HC Deb 29 April 1926 vol 194 cc2221-60

I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof the words this House urges the need of utilising every opportunity to develop trade within the Empire.

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


The very serious condition of the export trade is too well known to require an array of figures. I have selected Empire trade not because of any difficulty with foreign trade or any disrespect to that trade but because that is the particular trade which is likely to be soonest developed, and our energies, if placed there, will give the quickest return and the trade is likely to be more permanent. The position to which I more particularly refer is connected with the great trade in cotton, which plays a very important part in the exports of this country. In order to give the House some idea of the importance of the cotton trade, I would like to point out that in 1913 cotton manufactures were exported to the extent of 7,100,000,000 yards and, of that 3,800,000,000 yards were sent to the Empire. Last year we exported only 2,100,000,000 yards to the Empire, and the problem we are faced with in Lancashire is unemployment caused by this great diminution of our export trade.

The question arises, have we as a country used every opportunity we can to develop trade within the Empire? Is the co-ordination between the Mother Country, the Dominions, India and our Dependencies so complete that we feel nothing is left to chance and nothing has been left undone. I am afraid that those who have a knowledge of our export trade will not give an affirmative answer to that question. The lack of co-ordination in connection with our Empire trade is something which seriously retards the trade of the country. A very important Royal Commission reported in 1917 on this question, and an important feature of its recommendations was that there should be set up an Imperial Development Board, representing not only this country but India and all our Dominions and Dependencies. It was not intended that this Board should take the place of Imperial Conferences but that it should really be subservient to those Conferences. The Commission suggested that it would be a good thing for this Development Board to carry out the instructions of those Conferences and prepare Agendas for subsequent Conferences. Those interested in the next Imperial Conference will recognise that we are at the moment suffering from the lack of such a Development Board, and I hope it may be possible that when the Conference does meet they will put the subject which I am raising on the Agenda for discussion.

If I may speak of the conditions existing in Nigeria, I would like to say that we have a Dependency there the development of which would be a great advantage to both countries. The Under-Secretary of State for the Colonies has recently been making an extensive tour in these regions, and he will no doubt report that we need to develop railway and transport facilities there because they are vitally needed for the development of Nigeria. That is exactly what the British Cotton Growing Association said in 1919, and I should like to know if we can have any new information on this point. In that year the British Cotton Crowing Association reported and made special plans for developing cotton growing in Nigeria. Railway extensions were suggested, but they have not been completed. Certain harbour developments were also suggested and they have not been completed. In 1925, although Nigeria is a prosperous Dependency, there had been no extension of railways in that country since 1919. Then last year 147 miles were added, and further small extensions are now proceeding. This only gives 1,276 miles of railway to serve that great Dependency. The rate of extension is quite insufficient. We have all this talk year after year about these developments being necessary, and we get much sympathy from Minister after Minister. I think however we should now translate that sympathy into something more substantial.

In Nigeria it is not a question of getting the credit of the United Kingdom, because Nigeria is able to borrow on the security of her own revenue. If we could press upon the Department concerned, and upon the Government, the vital need of development in this particular part of our Empire, I am quite sure that money would go out from this country, which would produce employment, and goods would come back of which we stand most in need, namely, the raw material of our trade. I should like to read an extract from a speech which was made by the Chancellor of the Exchequer when he was Colonial Secretary. He went to Manchester in June, 1921, and this is what he said, speaking of our Empire: The neglect to develop the tropical possessions of the Crown is one of the most extraordinary features, to my mind, in the history of the last 20 years. Give these great fertile, teeming, virgin countries the scientific, modern, technical apparatus that they may require, in the way of harbours, railroads, light railways…and they will return you a plentiful reward for every pound invested in them. For every pound will go out, and can only go out, in the shape of the products of British labour, and for every pound there will come back raw material—cotton, rubber, fibre, and half-a-dozen other raw materials by which the industries of Great Britain will be nourished and revived and strengthened for the future that lies before them. It is a process which benefits all, and which benefits the natives as much as it does the planter or the British manufacturer here at home. The Chancellor of the Exchequer made that declaration in 1921. He expressed extreme astonishment that for 20 years there had been neglect in developing the Empire. Five years have elapsed. Is it not going to be possible for the person who holds the office of Colonial Secretary in another 15 years' time to be able to make the same charge against ourselves, who are now responsible for the administration of our Empire? I would suggest that, if the same enthusiasm that was displayed by the right hon. Gentleman when he spoke to us in Manchester were put into operation now, we should get some development of the Empire, and some improvement in our trade which would be to the advantage of this country and of the Empire generally. The great diffi- culty in these Dominions is that we neglect the making of surveys. They are an essential preliminary if we are going to have successful development, and I suggest to the Government that it would be easy even in these days of economy, to find a little money for securing a proper survey of our Dominions, so that, when the time is ripe for the expenditure, it will be made on areas which have been properly prepared and surveyed, and we shall get value for our money, instead of, as so frequently happens, there being a rush of enthusiasm in this country in the direction of, say, railway development, and then, when a few millions have been spent, it is realised that if there had only been a more accurate survey double the length of line could probably have been laid.

I come now to the subject of overseas trade, and am glad to see the Parliamentary Secretary to the Overseas Trade Department in his place. I think he has made an important proposal in connection with credit insurance. We all recognise the interest that he has taken in that question, and this matter of credit insurance is one in which the country is very keenly interested. What are to be the functions of the Committee? Who is going to benefit by the credit which this Government scheme will give? In the cotton trade, credits have been looked upon with some disfavour. It has been felt that Government interference in these credits was not necessary. But that has been the opinion very largely of the merchanting section. To my mind, the great difficulty which the cotton trade have had to face has been that due to the breaking-up, in 1920 and 1921, of the shippers, who provided the channel by which our Lancashire goods have been conveyed overseas, and there has been no substitution since then of people who could finance the carrying out of these great cotton trade operations. I suggest that we in Lancashire have, perhaps, paid too much attention to the local consideration that we could not get orders in Manchester, and that our mills had consequently to close, and we have not paid sufficient attention to the wider fact that in 1920 many of these shippers became bankrupt for hundred of thousands of pounds, many of them lost hundreds of thousands of pounds, and their resources were either completely destroyed or very much crippled. If we can now, when prices are on a lower level, get some assistance by which we may rebuild the bridge that was then destroyed, we shall be able to restore some degree of prosperity to our great trade.

I should like to ask the Parliamentary Secretary whether this credit will be given to those who send goods on consignment. After the failure of the shippers, this trade in sending goods on consignment has really become essential for the success of the industry. These thousands of millions of yards that are capable of being produced require some agency by which they may be exported. The ordinary agency has failed, and the enterprising manufacturer has to look to other quarters. What is happening? Some manufacturers have established direct connections with countries overseas. They have their own agents, and very often they have hundreds of thousands of pounds worth of goods there, available and ready to be used when the natives' purchasing season arrives. Unless these goods are sent on consignment, our trade languishes, because most of the merchants will only send goods when they have an actual order. The President of the Board of Trade shakes his head when I suggest that credit should be given to those who send out goods on consignment, but is it wrong to support the British manufacturer who is willing to take the risk? He does not want insurance of loss; he simply wants someone who will say to the bankers, "We will stand behind the Lancashire manufacturer until his goods have been sold in a foreign or overseas market."

I can give, from my own knowledge, the case of a man who, when the slump came in 1920, found his ordinary means of trade cut off. He started a consignment trade, and. sent goods overseas, but, this trade having developed, his bankers said to him, "You are taking great risks; we can only finance you to a certain extent." If be had been willing to adopt the advice of his bankers, his trade would have been kept at a low point, his mills would have been running half time, and those whom he employs would have been out of employment. But he was not going to be put down in this way. He was doing part of his trade through Holland, at Amsterdam. He went over to Amsterdam, opened an office there, and got a Dutch banker to finance him, and ever since the decline in 1921 the mills of that manufacturer have been kept going full time, and he is financed by a Dutch banker in Amsterdam. I suggest that, if it. is possible for a foreigner to give credit to a Lancashire manufacturer, because he relies upon him, because he knows his integrity and has command of the goods until they are sold, it should surely be possible for our own Government, having established a scheme, to encourage a home manufacturer who is willing to take; the risk himself.

4.0 P.M.

There is just one other point in connection, with the Overseas Trade Department. It is an excellent Department which gives information to manufacturers and traders, and it is a Department which is of particular use to those who use it, but it does not seem to be sufficiently well known to the traders of the country. I have asked the Department to give me the figures showing how many in the cotton trade are connected with what is known as their special register, and out of all the firms connected with the cotton trade there are only 151 on their special register. What does the special register do? For a few guineas a year you get through the Department from all overseas trade commissioners and consuls information as to the particular commodities and markets in which you are interested. If that information is sent with the details necessary, it is of particular use. The Parliamentary Secretary to the Department, I understand, is going to Lancashire next week to urge the need of publicity. I suggest that one of the first things he does is to establish in his own Department a publicity agency which will boast the good things which the Department can do.

Of course, it is impossible for these Consuls and Trade Commissioners to know the details of every trade, and we get information sent to us which is ridiculous in what it contains. It is not the fault of the particular overseas representative. It arises of necessity from his lack of knowledge of particular trades. It would be easy for the Department— and I hope that the Parliamentary Secretary will take note of this recommendation —to go, say, to the Cotton Manufacturers' Association and ask them to prepare a form which if filled up would give the information that would be necessary. If those forms were sent out, our Consuls throughout the world would know what information was expected. I have mentioned this matter to one of my hon. Friends who was a Consul in the Far East for over 20 years, and he tells me that if they had had forms of that description it would have been of inestimable value and would have made their work easy for them while they would have felt that the information they were sending home was valuable and could be practically applied. I hope that these two suggestions I have made may be of some help to the Department, and others in developing and expanding our trade.


I beg to second the Amendment which has been so ably moved by my hon. Friend the Member for Rossendale (Mr. Waddington).

I am going to resist the temptation to travel over the wide ground which he has opened up. I propose to confine myself strictly to one main issue, namely, the connection between Empire trade and the better distribution of man-power between this country and the Dominions. We all know the importance of Dominion trade. We all know, thanks to the preference given to us in those markets, that the Dominions are, per head, our best customers. That perhaps can be best realised by stating that if we take three customers, one in Australia, another in New Zealand, and a third in Canada, they spend with us on the average £29 15s. a year, and that if we take three other customers, one in the United States, another in France, and a third in Italy, they spend with us on the average £l 19s. 6d. a year. Comment upon those figures is needless. Although the Dominions are by far our best customers per head the trouble is that there arc very few heads in the community, and the number grows slowly. I was looking into the figures the other day, and I find that in Australia the average increase of population during the years 1911–13 inclusive was 150,000, but during the years 1923–25 inclusive the increase fell to 130,000. Therefore, in spite of the fact that there is a larger population in Australia at the present time than there used to be, the average rate of increase, so far from increasing proportionately, is decreasing proportionately. In Canada, the position is still worse. In 1912–13 inclusive the average yearly increase of population was 375,000, but during the two years 1924–25 that increase on the average has been only 141,000.

There, again, we see that there is a slow increase in the population of our best markets. That is not due to any such circumstances as a reduction in the birth-rate, or an increase in the death-rate. In both countries the birth-rate exceeds the death-rate by a satisfactory proportion. The reason the populations of those great markets do not increase as they should is because we do not send them the number of migrants that we ought to send to build them up. The figures on that point are very striking. Our average yearly migration to Australia before the War, in the years 1911–13 inclusive, was 57,000; in the years 1923–25, inclusive, that figure had fallen to 29,000. Our average yearly migration to Canada during 1911–13, inclusive, was roughly 132,000, and in the years 1923–25, inclusive, that average fell to 54,000. I think that is an alarming decrease. How can our trade with these great overseas Dominions expand as we might reasonably hope it to expand if the populations in those countries do not expand.

The gravity of the situation was fully realised as far back as 1921, when at the Conference of Prime Ministers it was agreed that a joint policy should be adopted to secure a better distribution of the white population between this country and the Dominions. It was fully realised again in 1922, when we in this House passed the Empire Settlement Act. But do we all realise what has happened since? The position has gone from bad to worse. The population of Great Britain, since 1922, has increased by over 600,000. Migration to the British Empire overseas generally, if it has not actually decreased as some maintain, has certainly not increased. My authority for making that statement is the Report to the Secretary of State for Dominion Affaire of the Inter-Departmental Committee appointed to consider the effect on migration of schemes of social insurance. I am not going to blame or criticise any person or Department or any Government either in this country or overseas. I am simply stating facts which are indisputable, and facts which will, I think, give rise to a feeling of dismay in the minds of all thinking people.

The causes for this comparative failure of the Empire Settlement Act and the policy embodied in it are, no doubt, many, and I would say at once that I believe some are entirely beyond the control of the home country. But this fact is clear that, whatever the causes may be, we have not spent on migration anything like the amount of money which this House authorised to be spent under the Empire Settlement Act, 1922. During 1922–23–24 and 1925 we were authorised to spend for purposes of Empire settlement £10,500,000. The actual expenditure during those year3 has been less than £1,500,000. In other words, we have spent during these four years less than the £1,500,000 which we were authorised to spend in the first year of the operation of the Act. There are many other causes. One of them, I submit, is that we have not really grappled with the real problem in regard to migration. That is stated with perfect clarity in this booklet issued, by the Oversea Settlement Department, entitled "Empire Migration and Settlement." On the very first page these words occur— The problem is to convert a large part of our industrialised population into a rural population engaged in agriculture. One would have thought that the first step in dealing with that problem was to try in some way to train our industrialised people who were desirous of migrating so that they might become fit to engage in rural occupations. So far practically nothing has been done in that direction. In reply to a question which I asked recently, I was informed that there are at present in this country only two training centres, both of them, I understand, juveniles out of employment, and the total number is 175. We ought to be preparing for migration at least 200,000 people a year, and here we have training establishments for 175. Another obstacle to migration is the severity of the restrictions imposed by the Dominion authorities upon intending migrants. That is a matter beyond the control of the present Government, but I hope it will be seriously and frankly and fully dealt with at the next Imperial Conference. There is no doubt that we have hundreds of thousands of people anxious to migrate and to seize the great opportunities that are offered overseas, and who would do so were it not that the restrictions imposed by the Dominion authorities are so severe that a very large proportion of them are ruled out.

Another obstacle to migration is that under the much-abused capitalist Industrial system the conditions of great masses of our people have so improved that when they are thinking of migrating they find that if they migrated, they would, or might, lose certain benefits. A number of people who are now either in receipt of or in expectation of some form of pension or benefit is enormous, and those people naturally say, "We know that if we remained in this country we are entitled, either now or in the future, to certain benefits and if we go overseas, while we may come under some Dominion scheme, it will not be as good as that under which we now benefit." Therefore, the proposal is made by Sir Donald Maclean's Committee that persons who are enjoying contributory pensions should be allowed a sum in compensation if they surrender those benefits in order to emigrate. That is a very interesting suggestion. I think it might perhaps be carried further, and I for one am not in the least frightened by the idea that that would entail some additional expense, because any expenditure which we may incur in facilitating emigration will not only be of benefit to the persons concerned, but will be a real economy to this country, not only in the long run, but in the near future. Whatever the obstacles are, and wherever they may lie, to emigration, we ought to make a determined effort to overcome them. I should like to see the spirit that animated the House in 1922 revived. Then we were all enthusiastic about migration. Now it seems to me we are all extremely slack. I hope that spirit will be revived, and that we shall do something big, bold and effective to increase migration from this country up to the pre-War figure of something over 200,000 a year. I urge this, not merely for the benefit of British trade, but also for the advantage of a great many people in this country, particularly young people, who through the density of our population are denied the opportunities which arc offered to them overseas; above all, I urge this in the interests of the Empire as a whole.


I think the Amendment would have served a more practical pur- pose if the policy of the party opposite had been embodied in it. Everyone agrees as to the necessity of developing Empire trade, and, as a matter of fact, trade wherever you can get it, in view of the conditions of the country, but a general desire, such as is expressed in the Amendment, must, of course, be embodied in a policy. Therefore, in reviewing the development of Empire trade, the sooner we come to grips with the differences that may develop in regard to these policies, the better it will be for the problem we have to consider. The policy that lies behind this Amendment, though it is not expressed in definite terms, is well known to the country. Already the party opposite have had one General Election, in 1923, on some phases of their Empire development policy, and during the last 18 months, using their majority quite legitimately, we have seen the movement for the realisation of that policy expressed in various ways. The necessity for markets to-day, of course, is a commonplace, and I propose to review the situation, first of all, in its general aspect, and finally to give, as far as I can, a contribution of what we have to offer on this side. Before the War, there were certain tendencies in world trade which were disturbing to Great Britain. The War, in the realms of trade as in many other spheres, has accelerated those developments, with the result that need of expanding markets, always an essential feature of British industrial life, has become aggravated because of the general decline in the purchasing power of Europe in particular.

But while these economic problems are the direct result of the War, there have been other developments accelerated by the War—political and social developments. For instance, before the War, the trade union movement and the cooperative movement largely accepted the function of working within the scheme of our capitalist civilisation. There was no majority challenge, as it were, on the part of this organisation to the general policy laid down by the employing interest. But to-day that position has also changed completely and remarkably, and the organised movement of the workers —the trade union movement, the cooperative movement, and the Labour party as its political expression — does not accept the general policy on trade and industrial and commercial development as laid down by Members opposite. They challenge the very system itself, therefore our attitude to the policy of Empire development must be conditioned by that remarkable growth of working-class opinion since the War. That leads me to make this first point—a very essential point—in the attitude of the House towards the matter, because we cannot overlook the fact that the population of the British Empire is composed of roughly 60,000,000 Britishers and 390,000,000 coloured people. In approaching this problem of Empire development, we shall not be a party in any sense at all to the use of British capital and British power, as represented by State action, in the further exploitation of the, coloured communities of the British Empire either for the British capitalist in the first sense, or, secondly, for the British community in its larger sense.

Having said that, I want to approach the problem now from the standpoint of the economic conditions of the country, which make improving foreign and Dominion markets an essential feature of our future progress. There is no other country in the world which has the same problems that we have to confront, because in this country, whatever our opinions may be as to the topsy-turvy state of British industrial and agricultural life, the fact remains that as the result of 100 years of development, we are dependent more than any other community in the world for our food supplies on overseas. That compels us in return to develop an external export trade in manufactured goods, again to an extent that no other country in the world is compelled to adhere to. This remarkable contradiction, remarkable lack of balance, in the economic structure of Great Britain raises problems that are peculiar to this country as compared with other communities. What is the position? Take our basic foodstuffs. Great Britain is compelled to import roughly 77 per cent. of its wheat and Hour from overseas. Of its meat supplies we import about 60 per cent., butter 80 per cent., cheese 70 per cent and dairy products 50 per cent. That presents a problem which makes necessary an always increasing area of cultivation throughout the world, and it makes of even greater importance the necessity of developing the output of every possible acre of land in our own country. Even if we make the development, of Commonwealth trade an essential feature, our policy should start from the utilisation of the land of our own country which, though limited in its extent, could nevertheless supply more than it is doing to-day.

But even admitted that there is the necessity for expanding the cultivation of agriculture abroad, it leaves us to the problem how to pay for it. We pay for it to-day in three directions. First, by the export of our manufactured goods, and, secondly, by our overseas investments and shipping. That brings me to a point which is relevant because I want to relate it to the policy of the party opposite. The main consideration of Great Britain, in view of its economic structure, is that we must have in this country an abundant supply of cheap food and raw material. Endanger the quantity of imports and the price of imports and you create a problem of a permanent character which may be more difficult to deal with than the post-War problems which we are now considering.

The next point is the necessity for securing expanding markets for our manufactured goods. I shall not attempt, there is no reason why we on these benches should attempt, to belittle Empire markets. Why should we? There is no difference on this side of the House with any hon. Members whether of the Conservative party or of the Liberal party as to the importance of Empire markets to this country. I want to prove that by recognising the facts of the situation. If we take a period before the War, from 1890 to 1912, what do we find the disturbing factor in world trade so far as this country was concerned? If we take our trade with the United States of America, Germany, France, Russia, Italy, Spain, Holland, Denmark, the Argentine, China and Japan, which covers almost the whole world as far as trade is concerned, our percentage of trade in those markets was steadily declining over that period. It was declining so far as our exports to those markets were concerned, without exception. When we put the figures into special categories, the situation is even more regrettable from the standpoint of this country. The export trade from the United States, taking the period from 1890 to 1912, went up from £176,000,000 to £452,000,000; the export trade of Ger- many rose in the same period from £166,000,000 to £440,000,000 while the export trade of Great Britain rose from £263,000,000 to £487,000,000. These three nations represent the most industrialised communities in the world, and we find that the export trade of the United States of America and Germany was growing in that period at a much more rapid rate than the export trade of Great Britain.

If we take a survey over a longer period in relation to Empire markets, we find that in the period from 1870 to 1924 the position is much more favourable. We were able to retain in our Empire markets over the longer period over 50 per cent. of the total imports of manufactured goods of India, Australia, New Zealand and South Africa. With these facts before us, it is futile to belittle the importance of Empire trade and Empire markets to this country. If we take a survey of broader generalities—I know that figures can always be manipulated; I could dissect the figures which I am quoting in order partially to destroy my own argument—we find that 450,000,000 British subjects in 1924, which more immediately touches the problem with which we are dealing, took from this country £332,000,000 worth of our manufactured exports, an average of 14s. 9d. per head, while; the 1,350,000,000 of foreign peoples tonic £462,000,000 worth of our manufactured exports, an equivalent of 6s. 8d. per head. That proves that on the percentage basis Empire markets are more fruitful for British development than foreign markets. While I admit that, it would be futile and suicidal for this country to overlook the importance of the £462,000,000 worth of trade that we did with foreign countries in 1924. We approach this problem, not from the standpoint of making the British Commonwealth a self-contained community, because that will build up racial hatred and economic prejudice throughout the world, but in its limited and more sensible sphere, because it does present a favourable market which we are legitimately entitled to develop.

For the purpose of clearing the air before I make an attack upon the policy of the party opposite, let me say that there is no contradiction in the international ideals for which we stand and national economic security. We do not contend that it is not within the province of the British people to secure economic safety for themselves by processes that are legitimate and an economic standard of living for the people of this country, but the international conditions that we lay down are that in gaining national economic security, and in raising the standard of life of the British people, we are not entitled to do it at the expense of other communities throughout the world. The party opposite, at election times or whenever they discuss this problem, presume that they are the real custodians of the British Empire. [HON. MEMBERS: "Hear, hear!"] The cheers of hon. Members opposite corroborate that statement. Our contention is that the principle of Preference, the relations of inter-Empire trade is not entirely a case of the Dominions handing out a measure of charity to us in the shape of tariffs. The Preferences which Great Britain gives to the Dominions exceed in many respects the advantages we get from the Dominions. In the broad comparisons of trade which I have given, we are still doing the bulk of our export trade with foreign countries. Of the goods that our Dominions export, mainly food products, Great Britain not only takes 50 percent. of the exports of the Dominions but, practically, Great Britain is the only market that the Dominions have for the export of their goods. Of the butter, cheese, fruit and other commodities and wool which they export, practically the whole output comes to Great Britain. Therefore, the problem is not simply one of encouraging or making it possible for the Dominions to export their goods to Great Britain, the real problem is, how we can increase the total output of food in the Dominions and still direct it to this country?

Comparing the measure of Preference given by the Dominions to ourselves and what Great Britain gives to the Dominions, we find that the total value of the Preference given to us by the Dominions is estimated at about £12,000,000. Of this sum over £7,000,000 is represented by the Preference given to this country by Australia. The balance of £5,000,000 is not a great contribution on the part of the rest of the British Empire to help the struggling Mother Country to overcome the difficulties of the post-War period. What are the Preferences that we give to the Dominions? Apart from the Preferences which we have given in the past, in the long struggle which the building up of the British Empire has represented, I would ask hon. Members to look at the tangible advantages they get from being linked to this country. Under the Colonial Stock Act of 1900, investments in the Dominions are trustee securities. Roughly speaking—these figures are given subject to correction—there is something like £2,000,000,000 of British capital.




I said the figures were given subject to correction. If I accept the corrected figure of £1,000,000,000, it will not destroy or belittle my argument. Assuming that on that preferential form of investment the Dominions save 1 per cent., the total saving on the reduced figure of £1,000,000,000 means a direct Preference of £10,000,000 from the mother country to the Dominions. It is true that the British capitalists invest that money to-day, but it was made out of British labour in the first instance. The British Government, which means the British people, have largely subsidised emigration so far. Although the Dominions are adopting a little more generous attitude towards that problem now, we have largely borne the burden in the past. The emigration contribution of Great Britain to the Dominions is not measured entirely by the amount of money that we spend upon that service to the Commonwealth. We incurred as a nation the cost of the education of our man-power in the early days. We incurred the cost of training all these individuals, and that cannot be measured in pounds, shillings and pence. After we have trained them in the educational sense and from the manual training point of view, they take their wealth-producing capacity to the Dominions. The cost of Imperial defence has always been borne in the major part by the people of this country. The subsidising of the postal service and the telegraph service has fallen upon this country, while the use of British consular and trade services are at the disposal of the Dominions. Finally, in recent years the party opposite, not content with these contributions from the mother country to nations that are already becoming in many respects richer than ourselves, are developing Preferences on sugar, wines and dried fruits.

I am opposed to the policy of a 10 years stabilisation of Preference. I do not, consider that the party opposite have any right to pledge this country to that policy. The Labour party, speaking for over 5,000,000 people, a party which is growing more rapidly in the confidence of the people of this country than any other political party—[HON. MEMBERS: "Oh!"] You will see that when the result of the East Ham by-election is declared to-night—are pledged to the policy of Empire development and the Government have no right to ignore the Labour party when they are framing their policy for the Empire. If they adopt that policy the inevitable result will be, pledged as we are to the abolition of food taxes, that when we become the Government of this country we shall abolish food taxation and incidentally, without any desire to do it, they will inflict by a policy of that sort serious injury on Dominion trade. The Dominions have imposed tariffs on manufactured goods. The primary object of the Dominion tariff is not to give a preference to Great Britain but to foster Dominion manufactures. Incidentally, after it has served this primary purpose, they are prepared to give a preference to Great Britain.

The policy of Preference on foodstuffs in this country is not to foster home agriculture. We impose food taxes in this country to raise revenue. Therefore, the principle of preference, as applied in this country to stimulate Empire trade, makes inevitable the retention of food taxation; thus you have two contradictory principles operating. The Dominions get the benefit both ways. They improve their own manufactures while giving a partial preference to Great Britain. We cannot limit ourselves to this system of Preference in the shape of food taxation until we defend British agriculture on the same plane by the imposition of taxes on wheat, meat, butter and commodities of that sort. That is where the party opposite arc trying to lead the people of this country under the guise of their Empire trade policy. In recent years they have thrown out a sop to British agriculture in the shape of remissions of taxation and a few thousand pounds more on rural road development, but the party opposite know that if this policy is continued it will lead, and must lead to the imposition of duties on meat, wheat, butter and other commodities. That is the inevitable development of this policy, and that is why we are opposed to it.

I turn now to a phase of Empire policy which is essential both to the Dominions and to this country, that is successful agriculture. Wherever we have successful agriculture in the world to-day it is upon a co-operative basis; the collaboration of the State with co-operative organisations. We see it in Denmark. The Dominions are turning more and more in that direction. In submitting our policy as against the fiscal plan of the Government, we stand more and more for the action of the State and of working-class organisations, like the co-operative organisations, as a means of developing the resources of the Empire and the trade between one part of the Empire and another, so that the benefits of this improved trade will not go to a comparatively small group of people in this country or in the Dominions but will ultimately go to the producers and the consumers. The reason why America and Germany are forging ahead is because they have applied themselves to organisation more than we have in this country. When we look at coal, electricity, transport, and other great vital services, we sec that the main reason for their failure to-day is because Great Britain has lagged behind other countries in applying up-to-date methods and more particularly the co-operative plan.

It is argued that if the State took action with regard to Empire trade there would be certain disastrous results. As a matter of fact, the wheat imports of this country, the meat imports of this country and the import of all provisions into this country, are to-day largely controlled by half a dozen or eight firms. The importation of the foodstuffs required by the British people is rapidly getting into the grip of a series of private trusts, and if six or eight groups of private importers can import the bulk of the foodstuffs of Great Britain without any disastrous results in the international or the economic sphere, is it not possible for the State, acting through the co-operative organisations, to perform that task? Assuming this process goes on, and we get one or two private trusts handling the meat or wheat supply, will the economic results be any different from what has happened to oil in Mosul, or rubber throughout the world? The inevitable tendency of the nations of the world to-day is to control their own economic resources; and it will be better for the peace of the world ultimately. There will be problems certainly, but it is far better for these problems to come to the surface so that the people of the country may be able to see them and understand them and grapple with them rather than there should be these vested interests behind the scenes.

Therefore, the plan we advance as an alternative to the fiscal plan of the Government is a collaboration of Governments, the British Government and the Dominion Governments, each representing their various communities, each working through the co-operative organisations which their peoples have built up, to insure that the advantages of this new wealth created in the twentieth century is enjoyed by the masses of the people. It is a practical proposition. In 1924 the Co-operative Wholesale Society of this country financed one of the largest wheat deals that has ever taken place in the Empire. If we can finance, as we have through working-class organisations, a deal which involves the whole output of one of the Australian States, why should not we finance the output of the whole of the Australian States? That is the policy for which we stand. The policy of this country in the nineteenth century was a policy whereby the power of Great Britain and the people of Great Britain was used largely for the purpose of exploiting the home community, and the same policy has operated largely throughout the Empire. We cannot let that be repeated in the twentieth century. That took place before the workers of the country had their organisation which could resist such a policy, but as far as we are concerned, and with the knowledge we have of what happened in the nineteenth century, we are not going to let that policy be repeated.

We see the results of a hundred years of private enterprise. Where are the great basic industries of this country to-day? They have been sucked dry and thrown away like a sucked orange. The coal position, which we are considering now, is the result of your policy during the last century, the policy which is embodied in this Amendment. We are not going to allow the raw materials and the wealth of the Dominions to be subjected to the same process in the twentieth century. You have a different, situation. You have a party on this side of the House which represents 5,000,000 people of this country, and in the Dominions you have a Labour party which is growing most rapidly in areas like Australia, Canada and New Zealand. Our alternative, which we want to make quite clear to this House, to the country and particularly to the Dominions is this: We do not accept the policy of the party opposite. We do not consider ourselves bound by this 10 years' stabilisation period. We do not look to the fiscal plan of the Government to improve Imperial trade. We look to the people of this country, operating through the Government, controlling its own resources, the Dominions controlling their own resources, leading not to a complete economic hegemony but to the development of a world democracy which will make for peace and not for exploitation. We cannot oppose this Amendment because of its pious character, but we take this opportunity of making our position quite clear, so that it will not be said in the future that we in any way supported the policy of the party opposite.


The last speaker began and finished on the note of exploitation, and I do not propose to follow him into all the ramifications of his argument. I want to say a word or two in regard to a particular market in which every qualified observer agrees there has been no exploitation whatever either on this side or the other. It is the greatest British market in the world and one in which the connection between the two countries is a record of beneficent economic influences from the first moment trade began between the two countries. I refer to India, and I want to draw the attention of hon. Members to some rather grave elements in the trade with that vast area. Let me draw attention first to the immensity of the Indian market. It absorbs one-eighth of our total exports, and there is something like one-fifth or one-sixth of the entire population of the world living there under the British flag. It is a market which we have developed to a considerable extent in the past, but it still admits of almost fabulous development if we treat it in the right way. The grave fact, to which I want to draw attention, is the decline in the percentage of total imports for which this country is responsible. Since 1914 our percentage of India's total imports has fallen from 64 to 54 per cent. The volume of that trade is still enormous. It was reported last year, as I have said, at roughly £100,000,000, and that very fact explains why the decline that is going on steadily is hardly realised in this country. The facts are generally stated in the form of percentages and, stated in that form, the fluctuations are so tiny that the actual decline does not appear on the surface.

5.0 P.M.

The most marked decline in actual volume is in the Indian consumption of cotton piece goods. Between 1914 and 1925, although values may have been steady at about £40,000,000 sterling, the actual decline in volume is enormous. The decline in English exports of cotton piece goods to India is from 3,000,000,000 yards in 1913 to some 1,400,000,000 yards, in the last completed year of our trade. What that means to this country, when you take into account the important position which Lancashire plays in the prosperity of the United Kingdom, is apparent. If you range over a number of the most important of Indian imports you will find not so great a decline, but you will find everywhere a steady trend of the trade into foreign channels, or at least into channels other than our own, where such channels can possibly be found. The contrast can be seen by comparing the figures of India's exportation, as it has expanded, with the figures of her importation. The general condition of India is one of tremendous prosperity, which has been very greatly enhanced as the result of her experiences in the War. In the field of Indian exportation you get a growth from £166,000,000 sterling in 1914 to £271,000,000 in 1925. That is an expansion of 65 per cent. It is quite in harmony with the trend of India's economic progress for the five or six decades before the War.


Would the hon. Member say that a country where the, people are able to purchase only £4 worth of goods per head per annum is a prosperous country?


I propose to deal with that question in a moment if my hon. Friend will give me an opportunity. What I was trying to draw attention to was the contrast between the growth of India's exportation, which is an indication of the general prosperity of a large portion of her population, and the very small growth of her importation. There we have progress in exportation such as we had been led to expect from all the intensive work that had been done before the War. The figures for importation are £128,000,000 in 1913–14, and £151,000,000 in 1925, or an increase of only 20 per cent. If allowance is made for the depreciated purchasing power of currency, there is practically no increase in India's absorption of foreign goods. The reason for the decline in absorption is to be sought in the higher cost of production in the producing market, the higher selling prices in India, and the inability of the Indian population, with an average income of some 60 rupees— or £4, as my hon. Friend puts it—a year, to pay anything but the very lowest prices available.

Before the War the share of the United Kingdom in the importation of India was some 64 per cent. The underlying reason for the present comparative stagnation of the importation figures is to be found in the high cost of production in this country and the relatively high prices of goods sent out from this country; and the effect in the India buying market is that India is hard at work in half a dozen spheres now, doing her utmost to find alternative markets where she can buy these goods at prices which her ryots can pay. We have not yet seen in India the result which will ultimately accrue from high-producing costs here and high prices of British goods, but I would refer the Minister to the excellent reports of Mr. Ainscough, of his own Department. Mr. Ainscough's anxieties, not merely in the sphere of cotton piece goods, but in railway purchases, general iron and steel absorption, and so on, runs over almost the entire gamut of Indian purchases.

I want to go a little further than merely draw attention to what is going on. I believe that the danger implied is very much greater than is realised. As a result of our long connection with the country and the beneficent work that we have done there, we have in India a tremendous quasi-natural preference. The Indian wants to buy British goods. It is not his desire, generally speaking, except in the case of an infinitely tiny political section of the community, to seek other markets than our own for the good old standard lines, if he can possibly get them from us. But certainly as regards piece goods he simply cannot pay present prices. We heard just now of the exploitation of one side and the other. The increase in the cost of production in Lancashire and the increased selling cost of Lancashire piece goods have worked infinite hardship to the mass of the people in India, to whom Labour Members in this House are so sympathetic. I have had people calling on me at my office in Calcutta to tell me stories of the appalling conditions in which their womenfolk are often obliged to exist on account of the increased cost.


Would the hon. Member suggest that, in order to overcome that difficulty, the Lancashire weavers and spinners should be given less in wages, or that the Indian ryot be given more in wages?


I will develop that subject if I have the time to do so. The Lancashire worker from his own point of view is engaged in what he describes as stabilising a new and higher standard of comfort. [Interruption.] Is it not his object at all costs to maintain the higher standard which the War brought in? I am well aware of the position in Lancashire. That is the general aim of the workers in this country—to stabilise their standard of living on a higher level than before the War. I want to make it perfectly clear that the oversea consumer in countries such as India is suffering inordinately from that process. The producer in this country is suffering acutely and the consumer in India is suffering acutely. In Lancashire you are getting very prolonged periods of short-time working. The American section of the magnificent Lancashire trade is now contemplating a whole week of unemployment in order to get rid of accumulated stocks. The simple cause is that the costs of production are too high for the India ryot to pay. The worker in Lancashire is suffering from incessant short time.

I want to suggest one or two lines on which I think that something might be done by our great Departments to get into touch with the Indian market, and, in some measure at least, get the two countries more nearly into reciprocal connection. There are several very big openings in India which could be utilised, if only the right methods were adopted. I have drawn attention before to the railway position. This matter is not so remote from the question of consumption and of the average income in India as it may appear to be. On the contrary, there is a very vital connection between the two. India now—it has been true for a long time past—is starved of the railway communications that the poorest of her population so urgently need if their standard of living and income are to reach the figure that they ought to reach. In the last 15 years we have had a considerable series of reports on the railway position in India. We had Sir Thomas Robertson's report in 1908; then the McKay Commission's report in 1911; and since the War we have had the invaluable report of the Acworth Committee. With one consent all those expert bodies have recommended a much greater rate of increase of railway mileage than has been possible for some time past. The McKay Committee two or three years before the War was anxious to see an annual expenditure of £12,500,000 sterling of pre-War money on Indian railways. The Acworth Committee since the War agreed—I have here some eloquent passages from the report, drawing attention again to the inadequacy of the railway communications—and suggested that a move should be made as soon as possible.

The result of all that was that we had a five years programme started, in each of which years £20,000,000 sterling was to have been spent merely on rehabilitating the Indian lines which had suffered so terribly as the result of the War. In point of fact, there has not been more than one year in which that sum has been spent. There have been very good reasons for it. They have not even spent in India the £20,000,000 recommended and provided for, apart from the general Budget, for rehabilitation work. Now they have started at last. They are just getting to their constructional programme. We have a programme which shows an average expenditure of £6,000,000 sterling per year for the next six years, until 1932. That is all in the right direction. But considering the development which India has undergone, as shown by the figures of her export trade during the years since Lord Inchcape sat as Chairman of the Railway Commission, and considering all that has happened, and the progress that should have been made, it is pitiable to think that even now they are to spend only £6,000,000 sterling of post-War money on a railway programme in a country which needed 12½ million sterling of good pre-War gold to be spent to get that country into anything like the condition that the prosperity of the country demanded.

I am aware of the work that the Railway Board in India is doing. Everyone is straining his utmost; everything is being done that can be done there. It is not a country in which you can get a sudden expansion of a railway programme. There is the question of personnel, the improving of the yards, and so on, and that is very slow work. I would refer the Minister to the report of the debate on the railway programme in the proceedings of the Indian Imperial Assembly. The Indian political leaders, even in that Assembly, make constant complaints that the rehabilitation work and constructional work are not going on nearly fast enough. May I read this one small extract from the Acworth Committee's Report: How much the economic development of India is suffering not from hesitation to provide for the future—no attempt has been made to do this—but from the utter failure to keep abreast of the day-to-day requirements of the traffic actually in sight and clamouring to be carried, it is impossible to say. Had the Government thought fit to borrow money, even at a rate considerably higher than the not rate of the return that the railways could earn on it, we believe this action would have been abundantly justified, but, in fact, the Indian Government never needed for many years previous to 1914 to face this position. For the past 45 years, the net earnings on the capital invested in Indian railways has never sunk below 4 per cent., and for the last 25 years it has only in three years sunk below 5 per cent., and this result was obtained though a substantial sum had been charged against revenue …. and in spite of the fact that, a not inconsiderable part of the total mileage had been built, not on commercial but strategic grounds. Since that was written, there have been two years when the railways in India did not pay. Now, the railways have a separate budget, thanks to the interest and statesmanship of Lord Reading, who pushed through that great reform, and they have also a magnificent organisation in the new railway board. The money allocated to them they can spend, and it is not appropriated for general State purposes. I submit that there is a chance of creating a real connection between the needs of the great iron and steel and railway manufacturing areas in this country, and the needs of India as expressed in passages such as that which I have just read, and as expressed also by popular leaders in the debates in the Assembly only three or four weeks ago.

That is the first patent opportunity to which I would draw attention. I do not believe that advantage can be taken of it unless the British Treasury, the Board of Trade and the India Office co-operate directly with the Indian Government and the Indian Railways Board. For effective action to be taken the water-tight compartments separating our Departments from one another and these Departments from the Indian Government—these are difficulties which would have to be removed. There will have to be closer co-ordination if we are to get full advantage of the possibilities of actual expansion in these markets There was a proposal in the last Imperial Economic Conference that £5,000,000 sterling—not a very large sum—should be appropriated to Empire Governments and I think the borrowing Governments were to be relieved of three-fifths of the interest charges or at any rate some part of the interest charges, in the interests both of the Overseas Dominions and our home producers. Surely the Indian railway position is an example par excellence of what could be done by co-operation on these lines. The money so allocated by the British Exchequer or the assistance given in the London loan market, would involve no risk whatever. There is the most magnificent security to be found in the world. The railways can not run away. The Indian population want this progress to go on more rapidly than it is going on at present, and the popular Indian Assembly is at one with them in that demand. It may be that lack of strenuous co-operation between all the parties concerned, and, possibly, an insufficient realisation in India of the tragic position of our heavy goods markets is preventing some really constructive scheme of this sort from being promulgated and put into operation.

If the House will bear with me I should like to refer to one other great opportunity which has a direct relationship with the suggestion from the Labour Benches that the prosperity of the population of India is assumed rather than real. There is the pathetic estimate— as it sounds to English ears—of the average income of the Indian inhabitant. I should like to say that this estimate is very theoretical and uncertain. Various estimates have been made. In Lord Curzon's time it was estimated that the average income of the population was 30 rupees a head. A very excellent estimate was made in the Madras Presidency by an expert economist, who, for that Presidency at any rate, estimated the average income at 60 rupees. For English consumption these figures are converted into sterling at the current rate, and we are now told that the Indian ryot possesses an average income, taking that vast population as a whole, of £4 per annum. It is exceedingly misleading to state it in those terms, but the subject would involve a too lengthy discussion at this stage. At any rate, no one denies that the standard of comfort among the vast population of 320,000,000 in India is pathetically low. It is my contention, and the contention of everybody who has gone to that country with an impartial mind, that the effect of the British connection—its law and order, its roads, railways, and security—on the purchasing power of most of the inhabitants has been wholly good. That purchasing power has been rising steadily. In my 10 or 12 years in Calcutta the daily rate of the coolie in the port has risen from four annas to 12 annas. In terms of English currency, of course, that is from 4d. to 1s., but I do not accept that translation at all. It is not a conversion corresponding with reality. The coolie in the Calcutta docks to-day, at 12 annas a day, is remarkably well-off compared with anything which his ancestors ever enjoyed.

The point to which I wish to come is that if a really strong interest were taken in the matter here and in our Departments, something might be done to improve the position in the producing areas of this country which are suffering from unemployment, and at the same time to improve the condition of the agriculturist in India. There has been in the last quarter of a century a wonderful development of co-operative societies all over that vast country. There are now something like 30,000 or 40,000 societies, mainly credit societies. They have never gone very far beyond the primary stage which you had at the beginning of the great co-operative society movement in Germany. What we desperately want is a re-examination of the position of that movement in India, with a view to utilising it for the improvement of the agricultural equipment of India, and the whole system of cultivation there. We want a re-examination of the present position of the co-operative societies— of the movement which has developed there since 1901—in order to see, again, whether credit cannot be utilised in that direction and whether some of the ryot's most pressing needs cannot be met. I have here some figures referring to the potentialities of the agricultural position in India, and I think they are very striking. They give some conception of what might accrue to our markets at home if greater prosperity could be brought to the Indian cultivator. Here again you have a complete and perfect interlocking between Indian interests and British interests, if you can only create the reciprocity and draw them together.

The acreage of that country is 200,000,000 acres, and the total, value produced, even now with the inefficient instruments which arc used, represents £600,000,000. The agriculturists employ 150,000,000 bovine cattle, and it is calculated that 25,000,000 of these are useless. The majority of them are used, of course, for purposes of traction, and for grinding and pumping and work of that kind. There is a real possibility in the approximate future of substituting mechanical methods of agriculture for these ancient and, indeed, almost antediluvian methods which have been going on for a millennium. The direction in which assistance can best be given to the Indian agricul- turist is by popularising the light metal plough. Canadian and American exports are actually at work now finding what the ryot wants and sending these ploughs into the country. Something ought to be done from this end to find out what is the ideal instrument required, and to give some standard specification to manufacturers in this country. Another direction in which a great deal might be done is in regard to the use of the oil engine. It is estimated that something like 500,000 of these engines are wanted in India, and would be absorbed by that country in a reasonable time. In 1923–24 it actually absorbed 2,920, and they cost £600,000; and the numbers have gone up in a single year to 3,670. I suggest in the whole field of agricultural India there are possibilities of development; that there is a case for examination and, at least, a probability that something could be done to bring grist to the mills of our manufacturers and their employers here, while promoting the trade and prosperity of India.

Lieut. - Commander KENWORTHY

I am sorry the hon. Member for East Ham South (Mr. Barnes) has gone out of the House, as I should like to congratulate him on his very forcible speech. May I also be allowed to congratulate the last speaker on the concluding portion of his speech concerning the need for modern machinery and agricultural Implements in India. As regards the first part of the hon. Member's speech, I do not quite know at what he was driving, unless he was demanding a reduction in the standard of the Lancashire worker simply on the ground that the standard of the poor Indian is so low. However, in a discussion of this sort it is better to avoid party and controversial questions. The only sentence I will use, which may possibly be regarded as of a controversial nature, is that I claim to speak for a party which, if it does not number 5,000,000 votes, at least numbers 3,000,000 votes in this country, and is the party without which we would not have an Empire at all today. We saved South Africa and Canada, and this country would not have lost the North American Colonies but for the party opposite. That is the answer to the question which was raised earlier in this Debate. The party opposite if they have not lost Ireland have very nearly done so. However, I do not want to be controversial, but I think what I have said will be accepted by all Students of history.


What about Scotland?

Lieut.-Commander KENWORTHY

If the party opposite had had their way, we would have lost Scotland. I desire to make a constructive suggestion which I believe will do much to help Imperial trade. It is that there should be no more waste of time in developing air communications throughout the Empire. There is no technical difficulty whatever in the way of running a regular aeroplane mails' service to Sydney, bringing Sydney within 10 days of London, flying by day alone, and within five days flying by day and by night. The chief of the Civil Aviation Department, 18 months ago, did a flight to India. Nothing has been done in the meantime, but he reported at the time that from England to Rangoon, with the exception of the Taurus and Lebanon Mountains, the route presented extremely favourable conditions for flying even in bad weather. That flight was done with one machine and was extremely successful. At long last the Government are starting an air mail service from Cairo to Bagdad, and on to Karachi—which we ought to have done three or four years ago.


They are not going on to Karachi.

Lieut. - Commander KENWORTHY

Eventually they are going to Karachi. They are beginning at long last. The importance of this matter is not so much from the point of view of passengers, though that is important enough, and it is not even from the point of view of carrying ordinary mails, though that is also important. The greatest financial advantage when you cover long distances such as we have in the Empire, and which, in a way, are an obstacle to Imperial trade, is in carrying documents bearing interest, by which I mean cheques, acceptances, bills, etc., and also in some cases getting your bills of lading out well ahead of the steamer, instead of them, as at the present time, sometimes arriving after the steamer. It is an easy calculation to see what you would save. £1,000,000 worth of documents bearing interest at 5 per cent. accumulates interest at the rate of £137 a day. By sending those documents by steamer, it takes 42 days to Sydney, and you could get them there in 10 days flying by day, or in five days, flying day and night, and make an enormous saving in interest, which might make all the difference between getting a business or bringing off a contract and losing it. I am speaking not from theory, but from a practical experience of America, where for three years a regular air mail service has been in operation from New York to San Francisco, and for the last 18 months it has been flying by day and night. It goes twice in 24 hours, and competes against an excellent railway service. There is only a few hours' advantage with the air mail; nevertheless, it pays its way handsomely by the saving on business documents carrying interest.

I repeat that there are no technical difficulties in the way of flying to-day from Croydon to Sydney, or from Croydon to Rangoon, by way of India, or from Croydon to South Africa. We have got to get out of our heads, however, two fallacies, and may I particularly draw the attention of the hon. Baronet the Under-Secretary of State for Air to this particular point? The first fallacy to get rid of is that of the spectacular long distance flight. That is unnecessary in this case. The great exploits of Englishmen, Italians, Portuguese and Americans in making long world flights are excellent from the point of view of human endurance, and courage, and endeavour, and progress, but from the point of view of the prosaic air mail, for it is prosaic to-day, what you have to visualise is a series of short hops of 200 or 300 miles each. That is the first fallacy to get rid of, and it is a question of aerodromes, spare parts and tanks, and we ought to have been working at this question since the War ended. The second fallacy is that an Empire air route cannot, unfortunately, be an all red route. It has got to link up for a part of the flight with the regular air services in Europe, and later on, in the case of the Australian Air Service, with the Dutch Air Service in the Dutch East Indies. You cannot get away from that fact.

There are no difficulties to-day at all in flying if you once get an agreement with the European nations concerned, either from London to Marseilles, and then on to Corsica, Rome, Corfu, Alexandria, and then joining up with the route that we are going to use from Egypt to India, or else, alternatively, going by the ordinary well beaten routes to Vienna, which exist, which are being flown every day, and which are used by business men in Europe, and then on to Belgrade, Constantinople, and through Turkey on to Bagdad—the route that was flown on the alternative journey by Sir Sefton Brancker. There is no difficulty in that except the difficulty, perhaps, of coming to an arrangement with the nations over whose territory you want to fly, but if we made the air mail service open to them, I believe we should have no difficulty there at all, and the more this air mail service tapped the countries through which it passed, the more useful it would be to our trade and to Dominion trade, the more it would pay, and the less opposition there would be. Again, the greater part of the route would be flown by British machines and British pilots. With regard to South Africa, the mail service is a little better, but the advantage of a regular bi-weekly air mail service from Alexandria to Cairo, to Nairobi, to Johannesburg, and to Cape Town would be immense. It would have a great effect upon our prestige, and it would help trade immensely.

Now I come to the next great advantage to trade. I have already dealt with the saving of interest on interest bearing documents and cheques, and now I would point to the advantage of getting valuable samples, engineering blue prints, contracts, and things of that sort more rapidly by this means. I have some small experience of trade in the Indian export trade, and I can assure the right hon. Gentleman the President of the Board of Trade that, if you ask any Indian merchant of old standing, he will tell you that the great need to-day is of a quickening of the mails to India for business purposes. Passengers are not quite so important, but samples could be carried, and remember that the aeroplane is for all practical purposes becoming reliable. On Sunday of this week, when the cross-channel steamers were held up by a gale, the civil aeroplanes carried passengers and mails to Paris, while the cross-channel steamers were sheltering in harbour and unable to go to sea; and to-day, with your three-engined aeroplanes, you can practically rule out accidents altogether.

This is not altogether a matter for the Imperial Conference. The Government reply will be: "Oh, we are going to have an Imperial Conference, and all these matters will be discussed there." We need not wait for that Imperial Conference. We ought to make our preparations beforehand. We ought to have had communications over the last few years. I do not blame the present Administration only. All our Governments have been extremely lax, unprogressive, and unimaginative in this matter, and we ought to have had the whole matter dratted out long before this Imperial Conference. The Imperial Conference will have a very crowded agenda, and this is not only a matter for the British Empire; it is a matter of arrangement with the countries over which such an air mail will have to fly, and it will be reckoned in the future an extraordinary fact that when we could have done it, technically, for four or five years, we have not to-day got a regular bi-weekly service between London and Sydney, London and India, London and Burma, and London and Cape Colony.

As to costs, it has been reckoned that a weekly air service each way to Sydney could be flown for £300,000. That is extraordinarily little, and I believe it would pay for itself handsomely. The actual flying costs of the companies that run the shorter distances in Europe are only 3s. per ton mile, but allowing 5s. per ton mile, that would come out to only £300,000. For every half ton of useful load, according to the Post Office figures, you can carry 39,000 letters, and allowing 3s. per mile, which is the European cost, the actuarial cost to-day, the 12,000 miles to Sydney would only be £1,800, which works out at only about 1s. per letter. We are really suffering from bad mail communication with the Antipodes at the present time. San Francisco is only about a fortnight to-day from New Zealand by fast streamer, and we are not utilising the Panama Canal as we could do by fast mail steamer. The mails to New Zealand are extremely unsatisfactory, and very often steamers arrive before their bills of lading which have been sent by mail. There are, it is true, mails to New Zealand, one fortnight by Vancouver and one fortnight by San Francisco, which is not nearly enough, and we ought to have a weekly mail service at least.

That is on the main question of inter-Imperial mails, but the step forward which we could make in this respect, to prevent this gravitation towards the American markets, in order to get to Australia and New Zealand is by the proper use of this great invention of the aeroplane, which I believe will do more for civilisation and progress than any other invention of the century. As for the airship, it would be well and good if that could be utilised, but we are only building two airships, and there will not be enough of them, doubtless, for years to come. Then the airships must have great revolving sheds and big ground staffs, while an aeroplane can land on any convenient open space and can be housed in a tent, and the cost is much less, therefore. I am not hostile to airships, but you can make an immediate start by means of the aeroplane, and I commend that to the President of the Board of Trade, the Postmaster-General, the Air Minister, and the whole of this House, and I hope that I shall be supported, quite apart from party questions. The cost is negligible, the technical difficulties are nil, and perhaps this point will appeal to hon. Members opposite, that you will build up a great reserve of pilots used to long-distance flying, who would be invaluable in case this country was threatened again, and, incidentally, a great many valuable long-distance aeroplanes as well. I put, this forward, however, as a means of helping Imperial trade and binding the Empire together, and I believe there is no measure which could be taken at such a low cost to do more in this direction. It is for this reason that I confine my remarks to this particular phase of inter-Empire trade.


I think the House and the Empire generally owe a debt of gratitude to my hon. Friend the Member for Rossendale (Mr. Waddington) for bringing forward this Amendment to-day. The hon. Member who spoke on the Socialist benches a short time ago did not appear to like the Amendment, for he devoted the greater portion of his speech to endeavouring to belittle the Empire and to minimise the advantages to this country of Empire development. He also gave a dissertation on internationalism, which, in his case, as far as I could judge, seemed to indicate that he has a most tender regard for every country but his own. There is no doubt that for a considerable time our foreign trade has been declining, and it is equally true that our Imperial trade has been slowly and steadily increasing, and, in my opinion, the future prosperity of the trade of this country, and particularly of the cotton trade of Lancashire, is bound up with the growth and development of Empire trade. I know there are many means of helping Empire trade. The Government themselves could do a good deal, and it cannot be said that this Government have not done more than any previous Government for some considerable time in this connection The system of preferences which were granted some little time ago has been of incalculable benefit to the wine trade, the tobacco trade, and the sugar trade of South Africa and Australia.

By loans you can also do a great deal. The loan of £10,000,000 to East Africa to build railways would be of great advantage because it would enable the cotton which can be produced there to be marketed. They can produce cotton in East Africa and in South Africa equal to the best American cotton, but the means of transport are so limited at present that they can grow more cotton than they can get down to the coast, and by granting this loan of £10,000,000 to East Africa the Government have done remarkably well. In addition, they have done a great: deal by having made a grant for the purpose of assisting the marketing of Empire goods. But altogether apart from what the Government can do, a good deal can still be done by the manufacturer and the producer. If the manufacturer in this country would only adapt his goods to the requirements of the country in which he wishes to sell them, he would at once increase his trade. I was, a short time ago, in Durban, Natal, and I wanted to buy a hat. My hat having been damaged by sea water, I felt that I must have a new one. I went into a shop in Durban, but I was unable to buy a decent English hat. Eventually I had to buy an American hat at a very big price. When I returned to England, I went into a neighbouring constituency which has the largest hat-manufacturing industry in this country. I there showed the hat to some of my manufacturing friends. They said it was an excellent hat, but that they could produce it, roughly speaking, for two-thirds of the price I had to pay. Unfortunately, the only English hat I could buy was not suitable to the climate of the place.

The same thing applies to motor cars. The last time I was in South Africa, two years ago, it was very unusual to see an English motor car. The American motor cars seemed to dominate the situation. I was shocked to see it, because motor cars are manufactured in my constituency. I made inquiries, and I found out again that it was the British manufacturer who was at fault, because I was told by the buyers that the representatives of the British motor-car firms went over there year by year, and although the people over there recognised the value and workmanship of their cars, unfortunately the British firms did not supply cars adapted to their roads. The English representatives show their models and adopt a take-it-or-leave-it attitude, and in many cases the Colonial buyer leaves it. So that it is not altogether a matter for the Government, but a matter for the manufacturer in this country to adapt his article to the particular requirements of the country in which he wishes to sell it. If we did that, I am sure, instead of their being nine out of 10 cars in the whole of South Africa of American manufacture, we should see a very large number of English cars, and so reduce very considerably the unemployment at the present moment in certain towns of this country.

There is another point which has often occurred to me. We cannot expect the Dominions to trade with us unless we trade with the Dominions, and it is up to us to spend every copper we can in purchasing Dominion goods. I, personally, smoke very fine South African tobacco, and drink nothing but South African wine. I believe that the fact that in the present Budget the Preference is to be stabilised for the next 10 years will enable the growers to know where they are, and I look forward to the time, not long ahead, when the South African wine industry will be one of the biggest industries in South Africa. There is another point. Thousands of our people leave this country every year for the south of France, North Africa, or somewhere else on the Mediterranean, in search of the sun. Occasionally they find it, but, frequently, they do not find it at all. In many cases time is no object, and I would say to those in that position, why do they not put 11 days' on their travelling time; and spend their holiday in the Cape Peninsular, where in the winter months they are sure of the most gorgeous weather, the most beautiful sunshine to be got in the world. For the extra 11 days' journey, they would get the most enjoyable voyage possible. If a large number of people who now go to the south of France spent the money in the South African Peninsular, it would contribute very much to the prosperity of that country.

A matter which has not been mentioned, but which would do more than anything to encourage Empire trade, is a system of Free Trade within the Empire— a system of Free Trade with what I might call the United States of the British Empire. Even those who have little interest in Free Trade generally, would agree as to Free Trade in the British Empire. Eventually we might realise the dream of those great Empire-builders who have gone before, of a great self-contained people of 450,000,000, trading freely one with another, with a strict ringed fence round, who would never go outside that fence, or certainly not for anything which could be produced in some quarter or other of the greatest Empire that the world has ever seen.


I am sorry the hon. Member who has just addressed the House began his very interesting speech by a rather curious misrepresentation of the speech made by my hon. Friend the Member for South East Ham (Mr. Barnes). If there was anything my hon. Friend did not say, it was that he belittled in any way the importance of trade within the Empire. Indeed, he spent a considerable portion of his time in putting forward our method by which we would develop Empire trade, and I hardly expected that an hon. Member, who, presumably, was in his place during the time my hon. Friend spoke, could have made such a curious misrepresentation of his speech. My hon. Friend declared that, in our judgment, the method of increasing Empire trade was not by taxation of food, a policy which the industrial population of this country will never stand, but that our method would be along the line of State purchase of the exportable Dominion surplus of the primary products, a proposal, indeed, which two years ago had the assent of the present Prime Minister himself. If the present Prime Minister considered it good enough to propose, I suggest that the right hon. Gentleman who is going to reply on behalf of the Government to-night should give us his view upon that very important proposal, and not, as in the past, simply get out of it by evading it. The hon. Member for Rossendale (Mr. Waddington), who, I am sorry is not in his place, because I intended to offer an observation or two upon his references to India, said at the beginning of his speech that India was extraordinarily prosperous. I interjected a question as to how that could be said of a country with 318,000,000 people, and an average annual purchasing power of £4 per head, a country where an influenza epidemic comes along and 12,000,000 of the people perish, because their bodies are unable to resist the attacks of the disease. To describe a situation in a sub-continent, where the people are unable to buy clothes, boots, furniture, or food, where they literally die of starvation every year in some portion of the country or other, as prosperity, seems to me to be a misuse of the English language.

Brigadier-General Sir HENRY CROFT

My hon. Friend will admit the enormous improvement in this respect under British rule.


God knows! What can the hon. and gallant Gentleman find to boast about in a situation where, in the year of grace 1925, the purchasing power of 318,000,000 people, after centuries of British rule, is £4 per head per annum? If one-fifth of the human race under our control is unable to buy few of our goods, it is surely vital that we should set about a policy of increasing their purchasing power— not a policy, such as was suggested on the Conservative benches this afternoon, of cheapening Lancashire goods, in order to accommodate Lancashire prices to the present purchasing power in India. That means that Lancashire has got to get down to the coolie level, in order to get into the Indian markets, and it is obvious to the meanest infant who interests himself in economics, that if you reduce Lancashire's purchasing power to a position in which it can get into the Indian markets, then you have lost the purchasing power in the home market, because Lancashire then ceases to be able to buy cotton goods at all, and the last state of affairs is worse than the first. I suggest that it is trifling with the matter to come at this time of day with the proposal that Lancashire should get down to the level of the Indian coolie. I do not intend to say more about India, except that every industry in this country ought to be vitally interested in the situation in India. Coal mines are being developed in India by British capital and by Indian capital. The wages paid are 8s. 6d. per week to a man and his wife.

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

At least that is better than the £4 a year.

6.0 P.M.


As a matter of fact, the coal miners' wages are higher than the others. One of the coal masters paying 8s. 6d. a week for man and wife is Lord Inchcape, whose friends get up and make speeches demanding that the British colliery shall get down to the level of the Indian colliery, in order to compete in the neutral markets of the world. It is the same in many of our other vital industries. It ought to be our united effort to raise the purchasing power of our customers, and not proceed with a policy of depressing it. The party opposite proclaim themselves to be the great friends of Empire— especially at electioneering times. Let us see what they are doing for the Empire. We talk about people from all over the world coming to London, and of the Colonies coming here. They are turned away. [An HON. MEMBER: "No!"] Yes, they are turned away. Australia has to go to America for her loans. They are driven away from here, while at the same time Czechoslovakia can get money. Austria can get money here— at 8 per cent! Germany can get money here. Loans are floated upon the London money market for practically every country but our own. The party opposite are in power. They have encouraged this, or at all events have winked at it. They profit by it. [An HON. MEMBER:" No!"] Oh, yes, they profit by it. The Government yesterday issued a White Paper dealing with the Trade Facilities Act— No. 61. If I cannot make an impression upon the Government Benches perhaps I may be able to do so on hon. Members opposite. [An HON. MEMBER: "It is impossible!"] Oh no, it is not impossible. Listen to this: The guarantee of a loan of £2,000,000 for a Greek electricity scheme "— Mark that! reported in Parliamentary Paper No. 24, of 16th February, 1925"— Listen to what this says: will be given to the Syndicat d' Etrules etd' Entreprises. The actual work given to the French and British capital is employed, and the British Government are guaranteeing it. What has the hon. and gallant Gentleman opposite to say about that?


It is a very great mistake, if it is not British machinery.


It is worse than a mistake, it is a crime; it is sheer robbery of the British nation. It is taking away credit which ought to be used for the development of our own country over which we have control. But it is not only that. This policy has been steadily pursued by the representatives of the financiers. Let me quote from the OFFICIAL REPORT—

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