturbed the industrial world. We met, we solemnly consulted, we heard one of two cases of unemployment and, at the end of a fortnight, we found that the professors of political economy were entirely wrong, that what was wanted was not work, and that there was a glut of employment if only there were enough men. So much for the help of political economy. Have not these difficulties with which the Government have to deal occurred time after time in our history? What was the case in our great war from 1793 to 1814? Look back upon the Parliamentary records—I have taken the trouble to look them up—and you will find that almost the same charges were brought against the Government as are brought now. They were wrong in their system of defence, they were wrong in the means by which they raised the army, they were wrong in their suggested proposals of peace and above all, they were wrong in all the conomical theories upon which they acted. They were blamed for all the difficulties which arose. I notice one Motion which was almost an exact anticipation of a Motion moved by an hon. Member during the Debate that took place less than a month ago.

Precisely the same difficulty which was found by the critics in these days was found within the Government itself. Two colleagues in the Government were Lords Grenville and Pitt. Their relations were those of life-long friends, year long colleagues, sympathising with one another in every respect. They had both been devout disciples of Adam Smith, but when the French war, and the consequent increasing prices, disturbed the economic conditions, perfectly honestly. Lords Grenville and Pitt differed diametrically on policy. Lord Grenville retained the old idea of unbroken free trade, Pitt, on the other hand, thought that there ought to be an interference of fixed prices and a regulation of imports and exports. But may it not be that the same perplexities, the same difficulties and the same doubts very reasonably and very honestly exist in the Government of to-day? We know now the inside working of the Government of 1797. We know down to the very smallest points how they differed. Perhaps when history tells how the Government was divided to-day it will conic to the conclusion that human nature is always the same, that difficulties recur again and again, and that we must not expect that Governments will be devoid of the difficulties which arise from human nature and will be able to exercise an intelligence above the ordinary.

But what help have we had in regard to prices, in regard to imports, in regard to economic questions, from our friends the super-men, the business administrators who were to open to us a new heaven? The Government last Session introduced an Anti-Dumping Bill. We had hoped that the business men had then got what they wanted and that they were satisfied. But what was the case? I followed the matter with great care and interest. The one thing I found was that one and all of them condemned that Bill. Not only did they condemn the Bill and insist on its being withdrawn, but for the life of me I could never make out what they wanted put into its place. I attended meetings upstairs and I read their speeches. I would like them here and now to stand up and tell me what help and what enlightenment they have to give us, and what they want in place of the Anti-Dumping Bill, which seemed to me to come very near to what they had been demanding for years. I hope to have these questions answered before the Debate ends. Now we are told it is the wicked extravagance of the Government that is causing all the trouble. If there is extravagance by all means let us stop it. I believe there is. I believe that the megalomania of some of our business friends in administrative duties has led us into extravagance. By all means let us criticise, but do let us keep a sense of proportion. What does the extravagance of particular Ministers amount to compared with our expenditure on education, on housing, on subsidies to railways, on subsidies to bread, on increased old-age pensions?

Are those who criticise the Government prepared to say that these things are wrong, that they may not lead to great and beneficent results, not only in increasing the comfort and well-being of our fellow citizens, but perhaps even in an economic sense by increasing the wealth and prosperity of the country? If they are not prepared to say that, then let us cease to have the constant criticism of increasing expenditure. The right hon. Gentleman the Member for Paisley (Mr. Asquith) seemed to think it a sin that the Civil Service Estimates amounted to £557,000,000. How is that accounted for? Not in administration, not in offices, but because vast sums are going, and rightly going, for housing, for education, and for all similar things. We are told that that tends to cause a rise in prices and that another factor is increased private extravagance throughout the nation. I admit that private extravagance goes on. Money that comes quickly goes quickly. I believe that this glut of luxury, this spending of money on dress, on food, on drink, on theatres, on picture palaces, and on motor cars, does increase prices very largely, but it will come to an end. The sources from which this money is foolishly and recklessly taken are not inexhaustible. When it does come to an end prices should fall. Whether it is right or wrong, we cannot blame the Government. The Government may preach, but it is a delusion and a snare to think that extravagance can be stopped by sumptuary law.

Difficulties arising from low production do not arise in this country only; the trouble has spread all over the world. At all events, the Government is not responsible. Let us exercise our power strictly on behalf of our constituents, with a full sense of the suffering which is caused by rising prices, increased taxation, and lowered resources, but do not let us get into that worst of all habits of nagging at the Government. That will never do the Government or anyone else any good. So long as this emergency continues, I, for one, as long as I think the Government does its best, shall give my support to it. I am not going to be troubled with schemes, generally emerging from the same fertile inventiveness for new combinations of parties. I am abandoning no principles; I shall not abandon any political principle to which I have adhered all my life long; but that will not prevent me from supporting the Government on every occasion when I think that in an unparalleled emergency, with unparalleled difficulties before it, it has done its best to surmount those difficulties, and that it has done so to an extent which may at least be compared with what has been achieved in past ages.

Mr. A. M. SAMUEL

I cannot pass without a certain amount of friendly protest against the rather unpleasant remarks of the right hon. Gentleman (Sir H. Craik) concerning economists. As a matter of fact, people will not follow the true laws of political economy. They try to break those laws and then grumble because economics turn round and break them. I am delighted to hear the right hon. Gentleman refer to the state in which this country was about 1814. If we read the essays of Cobbett we see the same pessimisms, the same prognostications of failure, of bankruptcy and of ruin that are adopted now by various people in this country and, perhaps, by some in this House. But if one reads the economic annals of the 19th century which Smart has recently published, one finds that a very few years after the close of the Napoleonic Wars we had a Chancellor of the Exchequer who was nicknamed "Prosperity Robinson." I have not the slightest doubt that we shall all live to see this country a great deal more prosperous and a great deal more comfortable in a few years' time than it ever was before. We must be a little more patient. We cannot get things straight quickly. It is true that we are going through a very troublesome time. One aspect of high prices seems to occupy the minds of many speakers, more particularly the right hon. Member for the City of Norwich (Mr. G. H. Roberts) and the right hon. Member for Platting (Mr. Clynes), and that is the shortage and dear-ness of food owing to shortage. I do not propose to deal with that aspect of the high cost of living. Owing to world shortage of supply, there are other things besides food that are dear, and I propose for a moment to deal with them. To some degree these high prices are due to our system of domestic expenditure—I do not like to call it policy, but it is really policy. I am not going to make any reference to the effect of increased wages on short supplies, but I will take the figures in the White Paper, namely, Civil Service Estimates, £557,000,000, to which the right hon. Gentleman (Sir H. Craik) and the right hon. Gentleman the Member for Paisley (Mr. Asquith) referred. We ought not to take the figures as a whole, because the last three items, Customs and Excise, Inland Revenue, and the Post Office, are not items which may be regarded as Civil Ser vice expenditure; we get a good deal back for this money. And take the figure, then, of £497,000,000. I have been through the integral items of that Estimate, and I find that education, housing, old age pensions, the Ministry of Health, National Health, the Ministry of Labour, the Ministry of Pensions, railway agreements, the bread subsidy, and the coal mines deficiency account for £354,000,000. I am not for a moment questioning or dealing with the policy which led to these moneys being voted or to these benefits being given to the people. Let us ask to whom these benefits are given. They are now being given to the very people who are suffering most from the high price of food and the high cost of living. These benefits, which are being given as a matter of policy, are being paid for by the people who get the benefit from them.

Sir H. CRAIK

No, not the professional classes.

Mr. SAMUEL

They are paying for them. I do not think the right hon. Gentleman gets my point. Heavily as the burden of the extra cost of living is bearing upon those to whom he refers, I say that, even if they think they are getting advantages from these grants, they are not; they are paying for them themselves, indirectly, and without knowing it. That is another vicious circle in our economies which is not generally recognised. Those of us who call ourselves economists, though we may also be manufacturers, have spent eighteen months in getting the House and the country to realise that what we are suffering from is not inflation of currency, but inflation of credit. We must now endeavour to let the country know that these expenditures for social reforms, subsidies and pensions and education are increasing the costs of living.

8.0 P.M.

I have said that of the £497,000,000 of Civil Service Estimates £354,000,000 is represented by education, housing, increased pensions, railway agreements, bread subsidy, coal mines deficiency, and so forth. I say that these benefits are to a great extent the cause of the high cost of living. Where does this sum of £354,000,000 come from? It can only come from taxation. It has been laid down as an axiom by Lord Morley that it docs not matter on whom you put taxation in this country: sooner or later industry and the working people have to pay for it. You will raise £354,000,000 by taxation for these various benefits, and, counting five to a family, each family annually benefits to the extent of £40, or 15s. per week per family. The money is raised by taxation, and the man who pays the tax gets it back out of the next man. The manufacturer gets it out of industry and his productions, and it is passed on to the working man, on to the housewife. If it comes by heavy income tax on to the capitalist, or the man who lives on income from savings, he demands a greater amount of interest for the rest of his money, and up goes the rate of interest and the cost of money, which is the raw material of industry, just as much as cloth is of a pair of trousers. Therefore you find that every penny raised for these benefits is paid for ultimately in the food and necessities of life by the people of the poorer section of the community, and consequently this adds to the price of living. People who ask for social reform and complain of high prices forget all this. I myself say, advisedly, having considered the matter, that these Estimates of £354,000,000 giving these benefits undoubtedly put up the price of living by 15s. per week for every family in this country If the Prime Minister advises that these social reforms should take place, he should at the same time, in order to clear the decks of inaccurate economies and inaccurate calculations and opinions, say: "Whatever advantages in social reform I am putting before the country, sooner or later the working people will have to pay for them. You may imagine the rich will pay because you tax them. That is an economic fallacy: the taxes fall on production, on industry, and on what you have, to pay for the use of capital in industry, and, eventually, on you: and, consequently, will put up the cost of everything you use or eat; so be very careful before you ask Parliament to put into operation social reforms which are beyond the powers of your purse."

There are two subsidiary causes which, I think, have assisted in producing high prices. The Profiteering Act, which I ventured to describe, when I spoke on the Second Reading, as a farrago of economic impossibilities, is one of them. It has driven goods which would have come into the home market into the export market. Some people became frightened of the Profiteering Act, and they said: "We will send our goods into the export market, where they will fetch whatever price we ask for them, and so protect ourselves from being attacked by the Profiteering Act." We know very well that it is a good thing to stimulate export trade; but that has been carried to extremes. I know very well, no one knows better, if I may say so, that the exchanges between ourselves and foreign countries must and can only be put right by increased exports. I have advocated the carrying on of that export policy to a greater extreme than I think now I was justified in doing. Let us follow it to its logical conclusion. If you put all your goods into the export market you are bound to deplete the home market and have scarcity, and up goes the price of everything here and you have discontent. It is all very well to wish to put the exchanges right quickly, but these things cannot be done in a hurry. I am of opinion that many of us were ill-advised in pushing the export trade and over depleting the home market, and particularly in exporting to those places where we neither got money or credit which we could use, or raw materials. That has depleted the home market of the supply which we require, and in that way caused dearness and dissatisfaction amongst our people. It is a well-known fact that high prices cause increased production. It may be, as an hon. Member stated, that it would have caused great dissatisfaction if the Profiteering Act had not been passed. But, on the other hand, it checked increased production. I believe if you look into the economics of the question that the only sound way is to let your export trade be the over-spill from the homo trade. At present we have got an export trade suspended between heaven and earth, like Mahomet's coffin, and resting on nothing like a satisfied home supply. If you have, an export trade which is not economically sound, so you will have trouble in the home market, because you have an export trade which does not fulfil the requirements laid down by economic laws.

There is another thing which I think also has kept up the cost of living. You have certain attacks made upon capital in this country, and I am bound to say the City Notes of the "Times" has pointed this out very well several times in the last few weeks, and it has also been dealt with in the Trade Supplement of the "Times," and the effects described. This inquiry about taxation on war savings has caused people to throw amounts of Government stocks on the market, and a reduction in the value of gilt-edged stocks and shares generally has followed the reduction in the value of Government securities caused by the selling. If there has been a fall of five per cent in seven thousand of millions of Government debt, £350,000,000 is lost, and this is half the estimate of the amount we are supposed to get from a tax on war savings. In that way you reduce the capital value of all money, and you correspondingly put up the interest value of money. If the addition to the interest value of money amounts to one per cent. on £20,000,000,000, which is the capital of this country working in industry and commerce, that means £200,000,000 sterling added unnecessarily to the cost of production of everything in this country. Therefore, I say, quite apart from the shortage of goods which brings the dearness, three things have been operating in our internal economic system which have tended if not to produce, at least to keep up high prices. The first is the Profiteering Act, which bas driven goods into the export market, and which has denuded the home market of goods required, with a consequent shortage which has caused dearness, The attacks upon capital have caused the price of money to go up and, say what we will, money is only labour in cold storage, and it has to be paid for. It is part of the mortar and cement of your industrial edifice, and as you put up the price of money, you put up the price of everything it produces and in that way the attack upon capital has helped to make things dearer. It is a pity, because from ignorance of the workings of the industrial system sections of the public have attacked capital, not on grounds of economics, but on grounds of envy, and they have injured the pour and those classes who are now feeling the cost of living owing to the increased cost of food and usable commodities, by frightening capital and rendering it dearer and scarcer for the use of industry. But above all those points, I want particularly to call attention to this, that the Civil Service Estimates, so far as they include the big total of £350,000,000 for social reforms, although I am not questioning the wisdom of them one way or the other, are being paid by the people who receive them. The way to get the money into the Treasury is by taxation, which is passed on to industry and production and so to everything those people use, and the consequence is that by embarking on an ambitious social reform programme, they have put up the cost, in the coming year, by £350,000,000, on the cost of living of the people, and I firmly believe that that will cost every family 15s. per week extra. When therefore the loss well-to-do households groan under the load of dear living they must remember that everything they need, called the necessities of life, has to bear the cost of the money spent on increased education, housing, pensions of all sorts, bread, railway and coal subsidies and increased cost of post office administration. That, therefore, is why the cost of living is so high.

Sir CHARLES SYKES

I purpose to confine my remarks this evening more or less to the question of the cloth trade, with particular reference to wool. I agree with the remark of the right hon. Gentle man the Member for Norwich (Mr. G. Roberts) when he said he was not in favour of the Profiteering Act. Personally, I did not agree with the way that that Act was put into operation, and I think since then it has done very little good. But I would like to take one section, and that is what is known now as the worsted yarn report, which was made some time ago, and very grave statements were made in that report as to the amount of profit that was made in the worsted trade. Very grave charges were made of the exceedingly high profits that were being made by worsted spinners, and I want to say here, quite deliberately, that so far as the statements went with regard to the department which I have charge of in Bradford, they were entirely untrue and unfounded, and I think it is certainly only due to the people concerned in that trade that when a report of this sort is issued the people responsible for the operation of the Profiteering Act should have at any rate some evidence given on which to base their facts. It is a positive fact that, no such evidence was given, and I understand that the President of the Board of Trade acknowledged that he did not understand by what method this evidence has been obtained. The public have a right to know the truth with regard to these charges, and I am very glad to know that adequate investigation is now taking place and that proper evidence is being taken.

I should like to ask the Parliamentary Secretary to the Ministry of Food to say under what circumstances the previous report was drafted and issued. It is a mass of incorrect and impossible statements, and yet it has gone forward to the public as the official statement on the matter. May I be allowed to draw the attention of the Committee to a fact which is very often overlooked when discussing the prices of various commodities? We are often led to believe that, by some magical wand wielded by accountants or clerks with a costing system, prices can be reduced as if by magic. But what are the facts? I daresay everybody in this country now knows what the drab serge mixture is. It is the Army cloth from which is made the Tommies' tunic. This cloth in 1910 and 1911 was obtained by the War Office under competitive tender at the price of 3s. per yard. By August, 1918, at a time when wool was being issued at an artificially low price, 30 to 50 per cent. below the world's market price, with that serge production checked under every stage of its manufacture, we paid 8s. 10d. a yard, which was almost three times as much as what was paid in 1910 and 1911. Therefore you will see that even under a costing system, with every stage checked, we paid 8s. 10d. a yard in 1918 as against 3s. in 1910 and 1911. Even at this the British Government without doubt equipped its Army at a lower cost than any other Government. So far as I can discover, none of these facts were brought forward by the Profiteering Committee or given to the public.

I have heard it said, and it is a common opinion, that the Government themselves have been profiteers in wool, but what is the truth? I can only say that, Government wool deal or no deal, the level of price which would have had to be paid in this country would have been exactly what it is to-day. The only difference the Government deal made was that 50 per cent. of the excess profits of the Australasian producers was diverted to His Majesty's Exchequer in relief of British taxation. To this course the Dominion Governments were only too pleased to agree during the War, faced as they were with the possibility of financial ruin. Payment had to be made by the British Government, whether the wool was sent to this country or not. Half their excess profits, therefore, were the insurance premium which they paid for financial security guaranted to them by the British Government, and had it not been for the British Navy what is now a considerable sum to the British Exchequer might have been a large deficit. The last speaker questioned the wisdom of our policy with regard to exports. I maintain that we must and should maintain our exports at a maximum, but the main consideration is whether a policy of low prices is a good policy in the interests of the country, and I would say here straight away that the policy of low prices in respect of goods which you have to export is one of the most shortsighted policies that could be devised for this country at the present time. We have an enormous debt to repay and a trade balance to adjust, and textiles happen to be far and away our most important exports.

Last year our exports of woollen and worsted goods exceeded the value of our coal exports by over £13,250,000, and textiles equalled considerably more than half our exports. The policy of artificially low prices would mean putting oft the time when British credit could be rehabilitated to its pre-War standard. We all realise, talking about more production, that we have lost, as the result of this War, practically a million men. We have lost also a tremendous amount of shipping, added to which we have reduced our working hours fifteen per cent. Therefore, how can we expect, with the conditions as they are, to get the improved production that is spoken of? I am no advocate of long hours, but it is an unfortunate thing that, instead of knocking off the working hours, for a couple of years we could not have all put our backs into it and said that, for a time at any rate, we would simply work longer hours. I know it might be misunderstood in some parts, but I am quite willing to do my share in it in exactly the same spirit as that in which we won the War. So far as this policy is concerned, an exception should be made in the case of food, for we do not rely upon its export to rehabilitate our commercial position throughout the world.

What is happening to-day with regard to textiles? All my life I have been connected with textiles, and it has been accepted by everybody that at certain periods certain types of wool have gone up in price. It has been a well-known fact that for a certain period the rough sort will not sell, and they want the best qualities that can be made. What changes the fashion I Because these particular things get out of reach, and increased prices reduce the extravagant demand; at least they did at one time, but not to-day. When merino wools had advanced to to such unreasonable prices, cross-bred wool became the fashion. What is the position to-day? Few people in this country realise that there are many descriptions of wool which no-one will buy. It is not that they are bad wools, but they are not the quality that suits the fancy or taste, although they are cheaper now than at the time of the Armistice. Cross-bred wool, which cost 15d. in July, 1914, and 30d. at the Armistice, is now less than this price. On the other hand, a fine merino wool, which before the War was 28d., and at the time of decontrol 72d., is to-day 130d. The consumer will pay in price for fine goods. As a result, an enormous shortage of high price wools accompanies an abundance of particular grades of wool that we have left. This country last year exported the same quantity of woollen and worsted cloths as before the War, and yet of the finest qualities the exports were down by 40,000,000, whilst our exports to America had actually declined by 84 per cent. and to Canada by 72 per cent. This refers to fine worsted cloths.

The extravagant consumption in this country of the better class goods has been one of the biggest factors in putting up prices. I only wish that the prices of fine goods would advance to a point where people of this country would be discouraged altogether from buying them. America is able and willing to give any price we like to charge, and, further than that, can afford to pay it. I would like to tell the Committee something that happened in my own place. Although a Yorkshireman by birth I have a mill in Scotland. We had a cloth which we sold at 15s. 6d. That cloth at the present time, owing to the increase in the price of wool, is in the vicinity of a sovereign. Less than a fortnight ago two buyers came in and offered as many pieces as we liked at 25s., which of course we refused, because that it not consistent with good business, and I only give it as an example to show to what lengths people have gone all over the world in the demand for higher priced stuff, without any regard to the value of it. It does not always follow that the highest priced article is the best and most suitable. Quite recently there were costumes offered in the West End of London made from a cloth that was used for the W.A.A.C.'s or W.R.E.N.S., or some of those people, and it was dyed blue. The cloth was made up and offered at 75s. 6d., and was shown for a week and never a costume was sold. From the same cloth they somewhat altered the costumes and marked them at 10 guineas, and every one was sold inside a fortnight. I made this plain statement of fact in my own town of Huddersfield five or six weeks ago, and the local paper, which, I may say, is not for me, but that does not matter, took the liberty of heading the paragraph, two days after, "The Borough Member shows the advantage of pricing things high." I do not want to show the advantage of pricing things high. I want to show that the reason is that the men and women have more money than brains. What they have to realise is that they have got to spend their money to better advantage than they are doing.

The noble Lord the Member for Hitchin the other day laid down a rule, whether in sarcasm or not I do not know, but a rule which, I think, would be a very wise one, and that is that if we are going to criticise, we must put something in the place of that which we are criticising, and it must be constructive criticism. I do not want to say to the Committee this evening that food control is unnecessary. I believe that food control is necessary, and I sincerely hope that the Government will continue to keep hold of that control. But we have people in this country, and particularly newspapers, who are making wild charges against the Government, and saying that all high prices are the result of their extravagances. They are making those charges without any sense of responsibility, and therefore that point of view I do not intend to pursue further, I want to say that, as a result of this war, we have adopted nationally a new standard of values. I honestly believe that, according to our new ideals, we require healthy men, women and children, and that these are regarded as greater national assets than mills, machinery and material possessions. The test, however, is at hand as to whether pre-War methods can be improved. We certainly cannot resume those methods. All the people of this country, I feel convinced, are assured of that. An hon. Member opposite declared recently in this House that the way out of our troubles was to nationalise all means of production and distribution. I admire an honest man. I do not mind if his opinion is against mine. But I will fight tooth and nail against any such ideal being put into operation in this country. Therefore, so far as that is concerned, we know where we are. We contend that our Empire has been built upon individual enterprise which provides the necessary incentive, and is the only method to employ to rehabilitate our supremacy amongst the nations of the world Let us stop giving this advice, stop this talk, talk, talk, and telling the other chap what to do.

Perhaps the Committee will allow me to tell them a story which will illustrate my point probably much better than my speech. There was a commercial traveller who very seldom took his wife away. On one occasion he invited her to accompany him to London. On the day up he was very explicit in explaining to his wife that whatever happened she had not to lose her nerve, she had to be very cool in all circumstances, in case of fire, say. "And remember, my dear," he said, "that yon must do everything I tell you." Sure enough they had a fire at the hotel, and this commercial traveller turned to his wife and told her to be very careful in all she did. He put on his frock-coat and silk hat, and took his overcoat over his arm, and together they walked downstairs into safety. Then the traveller turning to his wife said, "You see, my dear, that is the way to do it." Her reply was, "That is all right, but why did you forget to put your trousers on?" The whole point of that story is this. It is quite a simple thing to tell the other chap what to do. The fact of it is we want to start doing the thing ourselves. I am absolutely convinced that we have before us, as the right hon. Gentleman the Member for Paisley said, a wonderful era of prosperity. I refuse to be pessimistic. I trust the Government. I believe the people trust the Government. I suggest that the absolute control of the necessities of life and to free everything else is the solution of our difficulties. We all remember the old saying: "Back to the Land." May I suggest that the present ideal should be: "Back to freedom and responsibility." The people of this land have sound heads and hearts. They are inspired with an inherent love of justice, peace, and freedom. I submit that the solution of all our troubles is work, work, work!

Sir H. NIELD

The speech to which we have just listened ought to be widely published as a practical speech. It is one which will open the eyes, I hope, of the unthinking population to the real merits of this question of high prices. I congratulate the hon. Member, and join with him in offering my share of denunciation of the Press that has no responsibility, but day by day attempts to poison the public mind by making allegations without giving any particulars in support of them. The Press has been spoken of as the Fourth Estate of the realm. All I can ray is that the Press is doing very great disservice to the nation when it seeks to make the population, and particularly the womenfolk of the population, dissatisfied, and causes them to send postcards to Members of this House. The difficulty is that you cannot answer the Press through the Press. Therefore, one is obliged to speak here, to depend upon individual effort, and take the opportunity which is presented to us to-night. I recommend my hon. Friend who represents the Government at the present moment to consider whether or not the speech to which we have just listened might not with advantage be very widely circulated, not only to correct what is wrong, but the wilful misrepresentations which are made in terms of generality, and disturb the population, because—and this is at the root of the whole business—of the dissatisfaction of this or that person at the personal attitude of this or that Member of the Government.

The reason why I inflict a few observations upon the Committee is because I endeavoured to do what lay in my power, with the late President of the Board of Trade, in connection with the Profiteering Committees set up under the recent Act. I deprecated the criticism which was levelled at the Bill in this House. I deprecated the sneers which were made from time to time in a certain section of the Press in regard to the success of the working of the Act. In my judgment the Act has had a very great and deterrent effect on the prices which would have been demanded, and would have had to be paid, if it had not been the fear of proceedings before the committees and tribunals. As one of those engaged in connection with a committee of investigation of complaints under the Act, and a chairman on many occasions, I may say that the great difficulty with which the committees are faced is that the information which they must necessarily obtain through their investigating agents is from the persons, the wholesalers. I am perfectly assured of this: that what has been hinted at by more than one speaker is true, that the manufacturer and the merchant—the middlemen—all attempt to add the heavy burden of taxation on the cost of their goods. The result, as my hon. Friend behind me has said, is that in the end, though very long postponed, the excessive taxation is passed on to the consumer. That ought to be stopped. There is one tax which is levied which cannot be passed on, and that is the property tax. I see no reason why in those days, when we are engaged in struggling with questions of high prices, we should not be able to have some protection against heavy Income Tax, and in many cases Super-tax, being added to the cost of manufacture and made, therefore, to swell the price. When the committees come to investigate prices, the summaries are mixed up so completely with the cost of material that it is impossible for the committee to go beyond the figure of cost, and really to attack the person on the ground that he has added his fiscal burdens to what used to be the prime cost of the material which he is selling. That is a very serious blot in dealing with these cases. Many, many hours are given to investigating the prices, and in the end it is found impossible to make any order, or one of such a trivial amount as to look as if the mountain had been in labour and brought forth a mouse.

There is another matter. I refer to proprietary articles. I invite my hon. Friend on the Government Bench to make a note of this. A very large number of articles obtained at the stores are known by the name of proprietary articles. They have obtained fame by reason of prolific advertisement, or by reason of their peculiar merits. It takes longer to get fame by your merits than by newspaper advertisement, and the latter may be more costly! The effect is that the prices are put upon these by the manufacturers, and these articles cannot be got except from certain stores, or under certain conditions, because the proprietor has the protection of his name, which the Courts have given him, or the particular label, or some other protection, which keeps his goods well before the public, and prevents any other person taking advantage—and rightly so in ordinary times—of his special knowledge or other special qualities. It is notoriously true that, having secured this position, he compels the persons to whom he sells his goods to maintain a particular price, under penalty of withdrawing his goods from them should they sell under that price. The result is that he is left in possession of the field, and when an attempt is made to investigate the figures of cost they are so dealt with as to make it almost impossible to charge him with profiteering. I sincerely hope the Board of Trade will take steps to thoroughly investigate the practices which surround the distribution of these proprietary articles and see in what way they can get control over them in order to prevent an undue profit being made.

I agree that, so far as the results of the tribunals' working go, small sums only have in many cases been ordered to be returned to the purchaser, thereby bringing the proceedings of the Court almost into contempt. But that is not the whole matter. One looks round and sees conditions of prosperity amongst traders such as never prevailed before. One has no right to say but it is not unfair to infer that they have been making an undue profit, for this fact stands undeniable, that, notwithstanding the conditions of the times, the conditions under which all are living in the matter of food and clothes, there are many men, particularly in localities whore munitions have been made, who do-day are in a state of affluence which they had never dreamed of reaching. Their position is shown by their acquisition of land and property, by their general demeanour, and by their ability to live a life totally different from the one they lived before the War. I do not suggest that a person who has honestly and honourably by his exertions become possessed of an amount greater than he ever anticipated, should necessarily be condemned, but it is an inference almost irresistible that these persons have largely profited by the misfortunes of their neighbours.

Take the case of the butcher. I am assured on credible authority that when the Food Controller, acting, no doubt, with the best intentions, under a rigid scheme of distribution limited the profit of the retailer to 2d. per lb., conferred an inestimable boon upon the retail trader, because everybody had to fetch their meat, and he was enabled entirely to dispense with the cost of delivery. He ran no risk, no chance of selling at a loss, as in the days of competition, and the 2d. went into his pocket intact. What that meant to these men, anyone who chooses to closely observe can satisfy themselves. So far from being a mistake, I think the Profiteering Act was, really an earnest effort on the part of the Government to grapple with a mischief which was getting very bad and likely to produce more industrial trouble. I hope the Government will reconsider the working of the Act and will bear in mind the representations made by the departments concerned. I should like to disabuse the minds of Members of this Committee, and of the public, by calling attention to the very few persons who are engaged in this work. It is rot, as the Food Controller said this afternoon, as though they had set up an enormous new Ministry or a now department, or a new organisation. I have a question on the Order Paper, in which I ask specifically the number of persons employed, and I rather anticipate the answer will show that number to be astonishingly few, compared with the work already accomplished, and, when all the results of the working of the Ministry are ascertained and placed on record, I am sure that the public will admit—as the British public does always admit—that it has been premature in its denunciations, and that the Government have really endeavoured to do their best to meet an exceptional set of circumstances which could not have been foreseen.

Mr. BLANE

The public outside will expect from this important discussion some guidance as to how it should act in the future. When the right hon. Member for Paisley (Mr. Asquith) rose we expected some guidance from him, but I fear we are going away empty-handed. When the right hon. Member for the Platting Division of Manchester (Mr. Clynes) who was once the Food Controller, rose we expected to get some information from him, but he could only recite the old story of profiteering. We have heard that in the Press. Everybody speaks upon it, but it does not offer us a solution of the present trouble. I submit that a statement made by a right hon. Member occupying such an important position should be based on facts. The right hon. Gentleman accused the shipowners of profiteering. I happen to be in the unfortunate position of owning a ship. I would remind the right hon. Gentleman that food has always been brought to this country since the first 12 months of the war at controlled rates which left no profit at all. He knows as well as most of us that such things as meat and grain are carried and paid for by the ton while they are sold to the consumer by the lb. and therefore the cost of carrying to the consumer is very slight indeed. When accusing people of profiteering the right hon. Gentleman should bear in mind that there are other nations in the world which own ships as well as this country, that they charge twice the rates that shipowners are allowed to charge, and that the British Government has been obliged to pay them whatever rates they demanded because of our necessities. Seeing that it is impossible to control the whole mercantile marine of the world and that it is impossible also for the Government to regulate all the freights on food, the right hon. Gentleman surely had no right to accuse the Government of allowing the shipowners to profiteer. It is not such a statement as one would have expected from a man in his position. There is more tonnage in the world to-day than there was before the War. But until that tonnage is, allowed free play, and is not held up in our ports by congestion due to special necessity, or by the action of workmen—until such time as that, it is impossible to expect lower freights. The late Food Controller made a remark which was very interesting to me. He claimed for his Department that this country obtained food at a far cheaper price than any other country. We will admit that, but at whose expense? Although we had food cheaper than any other country, some section or other of the community suffered an injustice in consequence. For instance, when he wanted ships to carry the food here they were placed at his disposal, but I challenge him to state that he ever returned to the Ministry of Shipping an adequate sum such as the Ministry of Shipping paid to foreigners to carry that food. It is not fair to saddle the responsibilities upon the shoulders of one section of the community. Each and everyone—the man who earns £5 or £6 a week—should contribute his share of taxation, however small, and carry his burden as a loyal citizen.

The man in the street states that the profiteers have been the Front Benches on both sides of the House. He says the Government have been profiteering more than anyone else, and he will also tell you that Labour has been profiteering. I think Labour has taken advantage of its organised strength to extract from the community wages which they know in many instances a trade cannot afford to pay. We will say the Government have been profiteering. They have made millions on different commodities. But why? Let us face the subject honestly. Do not let us have these statesman-like speeches, as they are called, from which we can derive nothing. The Government required money. They have been saddling themselves with tremendous responsibilities and obligations which had to be met. The consequence is that they have got a lot of money by indirect taxation, and we have all had to bear it—the man who earns £2 a week and the man who earns £2,000. I doubt if there is anyone in the House who has been poorer than I have been or had to struggle harder than I have done; therefore, I have every sympathy with the working man who finds these high prices crushing him, but let us face it. Everyone has had to do his duty as a citizen, rich or poor, and the Government has extracted all this money from us consumers, and rightly so, but I would prefer the Government to speak honestly to the people and tell us they want this money, and instead of all this high indirect taxation, they should endeavour to place it upon the broadest shoulders. We have heard of profits made by trusts and big companies. Companies have made several times their pro-war profits, but do not let the worker forget that he has made several times his pre-war wages. I defy any hon. Member opposite to say that Labour, as a whole, is suffering anything to-day. In spite of the fact that we often hear working men accused of spending money, large sections of the workers are thrifty and have been saving money, and many of us who have shareholders know it, and they have been putting their money into War securities for the benefit of the State as a whole.

But the question we have to face it, how are we going to reduce prices? We might liken ourselves and the State to a man who is up to his neck in debt. He has to reduce his own expenditure to pay interest. I urge the Government to reduce expenditure. The man in the street wants to know why Ministries, which have been created during the war, should still exist. I am entirely opposed to the Ministry of Labour existing. I should prefer to see an industrial council. Again, I cannot altogether see why the Ministry of Pensions should exist. The war is supposed to have finished eighteen months ago. I assume, unless you have been dilatory, you have seen that those individuals who are entitled to pensions have got them. You never set up a Ministry before the war to give pensions to those who had fought for us. You have surely settled that now. Why cannot all these pensions be paid through the different post offices of the country, and why cannot we destroy this Ministry as a huge organisation as it exists to-day; I should not like to see the charming Gentleman who is in charge of the Ministry of Labour disappearing from that office, but if the office docs not disappear the Government might seriously consider the advisability of reducing it to a minimum. I urge the Government to take it into consideration, because so long as we are criticised because of our high Estimates, so long will there be no contentment in the country. I entirely disagree with the remarks of one hon. Member opposite with regard to pressure. I admit we have been pinpricked. I have received hundreds of postcards, but have thrown them into the basket without answering them because I consider myself a free representative of a free constituency in what I hope is a free House of Commons, and I will vote according to my judgment on all these matters.

9.0 P.M.

With regard to all these questions, one cannot deny that the Government is fully alive, but I feel that the Ministers themselves have not time to get the fullest possible information to bring before the House, and they rely too much upon information supplied to them by the permanent heads of these Departments. We have to reduce debt. We have all said that hundreds of times, but look at all the stores the Government have. There are very few men in the House who know how many millions are sunk in stores. I will challenge any Minister on the Front Bench to deny that there are nearer £1,000,000,000 than £500,000,000 sunk in stores, which are being sold out in retail fashion. I suggest to the Government that with these vast quantities of stores, which at the present rate will take seven or eight years to sell, they should consider the advisability of employing one or two big export firms with huge organisation, who can sell them abroad, extract cash from them on shipment, and reduce their debt. I understand that buyers have been over, and even two foreign Governments whom I could name were prepared to spend quite a large sum of money. These are matters which I am sure Ministers are not aware of, but the Chancellor of the Exchequer knows it. We want action. We must tackle this subject in order to commence reducing the debt. We must tell the truth to the people. The Prime Minister promised us a new world, and I promised my constituents that I would meet them there. Frankly, I am going to tell them that I have made a mistake, that it was only a dream and that I shall not be able to meet them there. So long as we are in debt we cannot give all this rare and refreshing fruit. It is all very well to speak about housing, but as things have been during the last five years with money floating about ad lib., a very large proportion of our citizens are in a position to improve their own surroundings. H right hon. and hon. Members on the opposite Benches are going to urge the Government to meet all the demands that are made upon them, and are going to ask everybody to lean on the State, what is the State to lean on? As reasonable men, is it not possible for them to persuade their great trade unions to stay their hands for, say, 12 months and give the Government a chance, without pin-pricking them every day, to bring down the cost of living? They have made a rod for their own backs. They have been complaining about congestion of the ports. Why is there congestion? One does not imagine that the Government keeps the ships there for the fun of it. Did not the Government know that they were threatened day by day and week by week by these great unions and that there was considerable trouble ahead, so far as one could see. What would not hon. Members and the country have said if the Government had waited for a great national strike and until all our transport stood still and there was no food? They would have blamed the Government. The Government took the precaution to stock the country with food and other necessaries of lift, and now you criticise them for it.

Give the Government a chance. Persuade your followers to stay their hands and let the Government prove to us, as I am sure they will in due course, that they can bring down prices. It is all very well to speak of the law of supply and demand. The world has been starving for everything and other nations are full of money and will pay the price. In regard to the necessities of life, there is no shortage, with possibly the one exception of wheat, because Russia has been closed. As regards meat, the production of frozen meat in the world today is 30 per cent. greater than it was before the War. Prices can be brought down, provided that hon. Gentlemen opposite will not persuade their followers that they have only to put up their hands and ask for more and they can get it. They should assist the Government in their endeavour to come to some happy state of affairs where we can all work together in the common cause. I urge the Government to look into the different Departments of the State thoroughly, and if the permanent officials there are not prepared to spend what we are prepared to give them, let them be cleared out to make room for someone else, because the people of this country will not be dominated by any bureaucracy such as exists at Whitehall. That was one of the causes of the downfall of Russia. They had one privileged circle of Government followers who were allowed to dictate to everybody and to extract from everybody. That will not do for this country. I ask the Government to look into this matter seriously, to hold the whip high and to let these Departments know that the Government are the masters. I urge the trade unions to assist the Government, and then, and only then, will our people be able to return to that state of contentment and happiness for which they have waited so long and so patiently, and which they so richly deserve.

Mr. CHARLES EDWARDS

The hon. Member who has just spoken appealed to us to tell our people a plain story and not to deceive them. He has told us that he deceived his constituents by promising them a new world. He ought, therefore, to go to his constituents and to explain the position in which he finds himself and to ask them to decide on the new issues that have arisen. One hon. Member said that we could not blame the Government. That is what I am going to do, and I am going to prove that they are to blame, at any rate to my own satisfaction. They have listened to the people who asked for de-control. De-control has been the great cry in this House from certain quarters. I do not know that in a single instance the consumers have asked for de-control. The demand has come every time from the producers and the traders, ostensibly so that they could have a free market to exploit the people and make bigger fortunes in consequence. Two weeks ago we were discussing the de-control of agriculture and were told that if we de-controlled everything it would right itself and prices would come down. We have been told that every time. Those are not the facts by any means. Over a week ago I asked the Minister of Food a question on this subject. I asked as to the articles of food which have been decontrolled and the immediate effect on prices of such de-control; and the amount of increase or reduction which took place?

Mr. McCURDY

The principal articles of food which have been decontrolled are fresh milk, homo produced butter and cheese, veal, margarine and its constituent materials, condensed milk, barley, oats and oatmeal, beans, peas and lentils, potatoes, tea and coffee. The most marked cases of changes of price following; immediately upon de-control are the following:— Cotton seed rose from £19 to £35 per ton, and palm kernels from £26 to £43 per ton within a month, with a corresponding rise in the other raw materials for the production of edible oils, while margarine itself, after a short period of price cutting, rose from 1s. to 1s. 1½d. per lb. on the average. Within a month or two of de-control barley rose from 67s. to 95s. 2d. per quarter, and oats from 52s. to 62s. 4d. per quarter. Veal, for which the controlled price was 10½d. per lb., was sold at anything up to 3s. per lb. Condensed milk has risen from 1s. 3d to la. 6d. and home produced butter from 2s. 8d. to anything between 3s. 6d. and 5s. per lb. Milk, on the other hand, showed a fall of 1d. per quart following on de-control, and there was a decrease of approximately 1d. per lb. in the group of peas beans and lentils."—[OFFICIAL REPORT; 4th March, 1920; Cols. 662–663, Vol. 126.] Only two articles in the whole list were reduced, and that by simply one penny, while all the others had gone up by many shillings. Therefore the statement that prices would come down as soon as decontrol had taken place is at variance with the facts. We are very fortunate in having control. In fact, if we had not had control, we should have had a revolution. I do not believe we have had too much control or too much Government trading; I believe we have had too little of both these things. Men deride this system of trading, notwithstanding the fact that the nation could not have been saved without it. The buying of wool was surely not a mistake; but the withdrawal of control afterwards seems to me to have been a mistake. The manufacture of war munitions was considerably cheapened when the Government took over the work. In the early part of this Parliament the Prime Minister told us how much the cost of the different articles had been reduced in price because the Government took the work in hand. Among other things, he mentioned the Lewis gun, the price of which was reduced by many pounds because the Government took over the factories. Yet we hear men talking in the House against Government trading on every conceivable occasion.

While there is a world shortage, I believe that control should be continued. I think, also, we should trade with Russia to the fullest extent. If we had traded with Russia, with her vast resources, instead of fighting her, it would have been very much better both for that country and for this country. Certainly, wages have gone up. The hon. Member (Mr. Blane) has been talking about wages, and charging labour with profiteering. I suppose that on the average labour has gone up possibly 100 per cent. or so, but the cost of living has gone up 162 per cent., or, according to Mr. Bevin, no less than 212 per cent. I can tell my hon. Friend that if we had gone on the old system of regulating wages, that is, wages rising according to the price of the commodity, we should be many shillings higher than we are to-day. If wages were the only things that affected prices, profits would certainly have remained the same; but profits have not remained the same; everyone knows they have enormously increased, not only during the War, but since the Armistice, In April, 1919, a Committee on Trusts and Combines reported that there was reason to believe that these trusts were forcing up prices, and they urged that action should be taken. We cannot blame the Government for not setting up committees. They are always setting up committees, but they never give effect to their recommendations. That is our quarrel with them about the mines. When the miners asked for an advance in wages and shorter hours, the Government gave the miners a Royal Commission and then refused to accept the findings; and the same thing has happened with several other committees which have sat and reported. Nothing was done till August, 1919, when the Profiteering Act was passed, but this Act did not touch the wholesaler or the trust. One hon. Member has been talking about the Profiteering Act being a real attempt on the part of the Government to put down profitering. I do not think anything of the sort. I think it was something to get into the Press to try to show the country that the Government was serious in this business and that this Profiteering Act was going to do something. The only thing I saw of its working was that it cast a slur on the retailers of this country.

On February 16th the President of the Board of Trade told us, in reply to a question, the number of Committees and Tribunals that had been set up, and the amount of fines imposed. I think the sum was £834 11s., in the case of 83 prosecutions. There were no sentences of imprisonment at all. I do not think those small fines had any effect whatever. I read in the paper this morning of a lady who, in a speech in Trafalgar Square on Saturday, said a profiteer ought to be hung to every lamp-post I do not know whether they would find a sufficient number for it, but one here and there would be a splendid thing, and would do more to put down profiteering than all these small fines which have been imposed. In a few cases shopkeepers have been asked to refund a halfpenny or three-farthings per pound or per yard, as the case may be. There was a Section of that Act which could have been some good. I remember when we were discussing that question that one hon. Member wanted to know whether the Government were serious on that point. I knew they were not serious, and I knew they did not intend putting it into force. This is Section 4, which allows local authorities to trade in articles where there has been profiteering. When asked why this Section had not been put into operation, the representative of the Government replied that it was not meant to be applied except where traders refused to trade in certain articles. No one would refuse to trade these days, when you can get profits such as are being made. There need have been no fear on that score. When this power was used, as was the case at Bradford, the Board of Trade tried to put a ban on the sales to the general public. The Board of Trade seems determined to prevent any interference with profiteering.

The Government has been selling at very, very low rates its vast stores of accumulated war material. The object of the Government seems to have been to make it possible for a few people to make fortunes at the expense of the community. That is how it seems to me. They have sold at very low rates and have allowed the buyers to exploit the community as they liked. Blankets were sold at 7s. per pair, and the Government were always careful that these should be sold only in very, very large quantities, so that it is a few Government contractors who have had the whole of them. These blankets were resold at 3s. 6d. per pound, or from 30s. to 40s. per pair. Australian boots were sold at 10s. 3d. per pair, and were retailed at 21s. Leather gauntlets, made of the very best leather, were bought at 2½d. per pair, and they were selling those as hard as they could sell them—I suppose they were not in great demand—at 3s. 6d. per pair, and then a factory was set up to turn this splendid leather into all sorts of fine leather goods. If the Government had set up a factory of their own, would not that have afforded an excellent opportunity for employing discharged soldiers instead of paying them money for doing nothing? Balloon material, made of the very best rubber, was sold for about 3d. per yard or 22s. per cwt. It was the intention to turn it into cloth for covering all sorts of vehicles—another case where discharged and injured soldiers could have been employed. But the Government wanted to give some individuals opportunities of making vast sums of money. Coming up from Newport the other day I saw something which made me think the Government are doing a sensible thing at last. They had placed a corrugated iron railing round their place. That was a very good plan, because it would prevent anyone from seeing what was inside. It would save a lot of complaints. I have seen mountains of wheelbarrows there. If these were sent to the local authorities, or to gardeners, or to people who have allotments, they would be very glad to get them; but they are left to rot. There are also spades which could be sent out in the same way. But the Government insists that they should be sold by the thousand, and would rather have them rotting on their hands than distribute them in this way. It would be a great advantage if the Government would try to help the community in that way. Then there is profiteering in housebuilding. Many thousands of houses are due to be built under the auspices of the Government, and the greater the cost of these the greater will be the claims upon the public revenue. The experience of the Government with the Ministry of Munitions should have helped them in this. In May, 1919, a committee was set up to report upon the control of the supply of building materials by combinations. That Committee reported that 60 per cent. were under such control. Then the Government suggested that the material for building should be obtained by tender. There are 120,000 houses to be built. It has been pointed out to a Committee under the Profiteering Act that there ought to be control of building materials, and that no notice has been taken of the 1919 Report. If the Government could only get the cost reduced by one-third it would be a great help to all those who are engaged in solving the housing problem. One local authority has a contract with a builder amounting to £1,000 for each house. If there could be a reduction of one-third of that, it would be very important. Houses are costing 500 per cent. more than they did in pre-War time. Some firms are making 800 to 1,200 per cent. more profit now.

With regard to shipping, the Government terminated the control and the rates went up. The prices paid by the public were 170s. against 107s. paid by the Government. Lord Inchcape, as Chairman of the Peninsular and Oriental Company, said that it was a great advantage that a large number of ships had been handed over at a cost of 33 millions sterling, and he said it would have been disastrous if the Government had been obliged to run these ships, and it was worth while to take them over at considerable risk and trouble. I think it was worth the trouble to get these ships at the price and be able to use them at a time when there was a rise in the rates. After eighteen months' investigation it is reported officially that there is a great increase in trade combinations in the United Kingdom which is stated at 80 per cent. Coming to Coats' in connection with the cotton and thread trade, we find that they exercised a control which is even more strict than the control of the Food Controller. Coats' firm harasses the shopkeeper so as to prevent him from selling at a particular price. The difference is that the control by Coats' is in the interests of one firm, whereas the food control was for the benefit of the community. I am now speaking against de-control, and I am urging that when Committees are set up some legislative action should follow. What it the use of those Committees if the Government will not introduce legislation based upon their report? We have had several important reports, and I hope that one of the results of this discussion will be that some legislation will follow. The right hon. Gentleman the Member for Paisley stated in his contest there high prices were consequent upon high borrowing. I think that the expected attack upon the Government this evening has fallen rather tame. I do not see how it could be any different, because in the early part of the War, 1914–15 and 1916—I am not quite sure of these dates—17s. 6d. out of every £1 had to be borrowed. 1do not see how we could expect anything different from one who had at that time been at the head of the Government. The Labour party is the only one which has a clear record in these financial Debates. It contended all along that there ought to be more taxation and fewer borrowings. It advocated the conscription of wealth, which the majority of this House is against, but its argument was that as we had conscripted life we ought also to conscript wealth. We did not see why, when we asked for the sacrifice of life for the sake of the country, we should not ask for the sacrifice of wealth for the same cause. How-over, that does not find favour with the House, as I know very well. The Estimate of the Board of Inland Revenue was mentioned, I think, by my right hon. Friend the Member for the Platting Division of Manchester (Mr. Clynes). I have some rather different figures, or, rather, I have worked them out in a different way. I find that 280 persons have added to their fortunes, between the outbreak of war and the 30th June, 1919, no less than £700,000 each. That is a pretty good bargain during the War for those few people. Two hundred persons have added £330,000 each to their fortunes during the War, and 565 persons added £230,000 each during the same period. We are told also that 340,000 people added no less than £2,846,000,000 to their fortunes, while the remaining 44,500,000 people added less than half that figure to their wealth.

We ask that legislation shall follow the reports we have just had. I have made that point once before, and I emphasise it again. If we are to have no results from these committees, that have done such excellent work, it has been useless to appoint them. I think that, if the Government legislate on the findings of those reports, the community would be greatly benefited, and I commend this to the Government as a method by which they can popularise themselves and also do a real service to the people of this country.

Mr. E. HARMSWORTH

The one thing which the Government has done well during the War has been the work of the Food Controllership. During the War, and after the War until the present time, it has been almost the most successful Ministry in the Cabinet. To-day we are supposed to be discussing the question of high prices, but I have heard very few hon. Members suggest how those high prices are to be reduced. It has been suggested that they should be dealt with by a stringent Profiteering Act, but, even if all profiteering—and I think there is a certain amount—were abolished, I do not think anyone could seriously say that that would reduce the high prices. It is no good discussing the reduction of high prices and saying they are the same all over the world. That may be the case, but it is no use saying that without suggesting some method by which they can be reduced. I suggest that they should be reduced by cutting down Governmental expenditure. There may be many people who would object to that, and say it would not reduce high prices. I believe it would. In other countries there are high prices, as there are in Great Britain. In France, as one hon. Member suggested, prices are much the same as in England, or perhaps higher. I suggest that the French Government also are guilty of great extravagance, in the same way as are the English Government, and I believe that that is one of the causes of the high prices in France. One hon. Member said that it is no use getting up and talking, without telling the Government where they are to economise. Being a new Member of the House, I do not know the procedure perfectly, but I should have thought that it was not the duty of this House to tell a Minister how to manage his own Department; I should have thought that it was the Minister's business to manage his Department, and that if he could not manage it himself, he should give it up. I suggest that the House should tell a Minister that he is to cut down his Department, but it should be left to the Minister to decide where it should be cut down. Surely the Minister is in possession of all the facts, and knows better than we can know where that can be done. I suggest that the House, on all the Estimates, should tell Ministers that they are to cut down their Departments. It is no use telling them where. [An HON. MEMBER: "Why not?"] Because, surely, the Minister knows better than we do.

Of course, one cannot say that high prices are entirely caused by the extravagance of the Government. It is quite obvious that they are not. But my point is that that is their chief cause. They are caused, as well, by many other things—the after-effects of the war, deficiency in the world's supplies of essential commodities, and various other causes all contributing towards the same thing; but the essential thing is to find out some way in which they may be reduced. We cannot increase the world's supplies of essential commodities, although we may talk about it; and we cannot alter the after-effects of the war: but we can alter the extravagance of the Government. That is the one cause which has been suggested this evening which can be altered, and therefore I regard it as the only cause of high prices which is worth talking about. Some say, of course, that, although Government expenditure may be responsible for high prices, the expenditure is necessary. Surely no expenditure is necessary, in these times, it would cause high prices at home. I am sure that no hon. Member would suggest that our costly adventures in the East were necessary, if at home they caused high prices. The Government's defence would probably be that large expenditure does not bring high prices. They cannot say they are not extravagant, when we are to-day considering Civil Service Estimates amounting to £557,000,000. This Debate has taken place on a very suitable day, when we are supposed to be considering Estimates of that nature.

Would the reduction of the expenditure of the Government bring down high prices? The origin of high prices is quite obviously the War and its after-effects. That was because the War left the country with an enormous debt a National Debt of about £8,000,000,000 alone. Had the Government taken that in hand, and attempted to reduce the debt, prices would not have risen as they have risen, but would have started a downward turn. The only possible way of reducing that debt is by the revenue from taxation overlapping the expenditure. I believe that, if the debt is not reduced, prices will show no tendency to go down, but will rather tend to increase. The only way is by rigorous economy in Government Departments and the cutting down of any expenditure which is not absolutely necessary. The Chancellor of the Exchequer said that one day we would have a normal year, when the Budget would be £808,000,000. The Budget in 1914 was £208,000,000. Therefore, the Chancellor of the Exchequer recognised that the £ had fallen in value to something like one-fourth of its previous value, because he recognised that a normal Budget would cost four times the normal Budget before the War. The only way to make the £ worth what it was before the War is to bring expenditure as near the 1916 level as possible, and if the expenditure of the Government were reduced nearly to the expenditure of 1914, then I believe that the £ would rise to its pre-War value. The question of high prices is the most important question of the day, because it touches everybody in the community, both rich and poor, more keenly than any other question of politics, and will continue to touch them even more in the future as prices rise. No other way of reducing prices has been suggested except by improving the Profiteering Act. I do not believe that that will reduce prices, because not enough money is being made by profiteering to reduce prices to any appreciable extent. The one way in which prices can be reduced is by the Government reducing expenditure and paying off the National Debt, and this is the course which I would ask the Government, as far as possible, to adopt.

Brigadier-General CROFT

I would like to congratulate my hon. Friend who has just sat down on the courage of his speech. The only remark I make is that, while he criticises the Coalition so bravely, possibly he may find later on that he will require a new home, and I can assure him that he will always be very welcome in that party which has a future. In all the wild words which are spoken on this question of prices and profits, no one is more ready than the average Labour Member to point out the extraordinary evil of high profits. I cordially agree with that, but when we in this House denounce increases in pro fits, let us be fair and recognise that, if labour is entitled to £100 where it had £50 before the War, equally are the average investor, and the average worker in industry by his brains, entitled to have the same difference in what comes to them, bearing in mind the increased cost of living Therefore, lot us get at the root causes of the evil, and, when we can find real profiteering, let us take measures which will make it impossible to continue. We heard allusions this afternoon to the question of building materials. I would ask the hon. Member who made that argument whether it is not a fact that there is no possible comparison between the increased cost of materials for building and the increased cost of building owing to the low output which unfortunately exists in the building trade? Reference was made to the very high shipping freights, from the River Plate in particular. The Government ought to watch this shipping question, but we ought also to remember that many of these great shipping fortunes were made from Government-controlled prices, and also that it is impossible for our shippers suddenly to reduce their freights, even by Government action, unless we are going to reduce the freights of the rest of the world. We do not want to injure the River Plate trade, in which we are at present able to do such good business. These are considerations which ought to cause us to pause before we go wildly into the question of the solution of this question.

We have had from the right hon. Gentleman (Mr. Asquith) a speech which rather disappointed his followers because it was not critical, and disappointed me because it was not constructive, in which he generally called attention to the upward tendency of prices all over the world. We had a most statesmanlike speech from the late Food Controller the Member for Norwich (Mr. G. Roberts), which I wish the Secretary of State for War (Mr. Churchill) could have heard, because then the right hon. Gentleman would have realised that we have some representatives of Labour in this country who would do credit to any Government if they had control. There have been very few criticisms of the Government, and we have been speaking generally of world causes, but there is one criticism with regard to congestion in the docks which must be emphasised. The Minister of Food has admitted that there are some difficulties with regard to this matter of distribution.

Whenever this question is raised, we are told that it is a matter for the Food Controller. The Food Controller says that it is because of a complete breakdown of our transport. Then we invite our superman to come to the House and explain why he has not improved our transport arrangements, and he says that it is all the fault of the Shipping Controller. The fact remains that you have got this condition of affairs in the docks and that the Government is responsible. I hope that the Government will find the solution of the problem, and that the Shipping Controller, the Transport Minister and the Food Controller will put their heads together in order to prevent that fatal congestion that takes place. We cannot deny that large quantities of bacon have been rotting in the docks, that men have been walking in sugar, and that tobacco has gone bad in very large amounts. These kinds of things become known to the working classes of the country. We all know the difficulties, but the congestion in the docks is one of the first matters on which all the Departments involved ought to get together to see that it is put right, because this matter is causing tremendous discontent among all who are working in the docks of this country.

Let me say one word in reference to the Prime Minister's statement regarding wheat, and also in reference to the speech of the right hon. Member for Norwich (Mr. Roberts). The Prime Minister pointed out how difficult it is for us to increase the supplies of raw material and of the food stuffs of the world. The right hon. Member for Norwich pointed out how vital it was, from every point of view, that we should increase our wheat production in this country. If six months ago the Government had said that we were to have a maximum price for wheat, in some way comparable with that for imported wheat, we should have had a greater amount of wheat sown last Autumn and this Winter. That step was not taken, however. I am glad the Prime Minister is now going to set the matter right. These are the facts. A quarter of wheat costs round about £5. I believe it is £6 for imported wheat, or something of that kind—130s. That means that every quarter of wheat grown in this country increases the wealth of the country by £5. On the other hand, if you have to buy that quarter from the United States or the Argentine, or from some other wheat-growing country, it means that you are increasing the national indebtedness by another £5. Apart altogether from any economic argument, it seems to me that the right hon. Member for Norwich puts his finger on the spot when he says that we must do everything in our power to increase our production. I feel sure that the Prime Minister, having seen how disastrous it is that the farmers should be growing other cereals than wheat, will go on with the policy he has now adopted and encourage wheat production by every means in his power.

When speaking from the Treasury Bench early last Session, Sir Auckland Geddes uttered what I considered to be one of the most momentous warnings ever delivered in this House. He told us that whatever we did we must import nothing from the United States which we did not require in this country. He said that that was obvious on the face of it, if we were to readjust the exchange. I would make this criticism. I think we were far too ready to get rid of our import licences. The Prime Minister spoke on this subject last Session, and I am afraid he made that speech here because he was about to go to Manchester to convince his followers there that he was a Free Trader. The fact remains that a great many articles are being imported which we can produce ourselves, or articles which are luxuries—feathers for ladies' hats, costing an enormous amount of money, an iniquitous trade, and absolutely unnecessary. No self-respecting woman would wear birds' feathers in her hat. Yet in spite of what the President of the Board of Trade said about this iniquitous traffic going on, we were startled to see that the licence for imports was taken off. There we are spending priceless pounds on fopperies and fineries which no woman requires. If we are going to right this question of exchange, which is, after all, one of the main causes of high prices, surely it is up to this House to see that the hon. Gentleman is kept on the straight and narrow path, and is not allowed to import useless luxuries into this country, that this House shall give a mandate and see that no superfluous goods are imported.

The right hon. Member for Paisley in his speech said that one of his hopes was the retention of a free market to bring down prices. I do not know whether hon. Members are satisfied with last month's import figures, but it seems to me a perfect tragedy that there should be this adverse balance against us, that we should see our imports always keeping ahead of our exports. Unless we check that we are bound to go to ruin. Unfortunately, invisible exports to-day do not exist, and I suggest to the Leader of the Liberal party that this is not the time to talk about maintaining a free market for those commodities which are not necessary for this country. The hon. Member for Thanet (Mr. Harmsworth) referred to the reduction of debt. Is not that the main point? I am afraid I am going to make myself more unpopular than usual by stating that it is chiefly the fault of Parliament itself. Day after day hon. Members come down and say that this class or that class is suffering very severely, and that therefore Parliament must vote another five, ten, fifteen, or twenty millions of money. That is the road to ruin. Unless we can restrain our hearts and allow our heads to govern us in this matter we shall go from bad to worse. The only way is to reduce expenditure to the lowest possible margin, and at the same time not to tolerate any increased demands until we have recovered our financial stability. I would suggest to the Chancellor of the Exchequer also to put an end to this foolish light talk about a levy on capital of any description whatsoever. The profiteers must pay, and by a super-tax on profits. The Government ought to have acted long ago when the prices first rose. Nearly all that money has gone back by this time into ships and factories and machinery. If you now start to take, a part of that you are going to create unrest. I believe the wealthy men of this country will be only too ready to give a great part of their profits to the State by means of a super-profit tax. That will be better than impairing the fabric on which the prosperity of this country depends. I thank the Committee for its toleration in listening to my somewhat contentious remarks. I think the hon. Member was right when he said that we must cut down expenditure. I also think that strictures ought to be passed on our fellow members as well as on the Government. If we are to reduce the National Debt we must be prepared to bear a very much higher burden of taxation for a limited time. That is the quickest method by which we can reduce food prices in this country.

10.0 P.M.

Captain WEDGWOOD BENN

There is one criticism from the benches opposite which I think is singularly unfair. It was stated that the right hon. Member for Paisley when Prime Minister added to the expenses of the country by incurring debt. Surely, hon. Members will remember that at that time all three parties in the State were united, and that if any blame is attached to the late Prime Minister for incurring debt, surely, the same blame attaches to the leaders of their own party who, very properly and patriotically, were united in order to win the War. I do not propose to deal with the War period at all. I think the Prime Minister will admit that during the War we were all prepared to do anything that might be required and to impose on ourselves any burdens which might be necessary. Any criticism I have to make could not possibly be directed to the period of the War time. I propose to ask whether the policy of the Government since the Armistice has been what it should be in order to keep down prices. First of all one must refer to the broken hopes which were extended to the people of the country at the time of the election and after it. The Prime Minister delivered a speech in which he said he hoped within a short time, two months I think, the cost of living would be reduced by four shillings per week to the poor. It was a very rosy hope; I do not think the figures justify the statement that the price of living has gone down 25 per cent.

The PRIME MINISTER

No! The cost of living did go down I think by the time I mentioned, but afterwards prices went up. They went down considerably at the beginning.

Captain BENN

But the fact remains that we are to-day debating the question which is agitating the whole country, namely, that of high prices. The inference from the Prime Minister's speech was that things were coming right, instead of which they have got worse. Why is it that the people of the country are so anxious? It is not because the highly paid trades are suffering most, but because of the poor people. The Board of Trade return, which we do not all accept as true, gives prices as going up 135 per cent., and the old age pension, even with the last addition, has only been raised 100 per cent. The poor people who are not in the organised trades, such as women workers, are finding out how very hard indeed it is to make ends meet. They are looking to Parliament to see if Parliament can do anything to assist them, and a great deal of credit which this House has in the country and the credit of our whole Parliamentary system depends upon the answer we give to them. The Government, when this question was raised at the end of last Session, rode off on the profiteer. There was a strong Parliamentary Committee appointed which might have done very useful work, but on the second day of meeting Sir Auckland Geddes appeared before the Committee, and without consulting the Food Controller, said "We have got a plan for dealing with high prices and we do not want the Committee." The Committee was dissolved, and this House dissolved as it was dissolved by another Cromwell at another time. The Committee never met since.

Mr. McCURDY

Oh, yes!

Captain BENN

Has the Committee done anything?

Mr. INSKIP

I was a member of that Committee, and may I say the Committee certainly met on some occasions, but was not able to proceed with its business because the Government said the Profiteering Act would accomplish the end.

Captain BENN

The hon. Gentleman has made my point. The Government said they had got a plan which was the persecution of the retail trade, and they gave the public to understand that this was all done by the man in the shop. A few months afterwards the Parliamentary Secretary to the Board of Trade said that £25,000 had been expended and 25 persons convicted. That was the story to that date of the actual working of this precious measure which was intended as a stunt remedy to meet popular agitation. Far be it from me to say there is no justification in the popular belief that some of the rise in prices is due to scarcity and the manipulation of that scarcity by some interests. I think that is so, but what does the Government do even in that regard? Take the case of palm kernels, which, I believe, supply the raw material, or part of it, for margarine; take the Government proposal by which the producers of palm kernels in the Colonies are compelled to supply these palm kernels only to the British manufacturers. You may think that proper or improper, but is it, or is it not, an assistance to the people who desire to form corners and trusts in raw materials? We have heard a great deal from the hon. Member for Thanet (Mr. E. Harmsworth), who was elected as an anti-Government waste candidate, but I am afraid we have not been honoured with his company in the Lobby as much as we had hoped from the professions he made at the time of his election. We have from this side from time to time tried to suggest ways to reduce the expenditure against which the hon. Member complains. After all, it is not for the Opposition to propose in detail the reduction of expenditure, but they do expect that those who are opposed to extravagant Government expenditure will support them in the Lobby on those occasions when they move reductions, rather as a general indication of the desire of the House than as a detailed suggestion as to which particular Department a reduction should be made in.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Hear, hear!

Captain BENN

The Chancellor of the Exchequer is very pleased with that. But I have sat on that side of the House when he was sitting on this side, and I frequently heard his friends say—and they are far more experienced Parliamentarians than I am—that it is not for physicians to prescribe until they are called in.

Mr. CHAMBERLAIN

I am afraid we should have to wait a long time.

Captain BENN

I have not any desire to visit the bedside, I can assure the right hon. Gentleman. But the Chancellor of the Exchequer has constantly urged on the public the necessity also for private thrift, and, of course, it is obvious that that is a very important thing, because the individual savings would go either to reproductive enterprise or the production of commodities in some form or another. I am not speaking about to-day, when we have had a speech from the Parliamentary Secretary to the Ministry of Food describing the general desolation of the world, but I am speaking of those old days immediately after the Armistice. Was the Government itself then setting an example of thrift to the nation? I must mention details and small things here, because, after all, the Government expenditure has been very lavish. I can remember question after question put from the Back Benches on the other side about fleets of motor-cars, about great cars visiting this House every day to carry about the Ministers. That was not an example to the public to economise. Then there was the Bill for doubling the salaries of Ministers and secretaries, and there was the speech made in this House of the most optimistic kind in the latter part of last year. And then we get the latest item, the cost of the Peace Conference in Paris, £503,000 in all, including the passenger and mail services. I assume this is for the Peace negotiations since the Armistice—half a million, including items which, I make bold to say, might very well have suffered reduction by any Government that was earnestly endeavouring to be thrifty and set a personal example of thrift and restraint to the nation.

Then we come to the question of what is conceived to be the remedy for this state of affairs. It is generally admitted, I believe, that in the case of a world scarcity, such as the Food Controller has told us to-night, some sort of Government control is required. I think we all admit that, but immediately you come to deal with the thing in the big, as he did in his most interesting speech, you see that the problem is not a national but an international problem; and so we see that the Government's pollicy should have been governed by a view of the whole world production, and not merely by a narrow national one. That, I think, really is the substance of all the proper criticism that can be levelled against the Government—that their policy has not been framed to put the world again on to a basis of flourishing reproductive work. On the contrary, everything they have done, instead of attempting to instil a spirit of international friendship, has all been based on a much narrower view of the needs of the Empire. There is the attitude to the Aliens Bill, and the Imperial Preference Scheme, and the failure of the Government to foster a friendship with the United States. [HON. MEMBERS: "No!"] Perhaps the Prime Minister does not remember the very offensive remark which was made by the Secretary of State for War in this House. I wish the Government would do more in this respect, because certainly no word of mine would make mischief in this regard. I think the matter is much too important. But I do contend that the Government's policy has failed altogether to attempt to set up the spirit of international goodwill, which, after all, has its trade aspects as well as its moral and ideal aspect.

Then we have the speech of the Food Controller to-night in which he spoke of under-production. He told us there was a fall in production all over the world. This is the Government which last year was placing embargoes upon imports. Without free circulation you cannot possibly get prices down. This is the Government which tells us now that there is nothing in Germany, and under-production in the States, and has actually a Dumping Bill ready to be produced in this House. I do not know what would be the fate of the Dumping Bill after the speech of the Food Controller to-day, but he told us that any man who looked back must realise that it was impossible to any set of statesmen to establish a staple peace in the world. Yet this is the Government who held over the head of Germany a big indemnity, than which nothing could be more discouraging to the spirit of production. The Food Controller told us that no set c£ men could possibly have restabilised the Governments of the world. Yet this Government continued the war with Russia, and there were Military Missions there. They tell us now that the world is short of commodities. Yet they forced the Russian Government to use transport, which is the backbone of any system of national distribution and affects prices, for war purposes! They are the people who refused to trade with Russia, although the Food Controller has told us that it is impossible to cut down the price of butter until the Siberian markets are re-opened! I have ventured to put before the House some reasons which have actuated us in the criticisms we have levelled at the Government. The question of prices is not a national or a narrow question. It is a world question. It is a question which could only be solved by the Governments, in this and all other countries, approaching it in a spirit of international goodwill.

Mr. HAILWOOD

I have listened to a good many views as to the best way of reducing prices. Many people in this country are looking to the Government to reduce prices, and asking for Government interference in one way or another. The more the Government interferes, the worse things will be. In the early days of the War, there was one commodity banished from the tables of the people of this country, and it caused a great deal of trouble at the time. I refer to the popular potato When potatoes vanished, we did not discuss prices, or press for higher wages to buy them. The people of this country, from one end to the other, started with their allotments to grow potatoes. They endeavoured to produce more potatoes to overcome the scarcity. That is the essence of the present question. To overcome scarcity we must have more production. The Government can in no way meet the situation by controlling, but by encouraging production; and production can only be encouraged by leaving the market free. High prices will stimulate production, and we shall get over the difficulty. There are many people who are apt to attribute the excessive borrowing on the part of the Government—or to make it appear so—as the main cause of high prices. I happen to know something about wheat. There is no more sensitive article on the market than wheat. Before War was declared, the wheat market began to rise It has always in history been the fact that the price of wheat rose the moment either scarcity was mentioned in any particular country, or there was danger of drought or other cause that would in any way limit its production, or any talk of war in any part of the world. It is quite obvious that it is only the shortage of production that brings about high prices, and the more interference we have from the Government the higher I am convinced will prices rise.

The best plan would be to get rid of the Ministry of Food, and to cut down the staffs of a lot of other Departments. If we had all these officials digging potatoes and sowing wheat we might get over our troubles very much quicker. They are increasing the population of London: they bring their wives and daughters with them, and these, I suppose, spend part of their time in jazzing and going to the pictures, when they could be better employed in milking cows and making butter. It would be better, at any rate, in the interests of the country. The hon. Member for Leith (Captain W. Benn) mentioned that the hon. Member for Thanet was elected as an anti-Government Waste candidate. I am one of those who went down to Thanet in order to help the hon. Member to obtain his seat, and I certainly did not go down to support an anti-Government candidate. The hon. Member came forward as an anti-Waste candidate. I believe this Government is also anti-waste, and in the interests of the community at large I think the presence of the hon. Member for Thanet will be a valuable asset to us in this House. I firmly believe that control is necessary if there is not sufficient food to go round. If it has to be rationed, then it will be necessary to have a Food Controller in order to apportion the quantity. But we have got past that stage. These foodstuffs to-day are not rationed, and therefore the necessity for control has gone. The best plan will be to get as many people as possible engaged on the work of production, and leave the markets to have free play. By reducing the number of Government officials we shall soon bring about a better state of affairs, and then prices will right themselves.

Lieut.-Colonel JOHN WARD

This Debate has not been remarkable, and after all that is usually what happens. If one had read the "Times" and the "Daily News" he would have imagined we were in for fireworks to-day, that the Government were to be put on their trial, and that we were going to have demonstrated by the right hon. Gentleman the Member for Paisley the way in which it is possible to get rid of the difficulties in the midst of which we find ourselves, I listened very attentively to the speech of the right hon. Member for Paisley, but except for the suggestion that we should open up with trade on the broadest lines with Soviet Russia—which to a certain extent has already been decided upon by the Government in particular and by the Allies in general—beyond that suggestion which was not a new one, nor was it one advising the Government to do something not yet attempted, and beyond the suggestion that we should open complete and the widest diplomatic relations with the Soviet power, not a single proposal was made which would, in the slightest degree, improve the position. The country outside has been expecting that some light would be thrown upon this subject to-day. There has been no light on the subject so far. It is true the Prime Minister had nothing to answer from his critics, but at least has not he dotted their i's and crossed their t's? Otherwise the country is in a parlous condition, and it shows quite clearly that this House has no remedy either on one side or the other, beyond the broad suggestion, with which I daresay the Prime Minister agrees, of the necessity of taking away every possible restriction against trade between nation and nation That, naturally, is necessary, but it is not necessary, I should imagine, to go to the extent of the hon. Member (Mr. Hail-wood). So far as the internal affairs of the country are concerned I should imagine in a state of the general scarcity such as exists to-day that to take away all control would probably mean increasing prices enormously, and would certainly make it more difficult for the poorer portion of the community to live than is even the case to-day. An hon. Member on the Labour Benches has quoted the results of de-control in 20 or 30 cases of commodities which are essential for the poor, and, with three exceptions, there was an immediate rise in some cases of over 100 per cent.

We have got into this difficulty because everyone was trying to make everything he could out of the War, right from the top to the bottom, no one more than another. The most that can be said on either side is to throw bricks at the other as to whether it was the top that began and the prices percolated to the bottom, or whether it began at the bottom and percolated to the top. It is a strange commentary upon the idealism with which our soldiers went into the War that while they were risking their lives, many of them for only a few shillings a day—in the case of my men in Siberia, even when their pay was raised to the top rate it would buy just one cigarette per day. Beyond these rations that is all the recompense they got. They fought to make our possessions and position secure, and while they were risking their lives for the defence of the State and everything for which it stands, from top to bottom, the whole community seems to have been engaged in one huge scramble to see who could get most out of it. That, I believe, is the cause of the trouble in which we find ourselves to-day. But what is strange, especially after the speech of the hon. and gallant Gentleman (Captain Benn), is that this scramble to take advantage of the necessities created by the war seems not to have affected our own people alone, but the world in general, because the disease is not national; it is universal. High prices reign everywhere. It was suggested that the Food Ministry and the Pensions Ministry should be destroyed. Why did we want to trouble about pensions? I have listened even to that suggestion tonight. That is the usual way in which comfortable people look upon their soldiers when once they had done their work. The next suggestion was that the Labour Department should be destroyed. Why did we want to bother about labour? What had the Government to do with labour? I should have thought the Government had everything to do with it. It is the State's business to take a great deal more care of the labouring interests of the community than it has hitherto done. It should be considered their business rather than that of any particular section. Even if these things were done, they are so infinitesimal compared with the vast subject we have been discussing, that they would not have the slightest influence so far as the general situation is concerned. Therefore, unless some superman can give us something better than we have listened to, the Debate has been an utter failure.

Mr. MARSHALL STEVENS

Except for the speech of the right hon. Member who has just spoken, and the charming little speech of my colleague, the junior Member for Manchester (Captain Thorpe), this has been the slowest Debate I have ever heard in this House or anywhere else. I only rise because, with the majority of hon. Members, I am fearful lest we do not do something to "ginger up" the Prime Minister into replying. I propose to deal with that section of the transport problem which so insidiously, and may be materially, does so much towards raising prices, and which cannot be better described than in the words of my hon. Friend—I hope I may call him, the Food Controller (Mr. McCurdy)—as a parasite. There is want of co-ordination between the many Government Departments—co-ordination which the various Governments throughout and since the War have failed to obtain. In this matter I can bring home blame to the Prime Minister and to the right hon. Member for Paisley. Several of us throughout the War tried to obtain some practical action either from the Cabinet or from the Prime Minister of the time to enable this question to be dealt with. Let me road an extract from a memorandum sent by me, by request, to the Cabinet Committee on the 1st February, 1915: I wish emphatically to point out that the main remedy for coping with the present situation and the greater difficulties likely to grow out of it in the immediate future is to be found in the temporary provision of some independent system of traffic control, or rather of traffic direction, such as I will later propound, These proposals are as applicable to-day as they were in 1915. This is of paramount necessity during the period of the War. It is suggested that the Cabinet Committee should appoint for the time being an Executive Officer capable by experience of judging the best means of clearing up the congestion of traffic and of suggesting the most adequate provision against its recurrence. He should not have any powers to enforce compliance with any orders or recommendations of the Committee, but should assist traders, port authorities, shipowners, railway, and other carriers to comply with such requirements. He should keep in close touch with the general traffic movements of the country, not only on land"— [HON. MEMBERS: "Agreed."] Then I will confine myself to two instances, although I could refer with equal cause—

The CHAIRMAN

This speech seems to have escaped the hon. Member last Wednesday. We have an Amendment before us dealing with the Board of Trade and not the Ministry of Shipping.

Mr. STEVENS

I understood that we were dealing with the question why prices had risen. I will take the cases of frozen produce and grain, with regard to both of which I can speak authoritatively. I was requested by Lord Rhondda to advise on the question of cold storage, and, upon my advice, cold storage was to be provided. I will read the last paragraph of my report: It is not necessary to state therefore a lack of co-ordination between the War Office, the Board of Trade, the Board of Agriculture, the Local Government Board, the Ministry of Shipping, and the Ministry of Food, inquiries by each of these Departments upon the same subject matter of cold storage have been overlapping, not only to the disadvantage of the Government, but also to the inconvenience of the port and other authorities. If all inquiries relating to cold storage could be addressed to one department, it would give general satisfaction. That was in 1917. To help the Food Controller I went back to Manchester and built a cold store with a capacity of 1,000,000 cubic feet, and at this moment there is accommodation in that store for 200,000 carcases of mutton. It had seven times the area and capacity of this Chamber.—[Laughter.]—I think this is too important a matter for laughter. I want to state a few facts with a view of lessening the great waste and expenditure that is going on by Government Departments In the last few weeks circulars have been issued contradicting one another from different Departments on this question. People from no fewer than nine different Departments have visited these stores on behalf of the Government. Before I go away from the frozen meat question let me say that it has caused no congestion in the ports. It has had to remain on the ships until cold storage was available. The fault for its lying on the ships rests with the Board of Trade, the Ministry of Food, and the War Office. These ships were allowed to come from Australia and New Zealand without inquiry being made as to whether there was sufficient storage to be had. It is want of business aptitude on the part of those responsible for that, and it has nothing to do with the port, or the shipowners, or merchants. It is entirely the fault of these three Departments. I come to an even more serious matter in the near future, the storage of grain. I wish I could do justice to the subject. Grain has never been mentioned in this House as being a traffic which has caused congestion at the ports; but it has done more to cause congestion than any other traffic, not because those who look after the storage of grain do not know their business—they are merchants and business men and ought to know it—but because they do know their business, and they retained accommodation for grain which should have been given to other departments of trade There is nothing more serious to-day, and I am only too glad that the Prime Minister is here to hear me say that. Unless something is done in the near future, whether the crop grown be short or great, our difficulties will increase, and the shorter the crop the greater will be the difficulty. The intricate machinery of transport is not generally understood, even by traders, and it is certainly not possible for professional politicians to understand it in all its intricacies. I had meant to show by facts how much can be done towards the reduction of prices, the stabilisation of industry, the stabilisation of commerce, of labour, and of capital, if something were done in that direction; but, in view of the fact that I have only now had the opportunity of addressing the House, I will leave myself in the hands of the Prime Minister, who, I hope and expect, will give me some reply.

Mr. C. PALMER

If I thought that for one moment I was standing between this House and the Prime Minister, I would not say a word; but as one who, like the hon. Gentleman who has just sat down, wants to "ginger up" the Government, I am profoundly disappointed with the Debate to-night. I thought the right hon. Gentleman the Member for Paisley was going to do what I, as a young and humble Member of this House, could not hope to do. I stood for a constituency on the plank of "gingering up" the Government, and I was delighted to find that, while I was talking in the wilds of Shropshire the right hon. Gentleman the Member for Paisley was pouring out words of wisdom to the mill-hands of that great constituency. I understood that he was coming back to this House to lay before it and the country a cure for all our ills, and with a determination to make the Government bring down prices and put this old country of ours on a pre-war basis. And so I have delayed a visit to place called Stockport, in order that I might take with me to Manchester those words of wisdom and those practical suggestions which were to have fallen from the right hon. Gentleman who is not yet the leader of the Opposition. I tell the House frankly that I have been more disappointed than ever in my life, and I go back to Stockport, where I hope we are going to "ginger up" the Government, without any new pabulum, without anything fresh that I can offer to the hard-headed men of Manchester.

May I congratulate the hon. and gallant Member for Leith (Captain W. Benn) on having the courage to do what his leader had not the courage to do. "Willing to wound, but afraid to strike," might, I think, fairly describe the attitude of the right hon. Gentleman the Member for Paisley. Our young and more gallant Friend did try to get a dig or two in upon the Treasury Bench; but the "ginger" has come, as far as I can sec, and I am sorry to say it, from the Treasury Bench itself. This is the point I want to make. The right hon. Gentleman the Member for Paisley made two suggestions, and only two, as far as I could see. One was that the cure for all our ills was to associate ourselves with the bloody hand of the Soviet Government of Russia, and the other, less deliberately stated, was that we should return to the old and battered ideas of Free Trade. The hon. and gallant Member for Leith has taunted the Prime Minister with having held out golden hopes to the country. I say—I hope without offence—that his leader, the right hon. Gentleman for Paisley, held out golden hopes at his election. He came back to this House to pulverise the Government, to ginger up, not only the Government, but the Opposition—and look at them to-night! Here is our hon. and gallant Friend holding the fort, and behind him the Members of the Labour party, while the whole Opposition have deserted that bench, because their leader had not the courage to strike out—to bring forward one single straightforward practical proposal or to attack the Government.

Lieut. - Commander KENWORTHY

Where is your leader?

Mr. PALMER

That gibe has no effect on me. My leader, as you call him, is lying ill in bed to-day, and it is very poor fun to make such a gibe.

Lieut.-Commander KENWORTHY

He would give us more ginger.

Mr. PALMER

If the hon. Member for the Soviet Division will be patient he shall have the ginger—

Major LLOYD-GREAME

Is this cross questioning on the subject of valetudinarianism in order in this Debate?

The CHAIRMAN

I would suggest to the hon. Member, who has not been very long with us, that he should address his remarks, and particularly his epithets, to the Chair.

Mr. PALMER

Although I have not been long in my present position I have been thirty-five years looking at these proceedings from aloft and I ought to have known I was transgressing. I apologise to you, Sir; I was led astray by the interruption. If the Prime Minister has anything to answer I am sure that with all his courage and capacity he will answer it, but I listened for fifty minutes to the right hon. Gentleman the Member for Paisley and I never heard so many platitudes delivered in a rotund voice. [HON. MEMBERS: "What is your remedy?"] My remedy, and the remedy of the hon. Member who at the present moment is ill in bed—(Laughter)— it is not a very humorous thing that a man is ill in bed—is that all our difficulties arise from high prices, and that the cure for all the difficulties with which we have to cope at present is to "make Germany pay."

Lieut.-Commander KENWORTHY

I noticed that the hon. Member spoke of "ginger" about twenty-seven times. He addressed his epithets chiefly to the right hon. Member for Paisley (Mr. Asquith) and the hon. Member for Leith (Captain W. Benn). I think he started to compliment me, but he was pulled up by the Chair. I do not propose to return the compliment. The right hon. Gentleman and the hon. and gallant Member for Leith can look after themselves, but I am going to try to put a little "ginger" into the Treasury Bench in the four minutes that are left to me. 1n April, 1919, a Committee set up by the Board of Trade reported on the question of trusts and combines, and made certain recommendations. We are now approaching April, 1920 and nothing whatever has been done, except the passing of the perfectly futile Profiteering Act, which I divided against in the small hours of the morning. We got two followers in that Division. I condemned the Bill then. I said it would do no good for two reasons. First of all, it did not in any way attack the wholesaler, the combine or the trust; and secondly, it did not tackle the subject from an international point of view. Let me recall the very admirable declaration issued by the Grand Muftis of the Peace Conference, in which they counselled disarmament, the end of military adventures, peace and free trade for everyone except themselves It was a case, very much, of the Devil rebuking Sin. Only a few days after this proclamation advising the half-starved nations of Europe to disarm and demobilise, we were being presented here with tremendous Estimates for the Army, Navy, and Air Force, for which no real case was made out. That same proclamation advised the ending of economic barriers between the nations; yet we have here a Government which, until it was pulled up in the Courts, did much to prevent the circulation of commodities between the different countries. We have been prevented from getting cheap cutlery and glass-ware, and other articles of Household use, which we can import at a lower price than that at which we can manufacture them our-selves. This has meant the keeping up of the price of goods.

11.0 P.M.

May I draw attention, in the two minutes that remain to me, to the great need of immediate international action to control the prices of the staple commodities. Take the case of coal in our own country. We control coal here, and the price is low in comparison with the world price. If the control were removed, we should have to pay at once the world price of coal, less insurance and freight. Coal is controlled, and we are enabled to pay less for it by making our Allies and neutrals pay more. That may suit us for the moment, but, in the long run, it is going to breed ill-will. Wool, oils, copper, steel and the like are not controlled, and the result is that we have to pay the world price. Prices, like water, find their own level. As the Reports of the one or two Committees show, this is really an international ques tion, and it can be tackled only by international action. We must control prices for the whole world by consulting together.

It being Eleven of the Clock, the Chairman proceeded, pursuant to Standing

Order No. 15, to put forthwith the Questions necessary to dispose of the Vote.

Question put, "That Item Class II. (Board of Trade) be reduced by £100."

The Committee divided: Ayes, 54; Noes, 238.

Division No. 59.]	AYES.	[11.0 p.m.
Barnes, Major H. (Newcastle, E.)	Hirst, G. H.	Sitch, Charles H.
Bell, James (Lancaster, Ormskirk)	Hogge, James Myles	Smith, W. R. (Wellingborough)
Benn, Captain Wedgwood (Leith)	Irving, Dan	Spencer, George A.
Billing, Noel Pemberton-	Kelley, Major Fred (Rotherham)	Swan, J. E. C.
Bowerman, Rt. Hon. Charles W.	Kenworthy, Lieut.-Commander J. M.	Thomas, Brig.-Gen. Sir O. (Anglesey)
Brown, James (Ayr and Bute)	Lawson, John J.	Thomson, T. (Middlesbrough, West)
Cairns, John	Lunn, William	Thorne, G. R. (Wolverhampton, E.)
Cape, Thomas	Maclean, Rt. Hon. Sir D. (Midlothian)	Tootill, Robert
Carter, W, (Nottingham, Mansfield)	Malone, Lieut.-Col. C. L. (Leyton, E.)	Walsh, Stephen (Lancaster, Ince)
Clynes, Rt. Hon. J. R.	Morgan, Major D. Watts	Waterson, A. E.
Edwards, C. (Monmouth, Bedwellty)	Murray, Dr. D. (Inverness & Ross)	Wignall, James
Entwistle, Major C F.	Myers, Thomas	Williams, Aneurin (Durham, Consett)
Finney, Samuel	Newbould, Alfred Ernest	Williams, Col. P. (Middlesbrough, E.)
Galbraith, Samuel	O'Grady, Captain James	Wilson, Rt. Hon. J. W. (Stourbridge)
Gritten, W. G. Howard	Palmer, Charles Frederick (Wrekin)	Wood, Major M. M. (Aberdeen, C.)
Grundy, T. W.	Parkinson, John Allen (Wigan)	Young, Robert (Lancaster, Newton)
Harmsworth, Hon. E. C. (Kent)	Robertson, John
Hartshorn, Vernon	Royce, William Stapleton	TELLERS FOR THE AYES.—
Hayday, Arthur	Short, Alfred (Wednesbury)	Mr. Tyson Wilson and Mr. Neil Maclean.
NOES.
Agg-Gardner, Sir James Tynte	Courthope, Major George L.	Hunter, General Sir A (Lancaster)
Allen, Lieut.-Colonel William James	Cowan, D. M. (Scottish Universities)	Hurst, Lieut.-Colonel Gerald B.
Ashley, Colonel Wilfrid W.	Croft, Brigadier-General Henry Page	Inskip, Thomas Walker H.
Atkey, A. R.	Dalziel, Sir D. (Lambeth, Brixton)	James, Lieut.-Colonel Hon. Cuthbert
Austin, Sir Herbert	Davies, Alfred Thomas (Lincoln)	Jephcott, A. R.
Bagley, Captain E. Ashton	Davies, Major D. (Montgomery)	Jodrell, Neville Paul
Baird, John Lawrence	Davies, Sir Joseph (Chester, Crewe)	Johnson, L. S.
Baldwin, Stanley	Davison, Sir W. H. (Kensington, S)	Jones, Sir Evan (Pembroke)
Barlow, Sir Montague	Dean, Lieut.-Commander P. T.	Jones, Henry Haydn (Merioneth)
Barnett, Major R. W.	Doyle, N. Grattan	Jones, J. T. (Carmarthen, Llanelly)
Barnston, Major Harry	Duncannon, Viscount	Jones, William Kennedy (Hornsey)
Barrie, Charles Coupar	Edgar, Clifford B.	Kellaway, Frederick George
Bell, Lieut Col. W C. H. (Devizes)	Edge, Captain William	Kerr-Smiley, Major Peter Kerr
Bellairs, Commander Carlyon W.	Edwards, Allen C. (East Ham, S.)	King, Commander Henry Douglas
Benn, Sir A. S. (Plymouth, Drake)	Edwards, Major J. (Aberavon)	Knights, Capt. H. N. (C'berwell, N.)
Bennett, Thomas Jewell	Elliot, Capt. Walter E. (Lanark)	Law, Alfred J. (Rochdale)
Bird, Sir A. (Wolverhampton, West)	Elveden, Viscount	Law, Rt. Hon. A. B. (Glasqow, C.)
Blades, Sir G. Rowland	Eyres-Monsell, Commander B. M.	Lewis, Rt. Hon. J. H. (Univ., Wales)
Blake, Sir Francis Douglas	Falcon, Captain Michael	Lewis, T. A. (Glam., Pontypridd)
Blane, T. A.	Farquharson, Major A. C.	Lindsay, William Arthur
Borwick, Major G. O.	Fell, Sir Arthur	Lister, Sir J. Ashton
Boscawen, Rt. Hon. Sir A. Griffith-	Fisher, Rt. Hon. Herbert A. L.	Lloyd, George Butler
Bowyer, Captain G. E. W.	Foreman, Henry	Lloyd-Greame, Major P.
Brassey, Major H. L. C.	Foxcroft, Captain Charles Talbot	Locker-Lampson, G. (Wood Green)
Bridgeman, William Clive	Gardiner, James	Locker-Lampson, Com. O. (H'tingd'n)
Briggs, Harold	George, Rt. Hon. David Lloyd	Long, Rt. Hon. Walter
Britton, G. B.	Gibbs, Colonel George Abraham	Lorden, John William
Broad, Thomas Tucker	Gilmour, Lieut.-Colonel John	Lort-Williams, J.
Buchanan, Lieut.-Colonel A. L. H.	Glyn, Major Ralph	Loseby, Captain C. E.
Buckley, Lieut.-Colonel A.	Gould, James C.	Lowther, Lt.-Col. Claude (Lancaster)
Bull, Rt. Hon. Sir William James	Green, Joseph F. (Leicester, W.)	Lyle, C. E. Leonard
Burdon, Colonel Rowland	Greene, Lieut.-Col. W. (Hackney, N.)	Lyle-Samuel, Alexander
Burn, Col. C. R. (Devon, Torquay)	Greer, Harry	Lynn, R. J.
Butcher, Sir John George	Gregory, Holman	Lyon, Laurance
Campbell, J. D. G.	Guest, Major O. (Leic, Loughboro')	M'Curdy, Charles Albert
Carew, Charles Robert S.	Guinness, Lieut.-Col. Hon. W. E.	M'Donald, Dr. Bouverie F. P.
Carr, W. Theodore	Hacking, Captain Douglas H.	Mackinder, Sir H J. (Camlachie)
Casey, T. W.	Hallwood, Augustine	M'Lean, Lieut.-Col. Charles W. W.
Cecil, Rt. Hon. Evelyn (Birm., Aston)	Hall, Lieut.-Col. Sir F. (Dulwich)	Macmaster, Donald
Chamberlain, Rt. Hn. J. A.(Birm., W.)	Hambro, Captain Angus Valdemar	Macquisten, F. A.
Child, Brigadier-General Sir Hill	Hanson, Sir Charles Augustin	Maddocks, Henry
Clay, Lieut.-Colonel H. H. Spender	Henderson, Major V. L. (Tradeston)	Mallalieu, F. W.
Clough, Robert	Herbert, Dennis (Hertford, Watford)	Malone, Major P. B. (Tottenham, S.)
Coats, Sir Stuart	Hewart, Rt. Hon. Sir Gordon	Marks, Sir George Croydon
Cobb, Sir Cyril	Hilder, Lieut.-Colonel Frank	Mitchell, William Lane
Cockerill, Brigadier-General G. K.	Hinds, John	Moore-Brabazon, Lieut.-Col. J. T. C
Colvin, Brig-General Richard Beale	Hohler, Gerald Fitzroy	Moreing, Captain Algernon H.
Conway, Sir W. Martin	Hood, Joseph	Morris, Richard
Coote, Colin Reith (Isle of Ely)	Hope, James F. (Sheffield, Central)	Morrison, Hugh
Cope, Major Wm.	Hopkins, John W. W.	Mosley, Oswald
	Home, Edgar (Surrey, Guildford)	Mount, William Arthur
Murray, John (Leeds, West)	Rothschild, Lionel de	Thomson, Sir W. Mitchell- (Maryhill)
Neal, Arthur	Roundell, Colonel R. F.	Thorpe, Captain John Henry
Newman, Colonel J. R. P. (Finchiey)	Samuel, A. M. (Surrey, Farnham)	Townley, Maximilian G.
Newman, Sir R. H. S. D. L. (Exeter)	Samuel, Samuel (W'dsworth, Putney)	Vickers, Douglas
Nicholson, Reginald (Doncaster)	Sanders, Colonel Sir Robert A.	Ward, Col. J. (Stoke-upon-Trent)
Nield, Sir Herbert	Sassoon, Sir Philip Albert Gustave D.	Ward, Col. L. (Kingston-upon-Hull)
Palmer, Brigadier-General G. L.	Scott, A. M. (Glasgow, Bridgeton)	Ward, William Dudley (Southampton)
Parker, James	Scott, Sir Samuel (St. Marylebone)	Warren, Lieut.-Col. Sir Alfred H.
Parkinson, Albert L. (Blackpool)	Seely, Major-General Rt. Hon. John	Watson, Captain John Bertrand
Pease, Rt. Hon. Herbert Pike	Shaw, William T. (Fortar)	Weston, Colonel John W.
Peel, Lieut.-Col. H. F. (Woodbridge)	Shortt, Rt. Hon. E. (N'castle-on-T.)	Wheler, Major Granville C. H.
Peel, Col. Hn. S. (Uxbridge, Mddx.)	Smith, Sir Allan M. (Croydon, South)	White, Lieut.-Col. G. D. (Southport)
Philipps, Sir Owen C. (Chester, City)	Smithers, Sir Alfred W.	Whitla, Sir William
Pickering, Lieut.-Colonel Emil W.	Sprot, Colonel Sir Alexander	Wigan, Brig.-Gen. John Tyson
Pinkham, Lieut.-Colonel Charles	Stanler, Captain Sir Beville	Willey, Lieut.-Colonel F. V.
Pollock, Sir Ernest M.	Stanley, Lieut.-Colonel Hon. G. F.	Williams, Lt.-Com. C. (Tavistock)
Pownall, Lieut.-Colonel Assheton	Stanton, Charles B.	Williams, Col. Sir R. (Dorset, W.)
Prescott, Major W. H.	Steel, Major S. Strang	Williamson, Rt. Hon. Sir Archibald
Pretyman, Rt. Hon. Ernest G.	Stephenson, Colonel H. K.	Willoughby, Lieut.-Col. Hon. Claud
Pulley, Charles Thornton	Stevens, Marshall	Wills, Lieut.-Colonel Sir Gilbert
Purchase, H. G.	Strauss, Edward Anthony	Wilson, Lt.-Col. Sir M. (Bethnal Gn.)
Rae, H. Norman	Sturrock, J. Leng	Winterton, Major Earl
Rankin, Captain James S.	Sugden, W. H.	Woolcock, William James U.
Raper, A. Baldwin	Surtees, Brigadier-General H. C.	Yate, Colonel Charles Edward
Raw, Lieutenant-Colonel N.	Sykes, Sir Charles (Huddersfield)	Yeo, Sir Alfred William
Rees, Sir J. D. (Nottingham, East)	Talbot, G. A. (Hemel Hempstead)	Young, Sir Frederick W. (Swindon)
Reid, D. D.	Taylor, J.
Richardson, Alexander (Gravesend)	Terrell, Captain R. (Oxford, Henley)	TELLERS FOR THE NOES.—
Roberts, Sir S. (Sheffield, Ecclesall)	Thomas-Stanford, Charles	Lord E. Talbot and Capt. Guest.
Robinson, S. (Brecon and Radnor)	Thomson, F. C. (Aberdeen, South)

Original Question put, and agreed to.

Resolution to be reported To-morrow; Committee to sit again To-morrow.

The remaining Orders were read, and postponed.