HC Deb 06 July 1925 vol 186 cc65-191


Considered in Committee.

[Mr. JAMES HOPE in the Chair.]




Motion made, and Question proposed, That a sum, not exceeding £334,714, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1926, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade and Subordinate Departments, including certain Services arising out of the War."—[NOTE: £200,000 has been voted on account.]

The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister)

I rise because my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) suggested that I should attempt to give the Committee, at the beginning of this Debate, as accurate a review as I could of the trade position and of trade prospects. The right hon. Gentleman was good enough to say that the review which I gave two years ago had proved substantially accurate. I only wish it had not. I am sure he will, however, appreciate the great difficulty that must be met with in attempting to present a complete picture of trade conditions and prospects. It is easy to make an accurate statement as regards external trade. The figures of exports and imports are there, but those figures give a very incomplete picture, and unless you can get really accurate figures of production it is impossible to make an accurate statement of the trade position. My right hon. Friend himself, not using his own figures but using deductions which have been made by a distinguished economist, on the last occasion gave some figures, which certainly were of a more alarming character than I think is justified. These figures were based upon the average over a period of years. It so happens that the period selected in cludes the year 1921. That was not only a disastrous year in industry, but it was also, by a coincidence, the worst agricultural year for a generation.


I am sorry to interrupt so early. There was a very big coal stoppage in the first part of the year also.


That is quite true, and I think if my right hon. Friend had looked at a more detailed comparison of the figures, he would see that that year, 1921, was a far more depressed year than any of the comparative years which he took in his pre-War average. I am not saying that in the least in order to quarrel with the right hon. Gentleman, but only to show how extraordinarily difficult it is to conduct an accurate test on that kind of estimate. I think it would be probably more accurate to follow the trend of the imports of raw material, which is a fairly good guide to production. These have been considerably on the up-grade during the last year and, on the whole, they have been on the up-grade during the last two or three years.

But we shall not be able to get a completely accurate picture until we get the Census of Production. That is being taken this year. I am glad to say that one of the last things I did before leaving office previously was to make the Order which renders possible that Census of Production. It is being taken this year; the returns will have come in towards the close of the year and we shall then get busy on them and present such results as we can as early as possible next year.

I take this opportunity of making an appeal to all those making returns for the Census of Production, not only to make them accurately but to expedite them as much as possible. The quicker we can get them in, the quicker we can have them examined and collated. I hope it may be possible, once we have the Census of Production, to carry it by voluntary action a step further. It is really impossible that one should have to wait intervals of 10 years without complete figures. In America, by voluntary action—because business men find it pays them to do so—both individual firms and trade associations present to the Administration very complete figures of production. I hope it may be possible, once we have the present Census of Production out, to obtain by co-operation with trade associations or representative individual firms, without putting them to undue inconvenience, such general figures of production year by year as will enable the Board of Trade to present in any one year a tolerably accurate picture of the nation's production. I believe if we could do so it would be invaluable—certainly it would be to any Government in office, and I believe also to industry itself, because nothing is so bad for trade as uncertainty. I have tried to make the best estimate which I can, based on actual figures, as far as they exist in the trade returns and— what appears to be more important at the moment—based on the best information as to output which I can get from representative industries, cross-checked by the view which the great joint stock banks get and the railways in their traffic returns.

When we come to review the prospects, there must be a tremendous factor of uncertainty. There is so much which lies altogether outside our own control. I want to say something as to what I think can be done by everybody in order to improve the position more rapidly, but obviously there are factors almost altogether outside our control. Take, for instance, China—a great actual market and a tremendous potential market. If one could say with certainty that there will be in China an authoritative Government standing for order and able to preserve peace, there might be a much more rapid revival of the textile trade with that country, and of the other trades concerned than would otherwise be possible.

There are very uncertain factors which one has to take into account, but if I may take first what is certain, I will take the comparison of our external trade, as we are doing it at the present time, with the pre-War figures. In 1913 our total imports were £855,000,000 and our exports £697,000,000, giving an apparent adverse trade balance of £158,000,000. In 1923 the imports were £1,158,000,000 and the exports £955,000,000, giving an apparent adverse balance of £203,000,000. In 1924 the imports were £1,338,000,000 and the exports £997,000,000, giving an apparent adverse balance of £341,000,000. Take the most recent figures which I can get, namely, those for the 12 months ending in May, 1925. They show imports £1,390,000,000; exports £995,000,000; apparent adverse trade balance £395,000,000.

40 P.M.

In order to get a more accurate picture of the trend of our import and export trade, I think it necessary to bring the figures down to a common measure of value. It is only in that way that you can properly assess the volume. The Committee will see that we have been trying, in successive tables which we have published from the Board of Trade, to show period by period the comparative volume of trade by taking the present values and converting them into the values of 1913. Of course, there is obviously some margin of error but it is the only fair standard of comparison one can take. I have attempted to do that, and, taking the year 1913 as 100, our trade, exports and imports, for the 12 months ending March, 1925, works out as follows: Food, drink and tobacco, net imports, 116.7; raw materials, net imports, 97.7—that is a better figure, I am glad to say, than one would have been led to suppose by the averages which my right hon. Friend quoted, and, as I have said, the importation of raw materials has been steadily increasing—manufactured articles, net imports, 110.4. Now I come to the exports. Manufactures, exports, 78, as against 100 in 1913. That shows some improvement upon the 12 months ending 1924.


Does that include coal?


No, it is manufactures. I am coming to coal next. I thought it was very important to divide the two. This is exports of manufactures. The figure for the whole of 1924 was something like 75.7. For the 12 months ending March, 1925, it was 78, and in the first five months of 1925, as compared with 1913 our net exports of manufactures ran: 74, 85, 82, 71, and 74, an average over all of 77.


78 is the figure for the year?


Yes, 78 is the figure for the year ending March, 1925. Now I come to coal. There you have a great fall. Taking the year 1913 again as 100, the exports of coal for the same period of 12 months were 76.5.


That is for the same period?


Yes, I have taken the same period, the 12 months ending March, 1925.

I have no doubt that our export trade to-day bears a smaller proportion to our total production than before the War. I could give many reasons for that, but all the evidence undoubtedly points to that conclusion. I think it is too uncertain to accept any figure, but there is not the least doubt that the proportion is very considerably smaller. I think it is also true that to-day we are probably getting our pre-War share of any overseas trade between one country and another that is going, and that makes the position rather more serious.

I have dealt with the visible balance of trade, and I want now to take into account, on the best estimate I can, the whole of the trade, including the invisible exports. I estimate than in 1913 we had a net balance of £181,000,000. That is the whole of the exports and imports taken together, visible and invisible, yielded us a net balance of £181,000,000 before the War, all of which, of course, was available for re-investment. In 1923 the Board of Trade estimated that the net balance was £102,000,000.


Reduced to the 1913 value?


No, sterling, and of course it goes far less in investments than a similar amount did before the War. I meant to draw atention to that very point. It is an actual net balance of £102,000,000. I think, on the whole, though the figure was not criticised at the time, that probably it ought to be rather larger. I think we did not make enough allowance for the earnings on foreign investments, but the margin of error, probably, is not much more than 10 per cent. one way or the other. In 1924 the estimate which the Board of Trade made was that that net balance had fallen to £30,000,000. That, again, I think perhaps is too low, and probably if one said £40,000,000 or £50,000,000 it might be nearer the mark, but, putting it at the best, I do not suppose that our net trade balance was more than £50,000,000 in 1924. I have had a further calculation made out, taking the same basis for the 12 months ending May this year, and, so far as I can see from that calculation, there is no doubt that the balance has fallen considerably and that probably we are hardly better than square on the trade account.


Does that take into account tourists' expenditure?


Yes, certainly. I do not want to go into details, because I have a lot of ground to cover, but my hon. Friend may take it that all invisible exports of every kind are taken into account, shipping, investments, commissions of one kind and another, and tourists' expenditure, and, of course, there is taken off it the amount of the payments we are making to America. I think probably it would be rash to assume that we have any substantial balance at all on the trade account at the present time. The Committee will admit that that is a very serious position, but it is very important, while realising its seriousness, not to exaggerate the seriousness of it. My right hon. Friend said last time that he thought we were living on our reserves. I am sure that it is not as bad as that. We are certainly re-investing borrowed money. There is no doubt about that. We are not saving enough ourselves to meet the whole of the issues that come on the market, and that means that we are re-investing borrowed money. What happens, I suppose, is, that we are keeping foreign balances which are due to pay for imports goods re-investing that money. But I am sure that we are not living on our reserves. The contrary is proved by the steady growth in War Savings Certificates and in savings bank deposits, and it is also proved by the volume of new issues and by the stability of the exchange. Therefore, while one does not want to underestimate the seriousness of the position, I am sure it is putting it too high to assume that we are really living on our reserves. We are, undoubtedly, very gravely below our pre-War capacity to invest. Before the War it used to be estimated that, including our foreign trade balance of £180,000,000, we had, in all, something like £350,000,000 of savings available for investment. We are nowhere near that position to-day, and yet to-day we need more and not less for investment, for the obvious reason, as my right hon. Friend reminded me, that money does not go so far and that, obviously, any capital enterprises need much more capital at the present time.


Are these figures going to be given in their present values? I thought my right hon. Friend was going to do that.


No, that is really a very difficult thing to do. I am not quite sure how you would make the calculation. You would have to take a varying value of sterling, and I do not think you could do it. Of course, where one is dealing with articles of production and with exports, you can bring the commodity value, which is a known thing, down to the 1913 value. We need more money for investment, because to-day more than ever it is important to have that money available for the development of new markets. Surely, there is only one way by which we can redress that trade balance and improve it, and that is by selling more British goods and more British produce both at home and abroad. That, I know, is an obvious thing to say, but I believe it is a thing which the country does not fully realise. If we can greatly increase the sale of British goods in the British market, then by every £1,000,000 worth more that we sell we improve our trade balance. In the same way, every time that we can produce more in agriculture we make it leas necessary to import. Again, the more we are able to sell the more we will fill our factories, and there is not a man in business to-day, and hardly anybody in the country, who does not realise that it is because our factories are half empty in many cases that the cost is so great. If we fill those factories, then our overhead charges are reduced and we are able to produce more cheaply. Every time we sell more we increase our balance and can invest in the development of new markets, thereby scoring by the orders we get immediately and by the trade which we breed. Therefore, I venture to repeat something which I said in another part of the country this morning. I would make the most sincere appeal to the whole of the British people to realise that if there can be a real national move—and it can only be done by individuals and by all in- dividuals—to buy more British goods, that is going to do more—indeed, there is nothing else except that which can really do it—to put this trade balance right.


And to keep up wages.


Of course, it would keep up wages, because the more you are able to sell, the more wages you are able to pay. I am perfectly certain that it is just the encouragement which is needed in order to induce people to take new risks in the develop ment of their plant and so forth. All I have said about buying British goods applies in just the same way to British agriculture. That is why it seems to me that the development of sugar beet is so important. You are creating employment in agriculture in that way—every factory you set up means orders in machinery incidentally -and you are thereby reducing every time the volume of imports. Is it not also true, just as the development of industry is enormously linked up with the importance of improving our trade balance, so greater agricultural development inevitably is going to improve that trade balance, and does not that make a strong link between town and country which often is not completely appreciated? I would carry it a step further. I would say: Cannot we, as individuals, give in our purchases a voluntary as well as a fiscal preference to Empire goods, thereby developing the best; market which we have got for our manufactures, and thereby doing, perhaps, more than we can in any other way to make quite sure that by putting less demand upon it we keep the pound at parity with the dollar without any artificial means? In both these there is really a chance for a national effort. It is a common interest; it is something in which we can all surely co-operate without any recourse to politics, and we shall succeed in getting our trade position right just in proportion as this voluntary effort is made. It is the voluntary effort which can put that trade balance right.

The statements which I have made about the general position and such lessons as I have ventured to draw from them are, I think, reinforced by any even cursory study of the condition of individual industries. I want, if I may, very briefly to touch upon some of those, because it completes the picture I am trying to give. Taking industry by industry, the seriousness of the general position is, of course, reflected at once in coal. In the first quarter of 1925 the output of coal was 92 per cent. of that of 1913, and it has been falling steadily recently. Exports are down by 25 per cent., and the general trade depression has reduced the capacity of the biggest industrial customers. The biggest customers of coal, iron and steel, and when you come to that you find that the production of pig-iron is, for the first quarter of 1925, 67 as compared with 100 before the War. That increase is partly due to a certain depression, but is also due in no small measure to the increased use of scrap steel.

In steel, the production to-day is somewhere about the 1913 level, but there is, of course, a tremendously increased capacity, and the ratio of production to capacity in this country is, I think, distinctly lower to-day than in most of the competing countries. Imports have increased by 25 per cent. in the first five months of this year as compared with the first five months of 1924. Prices, though only about 30 per cent. above pre-War, are being undercut, and, moveover, what no figures show, but what is unquestionably the fact, in this as in certain other industries heavy losses are being made. But it would be wrong, I think, to assume that a profit is being made in steel in other countries. I think that other countries which are competing actively with us, and beating us at the present time, are, many of them, actually losing money, and I think some will lose money, though they have not realised it. Both in Belgium and in France, with a fall in the exchange, transactions are carried out which would appear to show a profit—it is the same thing over again, as in Germany —but when finally you come to a settlement, you find that what is a profit on paper is not a profit in fact. That leads me to this, that in a case like steel, where the capacity of world production is greatly in excess of what the world can absorb at the present time, or, at any rate, pay for, I believe it is in the interests of the different countries and of the industry itself that an effort should be made to come to international agreements. I am sure that they would make for stability of prices, and I am sure that it is a sound thing to do in an industry which is placed in that position.

From iron and steel one naturally goes to shipbuilding. Bad, of course, but bad throughout the world, owing to the excess of tonnage. We are not, however, holding at the present time the proportion which we have held in the past. We have still got a large proportion of what tonnage is building in the world, but it is a lower proportion than before the War and a lower proportion than we had a year or two years ago. If you take the launchings, in 1913 the United Kingdom launchings were 1,932,000 tons, and the launchings in other countries were 1,393,000 tons. If you take 1924, the launchings in the United Kingdom were 1,440,000 tons, and in other countries 804,000 tons. If you take the figure of the tonnage buiding in March of this year, it was 1,165,000 tons in the United Kingdom and 1,232,000 tons in the rest of the world. Therefore, that shows that we are receding. [An HON. MEMBER: "Why do you take March?"] Because it is the last figure for which returns exist.


Has the right hon. Gentleman the proportion of the shipping of this country to the shipping of the world compared with the pre-War proportion?


No, I have not, but I could get that. I was going to give the total which is laid up, and I will see that the other figures are obtained in the course of the Debate, but my right hon. Friend will observe that that is not necessarily at all a test of our shipbuilding, because there are a great many ships flying the British flag which, unfortunately, have not been built in British yards. In engineering, while on the face of it, from the figures, it looks as if the volume of trade had been growing somewhat, in heavy engineering I think that is doubtful, and there, again, there is an enormous amount of business which is being done at ever-narrowing margins. In fact, in many cases you are over the margin between profit and loss. The exceptions to a general depression in the engineering trade are motors, which are booming—and when I say booming, I mean that certainly, in comparison with other industries, there is a greatly increased output—cycles, which are doing well, and the electrical industry, which is comparatively in a very prosperous position and is increasing its business largely, not only in the home market, but has got recently some pretty big orders outside.

Then one comes to the textile trades. The impression given to me of cotton is one which is borne out by the figures of exports. There was some improvement, but then a falling off, and at the present moment there is certainly a very definite dwindling down of orders, partly due to unsettlement in China, partly, I think, by common consent, to a. general waiting upon prices—people wanting to see how the new crop is likely to turn out. But there is one satisfactory feature in the cotton trade, and that is that, whereas when the fall in prices came before, manufacturers were carrying stocks which had been bought at very high prices, and they, therefore, found great difficulty in passing on the falling prices to the consumer, now as a rule they are in a position where any fall in the price of raw cotton ought to be reflected in a fall in the price of the finished article. There is one factor which, I think, deserves to be noticed in connection with cotton, and that is the increasing difficulties which are being encountered over Egyptian cotton. The crop is rather problematical, and the care in cultivation has very much gone down, with the result that there is a great uncertainty as to how much crop will be available from Egypt and as to what the quality will be. That emphasises once again the tremendous importance of pressing on with the Empire development of cotton wherever you can, and particularly with the development in the Sudan; and I know that, whatever party is in power, any steps which can be taken to assist in that will always be readily taken.

In wool, there has been a serious setback, and great fluctuations in the price of the raw material, with buyers consequently holding back. British firms are meeting with increased competition. I am sure that it is greatly in the interests of everybody concerned in the woollen trade, directly and indirectly, producer of raw wool, manufacturer and buyer, that there should be no hold-up of stocks. Whatever supply of wool there is in the world should come steadily forward, so that the market knows where it is. The hold-up of stocks does mean directly a hold-up of trade, and that really, in the long run, is just as bad for the elementary producer as it is for the manufacturer or the consumer.

Linen is bad; silk distinctly on the upgrade, both in real and artificial; hosiery showing some improvement after a decline; the rubber industry, comparatively a bright spot; non-ferrous metals, which, I think, my right hon. Friend said something about last time, very difficult to form an estimate of, because it varies so much with the branch of industry for which they cater—a very good example of the interaction, interdependence and interlinking of industry. For instance, you get non-ferrous metal trades that are catering for heavy engineering, depressed and those which are catering for house fittings and motor fittings good. Chemicals—I hesitate to speak of chemicals in the presence of a great authority, but one thing I think one might say with confidence, and that is that it is a very satisfactory feature that, in spite of a recent depression in the heavy chemical industry, it has not hesitated to go forward and develop new processes. In fine chemicals, contrary to some people's expectations, there has been a great development under the Safeguarding of Industries Act. Paper is steady; pottery is slightly down.

I have tried to give a brief review of different trades, and I mar say generally that that review is, as far as I can ascertain, borne out by the information which banks have, and it is borne out by the railway returns, which show for general merchandise a slight fall in the last month for which the returns are complete, namely, April of this year, as compared with April of a year ago. But while traffic in general merchandise remains fairly steady, there is a tremendous falling off in coal and heavy metals— and that, again, does show how very immediate and close is the interdependence of railway prosperity upon the prosperity of the basic industries. The same surely applies to all the sheltered industries. It is impossible, in the long run, for a country, or, at any rate, for a country which has got to live by a large amount of overseas trade, and face keen competition, to have sheltered trades prosperous if the unsheltered trades are unprosperous. The two are bound most closely, in the long run, to depend on one another.

I promised to say one word about shipping. British shipping, I think the figures show, is really making a very heroic and constant effort in face of the keenest competition. Freights are about the lowest on record, something like 104, as compared with 100 in 1913, that is, about 4 per cent. above the 1913 level.


Not on real value.


Of course, on real value it is enormously lower. Taking actual cash to-day, it is 104 as compared with 100 in 1913. We cannot help, I think, drawing a contrast there between the freights of shipping, which is a great competitive carrying trade, and the railway freights in this country—a comparison which one is inevitably driven to draw. When you come to the tonnage laid up in British ports, in April, 1925, it amounted to 377,000 tons. In January, 1925, it was 470,000 tons, and in April, 1924, 391,000 tons, figures which, I think, in face of the low rate of freights, justify the statement to-day that British shipping is doing its best to hold its own wherever it can.

I turn naturally from a review of our own conditions to say a word or two about conditions in competing countries. My right hon. Friend put to me a question last time which it is easy to answer. He said, "Is it a fact that there has been in different countries a considerable increase in competing manufactures? It is true of almost every country which is able to manufacture at all. As the right hon. Gentleman well knows, during the War, when we could not do our normal trade, when all the belligerent countries were dependent on the world to supply them as well, there was this enormous industrial development in almost every country, with the result that in every country to-day you have a far greater industrial capacity than ever before.


This country included?


This country included. It is the same everywhere, and the fact that these other countries have got such tremendously developed industrial plant means that, even as they get richer, we get a smaller share of their increased buying capacity than we should have done in pre-War times, because they have a new industrial capacity, and they take steps to see that they supply their own internal needs, and only call upon outside sources when necessary. Although, unquestionably, the world must have been getting richer in recent years, the volume of overseas trade available to any country seems to keep relatively small for this reason. That increased productive capacity not only means that it is harder for us to get into their markets, but it means, of course, that we have got keener competition to face in other markets. There is, unquestionably, a lower cost of living. There is no doubt at all that the internal value of the currency of some of our principal competitors is higher than the external value, which gives them an advantage, and them is no doubt that the hours of labour are longer.


Does the right hon. Gentleman mean a lower cost of living, or a lower standard of living?


I think, certainly; a lower cost of living, and, in some cases, a lower standard of living. There is certainly in some cases a lower standard—


But not a lower cost.


And a lower cost, without doubt, because the internal value is greater. The franc, the lira and the Belgian franc to-day, taking the test of wholesale prices in those countries, will buy more in their own countries than outside.


That is an argument as to the cost of living.


I am not taking that argument. I would much rather the right hon. Gentleman would allow me to take facts. I am far from drawing the argument of inflation, because, in the long run, inflation means great trouble, as Germany found. But, unquestionably, to-day the standard is lower, and the cost comparatively is lower than is the case here, and the hours are much longer.


That is very important. I am only on the facts, and not the argument. Does my right hon. Friend say that, after investigating the conditions in other countries, the cost of living is less, that is to say, the internal cost in, say, France, Germany and Italy is less than it is here?


Yes, I do without doubt. If you take the wholesale commodity prices, you find that the figure for the United Kingdom is 159, France, 520; Belgium, 537; and Italy, 619. The rate of the French exchange was 94 francs at the date when I took the wholesale prices, namely, May. You find the rate of exchange 94 francs, and you find that a comparison of wholesale prives gives you an internal value of the franc of 82, as against the external value of 94. In the case of Belgium, the external value of the franc is 97, and the internal value 84.


That is not the case of the purchasing power of the mark?


I do not think it is, for the mark is stabilised, but with regard to what I have said, I do not really think that there is any doubt about it. Everybody to whom I have talked, who has come back from making a comparative inspection, confirms this. I was talking to a manufacturer who does a great deal of business in France, and he said there was a difference of 25 points in the comparative value of the franc. I do not think there is the least doubt about it. But when you come to Germany, though there may not be the same difference in the value of the currency, you have got other things to face. There are much lower wages and longer hours. To-day, with a nominal 48-hours' week, the worker is working two hours extra at the same rate of pay for what is called "two hours' work for the Fatherland," and then an hour a day extra five days a week at the same rate of pay, and no overtime rate, at the discretion of the employer. That means that a nominal week of 48 hours is really a 55-hours' week.

There is a shortage of credit there at the present time, but there is a thing on the other side which, I think, is very noticeable, and of great importance. I remember my right hon. Friend, in a very interesting speech about a year and a half ago, drawing attention to the way that nobody would dream of saving in Germany. So long as the mark was crashing down, everyone was trying to convert any money he could into goods, so as to have some physical assets. Now you have the stability of the exchange there, and everybody who returns from Germany tells me that everyone in that country has begun to save. However low their wages, the people are beginning to save, and, instead of the flight from the mark, you see in savings bank returns, and so on, this tremendous saving movement going on in Germany.

In face of the competition which we have got to meet, and in view of the fact that many of our customers are poorer, there is one other thing which, I think, is worth reconsidering. It is commonly being said in many quarters, that we in this country should content ourselves with giving up the more basic processes, the simpler things, and concentrate upon the more finished goods. I believe that to-day, in the economic condition of the world, that would be disastrous. No doubt, it is true that, in a colossally rich country like America, you can sell the most expensive cars, and the most expensive china, but there is a very limited market. Taking the big markets of the world, either those we have or the ones we hope to develop, like the colonial markets in Africa, I believe that what you have got to concentrate upon is more and more goods of the type and price which your purchasers can afford to pay. It is only when you get the world in a state of far greater prosperity than we are likely to see for many years, that we could rely upon the practice of trying to sell expensive and most finished articles.

If that be at all a correct representation of the position—and, from particulars at my disposal, it is the most accurate forecast I can present—it seems to me to point, first of all, as I have said and emphasised, to the importance of increasing the home sale of our own home productions and improving our trade balance; secondly, of working always for stable conditions throughout the world. I know it is sometimes said that we can isolate ourselves. We really cannot do that. So long as we are doing the world's trade we cannot disinterest ourselves in the political or economic conditions of any country. It is not only the direct trade we do with Europe or the East, we depend indirectly, upon the further trade which the East has been able to do with the countries of Europe. Therefore, it is a right and a sound policy to take the long view that this country should always work for stability and the restoration of the normal conditions in every country. Undoubtedly that is true—[HON. MEMBERS: "Hear, hear!"]—yes, but it cannot be done all by one side; both sides must help.

If, then, the picture which I tried to draw of the conditions in competitive countries is at all near the mark, it means that everything that after all our manufacturers can do by salesmanship, by the best methods, and by the study of existing markets—all of which are necessary—we certainly cannot fill up our trade deficit in the old, and present markets. We have to develop so far as we can new markets. Surely these are to be found within our own Empire? There are the Dominions. But I do not need to dwell upon this aspect of the case, because every single person, every Member of this House, knows full well that the overseas people are not only ready to give us preference, but anxious to deal with us, and the very people with whom we are creating this export trade are those amongst whom we are creating opportunities for fresh settlements in new lands. This country perhaps hardly realises how tremendously important it is to develop our own Crown Colonies. In any new development that takes plane we are raising the standard of living of people for whom we are responsible. We are developing, not a conflicting and competing trade, but a complementary trade. I am perfectly certain that it is most important to-day that those in this country who have money to invest should invest that money, not only where it may be that orders will be placed at once, but where it will mean bringing in trade which in the future will mean a complementary and not a conflicting trade. That is why, to my mind, the Colonies are so important even if you look at the matter from a purely selfish point of view—why, I say, they are so tremendously important to this country. Perhaps it is not often realised, in some cases at all events, how quick the response is.

Last year, for example, or quite recently, the people of Uganda took from us between 6,000 and 7,000 bicycles in six months. When Uganda is producing that cotton which in the long run Uganda will be able to produce, we shall not only Be selling bicycles to them but Morris ears; therefore in the administration and development of these Colonies the duty of Administration and the interest of British industry march hand in hand. Everything we do in the direction I have indicated means greater opportunities and a population more able to take advantage of the developments. The development of sanitation and transportation means a growing export and import trade. In the development of the Crown Colonies, therefore, we are developing a complementary trade in which we can look forward perhaps to the quickest return commercially and industrially of any of the movements that we have in view.




There is no question of exploitation. Let me now sum up.

Lieut. - Commander KENWORTHY

Would the right hon. Gentleman, before he brings his very interesting speech to a close, tell us what are the measures that his Department proposes to take to help trade at the present time?


There the right hon. and gallant Gentleman puts me obviously in a somewhat difficult position, for if legislation be required, I should not be in a position to discuss it. As far, however, as my Department is concerned, I think the most effective steps we can take to assist trade is in the development of trade by dissemination of information, by the assistance given by the Trade Commissioner and Commercial Diplomatic Service, by the development of credit facilities and the further development of export credits, by further re-insurance, and so on. It may be said that there is nothing entirely new. I think the right hon. and gallant Gentleman will bear me out in this: that from our point of view, what we ought to do is what we have been doing in successive administrations, and that is to supplement the ordinary processes of trade. Wherever I can do so, I shall be only too ready to come forward and help in any possible development. We are limited in the amount of money that is available for investment. It is only by combined voluntary effort throughout the country, which no Government Department can compel, that we can get the money which is necessary for investment and the development of the different schemes. I think I have said all that I need to say in the nature of a trade review. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) referred in the last Debate to the conditions of unemployment, which have lasted now in varying degrees for several years, and asked whether I thought that condition was temporary or chronic. Certainly, I do not believe it is chronic.


One thing I was going to ask was as to the effect in the view of the Board of Trade of the restoration of the gold standard upon our export trade, and the prices paid for foreign investments?


I should say at once that it had been all to the good.


In what respect?


In this respect, that there may be something to be said for having an exchange which is a long way below par, but I have never been able to see that there was anything to be said for having an exchange which fluctuated a few points below par, an exchange that is at the mercy of every speculator. I do not, however, want to go over that again. The obvious advantages of the adoption of the gold standard were debated in this House. It has resulted in a great strengthening of British credit, and one can imagine the serious weakening of British credit that there would have been had we refused to adopt the gold standard at the time we did. That decision had to be taken.


I did not want to argue the point at all; I was only asking what was the effect?


I should say we have suffered very little, if at all, in our trade by adopting the gold standard. We have certainly avoided the disadvantages we should have suffered, had we refused to adopt the gold standard, at the time when a decision was necessary. There would have been a very serious shock to our credit and more insecurity, and in my opinion there would inevitably have been an adverse effect upon our trade. The right hon. Gentleman was asking whether the present position is temporary or permanent. I say I believe it is temporary. But the speed with which we can pass through the temporary period of trade depression really does not depend upon any action which any Government Department, or even any Government, can take. I think that this country would indeed be in a desperate plight if it had to depend upon the act of any Government to bring about a permanent improvement. What that improvement does depend upon is as to whether we can give our industry confidence, that confidence which it needs, and as to whether the whole of the British people are to make a national effort to help our industries. The difficulties at the moment will not be overcome through the action or inaction of any Government. They will be overcome by the people having faith in the country, by quality of manufactures, by sound credit, and the making up of our minds that the future in this respect shall continue the record of the past.

5.0 P.M.


I am sure the Committee have listened with great interest to the right hon. Gentleman in the able and exhaustive speech in which he has gone into detail as to the trade position of this country, He has given to the House and the country a large amount of that information which is so necessary to form some sort of opinion upon the present position. He said that he was sorry that he was so correct in the prediction made a couple of years ago about the course of British trade. I regret still more in finding myself fully confirmed in the view that I have expressed in this House for the last four years as to the effect that the policy of deflation, heavy taxation and debt redemption must inevitably have upon the elimination of our export trade, and upon employment. Nothing that has been said by the right hon. Gentleman as to trade conditions in the slightest degree moves one as to the consequences about which, I believe, no single economist in the country or outside it will possibly disagree. If that be so, why should we spend so much time in trying to prove something which every Government has endeavoured successively to destroy? In an eloquent speech the right hon. Gentleman told us to increase our markets—while the whole policy of the Government in another direction is to stop exports! It seems such a contradiction that I have never been able to understand it. If we make up our minds that we do not want to export, make up our minds that our export trade is gone, and that; our import trade is all important, that what we want to do is to buy and not to sell, then, obviously, the return to the gold standard is a right policy; but there is not a single human being I have met in this or any other country who would not agree that the return to a gold standard means an appreciation in prices of something like 11 per cent., and is a further bar to exports. The right hon. Gentleman says that he does not see how a depreciation of exchange could be of the slightest advantage to this country. As far as South Wales is concerned, a very small depreciation of the exchange enabled the Welsh tin-plate industry to get over the American tariff barrier, and to do a considerable trade there, but it has now entirely disappeared and caused a great deal of unemployment, with consequent unemployment in the steel industry and in the coal industry in South Wales. I do not want to argue the merits of one financial policy compared with another, but I must point out that we cannot have it both ways. We must accept the logical consequences of our action. The question is whether or not the effects of the depreciation are going to be temporary or not. Is it not the fact that we are in a worse position, as regards trade and unemployment than any other country in Europe which has been carrying on this terrible practice? They still manage to keep their workmen employed and their trade going, and their cost of living, apparently, is lower than ours. That last fact is the most remarkable, because we have always been told that one result of the sacrifices we have been making is. that the cost of living here is relatively lower than abroad. One advantage of the return to a gold standard obviously must be that we can buy wheat and meat in foreign countries at a lower price than a country which has a bad exchange. Now the right hon. Gentleman will not even give us that consolation. I think the right hon. Gentleman was wrong in the view he expressed—not wrong in his figures, but I think that what he was saying was not quite directed to the point we were dealing with. I do not think that absolutely the cost of living in France is cheaper than it is in England. All my friends who have opportunities of comparing housekeeping in both countries, and I was talking to one only this morning, assure me that it is very much more expensive to live in. Paris than in London with the same amount of money— a good deal more expensive; but the standard of living there is very much lower and, of course, one gets a certain compensation in that way. The internal purchasing value of an inflated currency is always higher than the external value.

Another point which I have never been quite happy about is the figures of invisible exports. Candidly speaking, I have never put any confidence in any figures of invisible exports which have ever yet been calculated, because I have never yet seen the basis on which they could be calculated. We have no figure showing the investments of this country abroad. There are certain figures to be got from the Schedules of the Income Tax, but they are misleading, because a large number of industrial concerns have works abroad whose profits are not dissected in that way, and I am certain that the figures are always very much higher than any estimate which has been framed. It is only on that assumption that one can explain what has been happening for many years. I had hoped the right hon. Gentleman would tell us, because it is an important factor in this connection, to what extent the recent rise in rubber, the profits of which have come to this country, would affect those figures. I have been informed that it makes a difference of about £50,000,000 a year— that is, the increase in the price of the rubber sold from the Malay Peninsula and elsewhere, which comes back as interest on capital here, amounts to about £50,000,000. I do not know whether that figure is right, but if it be so it would immediately increase the invisible export balance by a very great amount. One of the difficulties in the way of accepting any of these figures is that there is a complication of figures arising from the fact that we own so much raw materials and commodities like tea throughout the world, and variations in the price of these products may make increases and decreases of such a large character that it is extremely difficult to arrive at any close estimate.

What the right hon. Gentleman has pointed out, and what is perfectly true, is that in the last year there has been a change in the nature of our trade and industry. The proportion of our industry engaged in the home trade has increased in proportion to our export trade. The right hon. Gentleman has not given us any very definite! view, and I do not know whether he has been able to form one, as to whether that is a temporary or a permanent factor in our industrial system of the future, though a great deal depends on the view taken on that matter. Do we take the view that our export trade in the future is likely to remain at a lower level than it used to be? Do we take -the view that we cannot recapture the same proportion of our export trade as we used to have?


While, undoubtedly to-day the volume of our export trade is smaller, I hoped I had made it clear that by development of Empire trade I was practically certain we could increase it, though that, of course, is a matter of opinion.


I am not disagreeing with my. right hon. Friend for a moment. I am glad to have got that expression of opinion. It seems to me that future policy will depend largely upon what basic view is taken upon this question. For instance, there is the question of the development of agriculture in this country and its effect upon the home trade. If the people in other countries who grow food are no longer prepared to buy our manufactured goods, and so enable us to obtain the food we want in order to feed the people who make those goods, obviously there are only two things left for us to do. One is to grow more food in this country, and the second is to send our people to countries where they can grow food for themselves and, at any rate, manage to live, because people live on wheat and not on coal. Therefore that is a fundamental question.

It is difficult, I must confess, from a study of the figures of our export trade over a number of years, to form any definite view on this matter. The relative figures of exports over a number of years, even in the present depressed conditions, do not lead one to the conclusion that our export trade is irretrievably gone and cannot be regained. There are so many adverse factors which may not be permanent, such as disturbed exchanges, which are rendering trade with Europe almost impossible, which are giving other countries a false bonus on exports which they may not be able to maintain, and in the steel trade there is competition with subsidised French coke owing to the Ruhr agreement. Those are temporary factors, and I do not believe we shall not in time get compensating advantages which will very largely re-establish our position. One thing experience teaches in these matters is that there is in the world a great law of compensation. In the course of my business experience I have often seen markets disappear owing to tariffs and other causes, and everybody expressing the view that never again should we increase our manufactures, that never again would the export trade grow, and yet I have seen new markets and new demands spring up in other districts and the export trade developing to a far greater extent than ever before. How long one can continue that process it is difficult to say, because there is no law of the Medes and Persians that we are to manufacture goods and that other people are to buy them.

The right hon. Gentleman himself emphasised the tendency, arising from the War and the nationalistic feelings then created, for countries which economically are badly situated to start manufacturing for themselves, supported by national feeling and with Government help. That makes it more difficult for our export trade, of course, but is that going to be a permanent feature? Are people permanently going to pay more for goods than the real market value? Are people indefinitely going to buy goods at a dearer figure for the pleasure of having them made at home rather than to buy them from outside; and can countries which permanently adopt such a policy hope to continue to live in the world market of international competition? These are some of the factors which will have to work themselves out in the course of the next year or two. I do not know whether the right hon. Gentleman intended it to be so, but he rather gave me the impression that he looked upon imports as an unmitigated evil. I do not know that he quite meant exactly what his language would have inferred, but he was so passionately anxious that we should sell move British goods that he seemed to give the impression that imports were not bought by exports, but obviously people are not going to provide us with markets for nothing for any length of time.

There were one or two important points the right hon. Gentleman did not deal with. Naturally he could not deal with every question in a field as wide as this. He intimated in the course of his speech, however, that one of the difficulties we are suffering from is the wide divergence between the standards of wages and hours in Continental countries and in this country. It will be interesting to know how much wider the divergence is than it always was. Before the War English wages were always higher and the hours fewer, relatively, than in Continental countries, and the standard of living of the British working man was always superior to that of the Continental workman. Has that gap widened, or what is the relative position to-day? I have seen figures worked out as regards the steel industry which show a very remarkable divergence. The divergence is so wide as to be difficult to follow by serious people. The figure shows 36s. a week in Belgium and in France as against 63s. a week in this country for a skilled steel worker. That is a difference of nearly 100 per cent. There must, however, be compensating advantages. I cannot believe that it will be possible to maintain the real working efficiency of the populations of these Continental countries whose standards of living and whose wages are so low. They will not be able to maintain the real capacity for work. I think a lowering of the standard of living will, in the long run, prove to have been a costly experiment. We have always found in history that in competition with countries in the Far East owing to their poor standard of living, their efficiency is so undermined in this way that the cost of production is actually more, and I am not at all certain that some Continental countries will not eventually find them- selves getting into the same position. The right hon. Gentleman has not referred to the question of the coal trade at any length. That is a very serious matter because we are faced once more with a crisis which is vital to that industry. It is needless to point out that a stoppage in the coal industry must necessarily hold up almost every other industry in the country. On this matter I think we are all agreed that we hope and trust the Government will not be deterred from taking strong action in the national interest to prevent such a dislocation which would strike a fatal blow.


I cannot say that an allusion to the coal trade by way of illustration is out of Order, but the right hon. Gentleman will not be in Order, in going at length into the details of the dispute in the coal industry.


I was referring to the obvious reflection of the suite of things in the coal trade upon the trade of the country as a whole, and I was not about to go into any details. Another aspect of the question which we have to consider to-day is that of OUT investments abroad. Probably our large export trade in the past has been largely in consequence of our investments abroad. I think anyone who takes the trouble to examine the figures will find a- close relationship between the magnitude of our investments abroad and our export trade, and some very striking figures can be produced on this point. That being so, it is with considerable alarm that we find a continued diminution of our investments abroad. May I point out that that is not merely due to want of money, but more to a reluctance to invest abroad unless it has the security of Government sanction.

This policy seems to be preventing people who want to make foreign issues at the present time reluctant because they believe that that is not a policy which the Government of this country wishes to encourage. I think it is important that we should have some decisive statement on this vital question. In regard to this subject there are two schools of thought. One school approves of cheap money and conversion, and not want to make many issues, and they disregard altogether the important question of investments abroad and their effect upon imports. The other school are in favour of conversion even at a heavier interest, and they would like investments in foreign countries, carrying with them the export of goods from this country. Until the Government really make up their mind in regard to their fiscal policy on this matter we are really standing still.

The figures for 1923–24 and 1925 are really very remarkable. I am taking the first half of every one of these years. In the first half of 1923, £107,000,000 were invested in home issues, £50,000,000 in the Colonies and Dominions, and £40,000,000 in foreign issues. In the first half of 1924, £56,000,000 were invested in home issues, £32,000,000 in Dominion issues, and £37,000,000 in foreign issues. In the first half of 1925, £163,000,000 were invested in home issues, £32,000,000 in Colonial issues, and only £11,000,000 in foreign issues. These figures show that there has been a continual diminution in foreign investments. If these figures are compared with 1910, 1911, 1912 and 1913, you will find that our foreign issues have become almost a negligible quantity. The President of the Board of Trade has been boasting as to what has been accomplished by the fiscal policy of the Government, and he has announced that our national credit is extraordinarily good, but what is the use of that?

We do not want to borrow any money, but we want to lend money. If you are not going to use your national credit in a way that will help the unemployed, you will not be any better off than you were before. I want the President of the Board of Trade to give us a modest account of what he has done in his Department. He ought to be able to do a great deal, because he is the guardian of the trade of this country, and I think it is his duty as a Minister to represent the trading side of the community and to study both the monetary policy and the Budget policy. There seems now to be a growing tendency to regard all these questions from the point of view of the bankers of the City of London, but I think we should consider as well the point of view of the manufacturers and the people who are working in those industries. All these phases of the question should be examined more and more, not so much from the point of view of the Treasury or finance, but more and more from the point of view of trade and employment.

The right hon. Gentleman referred to the enormous importance of our trade with China. Of course, China had become one of our most important export markets, but during the last three years our export trade to China has been diminishing and it is now an almost disappearing figure. Of course, we cannot make ourselves responsible for the unfortunate disorder and civil war which has been occurring in that country which has been very much affecting our security and safety and hampering our trade. The position has got much more acute recently, and as most hon. Members are aware, we have reached a point at which trade has ceased to exist and those who used to do business with the Chinese are not now sending their goods to that country. On this point I wish to state to the Committee that I received a cablegram from the Chinese representative of the firm with which I am associated dated the 16th June which shows the state of affairs existing in Shanghai: Bolshevism becoming predominant. Government steadily influenced thereby. Anti-foreign particularly anti-British feeling running dangerously high. Chinese organisations presenting preposterous demands. Afford no oasis negotiations. Moderate Chinese terrorised. If foreign Governments show least sign of weakness situation will become very serious. They draw attention to a murder which has taken place near the office of our company in Shanghai. I am aware that this is more a matter for the Foreign Office, but unfortunately these things cannot be dealt with in water-tight compartments. It is a very serious matter, because, unfortunately, there has arisen in China much support for a movement of an anti-British character. Up to not long ago Great Britain and the Dominions represented 50 per cent. of the import trade of China, and only two years ago we had much the largest proportion. Whatever steps the Government may find it necessary to take with regard to the state of affairs in China, I am perfectly certain that they will be supported in every direction if they insist upon the protection of the trade rights and the trade we have carried on so long with China which must be recognised by the Chinese Government. All those British people in China who are trying to protect British trade should not be placed in jeopardy either now or at any future time.

The President of the Board of Trade referred to our Crown Colonies, and that is a subject upon which much discussion has taken place in this House. I regret to say that the right hon. Gentleman did not elaborate to the extent I hoped he would have done the steps the Government are going to take to bring about those changes from which there is such a great deal to be hoped for in the future. I understand that some development work in Africa is to be undertaken, but I would like to plead again for a much wider, a more comprehensive and a bigger survey of the whole problem. You have remaining in the African Continent a large territory capable of almost indefinite expansion, and a large population which could be turned into consumers of our goods if the economic position could be remedied. You can do that if you are content to wait for the economic development of these places, but with the small amount of capital yon are putting in and the returns you are likely to get, it will take many generations before any adequate results can be secured. This matter should be treated as an investment not by the Crown Colonies, but by Great Britain, based on the security of the revenues of Great Britain and on our credit, and then you will see what large schemes of railways, harbours, navigation, and so forth, would spring up in a few years' time, enormously improving the trade of this country.

I quite agree with my right hon. Friend that we are better occupied in developing territories that are under our own control, territories where we have law and order in our own hands, than countries over which we have no control, where we cannot interfere, and whose finances we cannot put in order. [HON. MEMBERS: "Russia!"] That is only one of many. Let us not devote too much time and thought in those directions, but let us really start on a big line—not a few millions here and there petered out at odd moments, but a big comprehensive scheme of £40,000,000 or £50,000,000 spread over a number of years. A much more popular issue than these small issues would be a big issue by the British Government which would enable them to finance developments in various parts of the world. I am perfectly certain that from a financial point of view the money would be more cheaply obtained and the issue more popular, and that a big scheme of that kind, under which contracts would be placed for a number of years ahead, particularly in those directions which we want, such as rails, bridges, locomotives, rolling stock, and matters of that kind, would give us help where we want it most. I see no reason why such a policy should not be adopted; it merely wants a little decision and courage, and I am certain that the country would welcome and support it. I think that even those people who are now wanting orders and wanting trade would be glad themselves to help to finance the arrangements in that way.

Then there is another small point upon which we might hear a word. The right hon. Gentleman spoke about our selling arrangements. The present exhibition in Paris affords us a chance of doing some good advertising, but I am sorry to say I am informed that our pavilion there is one of the poorest in the whole exhibition, and compares very unfavourably with those of countries like Italy and Poland. I have not seen it myself, but have been told, by a number of people whose judgment I could trust in the matter, that they regretted we were not making a better show at this very important exhibition. The right hon. Gentleman spoke about advertising, and there, again, there is a great deal to be done in the direction of an advertising campaign to show the excellence of British goods in British Dominions. I do not think we are quite as good at selling as some of our competitors. I must say that I have always found that the Americans are very much better in getting their goods over than we are and that their methods of advertising are excellent, and could often be followed with advantage by this country. Are the Government prepared to give any financial assistance to a considerable, well-thought-out and largely worked out advertising scheme, such as has been suggested in various quarters? It would probably pay to do something of that kind, and a good scheme worked out by competent people might very well, I think, be given some Government support. After all, our goodwill which we have achieved is a valuable and substantial asset, which is not sufficiently exploited. I think, myself, that that goodwill could be exploited in a bigger way than it has been hitherto, and I think it would pay the Government, in the general interest, to go into a scheme of that kind. It might help, not merely to recapture many of the markets which were taken from us during the War, but to open out new markets.

I was very much disappointed, during my visit to the Near East, to find that almost every motor car I came across, whether in Palestine, Egypt, Syria or Greece, was American; scarcely a British car could be seen. It was not that they were not suitable; I think they were more suitable, and, certainly, more economical; it was simply because no selling organisation has been created—people have never heard of British cars, they have never been allowed to see them or to know of their existence. The hon. Gentleman spoke about bicycles in Uganda, and I found the same thing with cars in India. I should like him to take up the question of our trade with India. I found that things were being done there which, no doubt unwittingly, were injuring our trade. In the case of motor cars, the high tariff on cars coining into India results in British cars being practically excluded, for the reason that, since the purchasing power of the country is low, the increased price of the British car plus the duty is so high that they cannot afford it, and buy the cheapest American cars. We give a preference to India in regard to tea and in regard to certain financial arrangements, and it is about time, I think, that our Board of Trade should look into the matter with the India Office in relation to our Indian trade. I do not know that that avenue has ever really been explored, but there is no reason why it should not be, and in many of these cases it would be doing a good turn to the Indians themselves, by enabling them to buy a better product at a lower price. I commend that to my right hon. Friend as a fruitful line of exploration on behalf of British trade. It is not so much that there is any desire to do us any harm, but the trade conditions on our side are not so fully understood that due regard is paid to these points, which may affect us very materially. On the India Office Vote we may have an opportunity of saying something more about the importance of the economic condition of that country, and, therefore, I will not enter into it this afternoon.

There was one point on which the right hon. Gentleman was very vague, namely, the question of railway rates. One of the disturbing phenomena at the present time is the fact that British railway rates since the War have been increased out of all proportion to the increase in the railway rates of the countries which are our chief competitors on the Continent of Europe. The burden of railway rates must have a direct effect upon heavy exports, and, especially, coal. The slowness of electrification here, as compared with other countries, is also an important matter. The President of the Board of Trade, in spite of the Ministry of Transport, still remains the Minister most interested in railways, and still has a close connection with this question, which I think requires considerable examination and speeding up. The question of railway rates will still remain, or ought to remain, very largely with the Board of Trade.

I remember, many years ago, opposing in this House many railway combinations on behalf of the traders of this country, on the ground that the reduction of competition between railway companies would mean less facilities and higher rates. Then, unfortunately, the House was persuaded to agree to the huge amalgamations which took place a few years ago, and we were told that they would effect large economies and great reductions in rates, and that the trade of the country would greatly benefit From my experience in past years, I was never as enthusiastic about that as some people were, and the recent experience has been more in the direction indicated by our past experience. Really, however, the mere fact of the existence to-day of less and less competition, through these enormous amalgamations, renders it more and more incumbent upon the Government to go into this question really seriously from the national point of view. It is one of the most important problems of the present time, and it must have a very great effect on many of our industries, because competitors are in many cases getting reductions on their export rates. British agriculture has always suffered from unfair discrimination in railway rates, and the railway question to-day remains, as it has been during the whole of my business life, at the bottom of the whole course of trade in this country. There are still other spheres of activity for the right hon. Gentleman. He is going, I understand, to do something towards Export Credits. If he could get the Export Credits Department not to ask for security which is certainly greater than any ordinary bank would demand, he would have achieved something.


Will the right hon. Gentleman explain to me, then, why it is that in a large number of cases credits have been given under the Export Credits Scheme which the banks have refused, and ultimately the business has been taken up by the banks because the export credit has been given?


I am glad to hear that the right hon. Gentleman has done some speculative business, but does he really think that undue risk has been taken, or that, in many cases, undue caution has not been exercised? It is a very difficult point. I would not for a moment advocate that he should rush into all the credits that are put up, but I do think he could afford sometimes to make a few bad debts. Continental nations do, and that is one of our difficulties. They are a good deal more rash than we are, but they do get business, and I am not sure that in the long run it does not pay them, although sometimes they make a loss. At any rate, the direction in which, as I understand, the right hon. Gentleman is moving, is certainly one which will have the support of the majority of the trading community.

This subject always involves one in longer speeches than one intends, and when one has finished one has only covered a very small amount of the ground; but, to sum up the situation, I think one might put it in this way: As I visualise the situation, I think our trade is depressed but not desperate. I think that in many directions and in many parts of industry the position is not as bad as is imagined. The coal, heavy steel, and shipping industries are very depressed, but in other directions there are bright spots, and I feel that, if we can get over the cycle of depression in which we are now, there is no reason why we should not again advance to prosperity. That is why I, personally, should be willing to adopt somewhat unortho- dox methods in order to stimulate our trade over this temporary depression. You cannot, of course, keep a nation on tonics for ever, but, when you are depressed, and when things are going to get better, you sometimes find a little tonic very useful. [HON. MEMBERS "Protection!"] I do not think Protection is a tonic, but I will not argue that question at the moment. I am sure the right hon. Gentleman, when all the indications are pointing out so obviously in what direction it is necessary to move, will not hesitate to put forward that stimulus to our export trade which is the one thing we require at the present time in order to get the wheels of industry turning once more. A change in the psychology of trade and the creation of a better feeling of confidence is necessary in order to get us out of our present Slough of Despond into a better state of things.


I am sure the thanks of the Committee will be given to the President of the Board of Trade for his very comprehensive review of the trade situation. I should like to reply to one or two points from the speech of the right hon. Gentleman opposite. One of the last items he mentioned was that of our tirade with India, which country takes the greatest amount of exports from us. I find that last year India took from us £90,500,000, 95 per cent. of which represented actual manufactured goods. This is a long way in excess of China with her £20,000,000, the United States with her £53,000,000, or Italy with her £17,500,000, and it is well to mark that these latter countries I have mentioned in return only took something like 40 to 43 per cent. of manufactured goods. India is taking a very large percentage of manufactured goods from us. There is a general feeling throughout the country that some definite information should be given to it as to whether what we are passing through is of a temporary or a permanent character. There seems to be an amazing uncertainty of opinion as to the position of our trade. It is evident in the mind of the ordinary elector, and it is also evident in the minds of some of those who are responsible for industry. For instance, I find so late as last week, at the railway centenary, in two speeches the suggestion was made that if we only waited for a short while the industrial clouds would roll away. The right hon. Gentleman who has just sat down 6aid something of the same kind. So late as last Monday the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) asked the same question of the Prime Minister—could not the Government state whether the present phase of trade is a passing one of a temporary character or whether we should look upon it as something of a permanent character.

In my own way I wish to lay before the Committee what I take to be a very serious view of the position of the trade of the country. I want to approach it from two aspects, first from the standpoint of a general survey and from the standpoint of the shipbuilding industry, which has been mentioned by the President of the Board of Trade, but not at any great length. I think we may apply certain tests which will not leave us in doubt as to the character of the trade of the country. The figures of unemployment are a test that all is not well. Unemployment is a local phenomenon. I admit that in other countries there may be a degree of unemployment, but nothing like the character and intensity of what we are experiencing. Unemployment is applicable largely to the main and staple industries of the country, and is the more acute for that reason. Another test is that of exports, figures of which have been given us by the President of the Board of Trade. Last year we exported in price values £100,000,000 less than we did in 1913, If you apply the test not only to the general trade of the country but to exports of a specific character, it leaves you without doubt. I have spent months in studying the Board of Trade Returns. In the iron and steel trade the volume of our exports is 77 per cent. of that of 1913, and of machinery 67 per cent. Cotton yarn tells the same story, and worsted yarn as well, and we have been told to-day that our coal exports have fallen some 18,500,000 tons within the last two years. So tested from the standpoint of exports, our trade is in a very serious position. If you compare it with other countries, it appears still more serious.

I was interested in a sentence that fell from the President of the Board of Trade in which he questioned the position of world trade. My own opinion is that the world trade has very nearly got back to what it was in 1913. All the exporting countries, excepting ourselves, have not only regained their original position, but are 12 per cent. in excess of their exports for 1913. It is an amazing revelation to find that France is 156 per cent. above pre-War, United States 104 per cent., and Argentine 117 per cent., while we are 24.6 per cent. behind what we were in 1913 in actual volume. We must see the urgency of it from the export point of view. The test of imports is equally important. No Member of the House or elector in the country can feel satisfied with the increased imports that we are receiving. The value of our foodstuffs last year reached the amazing figure of £555,000,000 —£101,000,000 in excess of 1923. I admit that the population on the land has somewhat stabilised during the last year or two, but you have 50 per cent. fewer people on the land to-day than you had half-a-century ago. You are cultivating 25 per cent. less arable land and producing 25 per cent. less than you did then. So you have this position, that you are increasingly importing your foodstuffs while you have an increasing depletion on the land, and you also have this fact, that you are increasing your imports of manufactured goods and you have a growing percentage of unemployment in our midst. [Interruption.] I have only been speaking for six or seven minutes, if the hon. Member will give me the same time as he generally takes himself I will put forward a solution from my own point of view. Another test I would ask the Committee to take is one which was raised by my hon. Friend the Member for Ilford (Sir F. Wise) last Monday. It is the question of our trade balances. It is a very serious thing that last year we were just on the verge of a favourable trade balance and making little reserve. Prior to the War we used to reserve something like 27.9 per cent. of our trade balance for investment at home and abroad. Last year it was down to something like 9.7 per cent.

I want to say something in substantiation of what I have said from the point of view of a specific trade or two. It is a great mistake simply to compare the present trade position with 1913. After very careful study extending over years, and having been interested in shipbuilding and shipping for many years, I think the correct thing is to make a comparison, not simply between recent years, but over a period of years, when this startling feature will be revealed. For many years prior to the War period—the War period has accentuated it—the trade position in the main staple industries was gradually declining. In the iron and steel trade we are to-day producing practically what we did in the late seventies. The President of the Board of Trade said something about the electrical industry. I admit that it is a growing industry, but it is significant that from 1922 to last year the import of electrical instruments had risen three-fold, which shows that whilst this young trade is expanding the imports are increasing in the case of this trades abnormally. This kind of thing has been operating in our midst during the past 30 years, and is the history of many of our lost trades. No one has taken the trouble to diagnose it until possibly an industry has fizzled out, and then someone says, "It has gone; let us put something in its place." I know hon. Members opposite say, "We pay for your imports by your exports. If one thing fails something else will be substituted." I believe that kind of theory is exploded and worn out. I belong to a shipbuilding constituency which has 53 berths and only seven ships building, and in a few months' time six ships will be imported into this country as manufactured goods from Germany. I ask myself and my constituency asks, "How are you going to pay and with what form of manufactured goods for these imported ships? We will have to alter our conception and our views of these things altogether.

6.0 P.M.

Let me come to the present state of shipbuilding. I am sure there is a misconception and a lack of information in connection with this great industry. Let me put it as plainly and palpably as I can. Thirty years ago we built 82 per cent. of the world's tonnage. We were the world's factory then for shipbuilding. Last year we built 50 per cent., in round figures. During the periods mentioned we have receded from being the chief shipbuilding centre of the world to a position of half and half. That is not all. This fact emerges over the past 30 years there has been an annual increase of world tonnage of some 50 per cent., the whole of this increase has gone to foreign countries, leaving the shipbuilding industry of this country as it was 30 years ago in point of output. I think the President of the Board of Trade made a remark in regard to shipbuilding this afternoon as to us getting a fair proportion of the world's trade, but the fact remains that at the peak period in 1913, when we built nearly 2,000,000 tone of shipping, the increased tonnage built in foreign shipyards was in excess of that which came our way. The result to-day is that instead of being the world's shipbuilding centre, foreign shipbuilders are competing now for the building of British-owned ships. The position has entirely changed from what it was, and, as I have already indicated, we shall soon have the spectacle of foreign-imported ships coming into this country.

Whilst we have remained stationary, foreign countries have increased from one and a-half times to six times their former output. Italy has now six times her output of 30 years ago, Germany four to five times, France five times, Denmark five times. So far as the shipbuilding industry of this country is concerned we can satisfy ourselves that never again shall we find ourselves in the position of the world's factory. In 1923 we only built 3 per cent. of ships for foreign owners. In my own town in 1923 we did not turn out a single vessel for foreign shipowners. That was increased last year, the increased tonnage being due to the fact that we had no longer the unfortunate boilermakers' dispute which occurred in 1923. Nevertheless the fact remains that at the present time we are only building 8 per cent. of ships for foreign owners.

I do not wish to appear unduly pessimistic in my outlook, but I think it is necessary that we should try to see the actual position of trade in this country. Take shipping, on which shipbuilding depends. A question was asked by the right hon. Gentleman opposite as to the position of the British shipping industry. The position in the British shipping industry is that we have gradually receded. It is true that we own the biggest amount of shipping in the world, but compared with 1914 we have receded from this position of eminence then, when we owned 44½ per cent. of the world's shipping—which was less than we had owned previously—now 33 per cent. of the tonnage of the world. It is a surprising fact that there has been added since that period 15,000,000 tons to the world's shipping. I admit that in that 15,000,000 tons, there are 10,000,000 tons built by the United States of America, but after making allowance for that, we find that while other nations have been adding greatly to their mercantile marine, the British shipping industry has only added some 40,000 tons. Even Greece has added more to her shipping than we have; Germany has rebuilt Her mercantile marine, practically. Japan has added over 2,000,000 tons, France 2¼ million tons, while we stand almost stationary with only an addition of 40,000 tons. From that point of view, the position of the British shipbuilding industry is very serious.

No doubt there are many hon. Members who wish to take part in the Debate, for certainly there is much that can be said. One hon. Member asked me what we propose by way of cure. As I see the problem, it appears to me in two aspects. First the restoration of the stable industries of the country—that is the first thing that is required—and the second is the preservation of the secondary or subsidiary industries. I want to be perfectly fair. This question should be raised infinitely higher than that of party politics. This trade depression has been with us for five years, and during that period every one of the parties represented in this House has had a turn at trying to remedy the position. I admit that the supporters of the late Government had not a very long period in office. If what I have said represents the true aspect of industry, and I were to ask hon. Members opposite how they would deal with it, they would advocate nationalisation.


Private enterprise is finished.


We are in a difficulty as a nation, and the suggestion of hon. Members opposite is that we should take the industries of this country and hand them over from one set of men, who have had generations of experience behind them, and say to another set of men, "Here you are. Takes over these industries and nationalise them.'' That would mean instead of having the great industries we have to-day, such as Brunner, Mond and Company, Beardmore's and the rest, we should have over every industry in the country the name of James Ramsay MacDonald Unlimited—

The DEPUTY-CHAIRMAN (Captain FitzRoy)

I do not think this argument is in order on this Vote. The hon. Member's suggestions would need legislation.


I had not intended going so far. Surely something might be said on the method of restoring industry. I think I am in order in saying that hon. Members opposite suggest a certain method. Another method has been suggested from hon. Members opposite below the Gangway which summarised means the subsidising of industry.


That, again, would need legislation. Any of these suggestions would be out of order on this Vote.


We say that industry is divided into two sections. Those industries which are suffering in a sense from foreign competition, but not in the form of foreign imports in the same way as other industries are. We have in this respect the coal industry and the shipbuilding industry. Up to a point they are not suffering from foreign competition in imports, and yet they are suffering in world competition with other countries. The coal trade is in competition with other countries, and one of the reasons of its present disability is, that it is not able to compete. We say that the only way to overcome that difficulty is by efficient production and increased output. I do not care whether you apply the word efficiency to the equipment of industry, or to the production from the workers' standpoint. I can deal very definitely with that aspect in the shipbuilding industry. Wherever a yard is not efficiently equipped, and therefore is not efficient in meeting competition with other countries, it is up to the owners of the yards to bring the equipment up to the efficiency point. At the same time, it is fair to say that from the point of view of labour, we have to take into very serious consideration that so far as the shipbuilding industry is concerned, there are 32 trade unions operating. I am not arguing whether that is good or bad, but the fact remains that there are 32 trade unions in that industry with their limitations, their demarcations, and all that results therefrom.

It is time that those interested got together to see whether adverse elements cannot be eliminated so that we can maintain our position in the world's industry. Surely that is a reasonable thing to suggest, and surely it is a policy which we could follow. There are other industries that are very hardly hit by foreign competition. I would support the Prime Minister right up to the hilt in saying that where an industry can be proved to be suffering from undue foreign competition that industry should be safeguarded by every means. All the information and all the statistics go to prove that we are more and more depending upon our Empire, our Dominions for the development of our industries. If it had not been for the Dominions last year we should have been hopelessly down in oar exports of manufactured goods. The exports to the Dominions alone saved the situation. In trying to define a general policy for the restoration of our industries, we may say that the Conservative policy of efficiency and of safeguarding industry and the cultivation. of all the needs and requirements of the Dominions is the only policy that will help us to any extent. The Prime Minister a week ago asked for suggestions on the question of subsidies. Personally I disagree with, or rather I dislike the idea of, subsidies. They could only be of value where it could be proved that an industry could be made more efficient through a subsidy being given to it. I think that the same would apply to the shipbuilding industry as well. I thank the Committee for hearing me so patiently while I have been giving my views, at some length, I fear, on this great question.


The hon. Member who has just sat down certainly gave us a very lugubrious picture of the industry with which he is so familiar. I do not propose to follow the percentages which he gave, because it is extremely difficult to take them in merely by hearing them, and I confess that I have a, rooted distrust of statistics which are expressed in percentages. Figures of percentage increase do not, I think, tell us much. With regard to certain places the statistics of shipbuilding might show an increase of 100 per cent., which would simply mean that where they had built one ship they now build two ships. I hope, therefore, that the hon. Member for Sunderland (Mr. L. Thompson) will not mind if I pass by his percentages, because, although they may be important, it is difficult to reason from them without fuller study.

What I would say in answer to him is that his speech and other speeches remind me of those which we used to hear about 22 years ago from the late Mr. Joseph Chamberlain. We remember Mr. Chamberlain telling us then that shipping was going and shipbuilding was going and other trades had gone, and, as we know, that period of slump and decline, which was very bad, was followed in a very few years by a. great expansion of trade until, I suppose, in 1913–14 we reached a record which had never been reached before. I am speaking generally, and as to many particular departments also. We cannot assume, merely because a previous depression has been succeeded after a few years by a very great boom, that that is going to happen again, but at the same time, at any rate, we should not be too much impressed by the gloom of the present time or by the statistics which can be quoted of the progress of other nations, because we have lived through such things before.

If I may remind the hon. Member about the shipbuilding industry, in which he is particularly interested and as to which he has exceptional means of knowledge, it has always been in a state of alternate boom and depression, a period of terrific shipbuilding in which all the shipping yards have been filled has been followed by a terrific slump in which Jarrow was ruined, and other ports have been practically starving, with grass growing in the streets, and in a few years more shipbuilding has risen there again. You can quote from the years of slump in the past up to 1913–14 to show that we were increasing up to then, but you will also find that shipbuilding has gone in waves representing periods of a few years, and I am sure that what I am saying is well known to the hon. Member.


My argument was this, that over a period of 30 years we have not been maintaining our position. In 1913 we had reached a peak, namely, 2,000,000 tons, and the fact is that foreign countries have increased their ratio until to-day we are producing practically only the same tonnage as we did 30 years ago. Meanwhile, the other countries have produced practically the whole of the increased world tonnage.


The hon. Member is pursuing another point. I am only speaking for the moment about the absolute amount of shipbuilding which was being carried on in the different ports of the United Kingdom, and I say that merely because we did a great deal of shipbuilding in 1913–14 and to-day are doing very little, we must not assume that that is a unique position. It has happened before, and I am not without hope that we may in a comparatively few years see a recurrence of the prosperity of 1913–14. One of the most interesting things in the speech of the President of the Board of Trade was that he expressed his belief that the present state of slump in employment was only temporary. Naturally, he could not prophesy how soon the improvement would come, but ho was not prepared to believe that the collapse was necessarily permanent or durable, and he regarded it as temporary only. I was very glad to hear him say that because, for what it is worth, that is my own opinion, and I am not at all inclined to admit merely because things are bad, in so far as they are bad, that that is necessarily a condition which has become chronic.

I rejoiced to hear the right hon. Gentleman say confidently that this country was interested in the restoration of the prosperity of other countries. I congratulate him on saying that, because although it is obvious that this country cannot be prosperous unless other countries are prosperous also, yet there has been so very much flirtation with the idea that the restoration of other countries was going to be disastrous to this country, that it would be a calamity if Germany became prosperous again in the way in which she was prosperous 15 years ago, that I am glad to think that the President of the Board of Trade has pinned himself definitely to the view that this country stands to gain, as I understand him, by the restoration of the prosperity of other countries. If other countries become prosperous they will compete with us, as they competed before, but that is not a drawback to our prosperity. We benefit by their competition. All benefit by having this general prosperity. We do not gain by the loss of other people. Trade and business is not a question of profiting by other people's losses. It is a question of mutual gain. There is an old Jewish maxim that no bargain is a good bargain unless it pays both parties, and no trade is advantageous unless it pays both parties to the transaction.

I shall not attempt to make a general survey of British trade but I will refer to one thing which was said by the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) which I think the President of the Board of Trade also said. He said that we might do a great deal more with our Crown Colonies. May I point out, as has been said by the hon. Member who has just sat down, that India has always been the best customer of this country, and there is no reason why India should not continue to be the best customer of this country. But I may mention particularly the very remarkable advance which has been made by the Gold Coast Colony and Nigeria. Twenty-five years ago the Gold Coast Colony produced very little and exported very little. It exported hardly any rubber and no cocoa at all. Since that; time the Gold Coast Colony has become by far the greatest producer of cocoa in the world and consequently has become a very large importer of British produce in return.

That may seem a small thing. The Gold Coast is a mere spot on the map, though it is a fairly big territory, and cocoa is one of those products at which many people are apt to sneer, but the development of the Gold Coast is of special interest as being purely a native development. It is not a capitalistic exploitation. The native production of cocoa has meant the opening of new markets of a very remarkable character for British goods. Something of the same kind might be said of Nigeria and the same sort of thing might be said about many of the Crown Colonies. We are apt to forget that it is not only the Dominions of Canada and Australia that are such remarkable buyers of our goods. India is one of those buyers and our Crown Colonies are also.

I am not going any further in that direction but necessarily it is a drawback, I think, to the speech of the President of the Board of Trade, a drawback which he could not avoid, that it was almost entirely concerned with overseas trade. The reason is obvious. We have statistics about imports and exports, and we have comparatively few statistics about home production. But we are always apt to forget that overseas trade, export trade, was never put at more than about 30 per cent. of our production. The President of the Board of Trade suggested, I think probably quite correctly, that our exports were a considerably smaller percentage of our total production than formerly has been supposed. Take them by way of guess at 25 per cent. Nothing turns on the figure, but it means that as much as three-quarters of our production is production for home consumption, and yet practically all our discussion this afternoon, so far, has turned on the amount of our overseas trade.

Just because the coal export trade is bad, or because the export of steel has fallen, we, must not straight away assume that that is at all typical of our total trade and our total production. The right hon. Gentleman gave some interesting statistics in reference to our imports of raw material which, as he says, are a very good index to our production, because the stocks of raw material are not supposed to differ very much in the aggregate from year to year in quantities. I think that he said that they were 97.7 as compared with 100 in 1913–14, which was a year of booming trade, almost a record year in this country, and yet we are using within 2½ per cent. as much raw material as we were using in that year. That seems to indicate that our production in the aggregate cannot be quite so small, cannot have fallen off quite so much as we are led to think by considering merely the export trade. Confirmatory of that is the fact that we are making to-day as much steel as in 1913–14. I forget exactly what it is. It is within a little more or less, but we are making practically as much as in 1913–14.

Of course a very serious situation is that the steel capacity of the world, not only of this country, but of all the other countries, the United States, France, Germany, Belgium, has enormously increased—it was forced up during the War—and the world's capacity for making steel is now perhaps twice as much as the world's consumption of steel. The consumption may increase, but it will increase rather slowly, and, consequently, half the steel furnaces of the world have to go out of use. Of course, the situation is aggravated by technical improvements. It is not instructive to compare our production of steel with our capacity for steel production. We forced up the capacity for production during the War, and other countries did the same. There is within view no way by which the steel productive capacity can be utilised, and I can see no alternative to steel furnaces remaining out of use. We are apparently producing as much steel as we did, and we could go on increasing. It may be a question of a struggle as to which of four or five countries will have the greatest percentage of steel furnaces out of use. I am sure that the Board of Trade is looking after that, so far as the British steel manufacturers will allow. But I do not think that our manufacturers have yet been very much inclined to enter into any international arrangement for sharing production. That point is worth considering.

When we are talking about the state of the export trade let us remember, first of all, what I have said, that the export trade is only about one-quarter of our production, and that our aggregate production is not very far short, if at all, of what it was in 1913–14. Then, if you take the other remarkable figure in which the Chancellor of the Exchequer is Interested, the yield of a penny on the Income Tax under Schedule D, you find that, instead of there being no profit or little profit or a declining profit from business, on the contrary there is, I do not say for a particular year, but on the whole, a remarkable increase in the aggregate profit made and in the salaries paid in industry and in the return from business. That is quite inconsistent with the state of things in the export trade. Of course there are other things to be borne in mind. Take the "Economist" newspaper, which publishes every half year the returns of about 400 joint stock companies—all the returns that it can get. Those figures do not show that there has been no profit made in industry. On the contrary, they show a regular and steady rise for the last four years in the dividend which is paid on the shares of those companies.

On that point I want to make a suggestion to account for the outcry of which we hear so much, as to there being no profit or little profit or even losses. There has possibly been a steady increase in the amount of prior charges in the accounts—on debentures or 10-year notes, and that kind of thing—before you come to the dividend on the ordinary shares. Of course, all those have to be included as part of the return from industry and as part of the profit. I notice that a great firm say that they made a loss of over £500,000 last year, but when you look into it you find that what they meant was that they had not been able to set aside the necessary amount for depreciation and reserve, and to pay interest on debentures and on temporary notes, by £500,000. But from the Chancellor of the Exchequer's point of view they had made a very large profit, though not quite as much as they had hoped, and it was bad for the ordinary shareholder. I suggest that that relative growth of prior charges accounts for the fact that the ordinary shareholder is discontented, although the company is yielding very considerable profit indeed.

There is enormous variety in the profitableness of different businesses in the same industry. Take the coal industry. In the aggregate we are told it is making no profit at all. The colliery companies' figures seem to indicate that they are making no profit—in the aggregate. As a matter of fact, we all know various collieries, belonging to companies the figures of which are published, which are making a very considerable profit indeed, possibly because their management is more efficient, more likely because their plant is more up to date, and most likely because they have been working better seams you may say that the coal industry is not making a great profit, but that is consistent with very large profits indeed being made by particular companies and particular businesses. That is true also of firms in the engineering industry. Some of them are doing very well indeed, and making considerable profits and paying big dividends. Nevertheless, engineering, generally, is depressed. I do not know whether there are shipbuilding firms which are making profit. They are not anxious to tell us, but I think there are such firms.

I now come to another point. What are you going to do to help by way of subsidy? Are you going to subsidise the firm which is making a profit already, or only subsidise the firm which is not making a profit? The subsidy comes out of the taxpayer's pocket. Will the firm that is doing very well be grateful to be asked, in a satisfactory year, to provide the necessary sums to subsidise a competitor who, possibly because of ill-luck or some other cause, is doing badly? That is the difficulty with subsidies. I am not prejudiced so much against subsidies as against import duties. Subsidies have not a tendency generally to raise prices. They may possibly have a tendency to lower prices, and that is one reason why they are recommended.


They raise taxation.


Of course, the subsidy has to be paid for, and the taxpayers have to pay. Therefore, I am not in favour of the subsidy. But, at any rate, the taxation to pay for a subsidy would fall upon the community more or less in proportion to the individual's ability to pay, whereas if you—


I think the right hon. Gentleman had better not pursue that line of argument. It lends itself to development, and it would be quite out of order on this Vote.


Of course, I bow to that ruling, though subsidies could be given, I suppose, from these Estimates. The point is that help to industry by way of bounty or subsidy is different from a, protective tariff. Let me pass from that and say a word about the statement which has been made as to the lower standard of living and the lower cost of living in some other countries. Of course, that remark does not apply to all other countries. France and Belgium and Italy, it is sug- gested, have an advantage in the exchange and a lower standard of living. That is something we have heard before. Thirty, twenty, and ten years ago I used to hear it. The contention is that it is impossible for the British manufacturer to pay high British wages in competition with manufacturers in other countries. That is not a new complaint. I do not think it is relevant to the present state of things, unless it can be shown that the gap is wider than it is to-day. I am not sure that the gap is any wider. Possibly it is not quite as wide as it used to be. Whether that be so or not, we have had no evidence that there is a British manufacturer who is suffering more from the competition of lower paid labour on the Continent than he was twenty or thirty years ago. A great employer three-quarters of a century ago stated in this House that he employed labour all over the Continent and paid all sorts of rates of wages, but the British navvy, with his high wages, was actually cheaper than the low paid labour that was obtainable elsewhere.

It is not the low rate of wages of which the manufacturer need be afraid, but the cost of labour according to its efficiency. Our mast serious competitors have not been the low-paid workers of India and China and Japan, but the relatively highly-paid workers of New England and the United States generally. This theory as to the low wages and low standard of living in other countries being a serious matter in the competition is unwarranted. The right hon. Member for Carmarthen (Sir A. Mond) stated that you cannot maintain for long a high standard of efficiency of labour at a low standard of living. As to the hours of labour, do you really believe that it is more profitable for industry to have labour working 55 hours than to have it working 48 hours a week? If so, you are flying in the face of all investigations and experiments. It is more profitable to have your labour highly efficient, working for relatively short hours, than to attempt to make production cheaper by working longer hours at a lower standard of living.

We have heard a lot of the balance of trade and the very serious depletion of our former credit balance in our overseas trade. I share the views of the right hon. Member for Carmarthen as to invisible exports. Undoubtedly it is true that this credit balance on overseas trade has tended to run off. I am not going to dispute that possibly this year it may amount to nothing. The margin of error is pretty considerable, but undoubtedly the credit balance has been greatly reduced. It has been suggested that it is very serious, because we are not saving and all the rest of it. That is nonsense. What the balance of overseas trade concerns is another very important matter, and that is how much this country can send overseas in one form or another. You cannot send to-day much overseas, but that has nothing to do with the amount that we can save in this country. The amount of our savings overseas is a comparatively small proportion of the aggregate savings of this country. The amount of our investments overseas at all times is a comparatively small fraction of the amount of our investments in this country. It does not follow, merely because the credit balance of our overseas budget is reduced to nothing, that our saving is reduced to nothing. The President of the Board of Trade told us that there was evidence that this country was saving in a satisfactory way. In war savings certificates, through savings banks, and in other ways, this country is saving steadily and the surplus of production over consumption in the aggregate, though not as much as it has been, is still very substantial. Our overseas trade balance and our investments overseas, after all, have no relation at all to our saving in this country. However, these are all general considerations, and I do not know whether this is an occasion for any further study of such general considerations.

I come to the point of what the right hon. Gentleman can do for trade. As he will realise, I do not imagine that the Board of Trade can change bad trade into good or enormously increase the productive capacity of the people of this country. We have heard of some things which the President of the Board of Trade is supposed to be able to do, but I am afraid those who have suggested that he could do these things are wrong. The Board of Trade is no longer the great department which it used to be, governing railways, transport and electricity and all sorts of things. The President of the Board of Trade has no longer those opportunities and he can do very little. But there is one thing about this I wish to ask him. One of our big industries is the textile industry, and one of the things which is affecting the textile industry is the cost of dyes. The right hon. Gentleman is more familiar than I am with the fact that it was a matter of great concern to the Government when we found at the time of the War that Germany was making all the dyes. Quite rightly, the then Government decided to make a great effort and to spend a considerable amount of money in the production of dyes in this country. That has been a success, so far as the dyes are concerned, and I believe we do now make 80 per cent. of our dyes in this country, which is a good thing, but there is a drawback in that they are very dear. The textile people tell me that, roughly speaking, they are satisfied with the dyes, but they have to pay three times the price at which they could get them from Germany. To a very considerable extent these dyes are being supplied by Germany to the textile factories of China at prices apparently very much below the prices at which our concerns are able to get their dyes—at least that is what has been said.

I hope the right hon. Gentleman will tell the Committee something about the British Dyestuffs Corporation in which the Government have invested £l,V50,000. We wanted to secure a really efficient general manager or managing director, and I am glad to see that such a gentleman has been found in the person of a very able and experienced practical chemist, and I have no doubt it was the best appointment that could be made We have also to consider the matter from the point of view of capital reconstruction and writing down, and I want the right hon. Gentleman to tell the Committee and the textile trade what progress has been made in that direction; what progress has been made in the direction of making dyes not merely for the use of the trade here, but for those elsewhere who are now getting them from Germany, and what- hope he can hold out that our textile firms will be able to get them at a cheaper rate than hitherto. It is not an easy thing to do, and I do not grumble at what has happened. When I had to deal with this question I found that things moved slowly, but I confess to a little disappointment that in nine months the Government have not got on faster in this respect. I congratulate the right hon. Gentleman on a very important speech. I congratulate him also on his optimism, which, I hope, I share. I believe this country is not played out. I believe our producing industries are not doing so badly as it would seem. They are, at any rate, making very good Income Tax returns which would seem very altruistic of them if they are doing so badly. [HON. MEMBERS: "The three years' average!"] Yes, the three years' average has by this time worked off the effect of one particularly bad year, I think we ought not to over-rate the effect on our total trade of the slump in the export trade. That is bad enough and is exceedingly serious for the coal industry and the shipbuilding industry, but, in all these things, it is necessary to have regard to the whole and not to be unduly influenced by what is happening in one direction. I believe that as other nations are restored to prosperity this present depression will pass away as other depressions have passed away before and that there will be a restoration of British industry.


There is a great contrast between the appearance and the temper of this assembly now as compared with last week when we were debating unemployment, and as I listened to my right hon. Friend the Member for Sea-ham (Mr. S. Webb) delivering an optimistic and cheerful speech, full of brilliant colours, describing the condition of British trade at present and its prospects in the future, I found it difficult to believe that there are 1,250,000 unemployed. My right hon. Friend is so accurate that I feel that I must have misunderstood what he said. I cannot believe for a moment that he imagines that British trade is prosperous. The only thing from which my right hon. Friend appears to derive comfort from is the fact that the Income Tax Returns are higher than he anticipated. That is one of the anomalies of statistics into which I do not propose to enter. We have had a Debate on statistics this afternoon, and I fear if we had to depend solely on figures, even accurate official figures, it would be impossible to get a correct view of the condi- tion of British industry and commerce. The Department over which my right hon. Friend (Sir P. Cunliffe-Lister) presides is one of the best staffed of all the Government Departments, and it is certainly stronger on its statistical side than it used to be in former days, but even the figures produced by that Department may mislead us if we take them in their cold appearance just as they stand, without an intimate knowledge of trade as we find it each in our own district and in our own industry and without a knowledge of the human element which is the most important thing in the conduct of our affairs.

The speech of the President of the Board of Trade centred on one point, namely, that when our trade balance was finally assessed, there appeared to be a smaller amount available for investment abroad than in any previous year during a long period. I do not distrust the figures of our invisible exports as much as the right hon. Gentleman the Member for Carmarthen (Sir A. Mond). They come as near a correct estimate as you can reach, but the fact remains that the amount of capital available for export abroad appears to be less in the last 18 months than it has been at any period since the War, and, if we are to trust the statistics as they are published and compare them with those of previous years, and make full allowance for the alterations in values, we appear at the present time to be in almost the same trade position as that in which we were in 1910. The year 1910 was a bad year. Trade was passing through what we should now call a slight depression, but we must go back to that year to find anything comparable with the figures of 1924. It appears to me- that as a result of the War we are just about 15 years behind the rats of progress which we might otherwise have attained. Indeed, I am not at all sure that 15 years is not too low an estimate of the loss we have sustained through the Great War. It was impossible for us to come from that war, even as victors, and not to find ourselves very much poorer, and the real truth is that the whole world is poorer because of the War. The total loss of the world's wealth cannot be accurately assessed, but there is no doubt all classes of the community are poorer than they were before the War, and this is true not only of the belligerent countries, both the victors and the defeated, but is equally true of the neutral countries.

I had the pleasure recently of seeing three Scandinavian countries, Denmark, Sweden and Norway, and it is a remarkable fact that in those three countries each of which, during the War, was in a most prosperous condition, able to draw into themselves immense profits far beyond their previous imaginations, you will find a depression which is almost exactly like our own and in some respects exactly the same. In shipping they are passing through a period of great depression. That is natural, because the shipping trade is not confined to any one country, but is a world-wide connection, but there are tiers of ships laid up in the Norwegian, Swedish and Danish ports just as in this country. Shipowners are bemoaning the fact that having got their vessels to the southern hemisphere they cannot bring them back even at a loss. They find that the export trade of all countries in the world in the heavy bulky materials which form the main portion of their cargoes is down to such a low level that there appears to be far more tonnage than there are cargoes to carry. They have in the shipping world exactly the same misfortunes as we have. They had the advantage of large accumulated reserves, even though these had been depleted by heavy taxation. Still they had those resources on which to fall back, but those resources are nearly exhausted.

When you turn to the iron trade you find exactly the same conditions obtaining there. The iron trade is depressed there just as it is here. They are nearer to their iron mines just as we are nearer to our great coal mines; they have great advantages in the way of cheap electric power just as we have the great advantage of cheap steam power, but yet their iron trade is passing through exactly the same kind of depression as our own. They cannot find buyers for their iron products abroad. The parallel to our coal export trade in Norway and Sweden is their timber export trade, and they are finding there again just the same trouble. Markets abroad are depleted, they cannot find as many buyers for timber as they did last year, and there is no doubt that a great many of the forests will end up the season with losses instead of profits. The iron ore mines are finding their output down, and some workings have been closed just as some of our older coal pits at home have been closed. The only explanation that can be offered is that these three Scandinavian countries, being exporting countries like our own, are dependent upon the poverty of Europe for their depression, and there is nothing but the restoration of Europe to prosperity which will reflect itself itself in the trade of those countries. Keen observers in Scandinavia tell one over and over again that there can be no return of their trade prosperity until Central Europe recovers. They say frankly that until Germany becomes a large buyer it will be impossible for them to have any return of the old markets which they enjoyed two years before the War. If the condition of those countries is almost identical with our own conditions, it is due to the same causes, and it can only recover by the same means.

7.0 P.M.

One thing quite apparent is that here at home we have awakened to the necessities of the case, and not even the optimistic speech of my right hon. Friend who has just sat down will dull us to the activity with which business men and leaders of labour have been devoting themselves to a solution of our industrial problems. It is a mistake to imagine that these matters are only to be solved either by departmental action or by greater commercial skill and activity on the part of those who are at the heads of industries. In the industries where competition is most acute, and where we find it most difficult to hold our own, all classes engaged in those industries have been devoting their brains to a solution of their problems. I can certainly speak with authority of the shipping industry, and there is no doubt of the fact that engineers, shipwrights, and all those who are engaged in the scientific side of shipbuilding as well as the managers, have been putting their heads together; and, were it not for the fact that they have been co-operating with great generosity in all departments, it would have been impossible for us to have shown, the output which was mentioned by my hon. Friend the Member for Sunderland (Mr. L. Thompson) about half an hour ago. We could not have held our own but for the co-operative efforts of all those who are concerned in these trades.

The truth is that, although the Income Tax returns may have gone up—and I dare say that is largely due to the fact that an immense amount of apparent wealth is now to be found in Government securities—Income Tax is paid largely by interest-earners, and not by those who have most actively engaged in commerce. That is perfectly true. There has been a great shifting of wealth, and now there is much more of the taxable income of the country in the hands of men who are drawing interest on investments which they have made, and not upon profits which they have earned in business. That is a great loss to the country. It is one of the things that we have greatly to deplore that there is not a greater proportion drawn from the industries which employ labour and use raw material, and so add to the material wealth of the world.

The impression that one draws from these general surveys is that on the whole the misfortunes of British trade at the present moment are to be found mainly in the three great heavy departments of iron and steel, shipping and shipbuilding, and coal. I know it is out of order to discuss the coal question on this Vote, but I believe I shall be within any strict ruling on the Board of Trade Vote if I discuss the carriage of coal, which comes naturally within the purview of the Marine Department of the Board of Trade. The carriage of coal is absolutely essential to the prosperity of British shipping. The carriage of a great bulk commodity like coal enables us to send our vessels away in large numbers from our ports to pick up the cargoes of the world, and bring them back to the Northern Hemisphere, or from North America to Europe and to our own country. If the export of coal goes down, there is bound to be idleness in our shipyards, and especially among the tramp-shipping which is the predominant part of the shipping of the world, and the drop in the export of coal is one of the things which undoubtedly gives us the greatest cause for anxiety.

How is that export of coal to be increased in the future? One cheerful fact I learned during the time that I was recently abroad was this. Although electrical power in Norway and Sweden is cutting out a great deal of the demand for coal—many of the railways in Norway and Sweden are now drawn by electric locomotives.—the elec- tricity being obtained by water-power, there still remains a good market for English and Welsh coal, which is the best in the world. I was in Stockholm at about the time when a considerable amount of British coal was sold for consumption in Danzig, Stettin and Hamburg, in competition with German coal which had been lying on the dump heaps for the last six or eight months. It was a sale of coal which will have to be mined, and which will give employment to the miners, I hope, in my right hon. Friend's constituency. It will certainly give some employment to the ships which will have to carry it overseas. The reason it is possible to sell British coal in these three ex-German ports, and sell it with a profit, is that it is more reliable than the German coal, and that those who sell it do so on such an honest basis that the German knows what he is buying. He is not so sure of the coal which he buys from his own dump heap. [AN HON. MEMBER: He is a good deal luckier than we are here in London anyhow.] There my hon. Friend is getting into the region of the retailer and not of the wholesaler. It will be a very long time before German coal is burnt in my hon. Friend's kitchen.

You find the coal trade and shipping bound inextricably together. I would make one reflection which may or may not be distasteful to my hon. Friends above the Gangway, and it is that I believe one of the reasons why one of the markets in Scandinavia is being lost to us, is due to the extension of electrical power, is that power is one of the first results of the old coal control. It is due to the great folly of those who controlled the export of coal demanding from the foreign purchasers the highest price they could get out of them at a time of war. No sensible merchant would have thought of doing that. He would have nursed his customers, and taken good care not to demand too much from them.


We are pleased to hear you say that.


I am glad to find that the hon. Gentleman confirms that. I want to draw a lesson from it, not that you should never be extortionate, but that immediately you eliminate that human element where men get into the habit of dealing one with another, by give and take, and you insist that the rules of a Government Department shall be carried out rigidly so that they will pass muster before the Public Accounts Committee upstairs, you destroy trade and you do not make it. If there had not been those heavy demands for rack prices in coal, in 1917, 1918, and 1919 the Scandinavians would not have been driven into their enormous capital expenditure for the production of electricity. They find now that they spent far too heavily on capital account then but, it is done and the power is harnessed. Those markets are lost to us, and I do not see how they are to be regained. There is little doubt that a revival in the coal trade would be one of the means by which the wheels of industry could be set going again all over the worold.

This applies also to the iron trade. It is all very well to go back to pre-War figures and quote statistics to show that before the War we were producing very little more than we are producing now. The truth is that what is being produced at the present moment is not being produced at a profit, and the iron companies are having to keep their plant going because they would lose more if they brought it to a standstill. The iron companies have been suffering under a very severe financial strain. They cannot look to the State to regain for them the prosperity which they have lost. I do not know what was passing through the mind of my right hon. Friend the President of the Board of Trade when he was referring to the iron and steel trade. He carefully concealed his thoughts, if I may say so. If he was thinking that a tariff on imported iron and steel was likely to be a permanent benefit to the country, I hope he will pause and devote some of his very wide knowledge and intelligence to the interests of consumers of steel. He may help the iron and steel trade, while at the same time placing a very heavy burden upon the shipbuilding trade and upon all the scores and scores of trades who are users of iron and steel in this country. Any idea of subsidising the iron and steel trade is also completely out of the question.

There appears to be very little doubt of the fact that the iron and steel trade throughout the world is depressed. It may be as my right hon. Friend the Member for Sea-ham (Mr. Webb) has said that our plants are greater than the re- quirements of the world. I do not know what can be the requirements of the world, but a much more active trade throughout the world would certainly react on the demand for steel as well as on coal. Steel is one of the things the world will require when it really becomes active again, when its railways are being extended, when its bridges are being built, its factories put up, and even its dwellings increased in number. The losses which are now made in the iron trade can only be cured by an increase in number of the buyers. My right hon. Friend the President of the Board of Trade says "Let us for this purpose look within our own Empire; there we are likely to have a larger and healthier demand." I quite agree with him that there are many parts of our Empire capable of rapid and almost unlimited development. Particularly is that true of our Crown Colonies where the natural wealth of the world is largely unharvested. Much may be done by the administrators of the Crown Colonies and those who manage the iron trade who find it very difficult at present to find markets for their exports may well cater for buyers abroad by finding out what the buyers require, and what they are most ready to buy.

Let me turn for a short time to the various lines of advice or recommendation made by the right hon. Gentleman, who said, "Buy British goods." Well, of course that is all to the good, but I doubt very much whether it will provide us with a cure for our industrial depression or stagnation if we are to buy British goods at a higher price than we can get similar goods abroad. To buy at higher prices would mean that the surplus available for the purchase of something else would be reduced. By all means let us buy British goods if we can get them at an equal price. I heartily agree with him about the development of new markets within the Empire provided those markets are developed by the extension of their natural wealth. When he comes to proposing, as I gather he did in rather indefinite terms, that the steel industry should enter into international arrangements, I am inclined to opposition. International arrangements in any one great trade like the steel trade simply mean a worldwide trust which would exploit all other trades of the world. Trusts are to be deprecated and not to be encouraged.

He obviously was giving advice, not only to this House and the country, but also to his own Government, when he said that we should all work for the stable conditions which are absolutely essential for our well-being. I disagree with some of my right hon. Friend's (Sir A. Mond) remarks when he suspects that the return to the gold standard has something to do with our trade depression. I believe the return to the gold standard is one step towards stable conditions without which we cannot expect to find new markets for our goods. If we have to enter into contracts for some time ahead the one thing that we want to eliminate is exchange risks. This enables those of us who have to produce or carry commodities to work on much finer margins. We have not to take a large margin to cover the risk. The return to the gold standard has reduced the uncertainty, and has helped the return of more stable conditions.

There is only one more remark I wish to make in concluding this short expression of opinion on the world's industry and commerce, and it is this. It is a mistake for us to imagine that you can restore the trade of this country or the British Empire to exactly the shape and form that it born before the War. Markets have changed, and some have disappeared. We have new competitors. There is no doubt that in merchant shipping the United States has come into competition with us and is not likely to pass away. She may break up some of the Government-owned 750 ships she has, for a great many of them are not fit for trade and may be turned into scrap iron. Still, when all that has been said, she remains and will remain one of the great competitors of the British mercantile marine. Here we have a new condition, absolutely unforeseen, which we could not possibly have prophesied even two years after the War had broken out.

The great change in the Russian Empire also has meant a great development and re-arrangement of our trade routes. As many of my North country friends in particular will know, when our vessels of the British Mercantile Marine carried coals away from this country, in enormous numbers they carried them to the Mediterranean ports at very cheap freights, and they were able to do so because they could get grain freights and timber freights and other freights home from the Black Sea. Now all the Black Sea markets have disappeared, and there is the carriage of practically nothing of any great moment from the ports of Odessa, Nikolaiev, Novorossisk, and Sebastopol. That means that the coal trade of the Italian, French, and Spanish ports is proportionately higher. That is one of the reasons why we have lost the command of some of these markets for coal. These things are so interknit that nothing but the recovery of the Russian trade in the Black Sea is likely to reduce the coal freights from this country to the Mediterranean. It is, therefore, in our interest that Russia should once more become a great producer as well as a great buyer, and, whatever may be the political opinions of those who form the Government of Russia, I say that it would be of the greatest benefit to this country if my right hon. Friend could, during his tenure of office, restore some of the old trade activity which distinguished Russian and English merchants and shipowners during the past generation. That, we may hope, will take place.

There have been great developments here at home, and just as it is necessary for those who control trade to have fluid minds, ready to take advantage of whatever openings they see in any part of the world, it is also necessary that there should be to some extent fluidity of labour. I think the rigid cutting up of labour into watertight compartments, so firmly fixed that there is no overstepping the boundaries, puts labour and the country as a whole under a considerable disability. I know that this matter is receiving the attention of many of those interested in the organisation of labour, and I am sure they will agree with me that, if labour could be made more fluid, without injuring the conditions of labour, without reducing the remuneration which it receives, or without lowering its standard of life, it would do much towards aiding the renewal of British trade prosperity. But when all is said and done, the only thing likely to bring recovery to the world as a whole, and likely to give a new start to the impulses without which there can be no renewal of prosperity or extended trade, is that Nature herself should give more freely of her bounty. Great harvests all over the world would do more to add to the world's wealth than all sorts of Government contrivances. I know the Board of Trade will do what they can to help British trade, but when all is said and done, it can do mighty little. The one thing that really can help us will be abundant harvests in Australia, in New Zealand, in South America and North America, and Europe. It is because I believe that that is the only means by which we shall regain our commercial and industrial prosperity that I say, without the least hesitation or qualification, that I would rather trust in God than in the Board of Trade.


Following the last speaker, who said that a good harvest is probably the most useful thing for the recovery of the world's trade, I would refer to a country which has had somewhat bad harvests and is now promised a good one, and in referring to that country I hope I shall have the sympathy of my hon. Friends above the Gangway, because it formerly was part of the Empire of Russia. I refer to Poland. Poland is a country which at the present moment has but little unemployment. I had the honour of visiting that country, in company with seven other Members of this House during the past month, and, therefore, as a contribution to this present Debate, I propose to say one or two things about Poland. It is interesting to us, in this country, to produce as much as we can produce, and exchange it against other commodities in the countries where we can exchange it. Undoubtedly, we shall endeavour to exchange the greatest possible volume of our goods with our own cousins across the seas, but our productive capacity is quite sufficient to exchange with many other countries.

When we went to Poland, what did we find? We found that the machinery in the various works was almost entirely German or Swiss, and as we went over the roads we found that their motor oars were almost entirely Italian or American. I do not want to weary the Committee with long repetitions or with many figures, but merely to give a fact here and there to indicate the lines on which we might do extended business with Poland. Poland is one of the marvels of this present age in her recovery from almost impossible conditions following the War. When the peace was made, she was promptly attacked by the Russians, and was engaged in armed conflict in 1919 and 1920, and it is only since that date that she has been able to settle down. When we talk of Poland but very few people realise that is is only a few years ago that Poland was half Russian, about a quarter German, and about a quarter Austrian, that this great population of 27,000,000 people were under different dominations and different laws, and were largely oppressed over a long series of years. They were spasmodically oppressed by some, systematically oppressed by others, and a certain small amount of liberty allowed to them by the Austrians in the South, and the effect of that oppression was to limit their possibilities and their development.

Then came the War, which passed over Poland five times, and that is a fact which we should not forget. In the course of that War a great deal of the material of Poland was destroyed. I have been in factories where the Germans had removed all the brass. I have been in fields for the cultivation of beet sugar where the machinery had been entirely destroyed, and where the peasants' houses had been burnt down. That was the condition in which Poland found herself at the end of 1918, and she set to work to resuscitate herself and, as I hope I shall show, with a very considerable amount of success. The working capital of the Poles was practically destroyed. Then they had the evils of inflation, which were not cured until a very recent date, but now they have come down to an economic position, with a steady exchange and with a new currency, and they are on a basis which shows every probability of their being able to trade advantageously with the rest of the world.

When one recommends a friend to enter a business, one usually gives reasons affecting his credit in order that business may be started at once, and I want to give one or two figures respecting Poland as showing how they are increasing their prosperity, and that, therefore, they are a field for the sale of machinery, principally. So far as public taxation is concerned—I am only going to give very rough figures—in 1922 the taxation raised was at the rate of a million a month, and in 1924 it was four millions a month, and they were able to point to the Income Tax returns with some satisfaction as a sign of prosperity. The exports in 1922 were 9,000,000 metric tons, and in 1924 they were nearly 16,000,000 metric tons, or very nearly double. In regard to trade with different countries, in 1922 it was measured by 845 units (thousand of francs), and in 1924 by 1,478 units, so that was again an increase of something like double. As we went through the country we saw all these industries, and we realised that they required the assistance of capital. They are largely an agricultural country. They had had their stocks entirely destroyed, and they were reduced to a position of great difficulty in cultivating their crops and producing their products to such an extent that on one estate I met a man who had been a race-horse owner, who said to me, with tears in his eyes, that after 34 years of getting up a stud farm, the Russians had come along and had roasted his horses and eaten them. That shows the straits to which people were reduced in that country.

These people are a people who have a steady Government, with liberal tendencies, and—this will interest hon. Members above the Gangway—they have universal suffrage at the age of 21 for the elections to their House of Commons, and suffrage at the age of 30 for the elections to the Senate. These facts tend towards the confidence of the people, and stable conditions, and I maintain that everything that the Poles have done—and they have done wonders in the last three years—shows that they are a people who are determined to progress, and it is to our interest that they should do so. Reference has been made by various speakers to stability in the centre of Europe, and I may say that, speaking the other day to an hon. Member, I referred to Poland, and he said, "Oh, that is a mere fleabite." It is possibly not within the knowledge of all hon. Members that Poland is the largest country in Europe after Russia, that Poland, in fact, is nearly five times as great as England, that it is as big as Germany and Czechoslovakia and Austria combined, and that it is bigger than France, Belgium, and Holland. Therefore, it affords a very great field for business, and it affords, to my mind, a safe field for business.

The Poles themselves know perfectly well that they cannot prosper as a nation if they do not live at peace with their neighbours, and conduct their business in such a way as will enhance their prosperity. They have certainly to meet the animosity of those who, in former times, were their rulers in the three parts to which they were subject, but they are a nation with a very strong national feeling. I think possibly the strongest asset that they have is a very strong religious feeling. We saw on all sides a very great amount of reverence and attendance at places of worship, and that all tends, to my mind, to make the country strong and reliable.


Something like Moscow!


I am speaking about Poland, and if I were to go through the whole of the knowledge that I have of the world at large, my speech would be extended to a great many hours. But it is my desire in this House, on the few occasions on which I address it, not to exceed the limit of 10 minutes, and to give the points as I know them. If we all repeated what our predecessors said, we should get much repetition, and we should not get very far ahead with the business. I shall stick to Poland, and ask the President of the Board of Trade to consider carefully all the facts and figures he can collect about that country. We found the Poles a people who are very worthy of support, a hard-working industrious people, with a very small amount of unemployment, but the War had damaged them and denuded them of their working capital, and if our Government can tend to produce business with Poland and to bring about the sale of British machines there, I think it will be to the benefit of both parties.

An hon. Friend reminds me of one thing which I was nearly forgetting. In Poland at this time, as in many other parts of the world, complaints have come before me about the way in which Englishmen do business. I think there is not sufficient publicity given to the methods of other countries. America has been referred to, but other countries also push their trade, and, in particular, when I was in Warsaw, I saw there were no British motor cars. I am not going to advertise those that were there, but there were no British cars, and a prominent dealer said to me: "You English only sell us pictures, but the other people sell us cars. The foreigner sends over cars and gives us credit." He is doing so. I, personally, saw the cars, and I inquired, and was told that they could get credit in order to buy one, but, said my informant, "You Englishmen send us pretty pictures, and when we decide to get a car and ask for it to be sent, we are told it will be ready for delivery next October or November, when snow will be on the ground, and the car will be no use." I hope the Board of Trade will do much more in that direction, in pressing better methods, in advising our Consular representatives, in taking advice from them, in seeing what we can do to make ourselves into commercial travellers for the sale of our goods—goods which are the best in the world in many respects. Foreigners will buy our goods, but they cannot always afford them, and there is no reason why, with a trustworthy people, we should not give them as much credit as possible.

Captain GUEST

It seems to me almost impossible to separate the condition of unemployment in the country to-day from a Debate which deals with the trade of the country, and although the day has not been set aside specifically to discuss that subject, I feel certain you will allow some latitude if one makes some reference to unemployment in its relation to the trade of the land. You further ruled, a few minutes ago, that no suggestion could be made if it involved legislation, but I am emboldened to make a suggestion, because the President of the Board of Trade gave us an indication that he thought, in the development of the Colonial markets, some prospect of a solution of the problem lay. I am convinced that this appeal, if it can, at some time or other, be developed and discussed on a better occasion, will not be successful unless the electors as a whole are satisfied as to the main conditions, which are, first, that the depression in trade cannot be cured by leaving it alone; secondly, that the causes which are operating now are far deeper and quite different from any which have supervened in this country before; and, thirdly, that everything else has been tried. It will involve, when the time comes, a re-arangement of our fiscal system, but if we carry our minds back to unemployment Debates during the last few weeks, it would be madness not to face this question. We have to-day been presented with statistics by captains of industry and by hon. Members with great knowledge of trade statistics. Speeches have been made by the right hon. Member for Hillhead (Sir R. Horne) and others, all of which, surely, must have convinced us that we are going through a depression which can only be improperly described as temporary. The right hon. Member for Carnarvon (Mr. Lloyd George) pressed the President of the Board of Trade to inform him at the first opportunity which of the conditions could be regarded as temporary and which as permanent.

It would look almost as if we were up against a condition which we must face as if it were permanent, and it is from this (point of view that I make the following suggestion. The figures of unemployment in industry have not always, I think, 'been stated with sufficient clearness in the House. We talk of one and a-quarter million being unemployed on the register. Why, there is an army as big as that again receiving assistance from some other form of municipal relief. You have conditions supervening upon that which, year by year, are intensifying the evil. I do not see how trade, which is doing badly now, can possibly rise sufficiently rapidly to carry on its back the new hundreds of thousands of people coming every year into the labour market, owing to the great increase of the population which took place in the Victorian era, and the rapidly-increasing population going on from year to year. These figures must be realised if we are to envisage the problem entirely. Coupled with that, you are faced with the conditions of Europe and the markets of the world. There are rising imports and falling exports to a degree which, to say the least of it, are alarming. Iron, steel, coal, depression in the cotton industry, all tell the same tale, and, unless we realise that that must be stopped—and how can it be without some much more drastic cure than anyone has suggested during the last few months—we are bound to go from bad to worse.

There are indisputable general considerations, such as the fall in the purchasing power of the European markets, the break in the old pre-War connections, which, no doubt, will never again be re- connected, and then, last of all, there is the great fall in the balance of new-wealth. The words used by an hon. Member in last Monday's Debate were the wisest that have been used. He said we are faced with a national disaster, and we are sitting on the bank refusing to help a drowning man. I think this national disaster can only be remedied on Imperial lines. It has been said that the Dominions and Colonies are not sufficiently interested in our welfare or suffering to come to our aid. What have we done for them? I am convinced that if we make an attempt to study this national question on Imperial lines we shall arrive at a solution. In this connection there are three general considerations I should like to put before the Committee. You have the fact of 65,000,000 Britishers scattered over the Empire, but extremely un-economically. You have the little island here, the Mother Country, over-populated economically, as is admitted by everybody, and you have the great Dominions, with their boundless resources, very sparsely populated.

The population, I think, can be redistributed, if you get. the Dominions working in harmony with the home Government on real schemes of Empire settlement. Everybody knows the Empire settlement migration schemes up to date have ended in being a pure farce. Last year 132,000 left this country, while the figure a few years ago was more than double that number. It is obvious that the Dominion Governments are not putting their backs into it because they do not think we are putting our backs into helping them. It is not a case of helping them in the same way that they help us; but if we help them in trade, I am certain they will be only too glad to take our population. We are told that every settler means £12 worth of trade to this country. Let us do what we can, then, in a broad scheme, which involves, I admit, a change in our fiscal system, to encourage the Dominions to take our families and our migrants in hundreds of thousands, every one of whom will be assured of a livelihood by producing the staple products of those Dominions. On the other hand, our trade will derive benefit in the export of British manufactured goods to them.

The President of the Board of Trade very truly said that the greatest hope for the solution of the industrial and unemployment problem Jay in the development of the home market and the Imperial markets. May I, in passing, remind the Committee of what is happening in the foreign markets, and what may be considered as more likely to be permanent than temporary. First of all, the foreigners are making for them selves largo quantities of goods they had to buy from us before. One hears an account of a very flourishing textile trade in Italy which was practically unknown 10 or 15 years ago. We heard from another hon. Member to-day that there is a fall in the purchase of Welsh coal for their railways, owing to the electrification of their systems. I think it was a fall of nearly 4.000,000 tons, all of which is a permanent factor that must be considered. Then there is the impoverishment of the foreigners as a whole. The hon. Member who spoke just before pointed out that the whole world is poor, and we must recognise it; but it seems rather sad and rather a pity that these impoverished nations are spending more on armaments to-day than ever before in their history. Then we have lost two very good customers. Russia has gone. China has practically gone; and, therefore, we have got to say to ourselves, Where can we find markets for our goods? Lastly, all these countries have increased the height of their tariff walls. We cannot in any way influence any of these five main conditions.

If that be so, I submit that we should study this question, and, if possible, arrive at a decision early. We sit and fiddle while Rome is burning, while unemployment is going from bad to worse, while trade returns go steadily from bad to worse. If we do not do it quickly, the Dominion Governments will have got so much compromised with their own manufacturers that it will be impossible to come into any scheme of Preference. The other consideration is that if we do not act quickly, we shall lose the advantageous position in which we stand in relation to some of those Dominions today. South Africa has shown herself inclined to make separate arrangements with other countries, to the exclusion of ourselves, and I have it on high authority that there is a Paper lying on the Table of the Canadian Parliament to-day. I believe a good deal could be done if this subject were seriously discussed, oven if it had to wait until the next Imperial Conference. A great deal could be done in the preparation of some broad outline of some broad scheme. It would, first of all, consolidate the Imperial partnership which was forged in the War. I think it would go a long way to solve our problems, do a great deal to stabilise the staple industries in the Dominions, bring advantage to British trade, and, what I care for much more, advantage to the poor army of helpless unemployed we have in this country. I have submitted— I hope not out of order—a suggestion, but I have only done it because on Monday last no concrete suggestion was put forward from any quarter, and to-day we have only heard the sad side of the depressing condition of our trade. I believe there is a future in the Imperial solution, and I trust the Government will do their utmost to give it close attention.


I desire to call attention to the item Services arising out of the War.—Payments in respect of restitution claims under Article 238 of the Treaty of Versailles. From time to time we have sought to obtain from the President of the Board of Trade and the Chancellor of the Exchequer a statement as to their intentions with regard to the disposal of the surplus which exists to-day out of the two funds, the one of £5,000,000, and the other of £300,000 in respect of belated claims. From questions put quite recently it was, I think, clear that the Board of Trade intended that the surplus should go to the claimants under these two funds. Subsequently, however, the Chancellor of the Exchequer, when pressed on the matter, said that if there was any saving in a normal case it reverted to the Exchequer, and that in respect to money that had been earmarked for a particular purpose they must carefully consider its future destination.

I hope that to-night the President of the Board of Trade will be able to indicate what is to be the future destination of what was originally referred to by the Financial Secretary to the Treasury as a very small amount. I find on reference to the figures that against the fund of £5,000,000 the sum of £423,943 still remains unspent, and as against the fund of £300,000 there still remains unspent £35,872. Against the first fund of £5,000,000 the number of claims that have been considered is 44,961, and the number of claims that were considered as belated claims against the fund of £300,000 was 23,105. The total balance, therefore, remaining still unspent as against both funds is not less than £459,815, a very considerable sum, and approximately almost as much again as the total amount that has already been expended against the £300,000 Fund. It may be that the Government will feel that the belated claimants ought to have the whole of the balance of the fund, but I think we shall have to examine how far the original claims were met by the Sumner Commission in their recommendations, and it will be interesting to know whether the Government is really prepared to consider not only the spending of this surplus, but even the extension of payments by a further supplementary grant.

I expect we shall be disappointed by the reply, because we have already been told at Question time that the Government cannot reconsider the matter. Those of us who represent the seaports in this country know very well that there is a considerable amount of discontent in the Mercantile Marine, and amongst the widows and dependants of those men, who, consequent upon being torpedoed during the War, have lost all their effects, suffered various kinds of danger, suffered in health, and in some cases lost their lives. Just because their claims were not submitted by the time or the date that was officially announced, their claims have been ruled out from any consideration. The argument of the Department is that a line must be drawn somewhere. Personally, I cannot see, if a claim can be justified, even though it be out of date— if it can be argued on grounds of justice —why it should not have consideration. The Government's advertising of the final date by which time claims should be received leaves much to be desired. I have discovered, so far as Liverpool is concerned, that the advertisement in the Press relating to the first final date was published in one newspaper only.

Mr. A. M. SAMUEL (Secretary, Overseas Trade Department)

Are you sure of that?


The first date was December, and the second date was June for belated claims. I am referring to the first date for the original fund of £5,000,000. The notice appeared in one morning newspaper only, and there are two on the Merseyside. That notice was apparently intended to reach the seamen who might have claims against the fund. Those hon. Members who are in close touch with their seamen constituents will know that the average, seaman does not buy a morning newspaper. He contents himself as a rule with one newspaper per day. If that newspaper does not happen to be the newspaper of our party then he contents himself with an evening publication. The first notification happened to be in one newspaper only, and perhaps not the one which might have the highest circulation. I have taken up this matter with the Department, and I have received every courtesy from the Department in their endeavour to explain that it was not due to the Department's action, but rather to the Royal Commission which had full powers in this matter of notification. I think, however, that it is very important to bear in mind that if seamen did not see these notices they should not be held responsible for their claims being out of date, especially if the notices did not appear in the newspapers which the seamen read. I hope, therefore, that that will be taken into consideration, and that we shall be able to get from the President of the Board of Trade some measure of hope that these claims in particular, whether belated claims or those which have been even outside the date of belated claims, if they can be justified shall have this £450,000, plus something else which a generous Government may consider can be given to them, and which will be given in due course on the recommendation of the Royal Commission.


I desire to express my thanks to the right hon. and gallant Gentleman the Member for North Bristol (Captain F. Guest) for the very excellent suggestions towards a real solution of our present difficulties that he has put forward. But I should like hon. Members, at the same time, to note what this House appears to think of a Debate on the Board of Trade Vote; it is obvious from the condition of the benches opposite. It is also obvious from the absence of almost all right hon. Gentlemen opposite during the whole of the Debate.


I think the empty benches are a scandal!

Notice taken that 40 Members were not present; Committee counted; and 40 Members being present—


As I was saying, when interrupted, during the whole of this Debate there has practically been no right hon. Gentlemen on the benches above the Gangway opposite. During the time the President of the Board of Trade was making his statement there were less than a score of Members, and this from the party who, only a week ago, asked permission to move a Vote of Censure on the Government because of its dealing with the unemployment question. Do right hon. and hon. Gentleman opposite dissociate unemployment from trade? Is it possible that any great party in this country can fail to realise that the unemployment question is one and the same as that of the Board of Trade duties? But hon. Members below were better represented than the party above the Gangway. I think that there were five leaders of parts of the Liberal parties, though only two supporters, who listened to the statement of the President of the Board of Trade.


All those present now on the Liberal Benches were here!

Lieut. - Commander KENWORTHY

The hon. and gallant Gentleman the Member for Leicester (Captain Water-house) is entirely wrong in what he says. I was here during the greater part of the statement of the President of the Board of Trade, and besides me there were several of my right hon. Friends, besides those on the back benches.


I am afraid I included the hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy) as a very distinguished leader of one of the Liberal parties. I want, however, if I may, to get rather under the surface in discussing this Vote. A week ago the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) asked whether this problem of unemployment was considered by those in authority to be temporary or permanent. He got his answer to-day from the right hon. Gentleman the President of the Board of Trade. That reply was that the condition was temporary. With all due respect to the President of the Board of Trade, I beg to differ from that view. In 1909 we find that in this country there was 9.7 per cent. of unemployment amongst those trade unions then giving in returns. That unemployment, for the period July, 1908, to June, 1909, did not fall below 7.7 per cent. That is worthy of very serious consideration, for it clearly points to the fact that we had present in pre-War times the root of the unemployment difficulty. We know that the War has aggravated the matter. We know that all wars and all international disturbances do aggravate it. I believe there has been an underlying cause which has run right through, and which to-day is acting more strongly than ever before.

8.0 P.M.

The trade of any country depends, I think, on four main things—men, money, materials, and markets. Let us consider the first. In the first instance, what men have we got available for industry in this country? We have 2,500,000 more adults in England to-day than we had in 1913. Is it a thing to wonder at, then, that we are not holding our own when our population is increasing, and rapidly increasing, and when we consider that the amount of raw materials available are actually decreasing? If we do not go forward we must go back. We have got this tremendous body of extra labour in this country, and how are we going to use it? We can only use it in productive industry. Secondly, is there sufficient plant for use in this country? I want to emphasise a point of view that has not been discussed—that of the textile trade. We have heard about shipbuilding from hon. and right hon. Gentlemen, but I do not think that we have had in this or the last Debate any real diagnosis of the problem of the textile trade. If the Committee will allow me, I should like to say one or two things to prove that the production of raw material is going down in spite of the fact that the machinery available for conversion is increasing. We are glad, I know, to hear that the Board of Trade are going to give us some figures, the figures of production and of potential production, for one invariably finds, when one delves into a matter of this sort, that one has the figures for Germany and the United States, but none for this country. Before the War the cotton spindles in the United Kingdom numbered 55,500,000, and to-day there are 56,600,000. In the United States of America before the War there were 31,000,000, and to-day there are nearly 38,000,000. In Japan, since 1900 up to the present time, they have increased from just over 1,000,000 to just over 5,000,000. It is obvious, then, that the world to-day is able to deal with a great deal more raw material in the cotton industry than in pre-War times. The wool industry is in exactly the same position, as far as one can collect figures there, although I should like to remind the right hon. Gentleman that no figures are available for England. In the United States they show an increase from 4,250,000 spindles in 1914 to nearly 5,000,000 to-day. The right hon. Gentleman the late Minister of Health, in a speech here a week ago, said that if our trade revives it only meant that the trade of another country was going down. That, I think, is the whole key of the position. There is only a certain amount of raw material in the world, and it has got to be divided up between the great converting countries, between the United States, this country and Germany. As things are to-day, we have just got to scramble for it. In point of fact, less cotton is produced now than before the War. In the seven years' average from 1909 to 1914 there were 23,700,000 bales of cotton produced, and in the five post-War years, 1919 to 1924, the number was 20,800,000, a reduction of 3,000,000. In the wool trade there is also a reduction, though not to the same extent. It is a reduction from 2,700,000,000 lbs. to 2,600,000,000 lbs., comparing the pre-War years with the post-War. It is these figures which I ask the right hon. Gentleman the President of the Board of Trade to take notice of, because until we can get our raw materials up to the proper standard it is perfectly hopeless to try to revive trade in this country.

In this instance, as we increase our production of raw materials, so we increase our market for our manufactures. The right hon. Gentleman the Member for North Bristol made that very clear in his admirable speech, showing that every man whom we send to our Colonies to grow us the raw materials which are vital for our industry becomes himself a market for that material when it has been converted into manufactured goods. I ask the right hon. Gentleman to use his influence with the Ministers responsible for other departments to get this problem dealt with. It is no use our coming here week after week and year after year to hear the same platitudes, to hear certain people urging economy, and other people urging trade with Russia. It is not a bit of good merely talking about things. We have appointed committees to go to our Colonies in different parts of the world. The hon. Gentleman the Under-Secretary for the Colonies has recently made a report to this House in which he says that we ought to put a bridge over the Zambesi and that we want railways in East Africa. The right hon. Gentleman the President of the Board of Trade said this afternoon, "Think what will happen when Uganda produces cotton," but how can Uganda produce cotton for us unless that cotton can be brought to us? Two generations ago England was the railway maker of the world. England can still be the railway maker of a part of the world, and I urge the right hon. Gentleman to push on those two schemes of bridges and railways. The right hon. Gentleman the Member for Norwich (Mr. Hilton Young) has issued a Report on Iraq. He says that railway development is most essential there. Will not the right hon. Gentleman try to get the Chancellor of the Exchequer to find the cash or to float a loan? It is worth a loan.

I do not believe that hon. Members opposite would for one moment object, as they have done in the past, to sending men out to our Colonies and Dominions if they knew that when they got there productive jobs and sound homes would be found for them. We object to sending them into the wilderness, but let us help our Dominions to help us. Let us realise that either we must spend something like £2,000,000,000 on housing in this country or provide homes elsewhere. Which is the better course, to invest the money in finding new markets, or to invest the money here where markets, although they can be made and can be preserved, cannot expand as they may in the Colonies? It is to our Colonies and to our Dominions that we have got to look for the solution, the real solution and the only solution of this problem. Subsidies such as have been suggested, and such as the Prime Minister touched on a week ago, may be palliative, they may help, but believing as I do that this is not a temporary problem we must have a permanent and fundamental cure, and that cure can only be found by developing markets and the production of raw materials at one and the same time within the British Empire.


The Committee have heard the leading speakers of various parties who have put their views and given their recommendations. Most of them have had an opportunity of trying their recommendations, and in spite of that we find that British trade is not at its best. All of them thought that their ideas would succeed, but in the very conflict between them and in the final result there is an admission that none of their ideas will achieve real success. We have to get to the point when national production will have to be co-operative production in order to maintain national trade, and in that co-operative production there will have to be no room for shareholders and interlopers; it must be reserved only for producers. Considering the explanations which the President of the Board of Trade has given, and which other speakers have either upheld or opposed, there is very little doubt that outside trade will have to be based upon international co-operation, and not upon trade as the President of the Board of Trade understands it at the present moment. Two or three points which the President touched upon rather puzzled me. Speaking of the Continental steel trade, he said the profit of the Belgian and the French manufacturers was only a sort of mirage; it appeared to be there but was not there, on account of the falling exchange. I do not quite take that view, because when Belgium and France have sent out their iron and steel products they receive in return from the countries to which those goods go other materials in terms of the value which their goods have realised in that country, and when those materials get to France and Belgium they have a money value in terms of their own money. The other point on which the President of the Board of Trade made a confusing statement was in regard to the lower standard and the lower cost of living abroad. He pointed out that as soon as the exchange was stabilised in Germany people started to save, though while the exchange was going down every day the tendency was not to save but to buy goods. I can hardly follow that argument, because if the German nation as a nation starts saving money and give up buying they will soon have bad trade and unemployment.

It is put to us by optimists and pessimists that there is a sort of cycle of good trade and bad trade for different nations, and that we are now having our turn of bad trade. The optimists rest upon the hope that some other country will lose its trade, and that we will recover ours. The pessimists differ from that point of view, because they think that because other countries are manufacturing goods by labour that receives less money and works longer hours we have no hope of recovering our trade unless we follow suit.

I submit to the President of the Board of Trade that his office has not been treated with the consideration it deserves. The position of the President of the Board of Trade should be second only to that of the Prime Minister. He should be a sort of dictator in the Cabinet, commanding his requirements and controlling the Ministers of other Departments. I put it to the President of the Board of Trade that his function is to see that trade is so kept up that the nation as a whole is housed and fed and clothed and otherwise treated with decency. Even at the present range of prices this nation cannot be so treated under a cost of about £2,500,000,000, and it is up to the President of the Board of Trade to see that this £2,500,000,000 mark is maintained. The position of this country is more difficult than that of most other industrial countries. We have to buy our food from outside, and in order to buy our food we have to exchange manufactured articles, but before we can exchange manufactured articles we have also to buy from outside the raw materials from which to manufacture them. We have not only got to promise the farmer abroad, "If you will give me your wheat I will give you cotton cloth," but we have to go to some other cultivators and say, "Let me have your cotton, and then I will make the cotton cloth, and then I will be able to buy my food." All our cotton, 80 per cent. of our wool, 80 per cent. of our hides and skins, a full 100 per cent. of rubber, and many materials required for the steel trade and machinery like copper, manganese, mica, lead and zinc, have all to be purchased from outside before we can turn them into manufactured goods, which, in turn, we exchange for foodstuffs. Taking that position the Board of Trade here has got to see that they maintain fully the activity of the people who are the real producers in the working classes. Studying the position calmly we have to arrive at some method by which this country should not only realise but should begin to see that our man power is the only power, as compared with other countries, where they have a combination of man power and raw material. I would ask the President of the Board of Trade whether he is satisfied that he is taking care of the man power of this country?

Does he consider it right that he should employ the man power he has in this country in such a way that about three-fourths of it should be at work for so many hours a day in order that the other one-fourth shall have not one hour's work per day. Is he satisfied with the position that that man power when not at work is maintained in that position of self-respect, dignity, right and physical strength in which it ought to be maintained. His other duty is to see the effect of this upon the trade of the country as compared with the world situation. Is the right hon. Gentleman satisfied that, apart from all political bias, the Treaty of Versailles and the Dawes Plan are helping and not hindering his Department? Is he satisfied that all the Foreign Secretary is doing in our relations with Russia or China is helping and not hindering his Department?

Above all, I would draw the attention of the Board of Trade to the most serious position of the foreign investments of this country. I appeal to the Committee to analyse rather than to generalise. We have heard many conflicting arguments. We have been told something about saving and spending and available funds for foreign investments and about funds not being available. At the same time we have been told that the savings of this country are getting greater and greater. If the spending of money is producing this result you cannot argue at the same time that the saving of money is also producing trade. If you once defend the spending of money as the means of producing or encouraging trade, you cannot at the same time have the consolation that, because your savings balance and other deposit are showing a rise in the savings of the people, that it is a good sign.

We were given figures relating to the foreign investments showing that they were dwindling down. I remember when the banks issued the German loan. In a very short time, £120,000,000 was offered when only £40,000,000 was required. This does not show that there is much unwillingness on the part of certain parties to invest their money. I appeal to the Committee to bear in mind the difference between the investments of modern times and a generation ago. A generation ago they were profitable to the trade and commerce of Great Britain. Taking the selfish point of view, and disregarding your moral duty towards others, and the rights of other people, your investments took the form of building railways, opening up docks and postal services, and this policy used to help you both in sending and distributing efficiently the materials that you produced and also in bringing back to this country the raw materials you badly required at economic prices.

Apart from the exploitation of foreign nations, and the resulting misery, that sort of investment was probably helping you, and you encouraged and promoted individual financiers to indulge in such investments. In the course of the last generation the character of British foreign investments has changed altogether, and I ask the President of the Board of Trade not to dismiss this point upon which we have no information, because it is one of the things we ought to investigate very thoroughly and scientifically. The main investments of Great Britain are no longer railways, but such things as productive factories erected abroad, and in many foreign countries they are opening coal mines, Jute factories and cotton mills, ironworks and tinplate works. Therefore we have quite a different position to face, and I appeal to the President of the Board of Trade to realise the fundamental difference between these two types of investments which are causing a shrinkage of trade in three different spheres of life.

You say to us now, "Give us British investments in Mexico, Brazil, or in China for establishing factories, coalmines or cotton mills." With what you call law and order and your rights in somebody else's country, where you have set up a factory, you manage to keep labour there at a much lower standard of life than labour in this country. What you actually do is to replace the workers of this country with a higher standard of life, and higher purchasing power, with a set of workers distinctly and deliberately with a lower standard of life and lower purchasing power. In these circumstances, the human labour employed is no longer a consumer of our goods, and by exploiting the labour of those countries you practically annihilate a certain amount of demand on your own trade, and the result is that there is a double shrinkage of trade. Then there is the third item that all these productive trades and foreign investments of Great Britain are creating a considerable amount of difficulties.

Taking generally the figures we have heard this afternoon—unfortunately, we are not given a reliable figure for such an important item—taking it roughly at the figure popularly accepted as the lowest and safest figure, British investments abroad amount to £4,000,000,000. with a consequent average dividend of about £200,000,000. Taking it, again, that this £200,000,000 has now to come into this country in the shape of raw materials from other countries, it has now to be realised that, whereas 30 years ago this quantity of raw material would have come into this country in exchange for work produced in this country, today it has to come in in exchange, not for something which, is produced, or manufactured here, but for something which British investment gets produced and manufactured by somebody else, and the £200,000,000 is approximately the difference between the two standards of life. That creates immediately a third and very large sphere of shrinkage in British trade. If you take the hypothetical position that about 50 per cent. of the goods which the British nation would produce are beginning to be produced outside the borders of Great Britain, in countries like India, Africa, China or the Argentine, from which you get raw materials, and if you create bank credits in your favour in those countries, and obtain those raw materials in satisfaction of those bank credits instead of in exchange for manufactured goods, you can visualise the great and permanent shrinkage in your trade.

I do not follow the line of argument that we should prevent all those people abroad from manufacturing anything at all, or taking part in any industrial activity, but I do put it in all seriousness as a matter for consideration, without any bias against what is called Socialism, confiscation, and so on, whether you have not been wrong, even in order to maintain your capitalist credits abroad, in making your national investments abroad an individual function, and an individual property, instead of a national function and a national property controlled by the nation. Things would have been quite different if, by some means or other, you had arranged from the very outset that all British investments abroad were not the concern and the property of individuals or individual corporations, but the concern and property of the whole nation, regularised and controlled and directed and legalised by the nation, always with an eye to seeing that this increased production did not create decreased consumption. I would ask the Board of Trade to consider the very great necessity of giving to this country a reliable and analysed census of what we roughly call "British investments abroad"—how much are they really, how are they divided in distributive and productive industries, and what is the burden of labour charge on such investments abroad as compared with investments here?

I do not agree with the theory that in the Oriental countries of the British Empire, as it is called, very low labour charges are made up for by very low production. I do not for a moment admit that that is true. For instance, I will admit that the operative in a jute factory in Bengal will, at his worst, be able to produce about one-third of what is produced by the operative in Dundee; but, while in Dundee it is difficult to reach a dividend of 10 per cent., the dividends in Bengal reach 100 or 150 per cent., and it is obvious that the wages of the operative in Bengal are not one-third of what they are in Dundee, but one-tenth or one-twelfth of what they are in Dundee. Similarly, I will take the case of the coal mines. I have been trying to get at the Board of Trade with certain questions, but I am barred, according to the etiquette of the House, from doing so. You are talking of the crisis in the coal trade at the present moment, and there is no doubt that it is there, but who has produced it? Those who are breaking down the cost of coal outside Great Britain are producing the crisis inside Great Britain. It may be very well to put the whole of the blame upon Germany, or France, or Belgium, but the real burden of the blame falls upon British Imperialist policy. You have coal mines to-day working in South Africa, and there are coal mines working in India, where Britain keeps law and order. The output per miner in India works out at 170 tons of coal per year, as against 200 tons of coal per year in Britain as a general average; but the wages are not in the proportion of 17 to 20. The miner's wages in Bengal are kept at 8d. a day on the average, which is about one-fifteenth or one-twentieth of what they are here.

Then comes the vicious circle. The African owner of the mines—that is to say, the British investor abroad—reduces his wages, and the Government of India, under pressure from the British mine-owners in India, appoints a Committee, and six weeks ago that Committee gives its verdict that the cost of coal at the pit's mouth, which ranges between 6s. and 7s. a ton in Bengal, and which produces 60, 80, 90 or 100 per cent. dividend for British investors—that cost of production must be brought down to 3s. 6d. per ton, for the reason that, by so doing, the Bengal mines will be able to secure as many orders east of Port Said as the South African mines. The German or other Continental worker is pulled down to that level through the exigencies of the Versailles Treaty; he has to come down to the lowest existing level, and the lowest existing level in the industries of the world is not created by Germany or Belgium but is created by the British Imperialist investor and employer.

The British Imperialist investor has produced the lowest imaginable wages in the cotton industry, and the lowest imaginable wages in the jute factories. The British investor abroad, by his Imperial policy, by his weapons of law and order, in China, South Africa and India has created a most disgraceful, diabolical, and inhumanly low standard of wages for the coal miners of the world, and then the poor German or other Continental miner has to come down to that level. I put it to the President of the Board of Trade whether he holds himself responsible that his office is intended to find a decent standard of life for the inhabitants of this country? That is what trade ought to exist for, and not for dividends, or bank accounts, or a few merchants, not for compiling Blue Books, nor for Chambers of Commerce. If that be so, does he or does ho not agree that the whole trouble arises from the fact that somebody outside Great Britain is producing coal, iron and steel, textiles, leather goods, oil, and other products, at a lower rate than that at which Britain produces at the present moment, or can produce and at the same time give a certain standard of life? If the President of the Board of Trade agrees that it is so, there are two ways. Does he agree with it or not? One way is to get the people of Britain to go down to that low level and to compete against each other, to cut each other's throats, enter into political squabbles and all kinds of international warfare and so on. The other mode is to take immediate active measures—there is no delay necessary— and to see that where Great Britain is solely responsible for ignominiously low standards of life in industry, and consequent low cost of production, the cost of production is not lower than what you decide ought to be a decent and human standard of life here. It is from this point of view that I submit that if this country had from the first made up her mind that all British investments abroad are something that is going to be a great menace to this nation in its ultimate development, and had kept entire national control of them, if you could have been the owners of all foreign investments as a nation, controlling them for the purpose of bettering human life and human comfort and making them the medium of production, and at the same time making the workers in those industries mediums of consumption of what you produce here, you would not have come to this pass. It is not a passing feature. It is futile to argue all the time as if it is German, French or Belgian competition that is hitting the trade of this country, bringing about the shrinkage of trade, the shrinkage of employment, and reduction of wages, when a greater culprit than Germany's rivalry is the British Imperialist investor and the British Imperialist exploiter in the so-called glorious British Empire.

The right hon. Gentleman the Member for Carmarthen (Sir A. Mond) alluded to the difficulties arising from the combination of the railway companies. I heard him with interest, but is the President of the Board of Trade aware that a similarly uneconomic and disloyal combination exists among the chemical producers of the country, and will he not prevent the right hon. Gentleman from entering into such wicked rings and combines to hold up prices artificially? I have it from the right hon. Gentleman's own firm in the last few weeks that they refuse to give a quotation here and a quotation there. His point was that he had had a letter from Shanghai about the grave Bolshevist danger which was reducing the trade of this country. If you take it for granted that the Bolshevists of Russia are fraternising with the workers of Shanghai and are telling them how human beings ought to live, greater honour, if they are doing so, to the Bolshevists of Shanghai than to the so-called Christian missionaries, who are getting the workers to live like vermin under the iron heel of foreign investors and exploiters. Why is the British nation not endowed with the same faculty of the mind and the same virtue of the heart as the Bolshevist of Russia? Why is the British nation not capable of producing human beings who can go to Shanghai and endear themselves to the people of China and say, "If you are working hard in factories or ships, or in the docks, we want to induce in you a fighting spirit, and we request you, after doing a hard day's work, to ask for that standard of living which we in Britain know to be the right standard"?


On a point of Order. Are the workers in Shanghai under the authority of the Board of Trade?

The TEMPORARY CHAIRMAN (Mr. Charles Edwards)

The hon. Member has been wide of the mark for the last ten minutes, and I hope he will confine himself to the subject under consideration.


I was not advancing any new illustration. I was refuting an argument which was considered to be in order and which was raised by a right hon. Gentleman two hours ago. Several of them did it, and I am sure several of them are going to. It is no use raising the Shanghai bogey. It is the duty of the President of the Board of Trade to curb the Foreign Minister and the Minister of War from looking at Shanghai from a wrong standpoint. What Great Britain wants to do is exactly what it is alleged the Russian Bolsheviks are doing. If you really mean business, if you want to maintain your trade, if you want the Chinese market, forget to treat the Chinamen as your slaves under the booming guns of your battleships. Learn to treat the Chinamen as the Russian Bolsheviks are treating them as your brothers and your equals, teach them that if they are to work in factories belonging to you they should learn to live like the men and women in Lancashire, and not as in some other part of the world. That is the real way, and the right way, of restoring your Shanghai markets and your Shanghai trade instead of through guns and bullets and by talking nonsense about the humane work, the Christian work, of the Bolsheviks of Russia.

One last word in regard to the suggestion that the Britisher should be asked to use British goods only. It sounds poetic, but you are crippling your own trade in the future, because we are still living in a capitalist world of individual rivals. If it is a virtue for Englishmen to say, "Only use British goods," why is it not equally a virtue for the Indian to say, "Only touch Indian goods and have nothing to do with these devil foreigners"? Why is it not equally a virtue for Chinamen to say, "Only have Chinese goods and have nothing to do with foreign devils"? It is the same spirit. If it is right for you, it is right for everyone else, and if you entertain that doctrine, and propagate it, that it is the supreme virtue for every national only to use the goods manufactured by that national, you will soon be deprived even of the raw materials on which your trade depends. Why should the Egyptian or the Indian or the Mesopotamian send you their raw material? The virtuous thing for them would be to use it themselves. I think the greatest danger for Britain will come from the spirit that every nation should use the national goods only, and I hope this Government, even in spite of its centuries of tradition, will abandon that injurious theory.

Lieut.-Commander KENWORTHY

I do not think anyone should take part in this Debate without making constructive suggestions. The President of the Board of Trade spoke only a little longer than the hon. Member who has just sat down and his whole speech was a collection of figures and statistics which could have been obtained from Official Blue Books. He made no mention at all of what the Government were going to do to help British trade, and in fact he seemed to suppose that the Board of Trade exists simply as a statistical Department. I propose to make three constructive suggestions. The first is that the export credit scheme should be extended to Russia. It is for the benefit of British merchants and no one else and it intended to help our people and ensure them against loss, and it would be of great advantage to trade and employment in this country. I know of no reason other than politics why that should not be done.

There is another matter of great interest, and that is, that at all costs the Government must do something with the Bank of England. The Bank of Englad is putting a real embargo on the granting of foreign credits abroad, which go out in the form, for the most part, of goods. The hon. Member for Chertsey (Sir P. Richardson) referred to the case of Poland. That is an immense market for our goods, in the same way as Russia. If our merchant bankers and financial houses are prevented by a rigid embargo imposed by the Governor of the Bank of England from giving any credits or advances or leans abroad, now can we help that country and our own people? It is obvious we have too much machinery here for our own needs, and it is necessary that we should get our goods abroad in every possible way. What is the use of going through the sweat and agony of getting back to the gold standard—that has meant a lot of distress and upheaval and has affected a great many people—if we are not once more going to become the money market of the world? It was a great advantage to this country to be the money market of the world. Therefore, I hope that the Government will pay attention to this question.

The third question is that of the cinemas, which was touched upon by the Prime Minister in his speech on unemployment. I have no sort of interest, direct or indirect, in the cinema industry, or any branch thereof. I was once asked to represent a famous character of history in a film, namely, Rob Roy McGregor, whose somewhat degenerate descendant I am. I am sorry the Secretary for the Department of Overseas Trade is leaving the House because he is an authority on Scottish history, and he would be interested to hear that piece of information. That is the only connection I have had with the cinema industry. I have never heard the cinema industry discussed in this House except in regard to taxation under the Entertainments Duty. A Noble Lord in another place has initiated a Debate on the question, and, at last, the Government appear to be waking up.

The plea that the Board of Trade, apparently, used in answer to a question of mine last week is that in the industry itself the different branches are not themselves united as to what ought to be done, or how they can be helped, or what they can do for themselves. I understand that, having refused help to this infant industry in its early days, when it badly needed it, some of our great captains of industry, named the Federation of British Industries, are looking into the question and are counselling delay because the different branches of the industry are lacking in unity. The fact that the different branches of the industry here have not come together as they have done in America—producers, renters and exhibitors uniting together, owning their own studios and having their own sale organisations and so forth, which puts them in a much stronger position—and because there are rivalries, makes it all the more essential that the Government should set up a strong, impartial committee to inquire at the earliest possible moment into the position. That committee would be above vested interests, and would be composed of independent people, with no sort of interest in the trade, direct or indirect.

It may be asked, How does this concern us? Suppose that 95 per cent. of the school books used in our schools were written, edited and published abroad. The position would be no more serious. I believe that a child learns more to-day from the cinema screen than from school books, and that 95 per cent. of the films shown in British theatres are of American, German or, in a very few cases, French origin. I believe in internationalism. I want this to be universal. I want art not to be one-sided. I want art to have a chance, because the production of cinema pictures is a new art. Do not let us make a mistake about that. Suppose 95 per cent. of the newspapers in this country were edited, printed and published abroad. The position would not be very much more serious than is the position shown by the figures in regard to the use of foreign films in this country.

In giving only two figures, I am going to serve a double purpose. People say that it is hopeless in this matter for this country, because the American market is so huge that the United States film distributors, having met their own market, can flood our market, and we have not a chance. In conjunction with an attempt to meet that argument, and also to show the importance of the cinema industry, I will give only two figures, the number of people per week who attend cinema theatres in the United States and the number who attend cinema theatres in Great Britain. In America, 50,000,000 per week see cinema films projected on the screen, while in this country the number is 20,000,000. My figures for Great Britain are taken from a statement made by a leading member of the trade, who read a paper at a recent conference in Glasgow, and my American figures are taken from the "Christian Science Monitor." These figures show that in this country the number of people attending cinemas are 40 per cent. of the number attending in the United States. I am not sure that if we had better films shown the numbers would increase. That shows that there is a very substantial market at home for British-produced films.

A further important side of the question is that it is almost impossible for the few British films now being produced to be sold abroad. In Australia, for instance, the so-called block system is in operation everywhere, by which before a big American picture—to use the jargon of the trade—is sold the company owning the picture house have to undertake to take a block, that is, a series of anything that is thrown at them from the same renting organisation for the producers. In consequence of there not being enough British films to create a block of that sort and keep the picture theatres going for a certain number of months, they have to take American or German films, or be ruined.

It is obvious that if there is to be for a period of years in our Dominions, in India and in foreign countries, almost a monopoly of American films and German films, with a few French and Italian films, and practically no British films, our prestige must suffer and our trade must suffer, because this is one of the greatest means of advertisement we could possibly have. Suppose we ever have strained relations with the United States of America. Suppose we have some difference over policy, and may be hostilities, what an enormous propagandist field there is open to America, if she was clever and subtle enough to use the cinema screen of the world to turn the public opinion of the world, and even of our own Dominions and Dependencies against us! The position is very serious. Apart from the question of employment, something ought to be done, and it is time that the Government woke up.


Did the hon. and gallant Gentleman support the duties on films?

Lieut.-Commander KENWORTHY

I am coming to the film duties in a moment. I will not be put off my stride by these inane questions. Import duties are utterly useless. There is a duty of 3d. a foot on imported films at present. The cinema film producing industry has been so weakened that there are not the films made here to take the place of the foreign films. Therefore, the foreign film is bound to come in, even if you impose an import duty of 100 per cent. The only effect of an import duty would be to put a greater burden on the exhibiting side of the industry, without helping the producing industry. Import duties would be utterly useless, at any rate, in the present state of the industry. Then in regard to the proposals that we should follow the German practice, which is that for every foreign film shown in a theatre one German film must also be shown—


I am waiting for the hon. and gallant Gentleman to suggest something which the Board of Trade might do to relieve this industry.

9.0 P.M.

Lieut.-Commander KENWORTHY

I was asked what the remedies were, and I am only touching on them. I have shown that an import tax would not only be useless but impossible, because English films do not exist at present, and it would be very difficult for a Government Department to attempt anything of the sort without injuring what must be a very delicate organisation. Then it is suggested that there should be a sort of licence paid for every foreign film shown, and a fund created, something like the Road Fund in connection with motoring, which would be used for subsidising the film-producing industry. That would be simply a new sort of Entertainment Tax which would be resisted fiercely by the exhibiting section of the industry. You do not want to antagonise a most important and powerful part of the industry, in which there are millions of money invested, as compared with only £500,000 invested in film-producing companies. The rest is invested in buildings, theatres, distribution, organisation, etc. You might just as well put a special tax on foreign jazz merchants or saxophone players. I could give the reasons for the bad state of the industry. Most important is the War. Before that the industry was going ahead. We entered the War at the beginning and America did not, and America got a great start in the industry. Then there is not the capital available in this country, and there has not been until now. Investors have been shy of putting money into the industry, and big business in this country has been very timid or even contemptuous. Then there is the fact that we have not got the studios in this country. Some time ago I visited probably the beet studio in this country, and I was appalled at the want of proper equipment and the lack of suitable settings and everything else. It was hopeless to expect two or three large films of five or six reels each to be produced simultaneously in such a studio. It needs a large capital and a great deal of land and equipment to have good studios, and until we have them we can do nothing. It is said that the climate is against us, but that is sheer nonsense.


I was hoping that the Board of Trade was coming in.

Lieut.-Commander KENWORTHY

The Board of Trade is responsible for helping British trade, and I have endeavoured to show first of all that there should be an export trade in British films which does not exist and I was trying to give the reasons. Then these films are a very potent means of advertising the goods of the country from which they come, and we are bound to suffer if we have not good British films going all over the world. The usual plea as to the climate is a fallacy because the Germans are producing films in spite of their climate, which is not much better than ours. Climate does not affect the production of films very much, and in any event the majority of scenes take place indoors. Some of the remedies which have been suggested are inadequate, and would do more harm than good. If I thought that an extra import tax would help this industry, so important do I consider it that I would not resist such a duty. I am not a fanatic on the question of Free Trade, however much a fanatic I may be on some things.

What is needed most is cheap money. I think that if those who are languishing in this film-manufacturing industry in this country would combine together in a great national organisation the Government ought, on a subject so important, to be prepared to help them financially with proper safeguards and Government representatives. At any rate the position ought not to be allowed to drift. It was only within the last day or two that I was able to ascertain that even this Department has a very shallow interest in the question. I am not sure even now as to whether it has been vested with the powers which do exist. I would like to know if the Government are not only watching the situation but are examining it with a view to doing something constructive to help what might be a great British industry employing the best artists, dramatists, writers, and actors, and hosts of workers, mechanics, electricians, painters, and so forth, and might be one of our leading industries, not only giving much employment at good wages, but also helping our prestige and influence abroad.


If in the course of my few remarks on the British film industry I should not find myself entirely in agreement with the hon. and gallant Gentleman who has just spoken, I am sure he will appreciate that it is not because I have not the interests of the film industry at heart as much as he has, nor because I have not studied the question, but merely because on certain details I do not see eye to eye with him. I address these few remarks to the Committee with very great diffidence. I always do address the House with diffidence, the more so as a few days ago the party of which I am a member was accused of containing only brass-faced wax-works, or something of that sort. But as one who has been for five years closely connected with the exhibiting side of this industry, perhaps I can offer a few suggestions which may not be entirely valueless. This is a subject on which one has to face realities and not fancies. The film-producing industry can be divided into two sections. There is that part, by far the largest and most important from a financial point of view, which produces what are known in the jargon of the industry as features, that is to say, the picture that forms the main item in the programme of any picture house. Then there is that part of the industry which produces short-subjects of interest, educational, travel, commercial and such like.

It is my opinion, after thinking this matter out very carefully and studying it as a member of the industry, that we in this country can never by any possible means expect to rival the Americans in the production of what are known as features. The hon. and gallant Gentleman has said that climatic conditions no longer play such an important part in the industry. I have visited the studios in America and have seen films in the making there, and although it is perfectly true that a far larger proportion of the films are made in the studios now than outside in the open country, yet it is still a fact that a considerable number of the big and expensive films have to be taken in the open, and are dependent on fine weather and sunshine and a large variety of scenery. As far as that side of the industry is concerned, we in this country are bound to be handicapped by climatic conditions. But there is something much more important than that, which must always handicap us in competing with America, and that is the enormous home market which America has and always will have. The export side of the American film industry is a comparatively small one compared with the enormous home demand.

Up to the present very few British films have been shown in America. There may be many reasons for that. The films may not be good enough. But the main reason is that the Americans have their home market, and they mean to keep it. Judging by their other industries, we may take it that we shall never penetrate that market to a large extent. Having that enormous home market, the Americans have an advantage for export which we can never hope to rival. By that I do not want to be thought to indicate that the industry in this country cannot be revived. I do not think it can ever be revived on a very large scale. On the other hand, the smaller and shorter films of an educational and commercial character could be developed very largely in this country. That is where I think that the Government, the Board of Trade, and, incidentally, the Board of Education, could be of the greatest value. By an examination of resources, by encouragement and by inquiry, they could do a great deal to encourage the making of good educational and commercial films which would be shown in this country and be sent to our Dominions and Colonies.

The hon. and gallant Member who spoke last mentioned various remedies which have been suggested, and in the end came down to two which he thought might be of real value. He suggested a, committee of inquiry. I am not much enamoured of committees of inquiry. I think they are best set up in the industry itself. Let the examination be from within rather than from without. If an industry with potential value, and yet for the time being not successful, wishes to improve its position, it is much better to have an inquiry from within than from without. As to cheap credit, as one who is interested in the industry I would be very glad to see cheap Government credit for this industry. But I could not honestly advocate it. It is a speculative industry. However much money you spend on a film you can never be certain of getting that money back. It is not the amount of money put into a film that makes it valuable. I cannot see how any scheme of cheap credit could be applied to the industry and be financially sound by any criterion.

The real hope for the industry is a combination of the various portions of the industry itself, the producing portion, the exhibiting portion, and the renter or middleman, who comes between and who may be eliminated in time. The American film-producing industry can always be certain of a market because it owns the theatres, to a large extent. Although such an idea for this country might arouse opposition, and in my own experience it aroused opposition some years ago, I believe it is the only remedy for the industry. The large owners of theatres should also become the large producers of films. We do not want anything in the nature of a trust; we do not want one large company owning all the theatres and producing all the films. We want groups of large producers to be allied with owners of large theatres. I suggest that as most likely to revive the industry. We have one large company owning many theatres. If they can see their way to turn their attention to the production of films, it would give new life to the industry. The Press can help very largely, too, but I must not develop that argument now. This is a subject on which one can speak at great length. There are, however, many subjects to be discussed to-night, and this is not an occasion to detain the Committee on one topic for any length of time. I thank the Committee for having listened to me while I have made these few remarks.


I do not propose to follow the very interesting remarks which fell from the hon. Member for Yarmouth (Sir F. Meyer) or the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) with regard to the film industry, but I do propose to advert to what I may call, without disrespect to them, the larger issues of the Debate, and in particular to the opening remarks of the President of the Board of Trade with regard to the small surplus, if any, that there is for export investment at the present time. He was followed by the right hon. Gentleman the Member for West Swansea (Mr. Runciman), who proceeded on the same lines. They argued that we had less money available for export because of our unemployment, and said that was the reason we were not making foreign investments. I suggest that is putting the cart before the horse. What is actually taking place is in the reverse order. The Bank of England has decreed that there shall not be any extensive foreign investment and, in consequence of that decree, albeit that is is unofficial, foreign investments do not take place in any considerable quantities. Here are the figures for the first six months of each of the last three years. In 1923, Colonial and foreign investments—and for this purpose the President of the Board of Trade will agree to group them altogether — were £88,000,000 for the first six months; in 1924, £60,000,000 and in 1925, £33,000,000. That is a little over half of what they were last year. That is the declared policy of the Bank of England, supported by the Treasury, and having as its object the restoration of the exchange value of the sovereign and making the £ look the dollar in the face. That is the policy consummated by the Chancellor of the Exchequer in his restoration of the gold standard and that being so, it stands to reason—as a result not as a cause—that there is not an excess of exports over imports because that is what is limiting foreign credit actually means.

There is, of course, another side to the picture. That is the limitation of imports by protective tariffs. That is a policy for which the President of the Board of Trade is himself responsible. When you come to the wide question, both these policies—the policy of the Bank of England fortified by the Chancellor of the Exchequer in restoring the gold standard and the policy of the President of the Board of Trade in limiting imports—have their relation to the fall in exports because it is only in one or other of these two ways that exports can be accounted for. Returning to the question of the exchange value of the £, I was very interested in what the President of the Board of Trade said. He spoke of the depreciated currencies in France, Italy and elsewhere as being a handicap to British trade. I rather hoped, therefore, that perhaps, secretly, in his heart, the President of the Board of Trade would agree with me on the question of the gold standard as against the Chancellor of the Exchequer, whereas, on the question of Free Trade versus Protection I find myself in sympathy with the Chancellor of the Exchequer as against the President of the Board of Trade. If what the President of the Board of Trade said be really true, as I think it is, that the fact of the franc in France and the lire in Italy having depreciated while possibly fraught with dire consequences in the future to those two countries is, at the moment, a great handicap to British trade, does it not follow quite directly that, if the English £ is made artificially to appreciate, it will injure us in trading with countries like the United States, which are definitely on the gold basis, and make the injury in countries like France and Italy still greater than otherwise it would have been?

In fact, during the last 12 months the value of the £ in terms of the dollar has been pushed up 10 per cent. That is to say that, except in so far as there has been a fall in prices in this country, we are 10 per cent. worse in our trading with the United States than we were a year ago. I think that fact is sufficient to account for the great fall in trade which has occurred in the last seven or eight months. It must be remembered that in 1920 and 1921 the trade of this country suffered a grave collapse owing to the deflationary policy pursued by the Bank of England and the Treasury at that time. I do not think there can be any doubt that those two events which closely synchronise, followed the one upon the other. Now the Bank of England and the Treasury are repeating that deflationary action on a similar scale and the same result has followed immediately. I do not think it is going too far to say that is the cause. You can see it clearly. The President of the Board of Trade sees it clearly. When the franc and the lire depreciate compared with the £ it follows also that the dollar depreciates in terms of the £ because the £ has been made to appreciate in terms of the dollar. When the Chancellor of the Exchequer introduced this matter into his Budget proposals, I prophesied there would be a fall in prices of 5 per cent. and threats to reduce wages. I said that would happen unless the Americans, at the same time, by putting more gold into circulation, put up prices in that country. Those prophecies, unfortunately, have been literally fulfilled. First, with regard to the fall in prices, in February the index figure of wholesale prices was 186; in March, 182; in April, 177; in May, 174; in June, 170; and it is 170 now, as compared with 186 in February, and, of course, the actual official act of restoring the gold standard is only part of the process which the Bank of England manipulated, with the support of the Treasury for some time, and the fall from 186 to 170 is almost exactly a fall of 5 per cent. Demands for reduced wages are being shown all over the country in all the principal trades, and, therefore, I think it is clear that one of the principal causes of unemployment to-day is the action of the Bank and the Treasury in restoring the gold standard at a time when such restoration was likely to be injurious.

It is too late to reverse that action. I do not think anyone suggests that we can go back now, but there are certain courses which we might consider. The first step which might be regarded as worthy of consideration, even though it is likely to have no effect, is to try to persuade the United States to bring in inure of their gold as a basis of credit and so prevent the necessity of further deflation in this country. In the discussions on this question, I pointed out to the Chancellor of the Exchequer that if he had some secret understanding with the United States, that they should put up prices and thereby prevent the need for a fall in prices here, I should view his action with much less fear than I did view it. He never answered that question—possibly because he could not reveal secrets, or possibly because he did not fully realise the point I was trying to make. I press it upon the President of the Board of Trade as to whether he cannot use his influence on the financial authorities of this country to induce the American financial authorities to do something to keep up their prices and prevent any further deflation here. I want the President of the Board of Trade and the Chancellor of the Exchequer to realise the full implications of the facts that finance is tied up with industry and that the action of the Bank and the Treasury in restoring a gold standard and forcing a fall in prices in this country must have had, as any similar action will always have, a very serious effect upon trade. What will the effect be? The effect in the first place will be upon the export trades. It will have the result of making the internal purchasing power of the pound lower than the external purchasing power, and the causing of great loss of trade and employment in all the export industries. Such action as was taken in this matter should not have been taken when the export trades were the ones that were most suffering in this country. The effect may to some extent have been to stimulate the internal trade and to have injured the export trade.

The hon. Member for Sunderland spoke of the injury to shipping. All that followed as a matter of course from the action which was taken in regard to this matter. The fact is, that all this attempt on the part of the financial authorities to think that they could work independently of the trade interests of this country, and that their actions are to be measured entirely by financial standards, must be definitely shown now to be incorrect, and we have therefore to recognise that whether we are dealing with the question of trade or dealing with the question of finance, what we do will have an intimate result, not only upon trade as a whole, but upon the interconnection of one trade with another. No action can be taken by the financial authorities which will not have its repercussions upon different forms of trade, and when we take full cognisance of that fact we shall not make such a mistake as was made then of bringing about a sudden appreciation of the pound, and thereby very seriously affecting the employment and trade in those industries which were already insecure and were suffering from the grave situation which had arisen.


I do not propose following the hon. Member for West Leicester (Mr. Pethick-Lawrence) in regard to the gold standard, but I think possibly many of his points are quite correct. I cannot help thinking, when he talks about deflation and there has been a good deal of deflation in the past years, but if he looks at the figures of the 31st March of this year compared with the 30th June of this year he will find there is more inflation than deflation. He will find that the Bank of England advances to the Government which were nothing on the 31st March of this year, are nine and three quarter millions on the 30th June, and the Treasury Bills are 20 millions up on the 30th June compared with the 31st March of this year. So really we get more inflation than deflation. I think in regard to endeavouring to persuade the United States to issue more gold for credit, I fear that that would be quite out of the question at the present time. The right hon. Member for Seaham the ex-President of the Board of Trade started his speech full of hope, and he ended his speech full of optimism. I agree about optimism, but the centre of his speech when he referred to a firm who had lost half a million pounds in money in a year I felt was hardly characteristic of an ex-President of the Board of Trade. He did not seem to realise that great loss. Although the actual debenture interest had been paid by the company, and this, naturally, is a fixed charge, if the debentures were not paid the debenture holders would have an option of putting in a receiver and bringing down this big company. I do not know quite to whom he refers, and whether he refers to Beardmore's who made that big loss in one year. It would be a serious thing for the whole of the country that a firm of that sort should go into liquidation, and when they lose large sums like that in one year we do not know what may happen in another year of depression. There have been many debates upon unemployment and trade and, as the Prime Minister said a week ago, there are many black spots. I think the hon. and gallant Member for Luton (Captain O'Connor) a week ago made an admirable speech. He fixed on one, or two things which are undoubtedly chaotically wrong. He referred in his speech to his own shoemaker where the shoemaker could not get makers of boots or shoes, and he also referred to the tailoring being short of men, and also to the fact that there were 88,000 women out of employment between the ages of 18 and 25, when many families in this country wanted domestic servants. I too feel there is something absolutely radically wrong in regard to those three points raised by the hon. Member for Luton. There was a question put down only to-day in regard to the alien waiters at Wembley. I do think it a disgrace to the country that we should have alien waiters at the British Empire Exhibition when we have such a large number of unemployed of all sorts and kinds. The hon. Member for West Leicester very truly stated that finance and trade were interlocked and interlaced. I almost go farther than he did. I think finance has played almost too great a part in the period since the War. I cannot help thinking when you see the big palaces of the new banks, and when you see the big dividends the banks are paying, that the bankers have not quite realised or worked in sufficiently with trade. The hon. and gallant Member for Central Hull referred to the Bank of England. I do not quite know what he wanted to do, but I should certainly not advocate interfering with the Bank too much so long as the Treasury have a certain control over thorn. I do not know whether the hon. and gallant Member would like to follow the Bank of France, but I must say if he looked into the position of the Bank of France and the Bank of England, the Bank of England is a credit to this country, whatever we may criticise in regard to it. I am not going to keep the Committee long, because I know there are many others who want to speak, but I must refer to another thing which I think is wrong, that is, the large amount we are spending on our social services. The right hon. Member for Hillhead (Sir K. Horne) stated on Friday that, compared with pro War days, we were spending three—


This speech would be more relevant to the Second Reading of the Finance Bill. The Board of Trade does not in any way control expenditure on social services.


I am sorry. I apologise, but I was only endeavouring to bring forward these figures to show that it affected our trade. I was going to explain how the social services brought up the cost of our production. I have here—


I quite sympathise with the hon. Member. It is perfectly true it is very difficult to draw the line in the ramifications of trade, but I really think it is a bit beyond the scope, and it could have been raised, and in fact was raised, on the Finance Bill. On the Board of Trade Vote it will not be possible to take more than one sentence.


I was going to give the extra cost of steel per ton, but I will not do it if yon say it is out of order. Now, in regard to Europe, we have in Germany men working longer hours, and conditions very different from what they are here, and I feel confident that even such a financial scheme as the Dawes Report affects the trade of this country. it means that Germany must export to pay the reparations, and that all affects the trade of this country. With regard to the debts of our Allies, I am very pleased that the Chancellor of the Exchequer has sent a quiet reminder of the debts owed to us, but what would it mean supposing France or Italy agreed to pay us these debts? It would only mean more goods coming into this country, and that again would affect our trade. I would humbly suggest to the President of the Board of Trade that perhaps he could consider some other scheme for settling the debts. Why should not he or the Chancellor of the Exchequer consider trying to negotiate with France and Italy with a view to their reducing perhaps their Customs duties on British goods into France and Italy? That would help our trade, and, however small it was, we in this country would benefit by improving our export trade. One thing that I feel is wrong in this country is that there are so many workers who are non-producers. We have not got sufficient producers compared with non-producers, and I feel that the more producers we can get into industry, the better it will be, and the more it will cheapen our costs by greater production of goods.

There is another important point which I hope I may be in order in mentioning, and that is the necessity for reducing the Government expenditure. If there is one thing that will help our trade more than anything else, it is a reduction in Government expenditure, and I am indeed sorry that the first quarter of this year shows that revenue has decreased by £7,000,000 and that expenditure has gone up by £5,400,000. That is not a satisfactory beginning for the financial year, and that does not look like reducing expenditure, especially when you consider that the Civil Service shows an increase.


I am sorry to interfere again, but the President of the Board of Trade cannot in any way control the expenditure of any Department other than his own. That is a matter for the Treasury, or for the Chancellor of the Exchequer, and you can hardly say that it is within the functions of the President of the Board of Trade to urge the Chancellor of the Exchequer to curb the activities of other Departments.


I have endeavoured to keep within your ruling, Mr. Hope, and I was hoping that I could have brought in that important subject as affecting our trade. The main thing is that we have to co-operate, and I feel that if we carry on some sort of co-operation between masters and men, and between mistresses and maids, we will increase our trade, and eventually improve it, to the satisfaction of everyone.


Last week the Government were challenged as to their attitude in regard to the prevention of unemployment, and the Prime Minister and the Minister of Labour both spoke, at some length, but failed to give any clear lead as to any definite policy with regard to the question. This afternoon, we have heard the President of the Board of Trade, and he, apparently, deprecated the suggestion that he, as President of the Board of Trade, could do anything material to relieve the condition in which trade is at the present time. That, I am sure, will come with some disappointment to the ears of those where trade is most depressed and industry is suffering most severely. The Prime Minister told us last week that things were not so bad, because 90 per cent. of our people are employed, and the President of the Board of Trade told us to-day that we should take courage because our steel production last year was practically equal to our pre-War production, but I am afraid that those suggestions will not carry any hope or comfort to those districts on the North-East coast of England—


I stated it as a fact.


I thought I said so.


I thought the hon. Member was saying that I deduced from it that the steel industry was in a satisfactory position, but if he did me the honour of hearing the rest of what I said about the steel industry, he would have heard that my deduction was quite otherwise.


I listened carefully to the right hon. Gentleman's speech, but I did not hear anything that was going to bring much comfort to the iron and steel industry, or to those districts described by the Prime Minister as black spots. Although the Prime Minister told us that 90 per cent. of our people were employed, that is no comfort to those districts where unemployment runs up to 24 per cent., as it does in the marine engineering industry on the North-East coast, or 42 per cent., as it does in the shipbuilding industry on the North-East coast, and those are figures which have been more or less constant now for several years. In fact, we are entering upon what one might call the fifth "winter of our discontent," and we had hoped, before we got again into the throes and hardships of another winter that we should have some help from the President of the Board of Trade, who is responsible for trade and industry. One rather wonders sometimes whether the Government or the nation realise the desperate condition in which trade is at the present time, and, if I might, I would refer to the position in my own town, which is the centre of the heavy iron and steel trade, in order that the President of the Board of Trade might realise how very serious this position is. There are works closing down, and the number of unemployed is over 24 per cent. In the town of Middlesbrough the numbers of the unemployed, through the lack of orders and the falling off of trade, are 2,000 more than they were a year ago at this time. That means that the trade itself has very little chance of improving, because of the very heavy cost of these men being out of work imposed on the district, and, as I say, one sometimes wonders whether the seriousness of the position is realised by those who are responsible.

We appear to have got into a state of indifference, apathy, and lethargy, and, as the doctors say that the condition of the patient is worse when that patient is indifferent or has apparently given up hope, so those districts where hope seems to have disappeared and despair is prevalent are the districts which appeal to the Government in order that they may get some hope. The Prime Minister, speaking a week ago, threw out the suggestion of subsidies. I should not be in order in following that to any great extent, but hon. Members this afternoon have deprecated subsidies directly to any particular trade or industry, and I share that feeling, but I suggest that the other proposal of the Prime Minister, of subsidies in aid of rates, is one that the Government might explore. The Prime Minister asked us last week to consider that matter, and I put it to the President of the Board of Trade whether he would direct his attention to that possible solution.


That is a matter for the Minister of Health. It is a question of the easing of rates.


I bow to your ruling, Mr. Hope, but I was submitting that it was one of the matters that the President of the Board of Trade might take into consideration, and that he might use his influence with the Minister of Health in considering the suggestion put forward by the Prime Minister. The President of the Board of Trade told us that the thing was to sell more goods, and, surely, one of the best ways of selling goods is to get your costs of production down, and one of the conditions which makes for higher costs of production is not only the heavy taxation, but also the heavy rates. If only those costs could be got down, there would be a chance of selling more British goods, because it is not, as we all agree, the fault of the workers, or the fault of these particular towns, that the rates are so heavy. So far as the workers are concerned, I notice that one of the leading steel manufacturers in the North of England, speaking the other day, gave utterance to some very valuable remarks on this question. He said: The men employed in the Iron and Steel industry were working better to-day than he could ever remember. In spite of the increased railway charges, taxation, cost of coal and shorter hours, productive costs were only 25 per cent. higher than before the War. All honour was due to men who helped to bring about this state of affairs. It was essential for the recovery of trade that all costs should be got down to the lowest level, and he did not think the Government fully realised the importance of this. That is one of the points I want to emphasise. The men are doing their share, and have suffered big reductions in wages, equal in the aggregate, during the last year and a half, we are told, to £500,000,000, and to those of us who know the iron and steel trade, the low rate of 41s. a week is not a wage crippling industry, but rather the productivity of those who have to exist upon it. Not only have wages fallen, but the output has increased. Therefore, there is nothing more that either the employer or employé can do to help matters, and I do wish to stress, with all the power I have, the importance of the Government doing something in this matter. We seem to be drifting on year after year, getting accustomed to this large amount of unemployment, whereas it is, apparently, no temporary matter, but is becoming a chronic state of things, and, really, it is essential that we should all rouse ourselves, and do everything in our power to remove what is a canker eating into the very vitals of the nation. It is only, as has been said, by co-operation on both sides, by goodwill and the determination of every man to contribute his utmost to the solution of this terrible problem that we can get a solution. But we do ask the Government to do their part, and perform their share in this most important matter. Judging by the speeches last Monday and again to-day, one may, perhaps, express some feeling of disappointment that the Government themselves are not prepared to do more, or to take a bigger lead in the solution of this problem.

I should like to say a word in support of the hon. Member for the Edgehill Division of Liverpool (Mr. Hayes) in reference to the claims of those who suffered from enemy action, and I do join in the appeal that sympathetic consideration should be given to these, even though they are belated claimants. The people who are suffering are the poorest of the poor, widows in many cases, people not accustomed to business methods, and who have not read the newspapers. The first that they know they are entitled to anything is when some neighbour has got something from the Government. Then they realise their position, put in their claims, and they are turned down because they are out of date. I do suggest, that if a claim be sound and just, it should not be barred by any statute of limitations of that kind. Moreover, the sum voted in both cases was arrived at before it was known what the claims were going to be. It would seem that the Government suggested, "We can afford so much, and we will share it round amongst those who make claims, without any relation to the real amount of the claims made." Therefore, I submit that the Government should exercise their generosity and sympathy, and extend the grants, so as to bring in those who are now termed "belated claimants."


I am very disappointed that we have had nothing in the course of this Debate about the Government's policy under the Safeguarding of Industries Act. Furthermore, I think we are entitled to hear something about this Committee of Research connected with a very important industry. Speaking with all deference to the judgment of my own party, and the judgment of the Prime Minister and the Minister responsible for our trade, it does seem to be extraordinary that the safeguarding of British industries, which was a vital point at the last General Election, is a point which, since this Government has been in office, has been practically entirely neglected. I should think that with trade bad, and with unemployment bad, we on this side of the House who supported this at the last General Election are entitled to have some definite programme given by the Government with regard to this important matter.

Much as I regret having to criticise my own party, I do feel that we in this Committee must, in justice to our own convictions and to our own ideas, press the Government for some information on this point. I hold very strongly the idea that the iron and steel trade of this country was one of the trades before the eyes of the Conservative party before the last General Election. It was a trade which had been very badly depleted by foreign competition, and, if any trade in this country be entitled to come to any Committee and complain of unfair competition, it is the iron and steel trade of this country. In these circumstances, I feel that it has a just and right claim to put before any Committee, and it is up to the Government to give this Committee some information to show con- clusively that something really is being done for the benefit of this great and vital industry. I suggest, with all respect to His Majesty's Government, that an adequate measure of the safeguarding of our basic home industries is essential for the return of trade. I am one of those people who believe, that in order to get back to our export trade, we must first of all reestablish our basic industries, and we cannot do that unless they are given a chance to compete, which they have not got at the present time. Therefore, I do feel that this Committee has a right to demand some proper and adequate information from the Government on this matter.

There is one other point I want to raise. I have listened throughout the whole of this Debate, and I should feel far more satisfied if we had some definite remedy laid down. [HON. MEMBERS: "Hear, hear!"] Right hon. and hon. Members say "Hear, hear!" I for one believe that, but for their opposition, we should have had a practical remedy, and if they really believed in trying their best to put politics on one side, they would say, "We will give your safeguarding of British industries a trial, and try to support it." There is one other point I should like to mention. A lot has been said about the development of the Empire. I believe in that development; but it seems to me that the President of the Board of Trade, and his Ministerial colleague, the Colonial Secretary—who I know has a great idea of Imperial trade and is interested in the safeguarding of industries—might put their heads together, and approach the Dominions with a definite scheme, and so try to solve a portion of our unemployment problem. It is all very well, if I may say it with respect, to be told that we are doing this or the other in regard to the Empire. What I should like to know is what practical scheme has recently been put to our Dominions with regard really to encouraging emigration? What proper Government scheme has been put to our Dominions? Have the Governments of Canada or Australia been approached, or consulted, with regard to our heavy unemployment? Has any capitation grant been suggested by our Government to the Dominions? After all, I put it with respect to Ministers that, if we could capitalise some of the out-of-work doles, put them in a lump sum, and give it to the Dominion Governments, they would be pleased to take some of our surplus labour that I do feel that we in this quarter of the House who have a real and genuine regard for the Empire and the people of the Dominions are entitled to have some sort of information as to whether the Government is doing something at this particular time.

10.0 P.M.


It is interesting to note the admonition that has just been addressed to the Government from their own benches; for it seems to me that the Debate this afternoon has been rather of a general character, and perhaps not quite enough directed to a criticism of the administration of the Department. I do not mean to say that any of us necessarily want to be carping critics of the administration, but what we might and ought to do is to criticise, though I realise that the President, in giving a needed review of the national trade position, had no time to give a report of the detailed work of his department. I would emphasise that this is the only opportunity we have of criticising its administration. I therefore, want to say one or two things. In the first place, let me say that we get a very different story now that we are in Committee of Supply and dealing with a departmental Vote to what we got during the General Election. I do not remember a single departmental Vote being taken where there has been any great criticism of the work of the Government's predecessors. During the General Election, however, we got a very different spirit For example—I am quoting from the "Star" newspaper of London—on October 9th, 1924, in a speech the Home Secretary said that he thought the Election would be a very bitter one. He went on to say that if the Conservative party got back to office he thought they would find that there were many questions where the Labour Government have gone behind the back of the House of Commons to further their own ends. It is just as well to point out that on the consideration of Departmental Votes since then we have had no attempt to repeat such an innuendo, and such a charge as that, and it is just as well that we should draw attention to the fact.

In regard to the administration of the present Government, may I say a word with regard to the President of the Board of Trade and as to what has been said as to the iron and steel trade. In reply to a question which I put on the Paper to-day the Prime Minister said that it was not the practice to reveal the terms of reference when a Committee was set up by the Cabinet. We had under the Government's proposal for the safeguarding of industries a White Paper handed to us in which was laid down the procedure of the Board of Trade in the case of an application received of a safeguarding character. The hon. Gentleman who has just sat down referred to it. That White Paper said: That a duty will be proposed in a Finance Bill if the Board of Trade are satisfied that a prima facie case for inquiry has been established. I want to ask the President of the Board of Trade to-night whether or not the Department has received an application from the iron and steel industry for safeguarding in accordance with the procedure act out in the White Paper? If so, will he kindly explain to the Committee on what ground the application has been turned down. Have they referred the application to the Civil Research Committee set up by the Board of Trade? Are the Board of Trade so unfamiliar with their own procedure laid down in the White Paper that they have to ask the Civil Research Committee to tell them whether there is or is not a prima, facie case for inquiry. There is one other point I want to put upon this matter. I notice in the Treasury Minute which was issued in regard to setting up the Civil Research Committee that the last paragraph of the Minute says that matters may be referred to special sub-committees of the Civil Research Committee, and that in connection with the special subcommittee it would be possible to appoint special outside experts to assist the Civil Research Committee. May we ask whether this reference of the iron and steel industry to the Civil Research Committee is to the committee as a whole, or is it referred, in whole or in part, to the sub-committee, and if so, is that subcommittee going to have the assistance of experts in dealing with the matter and who is it that has been appointed? Something very straight needs to be said against the procedure of the Government in this matter. There has been a formal application, as we understand it, and the matter has been referred to a Cabinet Committee, whereas if you had set up an inquiry in accordance with the procedure under the White Paper we should have not only heard the case of the iron and steel industry but we should have heard what had to be said by the users of steel on the other side!


The position is perfectly simple. There is no question of referring the application of the iron and steel industries to the Civil Research Committee. As was stated by the Minister of Labour in his speech on Monday, the application for the time being is held in suspense. It is also quite plain that in no cases would the Government recommend a duty to the House except after inquiry by a committee, constituted in accordance with the terms of the White Paper, and subject to the provisions of the White Paper. What has been done in regard to the iron and steel industry is that the circumstances have been referred for consideration to the Civil Research Committee of the Cabinet. That body has the right to have sitting with it on various questions, persons whom they can call in from time to time. That is a perfectly simple statement. The Government, of course, is perfectly entitled to refer questions of great importance to any Cabinet Committee they desire. I can say at once that any proposal in any case for establishing a duty can only come after inquiry by a committee set up in accordance with the terms of the White Paper.


It seems that my suggestion is substantially correct, that when the application for assistance under this procedure by the iron and steel industry was received, the Government were unable to make up their minds without further expert advice, as to whether there was a prima facie case for an inquiry as laid down in the White Paper. That, I may point out, is what was prophesied when the Government first introduced their White Paper. Another matter about which I would like to ask the Board of Trade is whether they do not think the time has come for a revision of the regulations governing weights and measures. It is difficult to go into this for fear of transgressing the rule about not talking about legislation, but the late Government last year found that it was imperative that at an early date—we had no time—there should be a complete consolidation of the position; and whilst I am glad to notice that there is a slight increase in the establishment charges of the Standards Department, I would like to know whether the Board of Trade propose a revision and consolidation and whether these proposals include making permanent the regulations as to the sale of bread by weight. I would also like to know what is the policy of the Board of Trade arising out of the findings of the Committee on the Bankruptcy Law, and what is the position of the inquiry into the working of the Companies Acts. Some of us are very anxious to see an improvement in the administration of the legislation dealing with the Companies Acts.

In connection with the matter we have been discussing so much in the general Debate, I would like to ask the Board of Trade what is the position of the inquiry into trade and industry presided over by Sir Arthur Balfour. I am persuaded that the President of the Board of Trade will find that a most valuable report will be presented to him, ultimately. I had I do not know whether to say the good fortune or the misfortune to be in the witness chair five and a half hours on one day, and I can testify to the thoroughness of the examination which that committee are making. In the meantime, however, trade is getting bad, and we would like to know whether the President of the Board of Trade expects the Balfour Committee to present an interim report which would be of any assistance in formulating a policy for the improvement of the trade of the country. I think it is very important, if the Committee have come to certain definite conclusions, that the President should have an interim report, and that it should be presented to Parliament.

May I say one or two things in regard to Imperial development and in regard to trade with other countries and, more particularly, with Russia? Though, I am sure, the official representatives of the Board of Trade would not say it, it is sometimes assumed by hon. Members opposite that Members on this side of the House have no concern for Imperial development. That really is not true. Even though some of us differ very strongly from the fiscal proposals of the President of the Board of Trade for securing preference, we are prepared to go a great deal of the way in other directions in order to assist Imperial development. Can the President tell us how soon he hopes to get a report, even a first report, from the Imperial Economic Committee? He shakes his head, so I suppose he is not very certain; but if he does not expect to get a Report fairly early there are still some things one can say to-night which may be of assistance. Those of us who have some experience in regard to the products of the Empire know that there are a few ways in which some Empire development could take place within a comparatively short period, if certain procedure were adopted. In regard to products like dried fruit, we are anxious not to have a repetition of what happened two years ago, when we got a standard grading of fruit, on which we were able to buy in bulk known standard grades. As a result of bad grading, bad packing, and actual fermenting of some goods it has become the practice not only of the people with whom I am connected, but of the trade generally, to buy only by the sample instead of buying in bulk. That is a position we want to get away from if we are to develop really good trade relations with the Dominions. If we can get a spirit of confidence we shall be able to buy in bulk on standard grades, knowing that we can rely on the quality and on getting delivery in time.

I believe there are numbers of traders, in addition to the movement with which I am concerned, who are anxious to place before their customers more and more products of the Empire. Because we do not agree with the Government on fiscal policy, it is not to say that we are not prepared to do what we can in other directions to develop the sale of Empire products. We have suggested that it is quite possible to do a great deal more than is being done at present to popularise Empire products in this country. I suggest that representatives of Empire traders would do a great deal more than they can achieve by advertisements if they would take propaganda direct to the consumer. We can probably give them a welcome in the numerous cooperative branches we have all over the country if they really want to educate the woman with the basket. We might also bring them into far closer relations than they are at present with trade union organisations for the same purpose.

Another matter we are concerned with is that if we are to develop the sale of our purchases from the Empire there ought to be better organisation on the part of the producers. It is true that producers are more co-operatively organised in Australia and in New Zealand—and they are increasingly organising in Canada—than they are in this country, but we could do even better with them if they were organised still more widely. I suggest that the excellent statistical department of the Board of Trade might have a little section devoted to a bureau of information of the various Empire organisations of producers, with information always available as to the possibilities of direct trading with those producers' organisations. What we are concerned about is the number of channels which still exist, especially in a market like Liverpool, through which Empire produce has to come before it finally gets to the larger distributors, and, through them, to the consumers in this country. If we had a bureau of information which was really functioning in London—I know this view is held by some representatives of the Dominions as well as by myself—we could do a great deal to facilitate trade relations with the Dominions.

But while no one will work more wholeheartedly than I to popularise Empire-trade, we have to remember that this country will not got back to a position of comparative prosperity unless we can get a widely-increasing trade with the densely populated countries of Europe, especially Russia. I have noticed in the replies to questions lately a sort of hardening of the heart of the Board of Trade with regard to the possibility of trade with Russia. In that great country there is a population, of 136,000,000 people, which must be compared with the combined population or' New Zealand and Australia of less than 7,000,000. It is true that we do a trade of £10 or £12 per head of the population with Australia and New Zealand, but a trade of 10s. per head with the people of Russia would be more than equal to the £10 per head of our trade with Australia and New Zealand.


Is the hon. Member aware that our total exports to Russia before the War were only £18,000,000?


What we require are new markets, and it is no argument to say that before the War we only sent £18,000,000 worth of exports to Russia. Here you have a great people and a great country with any amount of natural resources. Here you have a potential market, and if there is any doubt in the mind of the Parliamentary Secretary as to the possibilities of trade with Russia, let me say that in the co-operative movement we are concerned about trade with Russia, and we are doing a very large amount of business with that country. What is more, we find no difficulty with our transactions, and within the last three or four years, as a result of the trade we have done with Russia, not a single transaction has taken place without the whole of the money involved being paid as soon as it was due. I think our actual experience in that matter is rather better for the purpose of developing trade than the kind of talk being indulged in by hon. Members opposite with regard to the impossibility of our trade relations with Russia.


Does the hon. Gentleman suggest that other traders are following that example?


I did not say so, but what I do say is that the attitude adopted on this question by hon. Members opposite is destroying confidence, while really there is plenty of ground for complete confidence in regard to the development of trade with Russia, and from that point of view I should be glad to hear that the Board of Trade are willing to consider any Measure including the extension of the exports credit system for the wider development of trade with Russia.


Germany does most of the trade with Russia. The system is that the German firm finds, for example, an American firm with whom they ran act, and where one imports the other exports. The result is that there is only a small balance outstanding, and the risk is reduced to a minimum.


If the hon. Member has any suggestions to make like that to increase collateral security, by all means let him press them upon the Government, because there are many industries in this country which would have a new lease of life if they had an opportunity of extended credit to Russia. [An HON. MEMBER: "Can the hon. Member name one?"] Yes, engineering, for example, and if the hon. Member who interrupts me will inquire in the engineering districts, such as Lincoln, engaged in the manufacture of agricultural machinery, he will be able at once to confirm what I say.

There is one other point with which I want to deal, in regard to the administration of the Department. I am surprised to find, from what has happened in the last few months, that once again the Prime Minister does not seem to be living up to his Election pledges. I have before me this extract from the Election Address of the Prime Minister: The problem of the cost of foodstuffs is one which demands careful investigation by a Royal Commission. The importance of any feasible reduction of the6e costs, in its effects both directly upon the cost of living and indirectly upon our industrial position, is obvious. What I want to ask the President of the Board of Trade is, what has become of the "careful investigation" which is referred to there by the Prime Minister? Let me take something else from the Prime Minister—and I want to put this to the Government, and see how far they are living up to their pledges. We are always being told about the transparent honesty of hon. Gentlemen opposite, who always keep their pledges The Prime Minister came to Sheffield about 36 hours before the election, and he said: I have undertaken, if we are returned to power, to have a Royal Commission to inquire into the causes of the rise in the cost of food, and the remarkable discrepancy which exists in many cases between the price obtained by the producer of food and the price paid by the consumer; and I will guarantee this, that if. as a result of the inquiry, it is discovered that any practical steps can be taken to cure these ills, we will take them. [An HON. MEMBER: "Hear, hear!"] The hon. Gentleman cheers that, but I do not think that he action by the Board of Trade, since the setting up of the Royal Commission, is carrying out the pledge of the Prime Minister to take whatever action is recommended. The real position, I think, as to this inquiry by the Royal Commission on Food Prices, was stated by the political correspondent of the "Sunday Times," and I do not think it could have been better stated. The "Sunday Times," after saying that this "stunt'' inquiry by a Royal Commission had been disbanded, after only the first Report had been received, said: The Government must be sick of the subject by this time. The Food Commission was only appointed to get rid of a stunt clamour, and the seriousness with which the Commissioners took their job was very inconvenient, for, by the time their Report came out, the Government's hands were full. Ministers have now decided that the Commission shall not continue its inquiries and they would be very glad "— I wonder if this is true? Will they tell us if it is—. if the proposed Council, which is bound to be a costly futility, could be pre-natally despatched. Is that their view? Here is the position The Prime Minister obviously led the country to believe that the high cost of food was something which could be remedied by having an inquiry into it and finding a method for dealing with the spread of prices between the producer and the consumer. The Royal Commission met. It considered two main commodities only, bread and meat. It presented a Report, and it recommended that a Food Council should be set up, with powers to deal with those who are engaged in profiteering out of the food of the people, not only raising the cost of living, but thereby raising the cost of production in industry, which is suffering 50 badly at the present time. What has happened? So far as we can tell, the Board of Trade is merely appointing a Food Council without any powers at all, except to make further inquiries, which will, I suppose, be pigeon-holed, and of which nothing else will be heard; profiteers will be allowed to go on their sweet way undisturbed, the cost of living will remain high, and the cost of production, consequently, high also. What is to become of that great banner of the Prime Minister's at the Albert Hall Victory meeting? May I remind the representatives of the Board of Trade— I expect they were there listening at the Albert Hall on the 4th December—of what the Prime Minister said? He said: We may have to force a way through the jungle of interests but we have behind us in that magnificent recruitment of young members sufficient driving force to put anything through. [Interruption.] What are they putting through? The hon. Member for Cocker-mouth (Mr. Dixey) has made the only "drive" I have heard to-night. He has been worrying the Government about the safeguarding of industries. As a matter of fact, we hold the view—and I say it advisedly—that the real position is that the Royal Commission, imperfect though it was in its constitution and in the scope of its inquiry, having made certain definite recommendations, the Government are afraid to face the Issue because of the vested interests that are behind the scenes, and instead of dealing with the matter whole-heartedly and taking the necessary powers to deal with it, they are setting up another dud council in which they will be able to lose altogether the complaints which are received from time to time. Someone said just now, "What about co-operative societies as a vested interest?" I have yet to learn that nearly 5,000,000 of people who combine to save themselves middleman's profits are a vested interest. [Interruption. ]


They cannot profiteer then.


I am prepared to deal with that at any length you like, but only one at a time. The hon. Member who interrupted me knows as well as I do that of all the organisations in this country the only organisation acting as a bulwark to the consumer is the people who are in business for themselves, who save themselves the profits of the rest of the trading community. Let us compare, for example, the practice of co-operative societies with the private trader. They first limit the wages of capital, and after that return the balance to the worker and to the consumer. [HON. MEMBERS: "They pay no Income Tax.'"] They pay any amount of Income Tax.


You say that for three years they made no profits. They issued a return showing £99,000,000 profit in three years.


Not a profit. That is returned to the customer.


£68,000,000 are in reserve.


All I can say is the hon. Gentleman does not understand the returns. If he wants a little elementary education in it I shall be pleased to meet him and explain them. On the other hand, here is the kind of thing that this Food Commission ought to be inquiring into. There is the Meadow Dairy Company, with a capital of £.375,000 and an average dividend for six years of 93.6 per cent. on share capital, on top of the issue of a share bonus of 200 per cent. Is it not about time that profiteers of that kind are brought within—


Will the hon. Member tell us whether the ordinary capital is the whole of the money employed in the business or whether there is a debenture or preference issue?


I could if I had notice of the question. [Interruption.] I am as much entitled to ask for notice as hon. Members on the other side. Take half a dozen other firms I have here, who pay anything from 31 per cent. to 50 per cent. on share capital, one giving a bonus in 1919 of 300 per cent. There is no doubt at all as to the spread of prices which is taking place between the producer and the consumer. We charge the Board of Trade, after the inquiry, with taking inadequate steps to deal with the situation.

In reply to a question the other day, the President of the Board of Trade said he was aware of the growth of the new Grocers' Proprietary Articles Association, but he preferred to leave over for the time being any action until he had considered fully the Report of the Royal Commission. I should like to know tonight whether, having fully considered the Report of the Royal Commission, he proposes to take any action. I noticed from the "Grocer," of 27th June, that there are 10 firms of manufacturers who now agree with some 2,900 retail grocery firms to control prices. They say that they are to have a list of protected articles, and they are to combine for the maintenance of prices. Is the President of the Board of Trade going to allow an association like that to be formed for the keeping up of prices of the food of the consumer, without taking any action, or is he going to refer it to some special inquiry? We should like information on that.

At the present time there is an attack all through industry upon wages, in one big industry after another, when the real way of cutting down the cost of production is not to attack wages, but to make an attack upon the margin at present existing between the producer and the consumer. In spite of optimistic speeches made to-night, we think that there will be no final solution of the unemployment problem in this country until you adopt a system of trade which is entirely different from that which at present operates.


That would require legislation.


I am not sure that it would require legislation. At the present time in this country, and in every industrial country, the whole trouble is that you have solved the problem of production—there is no difficulty about production—but you have not got the markets. You have not got your masses of working people in receipt of such a share of the wealth they produce as to be able to absorb a fair share of the goods produced. There will be no solution, in my judgment, until, instead of the wages of capital being unlimited and the wage of labour strictly limited, you reverse the process and limit the wage of capital and allow labour to get a larger share of the wealth it produces.


My right hon. Friend the President of the Board of Trade earlier in the day made a very wide and exhaustive survey of the general trade position. I will reply to the important matters that have since been raised. In the first place. I will deal with the question of the film industry, which was raised by the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy). I was glad he raised the question, because it is most important, and its importance is not in any way underestimated by the Government, as was indicated by the Prime Minister in his speech the other day. A discussion has taken place in the House of Lords, when Lord Newton made a valuable contribution to the subject. Discussions on the question are going on amongst the various bodies interested in the trade, and it has been discussed in the Press. While these discussions are going on, the Government feel that it would be much better that they should not intervene. Certain national bodies have, I understand, definitely passed resolutions to co-operate in the movement, including the British Empire Producers' Organisation, the Overseas League, the Stage Guild, the Navy League, the Incorporated Society of Authors, the Empire Development Union, the National Union of Teachers, and other important bodies, who have viewed the question in all its various aspects.

I agree with much that was said by the hon. and gallant Member as to the importance of the cinematograph profession and industry from the point of view of education, national well-being, propaganda, advertisements and so on. But it seems to me that the alternative suggestion which has been made, which has the sympathy of the Government, will be of interest to the Committee. The speech of Lord Gainford the other day put forward the view that those who are interested in this industry believe that an inquiry is necessary, as it is essential to increase the prestige of the industry, but they think that the present moment, when certain action is being taken on their part, is not quite suitable for them, because they have not come to a definite decision as to the character of the evidence which they ought to place before the inquiry. The Government share their view, and if and when representations are laid before the Government they will be received with earnest consideration

The hon. Member for Hillsborough (Mr. A. V. Alexander) has referred to the Food Council. So far as I could gather, all that he said boils down to this, that the Food Council did not have any statutory powers and, therefore, would not be an effective body. The principal recommendation of the Food Commission—and hero I disagree with him—was this. The powers which they wished the Food Council to possess were not those of a Government Department, which would be bound by strict regulations, but those of a body which would act as an intermediary between the trade and the consumer and reconcile the common interests, which the Commission did not regard as necessarily conflicting. I think that it is apparent to the Committee, and to the people of this country, that the whole effort of the Prime Minister and the Government is in the direction of co-operation where it is possible, and the Food Council has been constituted in that spirit.


On a point of Order. Are we ever to have an opportunity of discussing this important question? We have had nothing about it except a few remarks from the Opposition to-night. Time should be found for such an important subject as this, upon which some of us feel very keenly.

Captain BENN

It is competent for the Government to give three additional Supply days which would afford the opportunity.


Hon. Members will understand that I have been taking advantage of the only opportunity I have. It may well be that the Council will never require any compulsory powers at all, but if experience shows that compulsory powers are necessary the Government will not hesitate to come to Parliament for whatever powers may be required. Meanwhile I believe that the Food Council will serve a very useful purpose, possessing as it will powers of investigation which are very important, and it will act as a deterrent, in spite of my hon. Friend's doubts, to that small minority of British traders who wish to act unfairly by the community. I believe that in that way there will be a response drawn from the people that will be far more effective in regard to the essential food supplies of the country than if the Government were to attempt to use the bludgeon of regulation and legislative enactments which my hon. Friend seems to want.


Do I understand that the Government pay no attention to paragraphs 342 and 343 about trusts and combines?


Certainly, the Government pay the very greatest attention to the whole Report, but the Clause that I have read permeates the whole Report, and it is on that aspect of the Report that the Government are basing their action. I want now to refer to what was said by the right hon. Member for Seaham (Mr. Webb) about dyes. He agreed as to the value of Government action in the dye industry, but he com- plained as to the clearness of the dyes that were produced in this country. I should say that he quite reasonably complained. But the position as to the prices of dyestuffs manufactured in this country is that in some important directions appreciable reductions have been and are being made. For example, there has been a very substantial reduction in the price of British-made synthetic indigo. It has to be borne in mind that the price of the dyestuffs in relation to the article dyed is very small indeed. Nevertheless, all the factors in the cost of production are under review, and there is every hope that there will be a steady reduction in the price of dyestuffs. The right hon. Gentleman made another remark which caught my attention. He put a question in this form, "Does anyone say it is more economical to work 54 hours a week instead of 48 hours, thus flying in the face of all the economists?'" There are moments in the workaday life of nations and men, when one may be forgiven, for saying, "A plague on these economists." To tell the normal man that for himself and the community it is bettor that he should work less rather than more, when more is within his capacity, is to tell him what I do not believe and what I do not think he believes in most cases.

Incidentally I may say that we are asking the Committee for money, and I want to refer to the main Board of Trade Estimates. The net sum provided in the Estimates for 1925–26 is £534,714. The gross expenditure is £1,558,071, and the Appropriations-in-Aid £1,023,357. The difference of £7,520 between the reduction and the net decrease shown in the printed Estimate represents amounts lifted out of the 1924–25 column of other Votes for comparative purposes in connection with the transfer of the Enemy Property Department to this Vote in 1925–26. The practice of distinguishing between transitory services arising out of the War and the ordinary services has been discontinued for the reason that war services are diminished in quantity, and in 1925 the Estimate for war services is £20,068 compared with £46,610 last year. I would point out that the reduction of £3,550 would have been greater by £37,000 but for the taking of the Census of Pro- duction this year. The actual amount provided for the census is £51,188 compared with £14,005 in 1924–25. There is a saving on war services of £26,500, made up of £15,000 on diverted cotton cargoes, and £2,170 on the food department, £5,800 on the reparation claims branch, £650 on air raids compensation grants and £2,875 on assistance to the dye industry, and possible savings in the permanent departments. If the gross estimate however —and this is meeting the point which was raised by the hon. Member for Ilford (Sir F. Wise)—were further adjusted by deduction of the provision for bonus— (£129,755) and of the exceptional provision already referred to, it would stand at £450,687 as compared with the pre-War figure of £409,910 in 1914–15. On this basis the increase over the gross estimate for 1914–15 would be £40,777, which is more than accounted for by Patent Office and Companies Department increases both of which are covered by fees. I wish to show to my hon. Friend that of all Government Departments, the Board of Trade is running economically, although he was complaining of extravagance, and the Board of Trade, I may say, following out his line of argument, is working at a relatively lower cost than it was working at in pre-War days. I frankly say that you might draw that argument out to the extent of demonstrating to the Committee that the Board of Trade is really a prosperous money-making concern, but the situations are not comparable. The Board of Trade has shed duties in those years and has assumed other duties, and so it is impossible to make a comparison.

I want to refer to the Reparations Claims Fund. This branch has been transferred to the Finance Department. £5,000,000 was voted, and distribution has taken place in accordance with the Sunnier Commission's recommendations. There is a small number of claims outstanding. Owing to lack of confirmation of the addresses of claimants and of information as to the next of kin of deceased claimants, etc., about 360 outstanding claims remained. £300,000 was voted by Parliament as a solatium to belated claimants, and we did hope that all the outstanding claims forms would be in last December, and that they would be examined or dealt with by the end of January. However, there has been more delay, and there are about 2,600 claim forms that are yet unreturned. They are coming in at the rate of 20 a week, and it is hoped that by the end of the financial year they will be dealt with. My hon. Friend raised the point as to the distribution of the surplus of the £5,000.000 remaining. Well, that really is a question for the Exchequer. Any balance in the normal course of things goes to the Exchequer.


Do I understand that the Board of Trade are not to make any representations in regard to this matter, seeing that it is the Department charged with the responsibility of spending the £5,000,000?


The Board of Trade is charged with the administration of the money.


It is charged with the administration of spending the £5,000,000, but what about the £460,000 left, which it has not administered?


If the Chancellor of the Exchequer will give us any more money, we shall certainly administer it, but we cannot provide funds out of the Board of Trade.


Before he sits down will the hon. Gentleman tell the Committee when the Government propose to introduce the Bill to extend the Trade Facilities Act, as foreshadowed by the Prime Minister last Monday week?


I am not aware to what Bill the hon. Member refers.


The Prime Minister said they were considering the extension of the Trade Facilities Act, so that repairs and renewals, as well as capital expenditure, could be applied for.


That does not require any legislation at all.


I will conclude by expressing the hope that the Committee will sanction the Vote.

Captain BENN

Will the hon. Gentleman say a word about steel before he sits down? The White Paper says that under certain conditions the Board of Trade would grant an inquiry. The conditions were established, and the Board of Trade did not grant an inquiry. Will he tell us in a word why that decision was made and no inquiry was granted?


I think my right hon. Friend has described what happened. He has said it is perfectly within the discretion of the Government to refer a matter of that kind to the Civil Research Committee, which they have done.


I listened with close attention to the speech of the Parliamentary Secretary, I hope with proper deference, but I detected not a single word in it which had any bearing upon the complaints and criticisms which have been made in the course of the Debate. I was not disappointed, because only a few days ago the Prime Minister stated that there was nothing which a Government could do to remedy the state of industry in this country at the present time. However, I rise principally to say that I share the regret of many hon. Members that the House has not been given an opportunity previously to deal with the question of the Royal Commission on Food Prices, and the disgraceful way in which the Government, having promised to deal with this matter, and having allayed the fears of a large part of the community by setting up a Royal Commission, have then completely disregarded the findings of that Commission, and have allowed the subject to drop altogether. On one or two occasions I have questioned the right hon. Gentleman on this subject, with little satisfaction either to myself or the House, because when I asked what powers the new Food Council would possess which are not already possessed by the Board of Trade, he referred me to "the very useful purposes set out in the Report of the Royal Commission." I have extracted one or two of the definite recommendations of that Royal Commission, and here is one of them: There should in future be an organ of the State with statutory powers permanently in being to watch over the supply of wheat, flour, bread, and meat for the people of this country. I assert that no single action can be taken by that Food Council which cannot already be taken by the President of the Board of Trade, and in those circumstances I assert that it is nothing but eyewash and whitewash to set up this Food Council at all. I much regret that time will not allow me to develop this theme. I may say that I had prepared some observations at length on the subject, but I can only deal with a question which, when mentioned by an hon. Member on the Opposition front bench, excited the Government's supporters to great agitation, and that was the question of the co-operative societies. I may read one extract from the Report, which is as follows: The attitude of the co-operative societies to price fixing is interesting. Witnesses from those societies have informed us that ' they are frequently approached by the local master baker with suggestions that the price of bread should be raised. It appears to be the case that co-operative societies do very often, owing to their refusal to act with the local master bakers, keep down the price of bread for the benefit, not only of their own members, but also of their rivals' customers. I am willing to support any organisation or body which will have the effect of keeping down the prices of the necessities of life to the poor people in the East End of London. A rise of 2d. in the price of the quartern loaf of bread means, in the case of poor people in my constituency, £3 a year in a family of three. That is a cruel impost on people who are already having a hard struggle to live, and I sincerely hope—

It being Eleven of the Clock, the Chairman left the Chair to make hits Report to the House.

Committee report Progress; to sit again To-morrow.