RAILWAYS BILL.

HC Deb 30 May 1921 vol 142 cc619-735

Order read for resuming Adjourned Debate on Amendment to Question [26th May] "That the Bill be now read a Second time."

Which Amendment was, to leave out from the word "That "to the end of the Question, and to add instead thereof the words this House cannot assent to the Second Reading of a Bill which not only fails to provide for the public ownership and control of the railways, but would prejudice the future acquisition of the railways by the State on a fair and economic basis, which provides for the payment to the railway companies of a sum far in excess of the amount due to them in consequence of temporary State control, and which, repealing the statutory limitation imposed upon railway rates, vests in a non-elected body the arbitrary power of fixing those rates."—[Mr. Clynes.]

Question again proposed, "That the words proposed to be left out stand part of the Question."

Mr. G. LAMBERT

The apathy with which this Bill is regarded in the country and the House is, to me, very deplorable. This is a Measure fraught with very grave moment to the future of the country. So far, the Debates have been very languid, and very little interest seems to be taken in this extraordinarily important Measure. This Bill deals with the future of the railways and railway rates, and when I realise what the railway rates were in 1913 pre-War, and what they are to-day under the new system. I am really quite astonished that there has been so little notice taken of these proposals. According to a Table furnished by the Minister of Transport, in January last the pre-War receipts for passengers on the railways were £44,000,000; for parcels and goods, £78,000,000; and from other sources, £13,000,000. That is a total receipts before the War of £135,000,000 a year. Under the new system the new passenger rates provide £105,000,000; parcels and goods, £188,000,000; and other sources, £25,000,000, making a total of £318,000,000 a year. There is an increase over pre-War rates for passengers and traders of no less than £183,000,000 a year. In other words, where the public were paying £1 in 1913, to-day they are paying £2 10s., and the service is infinitely worse, pilfering was never so rampant, and breakages were never so great.

We must realise that this is a heavy tax not only upon industry but upon almost every individual user of any commodity in this country. There are 40,000,000 people in Great Britain, and they are paying something like £4 10s. more per annum each in railway rates than they were paying before the War, and that is a considerable sum in a family. The point I propose to concentrate upon is whether the rates under, this Bill will be reduced. Will there be a reduction of the present very high railway rates? I must confess that I cannot see any evidence of it. The Minister of Transport suggested that there might be some reduction through amalgamation, and I think he put it at £25,000,000 a year. That, however, is a fleabite compared with the £183,000,000 the rates have gone up since 1913. The railways are placed to-day, or will be placed under this Bill, in a very privileged position. The net receipts in 1913 were the highest in the history of the railway companies, and these are to be guaranteed. [HON. MEMBERS: "No!"] At any rate, I read the Bill in that way, and this is what Clause 52 provides: The charges to be fixed in the first instance for each amalgamated company shall be such as will, in the opinion of the rates tribunal, so far as practicable yield, with efficient and economical working and management, an annual net revenue (hereinafter referred to as the standard revenue) equivalent to the aggregate net revenues in the year nineteen hundred and thirteen of the constituent companies and the subsidiary companies absorbed by the amalgamated company. That is to say, this tribunal is directed to fix the railway rates so that the railway companies shall have a net revenue not less than the year 1913, and surely that is quite clear. I am here to-day, not as a railway shareholder or as one having anything to do with railway companies, but simply as a member of the public, and they have to be protected in this matter. This Bill reverses all previous practice in dealing with the railway companies. The rates of the railways after four years of inquiry were fixed by the Act of 1894, and the onus is laid upon the railway companies to prove the reasonableness of any excess charge they make. Now we have three members of a tribunal who are to decide as to whether the rates are reasonable or not, and upon whom is laid a special statutory power to see that the rates are high enough to secure the companies their 1913 revenue.

Who are the members of this tribunal? One of them has to be acquainted with commerce, another has to be acquainted with the railways, and the third brings in the lawyer, and the lawyer must be the chairman. They are to fix the rates, having regard to Clause 52, and having regard to the efficient and economical working of the railways. I ask the House what possible knowledge can this tribunal, or, at any rate, what knowledge can the commercial gentleman and the lawyer have of the efficient and economical working of the railways. They are to be the judges. They are to fix the rates, and it is to them that the public have to look for protection, and to them only. They have no other protection. I had the honour of sitting on some of these railway committees a great many years ago, and the public in these matters is a kind of unorganised chaotic mass of uninformed people. On the other side there are very skilled railwaymen watching every movement on the board in this House. Where are the public to-day? They are not represented here. If the public were here they would not have the knowledge which these skilled railway officials possess. I have sat on railway committees, and I have seen the railway managers come down armed with financial information collected by their staff, and it is a very skilled and efficient staff, and they bring chapter and verse, but what protection has the public? They have not this skilled staff and all these accounts and checks and the rest of it. Before the War I remember that we got the Board of Trade and the Board of Agriculture to represent the agriculturists to inquire into the reasonableness of the railway rates, and then agriculturists and traders were found to be very impotent. To-day the whole thing is changed, and this tribunal is the sole protection for the public in this vital matter of inland transport.

The point which is causing me a good deal of apprehension is how industry is to recover in this country. I am not speaking in the least antagonistic to the railways, but I am speaking as one who sees and visualises the situation outside as being one fraught with extreme and extraordinary gravity. I say that railway rates ought to come down, and must come down, if industry is to recover. Let us just visualise the situation for the moment. We had the Treasury coming down here not long ago and saying the taxpayer will not pay more than £950,000,000 next year, and that we must have a great reduction of expenditure. "We have unemployed to-day without the miners 1,750,000. We have paid out in one week £1,800,000 in unemployment, benefit, that is, nearly £2,000,000, or nearly £100,000,000 a year." How long can this go on? That is one of the reasons why I say this Railway Bill should be very carefully examined, because it is essential that nothing should be done here which will hamper trade or prevent it recovering in this country. In this Bill there is no incentive to the railway companies to economise and put forth their best. This Rates Tribunal is to see, so far as they can, that the net receipts of 1913 are maintained. Practically you put the railways in the position of a Government Department. If a Government Department is inefficient, it still goes on, but if a private individual is inefficient, he goes down. I want fair play to the shareholders. We know that the shareholders put up their money, and that without their money the railways could not have been built, but you cannot put railway shareholders in a privileged position as compared with other capitalists in the country. If other capitalists do not use their property properly, they lose it, and you have no right to guarantee the property of the railway shareholders if they do not do their duty and put their best leg foremost.

With regard to the cost of living, the railways are a very important matter. Nearly everything we consume comes by railway. Today, in my own county of Devonshire, it is very difficult to get produce from Devonshire to London. The railway rates kill it. My right hon. Friend the Member for Platting (Mr. Clynes) made an admirable speech the other day, but may I say to him, very respectfully, that he and his friends, in chasing this hare of nationalisation, are forgetting the public? In this matter I am thinking more of the workers than I am of the capitalists. This is a question of the workers. If the workers have to pay more for their food, they will suffer. The rich people are not going to suffer if food goes up; they will get enough. I can meet this argument of nationalisation at any time and am prepared to meet it. Our great concern should be how the population is to be maintained in its present standard of comfort. Have we any guarantee that the present railway rates will not be increased after the 18 months allowed in the Bill? Do you imagine that the trade of this country can stand an increase on the £183,000,000 put on since the War?

Mr. MARRIOTT

It cannot.

Mr. LAMBERT

But have we any guarantee at all that this tribunal will not increase rates? Surely that is a very important matter to the British public, to the travelling public, and also to those traders who use the railway. This is not a matter of luxury. The luxury travelling can be put on one side, it is probably a matter of £1,000,000; but you run into hundreds of millions to be paid by the traders and the general public in the general course of their business. The Minister of Transport said he hoped that great economies would be effected by what he called statistics. Statistics, he said, were the pillar of the Bill. What is to prevent the railway companies, or what has there been, from keeping statistics?

Sir F. BANBURY

We have plenty of them.

Mr. LAMBERT

I am sure of it. They cost a great deal of money. My right hon. Friend says statistics are the pillar of the Bill—one of the pillars of the Bill. By the keeping of these statistics are we going to get a reduction of railway rates? That is the only point I am thinking about. This Bill is very beautifully balanced. I must not use the term "guaranteed rates,"but the railways, according to the Bill, are to get something very near it, their pre-War net receipts. The railway rates are to be fixed by this tribunal of a commercial gentleman, railwayman, and the lawyer. The wages are to be fixed by a National Board. Everything is to be beautifully balanced; but will it work? I am very doubtful of these beautifully balanced Parliamentary arrangements. The Minister of Transport has turned himself, in the construction of this Bill, into a kind of railway Blondin, though his figure does not look like tight-rope walking. It is a delicately equipoised arrangement. However, we have had a little experience of Acts like this, beautiful Acts of Parliament. There was a Housing Act of Parliament. It looked beautiful on paper. How has it worked out in practice? It is stated in this memorandum that the Bill will enable railways to effect economies long desired. Why have not the railways effected them before? They have had the liberty. Why must we wait for a Railway Bill to effect economies long desired by the railway directors and the management? Surely it is not necessary to have a Bill to do it. I say to those gentlemen who have made this bargain with the Government, the railway directors, that they should be very careful about this. By and by traders will wake up, and if rates do not drastically come down there will be an infuriated agitation against railways. I think my right hon. Friend said he was rather regretful that workers had not been represented on the boards of directors. After listening very carefully to this discussion, I would say that if the National Union of Railwaymen are to go upon the board to represent one particular interest, they are better off; but if they are to go there to utilise their experience as railway employs, in order to increase the general efficiency of the industry, it would do a great deal of good, and I cannot help thinking, when I see the list of railway directors, that it would have been far better if the railway companies had selected some of their own employés as directors. Of course, I would never say that they should have selected fewer Members of Parliament.

Let us come to this question of grouping. Why do you want a Bill to enable the railways to group themselves? If they want to do it, let them do it voluntarily. The voluntary principle is the mainspring of our industry and of our prosperity. I do not believe for a moment in this compulsory grouping. What does Parliament know about it? The railway companies must be judges of their own business. If they want to group themselves, let them do it. I live in the South of England, and I have a special grievance in the matter. We have got one railway serving the South-west of England which is very progressive, the Great Western Railway, and I say, "All honour to them! "But we have another, the South Western.

Mr. GRITTEN

Look at the North Eastern!

Mr. LAMBERT

I have not got experience of the North Eastern, but the South Western Railway—well, I do not think I need say much more. It was at one time very up-to-date and progressive. To-day it is very different indeed. The Great Western Railway Company can run trains to Exeter, 175 miles, in an hour's less time. I do not know whether there are any directors of the South Western Railway here. If so, I would like them to ride in one of their own lavatory compartments from London to Plymouth on a hot summer day. The windows are hermetically sealed. When it comes to the question of convenience of the public living in outlying districts, as I do, there is no convenience at all. Here we have these railways, the South Western, the South Eastern, and the Brighton, all of them serving the South and the West of England, to be grouped. We shall have stereotyped sluggishness in the South. I object to it, very much. Let me take another question. When this Bill passes, I understand the Ministry of Transport is still to go on.

Mr. GRITTEN

Get rid of it!

Mr. LAMBERT

It is still to go on. The Minister of Transport will be leaving, to our great regret. [Laughter.] Oh, yes, I have great respect for my right hon. Friend. He is a skilled railwayman. The Ministry of Transport is to go on, and who will succeed him there? Some politician. What does a politician know about railways? That is the worst of bringing these matters of industry under the purview of this House. I am a very strong individualist. This country was built up on individualism, energy, and initiative. Are we to have a politician, like we have with the Post Office, to control the railways?

Major MACKENZIE WOOD

You controlled the Admiralty, did you not?

Mr. LAMBERT

My hon. Friend said I controlled the Admiralty. As a matter of fact I was one of the members of the Board of Admiralty. Does he really compare a fighting force, which must be under the control of the Crown, with this industry? Let him remember, too, that were it not for industry the money could not be found for the Admiralty. Let those gentlemen who want nationali- sation show me a single nationalised railway system in the whole world equal to our own, even to-day. [Interruption.] Bring it along, bring your evidence. I want to learn about these matters. If you can show me any—

Mr. MILLS

The hon. Gentleman wants a comparison as to the cost of travelling. I would refer him to the cost of travelling on the Belgian State railways.

Mr. LAMBERT

Will my hon. Friend bring that comparison down to the House? Let him get on this Committee and prove that the Belgian or French, or any other nationalised, railways are as efficient and as cheap as railways managed by individual enterprise.

Mr. J. JONES

That will be easily done.

Mr. LAMBERT

It is a matter on which there will be a difference of opinion. I am anxious about the workers of the country, because the workers will suffer if a Bill such as this is allowed to go on and the railway rates are kept up. I am not one of those who say that this Bill should pass because the railways have got a great claim against the State. Under the Bill £60,000,000, less Income Tax, £51,000,000 actually, is to be paid. This is not a question of £60,000,000 this year, with me. It is a question of the £183,000,000 a year that has been put on to the railway rates since the War began, and which I do not believe the industry of this country can stand. I believe that the principle underlying this Bill is wrong. Why should we not go back to the system which worked in 1894 and put the onus of proof of any increase of charge upon the railway companies? This Bill does not do that. It simply leaves the railway companies—well-organised, disciplined and efficient—against the traders, who are chaotic, ill-organised and inefficient in presenting their case to these three Commissioners. I would put the responsibility upon the railways themselves. Give them all freedom of management, give them an opportunity of recovery, but say to them that year by year these rates have got to come down. They must come down if this country is again to recover its position. I object very strongly to the principle which underlies the Bill that the onus of proof of the reasonableness of rates must be on the trader and not on the railway. I believe that if this Bill is to do any good it must be hatched again in Committee, and hatched differently; its ground-work is wrong. I am speaking solely as one who is attempting to represent the great British public, believing that their interest is the cheapest possible railway facilities for both goods and passengers. I hope that when the Bill goes to the Committee the Members of the Committee will go to that body with the fixed idea that the railways exist for the community, and not the community for the railways.

The ATTORNEY - GENERAL (Sir Gordon Hewart)

There are certain remarks in the speech of my right hon. Friend the Member for South Molton (Mr. Lambert) with which it is not quite easy to agree, but there were at least two remarks with which I, at any rate, cordially agree. One was his statement that this Bill is certain to go to a Committee, which means, I take it, that he has no doubt at all as to the result of the Debate and of the Division, if Division there be, on the Second Reading. The other was that this Bill is concerned with what he called the vital matter of inland transport. No one who has thought about the matter and I hope it is not an intrusion for Members who have not the good fortune to be directors of railway companies to intervene in this Debate—no one who has thought at all about the matter can fail to come to that conclusion. We are dealing in this Bill, rightly or wrongly, with a problem which is of profound importance to the trade, the industry, and the whole future welfare of this country. Although we are dealing with it, as things now stand, after the "War, the problem is not a post-War problem. It is not a problem which the War has made for us. It is essentially a pre-War problem, although we are resuming it after the War, with the experience, and, it may be, subject to certain modifications, produced by the period of War itself. What was the problem? You go back, as my right hon. Friend the Minister of Transport went back in his speech on Thursday, to the position in the year 1913 or the early part of 1914. I do not want to make one disparaging remark about the railway system of this country, nor about any of those who have been responsible for its conduct and control. But, whatever the causes may be, you had in this country a railway system of which it was true to say that the cost to the user was relatively high, that the working of the railways was relatively uneconomical, and that the return to-those who were interested as stockholders in the railway companies was relatively low. Side by side with that state of affairs you had this further fact, that the railways, by reason of want of capital and of difficulties in raising capital, had not got it in their power to carry out those alterations and improvements which were necessary, on the one hand, for economy, and, on the other hand, for efficiency.

That was the pre-War condition. It has been modified to some extent, no doubt, by the experience of the War, but that is the problem with which this Bill has to deal. The keynote of the Bill is amalgamation, and the various steps which amalgamation requires and involves. I thought that my right hon. Friend (Mr. Lambert) seemed to take a somewhat gloomy view of the economies which might be expected as a result of the Bill. He referred to the figure of £25,000,000 mentioned by the Minister of Transport, but that is not a figure which is intended to represent the whole of the possible economy. I see from to-day's newspapers that there is, at any rate, one distinguished railway chairman who thinks that that figure was an excessive estimate. I think he puts it rather at something in the neighbourhood of £2,000,000 to £4,000,000. It was never suggested, however, that the figure of £25,000,000 represented the whole of the economies which might be expected when this Bill becomes an Act. There will be, or, at any rate, we hope that there will be, enormous further economies arising from, among other things, the declining cost of everything that is employed. My right hon. Friend also seemed to me to take a rather gloomy view of the Rates Tribunal. He appeared to think that the three members of that tribunal were going to arrive at their decisions by a process of imagination. They will, of course, have evidence before them; they will have information and materials before them; and when my right hon. Friend says, as he did more than once, that the public have no representation, he forgets that it is a part of the business, and the largest part of the business, of the Ministry of Transport to represent that very public.

The remaining complaint which my right hon. Friend made was that under the Act, when this Bill becomes an Act, there will be no incentive—meaning by that, I suppose, no pecuniary incentive—to the railway companies to effect economies. I should like to join issue with that statement. It seems to reecho a criticism which was made the other day by my hon. and gallant Friend (Major Hills), who compared a certain part of the machinery under this Bill to the machinery of that part of the Finance Act of 1915 which imposed the Excess Profits Duty. I cannot help thinking that my hon. and gallant Friend, who knows that Act of Parliament so well, has inadvertently been a little unfair to this Bill. He was dealing with Clause 53 of the Bill, which makes provisions as to the revenue obtained by an amalgamated company. That revenue is to be the standard revenue—and the standard revenue means an annual net revenue which is equivalent to the aggregate net receipts of the year 1913—increased by two additional allowances which are set out in Sub-section (1) of Clause 52. But, said my hon. and gallant Friend, if the actual revenue of the railway company is found by experience to exceed that standard revenue plus the two additional allowances, then the company is in the position of a trader who, under the Finance Act of 1915, has to hand back to the State a portion of the profits which he has earned. That, however, is not the case at all. Under the Bill, or, as I hope we shall shortly be able to call it, the Act, the whole of the surplus which has been earned by the company will be retained by the company. There is no question of the company's handing back, either to the State on the one hand or to the trader on the other, any part of the revenue which it has in fact acquired. It will have the whole of that revenue, not only arising during a year, but also arising for a period of something like six months afterwards; because, by Sub-section (6) of Clause 53, it is provided that modifications of rates shall have effect only from the 1st July in the year following the last year under review. It follows, therefore, that for a period of 18 months the railway com- pany may earn and be in possession, and it is not at any time or in any way to be defeated of possession, of the revenue which during that period has been acquired.

The problem which the Rates Tribunal will have to determine will be the problem of what are to be the rates for the future, and what the Bill provides, as I understand it, is that, looking only to the future, and not at all to the past, the Rates Tribunal will provide such a review of the rates as will for the future give to the company two things. These are, first, the standard revenue—that is to say, the revenue based on 1913—and, secondly, an amount equivalent to 20 per cent. of the surplus which the company has been proved to have acquired. As regards the 80 per cent. which it would have acquired if the rates that yielded the surplus were permitted to continue, that 80 per cent. will not be earned. It will not be taken from them, and it will be restored only in an artificial sense to the public, who otherwise would have paid it. There is no question, as there was under the Excess Profits Duty, of handing back to the tax-gatherer or anyone else any part of the profits which have been earned. If experience shows that the railway company earned a surplus revenue over and above the standard revenue, it will be empowered, in a revision of rates for the future, to enjoy the standard revenue plus an amount equivalent to 20 per cent. of that surplus, but not more. I should have thought, with great respect to my right hon. Friend, that that was an incentive to the railway companies to effect economies which would enable them to increase by at least 20 per cent. their standard revenue. I pass from that part of the matter to make one or two observations upon the speech of my right hon. Friend (Sir F. Banbury).

Mr. LAMBERT

Have you finished with me?

Sir G. HEWART

Only for the time being. I pass for the moment to make one or two observations upon the speech of my right hon. Friend (Sir F. Banbury). His speeches are always received with the greatest respect in this House, and for my own part, when I venture to join issue with him upon a matter relating to railway companies, I feel that I am com- mitting an offence which is almost equivalent to brawling in church. After all, however, perhaps he will allow me to take the view that there are many matters in this Bill upon which we are entitled and indeed bound to form a judgment, although we have not had the special advantage of railway experience and management. The right hon. Baronet was concerned, if I rightly heard his speech, to impute to the Minister of Transport, or if not to him to the Government as a whole, all the ingredients in the serious condition in which the railway companies now find themselves. And accordingly he found, or purported to find, that there was a diametrical opposition between two statements which my right hon. Friend had made. The first was that before the War the condition of the railway companies had been continuously going down, and the second was that the largest net receipts which the companies had ever had were received in the year 1913. There is no essential antagonism between those statements, because unhappily the condition of railway companies and the efficiency of railways depend upon a great many other matters besides the total net receipts. But I will ask the House to observe how the right hon. Baronet dealt with the first proposition. He sought to traverse it in this way. He said that in 1896 the price of railway stocks was higher than it had ever been unless one went back to the year 1845. No doubt that statement is true. But by itself I should have thought it was a statement of a most misleading character. If you look, as I have looked, at the Chart which shows the rise and fall in price of railway stocks for a period of thirty-five years from 1885 to 1920, it is indeed true to say that in 1896 the stocks stood at the highest price of the whole of that period; but if you look at the years from 1896 onwards—a period of twenty-four or twenty-five years—it is no less correct to say that there has been an almost continuous decline, and that is the foundation for the absolutely correct statement of my right hon. Friend.

5.0 P.M.

Sir F. BANBURY

It is quite true that in the years from 1906 to 1913 there was a continuous fall, but it was a fall which was shared by every other good security, including Consols, and was entirely owing to a Radical Government.

Sir G. HEWART

Now the right hon. Baronet suggests a field of controversy into which, on a suitable occasion, I might be prepared to enter. But it would be very unsuitable indeed to enter to-day into the misdeeds, and the consequences of the misdeeds, of a Radical Government. What I am concerned with for the moment is, not the cause, but the fact, and the fact, I gather, is agreed that from 1896 onwards there was a continuous fall in the police of railway stock. But when one comes to the years 1913 and 1914, the Government, when it assumed a particular kind of control of the railway companies, guaranteed them the receipts of 1913. Those were, in fact, the highest receipts. They were due to the enormous traffic of the year 1913. When one hears, as one does hear and read, complaints of what has followed upon Government control, it is at least fair to remember that throughout the period of the War the Government guaranteed to the railway companies the receipts of the bumper year 1913, not-withstanding two or three strikes of the first magnitude, notwithstanding the rise in cost of almost everything that was used, the rise in payment of almost everyone who was employed, and also notwithstanding all the other consequences of an utterly unparalleled war. The right hon. Baronet said that the Minister of Trans-port, against whom he seemed—I hope I am wrong—to have developed a certain antipathy, not of a personal character, of course, was not responsible for what occurred before August, 1919. It would have been hard indeed to make him responsible for that, inasmuch as he was not appointed until August, 1919. But the right hon. Baronet added that the Minister of Transport is responsible for what has occurred since then.

Sir F. BANBURY

All the bad things.

Sir G. HEWART

Within a very few days of his appointment we had the great railway strike of September, 1919.

Sir F. BANBURY

Cause and effect.

Sir G. HEWART

If that be what is suggested, then we have the measure once for all of the fairness of this criticism. A few days after my right hon. Friend's appointment there began the great railway strike. There followed, at intervals, two important coal strikes. There followed, through a complication of causes, a great decline in trade—what is called a trade slump. Is it really suggested that my right hon. Friend is responsible for these things? But the right hon. Baronet spoke of the management of the railways by the Minister of Transport. The House is perfectly well aware that throughout the whole of this period the management of the railways has remained in the hands of the companies. It is the companies themselves who have managed the railways. It is quite true that the Minister of Transport has from time to time given certain directions, with regard to which I affirm two propositions that I believe to be absolutely correct. The first is, that no direction has ever been issued under the Ministry of Transport which was not concurred in by the companies.

Sir F. BANBURY

No, I must correct that. Take my own company.

Sir G. HEWART

I am willing to make the exception which my right hon. Friend did on Thursday. I am willing to assume, until the contrary is proved, that the right hon. Baronet differs from all the other railway companies in every respect. The second proposition is, that in the case of settlements of wages, those settlements were in every case approved, indeed, they were more than approved, they were advised, by the negotiating committee. It was only the directions in relation to wages that had the effect of increasing expenditure, and this increase of expenditure had the approval of the Wages Board, including three out of four general managers.

Sir F. BANBURY

One objected—it was not the Great Northern. It was another company.

Sir G. HEWART

The right hon. Baronet is quite right. There was a Scottish railway. We must contemplate not one Athanasius contra mundum, but, apparently, two. But subject to those exceptions, whatever their precise dimensions and value may be, the Wages Board, with the approval of three out of four general managers, approved those increases of wages, because they were only just in order to bring the wages of the railway servants into line with the wages of other persons comparable with them.

Then my right hon. Friend took as an example, and a palmary example, of failure on the part of the Ministry of Transport, the omission to acquire the privately-owned railway wagons. Apparently, the Minister had said that there were some 700,000 of these privately-owned railway wagons, and that they should be acquired on fair terms. As I understand it, the companies are unanimously in favour of the policy of acquiring privately-owned wagons. What was it that stopped that acquisition? It was stopped, or at least postponed, by shortage of money in the hands of the railway companies. It was never suggested or supposed by anyone that it was the taxpayers' money that was to acquire those privately-owned wagons and present them to the railway companies.

The right hon. Baronet, looking at the parentage and origin of the Bill, came to the conclusion beforehand that it must be a bad Bill. He was sure that it could not be anything else. Then, looking at the Bill itself, he says it is a bad Bill, and he puts in the forefront of his criticism the dreadful charge that it is going to destroy the control of Parliament over the country and over the laws which Parliament has made. He founds that charge, as I understand it, upon Clause 3. That wicked Clause, which deals with the provisions to be contained in amalgamations schemes under the Act, actually says that a scheme of that kind may incorporate, with or without modification, any of the provisions of the Companies Clauses Consolidation Act, 1845, and the Acts amending that Act and Part V of the Railways Clauses Act, 1863. That is the foundation of the charge. Now, the House is well aware that those are adoptive Acts. They do not apply unless they are incorporated. And what this Bill does is common, I was going to say, to every private Bill; but in every private Bill of that character it is common form to incorporate these Acts of Parliament, subject to modifications necessary to suit modern circumstances. It is because of that ingredient in this Bill, an ingredient which is a commonplace and common form, that the right hon. Baronet permits himself to say that this measure is one to subvert the control of the country and the laws which Parliament has made.

He makes another appalling accusation against my right hon. Friend the Minister of Transport. He said that my right hon. Friend has revoked, and that he has revoked twice. [Laughter.] Yes, but it is a far more heinous offence than revoking in the card-room; he has revoked a Gas and Electricity Act at Heme Bay, and he has revoked an Electricity Lighting Order in Mid Sussex. The right hon. Baronet's argument is: If these things are done in the green tree, what is to be done in the dry? If the Minister of Transport is so audacious that, even as things stand, now he is prepared to do acts like that, what is to be expected of him if and when this shocking Bill becomes law? That was the argument. Let us look at it. The right hon. Baronet entirely omitted to explain either of two things. He did not explain why these revocations were made, and he did not explain under what powers they were made. These revocations were made because at Herne Bay and in Mid Sussex those who had got an Act in the one case, and those who had got an Order in the other case, were occupying the ground without supplying the need. To have permitted them to continue in the possession of those powers would have been permitting them to continue to play the part of the dog in the manger. Accordingly the Act in the one case and the Order in the other case were revoked. There was nothing novel in it. The powers so to revoke were conferred upon the Board of Trade over 20 years ago by Section 63 of the Electric Lighting Clauses Act, 1899, and all that happened upon this point in the Electricity Supply Act, 1919, was that these well-known and old-established powers were transferred from one department to another. That is the whole of that criticism. But observe the condemnation which the right hon. Baronet bases upon that sub-structure. He says: So what we sacrificed thousands of lives for in this War was to get a Minister who, by his own ipse dixit, and by his statement in the 'London Gazette,' can revoke an Act which this House has passed."—[OFFICIAL REPORT, 26th May, 1921; col. 387, Vol. 142.] I refer to that statement, not for its own intrinsic merits, which are no doubt great, but as a fair type and sample of the criticism to which, in some quarters at any rate, this Bill has been and is exposed.

I come now to something which, if the right hon. Baronet will allow me to say so, is a little more serious—not much, but a little more serious. I have already referred to the right hon. Baronet's suggestion or delusion that the Ministry of Transport has been managing the rail- ways of this country since August, 1919 He followed up that statement by a further statement that under the Bill the management and control of the railways are for the most part either continued in the Ministry or vested in various tribunals or bodies set up by the Bill. There is only one objection to that statement, but it is a serious objection. The statement is palpably at variance with notorious facts. What are the facts? I want to make three remarks about that state-statement, and three only. In the first place, all the temporary powers of the Ministry of Transport cease under this Bill. Members of the House who have looked into the matter are aware that those powers are contained in Section 3, Sub-section (1) of the Act of 1919. I am not going to enumerate them. They deal with such different matters as rates and fares, salaries and wages, working or discontinuance of parts of undertakings, and the carrying out alterations, improvements, or additions. Under the Bill those powers in the Minister cease. My second observation is, that the powers which are conferred upon the Minister by this Bill are strictly limited and necessary in character. Clause 12, Sub-section (2), confers powers as to common standards and co-operative working, and Clause 15 confers powers as to restrictions on combination, allocation of traffic, and pooling of receipts. I want to make two remarks about these powers. In the first place, so far as the companies are concerned, the interposition of a committee on which the railway companies are to have a majority, six out of nine, secures the companies against the arbitrary exercise of the powers, and it is provided that no Order can be made which prejudicially affects the interests of stockholders. My second observation is—and I submit this to my right hon. Friend the Member for South Molton (Mr. Lambert)—that it is obvious that where a regulated monopoly is to be substituted for unlimited competition there ought to be a Government Department charged with the duty of seeing that the monopoly is not abused. When I am told, as we are told again and again, that the public are to have no voice in this matter, I say that one answer to that criticism, and not the only one, is that the public will have a representative in the Ministry of Transport. My right hon. Friend (Sir E. Geddes) said on, Thursday, and I repeat his words: I want to put the thing fairly. I want to give the railways a reasonable amount of freedom in their management, and the community a proper amount of control."—[OFFICIAL REPORT, 26th May, 1921; cols. 354–5, Vol. 142.] My third observation under this head remains. The right hon. Baronet, I am sure, is aware, because he has given the Bill minute and careful study, that under the Bill if revenue is affected by an order of the Railway and Canal Commission, or by an order of the Minister, Clauses 52 and 53 come into operation. Those are Clauses containing provisions as to the adjustment of powers of charging to revenue, and a periodical review of standard charges and exceptional rates.

Sir F. BANBURY

The rates may not bring in revenue.

Sir G. HEWART

The right hon. Baronet concluded that part of his criticism by going so far as to say that this Bill is a bastard sort of Nationalisation Bill. Does that mean—it will be interesting to know, and perhaps we shall soon know—that the right hon. Baronet will go into the Lobby to support the Amendment of the right hon. Member for Miles Platting?

Sir F. BANBURY

The Question to be put from the Chair need not be the Amendment of the right hon. Member for Miles Platting, but the words, "That this Bill be now read a Second time," stand part, and, therefore, it would be perfectly open to vote against the words standing part without in any way committing oneself to the Amendment of the right hon. Member.

Sir G. HEWART

Then the right hon. Baronet has a means of escape. I think that the right hon. Baronet was a little hard upon the amalgamation tribunal. He said that everything in this Bill seemed to tend to produce new posts. But it is only if the parties fail to agree that the tribunal is to act as arbitrator. There was another part of his speech in which he seemed to be under a misapprehension as to Clause 4 of the Bill. That Clause does not require the approval of the Ministry to a voluntary scheme, but, on the other hand, the tribunal "must," not "may," confirm a scheme if that scheme conforms with the requirements laid down in Clause 3.

Then I come to the remarks of the right hon. Baronet upon the sum of £60,000,000, which it has been agreed shall be paid to the companies in settlement of certain claims. I agree that it is not £60,000,000 net. After Income Tax has been repaid, the sum will be £51,000,000. That figure has been criticised from two sides. It has been said with great force from the Benches opposite that the figure is excessively high, and it has been said or suggested upon this side that the figure is excessively low. I suggest to the House, and I think the House is really of this opinion, that the figure represents a fair compromise. There was not one of us who looked with care into the figures who did not come to the conclusion that it was a fair compromise. What was it with which we were dealing? We were dealing with claims which may or might arise at the conclusion of the period of control. If one looks at the Report of Lord Colwyn's Committee it is suggested there that these claims might amount to something like £150,000,000. But that figure did not exhaust all the claims which, at the end of the period of control, might be made. There was also an in-determinate something which was estimated to amount to another figure round about £50,000,000. Therefore, we were dealing with a total in the neighbourhood of £200,000,000. Applying to the question the best information we had and the best examination we could, we came to the conclusion that the Crown would be well advised to settle these claims which might arise at the end of the period of control for a net sum of £51,000,000. The House will observe the criticism which is made upon that figure—though in my submission it has no relation to that figure at all—by the right hon. Baronet. He says that this is a game of heads the Crown or the Ministry of Transport wins, and tails the companies lose. He says that we are getting it both ways. We are to settle for £51,000,000, but we are nevertheless to hold the terror of litigation over the heads of the companies. In that part of his criticism the right hon. Baronet is sinning against the light. He knows as well as I do that the £51,000,000 are payable in respect of claims which arise, or might arise, or have arisen, at the end of the period of control, and that that is something absolutely distinct and separate from disputes which have in fact arisen during the period of control upon certain payments which have already been made. There is, for example, a sum in dispute, I think of £8,000,000 about excess maintenance. There is a sum of £5,000,000 in dispute upon the application of certain agreed formulae to other items of account. And there is a further sum of a couple of millions which represents the amount paid in respect of maintenance of rolling stock and plant which have been taken and sent overseas. Those sums in dispute amount to a total of £15,000,000. They once were larger.

Sir F. BANBURY

The Minister of Transport in this House on the 3rd May, in answer to Sir Edward Carson, gave the amounts as £20,000,000, £8,000,000, and £3,000,000. It is in the OFFICIAL REPORT.

Sir G. HEWART

I am sure that my right hon. Friend is right, and that if error there be the error is mine. The point is not the amount, but the disputes with which that amount is concerned. They are disputes as to whether moneys which have been paid under various heads, excess maintenance, rolling stock overseas, and other items of account, have not, in fact, been excessive. What in the world have the merits of those disputes to do with the total sum of money to be paid in respect of other matters at the end of the period of control? I am in favour of settling everything, if it can be done, on fair terms. But the right hon. Baronet is aware that, in dealing with these disputed claims which have arisen during the course of the period of control, very different considerations apply to different railway companies. It is impossible to make a general settlement, because this company may have a clean sheet and that company may not. If the right hon. Baronet will help us to come to a settlement, we shall all be indebted to him. But meantime it is quite beside the mark to criticise the sum of £51,000,000 payable at the end of control by reference to the pendency of these disputes as to what has already been paid.

Well, I listened very carefully to the comprehensive speech of the right hon. Baronet, who is, of course, the most active and, if he will forgive me for saying so, the most censorious critic of this Bill. And at the end of his speech he did not shirk the question, what ought we to do? He told us that we ought to withdraw the Bill. How many times, have we heard a similar suggestion from him?

Sir F. BANBURY

The Revenue Bill was withdrawn a little while ago.

Sir G. HEWART

Then we are to-restore the railways to the companies. We are to fix—I am sure that my right hon. Friend the Member for South Molton (Mr. Lambert) will be interested in this—the existing rates for 20, 30 or 40 years or for all time, we are to give power to the railway companies to reduce those rates if they like, and we are to abolish the Act of 1894. Now those charges which are to be continued in perpetuity are the peak charges, the climax charges of the War. Rates for goods are now, I understand, on an average 112 per cent. above pre-War standard, and fares for passengers are 75 per cent. above pre-War standard. The right hon. Baronet himself, in another part of his speech dealing with another point, actually said: You cannot increase rates any more. In fact, I am inclined to think you have got them too high already, and if we are going to get the traffic and give the merchants and manufacturers of this country a chance, we-shall have to reduce the rates."—[OFFICIAL REPORT, 26th May, 1921; col. 393, Vol. 142.] Then observe his plan. We are to give the companies power to retain these maximum rates in perpetuity, with power to reduce them if they like. Suppose that they brought the charges to a little below the maxima. What is the other ingredient in the right hon. Baronet's proposed settlement? We are to abolish the Act of 1894. That Act provides that where, within the limits of the maxima—there was no question of raising the maxima—any company proposes to raise an existing charge, then that company is required upon challenge to show that that increase is reasonable. Abolish the Act of 1894, says the right hon. Baronet, give back the railways to the companies, continue the maximum rates in perpetuity, letting the companies reduce them if they like, and if they want to raise them again there shall be no Act of 1894 to prevent them!

Sir F. BANBURY

Not above the maxima.

Sir G. HEWART

I agree, but if the companies like to reduce them, and do reduce them, then there is to be no Act of 1894 to prevent them being raised again.

Mr. LAMBERT

Are not you repealing it yourself?

Sir G. HEWART

No. I do not agree.

Sir F. BANBURY

You are.

Sir G. HEWART

Not as part of any such scheme. That being so, I begin to understand what was meant by the right hon. Baronet in the beginning of his speech when he said that, instead of facing a temporary catastrophe, this Bill is to give us a catastrophe for all time. A catastrophe for all time is a conception which puts some strain upon the imagination. But if you are to satisfy the phrase "catastrophe for all time," then I think it might perhaps be satisfied by a settlement under which the railway companies were to have unfettered control of the railways, with the rates fixed for ever at their present maximum point, with powers to the companies to reduce them if they wish, but also with absolute power to raise them again to the maximum level. The great mass of the railway companies of this country approve the bargain that has been made, and they approve, in substance, this Bill, as the trading community does. It is at least a well considered attempt to deal with this great problem with fairness to the public, fairness to the men, fairness to the traders, and fairness to the companies. I hope that the right hon. Baronet, even at this eleventh hour, may think better of it. I am sure that he remembers the story of the 12th juryman who was satisfied that his 11 colleagues were donkeys. He enjoys now—I must not say a grandiose, but a solitary eminence. Yet even at this late stage I appeal to the right hon. Baronet to come over and help those who are seeking to make this Bill nothing but a fair measure for all parties concerned, and not least, fair to the public of this country.

Colonel MILDMAY

I think that the House will be agreed as to the geniality of the speech to which we have just listened. I agree with both the last speakers as to the supreme importance of this Bill. While I am anxious to say a few words in regard to it, one cannot help being daunted by the difficulties of dissecting this Bill with its 75 Clauses and seven Schedules, and I have some doubt of my ability to do so in a helpful way. I happen to be a director of a great railway company, the Great Western Railway Company, and I am proud of the tributes which have been paid to it by the right hon. Member for South Molton (Mr. Lambert), and the right hon. Member for Peebles (Sir D. Maclean), the other day. That railway company endeavoured during the War to do its duty by the Government and by the public in every sense, financially as in other respects. I believe that the Minister of Transport would be the first to admit that. The House probably knows that, throughout last year, there appeared in the Press a series of anonymous articles containing most damaging charges against the railway companies. The general charges implied a desire to defraud the Government in the interests of shareholders, and among all those accusations that was the one to which we were most anxious to have an opportunity of replying, as, of course, we could reply. It seemed to us that this avalanche of accusations was due to the desire to create an atmosphere favourable to the Ministry of Transport. I wish to disclaim any desire to press that, because the Minister of Transport himself denied that he was in any way responsible for those accusations, but somehow or other—I do not think that this will be denied—the House derived the impression that the Minister of Transport was not greatly concerned to dissociate himself from those accusations.

This being so—at any rate, we think it is so—I and some others went to the Ministry of Transport to see what was the ground for these accusations. They said in answer, "This or that little company has made outrageous claims." Why tar everybody with the same brush? We thereupon made the rejoinder that it was only fair we should put forward our case in the newspapers; but it was represented to us, that it would not be desirable for us to do so at that time, and we deferred to the wish which was so expressed by the Ministry of Transport, and refrained from clearing ourselves in the Press as we wished to do. The House will look at the position. We believed, we knew, we had done our duty throughout the War. We were held up to the public as miscreants, and had no opportunity of making clear our side of the case, and we were told that our restlessness under these accusations was due to a guilty conscience. Has there not been a little too much of this preparation of the ground? What I call "preparation of the ground" is the enormous claims which were attributed to the railway companies in the newspapers. Were these claims put forward in the newspapers in this way, so that when the real claims of the companies were known, the Government would be able to boast that they had reduced them very considerably? It looks rather like it. I have always been on very good terms with the Minister of Transport, and I do not want to endanger our happy relations, so I will not press that point.

As to the great cause which the country has to be grateful to the railway companies, I must say something. It is known well enough that in 1915 Lord Kitchener was unable to obtain sufficient munitions. I know that myself, because I was in the Ypres salient just before the second Battle of Ypres at a time when our guns had only one round per gun, although we read in the newspapers that we had all we wanted. Our men were being bombarded from north, east, and south by a concentration of German artillery, and naturally they suffered terribly. I remember very well that the General Officer Commanding the division in which I was serving talked with me on the subject and said, "How can I produce some confidence in the men in the trenches who are suffering in this way? "He replied to his own question, "I will fire the one round from each gun directly over their heads so that they may know that there is something being done."There is pathos about that. In these circumstances, Lord Kitchener begged the assistance of the railway companies, and the use of their buildings and repair shops, and, as a result, shells and guns military wagons, and equipment of all kinds were turned out in enormous quantities by the companies for four years and sent to the Army. That was in addition to their services in conveying troops and stores. All these munitions were produced at cost price, saving millions to the country. That is rather a contrast to the sister transport service, the shipping industry. There was no profiteering in our case. There were no inflated dividends, and we made no immense fortunes. All of our personnel that we could spare and that was not abroad fighting was devoted to helping the Government against the enemy, and the arrears of maintenance, of which so much has been said, were due largely to this cause.

I come now to the Bill. I admit that my views are not entitled, perhaps, to the same weight as those of our greatest experts in railway matters, who are to be found on both sides of the House. Therefore I rather shrink from speaking for my co-directors of the Great Western Railway Company as a whole. I have, however, taken a deep interest in the railway questions that are at issue and I offer my opinion for what it is worth. I say frankly and honestly, that there are certain provisions in the Bill which are distasteful to me. I am convinced that some amendments are required, not only in the interest of the railway companies, but in the interest of the public. On the other hand, I realise that we railway directors, while we are of course responsible to the owners of the railways, are at the same time to a certain degree servants of the public. Bearing that in mind, I find in the provisions of the Bill a basis on which I am convinced you can build a settlement which will be to the durable advantage of all parties and people in the land. In the speech of the Minister of Transport there were one or two points which seemed to me rather questionable. He startled me when he said that, in the view of the Government, there is no obligation upon the State to put the railways back into a pre-War position. The right hon. Gentleman added, "I have no doubt that will be disputed."Of course it is disputed. I cannot help thinking that his recollection is a little hazy in this connection; for the Home Secretary, when in charge of the Ministry of Transport Bill in 1919, said: The railways which are taken over under the Act of 1871 are to have full compensation. Under this Act, if the Bill becomes law, they will be entitled to be paid for depreciation even if this is not claimed in the 1914 agreements. Again, in moving the Second Reading of this Bill, the Minister of Transport said that the railway industry was in a declining condition before the War. It had declined, and he endeavoured to demonstrate that the present financial position was partly due to a continuance of that decline and was not mainly attributable either to the consequences of the War or to Government control. The Attorney-General has dealt with the question in some degree to-day, but he did not convince me at all. I do not see how it is possible to get over the assertion of the representative of the Government that the most prosperous year in the history of the railways was 1913. I shall not pursue that further.

On the question of the present high rates of wages and their particular allocation, the Minister of Transport has been anxious to represent, as was the Attorney-General this evening, that they are not due to Government control, and especially that he is not responsible for the last additional increase given by the National Wages Board in June, 1920. His words were, "He was not concerned." I cannot agree with that, although the Attorney-General offered an elaborate explanation of it this evening. I feel most strongly that the railway managers who were upon this Board were not entirely free agents, and that they were subject to a certain amount of pressure. Let me give an instance out of many of how increased pay bears upon a company with Government control—increased pay which would never have been conceded by the company itself. On the Great Western Railway there is a station called Stanton, in Wilts. Before the War there were employed there one stationmaster at 27s. a week and one gateman at 19s. per week, and the total cost of the station per annum was £119 12s. At present there are employed at the station one stationmaster at 108s. per week, two gatemen at 66s. per week, and one porter at 66s. per week. That is a total per annum of £796, as against £119 12s. before the War. The revenue at this station in 1913 was £998; in 1920 it was £875. That is a condition of affairs which no businesslike company would have sanctioned if it had been a free agent. The question as to the position of men at level crossings has been quoted before in this House. Anyone can see that the railway companies would never have brought about the present condition of affairs if they had been acting on their own responsibility in the settlement of wages.

I do not wish to go deeply into the question of wages, but incidentally I will say this—it is the purchasing power of wages and not their nominal pecuniary value that must be the basis of future wage settlements if we are to have a cessation of all that labour unrest which has been so serious in the past. That principle cannot be controverted. It is not recognised, but it cannot be avoided. I shall not elaborate the theme. There is no intention upon the part of the railway companies to make any such general attack on wages as is suggested by those who are anxious to inflame the railwaymen against the companies' management.

As to grouping, I am in full accord with the Government policy, for it carries out only what has been the railway companies' policy for years. The Great Western Railway Company now represents an amalgamation of 137 companies. The main line from Paddington to Penzance was originally composed of five independent concerns—the Great Western from Paddington to Bristol; the Bristol and Exeter Railway to Exeter; the South Devon Railway to Plymouth; the Cornwall Railway to Truro; and the West Cornwall Railway to Penzance. Amalgamation has, of course, resulted in a better service for the public and the better working of the railways from every point of view. Many other examples could be given. It has been well said, and it may be accepted as an axiom, that competition by a number of railways serving the same area means expenditure which, of necessity, has to be borne by the trading and travelling public. As a director of the Great Western Railway Company, I say that the railway service in South Wales will gain very greatly by the amalgamation which is proposed. At the same time it must be made certain that the amalgamation is not made so big and swollen as to be unmanageable, as are the American trusts.

6.0 P.M.

When the Minister of Transport says that the economies to be effected are to amount to £25,000,000 a year, I think he is over-sanguine. The Attorney-General pooh-poohed that idea and suggested that it was likely to be an even higher sum. It has been stated that competent experts have declared that there would be a saving of £45,000,000 a year. Does the Minister of Transport base these estimates on the present inflated cost of working? That is a most important point. It is hardly fair if he does so. On the other hand, if he contemplates an economy of £25,000,000 a year on pre-War expenditure, he seems to forget that the total cost of working the railroads of Great Britain in pre-War days amounted to no more than £76,000,000. To say that on that expenditure you are to save £25,000,000 is surely absurd? The hon. and gallant Member for Durham (Major Hills) suggested that the door should be left open for voluntary grouping. I cannot quite agree with that suggestion. You must have some kind of compulsion in the background, just the right amount, or matters will be likely to drift on in-definitely. There must be no unjustifiable haste. I ask myself, Is the date, 30th June, 1922, too early a date for the completion of all these amalgamations? Very big interests are concerned and those interests may lie in different directions. It will take considerable time to reconcile those various interests. There was a most important declaration on the subject in this morning's papers from Sir Alexander Butterworth, in an address to the shareholders of the North Eastern Railway Company. I am sure that the Government would do well to study all that he has to say as to the giving of sufficient time for amalgamation. Then there is the grant of £60,000,000 to be paid to the companies—a very modest estimate in comparison with the £165,000,000which was mentioned in the Colwyn Report, and so moderate, according to one hon. Member, that it made one doubt whether £60,000,000 was not too high. It would seem that anything those responsible for the railway companies do must be looked upon as suspect. In this connection, the railway companies are entitled to some credit. They refused to bargain in the Chinese fashion. They refrained from putting their claims so high in the first instance as to have something to give away. Such a procedure has been very detrimental in the case of the coal-mining difficulties, and the process of arriving at a settlement by alternate pecuniary concessions on each side is a very bad one. The railway companies placed their cards on the table, they frankly assessed the sum to which they thought they were in justice entitled, they stuck to that sum, and they determinedly turned a deaf ear to any suggestions as to its reduction. The right hon. Baronet the Member for the City of London (Sir F. Banbury) complained that of the £60,000,000 £9,000,000 is to be paid in Income Tax- Except in cases of railways paying no dividends this is a most advantageous proposal for the railway companies. All the money accruing to railway companies from this source, however applied, will increase the sum available for dividends, which in ordinary circumstances would be subject to deductions in respect of Income Tax. I do not see how there can be any legitimate complaint in connection with this provision.

I regret very much that the Minister of Transport poured cold water on the arrangement—which was arrived at with infinite trouble—as to wages and conditions of service, in so far as it involved the abandonment of the representation of employés on the boards of directors. It seemed to me that the hon. Member for Miles Platting (Mr. Clynes) spoke with very little knowledge in this connection. I do not believe that the men have ever wished for representation on the boards. I wish the right hon. Member for Derby (Mr. Thomas) were here to-day. I think he would bear me out when I say so. The idea must originally have come from America, for it was proposed in the Cummings Railway Bill that there should be a similar provision, but it was never passed. The proposal was turned down and does not find a place in the United States Transportation Act. The hon. Member for Central Edinburgh (Mr. W. Graham) suggested that perhaps in the Committee stage this determination not to have working men on boards of directors might be reversed. I have here an important letter on that subject from Mr. Cramp, dated the 27th May, and addressed to Sir Herbert Walker. It is as follows:

"DEAR SIR HERBERT,—I have just had an opportunity of reading last night's Debate on the Railway Bill, and I note that Mr. William Graham made the following statement: 'The position of the railwaymen is this: they were very anxious to secure a national wages system, and they are still very anxious to preserve that system; but they are also very anxious to maintain the claim which was previously put forward for representation on the Boards of Management, and they see no reason whatever why that claim should not be pressed in the course of the Committee stage of the Bill.'

This statement would convey the impression that the members of the railwaymen's union desire to repudiate the arrangement which they made with the representatives of the railway companies. Therefore, I want to state quite plainly that so far as the National Union of Railwaymen is concerned, having entered into a bargain, they are prepared to keep it whether the results are satisfactory or otherwise. This being so, the National Union of Railwaymen has not withdrawn from the agreement made with your- self on 3rd May, and my desire in sending you this letter is to ensure that our attitude shall not be misunderstood.

Yours faithfully,

C. T. CRAMP."

It has already been said in the course of the Debate that no pressure has been exerted upon the men's leaders. They are not amenable to such pressure, and have never shown themselves amenable to it. They stand up for their rights, and are not afraid to do so. The "Railway Review," the organ of the railwaymen's union, has repudiated any wish to have men upon the board, and has said it was inadvisable that they should be there. The "Railway Service Journal," the organ of the railway clerks, contains this passage: We have not the slightest desire to see the Railway Clerks' Association sharing in the management with Lord Claude Hamilton, Sir Frederick Banbury, Sir Herbert Walker, and other directors and managers, and we sincerely trust none of the railway trades unions will accede to or accept representation, even in an advisory capacity, on any Boards of Management so long as railways are privately owned and controlled. I agree that what is wanted—to quote the words in which it was so very well put the other day—is "to secure for the working man a greater share in, and responsibility for, the determination and observance of the conditions under which work is carried on." Nothing but good can come from such an association. It is right from the point of view of railway directors and those who manage railways that the men should be made familiar with the difficulties of management, and this object is attained by the admirable understanding arrived at between the railway companies and the trades unions. The Government are now being urged to lend their assent in Committee to a provision which shall place the men upon the boards. I would say to the Government: Do not meddle with any portion of this arrangement which has been arrived at with such great difficulty. You will endanger the whole agreement if you do. Frankly, I must tell the right hon. Gentleman that we cannot look upon this as a Committee point. It is far too important for that, and he will force our opposition to the whole Bill if he seeks to disturb the arrangement which has been arrived at after so much trouble.

Sir FORTESCUE FLANNERY

My hon. Friend says, "Force our opposition." Whose opposition?

Colonel MILDMAY

I think I am entitled to say that on behalf of the majority of railway companies. That may be taken as the position until it is contradicted. The railway companies are entitled to the thanks of the community for what they have lately done. They have been faced, like the great mining industry, with all the difficulties of decontrol, and it seems to me they have met those difficulties far more wisely. Infinite pains have been taken by the railway authorities—and I may say it quite proudly, by the Great Western in particular—to get a happy understanding with the men, and I am glad to think we have succeeded. If only the coal owners and the coal miners had been as frank and open in their negotiations things would have gone far better. The whole details of this arrangement are being worked out at the present moment, and one of the most important provisions which has been agreed to is this: There shall be no sudden withdrawal of labour, nor are employés to hamper the proper working of the railway, on account of any unsettled question falling within the purview of the Central Wages Board, before the expiration of one month after such matter has been referred by that Board to the National Wages Board. To my mind this delay, which is provided for means a very great deal. In the case of the League of Nations there is a provision that there shall be delay before War is declared, and this is just the same in connection with the railways. There is besides this the establishment of the Councils familiarised to us, by association with your name, Mr. Speaker, and this will enable great use to be made of the intelligence of the very best railway men. This is nothing new to the Great Western Railway system. We have long had a Suggestions and Inventions Committee, and we pride ourselves on being pioneers in these matters. We have had thousands of suggestions to the mutual advantage of the company and of the suggestors.

What about the opposition to this Bill? There is opposition from Labour which clings to the possibility of nationalisation. I am not going to discuss that, because it is obvious that in present circumstances the public will not have it at any price. They have had too much experience of management by Government. The Scottish companies oppose it, but it seems to me the objections which they have made can be dealt with in Committee. They are mainly connected with grouping, and it seems to me that such questions as that of longitudinal linking instead of lateral linking can be dealt with in Committee. There remains the opposition of my right hon. Friend the Member for the City of London (Sir F. Banbury). I do not wish to hurt his feelings, because he is a very old friend of mine, but opposition has become a habit with him. Is he quite sure that he has the backing of his constituents in opposing the Second Reading of this Bill, involving such an advantageous labour agreement as that to which we have come? He has commented upon the voting in the Railway Association upon this agreement, and has told us that 21 voted for and 10 against. But who were included in the 10? There was the Great Northern Railway—his own railway—there were five Scottish railways, and there were also three Irish railways, to whom the scheme does not apply at all. It is obvious that the great mass of the railway opinion in this country was in favour of the agreement, and no wonder Sir Herbert Walker thought it his duty to sign on behalf of the railway companies generally, while not, of course, binding those who objected, the agreement being subsequently signed by the right hon. Member for Derby (Mr. Thomas), by Mr. Bromley, and by Mr. Cramp on behalf of the Trade Unions. But my right hon. Friend, my very old Friend in this House, if he will allow me to say so, should strike out a new line. Let him no longer be in this House the handmaid of obstruction. I hope I may say that without offence. Let him no longer take a lugubrious view of the future. We are not going to the devil so very fast. I am not a follower of the gloomy Dean. We have heard a great deal of froth talked lately. It has had far more prominence in the newspapers than it deserves. I have every confidence, however, in the sound common sense of the masses of the people. At this moment we ought to try to be helpful to one another. I welcome this Bill. I welcome the substitution of co-operation for cutthroat competition. I welcome the dismissal of the possibility of endless litigation and great disputes. The Bill does require considerable amendment, but I can assure the right hon. Gentleman that the majority of the railway directors will meet him in a fair spirit and will give him all the assistance in their power to construct a railway policy on the lines he has suggested.

Mr. JAMES WILSON

There are many points in this Bill which are certainly commendable, but on analysing them thoroughly and carefully one is driven to the conclusion that the advantages of the Bill do not so completely outweigh its ill effects as to justify this House in giving the measure a Second Reading. There can be no doubt that in the early days of railway history in this country small railway companies and private enterprise played a useful pioneer part, but in the year 1914, before control, railway management in this country had been reduced to a complete absurdity. The Government had to take over the control of 114 separate and competing railway companies in this country. They had to take over concerns managed by 120 boards of directors, many of whom directed no one but themselves, who had neither rolling stock nor staff, but who successfully used their influence against every progressive suggestion that was made by the large railway companies who in the main manipulated the control of the railway companies of this country. On any proposal which was calculated to improve the efficiency of the railway service as a whole the whims of these boards of directors with neither railway stocks nor staff had to be considered, and very often their prejudices had to be taken into account to the detriment of the general and efficient railway service of this country. It is for that reason that the grouping arrangement is to be welcomed as a step in the right direction. It is only regrettable that the Minister of Transport did not display that courage, with which we are all so familiar, and come forward with a Bill embodying the principles of nationalisation and central administration in order to give the people of this country the real advantage of a sound, efficient and economical railway system.

I was delighted to hear the Minister say that he approves of the principle of working-class representation on boards of management. Everyone must have heard with profound relief that the Government of which he is a distinguished Member was prepared to support that principle in the Bill now under consideration. But the Minister regretted that the trade unions had bargained themselves behind his back out of that provision. Let us see what the position of the trade unions is now and always has been in regard to that proposal? The proposals of trade unions in relation to the management were that as a first principle the railways ought to be State-owned, and, secondly, that the boards of directors should consist of one-half nominated by Parliament and the other half of the representatives of working men elected through their trade unions. Under a scheme of national ownership, what did the Minister and the Government propose to the representatives of working men as an alternative to the suggestion put forward by the trade unions. The Government proposal was that the board should consist of about 21 members for each group of railways, that the majority of the board should represent the shareholders and the large trading interests, and that the remaining membership of the Board should consist as to two-thirds of employés elected by the workers on the railways and one-third of the leading administrative officials co-opted by the rest of the board. The trade unions felt that it would be desirable, and personally I agree it would be desirable, to have working men representative on the boards of directors, even under private ownership. I for one am quite sure that these working men could put a point of view to the directors which is not being put to-day, and in the very nature of things cannot be put, and that would be a distinct advantage to the general community and to the railway companies as well. The trade unions felt, however, that the proposal of the Minister was such, faced as it was with the hostility of the railway companies, which has been re-echoed and reinforced here this afternoon, that under these conditions representatives of labour would be in such an invidious position as not to warrant them in insisting at the moment on representation on the board of directors. I think a profound mistake has been made, and I hope at no distant day—I believe it will not prove far distant—railway companies and those who speak for them will take a more broad and comprehensive outlook. We are getting many admirable arrangements now for utilising the best brains of the railwaymen, and the railways are prepared evidently to use them in any capacity except on the boards of directors. I do not wish to pursue that any further than to say this. The trade unions have made a bargain. They will stand by that bargain, and much as I feel a mistake has been made, we can all join in the hope that at no distant date this mistake will be retrieved, and the railways will take more comprehensive views on the question of management which will be to the general advantage, not only of the railways, but of the trading community of the whole country.

There is no doubt that this grouping of railways is going to have a tremendous effect on the efficiency of the railway service. The wicked and wanton waste which took place in the administration of our railways before the War was deplorable and was increasing to such an extent that I am quite persuaded, sooner or later, nay, I believe sooner, it must have killed the trade and commerce of this country altogether. The amount of haulage of empty trucks from one end of the country to the other, producing no revenue, was something that was a complete negation of management which ought to be discontinued absolutely, and the elimination of that, and of the useless and wanton duplication of services totally unnecessary, is bound to be reflected in reducing the costs of administration and consequently reducing the charges of all kinds which fall not only on the travelling public but on the traders, very materially in the near future, so soon as the effects of these new proposals come to be felt. When one looks at the situation from that aspect one can only deplore that when we are dealing with this proposal on the lines that we are now considering it, and when the country is ready for a reorganisation of the railway services, the Government have not been bold enough to make a complete sweep of the old order of things and to set up a railway service in this country which shall be owned by the people and which will have centralised administration in order to eliminate the waste that will still exist under this system of grouping. There is a welcome suggestion that in the reductions of charges that are bound to accrue as a result of this very limited proposal there is going to be a mutual advantage both to the railway companies and to the public. My experience as a working man has been—and I am not apologising for the railway companies, but one does get an impression when one has served on a public service for many years—my impression as a rail- way working man is that there is a tendency on the part of the public to put obstacles wherever possible in the way of railway companies giving an efficient service, and then to criticise the companies when they find that the service is not all that can be desired. Under the old form of management and the wastage of rolling stock the demurrage was deplorable in the extreme, and if we are going to get the full benefit from the railway services there must be co-operation between traders and the public and the railway companies in order to get the best possible results. I hope that those who are able to exercise some influence may do so, in order that we may, in the interests of national efficiency and economy, get the most perfect railway service in this country that is possible.

I have to draw the attention of the Minister to Clause 56 of the Bill, in which there are included certain words, to which very strong exception is taken. It deals with the question of wages, and it goes on to say, it shall be referred to and settled by the Central Wages Board. I do not quite know what the Minister has in his mind as to the meaning of those words, but it is only fair to the Minister to say that he is not here charged with importing this into the Clause, for I happened to receive a copy of a document which was issued as a result of a meeting between the trade unions and the railway companies, and these are the exact words contained in that document. But it does appear, however, when set up in cold print, that it would admit of the construction that the trade unions have abrogated their right to strike if they so desire. They think that the implication of the words is that it must be settled, and that the trade unions have forfeited their right to withdraw their labour. In order to give weight to that, I have a copy of a document showing that, at a subsequent meeting, the Committee considered the proposal in the Bill, after it had been drafted, and the joint opinion of that Committee is this: When the representatives of the National Union of Railwaymen called attention to Clause 56—which provides that all questions relating to rates of pay or conditions of service of men to whom this part of this Act applies shall, in default of agreement between the railway companies and the trade unions concerned, be referred to and settled by the Central Wages Board, or, on appeal, the National Wages Board, in their view, this wording, coupled with that contained in the Clause of the draft scheme, to the effect that no withdrawal of labour shall take place before the expiration of one month after such matter has been referred to the National Wages Board, implies that the trade unions have sacrificed the principle of the right to strike. The railway representatives pointed out that the stipulation in Clause 4 of the draft scheme, that there shall be no withdrawal of labour, is applicable only to the period prior to the consideration of a case by the National Wages Board, and suggested that, if there is any doubt as to the meaning of the words in the Bill the intention should be made clear when the Clause is under consideration. I should like an assurance from the Minister, before the Bill goes to Committee, if it is able to survive its First Reading, that he will accept the principle, at all events, that there is no intention in the Bill of denying to the workers the right to strike after a stipulated period, and that he will accept words in Committee which will meet that point of view.

The MINISTER of TRANSPORT (Sir E. Geddes)

Is my hon. Friend reading from the Minutes of a further meeting, or some other document? I do not know what it is.

Mr. WILSON

This meeting was held at the St. Pancras Hotel on Friday, 20th May, 1921. The representatives of the companies were Mr. W. Clower (in the chair), Mr. Beveridge, Mr. A. Harris, Mr. E. Wharton, and Mr. H. Wheeler; and the representatives of the men were Mr. Cramp, Mr. W. J. Abrahams, Mr. W. J. Watson, Mr. Bromley, Mr. Oxlade, Mr. Walkden, and Mr. R. W. Gill. They were the representatives of the three trade unions. They considered the Bill, and these words in relation to the Clause, and the railway companies said that the Clause as now framed would carry the implication far beyond anything they intended or desired, and suggested that the Bill should be so amended in Committee as would make that point perfectly clear. I should like an assurance from the Minister that in Committee he will accept that point of view, and accept words that will remove any apprehension that may exist in the minds of representatives of the trade unions.

There is another point upon which I should like some assurance from the Minister. At the present moment there are on most of our railways superannuation schemes, and the working and administrative staffs of railways have a vested interest in those schemes in this country to the amount of about £21,000,000 to £22,000,000. Therefore, it will be desirable that in any new scheme the vested interests of the workers ought to have adequate protection. It is felt that in this Bill—and I am not going to weary the House with details, because it is all Committee work, if it is going to be dealt with at all—sufficient and adequate protection is not made, not only for the immediate, but for the prospective benefits of members of these existing superannuation funds and pensions schemes on the railways, and that, having an amount of invested capital, as I have mentioned, amounting to £22,000,000, they believe that they are entitled to more adequate consideration and safeguard than this Bill provides. I should, therefore, like an assurance from Minister that he will in Committee be prepared adequately and fully to safeguard the rights of the workers, so far as superannuation and pension schemes are concerned.

That brings me to the last point that I wish to make in connection with this Bill. There is no doubt that the railways of the country made a very valuable contribution to the success during the past five or six years, and that they were in a much more parlous state than many of the general public were aware or dreamt of, because, after all, you could not have a railway service taxed to its utmost capacity, as the railways of this country were taxed, and when you found all branch lines, locomotives, rolling stock and everything else lifted from this country and almost within a few hours running on the other side of the water, with the depleted staff, the consequent neglect of repairs, maintenance and renewal, you could not have that going on for four or five years without very seriously affecting the service, and at the period of the Armistice the railways of this country were in a very parlous state indeed. But I think we are entitled to congratulate the Minister on overtaking so efficiently and so effectively the arrears of main- tenance and renewals, and restoring the railway system in a comparatively short time.

Those of us who keep our eyes about us, if we are not wilfully blind, cannot fail to see on every railway almost interminable lines of completely new stock, which is very properly being built, if the railways are to meet the calls upon them, which are bound to arise when the present trade depression is over. Every railway company in this country is fortifying itself with new stock of all sorts which will supply the needs for many years ahead. All the arrears have been overtaken, and I venture to suggest that when the railway companies take over the railways again in August of this year, they will have handed back to them from the nation a system of railways which, from a commercial point of view, is infinitely more valuable than the service which the nation took over in August, 1914. The Minister and his Department are entitled to every credit for getting the railways restored at the earliest possible moment, if the railways are going to play that part which they must play if the trade and commerce of this country are to improve in the immediate future. But when we look at that aspect of the case, and place it alongside this proposal to pay to the railway companies £60,000,000 gross, one has looked to this Bill in vain, one has listened to speeches and failed to find any ground to justify this House in admitting that the railway companies are entitled to that colossal sum. There is no doubt about it, and if my knowledge and if my words do not amount to much, let us get to the facts.

We have only recently had the Report of the Colwyn Committee, and we have all fresh in our memories the tribute which the Minister rightly paid to the members of that Committee for the valuable assistance and service they have rendered to him and to the country. The Colwyn Committee had to consider claims from railway companies for compensation amounting to from £156,000,000 to possibly £200,000,000 in the aggregate. But it would be idle to pretend that the Colwyn Committee ever held the opinion that the companies were entitled to that amount of compensation, because, as I understand it, the Colwyn Committee were very doubtful that the companies were entitled to any compensation at all, and, if they were entitled to any com- pensation, then the sum ought to be very small indeed. Therefore, one fails to find what justification there is for the Government even proposing to pay this colossal sum. But one is almost astounded that the railway companies should have made a claim when one considers the whole circumstances and the whole situation. As the hon. Gentleman who preceded me said, the railway companies in the period of the War were not able to make the same colossal profits as were made by the sister service, the shipping companies. Are we to understand, then, that the claim is now made in order that the railway companies may enter the lists as War profiteers? If so, there appears to be no justification for it. But were the railway shareholders very badly dealt with in the period of the War? True, they were not in the position of making colossal profits, like shipowners and several other concerns one could mention. But, at least, they had this advantage during the whole period of the War, that they were paid their dividends on the best year the railway shareholders of this country had ever experienced. During the period of the War they were freed from any risks. Every bill they presented had a Government backing, and was backed by this country. I am going to suggest that, after all, it is only assumption that even the railway companies would have done better under individual management during war conditions than they did under the Government's proposals, which gave them reward based upon the best year of their experience in the country.

I therefore suggest that no case has been advanced that would warrant this House agreeing to that sum being paid to the companies, because I would ask them and the House to bear in mind that the railway companies are not the only concerns which were commandeered for War service in our period of emergency. I would ask the House to remember that we commandeered the best and most virile human lives in the country. What was the basis of our compensation? We only paid compensation when disability to earn was proved, and when damage and depreciation was proved. That was the acid test as applied to human life in this country. I suggest that the same moral test should be applied not only to railway companies, but to every concern that was commandeered by the nation during that period. I therefore wish to suggest that when all these things, which I submit are facts, are allowed for, nothing will justify the House in voting this colossal sum of money to the railway companies. In effect it means this: That the people of this country are to be levied to the tune of almost 10s. a head. Many people who have got to pay that 10s. are people who made greater sacrifices than did the railway companies; they ran bigger risks and greater dangers in defence of the property of the railway companies. Many of these got no compensation whatever. They are to be levied to the tune of 10s. per head in order to reimburse the railway companies for the dangers they had never faced, and the losses they had never sustained.

Colonel GRETTON

I shall endeavour to compress my remarks into the smallest possible space of time, as a good many others desire to speak. One feature of this Bill, to which I wish particularly to draw attention, is that of the Bill in relation to the interests of the traders of this country. The Government and the Minister claim that they have behind this Bill all the railway companies and the traders. The Debate has shown that they have not the united support of the railway companies. It certainly can be proved that all the railway companies, who have addressed circulars to their shareholders, have made large reservations in their support of this Bill, declaring that Amendments of a vital character will need to be carried if this Bill can be accepted by them and their shareholders. In regard to the trades, I venture to say that many of them are only just beginning to be awake to the real meaning of this Bill to the trading community. A great deal of attention has been paid to comparatively minor points—as to continuous mileage, station charges, terminals, and matters of that kind. But those are not the vital matters.

As the House is aware, in the matter of continuous mileage, goods carried by the railway companies are charged so much for the first 10 miles, and so much more for each succeeding factor until the mileage reaches a maximum of 50 miles, and a lower rate is charged for each stage as you proceed to send your goods longer distances. That is called a tapering rate, and that comes into operation when goods pass from one railway system to another. In that case the new company is entitled to make the same charge commencing a new tapering rate. On all continuous mileage the railway companies would lose very considerably. The consequence is that the Railway Rates Advisory Committee suggest that in the continuous rates which is to be part of the system of rating in the future the charges shall be increased l½ per cent. in order to put the railway companies on the right side. I only bring this forward to show that some of these matters are not so attractive as they seem in the first place. I hope to show before I sit down that there are other matters in which adequate protection is not provided.

In the first place, what does grouping mean to the trader? It is an entire abandonment of the whole system on which the railway business of this country has hitherto been conducted, that is, that there should be abundant facilities for the traders, with alternative routes, and if the rates were not satisfactory or the facilities were not sufficient, that there should, in fact, be competition. It is agreed now that that principle was carried too far. A great deal of unnecessary mileage was built, and in some cases unnecessary accommodation in stations was provided. The complete abandonment of that system means setting up groups of railway monopolies all over the kingdom. That, in fact, is the proposal of the Bill, and the Minister very frankly confesses it. He used a simile. Similes are not always fortunate. He suggested that each railway group should cultivate its own cabbage patch, and not allow any other group to interfere with its cabbages. That is a system of complete monopoly, and I contend that if it is to be applied as suggested in this Bill it will be a great detriment to the traders of this country. The whole system of grouping will have to receive the most careful investigation from the point of view of the traders and the public.

What does the Bill propose? In practice it draws a line down the centre of England from the Scottish border to the Thames. On the right or eastern side, speaking broadly, there is to be one monopoly formed around the North-Eastern Railway Company which in itself already is a monopoly in the finest and richest trading district from the railway point of view. These groups of railway monopolies, it will be seen, shade off to the east and west to some extent, and although there may be a certain amount of competition, and alternative routes to the north and the south, the practical monopolies are east and west. I would suggest that most careful attention should be paid, not only in the interest of the railway companies—which has already been discussed in this House—but also in the interest of the traders and public, to these groupings of railways. Much has been made of saving under the powers in that direction that will accrue from the groupings and amalgamations. A good many of us in business who have had to deal with these matters of amalgamation—and these include hon. Members—who have had to investigate them very carefully to see whether or not they were advisable economically and so on; as to whether or not in fact they possessed the advantages in savings claimed for them at first sight, have not always found it to be the case. I may say that all the proposed amalgamations which I have had the opportunity of investigating in different branches of business have all whittled down to a comparatively small compass as regards economy; the advantages claimed are only to be found in greater production in other directions and not in less cost of working.

Therefore, in regard to the higher dividends proposed in this Bill, I can only think that experience will show that the promoters and those who rely upon their forecasts will be bitterly disappointed at first. These amalgamations inevitably bring higher expenses, in some cases for many years to come. There is rearrangement of stock and working, which is to produce really efficiency and economy. But the creation of new rolling stock and plant, the rearrangement of control, and matters of that kind involve a very heavy expenditure, and those hon. Members take a limited view who suggest that if there are to be any economies in working expenses they will arise from the comparatively small item of the abolition of a certain number of directors' salaries, which, after all, is a very small consideration. Any considerable saving of working expenses will involve a reduction in the wages bill and of the numbers employed. Every train cut off and every branch-line closed means a reduc- tion in the number of men employed. From the point of view of the men who anticipate differently there will be a bitter disappointment if the Bill goes forward as now suggested. What is the proposal in the Bill to deal with these great monopolies? The proposal is that the Minister should take continued powers which will enable him effectively to control the operations and relations of these great amalgamated companies, to fix rates and matters of that kind, and to have control—I think I am right in saying—over schemes and methods of standardisation. The great and important powers to be attached to this purpose of standardisation may take years to work out. On every occasion in this Bill the powers of the Minister are to be the controlling factor. I am not in the least objecting to my right hon. Friend, I am talking impersonally of the Minister of Transport. Wherever there is a difficulty the Minister is to be referred to, and if he cannot make up his mind in 14 days, which appears to be the time contemplated in the Bill, he can refer the matter to one or other of the tribunals to be set up by the Bill. These tribunals are not judicial tribunals. The judicial form of tribunal, the Railway and Canal Commission, is pushed into a back place and its long experience is to be used merely in deciding questions of undue preference and other matters of that kind. The real vital business is to be done in the first place by the Rates Advisory Committee, which is apparently to arrange the classification of rates, and then to arrange for tribunals to be set up to decide what charge is to be made under the various headings of that classification and to decide all other questions in relation to rates.

7.0 P.M.

I would call attention to this fact, that the railway companies under this Bill are to be precluded from the ordinary freedom of traders. They can make no bargains, they can make no arrangements, with their customers without referring to the Minister for his approval. If the Minister does not approve he refers to the tribunal, and this tribunal is to have power to charge fees and to charge costs. What is to happen? It must inevitably happen that every time a rate which is not a standard rate is under discussion, or if the standard rate requires to be altered for any trade, every facility which may be required by the trader has to go before the Minister and, if he refers to the tribunal, some skilled expert is to be employed in order to state the case. Even though it may be agreed between the railway company and the trader, they will have to appear with their experts in order to obtain the approval of the tribunal. What a mad system of carrying on business!—bound and tied hand and foot, no freedom to bargain, no freedom to develop traffic except by the will of the Minister us advised by the tribunal. The constitution of the tribunal is open to grave objection. It is to consist of a legal gentleman, who is to be chairman. There is to be a person skilled in railway business—in fact, a representative of the railway companies—there is to be a trader of experience, and there is to be a panel from which other gentlemen are to be drawn on any particular occasion. We have had some experience in the Rates Advisory Committee of this sort of tribunal. Except for the chairman there was only one gentleman on this tribunal who knew the issues, and that was the representative of the railway companies. The traders' representatives were out of their depth dealing with matters with which they had no previous knowledge, doing their best, but quite inadequate to deal with the legal gentlemen who appeared before them as counsel, or with the railway representative who sat with them on the tribunal. I suggest that the traders' representation on this Rates Tribunal is entirely unsatisfactory. What salary is to be paid? If you are to get a first-class man, thoroughly versed in trade and business and fit to deal and adjudicate upon the multitudinous and important questions which must come before this Rates Tribunal, he must certainly be a full-time man and a firstrate man. You cannot get such a man for a low salary. How are you to pay him? If you are to have men on the panel they will have to be paid adequate fees during the time they are employed. You may get a legal gentleman to preside. You will not get a first-class man with full vigour of earning powers except for a very large salary—one who has spent a long time in his profession and reached a position of eminence, but for whom the period of retirement has come more or less in view. But it is going to be a costly business, costly to the traders and costly to the railway companies, to appear before this tribunal.

I must pause, if I may be permitted to do so, to call attention to the continued and apparently determined hostility both of the Rates Advisory Committee and of this Bill to exceptional rates. Exceptional rates have been the groundwork for developing trade and the railway business of this country. Railway business has been built up on exceptional rates, yet these exceptional rates are hedged around with such great hostility that the whole position of the trader is imperilled and the business of the railway companies is also imperilled. Let us remember that the railway companies are not in the position they were years ago. Owing to the development of road transport a great deal more can be done over certain distances and certain routes with goods traffic that formerly inevitably had to go by rail. The railway passenger traffic is also imperilled by the same cause. The railway companies will have to fight hard to obtain their traffic. Rates are already too high—112 per cent. over pre-War charges for goods and even the 75 per cent. addition to passenger fares are killing traffic. People who formerly travelled are going by other means than the railway or are travelling less, and in the same way the trader is doing his best to find other means of getting his goods carried. To get back their business the railway companies must find charges that will pay traders to use the railways. The Minister proposes to set up this tribunal which only makes it more difficult for the railway companies to afford any facilities to develop traffic. In fact in this Bill the trader sits down as the victim to be plucked or to be milked for the benefit of the Minister and the railway shareholders. The railways should be allowed to develop their business like any other trade in this country and should not be put under the control of a Minister and bound hand and foot to tribunals.

We have some ground for complaint because of the very short period this House has been allowed for the examination of this Bill. The Bill is being rushed. The House does not realise what is going on, and the public outside realises still less. The inevitable day is the 15th August. It is then that the exceptional powers of the Ministry of Transport Act disappear, and that date is very near. That date is one of the means of pressure that is being brought to bear on the railway companies. They must have some Bill, they must have some concession, they must have some payment of money, or they will not be able to carry on when the Minister departs on the 15th August. No one can be more disappointed than the Minister himself that more has not been done during the last two years. It is more disappointing still that when the date for the end of control comes along we are paying more than double for railway carriage in this country. Railway companies, in spite of these heavy charges and great burdens on the traders, are in an unsound financial condition, and if they cannot receive a payment on account from the Ministry of Transport for the claims and charges due to them before the 15th August, they will find themselves, or at least many of them will find themselves, in the direst financial stress. I do not think it is quite fair to the House or quite fair to the country that this matter has not been brought forward at a much earlier period of the Session when it might have been examined more closely and conclusions arrived at more fairly.

In conclusion, I have to say that the fatal defects of this Bill, as it appears to me and many others, are that it continues the vicious system of Government control which has so largely failed in the period which has supervened since the end of the War. It continues practical control over the railway industry and over the business and trade of this country, so far as it is connected with the railway, and there is no sufficient safeguard or care for the interests of the general trader or the general public, who ought to be the first consideration and who, I submit, would be the first consideration of the railway companies if they had a free hand. Unless this Bill is most radically amended in Committee, it will, in my opinion, bring disaster on the business of this country.

Rear-Admiral Sir R. HALL

I wish to point out that in regard to the two periods provided for in the Bill there is an interval between them. After the 31st of December, 1922, the railways are to be compulsorily amalgamated. During the whole period of control the 1913 basis of net receipts has been the one accepted. I wish to point out that in Clause 10 the 1913 basis of net receipts is specifically mentioned in paragraph (ii) as follows: (b) The sum of five million pounds shall be distributed in respect of claims for compensation for any abnormal increase in the ratio of working expenses to receipts for the year nineteen hundred and twenty-two as compared with the ratio of working expenses to receipts for the year nineteen hundred and thirteen. In this proviso the Government recognise their liability for the expenditure of the railways on ordinary maintenance, but when it comes to the question of amalgamation we find rather a different state of affairs. When you come to Clause 6, there you find a proviso which has to be read in conjunction with Clause 52, and it clearly lays down that the amalgamation shall be calculated on the 1913 basis of the net receipts. That is confirmed by Clause 52. Clause 6 is in line with the procedure after the 15th of August, when control ceases, and it is in line with the procedure after amalgamation. There is, however, a proviso in Clause 6 which entirely stultifies the 1913 basis, because it lays down that the tribunal are not to base their calculations on the net receipts of 1913, but on the problematical receipts of the future. I do not know anyone who can say what the problematical receipts of any railway are going to be in the future, and this gives the tribunal an impossible task, because they have no basis to go upon.

It will involve most extensive and expensive litigation or arbitration before this tribunal to arrive at any basis at which to start from, and it can hardly be the intention of the Government, when it comes to amalgamation, that they should force the companies to be amalgamated on a basis to which they themselves have never worked. It may be said that the Government accept no obligation to put the railways back on a pre-War basis. That may be arguable. The Minister of Transport may say the terms for amalgamation are a domestic matter for the railway companies themselves to settle. I am aware that the Government in their White Papers definitely state that the principle laid down in Clause 6 has been accepted by the railway companies. It was accepted by a majority of votes, but it was inserted afterwards, and at any rate it has never been agreed to by the company which I belong to, and many other companies.

It may be said that this being a domestic matter the Government have no responsibility for it at all. That would be correct if the principle of amalgamation were voluntary, but amalgamation is compulsory under this Bill, and that being so the Ministry cannot divest itself of responsibility for everything that is in this Bill. The point I want to rub in is if the proviso in Clause 6 stands there must be a claim against the Government. That claim must be the difference between the 1913 value and the depreciated value which has taken place during the period of control. We are only too glad to have an opportunity of settling these questions on just and equitable terms, and I ask the Minister of Transport to give us a definite assurance that Clause 6 as it now stands will receive such treatment that justice will be done to these companies which have suffered abnormal increases in their working expenses.

Mr. MacVEAGH

The remarks I intend to make on this Bill will be of a very limited character. I desire to express my cordial agreement with my hon. and gallant Friend opposite (Sir R. Hall) who has just set such an admirable example of brevity as to the operation of Sub-section (1) of Clause 6. This Clause would undoubtedly operate most unfairly upon the weaker railway companies, because it alters the whole basis of valuation. Hitherto we have spoken of the net receipts of railway companies in terms of their net receipts of 1913, but under this Sub-section it is proposed to depart from that practice, and to establish a kind of rule-of-thumb conjecture as to possible future receipts. In the first place no man can tell in the present condition of the railway companies which basis would be the more favourable to the weaker railway companies, whether you value on the net receipts of 1913, or on the possible receipts of the future, because the decision would depend entirely upon the vagaries of the Arbitration Tribunal.

I can imagine discussions proceeding for weeks and months before this tribunal as to the potential future profits of any particular railway. On the old basis the weaker railway companies would at least know where they were, and for that reason I submit that the 1913 test should still be applied. A small reduction in the lump sum would not seriously affect any of the big railway companies, but it might destroy altogether the dividends of the weaker companies. I would like to know why this new element should be introduced at all. In every other Clause you adhere to the net receipts of 1913, and when you come to amalgamation I would like to know why it is proposed to depart from that standard. This Bill provides that the new rates and fares shall be on such a scale as to provide for each constituent of the amalgamated group such net receipts as will secure for the whole group the net receipts of 1913. Therefore there is no injustice in requiring that the weaker companies should be treated on the basis of 1913. I fail to see why there should be one basis in reference to fixing rates and fares, and an entirely different basis for amalgamation. In the case of the weaker companies the traffic has been diminished more seriously, and the standard of increased wages has increased the working expenses in a greater ratio in the case of the weaker companies than in the case of the bigger companies. The financial equilibrium has been more seriously disturbed in the case of the weaker companies than in the case of the stronger companies. Before this measure goes to the Committee stage, I hope my right hon. Friend, in his reply, will be able to tell us that he intends to give favourable consideration to this subject, and give us an assurance that the weaker companies will be treated with fairness. It is not right to take one set of companies and say that they should be dealt with on the basis of the 1913 net receipts, and to say to the weaker railway companies, "We are going to punish you because there was a war."

I want to say a word or two about the light railways. The protection and development of the light railway system is vital to the future of transport, and I suggest that the interests of the light railways are not adequately safeguarded in this Bill. Invaluable help might be given to the development of light railways by the simple expedient of allowing local rating authorities to guarantee interest or dividend on new light railways which are projected, and of course to include covering guarantees from other local authorities or from local landowners. That would be purely voluntary, and I think local authorities are the best judges as to the prospect of the success of light railways, and they would be very careful not to mortgage their credit unless there was a reasonable chance of success.

I wish to call attention to Sub-section (2) of Clause 65 which empowers railway companies to take over light railways without their consent. That, I submit, is a very unfair provision. These light railways were constructed under the Light Railways Act which gives them a guarantee that they would not be taken over without their consent. They were sanctioned by a Provisional Order passed through this House which has all the force of an Act of Parliament, and to empower any Government Department or any railway company to take over private property in that fashion and to take over an undertaking that was authorised by an Act of this House itself is I suggest a very tall order indeed, and I hope my right hon. Friend will see his way to abandon Sub-section (2) of Clause 65.

Clause 8, Sub-section (2), provides that the Commissioners forming the Tribunal shall be Sir Henry Babington Smith, Sir William Plender, and Mr. George John Talbot. With regard to Sir William Plender and Mr. Talbot they know something about railways, but Sir Henry Babington Smith knows nothing about railways and he is to be the Chairman. It would be more rational to appoint as Chairman of the Tribunal one of the gentlemen who know something about railways. Sir Henry Babington Smith is a distinguished ex-Secretary of the General Post Office, and he is, I believe, Chairman of the National Bank of Turkey, but that does not make him an authority on railways. Indeed, the Post Office has convinced everybody of late that it knows so little about business methods that it is not a recommendation to anybody that this gentleman was formerly Secretary of the General Post Office. I have no doubt from his distinguished public career that he is a public servant of great ability and great capacity, but I do suggest that it would be more appropriate that one of the two Commissioners who understand railway problems through and through should be Chairman of it. Finally, I suggest to my right hon. Frend that he should confer with the Chancellor of the Exchequer and put himself in a position to make some announcement with regard to the continued exemption beyond 1922 of railway companies and of all public utility companies from the operations of the Corporations Tax. They are exempted from the Corporations Tax, I believe, till the end of 1922, but I suggest that all public utility companies ought to be permanently exempted. If my right hon. Friend could carry his persuasion further, and induce the Chancellor of the Exchequer to drop the tax altogether, as he has dropped the Excess Profits Duty, he would find it a very popular decision. But if that cannot be done, I appeal to the Minister of Transport to bring his influence to bear upon the Chancellor of the Exchequer with a view to the remission of this tax beyond the period ending 1922.

Major BARNES

During the War the Government found it necessary to take possession of and control two of our great industries, the mining industry and the railway industry. Since the Armistice it has been their business to determine how and when and under what conditions they should relinquish possession and decontrol these industries. The task has been undertaken by different members of the Government, and they have employed different methods. The Chancellor of the Exchequer, and later the Prime Minister, have dealt with the mining industry. The Minister of Transport is dealing with the railway industry. When we see what they have done with the mining industry, and when we see what he is likely to do with the railway industry, I think, on comparison, all the advantages are with the scheme proposed by the Minister of Transport, and we can really only estimate his success by comparing it with their failure. They made no real effort to bring owners and men together, they made no provision for getting over that very awkward period between the end of the War and the return of normal times, and we can only estimate the importance of the great constructive effort which the Minister of Transport is making when we realise what would be the feelings of the House and the country if there were a Minister of Mines who could come down here with a Mines Bill which had behind it the support of the Mining Association and the Miners' Federation, and which had been agreed to by the great business communities of the country, and could assure us that under the terms of that Bill we had before us the prospect of something like indus- trial peace until 1923. Such a situation, had it arrived, would have been a great relief, and one of the greatest causes of rejoicing which this country has had for many a long day. Consideration of this Bill from that standpoint does give us a true perspective, and does show us what we have to consider in this Debate. I say that without committing myself in any way to agreement with everything in the Bill. There are many points in it which are very substantial Committee points, and after the Minister has got a Second Reading—whether he gets his Bill or not without a Division, and I hope he will get it without a Division—I have no doubt he will have a very useful and perhaps a prolonged period in Committee, with the assistance of Members of all parties in the House, in shaping a really useful Measure.

I cannot help expressing my regret that I do not feel myself able to support the Amendment put forward by my friends who sit round me on this side of the House, not because I am not in sympathy with their aims, for I am in sympathy with their aims, and I desire public ownership of the railways as intensely as they do, but because I do not possess their fears. If I believed, as they say in this Amendment, that this Bill failed to provide for public ownership of railways and would prejudice their future acquisition, I should not be supporting it. I have been told by friends on this side of the House that this will prevent nationalisation, and others who have spoken have thought the Bill is going to bring it about, but I think that, while it is not nationalising the railways at the present time, it is not imposing any substantial, indeed any, barrier to their acquisition by the State in the future. It would be perfectly true to say that this Bill fails to effect public ownership and control of the railways, but it is not correct to say that it fails to provide for it. What is it doing? It is amalgamating two hundred odd companies into six. The very essence of public ownership is one financial unit, and six financial units are nearer to one than two hundred, and to that extent the Bill is really making provision for the future public ownership. That, I realise, would be an objection to the Bill in the minds of some Members, but to my mind it is one of its advantages. Then it is feared that this Bill is going to prejudice the future acquisition of railways by the State on a fair and economical basis. Again, if I thought that, I would not support it. I am one of those who believe in the public ownership of railways, and that they should be acquired at a fair price as soon as the people of this country are ready to acquire them. I do not find anything in this Bill which is going to prevent that, but, on the other hand, there is a great deal in it which will make that problem simpler when it arises in the future.

In the first place, the subsidiary companies have got to be acquired by the constituent companies, and then you have got the constituent companies which have to be amalgamated into amalgamated companies. The fact that these financial undertakings are to be carried out as they are to be carried out under the Bill is one of the great guarantees that we are going to have something like a fair valuation of the railways, and that the constituent companies will not absorb the subsidiary companies on anything but fair and equitable terms, though they will endeavour to drive as good a bargain as they can, and we may be sure that when the constituent companies come to amalgamate the amalgamation will be on terms equitable to each company. If there is any possibility of these amalgamations taking place on terms inequitable to the general community that is something we should examine into and safeguard in Committee. I think there is a great advantage in the position which establishes the net aggregate receipts as the basis on which the companies are to be absorbed in the amalgamation. It appears to me to be a proceeding very analogous to what has taken place with regard to tithe. In place of the fluctuating income which the tithe owner used to derive, his income is commuted for a sum which is not a fixed sum, but on a fixed basis, and as far as I understand the Bill what is going to take place is that the whole of the capital invested in the railway companies prior to the War is going to be treated as something having a fixed income, and that is the income of the 1913 net receipts. Whatever may happen in the future, the only question that can arise will be on what terms that income is to be acquired. If the State ever really does acquire the whole of the railways the problem will be on what terms that annual sum is to be paid for, whether it is to be treated as a capital sum, or as an annuity, or in any other form. I think my Friends on this side may take it that there are plenty of precedents in regard to dealing with matters of that kind which will amply safeguard the State in the future, should it ever desire to acquire the railways.

Then the Amendment says that the Bill provides for the payment to the railway companies of a sum far in excess of the amount due to them in consequence of temporary State control. As a member of the Colwyn Committee I am interested in the provision made for the railway companies, and if I thought the payment being made here was a payment made purely and solely in relationship to the railway agreements held by the railway companies I should take objection to it. On the Colwyn Committee my view was that the proper sum to be paid to the railway companies was the sum they were entitled to under the agreements less any amount that was due, not to control, but due to circumstances of the War. I joined with my colleagues in a series of recommendations which we said would, in our opinion, lead to that claim being reduced to an insignificant amount. Nobody can say that the £60,000,000 in this Bill and the £46,000,000 they have in hand is an insignificant amount, and in so far as those sums are in the Bill and have been paid, it cannot be said that a settlement has been made on the lines laid down in the Colwyn Report. But I do not regard this sum as being entirely or closely related to the claims made by the railway companies under their agreements. I regard this sum as the amount which is being paid for the purpose of arriving at a settlement of this railway question and for carrying the whole question over this present abnormal period into a period of something like comparative peace, and from that point of view I do not disagree with him. To avert anything like a similar catastrophe to what has taken place in the mining world the sum which is to be paid cannot be regarded as excessive.

As far as the Bill provides protection for the general public, I attach a very great deal of value to the provision of statistics, suitable statistics, but I think, in addition, it would be necessary to see in Committee, or later in other legislation, that alternative methods of transport are fully developed and released from the control of the railway companies. Nothing more effective in that way could be done than to give support to the case which the hon. Member for Birmingham (Mr. Neville Chamberlain) has so much at heart, and that is the release of the inland waterways of the country from railway control, and the making of due provision for seeing that the seaborne trade, coasting trade, gets a fair traffic. The Minister for Transport has already done a very great deal with regard to roads. My own view with regard to roads is that our present system penalises road traffic by imposing heavy motor duties, and is wrong. These are all matters in which we must look for real competition to replace the competition which the present system of pooling will undoubtedly diminish. I do not regard this Bill as a final settlement of all the problems that will arise in the railway world. It is certain, as far as capital and labour are concerned, that we shall have to deal with a great many vexed questions. But it is a great step towards a settlement, and, above all, it is a great advantage that it is going to save us from an extension of the great industrial dispute, that it is going to give us a period of breathing time, and to carry us over the gulf between war conditions and normal conditions. I think that the Minister of Transport may be congratulated on a measure which is not a party measure in any sense, but a great effort which, in my opinion, if the real interest and attention of this House be given to it, with a regard solely to the public interest, may be of vast advantage.

Mr. MARRIOTT

Everyone will agree at any rate upon one point, namely, that this Debate has followed a very remarkable course. The Attorney-General, in his exceedingly brilliant but as I thought somewhat irrelevant speech, said that the right hon. Baronet the Member for the City of London (Sir F. Banbury) stood in a position of lonely eminence on this question. I have listened to very nearly the whole of the Debate since it started on Thursday last, and, with the exception of the speech which we have just heard, I do not recall a single speech in the whole course of the Debate—except, of course, those that came from the Ministerial Bench—which gave anything in the nature of a cordial approval to the Bill. From every quarter of the House there has been—from very different points of view and from very different motives—a fusillade of attack upon the Bill and upon the Ministry. Some hon. Members have expressed themselves in favour of the principle of the Bill, although they were very critical of every single provision which the Bill contains. I have done my best to make some study of the Bill, and I have been anxious to discover what the principle of the Bill really is, but the only conclusion at which I can arrive is that the principle of the Bill is a conspicuous lack of principle.

I said just now that the Bill has been attacked from every quarter of the House, and on very opposite grounds. The attack was begun in the very reasonable speech of my right hon. Friend the Member for Miles Platting (Mr. Clynes). He attacked the Bill on the ground that it was not true nationalisation. My right hon. Friend the Member for the City of London (Sir F. Banbury), on the other hand, attacked it because it was a bastard nationalisation. My hon. Friend the Member for Edinburgh (Mr. W. Graham) attacked it on the ground that it did not provide for syndicalisation or, as I think he put it, for guild socialism. It has been attacked all round by the Members from Scotland on the ground that it does injustice to Scotland; and it was attacked just now by an hon. Member from Ireland on the ground that it does injustice to the smaller companies. It has been attacked by the hon. Members for Hull on the ground that it does injustice to Hull, and it has been attacked by my right hon. Friend the Member for South Molton (Mr. Lambert) and by my hon. and gallant Friend the Member for Burton (Colonel Gretton), on the ground that it will work a gross injustice to the traders of this country. I am not quite sure on what ground my hon. Friend the Member for Eccles (Mr. Stevens) attacked the Bill the other night, but my impression is that he was more concerned to attack the Great Northern Bailway Company than the Bill itself. But this is not the place for an answer to that attack.

I admit that it is quite possible that my own views, which are generally—though not entirely—opposed to the Bill, may be to some extent biased by the fact that I am a proprietor and a railway director; but I would ask the House to believe that I have made a very honest, or, at any rate, a very strenuous, attempt to consider the Bill primarily from the point of view of the interests of the State and of the community. After all, those interests are primary and paramount over all other interests. Of course I do not mean to suggest that there are not other interests to be considered. There are. There is the interest of the employés of the railways—a very important interest which should have every consideration. I believe there are some 700,000 of those employés, and they are entitled to the highest consideration. Then there are the interests, as everyone will admit, of the proprietors—the people by whose thrift and self-sacrifice the railways of this country have been entirely constructed. I know it is rather unfashionable to suggest that their interests are entitled to consideration, but they also, after all, form a very considerable body of electors. I do not know exactly how many there are of them. I do not think it has ever been ascertained, and probably could not be ascertained without rather laborious research. But the number of holdings has been accurately ascertained, and I fancy that the figures will surprise a good many people who have not given much thought to this subject.

The aggregate of holdings of ordinary shares in the railway companies is 418,636, of which over 62 per cent. represent individual holdings of less than £500 apiece, while a further 80,000, or 19 per cent., represent holdings of over £500 but less than £1,000. Over 80 per cent. of the ordinary shareholders, therefore, hold less than £1,000 apiece. Besides these there are some 408,000 preferential holdings, of which, again, over 50 per cent. represent less than £500 apiece. One may take it, therefore, that the total of ordinary and preferential holdings combined is over 827,000. Adding to these the holders of debenture stocks, I think it would probably be within the mark to say that there are over 1,000,000 holdings of railway stocks and debentures in this country. That is an interest which is entitled on the mere ground of numbers, and on other grounds as well, to consideration, because, after all, those shareholders do possess certain legal rights, and you cannot ignore those rights with impunity, or cancel them without grave detriment to the well-being of the community at large. On the very lowest grounds of political expediency, you cannot play fast and loose with legal rights without inflicting a blow on the whole fabric—in some sense a substantial fabric, but in another sense a very delicate fabric—of national credit. I believe, and I do not think that anyone will controvert it, that at no moment in the history of this country was there ever a time when it was more absolutely essential to industrial reconstruction to have an abundant supply of relatively cheap capital. That is essential in the interests of the manual workers, and it is essential in the interests of the community at large.

There is another interest to be considered in this matter, namely, that of the traders and of the travellers, for whom my hon. and gallant Friend the Member for Burton spoke so well; but I repeat that it is the interest of the community at large that must be regarded as paramount. Attempting, as I shall, to consider the Bill for the moment mainly, though not exclusively, from that point of view, it may be asked why I regard it, as I do, with considerable apprehension. I have two reasons for that, one of which applies to the Bill as a whole and the other to particular provisions in the Bill. I ask myself, in the first place, was there really any necessity for a Bill of this elaborate description? I do not deny that there was a necessity for a Bill, but here we have a Bill of six parts, 75 Clauses, and seven Schedules, dealing with the grouping of railways, with railway services, railway rates, wages and conditions of service, accounts and statistics. My first objection to the Bill is that its provisions, taken in their entirety, constitute a very serious extension of State interference and of State control. So far as that is so, and I think it will not be denied, the Bill does run counter to one of the strongest—shall I say prejudices, or shall I say convictions?—of the moment. If the experience of the War period in this country proved anything—I mean, of course, in the economic and industrial sphere—it demonstrated conclusively the impracticability of the collectivist ideal, the ideal of nationalisation.

The only thing that the people of this country ardently desire to-day is, I believe, to be let alone to manage their own business, to order their own lives, with the least possible interference from outside. Yet here we have a Bill the whole object of which is to establish a permanent principle of control, and to impose in perpetuity upon a great industry or a great service the fetters which were justified only by a great national crisis and a very urgent national necessity. My first objection is to this perpetuation of the principle of control. How is that control to be exercised? In the first place we have the Ministry of Transport. Of the various authorities set up or continued under the Bill, the Ministry of Transport is, in a sense, the least important, although by far the most pervasive. It survives to impose upon the companies—this is under Clause 67—a particular system of account keeping, and to receive accounts and returns. Some of those statistics, I admit, are of value, but many of them I know to be absolutely valueless, and yet it is costing the railway companies at the present moment £500,000 a year to compile them. Even if those statistics were regarded as essential, there is, in my opinion, no earthly reason why a very elaborate and expensive Government Department should be retained in being in order to receive them. That function might perfectly well be transferred, and in Committee I hope to be able to propose that it shall be transferred, to the Board of Trade, for the Board of Trade has other functions under the Bill, chiefly in regard to applications by public authorities. But besides the Ministry of Transport and the Board of Trade you have the old Railway and Canal Commission, with power to make orders as to the working of the railways, and much more important than any of them, you have your new amalgamations tribunal and your new rates tribunal, both of which are to be set up in the supposed interest of the community, and both of which are to be paid for at the expense of the railway companies. These departments, boards and tribunals in the aggregate constitute a very large and, as I believe, an excessive measure of interference and control. But I hope the House will allow me to guard against one possible misapprehension. I do not for an instant suggest—I hope I am not so foolish—that you can treat a railway company as we treat a cotton mill or a glass factory. The railway companies have been constructed by private capital and they belong in a proprietary sense to those who constructed them, but they have been constructed under statutory permission and they have been endowed by the Legislature with statutory powers, and that being so I acknowledge entirely that they stand in a somewhat special relation to the State, partly as semi-monopolistic undertakings and partly because they offer a commodity which is in universal demand. But do not these arguments if they are put forward prove too much for the present Bill? Are they not rather arguments in favour of the Bill which was brought forward by the right hon. Gentleman the Member for Derby and which represents, as I understand, the considered views of the Labour party, and offers, as it seems to me, a logical solution of this problem? There is one other logical solution, and that is to hand back the railways to their proprietors under such conditions as will restore their dividend-earning capacity which the State, as I submit, has during this period of occupation and control done a very great deal to destroy. For either of these solutions, either the nationalising solution or what I may call the individualistic solution, there is a very great deal to be said.

8.0 P.M.

If I had to consider this problem solely from the point of view of the interests of the railway proprietors, I should be very strongly tempted to close with the Bill of the right hon. Member for Derby in preference to this. I do not say the terms of the right hon. Gentleman's Bill are over generous, but they are not predatory. There is no talk or thought of what people think of as confiscation. From several points of view I think that Bill is preferable to the one we are discussing to-night. For this Bill has many of the disadvantages of nationalisation, without the compensating advantages. No one can say this Bill is not in a sense predatory. In the first place, there is a provision with regard to compulsory amalgamation. The railways were constructed by their proprietors as separate undertakings. Many of them would desire to amalgamate, but by this Bill you are compelling them to do so whether they desire it or whether they do not, and the State has no right to impose this compulsory amalgamation, and still less to make the proprietors of the railway pay for a tribunal which they have not asked and they do not want. Then you have a provision, which may again prove to be predatory, in regard to the compulsory standardisation of plant, equipment, and so on. No one denies, as far as I am aware, that what is called standardisation is an ideal at which we ought to aim, but it cannot be attained at all rapidly without inflicting very undeserved loss upon the proprietors. Then, by Clause 12, power is conferred, in this case on the Railway and Canal Commissioners, to order certain alterations in the working of the railways as regards services, facilities and conveniences. On that point the Attorney-General was not entirely accurate in his submission. He told the House that the revenues of the railway companies are protected under this Clause by an appeal to the Railway and Canal Commissioners. As I read it there is protection as regards capital expenditure to a certain extent, but I find no protection as regards expenditure on account of revenue.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)

I understood the Attorney-General to refer to the guarantee of the revenue on the basis, not of a guaranteed revenue in terms, but of standardisation of the revenue on the 1913 basis.

Mr. MARRIOTT

I thought that was a separate point. I thought there were two separate points made by the Attorney-General. But I pass from that to notice the point made by the hon. and gallant Member for East Newcastle (Major Barnes) in regard to the compensation of £60,000,000. That is an offer which I think will have to be subjected to very close scrutiny if and when we get into Committee. It is a very complicated matter, and, unless I misapprehend the whole import of this Clause, it seems to me to be open to very grave criticism, and, in particular, to two criticisms, first, that it is, as I think, inadequate in amount—of course, there is a difference of opinion on that point—but also because it seems to me to be offered in a very objectionable, I was going to say almost a commercially immoral manner, for part of it, so it is suggested, shall be spent in the payment of dividend. I cannot comprehend that suggestion in the Bill, and, in particular, I find myself unable to understand the penal proviso—for it is a penal proviso—that whether it is so spent or not, 50 per cent. of the aggregate amount of compensation shall be treated as income, whether it is spent as income or not, and shall be subjected to Income Tax. Then, worst of all, this lump sum is not offered as a settlement of all mutual claims as between the railway companies and the State. The companies are to accept it in full satisfaction of all their claims against the State, but by accepting it are to debar themselves from the ordinary legal remedies secured to them by the Statute of 1871, and possibly by other Statutes as well. But, on the other hand, the State is still to remain, as I understand it, entirely free to prosecute its claims against the companies in the courts. A more preposterous case of "heads I win, and tails you lose" was never conceived outside the realm of burlesque.

I do not wish to trespass on the time of the House, otherwise I should have something to say in regard to the exceedingly detailed provisions in regard to rates and charges. But I think that is really rather a matter for Committee stage. I turn to the provisions in Part IV, which deal with wages and conditions of service. The original scheme of the Bill contemplated the presence of representatives of the employés on the directorial boards. Speaking only for myself, I should have welcomed their presence on those boards provided they were elected, like other directors, by duly qualified proprietors, that is to say, by the people to whom the railways belong, and to whom nominally this Bill proposes to restore them. I ask whether there would be really any practical difficulty in this. The right hon. Gentleman the member for Derby claimed the other day that he is the largest shareholder in English railways. I would ask him whether he cannot use that powerful position to promote the candidature of his nominees to the board. It would, no doubt, involve some little alteration of the rules of procedure, but that surely is not beyond the ingenuity either of the right hon. Gentleman or of the Committee to which the Bill will be referred.

For the moment, however, I am only concerned to demonstrate that from more than one point of view this Bill seems to me inferior to that put forward by the right hon. Gentleman. On the one hand, it devolves the whole financial responsibility upon the existing proprietors, while it hands back to them a damaged property with meagre compensation, and then, having reimposed the whole financial responsibility on the shareholders, it takes the management of their own property out of the hands of the shareholders in no fewer than eight several ways: first of all by the power of grouping and amalgamation, secondly the working of their undertakings as regards railway services, facilities, and conveniences, thirdly as regards standardisation, fourthly as regards co-operative working, the common user of railway stock and so on, fifthly as regards pooling arrangements, sixthly as regards power to fix rates, seventhly as regards wages and conditions of service, and lastly as regards accounts. It seems to me impossible to avoid the question whether in view of all these restrictions, controls and imposition it would not be simpler, fairer, and more just to buy out the existing proprietors altogether. I think there is a very great deal to be said for that solution of the question, and if I were considering this matter solely from the point of view of the proprietors I think I should answer that question in the affirmative. But, to my mind, the interests of the State in this matter are paramount over all other interests, and, from the point of view of the interest of the State, the nationalisation solution is, in my opinion, the worst of all. This Bill, so my right hon. Friend told us, is bastard nationalisation. I agree that it contains none of the advantages of nationalisation and embodies many of its worst features, and unless it is drastically amended, as I hope it will be, it ought not to receive the support either of those who are the guardians of the just and legal rights of the proprietors, still less of those who are concerned for those larger national interests which are so deeply and so vitally involved.

Lieut.-Colonel A. MURRAY

I desire to deal with some of the proposals of this Bill as they affect Scotland, and in doing so I shall endeavour to argue the case as concisely as possible, without any wealth of detail. I approach this subject from the standpoint of Scottish traders, Scottish agriculturists, Scottish railway employés, Scottish railway shareholders, and the Scottish travelling public. In whatever order you place these interests they are equally concerned in the continued prosperity and financial stability of the Scottish railways. Viewed from the standpoint of the great bulk of the classes of persons I have enumerated in Scotland, there are many provisions in this Bill which give rise to feelings of profound misgivings and dismay. The particular parts of the Bill with which I propose to deal, and which give rise to the greatest disquiet in Scotland, are the proposals in the Schedule as regards grouping.

I listened to the speech of the Minister of Transport on Thursday. He is fully aware of the anxious state of public opinion in Scotland with regard to the grouping proposals which have been put forward, but it was not until the end of his speech that he made reference to Scotland. I carry my mind back to an occasion four or five years before the War when there was a discussion on the Bight to Work Bill, and an hon. Member representing the Labour party made a very eloquent speech in favour of the Bill. Then there arose from behind him an hon. Member who said, "I have listened to the arguments in the middle of the speech of the hon. Member, and they have not convinced me. Then the hon. Member came to his peroration, which contained everything that even he did not dare to attempt to prove by argument in the middle of his speech."To my mind there is a striking analogy between the two occasions, and the two perorations. It was not until the peroration of the Minister that he made any allusion to the Scottish case. He said that he thought it would probably be for the convenience of the House if the Government dealt with the case of the Scottish companies in the course of the Debate. Why? If he has a good case to put forward in respect to the Scottish companies and the Scottish grouping, why should he not put it forward at the beginning of the Debate instead of leaving it to the end?

Dr. MURRAY

It should be in the fore-front of the Debate.

Lieut.-Colonel MURRAY

He said that he could not find out exactly what the Scottish companies want. The hon. Member for Camlachie (Sir H. Mackinder) and myself have been asked by the Scottish Members to give expression in this Debate to what the Scottish Members and the Scottish community generally want. I have said that the grouping proposals have given rise to great anxiety in Scotland. What, briefly, is the history of this matter? At the end of last year what is commonly called a White Paper was issued, and in that White Paper the Scottish railway companies were to be grouped by themselves in a single group. The Scottish railway companies, the Scottish trading community and the Scottish railway shareholders gave very careful consideration to the grouping proposals contained in the White Paper, and they were unanimous in their opposition to them. I might quote at great length the arguments adduced by various bodies in Scotland against the proposals in the White Paper. They were opposed by the Chambers of Commerce of Aberdeen, Dundee, Edinburgh, Glasgow, Greenock, Leith, and the South of Scotland. There was a very important meeting at Glasgow in February of this year, consisting of representatives of the 17 larger towns, the Convention of Royal Burghs, and several county councils. All the Scottish iron and steel manufacturers were present, comprising the ironmasters, the steel makers, and the bar-iron manufacturers in Scotland. They were all in opposition to the proposals in the White Paper.

The demand put forward by these various bodies was that if compulsory grouping was to take place it should be on sound financial lines, and that, so far as Scotland was concerned, that could only be achieved by grouping the Scottish railways longitudinally with the English companies, with which in the past they have been most closely associated. Scotland is not alone in that demand. I propose to quote briefly from a letter sent to the Minister by the Railway Companies Association on the 8th December, 1920. In this letter the following statement appears: If, as the Minister has indicated, the grouping of railways is a fundamental principle of the Government's scheme, and the railway companies will have no alternative but to group in some form or other, the Association are of the opinion that in determining the scheme of grouping, one of the principal considerations should be the securing of financial equilibrium within each group. The letter goes on to state: In order to secure that financial equilibrium, the Association suggests an alternative scheme. What is that alternative scheme? In the alternative scheme the Caledonian, the Glasgow and South Western and the Highland line were associated with the North Western, Midland and other railway companies, while the North British and the Great North of Scotland were associated with the Great Central, the Great Northern, the Great Eastern and the North Eastern. I want to draw the attention of the House to this fact. This grouping was approved by all the companies' members of the Railway Companies' Association, with the exception of three, the North Eastern, the Hull and Barnsley, and the Barry Company. The Minister has given no reason why the proposals put forward by the majority of the Railway Companies' Association were not acted upon in this Bill. It is no defence to say, as has been suggested by the Minister, that the Association was not unanimous, or that it was lukewarm. The proposals were the proposals of the majority. There are many momentous decisions taken in this House by majorities. Most majorities are luke-warm, in fact it is only the minorities that are enthusiastic; but the Government acts on the decision of the majorities none the less. Time and again the Minister in his speech justified the inclusion of this provision or that provision in the Bill because, as he said, it was the decision of a majority.

What I ask the Minister—and I hope we shall have a reply in this Debate—is why in the case of the Scottish grouping he has not accepted the opinions of the majority of the Railway Companies' Association? He may say that these were the opinions in December last. What are the opinions now? There was issued this month, May, a memorandum of the views of the majority of the companies' members in the Railway Companies' Association, and, quite contrary to what the Minister may have led the House to infer in his peroration—I do not wish to accuse him of misleading the House—the majority of the Railway Companies' Association is still a majority. They refer in this memorandum to the grouping of the Scottish companies, and they say: It will be remembered that the Ministry of Transport issued a White Paper indicating their general ideas. To this the Railway Companies' Association responded with a letter signed by the Chairman, in which he suggests that a more effective scheme of grouping than that proposed in the White Paper might lead to including the Scottish railways in the principal English groups. This was commended as being a scheme more calculated to establish fixed equilibrium, and the Scottish companies concurred in the recommendations; but the Minister rejected that part of the proposals, and has formed the Scottish companies into two groups. I hope that the Minister will support their proposals in this regard when he comes to reply in the course of this Debate. But the Minister has to a certain extent changed the proposal that was submitted in the White Paper. He now proposes that the Scottish railways should be separated into two groups. If the arguments in favour of the one Scottish group hold water, namely, the elimination of competition and the saving of expense in administration and working, then those arguments must fall to the ground by dividing the railways into two Scottish groups. In other words, he can only support the two Scottish groups for reasons totally different from those for which he supports one group. The Scottish demand is the grouping of the Scottish railways with the English railways on parallel lines.

This is a very serious matter so far as Scotland is concerned, and the House will forgive me if I explain briefly why the bulk of Scottish opinion desires longitudinal grouping with the English lines. First it is necessary to emphasise the changes that have been brought about during the period of control. The standardisation of wages and hours on a national basis has placed a very heavy burden upon Scottish companies. It is admitted by the Minister and the Parliamentary Secretary, and is not open to dispute, that owing to geographical and economic conditions in Scotland the burden is much heavier in the case of Scottish companies than in the case of some of the English companies and that the working expenses of the Scottish companies have been increased in a much greater ratio than those of the English railways. I merely quote one set of figures. The increase in working cost in 1920 as compared with 1913 on eight English railways was 227 per cent. On five Scottish railways the increase was 291 per cent. With the uneconomic burdens imposed on the Scottish railways and imposed, not with the assent of the Scottish companies, but by the executive from the outside, how are the Scottish railways, standing by themselves, if and when this Bill is passed, to maintain their financial equilibrium, and consequently a good train service at reasonable rates and fares? That is the point. The Minister may say that the answer to that question is contained in this Bill. I differ from him. This Bill provides a rates tribunal which is to fix rates and fares in order to produce a standard revenue for each of the companies, calculated roughly on the 1913 dividends. It is obvious to the meanest intelligence that the rates and fares which are quite sufficient for companies operating in the rich North-Eastern or Midland districts of England are insufficient to provide the standard revenue for the poorer districts through which the railways operate in Scotland.

One other consideration with regard to rates. The Bill proceeds on the assumption that it is possible to increase rates and fares up to any amount in order to produce a standard revenue. This is a fundamental fallacy so far as Scotland is concerned. It leaves out of account the special conditions of Scotland. Scottish railways have a much shorter average length of haul than English railways. The density of traffic is much less. Nearly all the important centres of traffic are on or near the sea, and the Scottish railways are exposed to the competition of coasting steamers to a greater degree than is the case in England. The competition of sea and road traffic has been proceeding at a much greater rate than was previously anticipated. Present rates and fares are bringing about a transference of traffic from the railways at an increasing rapid rate. I might quote figures to show that the increase of rates during the period of control have been a very heavy burden upon Scotch trade, and the present rates and fares appear to be as high as the traffic can possibly bear. If what I have said describes correctly the situation so far as Scotland is concerned, and I believe it does, then I apprehend that one of several consequences must follow if the Scottish grouping which is proposed in this Bill is adhered to. Either the Scottish rates and fares will have to be raised above the level of English rates and fares, which will prejudice Scottish traders in competition with similar English traders, or if that does not happen, the attempt to increase rates in order to produce the standard revenue may not only not produce the standard revenue but actually decrease the revenue. In either event the results to Scottish trade, Scottish railways and the Scottish community generally, must be very serious indeed, if not disastrous.

Certain figures have passed between the Minister and between Scottish Members and the Scottish railway companies. Those figures have been challenged by the Minister, but the Minister has never given any figures of his own to the Scottish companies to support the argument that he produces against the Scottish figures. The Minister may say in his reply that Scotland has failed to prove her case for special treatment. If that reply were made, I would remind the Minister that he himself met the Scottish Railway Chairmen on 20th November, and admitted the special circumstances in regard to Scotland. They were also admitted by Sir George Beharrell, a very distinguished official of the Ministry of Transport, in the "Scotsman" recently, when issuing a memorandum explaining this Bill, and he said that the position of Scotland was undoubtedly difficult. I would ask the Minister, where in this Bill is there anything to deal either with the special circumstances to which the Minister himself made allusion or to the undoubted difficulty which was referred to by Sir George Beharrell? It has been suggested that if the Scottish railways are grouped with the English railways, the Scottish traders may suffer by a rise in rates to the English level. That is one of the arguments used in the explanatory memorandum. This aspect of the question has been very carefully considered by the Scottish trading community, and what they fear is, that unless the Scottish-English allied grouping takes place Scottish rates will rise far above the English level. That question was considered not only last December, when the White Paper proposals were issued, but quite recently. I could quote to the House the personal view of many Scottish traders on the subject. On the question of rates, Mr. J. A. Mitchell, who headed a deputation to this House, said: The Minister of Transport has quoted figures only in a general way. We are not satisfied that there is anything in those figures which will lead us to change our view. We feel that if the Minister has figures which have an important bearing on the subject he ought to come out in the open with them and allow them to be subject to criticism. There have been great meetings held in Glasgow, in Edinburgh, in Aberdeen, and in Inverness within the last week, all of them having carefully considered the proposals of the Minister and all of them protesting against those proposals and asking for the longitudinal grouping for which I am asking. I am told there has been weakening on the part of traders; there has been no weakening at all. A prominent trader who is a friend of mine writes: So far as I know there is no weakening among the traders. They do not accept Geddes's statement, and until he puts forward figures to disprove the estimates of the Scottish railways, they will, I think, stand to their former position of opposition to the grouping proposed. I think I have said enough to show what Scotland wants. Scottish railways do not wish to be excluded from this Bill. Let me be clear on that point. What they require is fair treatment so far as grouping is concerned. They require the longitudinal grouping with the English lines. I hope the Minister of Transport will take to heart the remarkable unanimity of Scotland in this respect. Expression to it has been given from every quarter of the House. The right hon. Member for Peebles (Sir D. Maclean) assured the Minister that Scotland was on the warpath in the matter. Then there was the speech of the hon. Member for Central Edinburgh (Mr. W. Graham) and that of the hon. Member for Camlachie. An independent witness, the "Times," said: As far as we can gather, the whole strength of public opinion in Scotland is against the Minister of Transport. I could have elaborated other objections to certain provisions of the Bill, including the £60,000,000 which ought not to be in the Bill. The majority of the railway companies have not been able to make up their claims; no time was allowed for the examination and preparation of claims by the individual companies. Then there are the needlessly extensive powers of the tribunals, the unnecessary obstacles to the speedy adjustment of special rates between companies and traders, the continuation of a large measure of control in the Ministry of Transport, the interference with the control of capital expenditure, and, so far as Scotland is concerned, failure to provide a Rates Tribunal to hear Scottish questions in Scotland, or for appeal to the Court of Session. All those are matters which will form the subject of special Amendments in Committee. I, therefore, strongly urge once more the most favourable consideration for the grouping proposals we put forward with the united opinion of Scotland behind them. In this matter all that Scotland demands is fair treatment. She asks that no more and claims that no less should be meted out to her.

Colonel LAMBERT WARD

I would not have attempted to intervene in this Debate, and would not have persevered in that attempt in the way I have done, had I not been specially asked by the constituency I represent to oppose this Bill and to lay before the House the case of Hull. Unless this Measure is drastically amended in Committee, at any rate so far as certain schedules are concerned, Hull stands to lose advantages which her citizens worked and struggled hard to obtain forty years ago, advantages which they have struggled equally hard to maintain on more than one occasion since then. Hull is not notorious for its unanimity in matters political or municipal. At the present time Hull is represented in this House by one Coalition Liberal, one Independent Liberal, one Coalition Unionist and one Independent Unionist, with the result that our votes on almost every occasion cancel one another. In this particular case, however, Hull speaks as one man. The citizens are absolutely unanimous in their opposition to this Bill, and for one reason only—because of the grouping of the railways and because their own particular railway is to be grouped with the North Eastern Railway. To show the unanimity which exists in Hull regarding this Measure, I have only to state that the Chamber of Commerce and the Chamber of Trade, and a large variety of other organisations have passed resolutions condemning the proposal, and have requested that their representatives in this House should oppose it. In addition to that, practically every association of traders has done the same, such as the Association of Shipowners and the Association of Fruit Traders. Needless to say, this unanimous opposition has not been raised for nothing.

For many years before 1880 Hull was in the unfortunate position of being served by a railway company which deliberately neglected the city's interests. From 1845, when I believe the railway was opened, until 1880, Hull was served by the North Eastern Railway Company. For some reason or other, the North Eastern Railway Company thought fit to neglect Hull in favour of the ports further north. In addition to that, traders had reason to complain of the autocratic attitude adopted by the officials of the company. I do not know why the North Eastern Company starved Hull in favour of Newcastle, but I have been told that the directors of the time had personal and private interests further north which led them to develop Newcastle at the expense of Hull. The fact remains that for many years Hull had no suitable railway facilities whatever, and when traders went to interview the officials of the company on the subject they were received, I am told, with the scantiest courtesy. At last, weary to death with the lack of facilities, they decided to have their own railway, and they promoted the Hull and Barnsley Railway Company. I do not go so far as to say that the traders and Corporation of Hull were alone in the promotion of that company, but I do claim that had it not been for the support, financial and otherwise, of the Hull Corporation, it would never have come into existence. They assisted in the promotion of the company, firstly, by investing £100,000 in its ordinary shares, secondly, by selling to the company the very best available site for a dock on the river front, and, thirdly, by giving evidence and using all their influence, in its support. The objects of the corporation were not financial in any way. They were simply to foster the trade of the port and break the railway monopoly which existed at the time and was in the possession of the North Eastern Company, the town having suffered much through being only served by one line. In return for this support the Hull Corporation were accorded certain facilities and favours, and they were given a right of veto on any proposed amalgamation between the North Eastern and the Hull and Barnsley Companies. It was only natural that, having promoted this competitive railway company, they were anxious to assure that for the future they should have the benefit of this competition, and that as soon as the new railway was constructed the powerful North Eastern should not come along and buy up a controlling interest in it. They succeeded in having this right of veto incorporated in the Hull and Barnsley Act, 1880. I should like to read a few lines of that Act: The company shall not sell, dispose of, or lease any land or foreshore for the purpose of a dock or docks or works or conveniences connected therewith, or any part thereof, nor shall they in any way transfer the management or control thereof, without the consent in writing of the corporation first being obtained. In 1893 an Act was passed to enable the North Eastern Railway to take over the dock, but the veto of the corporation was still preserved in that Act, which states: The North Eastern Railway Company shall not, without the consent in writing of the Corporation under their common seal, at any time purchase or take on lease, or amalgamate with, or accept the transfer of, the management and control of the Hull and Barnsley undertaking or any part thereof, or enter into any general arrangement with the Hull and Barnsley Company or make any application for such purpose. Since that time several attempts have been made by the North Eastern Company to acquire a controlling interest in the Hull and Barnsley Railway, but the Hull Corporation has always exerted its veto, and up to the present time it has always been respected. In 1899 a Bill was promoted to construct a new dock, now known as St. George's Dock, and this Act contained a Section which ran as follows: Nothing in this Act contained shall alter or affect the provisions of Section 8 of the North Eastern Railway Dock Act, 1893, or of the agreement contained in Schedule D of the Hull and Barnsley and West Riding Railway Act, 1880. Thus, under no less than three Acts of Parliament the Hull Corporation is given the right of vetoing any amalgamation on the part of the Hull and Barnsley and North Eastern Companies. My colleagues and I are opposing this Bill because we feel it is injurious to the best interests of Hull that these two railways should be amalgamated. The Bill entirely ignores the unique position of the Hull Corporation in reference to their railway, because, after all is said and done, the Hull and Barnsley Company is practically the Hull Railway. If this Bill becomes law, the port will once more be placed at the mercy of a single company. It is no good pointing out to residents and traders in Hull that conditions have altered and that under the Ministry of Transport their interests will be protected. Hatred of the North Eastern Railway Company is a tradition in Hull on account of the treatment which the town received prior to 1880, and once a city or corporation has received treatment such as that, they will not willingly revert to conditions which even make possible the continuance of that treatment. The position might be made even worse in Hull now, because at that time the docks were not owned by the North Eastern Company; but now they are owned by that company. If the proposals embodied in the Bill become law, the entire railway and dock facilities of Hull will be in the hands of one body, a state of affairs which the Corporation of Hull have struggled to defeat for more than 50 years, and which, up to the introduction of this Bill, they had succeeded in defeating.

Mr. G. BARNES

In view of the number of Members desirous of speaking, I shall put my points in tabloid form. First, as a Scotch Member, I associate myself with the eloquent statement made last week by the hon. Member for the Camlachie Division of Glasgow (Sir H. Mackinder) in regard to the Scottish railways. That does not mean I am not in favour of the grouping system, but I think the Scotch companies have been dealt with unfairly. Government control of the railways has had the effect of up-setting the pre-War equilibrium of the Scottish companies, and, moreover, in the future they will not be able to resume their pre-War position because they will be subject to terms which will have to be operative over the whole field. I support the hon. Members from Scotland who have spoken so well in regard to the solidarity of Scotland on this matter, and I hope the Government's last word has not yet been said upon it. I am going to vote for the Bill for four separate and distinct reasons. First, it tends in the direction of public ownership; second, the grouping will tend to economy; third, it brings something in the nature of reason and common sense to take the place of strike and lockout in industrial dispute; and fourth, there is a little improvement in what it does in the way of the division of surplus revenue between the companies and the community.

With regard to the first point I approach the matter entirely from the point of view put forward by the leader of the Labour party. I am in favour of public ownership. To my mind it is absurd that the main arteries of the country should be owned by private capitalists and controlled by directors who, in the very nature of things, must have regard, if not exclusively at all events mainly, to the interests of their shareholders. But here I part company with my right hon. Friend, who thinks that the effect of this Bill will be to make public ownership more remote—or to make nationalisation more remote. I may say by way of interpolation that the word "nationalisation "has no attraction to my mind, because it seems to carry with it the suggestion of a bureaucracy, and I do not want that. I am in favour of public ownership, and until we have some better foundation to build upon for central or national control, I shall myself be in favour of something in the nature of local control. I do not fear that this Bill will make public ownership more remote. It seems to me that the enlargement of the unit of administration must necessarily mean the larger unit which he and I desire. I am glad to learn that the Minister of Transport says the question of joint control, or the representation of Labour on boards of management, is still an open question.

Sir E. GEDDES

I did not say that.

9.0 P.M.

Mr. BARNES

If I remember aright, the right hon. Gentleman said it could be dealt with in Committee. There is a good deal of opinion in this House, at any rate, that it ought to be regarded as an open question. I do not know what is the reason for the previous arrangement breaking down, although I have my own opinion on that. But this question of joint control is one of great importance. It is a question on which extremes meet. The hon. and gallant Member for Totnes (Colonel Mildmay) spoke to-night as a director of the Great Western Railway Company. Although he said he would be in favour of co-operating with workmen in regard to settling conditions of work as far as possible—I think he said he endorsed the principle of the Whitley Councils—yet he was altogether opposed to the workmen having a seat on the board of directors. I noticed he was loudly cheered in that by the right hon. Baronet the Member for the City of London (Sir F. Banbury). That attitude is very unfortunate. It is really the attitude of keeping the work- man at arm's length—of assuming superiority, of assuming that the worker is not as fit to take part in directorial duties as other people. That attitude is extremely unfortunate for the continued future smooth working of industry in this country. That is the point of view of the extremist on the capitalist side. But we have the same extreme on the other side. We have the workman's leader in effect saying to the workman, "Have nothing to do with capitalism, it is an unclean thing." I would ask people who talk in that way, do they expect that in the course of one night a new heaven and earth will grow up and that the capitalist will fade away entirely? If so, it seems to me that they imagine a vain thing. The system of capitalism may be right or wrong, good or bad, but systems are not made, they grow and they grow in obedience not only to the will but in accordance with the capacity of the people. Therefore, it seems to me that Labour ought to welcome any opportunity of serving an apprenticeship for this work. For my part, I regret exceedingly that this question of the representation of Labour upon directorships of companies has been dropped somehow out of the Bill. On the second point—that the Bill will effect some economy—I do not know how much, but I fancy the Minister expressed the hope it would be an economy of something like £25,000,000. If it is that will be a great thing both for the business of the country, for the companies, and for the workers. But whether it is so or not it seems to me clear that the Bill will effect some economy because of the grouping together of a number of companies with separate staffs and the saving also of expenditure due to the promotion of new companies. I remember a few years since sitting on a Bill upstairs with three colleagues. Two of them were killed in the War, and the other has also died. We sat for 11 days. We had before us expert engineers and railwaymen from New York; we heard the principal lawyers of the Parliamentary Bar; and I was told that the promotion of the Bill cost something like £70,000. Somebody had to pay that. You cannot get experts from New York and you cannot get tip-top lawyers for nothing; and when I think of the money wasted in times gone by, sometimes wasted by one company seeking to poach on the preserves of another company, or wasted on the promotion of Bills in districts where there is only work for one company, and thereby involving starvation for two companies if set up, it is when I think of these things that I am induced to support the Bill upon the second of the grounds I stated.

I come next to my third ground, and I am afraid that here I shall not find I have many friends. The House will remember that provision is made in the Bill for the settlement of labour disputes by reason, argument, and common sense, as against recourse to a strike or lockout. I have heard a lot of speeches during the last few days, and I have been interested in noting the anæmic and fainthearted expressions of the Leader of the Labour party, of the right hon. Member for Norwich (Mr. G. Roberts), and of an hon. Member on the opposite side who spoke to-night. The Leader of the Labour party thought the Bill went too far. My right hon. Friend the Member for Norwich thought it was on the right course, and therefore endorsed the degree of arbitration that might be embodied in the Measure, although he is against the principle of arbitration generally. That seemed to me to be the attitude of the hon. Member who spoke opposite. For my part, I could go much further than either of them. I endorse the Bill, but I should also have endorsed it if the Government had made it a condition of having the matter settled in the way suggested, as a condition of giving the other conditions of the Bill, not only to the workers, but to the companies.

The question of compulsory arbitration is not involved in this Bill, but I should like to say a word or two about it. I think it is time that more attention was given to the rights of the community in industrial disputes, and I believe the application of the principle of compulsory arbitration is merely a matter of time and circumstances. Events are forcing it to the front. Time was when organisations of labour and capital were small, and when a dispute could be watched by the community with comparative indifference. But now organisations are large, they cover the whole field, they involve the whole community in loss and suffering, and, therefore, it seems to me that the community will have to assert itself in its own protection. It cannot go on with conditions as at present, when the com- munity is simply squeezed between the millstones of capital and labour, or labour and capital, as the case may be. My right hon. Friend the Labour Leader expressed himself tentatively in favour of the principle provided there were these four safeguards: first of all, a minimum wage; secondly, a maximum profit; thirdly, joint control; and, fourthly, what he called a fair distribution of the surpluses. But he did not bring Labour into the distribution at all. I should like him, if he speaks again on this matter, to tell us quite frankly whether he is in favour of profit-sharing. I am going to say quite frankly I am, so far as this particular Bill is concerned, and I do not know I would not go further. I admit I have changed my attitude. Twenty or even 10 years ago, I would not have said this, because at that time I was always in fear that the promotion of profit-sharing schemes had at the back of them the weakening of trade unions. But now, I would like to suggest to my hon. Friends, have we not got beyond that stage? I think we have. Trade unions are sufficiently strong to withstand anything of that kind, so that it seems to me we might very well provide the incentive to efficiency to the workmen as well as the owners of the railways.

I may be accused of being inconsistent. I do not care two pence about being inconsistent. If one is consistent in looking at the facts at the present time, that is the best form of consistency, and at this time I am in favour of the workmen having a share in surplus profits. It is not at all a new principle. Many co-operative societies adopt it. Of course, the basic principle of the federated co-operative movement is a standard wage to the labour, a standard profit to the capitalist, and then a distribution of all the rest to the purchasers. It is a very good principle, but I do not see why we should not adjust our minds to the new facts of the situation, and, so far as this Bill is concerned, bring in labour and capital as well. As I say, some co-operative societies adopt it. I have intimate knowledge of one where there is a standard wage paid to the workman, a standard profit to the capitalist, and a standard dividend to the purchaser, and then the surplus is divided in equal proportions between all three. Therefore, they are all directly interested in adding to the surplus, or seeing that there is a surplus. Then, on the fourth point, that is to say, the division of the surplus revenue, if there is any, I think there is a good deal to be said for the point put the other night by my hon. and gallant Friend behind me as to the division not being quite simple of 20 per cent. going to the company and 80 per cent. to the traders. That is to say, the company gets one if it has made five. It seems to me it would be more eager to save if it got two instead of one, and I think there is reason for the consideration of that matter.

Let me conclude by saying that I shall vote for the Bill, although I hope there will be something done in the direction of a re-consideration of the grouping, and also, of supreme importance, not only so far as this Bill is concerned, but so far as the whole industrial situation of the country is at this time concerned, I hope there will be some reconsideration of the point in regard to workingmen having a seat on the board of directors. You have got to do something to add to the interest of workmen in their daily lives. You have got to see that they are not treated as mere hands, as they were 50 years ago, because to-day you are not dealing with the sort of workmen with which you were dealing 50 years ago. A man, 50 years ago, was illiterate; he accepted without demur a position of subordination. The workman to-day is educated, and, as Mr. Justice Sankey said a few years ago, why should we not avail ourselves of that education? I hope, before the Bill passes its final stage in this House, we shall carry out what I know, not in this connection, but in other connections, was the intention of the Government some time ago, and that was to give workmen seats on boards of directors, in the same way and having the same status as other people.

Mr. TREVELYAN THOMSON

What-ever may be the merits of the claim of local railways, or even of national railways, I think the one predominant need in all parts of the country is the reduction of the present charges and the costs of our railway system. The question naturally arises, how far is the trader protected, and how far are we going to gain by the proposals which are made? Some hon. Members, representing railway companies more directly, have suggested that the present impasse is due to the bureaucratic control of recent years, and they made light of the figures which the Minister gave to the House, when he introduced the Bill, showing that in other countries the haulage charge per ton mile is much less than here. The hon. and gallant Member for Durham (Major Hills) suggested it was unfair to compare costs in America with its large runs and costs in this country with the shorter train loads and shorter distances. But surely the comparisons the Minister gave with regard to Prussia and France are in more ways comparable, because, although their average train run may be somewhat larger, on the other hand they have a lesser proportion of heavy traffic, such as coal and ironstone, and, therefore, I think the comparisons the Minister gave were fair. As compared with our .9 per ton mile, in those other countries the point is as low as .6 per ton mile.

Those figures were the result of pre-War investigation, the result of the railway companies' investigation without what they complain of—the control of the State. Therefore, I submit by their own showing, without that bureaucratic control of which they complain, that they had, comparatively speaking, a free hand and they have failed, as compared with other railways in other parts of the world, to give the British traders those facilities which they had a right to demand. Surely, the only way in which we can look for salvation in this regard is by these forms of co-ordination and unification which the Minister has outlined? My own regret is that the Minister has fallen short in this Bill of that larger vision and scheme which he outlined in his original Transport Bill, and even the larger scheme which was outlined by the Government before the election. It is another case, like so many, of the big hopes that were raised having tumbled to the ground in the course of years.

We were told—I think rightly—that the transport systems of the country were not merely feeders and arteries to our trade, but were also the lungs of our towns, and that the whole housing question was as dependent on our railways as upon the special conditions of town life. Personally, I regret that after the high hopes that were raised and the vision held out to the country, the Government have seen fit to whittle down their proposals so that there no longer is any counterpart to their housing programme. The right hon. Baronet the Member for the City of London rather chided the Minister for not having fulfilled the promise that he outlined. Surely that is not fair criticism, because the House refused, at the suggestion of the right hon. Baronet, those larger powers which the Minister had suggested should be his—to take the docker from the centre of London and let him live on the outskirts in the fresh air. Therefore I think it is very much to be regretted that the Government have curtailed their scheme to this extent. Such, however, is the desire of us all to make it workable that I want to suggest, in a minute or two, to the Minister, that when the Bill goes into Committee he might protect the rights of the trader to a larger extent than is foreshadowed.

Take the question of the Amalgamation Tribunal. As stated in the Bill, you have three members, two of them excellent professional men of high standing who have been connected with railway work all their lives, and a legal gentleman. Surely it is only right that the traders, as traders, should be represented on that Tribunal? It may be said the question of amalgamation is simply a claim of one railway against another. I submit it is more, because it depends upon how these various claims are allotted as to how the various traders in the different parts of the country will fare. The hon. and gallant Gentleman for one of the Liverpool Divisions suggests that Clause 6 (1) should be waived in Committee, for, he suggests, it would act very unfairly to the traders of the North Eastern District. In 1913 the North Eastern Railway—I am not pleading for the railway company, but for the traders in the district—the year 1913 is the basis on which the amalgamation is to take place, and in that year the North Eastern Railway was paying a higher rate of wages and working shorter hours than any other company. If they are going to amalgamate on a basis of the 1913 figures, without regard to the position which has been changed during recent years by improved services and shorter hours on the other railways which are coming into their combine, the traders of the North Eastern District will have to make up their increased rates by a burden which ought to be borne by the other partners in the control. I put that as supporting what the hon. and gallant Member for Liverpool suggests. I have no doubt the Government will see that in Committee they will not in any way reduce the protection which Clause 6 (1) gives to the various traders when this question of amalgamation is being considered.

As to the Rates Tribunal, I think there the representation of the traders on the Board requires to be emphasised. It should be increased, because surely in all these matters it is expedient, and for efficiency. The trader does not want to wait 14 days, nor, indeed, 14 hours, before he gets a reply as to what particular rate is available for any special cargo that may come along. I do hope that in Committee the Bill will be improved so that the traders may be more and more aided and protected.

I trust the competition which is in existence to a limited extent with regard to road transport, the competition in regard to sea-borne traffic, and also in regard to the canals will be increased and continued under the Ministry, whatever we may not have of competition as between one railway and another. We know as traders that for many years now there has been no effective competition as between one railway company and another, and I trust that the Minister and the House will see in Committee about protecting these rights of competition which exist in regard to road transport, canal traffic, and sea-borne traffic, so that we may get the whole of the advantage from the unification and economies that will come from this Bill: while at the same time that there shall be a measure of competition in respect to these other matters of transport. I support what has been said by the right hon. Gentleman who has just spoken (Mr. Barnes), in regard to labour having a greater share in the management and direction of the railways. I deplore, as other speakers have deplored, the fact that an arrangement has been come to between the National Union of Railwaymen and the railway companies in this matter. I feel that here was a grand opportunity for a grand experiment to be made to give labour a real living share in the direction of industry. Along these lines lies safety for the future. Here was a great opportunity. It is deplorable that the Government should have been in any sense a party to get away from that as an ideal, as they have from their other ideals in connection with the Transport Bill.

Lieut.-Colonel JACKSON

I do not want to raise any great criticism in regard to the Bill, but merely to point out to the Minister in charge what appears to me to be an omission—quite unintentional no doubt—which is causing a considerable amount of anxiety amongst large numbers of those employed at the present time at the Railway Clearing House. I think the Railway Clearing House should be considered as part of the railway system of the country. If it be so considered, it ought to come under the provisions of this Bill which apply to the rest of the railway system. The staff of the Railway Clearing House numbers 3,000 members. One may presume, therefore, that the staff will probably have some very useful work to do in the future. Owing, however, to the fact that 50 companies are at present parties to the Clearing House and support it, and that under the provisions of the Bill, it will be observed, they will be absorbed into six groups and the companies will disappear, becoming six instead of 50, the work of the Railway Clearing House will naturally be reduced, and as a consequence the staff to a very large extent will also be reduced. Under the third Schedule of the Bill it is provided that officers and servants of the railway companies who are displaced through amalgamation shall have special consideration. What I ask the Minister to-night is, If it is, as I believe, an unintentional omission that the Railway Clearing House has not been brought into the Bill, it should come under its provisions. He will be able to tell us, and we will be able to bring the Clearing House into the Bill.

I have listened with great interest to nearly the whole of this Debate last Thursday and to-day. I listened with great interest to the speech of my right hon. Friend the Minister. In that speech he greatly impressed the House, as he did me, although I must say I did not agree with all he said. My right hon. Friend, of course, by this Bill is out to improve the railway system of the country, and he has produced this Bill for that purpose. It may be perfectly legitimate that he should under the circumstances prove or attempt to prove that the railway system of this country in 1913 was not altogether in a satisfactory condition. My right hon. Friend speaks on this point with great authority. He has had, I know personally, a very great experience. I have had the privilege of watching his career for the last 20 years with growing admiration and respect. He has played many parts. He has played them with distinction, and I sincerely hope his ambition is not yet exhausted. If by any chance he happens to be out of a job, I think I can propose a new one for him. His attention may have been drawn to the fact that we have not done very well in the Test Match to-day! My right hon. Friend stated, and perfectly legitimately no doubt, that the cost of running the railways, the cost of running a ton mile, was heavier in this country than in any other country in the world. He quoted figures, no doubt compiled from careful statistics, that it cost 9 of a penny to move a ton in this country as compared with 4 of a penny in the United States and 6 in Prussia and France. I am afraid I cannot criticise those figures. I have not the remotest idea how they are compiled, but of course we must take them, coming as they do from my right hon. Friend, as being correct. But I would have liked him to have given the comparative cost to-day in all those countries. There might have been a greater difference, or there might possibly have been a smaller difference. Taking those figures, I am not a betting man, but if I were I would be prepared to wager 9 of a penny to 4 of a penny if my right hon. Friend walks into any general manager's office in this country, with the exception of the North Eastern Railway, he would find those figures are disputed. I would ask my right hon. Friend whether those comparisons are quite fair. I wonder if he would really assert that by all the reorganisation and all the regulation of a Bill you really can bring the conditions which prevail in this country of ours to be anything like comparable to the United States.

Sir E. GEDDES

I never said so.

Lieut.-Colonel JACKSON

I know my right hon. Friend never said so. I am asking him whether he would say so now. My right hon. Friend also said that the financial condition of the railways of this country to-day was not owing to Government control; that that condition existed before the War. Well, I dare say that is true in one or two instances, but it is not true with regard to all the railways. I am certain my right hon. Friend will not say it is true with regard to the North Eastern Railway. But whether it is due to Government control, or, let us say, due to the War, the fact still remains that during these last two years, in spite of the wishes, in spite of the advice, in spite of the protests of the railway companies, expenditure was forced upon them which they did not want, and which was much more than their earning capacity, and which they said was more than their earning capacity to meet. I was impressed by the right hon. Member for Miles Platting (Mr. Clynes) when he also said the position of the railways in this country in 1913 was chaotic and their financial position insecure. If the position of the railways was chaotic—and I suppose he means in administration and management, it was indeed a wonderful recovery which the railways were able to make to be able to carry out their difficult duties during the War in a way which won the admiration of the world. It is an indisputable fact that in all the belligerent countries the British railways were the only railways that did not break down under the strain. My right hon. Friend referred to the Report of the Transport Committee, and he quoted this Report in support of the Bill. I was a member of that Committee, and I was thoroughly satisfied to agree with the Report. It chiefly advocated amalgamation, or rather I should say co-operation, between the various railway companies. I do not hesitate to say I am a firm believer in the principle of amalgamation of the railways of this country if we are really going to have an increase of efficiency and economy, but I believe it can be done just as well if it is allowed to be done voluntarily instead of by compulsion as under this Bill. Under this Bill all the amalgamations are to be completed by June of 1922. That time appears to me to be too short for these amalgamations to be carefully thought out. It is just about the time, if I am to judge by some of the criticisms of this Bill, when we shall be emerging from the Committee stage.

There is an Amendment before the House, moved by the right hon. Gentleman the Member for Miles Platting, and it deplores the railways are not going to be State-owned or, as I should say, nationalised. I do think my hon. Friends opposite are a little impatient. What worries me, and what worries a great many of my hon. Friends who sit upon this side of the House, is that this Bill appears to be so very little removed from nationalisation. My right hon. Friend the Member for the City of London (Sir F. Banbury) drew the attention of the House to the number of Clauses in which the control of the Minister or tribunals or committees came into the Bill. After all, it is only necessary to extend control a very little further before you get to a condition which amounts to State ownership. I was interested to-night to hear two speeches, one from my hon. Friend the Member for East Newcastle (Major Barnes) and the other from the right hon. Gentleman the Member for the Gorbals Division (Mr. G. Barnes). Both took up the same attitude: "You need not be the least bit alarmed. Do not be in too much of a hurry. We are not in a hurry. We are in favour of nationalisation, and this Bill puts us on the straight high road for it." It is only adding to my worries, and I am extremely sorry it appears to me to be the case. When I first read this Bill, I must say I thought it was the outcome of a struggle in the Cabinet on the question of nationalisation, and I could not help thinking in my own mind that somehow the extremists had very nearly captured the machine. The right hon. Gentleman the Member for the City of London, on the Railway Companies' Association, I know, has the idea that the extremists stampeded the association in the line they have taken. But I cannot dispute the justification of the Government to introduce a Bill at this particular time. They are introducing a Bill for the purpose, in their view, of including the railway services of this country. No railway company should, and no railway company in my opinion would, for one moment put any obstacle in the way of any Bill which appears to them to tend towards that end and to show a real effort and a real chance of making that improvement.

When all is said and done, we have to consider the community. Those connected with railway companies have to remember that the interests of their shareholders are inseparably bound up with the interests of the community. The Bill proposes to improve the services of the companies by two methods, first by amalgamation and secondly by extended Government control. I heartily agree with amalgamation, and I think it is the proper method, but extended Government control I regret. I do not think that during the past seven years Government control has proved a very great success or gives us any great encouragement. I would like to see that control drastically modified in Committee, and then perhaps many parts of the Bill which we approve of may be made a success and increase the advantages and facilities of the railway companies. If those modifications are made in Committee, perhaps we may have a Bill which, although at the present time I am not satisfied with, I shall be able to support on Second Reading. I hope it will emerge from the Committee so as to enable me to support it on the Third Reading.

Mr. A. HENDERSON

The hon. Gentleman who has just resumed his seat, like many other speakers who preceded him, has offered criticisms of the Labour party in tabling this Amendment to the Second Reading of this Bill. He appears to think that we were rather impatient because at this stage we were protesting against the Government failure to provide, as we state in our Amendment, for public ownership and control of our railway system. I suggest if this Bill could have been considered, or at any rate if the question of a new system for our railways could have been considered apart from some of the more recent experiences we had during the five years of the world War, I think we might safely say that the principles contained in our Amendment would have received much more general support both in this House and the country. It is because we have had experience of a form of control that is not public ownership in the sense that we on these Benches stand for, but a form which gives us everything that is bad in connection with Government control without giving us the effective control that we aim at; and because that system has been tried during the difficult times of the War and has not answered the expectations which were placed upon Government control, that the whole question of public ownership appears to have got seriously prejudiced.

I am quite certain that in this country, prior to 1914, there was a very strong desire—in fact, it might be said that opinion was rapidly ripening—in favour of some better and more effective system of railway control and management than that which we enjoyed at that time under what was known as private ownership. As has been so frequently stated, we had numerous companies. I think one hon. Member said this afternoon that in 1914 there were something like 120 boards of directors and committees existing in connection with the whole of our railway system. It is well known that we had serious overlapping. We had a great amount of waste, and there were very serious delays, and traders were constantly crying out about them. We had vexatious rates that were being charged; we had the old question of the anomalous system of rates as between home and foreign produce that was being carried over our railway system.

That is not all. In addition to the experience we had before 1914, we have had our War experience. Surely, after the difficulties we experienced during the War and the vast amount of expense to which the country was subjected, including now an additional sum of £60,000,000, one would have thought that this would have influenced the Government to devise some means whereby we would at any rate have been prevented from having a recurrence of the position we find ourselves in when the Government of the day determined to control the railways for the period of the War. We all hope, I am sure, that the possibility of any war in the future may be very remote, but I do not think it would be going too far to say that if we have to avoid another great conflagration our international relations will have to be placed on a much different footing than, unfortunately, they have been during recent months. At any rate, with the world so disturbed as it has been we cannot afford to ignore entirely the position which the State would again find itself in should we ever be involved in another great war similar to that which we have just gone through.

It seems to me, having regard to all these considerations, it is to be regretted that the Government have not been much more courageous than the policy of their Bill represents. It seems that the policy of the General Election was one thing and the policy of this Bill is another. What my right hon. Friend (Mr. Clynes) said in moving this Amendment I will repeat, that during the election campaign the right hon. Gentleman, now the Colonial Secretary, made the most emphatic declaration as to the future intentions of the Government with regard to the railways. Then, many in the country and in this House regard the public ownership and complete unification of our railways as part of the Government's policy when the Government established the Ministry of Transport in 1919. The Bill before the House does not, in my judgment, give us the best system that could be devised. It does not give us the system we were led at the General Election to expect that the Government would bring before the House. Having regard to the importance of transit in the development of industry, one would have thought that a serious attempt would have been made to give the country the most complete and the most unified system of railways and transit that it was possible for experience to devise. The Bill does not provide that system, and that is our clear and definite justification for moving the Amendment. We have the fear, as we say in our Amendment, that the Bill will create such vested interests as to prejudice the future. My opinion is that when this wave of reaction passes, when all the talk about "squander-mania" leaves people cold, people will come round again to the feeling, not only with regard to railways, but with regard to other essential services that we ought not to be left either during periods of peace or any possible future period of War at the mercy of privately-owned and privately-controlled public services. Therefore we think the Government have gone too far, not merely in failing to provide us with the system itself, but is probably making it impossible for it to be introduced. It may be that it is part of their policy; that they are apprehensive of what the electors may do either this year or next year or at some date in the future. They are afraid that the Government might be changed for a Government of advanced views, and they are determined, not only to provide for their friends when they are in office, but to do something for them when they no longer occupy the seat of Government.

I want to refer to the much debated question of wages boards and the workers' association in the control and manage- ment of the companies. I hope this question is not going to be left by the Government where it is at this moment. The Government have a great responsibility in this matter. The Minister of Transport, in his first White Paper (Cmd. 787), indicated that it was the intention of the Government to give the workers representation on the boards of directors. This is so important that I feel I must quote it to the House— The composition of the Board is considered to be of the greatest importance, and while in the past the directors of railway companies have all been appointed by the shareholders the Government are of opinion that the time has arrived when the workers, both officials and manual workers, should have some voice in the management. The Board of Management should, in the opinion of the Government, be composed of representatives (a) of the shareholders, who should form a majority on the Board, and of whom a proportion should hold large trading interests, (b) of employés, of whom one-third might be leading administrative officials of the group, to be co-opted by the rest of the Board, and two-thirds members elected from and by the workers on the railways. It seems to me that that makes the Government responsibility in this matter exceptionally clear. During this Debate we have been told that an agreement has been entered into whereby the representatives of the unions have abandoned their claim to representation on the boards of directors of the companies. I want to try to state what, as far as my information goes, and I have been in close touch with some of the responsible representatives of the unions, the position is, especially in view of the confusion that appears to be in existence, when the unions discussed wages boards and a share in the management with the companies, I think I am right in saying they did so on the suggestion of the Minister of Transport. As soon as the discussion opened, the representatives of the unions found the strongest possible objection to the suggestion, in fact, I think to both suggestions, but certainly one of the suggestions, on the part of the companies. First, they found objection to the continuance and reconstruction of the National Wages Board, and, secondly, the most decided objection to their having representation on the boards of management. Now there cannot be any doubt that to this latter point the companies are to-day, and have been all along, definitely and irrevocably opposed. I think we can safely say that it was only after great pressure that the companies withdrew their objections to the reconstitution of the wages board, and they said they could only do so if the unions would not ask—and I want the right hon. Gentleman to follow "me very closely in this—if the unions would not ask for the insertion in the Bill of provisions for giving to the employés a share in the management. The maintenance and improvement of the National Wages Board has been for a long time a burning question amongst railway employés. It has been repeatedly brought to the notice of the Minister of Transport, and I think it might be said that he has accepted very freely the principle without having made any very decided effort to induce the companies to accept it. The unions assert that with regard to the reconstitution of the wages board they have had little or no assistance from the Ministry of Transport. The unions authorise me to say that in such circumstances—

Sir E. GEDDES

Will the right hon. Gentleman kindly say which unions?

Mr. HENDERSON

The three unions are acting together in this matter—the National Union of Railwaymen, the Locomotive Men's Union, and the Railway Clerks' Union. We have had them here during the discussions in connection with the Bill, and what I am saying I am entitled to say on behalf of the whole of the three unions. I was about to remark that they thought, having regard to the circumstances I have just mentioned, that it was in the interests of the community, and also of the railway employs, that they should recognise that it was more important at the moment that industrial peace should be made and if possible maintained by the continuance and extension of these boards, than that the employeés should insist upon their right to a share in the management of the railways.

Sir E. GEDDES

I am very sorry to interrupt my right hon. Friend, but I am sure he will excuse me, because it is important that we should get the true facts. When the three unions on behalf of which he speaks saw him, was that before or after the letter dated the 22nd May from the National Union of Railwaymen which was read in the House to-day?

10.0 P.M.

Mr. HENDERSON

The first interviewtook place on Thursday during the last Debate, the second took place to-day. I have not seen the letter, but have only heard it read. I do not think, however, that there is anything in it which is at all opposed to the point I am making. If the right hon. Gentleman, now that he has interrupted, will read the letter and point out where it conflicts with what I have said, I shall be prepared to resume my speech.

Sir E. GEDDES

The letter is as follows: I have just had an opportunity of reading last night's Debate on the Railways Bill, and note that Mr. Graham, M.P., made the following statement: 'The position of the railwaymen is this: They were very anxious to secure a national wages system, and they are still very anxious to preserve that system; but they are also very anxious to maintain the claim which was put forward for representation on the boards of management, and they see no reason whatever why that claim should not be pressed in the course of the Committee stage of the Bill.' That is what the hon. Member for Edinburgh said. The letter goes on: This statement would convey the impression that the representatives of the railwaymen's unions desired to repudiate the arrangement which they made with the representatives of the railway companies. Therefore, I want to state quite plainly that, so far as the National Union of Railwaymen is concerned, having entered into a bargain, it is prepared to keep it, whether the results are satisfactory or otherwise. This being so, the National Union of Railwaymen is not withdrawing from the arrangement made with yourself on 3rd May, and my object in sending you this letter is to ensure that our attitude shall not be misunderstood.—Yours faithfully, C. T. CRAMP.

Mr. HENDERSON

I think I am quite safe in saying that no single word in that letter conflicts with the point I have made. I never suggested for a moment that the National Union of Railwaymen desired to violate or depart from the agreement into which they have entered. I was not dealing with the agreement, but with the position of the Government in regard to this question of a share in the management of the railways. I was showing the procedure that had been followed up to a certain point, and I hope I should be the last in this House by any word or suggestion to try to influence the railway workers or any other body of workers to depart from agreements for the settlement of wages disputes, because I have spent too long a life in endeavouring to induce them to make such agreements. The point that I was making was that the unions were not pleased with the arrangement made. I am trying to show that they made an agreement under pressure, that it was a case of Hobson's choice, and that in the public interest, instead of pressing for representation on the management, they gave way.

Colonel MILDMAY

I hope the right hon. Gentleman will pardon me for interrupting him, but has he taken into consideration the passages in the railwaymen's newspapers giving their opinion on this point?

Mr. HENDERSON

Now that I am challenged, I will give my right hon. Friend a few quotations from the railwaymen. The first that I will give is dated 15th December, 1920. It says: The railway workers expect that their new conditions of service will be continued if and when the railways have passed out of Government control, and they are expecting representation on the board of management in accordance with a recommendation of the Minister of Transport. The next is dated 21st January, 1921— Where your correspondent goes wrong is in assuming that, in the event of my suggestion not being adopted by the railway trades unions, or in the event of the unions being unable to get nationalisation accepted, the association would decline to co-operate with the other unions in being represented in the Councils of Railway Management. Then, in May, 1921—this paragraph deals with the agreement to which the right hon. Gentleman has just referred— No doubt there will be surprise that the parties to the agreement are not to have the promised status on the management committees of the railways, but, as our readers will doubtless remember, we ourselves have never been keen on such representation so long as the railways are not nationalised. I think all that goes to show that I was quite right in urging that they were not pleased with the agreement which they have signed, and, I hope, will loyally keep, and that that does not rid the Government of the responsibility that I was endeavouring to bring home to them.

Colonel MILDMAY

Without any desire to interrupt the right hon. Gentleman, will he allow me to ask him whether he has any more recent expressions of opinion, which most strongly express the determination of those on behalf of whom he is speaking to have no representation on the boards of directors?

Mr. HENDERSON

If I had anything more recent than May, 1921, I should certainly have quoted it. My right hon. Friend asked me to quote from their papers, and I have actually quoted from the "Railway Clerks Journal" of three different dates, including the last issue. Surely I cannot be expected to get the next issue, which probably has not yet passed through the printers' hands. But that is the position, and it seems to me that this is too important a matter for the Government to leave where it is at the present moment. The hon. and learned Member for the Exchange Division of Liverpool (Mr. L. Scott) said on Thursday that the railway companies were definitely opposed to any such proposal as a share of the workers in the management. I think this is a question that does not merely concern the directors of companies, and, further, it is a matter that does not merely concern the railway workers. This is a matter of vital importance to the whole future of industry. Since the Armistice those who mix with the workers, especially the organised workers, know that one of the things they have been advocating most strongly is a share in the control of industry, the raising of the status of the worker, and surely we cannot say that we are prepared to use the intelligence of the worker up to a certain point and then refuse to use either the intelligence or the practical experience of the worker when it comes to the actual details of management. I am convinced in this matter that those who are responsible for organising the other side of industry are doing themselves a positive injustice, because there is not anything which would be so calculated to improve the relations between employers and employed as that the employing classes should be prepared to take into their confidence the representatives of the workers, not merely in what are called shop committees or pit committees, but to take them into a share and show them the responsibility for the commercial side of commercial and industrial affairs. Therefore I hope the Government will not leave this matter where it is, but that during the Committee and Report stages it will have most careful consideration, in the hope that even now we may be prepared to assist the directors and the unions to a solution other than that contained in the agreement which has been referred to.

I am now going to speak from the standpoint of one of the districts in Lancashire. It is a Committee question I am going to refer to. My right hon. Friend knows something about the St. Helens Canal and Railway Transfer Act, 1864. Many of the traders in the Lancashire area, and also in my constituency, feel that they are being most unfairly dealt with in the Bill. They have enjoyed certain rights since 1864. Repeated attempts have been made to take away those rights. On several occasions the London and North Western Railway Company promoted Bills but a Committee of this House and a Committee of the House of Lords laid it down clearly and unmistakably that those rights had to be respected. They are all swept away under this Bill. These traders are left at the mercy of the Rates Tribunal and I am merely asking the right hon. Gentleman to see that we have a full opportunity to discuss this aspect of the case in Committee because the chemical and the glass industries, which may be described as key industries, for which the Government is legislating, feel that they are being very hardly hit. It seems to me it is a great mistake for us to talk about protecting key industries if we are going to make it more difficult for them to carry on their business as they have done by taking away rights which they have enjoyed since 1864.

Sir E. GEDDES

I feel that for a Bill of this magnitude and importance I have to thank the House for the reception it has obtained. The opposition to the measure is fairly and clearly defined. There is the opposition of those who desire to see nationalisation, there is the opposition of the Scotch Members who are anxious about the Scotch railways, and there is the opposition of my right hon. Friend the Member for the City of London (Sir F. Banbury), and my hon. and gallant Friend the Member for Hull.

Lieut. - Commander KENWORTHY

And you have not heard the last of it either.

Sir E. GEDDES

The first point which is raised was that of nationalisation. The right hon. Gentleman the Member for Platting (Mr. Clynes) referred us back to 1918, when we were at war, and to some answers given by the Prime Minister to a deputation from the Trades Union Congress and to something which was said just previous to the General Election by my right hon. Friend (Mr. Churchill). I think both those utterances were made in a sympathetic tone to a re-organisation of the railways, but, so far my personal knowledge goes, nationalisation was looked upon by both my right hon. Friends as possibly something which the country had to accept, and this Bill is the only alternative the Government has been able to find. That is really the position. Nationalisation looked like an evil that we might not be able to avoid. I believe we can avoid it. As to the Bill itself, I think there has only been one hon. Member who has spoken against one of its principal features—grouping—the hon. and gallant Gentleman (Colonel Gretton). Everyone else, even including my right hon. Friend the Member for the City of London, has spoken in favour of grouping or else has not spoken against it, and, generally speaking, compulsion in the last resort appears to be accepted as essential. [HON. MEMBERS: "No!"]

Mr. G. BALFOUR

A large number of Members who have not yet spoken are totally opposed to the Bill, and will speak against the principle.

Sir E. GEDDES

I regret that I have not had an opportunity of hearing the hon. Member's views. I am referring to those who have spoken. As to the basis of the terms of amalgamation, points were raised by my hon. and gallant Friend the Member for the West Derby Division (Sir R. Hall) and by the hon. Member for South Down (Mr. MacVeagh) on behalf of the Great Eastern Railway and the smaller companies. The Clauses which deal with the terms of amalgamation are, of course, a matter for the House. We have to see that they are fair, but dealing, as I have to deal, with the Railway Companies' Association—we cannot deal with every railway, as there are too many; we deal with their association—those represented by both speakers are members of the association. This Clause was theirs. If it is not fair the House will see that it is fair before we pass it through Committee, and between now and the Committee stage I am quite prepared, and I feel sure the Committee will be anxious to see, that no injustice is done, and I shall certainly make it my business to ascertain the facts. As regards a general measure of State regulation, it is generally admitted that if you are going to avoid the evils of trusts and large combinations, you must have a measure of State control to protect the public. What that measure should be, I do not know. I put it in the Bill as I thought fairly, not to be too oppressive to the railways, and to be adequate protection to the users, the community. If I have erred in one respect or another we are open to change. If the traders and the public on the one side, and the railways on the other, will represent their views, I have no doubt that we can arrive at a fair adjustment.

Another point which has been raised at considerable length has been referred to by my right hon. Friend (Mr. Henderson), and that is the question of the men on the boards of the railways. The history of that the House ought to know as fully as possible, because it is a very important point. My own attitude, and the attitude of the Government, is quite well known. We think that a mistake has been made by both sides, both by the unions and by the companies. The unions and the companies desired to meet to discuss their relations. Speaking from memory, I do not think that I knew they were going to discuss the question of men on the boards. They asked me to arrange a meeting. It simply meant the passing of letters, and they met. The unions knew quite well that the Government had determined to invite this House to include in the Measure the inclusion of men on the boards. There was no possible ground for misunderstanding between myself and the unions on that point. They went into the negotiations, and they came to an agreement. My right hon. Friend says that it was by force majeure. I know railway unions very well by now; I have lived with them for 20 years. I do not think there was much force majeure. If there had been, if they had felt that they were being unduly pushed, and they knew that the Cabinet was united on this matter, it would be contrary to past history for them not to have been in my room within 24 hours. They never came. I regret their decision, but it is a decision, and it will be a very serious thing if bargains made like that are to be upset without protest by either side.

This House is, of course, free to take its own decision, and this House will no doubt weigh the grave step which it may be invited to take by my right hon. Friend and those for whom he speaks. If the parties went into a bargain like this, which we hope will make for peace in the railway industry between labour and employer, and if this House deliberately breaks that bargain, they will take a very grave responsibility. We have trouble enough to-day. Here the employers and the employed have agreed. Here is a document which was sent to me, which I never saw until it had been sent to me, and never dreamed it was coming to me. This document says: The agreement contained in Clauses 1 to 4, which are operative Clauses, has been arrived at on the distinct understanding that the Railway Bill as presented to the House of Commons shall contain in the form of a Clause or Clauses the following provisions, and that no further reference shall be made in the Bill either in regard to management or wages conditions. You could not have anything plainer. The men never said, "We have been forced into a hole; we are really driven with our backs to the wall to drop something that we desire in order to have something else." This document was the first that I heard about the matter. My hon. and gallant Friend (Lieut.-Colonel Jackson) asked about the staffs of the Railway Clearing House in the Bill. That point will be met.

I come now to the very large question of the Scottish railways. Their case was put very strongly and clearly by my hon. Friend the Member for Camlachie (Sir H. Mackinder) and other speakers. I admit that it is a difficult question. It bristles with difficulties. It has been the most controversial aspect of the whole Bill. Frankly, it is the most powerful opposition to the Bill I have seen yet. At the same time—and I know that my Scottish compatriots are with me here—we have got to be logical. We Scottish are always logical. We try to be fair always—on our own side. We must try to be constructive. There is no use saying this is all bad. Let us find the solution. The national sentiment in the Scottish case is rather perplexing. They first say, "We desire to be bracketed with our good and faithful friends south of the border, and to have our railways managed from King's Cross and Euston." That goes with it. On the other hand, they say, "If you leave us as a Scottish system or two Scottish systems, it is preposterous that a tribunal composed of Englishmen"—it would not be—"should have any say in Scotland or even on a Scottish tribunal." I will ask the Scottish Members to let me put the case as I see it.

Lieut-Colonel MURRAY

That is not the position as we see it.

Sir E. GEDDES

My hon. Friend has put the position as he sees it. Scotland is not as rich naturally as England. The Scottish railways in the past have been more frugal than the English railways—before the War. Their standards were lower. Maintenance was much lower and the freight rates were lower on all bulk commodities—much lower than in England. They were in difficulties before the War, and before the War they had a solution of those difficulties. Evidence was given in 1908 before the Board of Trade on the subject of amalgamation by Mr. Jackson, General Manager of the North British Railway, who said: The amalgamation which resulted in the five existing Scottish undertakings simplified the railway organisation, enabled economies to be effected in working management as well as in giving better service and facilities for traders and the public, which would have been quite impossible with a large number of comparatively small railways. The arrangements at present existing between the five companies with regard to mutual traffic and mutual availability have done something more in the same direction. There is no reason to believe that further scheme of amalgamation which would unite in one all the railways of Scotland would not have the same beneficial results as attended the amalgamations which have already taken place. He gives then five heads under which savings can be made, and adds: If the Scottish railways are to be maintained as efficient factors in ministering to the development of the trade of the country relief must come to them from some quarter, as with their capital commitments and the ever-increasing demands of labour, the requirements of the Board of Trade, and the formidable tramway and water competition which they have to meet, with consequent decreasing and even vanishing dividends, it is impossible to continue to find the money to meet their absolute needs, much less to provide for development. Amalgamation, with its possible economies, will afford a substantial contribution toward the relief required. That was before there was any Government control, before the existence of the Ministry of Transport, and before the War.

Mr. G. BALFOUR

Voluntary amalgamation.

Sir E. GEDDES

They asked to amalgamate, and they could do that after this Bill. That is what they wanted in 1908 to conserve their vanishing dividends—the North British Railway. Now it is said to be the worst thing possible. Mr. Jackson was their general manager. I met the chairman of the Scottish railways, and it is rather remarkable that they are not agreed. In 1921 Mr. Allan, chairman of the Caledonian Company, dissented from the general view of the rest of the chairmen. He said: I wish to say on behalf of the Caledonian Railway that while we still adhere to the grouping proposals submitted by the Railway Companies' Association, we desire to answer your question for ourselves"— That was whether there should be two groups instead of one— on the assumption that any grouping with the English railways is excluded. We recognise the possibility of important advantages to be derived from the formation of two groups in Scotland, following the lines of the Railway Companies' Association. That is the Caledonian plan; it wants to be divided in that way, and the other side does not. They are, therefore, not agreed.

Sir H. MACKINDER

That does not exclude amalgamation with corresponding systems in England.

E. GEDDES

ill come to that in a moment. They are evidently not agreed. The North British in 1908 wanted one group for the whole of Scotland. That was the ideal. Now the Caledonian Company want a group of themselves and certain other railways, and the formation of two groups. To-day it is claimed that the Scottish railways wish to be grouped longitudinally. It is agreed that the freight rates in Scotland are lower than the corresponding English rates. There is no doubt about that. The Chairman of the North British Railway said to me the other day: If you put up the rates, you upset the lines over which competition has been carried on in the past. The chairman of the Caledonian Company, however, says that they would admit that the rates in Scotland would have to be on the same basis as those in England. He says, "Group me with England and put up the rates." His colleague on the North British says, "If you put up the rates you kill the traffic." I do not think there is any need to put up the rates. That is where we join issue. Hon. Members who speak here do not represent but they speak for the Scottish railway companies.

Lieut.-Colonel MURRAY

We speak for Scotland.

Sir E. GEDDES

Has one hon. Member dared to say that he advocated the putting up of the freight rates? Not one. I do not think it is necessary to put up the rates. You could improve the shareholders' position. That is not what we are here to do, but to see justice done to the community. The maintenance of Scottish railways has for a very long time been on a far more frugal basis than the English standard of maintenance. Their permanent way they maintain 37 per cent. lower than England; locomotive 17 per cent. lower; wagons 33 per cent. lower.

Mr. G. BALFOUR

What standard is the right hon. Gentleman taking?

Sir E. GEDDES

I am giving it as nearly as I can per mile or vehicle or locomotive. It does not matter whether it is pounds or pence. I will not say whether it is adequate or inadequate; it is not as high as England, and these vanishing dividends that have been talked about were being paid with that lower standard of maintenance. They ask for help. They say that the outcome of the seven years War period—be it the result of Government control or otherwise—is that they are bankrupt. I do not admit that, but let us consider how this help for which they ask is to be given. There are three interests who can help. First, there is the State. Does anyone suggest that this House should vote an annual subsidy? I would not dare to suggest it. They are members of an association, and if members of a trade union make a bargain and small branches of the union break away we know what is said. Here an association has made a bargain. The bargain was made with me by a committee of the association and was agreed to by a majority of the association. They have made a bargain to settle this for £60,000,000 gross, or a maximum of £51,000,000 net.

Lieut.-Colonel MURRAY

They did not accept the association's proposals.

Sir E. GEDDES

I am dealing with the association as a whole. That is the sum we have arrived at, to wipe off the whole of the State's liability for this period. [An HON. MEMBER: "It is too much."] It may be too much, but we think it is fair, and we have made the bargain subject to the ratification by the House. The next interest that may be called upon to help the Scottish railways—if they are as bad as they say, and I do not believe they are—is the freight payer. The Scottish freight payer may be called on to pay the same rates, proportionately, as the English freight payer. That may be the right way to do it.

Lieut.-Colonel MURRAY

Hear, hear!

Sir E. GEDDES

My hon. Friend speaks with knowledge of the North British Railway when he says, "Hear, hear!" They view it with equanimity. On the other hand, authorities equal to himself say it will kill traffic to increase the rates.

Lieut.-Colonel MURRAY

Scottish traders are quite prepared for an increase.

Sir E. GEDDES

They have not said so to me. The alternative offered is to make the English trader pay; to leave the Scotch rates at their present level and let the English trader pay higher rates in order to support the Scotch railways. Is that possible? The third interest to which I refer is that of the shareholders. I do not wish to commit myself as to what the exact terms will be on which Parliament will eventually provide for amalgamation. There are cases of small railways, and there is the case of the Great Eastern Railway so ably put by two hon. Members who have spoken to-day. The Scotch railways say they cannot exist and they ask to be grouped with the English lines. Having said that they are bankrupt, they asked to be grouped with the English companies.

Mr. G. BARKER

Give them a pool.

Sir E. GEDDES

Do they suppose for a moment that this third alternative is possible and that they can come with this proposal to the English companies, having declared themselves to be bankrupt, with all their propaganda on record, with the speeches of their chair- men on record, with the circulars they have issued available in print—do they imagine they can come forward and say to the English companies: "Take us at our full 1913 value"? It is not sense. Is the English shareholder to be asked to dispense charity to the Scottish railways? It is not reasonable. Have they ever asked the English railways what terms they can get? Have they discussed that? Have they settled it with them? No, they have discussed and settled nothing; they simply stay there in the north and complain. When I met a deputation of Scottish chairmen—

Lieut.-Colonel MURRAY

Where?

Sir E. GEDDES

In London—in my room—they said unless it is on a pre-War basis we do not want to be fused with the English companies. That was told me by the Chairman of the Committee of Chairmen who came to see me. They asked that English shareholders should take them over on that basis. Here there is a fault. I think I ought to speak plainly. There are a large number of Members representing Scottish constituencies who feel that they must represent the interests of the country from which they come. I agree. I thank them for the attention they have given. I thank them for the industry which they have displayed in trying to get at the bottom of the matter. I deplore that they have not been able to get down to the real facts. They are talking in the sky at present, and I cannot get up there. I am too heavy. They have really done nothing to find a basis. They make capital out of the eight-hour settlement which was agreed to long before I went to the Ministry.

Lieut.-Colonel MURRAY

But it is there, all the same.

Sir E. GEDDES

Quite so, but were there no difficulties and no anomalies before? There were anomalies everywhere. They did not try to meet the men to talk this matter over with them. In March last I spoke to the Industrial Secretary of the National Union of Railwaymen. He said quite clearly that in some cases an eight-hour day was really ridiculous. He had consulted his executive, and they agreed to go into the matter. They were quite prepared to discuss the cases where an eight-hour day would not allow a man to do a fair day's work. Have the Scotch companies met in order to try and put this thing right? My hon. Friend does not answer. They have not.

Lieut.-Colonel MURRAY

If the right hon. Gentleman will answer some of the questions I am anxious to put to him I will give him a reply.

Sir E. GEDDES

They have made no attempt to settle this matter. The fact is the Scottish companies have overstated their case. In the first place, they said they were £3,500,000 worse off than in 1913. But they could give no evidence of it. Later on they produced another estimate showing that they were £7,000,000 worse off than in 1913. That, too, was challenged, and they withdrew it. There are no figures before us on the point. We have only an expression of the fear that they are bankrupt. They are not bankrupt. They desire to have their position improved. They maintained their property on a very sparse basis before the War. During the War they maintained it on a very much higher level, and I shall have something to say about that later on. I do not think they need have very much anxiety if they will only pull themselves together. I agree they have anxieties, but the real facts are these: We made a settlement with the Railway Companies' Association, of which they are members, for £51,000,000. During the War they have spent money on the maintenance of their undertakings which, if it were applied pro rata to the whole of the railways in the Kingdom, would have involved the State in an additional £58,000,000 over and above the normal maintenance, irrespective of prices. We have settled for £51,000,000 with the majority of the Railway Companies' Association, and the Scottish companies have spent at the rate of £58,000,000. There is nothing in the settlement for them, if you look at it in that way, but I have a claim on behalf of the community. They have a time of anxiety, but until they come down to practical politics, as their English colleagues have done, there is no settlement in sight. I have tried for months, and can get no settlement. I invite the Scottish Members, with great respect, to assist me in this matter, as they have assisted me to-day, to endeavour to find a solution. They have not found a practical one. I invite them to bring the Scottish companies to reason, to talk practical polities, to come down from the skies, and talk what this House can consider. If we can once get on that basis, we can get a settlement.

Lieut.-Colonel MURRAY

Will the right hon. Gentleman produce his figure?

Sir E. GEDDES

If the Scottish companies will come with representative Scottish Members and talk this matter over on a business basis, I think we ought to get to a settlement. So long as they remain in the skies, I see no hope. I have no money, but I will endeavour in every possible way to meet a difficult situation. It is difficult because of the past, and because of what they have done during the War. I do not say whether it is right or wrong, but I do not agree with what they have done. These things have got to be settled. We have got to try to clear up the great effort of the War without fighting each other, and I will try to do that. That is all I can say about the Scottish case to-night. I thank the House for the way it has received a measure of such far-reaching importance.

Lieut. - Commander KENWORTHY

What about Hull?

Sir E. GEDDES

That can be dealt with in Committee.

Lieut.-Commander KENWORTHY

It affects the whole of Yorkshire.

Sir E. GEDDES

I was there long before my hon. and gallant Friend.

Lieut.-Commander KENWORTHY

I will be there longer than you will, perhaps.

Sir E. GEDDES

I think, on the whole, the House will approve of the Bill. I hope that we will be able to improve it very much in Committee. It is not a party measure. For better or worse, whether it is successful or not, it is an honest endeavour on behalf of myself, the railway companies and those traders who are organised and can be coherent, with a contribution from the men, to arrive at a fair settlement of a problem which is perplexing not only this country, but the whole world. I believe that by this measure, as improved in Committee—which I am sure it will be— we can get our railways on a really healthy basis. There are those who do not agree. I do know that the traders who are coherent, organised, and can express their own views, and the vast majority of the railways, agree, and on that basis I invite the House to give me the Second Reading.

Mr. G. BALFOUR

At this late hour I shall not endeavour fully to go into the details of the Bill, and although at all times reluctant to speak in opposition to the Government, I should like to say a few words. As I understand a Second Reading Debate, I have always assumed it was the duty of the Minister to deal exclusively with the principle involved in the Bill. I have listened to the introductory and winding up speeches of the right hon. Gentleman and I have not yet heard one word uttered by him on the principles involved. I also listened to the able support given by the Attorney-General and, again, not one word was uttered touching the real principle of the Bill. The whole Debate has been a Debate on Committee points. The hon. and learned Gentleman the Member for the Exchange Division of Liverpool (Mr. L. Scott) touched upon this same point. He referred to what the Minister said in reply to an interruption by the right hon. Baronet for the City of London. "If there was," said the Minister, "any bureaucratic control in the Bill we could deal with it in Committee." We have arrived at a peculiar stage in conducting our affairs here, when on Second Reading we confine ourselves entirely to Committee points and refer to Committee a decision on the main principle of a measure of this kind.

I want only briefly to deal with one or two points. The Bill, as I understand it, puts before us these considerations: 1. The compulsory grouping of lines without any public advantage yet having been shown. 2. The transference of the powers of Parliament to a tribunal. 3. The transference of the higher powers of management from the companies to the tribunals. 4. The elimination of any healthy competition. 5. The constitution of a National Wages Board. It is, in short, the establishment of bureaucratic control in a direct breech of the pledge that was given at the 1918 election, that industry should rightly claim to be free. The Minister—rightly—might ask what any hon. Member who offers such criticism would do, and even at this late hour I would offer a suggestion on the right methods of dealing with this matter. I would bring in a Bill on constitutional lines authorising (a) the railway companies to amalgamate voluntarily, the amalgamation to take effect on the approval under seal by the Minister; (b) the existing railway companies to have specific powers to introduce a Bill for a specific purpose to amalgamate with smaller lines; and (c) to authorise maximum rates for goods and passengers to suit the altered conditions. I suggest that a Bill like that would not in any way offend British instincts. This Bill, in my opinion, cuts right across British liberties and it strikes right at the root of those cherished things which have made us a great people and a great nation. As I listened to the Minister of Transport speaking on behalf of the proposals of the Bill, I could not get away from the impression of a grown man, knowing a great deal about railways, going back to the nursery and playing at trains. This is an unbusinesslike, an unpractical, an unworkable Bill, if we are going to maintain our liberties and maintain our great position in the world of commerce. What is the assumption in the Bill I The assumption in the Bill is that men who have risen to a great position in the control of industry are weak and are of no ability, or even possibly dishonest; but this bureaucratic Ministry will provide the brain, will provide the initiative, will provide the honesty, and, forsooth, by magic will guide and control and inspire great enterprises which cannot be done by the tested, proved ability of men who have built up those great industries. They say, these bureaucrats, "How well we handled business during the War!"They handled during the War, and why? Because commercial results did not matter. Men who could not achieve any distinction before the War believed themselves to be business marvels in the non-competitive War period. In effect, this Bill says, "No longer can we trust British subjects to deal with and manage the great enterprises which before the War were the envy of the world. No longer can we leave any freedom or any liberty of action. No longer shall unwritten law form a large part of our constitutional machine. We, the War-developed bureaucrats, know better how to conduct affairs. Liberty must die. Freedom must go. All must bend to the will of tribunals, committees, Minister. Nothing can be done without first asking the Minister, who refers to tribunals, who hold inquiries." This is out fate, and it is death to the very quality which made us great. The measure is founded upon the principle of self-helplessness, contributes a complete change to our race spirit, and must, in the long run, bring about the downfall of the nation. We became a great people, because in our island home, breathing the spirit of liberty, we rapidly claimed the hearts of immigrants, who soon felt and responded to the change from chilly serfdom to the exhilarating freedom nowhere else to be found. British liberty has been the solvent in the past which acted rapidly on the different races of which are composed and made possible that unity of sentiment and spirit by which alone we exist as a great nation and hold together as a great Empire. I have not a share in a railway company, and I am not aware of any friend of mine who has, but I think it right to utter in this House a protest because none has been made against the underlying principle of this Bill which, if we persist in placing upon the Statute Book, will inevitably bring us down. Are we to give a Second Reading to a Bill which contains something which has never been dealt with by the Minister of Transport or by the Attorney-General that is a restriction of our liberty which means that this small island community cannot maintain its position and hold together as a great empire. If we pursue this policy, which was first put forward in the Housing Act, we shall experience the same failure, if not a greater one, as well as the failure of our industry and commerce. If the Amendment is pressed, I shall certainly join in opposing the Second Reading.

Mr. WATERSON

I want to mention two particular points in which the men concerned have a great interest, and which no speaker to-day or on Thursday last has mentioned, and that is the question of the men engaged in the railway industry who are receiving or are likely to receive pensions and superannuation. These men are anxious to know what their future is likely to be. One company from its friendly society grants a pension of 2s. a week out of the accumulated fund, but when the National Health Insurance Act came into operation the railway companies gave a guarantee to these men to give them at 65 5s. per week additional pension to the 2s. out of the accumulated fund. These men want to know whether this will be guaranteed to them under the system of grouping. These men feel that a Committee should be established to investigate the whole of these funds. We are told that £20,000,000 are at stake, and we want an investigation to see that justice is done to the men and in order that their position will not be jeopardised. With regard to the claim of a Scottish Member, that he spoke on behalf of the railway employés, I have been in touch with the authorities and I am informed

that the hon. Member had no right to speak for the railway employés of Scotland, because not a single branch of the union there has protested against the system of grouping which the Minister of Transport wishes to apply to Scotland.

Lieut. - Commander KENWORTHY

rose—

Mr. CHAMBERLAIN (Leader of the House)

rose in his place, and claimed to move, "That the Question be now put."

Question put accordingly, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 259; Noes, 65.

Division No. 123.]	AYES.	[11.0 p.m.
Addison, Rt. Hon. Dr. Christopher	Churchman, Sir Arthur	Higham, Charles Frederick
Agg-Gardner, Sir James Tynte	Clough, Robert	Hills, Major John Waller
Allen, Lieut.-Colonel William James	Coats, Sir Stuart	Hinds, John
Armitage, Robert	Cobb, Sir Cyril	Hoare, Lieut.-Colonel Sir S. J. G.
Ashley, Colonel Wilfrid W.	Colvin, Brig.-General Richard Beale	Hohler, Gerald Fitzroy
Astbury, Lieut.-Com. Frederick W.	Conway, Sir W. Martin	Holbrook, Sir Arthur Richard
Astor, Viscountess	Craik, Rt. Hon. Sir Henry	Hood, Joseph
Atkey, A. R.	Curzon, Captain Viscount	Hopkins, John W. W.
Austin, Sir Herbert	Davidson, Major-General Sir J. H.	Horne, Sir R. S. (Glasgow, Hillhead)
Bagley, Captain E. Ashton	Davies, Major D. (Montgomery)	Howard, Major S. G.
Baldwin, Rt. Hon. Stanley	Davies, Sir Joseph (Chester, Crewe)	Hunter, General Sir A. (Lancaster)
Balfour, Sir R. (Glasgow, Partick)	Dean, Commander P. T.	Hurst, Lieut.-Colonel Gerald B.
Banner, Sir John S. Harmood-	Dockrell, Sir Maurice	Inskip, Thomas Walker H.
Barlow, Sir Montague	Du Pre, Colonel William Baring	Jephcott, A. R.
Barnes Rt. Hon. G. (Glas., Gorbals)	Edwards, Major J. (Aberavon)	Jodrell, Neville Paul
Barnston, Major Harry	Elliott, Lt.-Col. Sir G. (Islington, W.)	Johnson, Sir Stanley
Barrand, A. R.	Elveden, Viscount	Jones, Sir Edgar R. (Merthyr Tydvil)
Barrie, Charles Coupar (Banff)	Evans, Ernest	Jones, Sir Evan (Pembroke)
Beauchamp, Sir Edward	Eyres-Monsell, Com. Bolton M.	Jones, G. W. H. (Stoke Newington)
Bellairs, Commander Carlyon W.	Falcon, Captain Michael	Jones, Henry Haydn (Merioneth)
Benn, Sir A. S. (Plymouth, Drake)	Falle, Major Sir Bertram Godfray	Jones, J. T. (Carmarthen, Llanelly)
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)	Farquharson, Major A. C.	Joynson-Hicks, Sir William
Bennett, Sir Thomas Jewell	Fell, Sir Arthur	Kellaway, Rt. Hon. Fredk. George
Bentinck, Lord Henry Cavendish-	Fisher, Rt. Hon. Herbert A. L.	Kelley, Major Fred (Rotherham)
Betterton, Henry B.	Flannery, Sir James Fortescue	Kenyon, Barnet
Bigland, Alfred	Ford, Patrick Johnston	Kidd, James
Birchall, Major J. Dearman	Foreman, Sir Henry	Kiley, James Daniel
Bird, Sir A. (Wolverhampton, West)	Forrest, Walter	King, Captain Henry Douglas
Blades, Sir George Rowland	Foxcroft, Captain Charles Talbot	Kinloch-Cooke, Sir Clement
Blair, Sir Reginald	Fraser, Major Sir Keith	Knight, Major E. A. (Kidderminster)
Blake, Sir Francis Douglas	Fremantle, Lieut.-Colonel Francis E.	Lambert, Rt. Hon. George
Borwick, Major G. O.	Galbraith, Samuel	Lane-Fox, G. R.
Boscawen, Rt. Hon. Sir A. Griffith-	Geddes, Rt. Hon. Sir E. (Camb'dge)	Lewis, Rt. Hon. J. H. (Univ., Wales)
Bottomley, Horatio W.	Gee, Captain Robert	Lewis, T. A. (Glam., Pontypridd)
Bowles, Coonel H. F.	Gibbs, Colonel George Abraham	Lindsay, William Arthur
Bowyer, Captain G. W. E.	Gilbert, James Daniel	Lloyd-Greame, Sir P.
Bramsdon, Sir Thomas	Gilmour, Lieut.-Colonel Sir John	Lorden, John William
Brassey, H. L. C.	Gould, James C.	Loseby, Captain C. E.
Breese, Major Charles E.	Green, Albert (Derby)	Lowther, Major C. (Cumberland, N.)
Bridgeman, Rt. Hon. William Clive	Green, Joseph F. (Leicester, W.)	Lowther, Sir Cecil (Penrith)
Broad, Thomas Tucker	Greene, Lt.-Col. Sir W. (Hack'y, N.)	Loyd, Arthur Thomas (Abingdon)
Brown, T. W. (Down, North)	Greig, Colonel James William	Lyle-Samuel, Alexander
Bruton, Sir James	Guest, Capt. Rt. Hon. Frederick E.	M'Curdy, Rt. Hon. Charles A.
Buckley, Lieut.-Colonel A.	Guinness, Lieut.-Col. Hon. W. E.	McLaren, Hon. H. D. (Leicester)
Bull, Rt. Hon. Sir William James	Hacking, Captain Douglas H.	M'Lean, Lieut.-Col. Charles W. W.
Burn, Col. C. R. (Devon, Torquay)	Hall, Rr-Adml Sir W. (Liv'p'l, W. D'by)	McMicking, Major Gilbert
Butcher, Sir John George	Hamilton, Major C. G. C.	Macpherson, Rt. Hon. James
Casey, T. W.	Hannon, Patrick Joseph Henry	MacVeagh, Jeremiah
Cayzer, Major Herbert Robin	Harmsworth, C. B. (Bedford, Luton)	Maddocks, Henry
Chadwick, Sir Robert Burton	Harris, Sir Henry Percy	Mallalieu, Frederick William
Chamberlain, Rt. Hn. J. A. (Birm., W.)	Hennessy, Major J. R. G.	Malone, Major P. B. (Tottenham, S.)
Chamberlain, N. (Birm., Ladywood)	Henry, Denis S. (Londonderry, S.)	Marks, Sir George Croydon
Child, Brigadier-General Sir Hill	Hewart, Rt. Hon. Sir Gordon	Matthews, David
Mildmay, Colonel Rt. Hon. F. B.	Rae, H. Norman	Thorpe, Captain John Henry
Mitchell, William Lane	Raeburn, Sir William H.	Townley, Maximilian G.
Molson, Major John Elsdale	Raw, Lieutenant-Colonel Dr. N.	Tryon, Major George Clement
Mond, Rt. Hon. Sir Alfred Moritz	Rees, Sir J. D. (Nottingham, East)	Waddington, R.
Moore, Major-General Sir Newton J.	Reid, D. D.	Walters, Rt. Hon. Sir John Tudor
Moore-Brabazon, Lieut.-Col. J. T. C.	Renwick, George	Ward, Col. J. (Stoke-upon-Trent)
Morden, Col. W. Grant	Roberts, Rt. Hon. G. H. (Norwich)	Waring, Major Walter
Moreing, Captain Algernon H.	Roberts, Samuel (Hereford, Hereford)	Warner, Sir T. Courtenay T.
Morison, Rt. Hon. Thomas Brash	Roberts, Sir S. (Sheffield, Ecclesall)	Watson, Captain John Bertrand
Morris, Richard	Robinson, S. (Brecon and Radnor)	Weston, Colonel John Wakefield
Morrison, Hugh	Rothschild, Lionel de	Wheler, Col. Granville C. H.
Morrison-Bell, Major A. C.	Roundell, Colonel R. F.	White, Col. G. D. (Southport)
Munro, Rt. Hon. Robert	Samuel, A. M. (Surrey, Farnham)	Wild, Sir Ernest Edward
Murray, John (Leeds, West)	Samuel, Samuel (W'dsworth, Putney)	Williams, C. (Tavistock)
Neal, Arthur	Sanders, Colonel Sir Robert Arthur	Williams, Col. Sir R. (Dorset, W.)
Newman, Sir R. H. S. D. L. (Exeter)	Sassoon, Sir Philip Albert Gustave D.	Williamson, Rt. Hon. Sir Archibald
Newton, Major Harry Kottingham	Scott, A. M. (Glasgow, Bridgeton)	Wills, Lt.-Col. Sir Gilbert Alan H.
Nicholson, Reginald (Doncaster)	Scott, Leslie (Liverpool, Exchange)	Wilson, Daniel M. (Down, West)
Nield, Sir Herbert	Seddon, J. A.	Wilson, Rt. Hon. J. W. (Stourbrdge)
Norman, Major Rt. Hon. Sir Henry	Seely, Major-General Rt. Hon. John	Wilson, Lt.-Col. Sir M. (Bethnal Gn.)
Oman, Sir Charles William C.	Shortt, Rt. Hon. E. (N'castle-on-T.)	Winfrey, Sir Richard
Ormsby-Gore, Hon. William	Smith, Sir Allan M. (Croydon, South)	Wise, Frederick
Parker, James	Smith, Sir Harold (Warrington)	Wood, Hon. Edward F. L. (Ripon)
Pearce, Sir William	Smith, Sir Malcolm (Orkney)	Wood, Sir H. K. (Woolwich, West)
Pease, Rt. Hon. Herbert Pike	Smithers, Sir Alfred W.	Wood, Major Sir S. Hill-(High Peak)
Peel, Col. Hn. S. (Uxbridge, Mddx.)	Sprot, Colonel Sir Alexander	Woolcock, William James U.
Percy, Lord Eustace (Hastings)	Stanley, Major Hon. G. (Preston)	Worsfold, T. Cato
Perkins, Walter Frank	Starkey, Captain John Ralph	Worthington-Evans, Rt. Hon. Sir L.
Perring, William George	Steel, Major S. Strang	Young, E. H. (Norwich)
Philipps, Sir Owen C. (Chester, City)	Stephenson, Lieut.-Colonel H. K.	Young, Sir Frederick W. (Swindon)
Pollock, Sir Ernest Murray	Stevens, Marshall
Polson, Sir Thomas A.	Stewart, Gershom	TELLERS FOR THE AYES.—
Pratt, John William	Sutherland, Sir William	Colonel Leslie Wilson and Mr.
Prescott, Major W. H.	Taylor, J.	Dudley Ward
Purchase, H. G.	Thomas, Sir Robert J. (Wrexham)
NOES.
Balfour, George (Hampstead)	Hartshorn, Vernon	Sexton, James
Banbury, Rt. Hon. Sir Frederick G.	Hayday, Arthur	Shaw, Capt. William T. (Forfar)
Barker, G. (Monmouth, Abertillery)	Hirst, G. H.	Short, Alfred (Wednesbury)
Bell, James (Lancaster, Ormskirk)	Hodge, Rt. Hon. John	Sitch, Charles H.
Bowerman, Rt. Hon. Charles W.	Holmes, J. Stanley	Smith, W. R. (Wellingborough)
Briant, Frank	Irving, Dan	Spoor, B. G.
Cairns, John	John, William (Rhondda, West)	Swan, J. E.
Cape, Thomas	Kennedy, Thomas	Thomson, T. (Middlesbrough, West)
Clynes, Rt. Hon. John R.	Kenworthy, Lieut.-Commander J. M.	Thorne, G. R. (Wolverhampton, E.)
Cope, Major William	Lawson, John James	Thorne, W. (West Ham, Plaistow)
Davies, Evan (Ebbw Vale)	Lunn, William	Tootill, Robert
Davison, J. E. (Smethwick)	Macquisten, F. A.	Ward, Col. L. (Kingston-upon-Hull)
Edwards, C. (Monmouth, Bedwellty)	Morgan, Major D. Watts	Waterson, A. E.
Edwards, G. (Norfolk, South)	Murchison, C. K.	White, Charles F. (Derby, Western)
Forestier-Walker, L.	Myers, Thomas	Wignall, James
Gillis, William	Newbould, Alfred Ernest	Wilson, James (Dudley)
Glanville, Harold James	Nicholson, William G. (Petersfield)	Wilson, W. Tyson (Westhoughton)
Graham, W. (Edinburgh, Central)	Rankin, Captain James Stuart	Young, Robert (Lancaster, Newton)
Gritten, W. G. Howard	Remnant, Sir James
Grundy, T. W.	Rendall, Athelstan	TELLERS FOR THE NOES.—
Guest, J. (York, W. R., Hemsworth)	Richardson, R. (Houghton-le-Spring)	Mr. Arthur Henderson and Mr.
Hall, F. (York, W. R., Normanton)	Rose, Frank H.	Neil Maclean
Harmsworth, Hon. E. C. (Kent)	Royce, William Stapleton

Bill read a second time.

Motion made, and Question put, "That

the Bill be committed to a Committee of the Whole House."—[Mr. Clynes.]

The House divided: Ayes, 74; Noes, 246.

Division No. 124.]	AYES.	[11.12 p.m.
Atkey, A. R.	Edwards, C. (Monmouth, Bedwellty)	Hirst, G. H.
Banbury, Rt. Hon. Sir Frederick G.	Edwards, G. (Norfolk, South)	Hodge, Rt. Hon. John
Barker, G. (Monmouth, Abertillery)	Entwistle, Major C. F.	Holmes, J. Stanley
Bell, James (Lancaster, Ormskirk)	Galbraith, Samuel	James, Lieut.-Colonel Hon. Cuthbert
Bowerman, Rt. Hon. Charles W.	Gillis, William	John, William (Rhondda, West)
Bramsdon, Sir Thomas	Glanville, Harold James	Kennedy, Thomas
Briant, Frank	Gritten, W. G. Howard	Kenworthy, Lieut.-Commander J. M.
Cairns, John	Grundy, T. W.	Kenyon, Barnet
Cape, Thomas	Guest, J. (York, W. R., Hemsworth)	Kidd, James
Clynes, Rt. Hon. John R.	Hall, F. (York, W. R. Normanton)	Kiley, James Daniel
Davies, Major D. (Montgomery)	Harmsworth, Hon. E. C. (Kent)	Lambert, Rt. Hon. George
Davies, Evan (Ebbw Vale)	Hartshorn, Vernon	Lawson, John James
Davison, J. E. (Smethwick)	Hayday, Arthur	Lunn, William
Lyle-Samuel, Alexander	Rose, Frank H.	Tootill, Robert
Macquisten, F. A.	Royce, William Stapleton	Waterson, A. E.
Marriott, John Arthur Ransome	Sexton, James	White, Charles F. (Derby, Western)
Morgan, Major D. Watts	Shaw, Capt. William T. (Forfar)	Wignall, James
Murray, Dr. D. (Inverness & Ross)	Short, Alfred (Wednesbury)	Willoughby, Lieut.-Col. Hon. Claud
Murray, William (Dumfries)	Sitch, Charles H.	Wilson, James (Dudley)
Myers, Thomas	Smith, Sir Malcolm (Orkney)	Wilson, W. Tyson (Westhoughton)
Newbould, Alfred Ernest	Smith, W. R. (Wellingborough)	Wood, Major M. M. (Aberdeen, C.)
O'Grady, James	Spoor, B. G.	Young, Robert (Lancaster, Newton)
Rankin, Captain James Stuart	Swan, J. E.
Remnant, Sir James	Thomas, Sir Robert J. (Wrexham)	TELLERS FOR THE AYES.—
Rendall, Athelstan	Thorne, G. R. (Wolverhampton, E.)	Mr. Arthur Henderson and Mr.
Richardson, R. (Houghton-le-Spring)	Thorne, W. (West Ham, Plaistow)	Neil Maclean
NOES.
Addison, Rt. Hon. Dr. Christopher	Ford, Patrick Johnston	M'Lean, Lieut.-Col. Charles W. W.
Agg-Gardner, Sir James Tynte	Foreman, Sir Henry	McMicking, Major Gilbert
Allen, Lieut.-Colonel William James	Forestier-Walker, L.	Macpherson, Rt. Hon. James I.
Armitage, Robert	Forrest, Walter	MacVeagh, Jeremiah
Ashley, Colonel Wilfrid W.	Foxcroft, Captain Charles Talbot	Maddocks, Henry
Astbury, Lieut.-Com. Frederick W.	Fraser, Major Sir Keith	Mallalieu, Frederick William
Astor, Viscountess	Fremantle, Lieut.-Colonel Francis E.	Malone, Major P. B. (Tottenham, S.)
Austin, Sir Herbert	Geddes, Rt. Hon. Sir E. (Camb'dge)	Marks, Sir George Croydon
Bagley, Captain E. Ashton	Gee, Captain Robert	Matthews, David
Baldwin, Rt. Hon. Stanley	Gibbs, Colonel George Abraham	Mitchell, William Lane
Balfour, George (Hampstead)	Gilbert, James Daniel	Molson, Major John Elsdale
Banner, Sir John S. Harmood-	Gilmour, Lieut.-Colonel Sir John	Mond, Rt. Hon. Sir Alfred Moritz
Barlow, Sir Montague	Glyn, Major Ralph	Moore, Major-General Sir Newton J.
Barnston, Major Harry	Gould, James C.	Moore-Brabazon, Lieut.-Col. J. T. C.
Barrand, A. R.	Green, Albert (Derby)	Morden, Col. W. Grant
Barrie, Charles Coupar (Banff)	Green, Joseph F. (Leicester, W.)	Moreing, Captain Algernon H.
Beauchamp, Sir Edward	Greene, Lt.-Col. Sir W. (Hack'y, N.)	Morison, Rt. Hon. Thomas Brash
Benn, Sir A. S. (Plymouth, Drake)	Greig, Colonel James William	Morrison, Hugh
Benn, Capt. Sir I. H., Bart. (Gr'nw'h)	Gretton, Colonel John	Morrison-Bell, Major A. C.
Bennett, Sir Thomas Jewell	Guest, Capt. Rt. Hon. Frederick E.	Munro, Rt. Hon. Robert
Betterton, Henry B.	Gwynne, Rupert S.	Murchison, C. K.
Bigland, Alfred	Hacking, Captain Douglas H.	Murray, John (Leeds, West)
Birchall, Major J. Dearman	Hailwood, Augustine	Nall, Major Joseph
Bird, Sir A. (Wolverhampton, West)	Hall, Rr-Adml Sir W. (Liv'p'l, W. D'by)	Neal, Arthur
Blades, Sir George Rowland	Hamilton, Major C. G. C.	Newman, Colonel J. R. P. (Finchley)
Blake, Sir Francis Douglas	Hannon, Patrick Joseph Henry	Newman, Sir R. H. S. D. L. (Exeter)
Borwick, Major G. O.	Harmsworth, C. B. (Bedford, Luton)	Nicholson, Reginald (Doncaster)
Boscawen, Rt. Hon. Sir A. Griffith-	Harris, Sir Henry Percy	Nicholson, William G. (Petersfield)
Bottomley, Horatio W.	Hennessy, Major J. R. G.	Norman, Major Rt. Hon. Sir Henry
Bowyer, Captain G. W. E.	Henry, Denis S. (Londonderry, S.)	Oman, Sir Charles William C.
Boyd-Carpenter, Major A.	Hewart, Rt. Hon. Sir Gordon	Ormsby-Gore, Hon. William
Breese, Major Charles E.	Higham, Charles Frederick	Parker, James
Bridgeman, Rt. Hon. William Clive	Hills, Major John Waller	Pease, Rt. Hon. Herbert Pike
Broad, Thomas Tucker	Hinds, John	Peel, Col. Hn. S. (Uxbridge, Mddx.)
Brown, T. W. (Down, North)	Holbrook, Sir Arthur Richard	Percy, Lord Eustace (Hastings)
Bruton Sir James	Hood, Joseph	Perkins, Walter Frank
Buckley, Lieut.-Colonel A.	Hope, Lt.-Col. Sir J. A. (Midlothian)	Perring, William George
Bull, Rt. Hon. Sir William James	Hopkins, John W. W.	Philipps, Sir Owen C. (Chester, City)
Burn, Col. C. R. (Devon, Torquay)	Horne, Sir R. S. (Glasgow, Hillhead)	Pollock, Sir Ernest Murray
Butcher, Sir John George	Howard, Major S. G.	Polson, Sir Thomas A.
Casey, T. W.	Hunter, General Sir A. (Lancaster)	Pratt, John William
Cautley, Henry Strother	Hurst, Lieut.-Colonel Gerald B.	Prescott, Major W. H.
Cayzer, Major Herbert Robin	Inskip, Thomas Walker H.	Purchase, H. G.
Chamberlain, Rt. Hn. J. A. (Birm., W.)	Jackson, Lieut.-Colonel Hon. F. S.	Rae, H. Norman
Chamberlain, N. (Birm., Ladywood)	Jephcott, A. R.	Raeburn, Sir William H.
Child, Brigadier-General Sir Hill	Jodrell, Neville Paul	Raw, Lieutenant-Colonel Dr. N.
Churchman, Sir Arthur	Johnson, Sir Stanley	Rees, Sir J. D. (Nottingham, East)
Clough, Robert	Jones, Sir Edgar R. (Merthyr Tydvil)	Reid, D. D.
Coats, Sir Stuart	Jones, Sir Evan (Pembroke)	Renwick, George
Cobb, Sir Cyril	Jones, G. W. H. (Stoke Newington)	Roberts, Rt. Hon. G. H. (Norwich)
Colvin, Brig.-General Richard Beale	Jones, Henry Haydn (Merioneth)	Roberts, Samuel (Hereford, Hereford)
Conway, Sir W. Martin	Jones, J. T. (Carmarthen, Llanelly)	Roberts, Sir S. (Sheffield, Ecclesall)
Cope, Major William	Joynson-Hicks, Sir William	Robinson, S. (Brecon and Radnor)
Cowan, Sir H. (Aberdeen and Kinc.)	Kellaway, Rt. Hon. Fredk. George	Rothschild, Lionel de
Craik, Rt. Hon. Sir Henry	Kelley, Major Fred (Rotherham)	Roundell, Colonel R. F.
Davidson, Major-General Sir J. H.	King, Captain Henry Douglas	Samuel, A. M. (Surrey, Farnham)
Davies, Sir Joseph (Chester, Crewe)	Kinloch-Cooke, Sir Clement	Samuel, Samuel (W'dsworth, Putney)
Dean, Commander P. T.	Knight, Major E. A. (Kidderminster)	Sanders, Colonel Sir Robert Arthur
Du Pre, Colonel William Baring	Lane-Fox, G. R.	Sassoon, Sir Philip Albert Gustave D.
Edwards, Major J. (Aberavon)	Lewis, Rt. Hon. J. H. (Univ., Wales)	Scott, Leslie (Liverpool, Exchange)
Elliott, Lt.-Col. Sir G. (Islington, W.)	Lewis, T. A. (Glam., Pontypridd)	Seddon, J. A.
Elveden, Viscount	Lindsay, William Arthur	Seely, Major-General Rt. Hon. John
Evans, Ernest	Lloyd-Greame, Sir P.	Shortt, Rt. Hon. E. (N'castle-on-T.)
Eyres-Monsell, Com. Bolton M.	Lorden, John William	Smith, Sir Allan M. (Croydon, South)
Falcon, Captain Michael	Loseby, Captain C. E.	Smith, Sir Harold (Warrington)
Farquharson, Major A. C.	Lowther, Major C. (Cumberland, N.)	Smithers, Sir Alfred W.
Fell, Sir Arthur	Lowther, Sir Cecil (Penrith)	Sprot, Colonel Sir Alexander
Fisher, Rt. Hon. Herbert A. L.	Loyd, Arthur Thomas (Abingdon)	Stanley, Major Hon. G. (Preston)
Flannery, Sir. James Fortescue	McLaren, Hon. H. D. (Leicester)	Starkey, Captain John Ralph

Steel, Major S. Strang	Ward, Col. L. (Kingston-upon-Hull)	Wilson, Daniel M. (Down, West)
Stephenson, Lieut.-Colonel H. K.	Ward, William Dudley (Southampton)	Wilson, Rt. Hon. J. W. (Stourbridge)
Stevens, Marshall	Waring, Major Walter	Wilson, Lt.-Col. Sir M. (Bethnal Gn.)
Stewart, Gershom	Warner, Sir T. Courtenay T.	Winfrey, Sir Richard
Sutherland, Sir William	Watson, Captain John Bertrand	Wise, Frederick
Taylor, J.	Weston, Colonel John Wakefield	Wood, Sir H. K. (Woolwich, West)
Thomson, T. (Middlesbrough, West)	Wheler, Col. Granville C. H.	Wood, Major Sir S. Hill- (High Peak)
Thorpe, Captain John Henry	White, Col. G. D. (Southport)	Worsfold, T. Cato
Townley, Maximilian G.	Wild, Sir Ernest Edward	Worthington-Evans, Rt. Hon. Sir L.
Tryon, Major George Clement	Williams, Aneurin (Durham, Consett)	Young, E. H. (Norwich)
Waddington, R.	Williams, C. (Tavistock)	Young, Sir Frederick W. (Swindon)
Wallace, J.	Williams, Col. Sir R. (Dorset, W.)
Walters, Rt. Hon. Sir John Tudor	Williamson, Rt. Hon. Sir Archibald	TELLERS FOR THE NOES.—
Ward, Col. J. (Stoke-upon-Trent)	Wills, Lt.-Col. Sir Gilbert Alan H.	Colonel Leslie Wilson and Mr.
		McCurdy

Question put, and agreed to.