BOARD OF TRADE.

HC Deb 20 July 1927 vol 209 cc509-40

Motion made, and Question proposed, That a sum, not exceeding £296,617, 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, 1928, 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: £205,000 has been voted on account.]

Mr. RUNCIMAN

My object in rising to-night is to call the attention of the Committee to the proceedings of the Geneva Economic Conference, and to invite from the President of the Board of Trade a statement of the attitude of the Government towards the findings of that Conference.

The DEPUTY-CHAIRMAN

This Vote is for the Salaries and Expenses of the Board of Trade, and practically every question for which the Board of Trade is responsible and for which there is no separate Vote can be discussed, but before allowing the Debate to proceed on the Economic Conference at Geneva, I should like some assurance from the Minister as to what extent his Department is responsible for the proceedings, of the Conference.

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

I can certainly give that assurance. While this Conference was not a Conference of Governments or Government representatives, the representatives who went from this country were selected by me as President of the Board of Trade. Their secretariat was supplied by the Board of Trade and is paid for out of my Vote, and the working out of all the economic work which the League of Nations has to do through its Economic Committee is conducted by the Economic Adviser to the Government, whose salary figures in this Vote. I think that that amply justifies the raising of the subject on this Vote.

The DEPUTY-CHAIRMAN

With that assurance, I shall be satisfied that the subject can be raised on this particular Vote.

Mr. RUNCIMAN

The President of the Board of Trade has in two or three sentences given the genesis of the Economic Conference itself, for it was the preparatory stages for which the Government were mainly responsible and in which they participated which made it possible to hold the Conference at all. It follows quite naturally on the old Brussels Financial Conference of some years ago. That was the only ground on which it would have been possible to have called it together for it to have attained anything like the unanimity which characterised its business. That is due to the fact that events have moved rapidly up to the stage where all the European countries have come to the conclusion that it was impossible to go on on the present basis with the interests of our various countries at stake, and that the sooner we had a clearing of the ground the better it would be for Europe and for everyone concerned in European trade.

It is not generally known that one of the first duties of the Conference when it met was to deal with the subject of agriculture. About one-third of the Conference was directly interested in agriculture. The representatives who went there were selected in many cases because of their special agricultural knowledge, and many of them because they were good representatives of agricultural interests and organisations. The wisdom, of the League of Nations in selecting agriculture as one of the main subjects of the Conference was to be found in the fact—it is well known to anybody who has taken the trouble to study economic conditions—that industry and agriculture are inseparably mixed up. You cannot completely disentangle the one from the other. No matter what the country is, if its agriculture is depressed, its industry cannot flourish, and, similarly, unless some of the same modern methods are applied to agriculture, it is equally certain the farmers cannot make ends meet.

I had the honour of being at the Conference as the representative, not of this country, but of the International Chamber of Commerce, which shared with the Government and with the economic organisation of the League of Nations the duty of preparing the work for the consideration of the delegates. The International Chamber of Commerce had worked partly through its national committees but principally through its Trade Barriers Committee which met in Paris, in London, and elsewhere. Throughout the two or three years of this preparatory work they had the advantage of the collaboration of men from almost every trade. They had 22 national committees to aid them, and the 22 national committees were themselves representatives of the main industries of their various countries. These committees and the central committee of the International Chamber of Commerce never attempted to isolate commercial and industrial affairs from agriculture, and I think it is only fair to say that they found, as we found at the Conference itself, that in every country in the world the plight of the farmers appeared to be similar. We all know from our own experience that farmers never anywhere at any time admit having made a profit on their trading. It is the common complaint of all farmers in all countries, and there was no complaint made by the agriculturists in this country which was not repeated with equal sincerity and with equal emphasis by the representatives of every country in the world, including, strangely enough, the farming representatives of the United States of America.

They all held the view, in the long run, that nothing was to be gained by artificial State assistance. In their findings they came to the conclusion without a single dissentient voice that improvement must, in the first place, be the work of the agriculturists themselves. In the second place, they declared that it was impossible for agriculture to flourish unless co-operation and association of interests was not only recognised but organised. They all believed that the high rates of interest affected their industry more directly than anything else. They complained also that heavy taxation in every country in the world hampered production. They were unanimous in their desire for better instruction and better training, especially among younger farmers, and they begged for the removal of all hindrances, for the free circulation of, and trade in, agricultural products. And, finally, they joined up with all the other sections of the Conference in favour of the reduction of Customs protection to a minimum. There were some other recommendations which they made which had to do with a agricultural credit, and the diseases of animals and plants, the furtherance of agriculture in undeveloped colonies, and they all adhered strongly to a national policy in afforestation for every country in the world. These findings were agreed to without a single dissentient voice, but I ought to say at once that in the plenary session with which the Conference concluded the Russian representatives were an exception to that rule. They did not, however, vote against any of the findings of the Agricultural, Industrial, or Commercial Commissions. The Russian representatives were in a position by themselves. They held a view which was peculiarly their own, not shared by any of the other delegates at the Conference, whether they were men of business, financiers, or leaders of great labour organisations.

Mr. KIRKWOOD

What was the Russian point of view?

Mr. RUNCIMAN

The Russian point of view was that the only way you could make the agricultural industry prosperous was by leaving it to the farmers to work for themselves and not under the control of the State. They explained that their own moujiks, the small farmers, would have nothing to do with State control or State ownership. The moujik adhered just as strongly as the rest of us do to the view that the only way in which agriculture in Russia could recover was by the agriculturists working in their own interests. There was official disagreement with our phraseology, but in sentiment they shared our views.

The Industrial Commission was set a much more difficult task. It was not that they had the task of registering the complaints of men depending on and engaged in great industries, but they tried to gather together the views of the manufacturing and producing concerns of the world, and, under the guidance mainly of the French delegates, an effort was made to substitute what is called rationalisation for other means of solving our international trade troubles. I do not think I am saying anything indiscreet when I tell the Committee that, so far as one could ascertain, the leaders of French opinion at the Conference held the view that by rationalisation, which they meant to include international organisations in the nature of cartels, they could get over all the disadvantages of high tariffs and trade barriers, and that it would enable them to turn the corner without raising any of the old controversies which have raged in this country and Europe for a 100 years.

They found, however, as the Conference went on, that they had a difficult task to define exactly what was meant by rationalisation. They also discovered that any attempt to organise European trade on the cartel basis raised a very large number of very thorny questions. In the first instance, the consumers, speaking as they could only do through the representations of men representing large bodies of distributing organisations like the co-operative societies, would have nothing whatever to do with the cartel arrangement. The distribution of great industries on a national basis and the settling of quotas, in their view, meant that the consumers in the various countries were to be placed at the disposal and made the victims of great international trading organisations. Day by day the Conference was blocked in its work because this point of view was put with all the variations which came from the national peculiarities and from the individual views of the delegates. Ultimately, the Industry Commission declared in favour of a by no means new principle, namely, that maximum efficiency with minimum of effort was what they wished to secure. One cannot see very much in the way of practical policy to be got out of that admirable phrase. They also declared in favour of the avoidance of waste of power and materials, a principle to which I need hardly say every one of us is prepared to make his contribution. They also declared in favour of the reduction of all unnecessary charges for distribution, a principle with which I am sure the hon. Member for Dumbarton Burghs (Mr. Kirkwood) will heartily agree. They wanted to get rid, as far as they could, of the middleman.

Mr. KIRKWOOD

Hear, hear! They showed their intelligence.

Mr. RUNCIMAN

But they admitted that without the middleman there can be no extension of commerce in any direction. That was what they meant by rationalisation. On the question of cartels, there was no agreement, and it is hardly likely that there will be any agreement. An international arrangement will be made from time to time, and in some industries it is quite conceivable that it may do a certain amount of good; but, on the whole, the view of the Conference was against placing the trading communities of the world under the control of international organisations.

9.0 p.m.

The most difficult questions came before the Commerce Commission. There were three Commissions in this Section, and they had to deal with the most controversial subjects. Both in the Commission and in the plenary session we all felt, even those of us who held the strongest views on economic questions, that it would be absurd for us to waste our time over controversies in the old form between Protectionists and Free Traders. The Conference, therefore, while it could not pledge itself to anything that could be called Free Trade, was universally in favour of what it caled freer trade. For that, I think we have every reason to be thankful; it was due not only to the good sense of the delegates themselves but to the pressure of our own times. They wanted to get rid, naturally, of all trade barriers in so far as they interfered with international trade. There was a general feeling that nationalism had run riot in Central Europe and had harmed not only Central Europe but the world at large.

When they split up their subjects into these various categories, they were all [...] favour of reducing, for instance, the obstacles to rapid, easy and cheap rail transport. They had some practical suggestions to make—which may have a much more potent effect upon trade and prosperity in Europe than a great many of the political movements—in favour of uniformity in rolling stock, interchangeability of engines, wagons, and so forth, and uniform regulations throughout Europe, so that traffic might be conducted everywhere without interruption, and the simplification of all Customs formalities. In sea transport, the Conference declared unanimously in favour of the abolition of every form of flag discrimination. That was one of the most useful things on which agreement was obtained. There is now, as far as we know, in Europe only one important maritime country which maintains anything in the nature of flag discrimination, and it does not dare to do that openly. They condemned subsidies to shipping companies or individual shipowners. They declared that the maintenance of State shipping was leading to a good deal of depression in the shipping industry, was not cheapening the carriage of goods over the high seas, and was having the disadvantage of placing those who had shown enterprise in the building up of shipping concerns at a great disadvantage compared with State-owned fleets.

They made some progress in the solution of the difficult problem of double taxation and urged that sanitary Regulations, which are so essential for the good health of our ports and ships, should not be so manipulated as to be turned into a form of protection or flag discrimination. Finally, they pleaded, as did other sections of the Conference, for the diminution of all vexatious Customs Regulations and methods. On most of these points, I have no doubt my right hon. Friend will be able to tell the Committee that some progress has been made by international agreement. A great many of them could have been attained by Conventions if the Conventions to which national signatures have been attached had been ratified. Therefore, the Conference urged that in every case where the findings had been agreed to ratification should take place at the earliest possible moment.

When we come to the extremely thorny question of tariffs, four declarations were made by the Conference, and they are so remarkable and so plain that I venture to read them, briefly, to the Committee. Their view was that of all trade barriers none was more mischievous than that of the unduly high tariffs which had grown up since the War. There was no doubt that the temporary difficulties of the years from 1919 to 1925 had led to tariffs being rushed up in some countries in order to keep pace with a heavily depreciated exchange in others, and that a number of purely temporary causes had justified the Governments of various European countries imposing tariffs out of all proportion to the normal needs of their countries, and now, as these temporary conditions had entirely changed the necessity for maintaining these absurdly high tariffs had passed away. We are gradually reaching a stage of normality, currency troubles are less than they were, the stability of the exchanges is being more and more assured, and the Conference from end to end felt that the time had now arrived when it was possible to change the whole course of tariff making, and when, instead of sending tariffs up to a higher level, they should all be sent down to a lower level. Therefore, they declared that, the present high tariffs have a harmful effect on trade and production; and under that heading the view was held, as far as I can gather without protest or reservation in any quarter, that the attempt to work out international trade over and through the obstacles of high tariffs did far more harm on the whole to the trade of Europe as a whole than it did good to the individual countries.

Where it was thought that an individual trade or one separate country could gain by high tariffs, they came to the conclusion that the harm that was done to European trade as a whole far more than counter-balanced that small degree of good which might he done locally and to carefully selected trades. Therefore, the Conference believed that these high tariffs had a harmful effect on trade and production. Secondly, they held the view that substantial improvement in economic conditions can be obtained by increased facilities for trade and commerce. The work which had been done by the Statistical Branch of the Economic Section of the League of Nations made it quite clear that, whereas in the world the power of production now is greater than ever it was, the amount of goods which are actually exchanged as between the various countries of the world was far less not only in value, but in volume, than it was previously to the War. They therefore held the view that by increasing the facilities far trade and commerce there should be a substantial improvement in economic conditions; and by economic conditions they meant not only the amount of prosperity which may accrue to those who own and organise industries, but to those who are employed in them. Thirdly, they held the view that: Tariffs, though within the sovereign jurisdiction of the different States, are not a matter of purely domestic interest. That meant that they were taking a far wider view than could be obtained by merely sitting each at home in their own economic departments or in their own counting houses, or chambers of commerce, and paying no attention to what happens outside. They held the view that, if the general international trade of Europe is to remain good, it can only be improved by largely increasing the purchasing power of the people of Europe; that, if their purchasing power is increased, the prosperity of our international trade must, of necessity, increase also; that nothing could add more to the purchasing power of the people of Europe than by preventing prices being raised to an artificially high level, and that to maintain them at a high level by means of tariffs was only to injure trade or industry which, in the long run, we sought to benefit. The Conference, therefore, held the view that the domestic effect of tariffs was not the only aspect of these trade barriers which they were discussing and examining.

Lastly, their view was that some of the causes which have resulted in increased tariffs have now largely disappeared, while others are diminishing. In the words of the Conference, they say: The time has come to put an end to the increases in tariffs and to move in the opposite direction. Nothing could be more emphatic, and what is most remarkable about this finding is that it came from every nation, from men of every trade, and it was the opinion expressed by every national delegation. There never has been an International Conference where the unanimity was so complete, and, however that may have been attained, it was not attained by any false phraseology or secret reservation, because the whole Report is plain speaking from beginning to end.

Furthermore, they suggested four lines of action. The first was, independent action by the several States to remove or diminish trade barriers; and we must quite frankly face the fact that it means in every one of these States that an effort should be made to reduce the import duties on goods which come from abroad. Secondly, they thought that concerted action by commercial treaties was the best way of attaining this end, and one of the reasons why that view was held was that the only way in which business men are able to make their arrangements far ahead, to enter on long contracts, which give security for them and steady and continuous employment for their workpeople, was by knowing that the tariffs would not be altered spasmodically, or suddenly, or sporadically. Therefore, they urged that whatever was done by way of a maintenance of import duties should be done under commercial treaties—commercial treaties which provide for most-favoured-nation treatment. Their third line of action was to abolish the practice of imposing bargaining tariffs in advance of negotiations. That is a method which is well known to anyone who has studied tariff history in Europe. Whenever there was a likelihood of a new series of negotiations spreading over large groups of trade, it had become the habit in Europe for the negotiating countries first to put up their tariffs in order that they might have something on which to negotiate. The Conference declared emphatically against the practice of these bargaining tariffs in advance of negotiations. Then, for the purpose of making some practical progress in each of the various Governments concerned, they asked that greater powers should be given to the economic section of the League of Nations. That, I am sure, everybody will agree with, for it has proved to be one of the most efficient branches of the League of Nations' organisation.

Those were the views and findings of the Conference. How are we to put them into practice? The first thing that is made clear is that we must have public opinion behind us in all the countries concerned. There is no need for us to return to the old controversies and travel along the same old lines. All that we need to do for the purpose of making our national business arrangements is to treat every one of these problems as if it were a business problem, and it will then be found that the combined wisdom of the economic world was well expressed in the findings of the Conference and in the lines of action which have been recommended by the Conference.

What can be done by the Governments concerned? I must confess that I hoped that our own British Government would have taken the lead. There was a great opportunity for them, and it is a pity that the lead should have passed away to any other statesman. The International Chamber, however, has just recently met in Stockholm, and it has endorsed every one of the findings of the Conference. It said quite emphatically at the Congress last week that in endorseing the work of the Conference that the work depends for successful result on the execution of the principles laid down and approved by the delegates of 50 nations, and that these principles must be carried out by sound national policies and by mutual collective agreements. Already some of the Governments have taken those steps. The Austrian Government, which has been passing through troublous times during the last week or ten days, was one of the first to declare that it would accept these findings as a whole and without reservation. Belgium followed almost immediately. Czechoslovakia accepted the findings and declared that it would act upon them, and, what was still more remarkable, the German Government adhered to them throughout, and Herr Stresemann at Geneva, during the meeting of the League of Nations Council, moved a strong resolution in favour of the recommendations of the World Economic Conference.

It was observed that while the nations which gave their adherence were maritime nations, Great Britain, although the leading maritime nation, appeared to hesitate in giving its approval to the work of the Conference. If that is still the attitude of the British Government, I should greatly regret it, for I do not think that any better service could be done not only to the trade of this country but of the world, than for the British Government to take the lead in this new movement and become one of the foremost spokesmen of the new feeling in European trade. I hope that my right hon. Friend will be able to assure the House that the Government intend not only to give their adherence to the general principles which have been laid down, but will accept the findings as a whole. The foreign countries which have already set us a good example are just as jealous of their sovereign rights as we are, and they have just as great financial difficulties and probably greater. The only objection there can be to the main findings of the Conference with regard to tariffs is that by pledging itself to international action our Government might be giving up some portion of their sovereign rights.

It may be suggested that the attempt to lay down a settled tariff policy for a period of years, to make no alterations contrary to the commercial treaties entered into, does mean that the Chancellor of the Exchequer surrenders each year a right which he has, and which has always been accorded to him by the immemorial custom of this, House, of imposing Customs duties at short notice. Indeed, it would be almost impossible to get full value out of Customs duties if long notice were given of their imposition. I doubt whether any Government at any time would give up that right. But that need not conflict with the findings of the Conference, for the Conference referred only to Customs duties which were put on as protective duties and which were not also associated with countervailing Excise duties. It has been our practice in the past, in the main, to have, countervailing excise duties whenever we impose Customs duties. If we return to that practice and adhere to it in future, there need be no difficulty in carrying out the findings of the Geneva Conference, nor need there be any surrender of sovereign rights.

Are we quite sure that if we do nothing in this matter the world is going to stand still to suit our feeling? As one sees the development of feeling in Europe, it becomes more and more clear that the central European countries are more prepared now to act together than they have been at any time since the War. Their local jealousies are being overcome, whether by weight of circumstances or otherwise it is not for me to say. But they are being gradually overcome, and if it should so happen that in the next few years there is formed a Central European or Eastern European Zollverein with Germany at the head of it, there is only one way of counteracting a measure that might be to the detriment of this country, and that would be by Great Britain taking the lead rather than leaving it to the Germans to prescribe for Europe what they believe to be best. We are in a position to do that, far more powerful than any other country in the world. We are even now the greatest importing country in the world. One-fifth of the entire exports of the world are into Great Britain. A good deal of it certainly is for re-exportation, and in the process it gives good employment in our ports and elsewhere. But that is the fact; one-fifth comes to this country.

The representatives of foreign nations had to listen to that tact on many occasions at Geneva, and it made a profound impression on their minds. A great many of them who had been looking at the statistics piecemeal found, when they were put in that simple form, that the best they could do for their-own countries was to keep on good terms with this magnificent customer for what they produced. It therefore enables us, if we take full advantage of that position, to take a lead in the economic improvement of Europe far greater than that which can be given by anyone else. But there lay behind the whole of these findings—and everything that was suggested there has been endorsed by the International Chamber of Commerce—a general recognition of the fact that it is impossible for us to live in isolation, that we are as dependent on the trade of other countries as we are on trade in the several portions of our own. There can be no depression anywhere without its reacting here. There can be no increase of prosperity in Great Britain without its equally reacting on the trade of other countries.

It was this idea of interdependence which animated the representatives of 50 nations, men gathered from countries more diverse than ever assembled before in Geneva, for we had the great advantage of having present not only those who are members of the League of Nations, but delegates from the United States of America. They all recognised the general principle that world prosperity is now so much one unity that it is impossible for us to go on on the assumption that we can bring about any degree of prosperity in our own great basic trades by injuring the basic trades of other countries. We cannot, indeed, hope that there will be large purchasing of what we produce unless our neighbours are more prosperous than they are at the present time. It was that idea of interdependence which bound the delegates together in arriving at what is an epoch-making decision by all the nations of the world; and I invite my right hon. Friend to assure the Committee to-night, and to assure the world outside these Islands, that we in Great Britain avow that international interdependence, and that we intend in the future as in the past to be the leaders of world economic progress.

Mr. RAMSDEN

My intervention will he very brief indeed. I am sure that we have all listened with the greatest interest to the speech of the right hon. Gentleman who has just spoken, though whether we agree with him or not is a different question. Apparently all the delegates who attended this Conference in Geneva must have left it with a very self-satisfied air, but I am very much afraid that quite a number of them must have agreed to certain of the resolutions that were passed there with their tongues in their cheeks. Speaking as one who, perhaps, may be considered to be labelled for the time being as a Protectionist, I should like to say that, if we could attain the ideal that has been referred to, I for one should be the very first to subscribe to it, and agree with what has been said by the right hon. Gentleman, but I am very much afraid that, as a matter of fact, we in this country are one of the greatest obstacles that exist in the way of attaining this object. That is because we are still a Free Trade nation. I believe that if we were fortunate enough to possess a form of tariffs similar to those possessed by most of the Continental nations there would be very much more chance of success for anything of this kind. As the situation stands at the present moment, we have practically nothing to offer, and other nations have every advantage in maintaining the status quo as far as tariffs are concerned.

The right hon. Gentleman referred to the large quantity of goods that come into this country every year. I am afraid those goods will continue to pour into this country and that we shall not obtain the benefit of reduced tariffs on the part of other nations unless we ourselves have something with which to bargain. I do hope that the President of the Board of Trade, although perhaps he may agree in principle with what the right hon. Gentleman has said, will also realise that, if we are to achieve anything really practical, we shall have to have a tariff system of our own, and it is only then that we can obtain what we all desire.

Mr. DALTON

The right hon. Gentleman the Member for West Swansea (Mr. Runciman) who opened the Debate gave the Committee a very interesting account of the Economic Conference and its conclusions. I do not know whether the hon. Member for North Bradford (Mr. Ramsden) who has just sat down has spoken the average mind of the Tory party on this matter, but, if he has, then evidently, instead of being in the front rank, as we had hoped, of the movement towards the more rational working of the trade of the world, we are evidently hanging behind. It is a curious thing that on the morrow of a Conference of this kind it should be argued in this House by a supporter of the Government that our duty is to increase our tariffs at the very moment when the representatives of all the nations of the world, including the representatives of our own country, have been arguing in exactly the opposite direction. It will be interesting to hear the President of the Board of Trade later on explaining the attitude of the Government.

I should like to join in the remarks made by the right hon. Gentleman in regretting that our Government did not at an early stage throw itself wholeheartedly behind the recommendations of the Conference. At the meeting of the Council of the League our Foreign Secretary not only hung back behind the representatives of the foreign countries there represented, but even used his influence to get toned down the very mild and moderate form of words suggested by Dr. Stresemann, who had proposed— That the Council invites all countries and Governments to give to these principles and recommendations their close attention and the active support necessary to facilitate their adoption and application. But our Foreign Secretary made the characteristic remark that he was afraid they were going too far at too early a stage. That is a characterisic attitude when he attends the meetings of the League of Nations. Our only fear whether he is not going too far in a backward direction. I should have thought it would have been perfectly easy, and a gesture which would have cost nothing, to have supported the appeals of the Belgian, German, and other representatives, for the adoption of the Resolution in its original form. My hon. Friends who sit on these benches have never taken quite the same emphatic view of the importance of Free Trade as that taken by the Liberal party. We have in the past opposed departures from Free Trade by the present Government, but we have never been able to forget that even under Free Trade we have known continuously poverty, unemployment and bad social conditions. I hope therefore—

The DEPUTY-CHAIRMAN

The hon. Member must not develop this into an argument of Free Trade and Protection. It is a very different Debate. That argument really concerns something outside the Vote of the Board of Trade. The hon. Member must keep strictly to the lines of the subject raised by the right hon. Gentleman the Member for West Swansea (Mr. Runciman).

Mr. DALTON

I think I shall he able to keep within those lines. I was merely anxious to emphasise the point that, although our attitude has differed somewhat from that of the Liberal party, none the less there is no difference on this issue between us and them, nor I hope between either of us and the Government, in welcoming the appeal made at the Conference, and the recommendations for a general abatement of tariff barriers, although, as I was indicating without wishing to pursue the argument at length, we do not regard Free. Trade or even freer trade as so universal a solvent as it is regarded in some quarters. None the less, it is evident that one of the chief reasons for the slow recovery of the world since the War, and particularly in Europe, has been the enormous multiplication and the raising to such unparalleled heights of the economic barriers which the International Conference recommended should be abated. Much has been said about the difference between conditions in Europe and the United States, and it is quite obviously true, as the Conference observed, that one of the causes of that difference is that the United States is not hindered within itself by these economic barriers. In spite of the observations of the hon. Member for North Bradford, I cannot but believe that an action by His Majesty's Government in the direction of at once taking off, as a gesture to the world, the small and, from the revenue point of view, comparatively unproductive Safeguarding Ditties., which the President of the Board of Trade—

The CHAIRMAN

The hon. Gentleman cannot go into that question. This is a question of the proceedings of the Economic Conference; and such responsibility as the President of the Board of Trade has attached to him for the nomination of the delegates, and any instructions given by him. To discuss the safeguarding of industries covers a matter of legislation, which, while relevant on the Finance Bill, cannot be discussed in Committee of Supply.

Mr. DALTON

I am anxious to bow to your ruling. I am sorry that that will deprive the hon. and gallant Member for Bournemouth (Sir H. Croft) of the opportunity of speaking on that point later. May I submit to you, Mr. Hope, on that point of Order, that your predecessor in the Chair has permitted the right hon. Gentleman the Member for West Swansea to deal in some detail with the recommendations of the Conference, the chief of which is, of course, the abatement of Customs barriers. The right hon. Member for West Swansea has been permitted to express the hope that the Government will not be backward in giving effect to the recommendations of the Conference, and I am merely repeating, from a slightly different angle, that same aspiration, and if we are to translate that vague and general aspiration into concrete form, what it amounts to is that our hope is that the President of the Board of Trade will use his influence to remove the Safeguarding Duties. I do not wish to carry the matter further, but it seems to me difficult to distinguish between the argument permitted and that which in your judgment is in order, but I do not want to pursue it in any greater detail.

The CHAIRMAN

The hon. Gentleman appreciates what the hon. and gallant Member for Bournemouth (Sir H. Croft) would have to say in answer to his arguments. I think he would see to what lengths we should go if he opened such a discussion and pursued his argument.

Mr. DALTON

I will not pursue that. I only hope within the limits of the ruling the President of the Board of Trade may be able to give some information to the Committee when he comes to reply. If I may turn from the commercial to the industrial and agricultural parts of the recommendations, I am bound to say I do not find anything there which is very impressive. "Rationalisation" seems to be one of those high-sounding words which, while it is new and before it becomes hackneyed, is apt to mislead people into the belief that something new has been discovered. I do not think we are called upon to take any very definite or effective action on the industrial section of the Report. Hon. Members who are associated with me on these benches prepared, or there was prepared on their behalf, a memorandum which was put before the Economic Conference, which received some attention, and on which I should like to say a few words. The memorandum which was sent with the authority of the Labour party and the General Committee of the Trade Union Congress expressing their views, differs in some respects from the general body of this Report and it approached certain fundamental questions which the Report has left alone. The view was taken in this memorandum that the chief purpose of the Economic Conference—one of its many purposes and, to us, probably its chief purpose—was to examine those economic tendencies which affect the peace of the world. Although there is a reference in the Report, to that purpose, it is merely a suggestion that in future other conferences should pursue investigations. The Conference recommend: That the Governments of the peoples and countries here represented should together give continuous attention to this aspect"— that is the maintenance of peace— of the economic problems and looks forward to the establishment of a recognised principle designed to eliminate those economic difficulties which cause friction and misunderstanding in a world which has everything to gain from peace and harmonious progress. With such general terms one can hardly quarrel, except by suggesting that it does not carry one very far. The memorandum to which I have referred made much more specific proposals—in particular one for the setting up of an International Economic Office parallel with the International Labour Office under the League of Nations. It was proposed in that memorandum—and I shall be interested to hear whether the Government have any suggestion to make along those lines—that such International Economic Office ought to be given considerable functions in the way of organising periodical surveys of various problems such as international trusts and so on, and also, perhaps, acting as arbitrator where both sides so wished, in any disputes arising through the action of international trusts in relation either to Governments or important bodies of consumers. Various other detailed suggestions were made in that memorandum. We drew attention to certain matters and certain economic tendencies affecting the peace of the world which are not dealt with in the Report of the Conference. We drew attention to the difficulties arising from the development of what are called "backward countries" and the clashes and competitive difficulties arising as between investors of different nationalities and so forth.

My general conclusion, comparing our Memorandum with the Report of the Conference, is that the Conference evaded a large number of fundamental questions which sooner or later will have to be surveyed boldly and constructively. This Conference has been remarkable in that it is the first of its kind. It has been remarkable in the fact that so many nations have been represented and so many representative people including co-operators and trade union leaders in addition to representatives of employers' organisations and of various business organisations, have been present; but my feeling is that, although the recommendations which were made in the Report are in the right direction, so far as they are positive at all—and I hope they will he accepted by the Government—yet there are many questions which still await formulation and recommendations regarding them. It is clear that this is only the first of a series of Conferences of this nature and I hope the second is not very far away. I hope now that we have got such remarkable unanimity of opinion on certain points among the members of this first Conference that those who are doubtful as to whether such Conferences serve any useful purpose will be encouraged, particularly if the various Governments implement the resolutions which were there passed and that at a very early date it will be possible to summon a second Conference which will go rather more deeply and courageously into particular questions which were well within the terms of reference of this Conference but were treated somewhat superficially or left altogether out of the final recommendations.

Sir P. CUNLIFFE-LISTER

I am very glad that the right hon. Gentleman the Member for West Swansea (Mr. Runciman) has raised this subject in Debate, because I think we can more conveniently present our view in Debate than in the limited space of questions and answers. Great Britain is more interested than any other country in the world in the development of international trade, and therefore, whatever Government is in office here, Great Britain must welcome any movement which will increase the facilities for international trade. I at once respond to the challenge thrown out by the right hon. Gentleman when he asks what part is Great Britain going to play, by saying this—that long before this Conference took place Great Britain had taken a lead on the very lines of policy which this Conference recommends. We have granted greater freedom of trade than any other country in the world. We have been as active as any country—I think I may say with confidence, more active than any other country—in negotiations both under the auspices of the League of Nations and otherwise for the making of agreements to facilitate trade and transport, and we welcome wholeheartedly any progress which can be made in that direction.

I think this Conference was of real value for two reasons, principally, which appeal to me. In the first place, it was of value because of the principles which were enunciated and the agreement with which they were subscribed, but it was also of importance because this was a free and unfettered Conference of experienced men, representing commercial opinion of every class, and was a free expression by them of what they think from their practical experience is necessary if trade is to flow more freely. I agree that it is of vital importance not merely that Governments should make professions, but that those professions should be followed by action. But action will not follow the professions, unless in each country there is a predominating determination that those principles shall be carried out.

I should like to pay a whole-hearted tribute to the work of the British delegation at the Conference. They were selected by the Government while the Government, of course, left them as members of the Conference an entirely free hand. I think it is already recognised that that delegation played a most active part in the whole work of the Conference. Its preparatory work, its work while it was in session, and the Report which was drawn up owe a very great deal to that British delegation. I am very glad that my right hon. Friend was able to be present on behalf of the International Chamber of Commerce, and I think the closer the International Chamber of Commerce works with the economic organisation of the League, the more fruitful in future is likely to be the work. There is no doubt about our policy and our good will, and that policy and that good will are evidenced not by mere professions but by acts In. these matters justification by works is more compelling than justification by faith, and I sincerely hope that, as a, result of this Conference and of the, agreement which practical men reached at the Conference, works, and works all round, may follow.

I should like for a few moments to justify the claim that in our actions we have led the world to freedom of trade in the widest sense and in accordance with the spirit of the Conference. Indeed, I think I could make, with safety, the claim that the great bulk of the recommendations of this Conference are largely based upon the experience of this country and upon the action which this country has taken. We have taken that action, firstly, as an individual nation, and, secondly, by international agreement. We have taken it, therefore, and we are taking it year by year, exactly in the way which the Conference laid down. My right hon. Friend cited the recommendation which said. "Let States proceed by individual action within their own jurisdiction, and let them also proceed by international agreements and conventions and treaties," and in both those ways we have taken action.

Let me take individual action first. Our ports are free to all the world. The shipping of every country receives national treatment in every port in this country. Take another principle laid down by the Conference, namely, the treatment of foreign nationals. Foreign nationals are free to trade in this country, they receive national treatment when they come here, and they are subject to the same taxation as our nationals when they are here. Take the tariff. Our tariff is the least protective tariff in the whole world. Excluding, as is fair—as the right hon. Gentleman, I think, agreed, and as I think is made plain in the recommendations and Report of the Conference—excluding revenue duties which are countervailed by excise, the duties here which can be held to have any protective element, as was said by the British Delegation at the Conference, cover only two or three per cent. of our total imports, and even if you were to include, in the scope of duties to which the Conference referred, duties of a purely revenue character countervailed by excise, we compare favourably with other countries. We are negotiating at the present moment with the French Government. To-day two-thirds of French imports into this country come here free of any duty at all. That is more than the total of our exports to France, practically all of which are subject to a duty.

Take another point which both the right hon. Gentleman and the Conference stressed. There is in our administration no sort of discrimination, no manipulation by which one foreign country is advantaged as against another or by which our nationals are treated differently from the nationals of other countries. Again, no privilege is accorded in this country to a State enterprise. The Conference laid stress upon the value of each country having good production statistics. We have our Census of Production, and it is well known to the Committee that we are trying at the present time to keep that Census up to date year by year, by securing voluntary returns from the great staple industries of this country. I think I have said enough to show that where the individual action of a country can help, this country may claim that in deeds as well as words it has led on the lines of the principles of this Conference.

If I turn to the sphere of international action, we have tried to carry equal treatment as far as we possibly can. The most-favoured-nation Clause is a cardinal feature of all our commercial treaties, and it is extended equally to all foreign countries, as the Conference recommended. We have reduced the prohibition of imports to a minimum, and we have proved that we are willing to commit ourselves in that matter in the German Treaty, which I negotiated three years ago and which this House has approved. We have been active in the making of international Conventions, and we have been active not only in the signature of those Conventions, but we have been more active than any other country in the world in their ratification. I could take the Committee through a list of Conventions which have been negotiated under the auspices of the League, but I will touch on only a few. I do not think it is too much to say that in nearly all those negotiations Great Britain played a leading, if not the leading, part, and we were able to do it because we were able to draw upon the practical experience of men like my right hon. Friend, whose business experience was at the disposal of the Government of the day.

We have signed and ratified the Freedom of Transit Convention, the object of which was to facilitate international traffic and to make through traffic free of Customs duties. We have signed the International Waterways Convention, to secure equality of treatment for vessels of all nations in navigable water ways of international concern. We have signed and ratified the International. Railways Convention; and the same is true of the Maritime Ports Convention, which is of the greatest importance, and it is vital that other countries should follow in our footsteps in that matter and should not merely profess adherence to but should ratify and carry out that Convention. We are parties to the Convention on Customs Formalities, to the Protocol on Arbitration, and to the Convention for the Regulation of Aerial Navigation.

Passing from the League, I should recall to the Committee those other Conventions on maritime matters which have been negotiated by the International Maritime Convention and diplomatic conferences following upon it. One example, to which I know all hon. Members interested in commercial matters attach great importance, is the Convention for the Unification of the Rules relating to Bills of Lading. What a lead we gave to the world there! We signed. We did not wait for the protocol of ratification to be opened for signature. We showed our belief to the whole world by passing legislation to carry out in their entirety the recommendations of that International Convention. It is of the greatest importance that countries which, while they are nominally parties to those Conventions have either not ratified them or not carried them out, should come into line. There are not a few of such countries. We are ready and anxious to continue on the same lines, and the work is beginning. Already the Economic Committee of the League have begun their work on the simplification of tariff nomenclature, which was what the Economic Conference desired first to be put in hand. They have already had the first meeting. We are looking forward to a diplomatic conference in the Autumn to try to arrive at a Convention for the Prohibition of Import Restrictions. In that we shall most certainly be in the forefront.

We have proved our goodwill as regards these principles by action, and I think we are entitled to ask, and ask in a spirit of hopefulness after this conference, Is our lead going to be followed? Able men from many countries, in complete sincerity, signed the resolutions of this Conference because, like my right hon. Friend, their practical experience led them to believe that if we could get freer trade in the world, if we could remove more international obstructions, there would be more trade done generally and each country would prosper. We are entitled to ask, Do those countries mean it? I hope they do, but I think the strictures which the hon. Member for Peckham (Mr. Dalton) saw fit to pass upon our Foreign Secretary were singularly out of place. He would surely reply that his justification was by works, and he and I and this House are entitled to ask whether other countries are going to follow where we are not waiting to lead but where we have already led? I hope, and I believe, that a reply will come from all those countries. I hope that they really do intend to do all in their power, individually and by agreement, to make trade easier; but we are bound to face certain facts. It was not long after this Conference concluded that we found an embargo put upon the import of our coal into France. We must speak frankly of these matters. If anything was contrary not only to the spirit but the precise, dogmatic recommendation of this Conference, the imposition of that embargo was plainly contrary to it. There is pending in France at the present time a new tariff proposal, it is before their Chamber. I hope most sincerely that in the negotiations which we and other countries are having now over that proposed tariff something of the spirit of this Conference may be realised in the result.

10.0 p.m.

The hon. Member for Peckham (Mr. Dalton) contrasted with the action of the British Foreign Secretary the pronouncement made by the German Chancellor at the meeting of the Council of the League. While I hope that it is true that Germany, which has a general tariff, is contemplating some reduction of the general rates, I am bound to point out, when the action of my right hon. Friend is contrasted with that of the German Chancellor, that three German duties have since been increased—those on sugar, potatoes and pork. The United States were present at the Conference. The United States have the highest tariff in the world, with the exception of Russia. Do the United States intend to reduce their tariff? I sincerely hope that they will follow out the recommendations which are made by this Conference. I come to a much smaller country, but one with which we do much trade. We have been questioned in this House about flag discriminations in Portugal. Portugal was represented at the Conference. We have never practised flag discrimination, we do not intend to practise flag discrimination, and I am entitled to ask, Is flag discrimination going to be abandoned in those countries which still practise it? Is it going to be abandoned when there is a convention of the League of Nations, open to the whole world, which forbids it? We are only too anxious to see progress made by treaties and through the machinery of the League. We ourselves have made 17 commercial treaties since the War. In every one of those commercial treaties there is a most favoured-nation clause of the widest kind.

What, then, is the pratical course? I have no doubt that the practical course is the course which, I understand, the League of Nations are already adopting. It is that the economic organisation of tile League should tackle these questions in detail. I am bound to say, and I think the Committee will agree, that there is really more merit in a few accomplished facts than in any number of resolutions. Resolutions are excellent if they represent the determination of countries, but the tackling of these problems one by one and their carrying through by joint agreement show whether the countries are adopting the recommendation, and therefore, I think, the action which the League are taking is obviously sound. Their line is that nations should try to ensure the carrying out of those Conventions which have already been made, and that the economic organisation of the League should take up the individual subjects one by one. As I have already indicated, they have taken on that work. They have taken up tariff nomenclature, they have taken up the question of import prohibitions.

The hon. Member for Peckham said he hoped the Government would indicate that they would regard with favour the establishment of some new organisation in the League, or associated with the League, to deal with economic affairs. I cannot give him encouragement in that direction. That matter was prominently brought before the Economic Conference, and I think the right hon. Gentleman the Member for West Swansea will bear me out when I say that it was practically the unanimous feeling of that Conference that no attempt should be made to set up a rival organisation to supplant the existing machinery of the League. The Economic Committee has worked well. It has a large number of Conventions to its credit. I think—and here I speak with some diffidence—that it could well be strengthened. I am sure that you do not want to make that Committee too big. I am sure that, if any attempt were made to convert the Economic Committee of the League into a representative organisation where all sorts of interests were represented, you would get a body of enormous proportions which would be cumbrous and which would not do half the work which the existing body is able to do.

But I do believe that it would be of value to the Committee, and I should suppose that it would be within its competence as constituted at the present time, that it should be able to call in, as it deals with these questions, one by one, the best men, whatever their nationality, to help it in dealing with any particular job of work. I think that you would get men to come and help the League if you called them in for this or that specific piece of work. You want the most practical men you can get, and those are the men who are actively engaged in business to-day. They are the men the Economic Committee want, I believe, to call upon, but you cannot expect them to give an enormous amount of time. On the other hand, I think that you might call on them, and I think they would be willing to come and do any particular job of work which they knew would be a practical job of work to be taken in hand.

I would like to make an appeal, and this is only a repetition of what I said in the right hon. Gentleman's presence at a large meeting of business men in this country when we were preparing at the outset for the meetings of the Economic Conference. I would like to appeal to the business men of this country that more of them, and particularly more of the younger generation, should take their part in international economic work, work like that of the International Chamber of Commerce. It is the same men who too often have to carry the load, and it is not only a duty which I think this country—a great commercial country—owes to the general commerce of the world, but, if that work is undertaken, the influence of Britain will be greater for securing the economic facilities we want, greater than by any action which Governments can take, the practical men will meet their opposite numbers. They will be meeting the men who, while they are competitors in the same line of business, will be taking the same view, and will recognise the same over-riding interests. Individual firms will find those who render that service becoming more valuable members of their own individual firms. I hope have said enough to convince the Committee that we have not been backward in the past; that we shall certainly not be backward in the future; that we shall play our part in the forefront; and I am sure that it is on the lines I have indicated, lines which the League has already shown that it means to follow, that a really sincere and practical advance will be met by success.

Sir JOHN SIMON

The right hon. Gentleman has made a very lively, useful and striking speech. I am not sure that all the Members of the Government party in the House are as equally delighted with all his sentiments as some other sections of the House may be. The hon. Gentleman the Member for North Bradford (Mr. Ramsden), who spoke earlier in the Debate, professed a very stout view to the to contrary, and I could wish very much that the President of the Board of Trade had expressly repudiated it. The hon. Gentleman the Member for North Bradford, in dealing with the recommendations of the Conference, expressed the gravest doubt as to whether the recommendations would be found, in the end, to lead to any practical and valuable result, and, in particular, he asserted that, in regard to the recommendations of the Conference, that the countries of the world should work for a general reduction of tariffs, so far as we were concerned, the recommendations would be very difficult to put into practice, because, in his view, we could not hope to induce other people to reduce their tariffs unless we first increased ours. I have not the slightest intention of raising any general discussion on these hoary controversies, but, when I heard that argument used, I at once recollected the case of those people who assure you that they do not feel that they will ever be able to be satisfactory temperance reformers, or be themselves strong abstainers, until they first have taken part in a really good carouse. If the words of the President of the Board of Trade mean anything—and, of course, they mean a great deal—he has rejected that old school of thought.

But there is one consideration upon which I do not think the right hon. Gentleman touched. He pointed out, I think with complete truth, the justification for assuming that the evils which this Conference joins in regretting and denouncing are recognised as evils, and, while he admitted that they exist in many parts of the world, he said that they still exist in this particular country to a much less degree than in many other countries. He said, for example, that the tariff in the United States was extremely high; that, alike as regards the height of the tariff and the number of articles touched by it, we were not, at any rate, as bad as some of these other more benighted lands. I am sure that the hon. Baronet the Member for Bournemouth (Sir H. Croft) will agree entirely on that score.

The CHAIRMAN

The right hon. and learned Gentleman is, I am afraid, hovering on the brink of disorder.

Sir J. SIMON

I apologise to my hon. and gallant Friend the Member for Bournemouth, but I think it is strictly relevant to consider how far the Government of this country can usefully shape its course or allow itself to be influenced by these recommendations of the Conference. It is not enough, I think, to point rather complacently to the fact that other countries are in much more immediate need of salvation than we are at the present moment. We are all miserable sinners. The most important question is whether we are worse sinners new at the beginning of the third year of the present Administration than we were when this Administration began. There are sinners of all sorts. There are occasional sinners and perpetual and continual sinners. There are also repentant sinners who return to the true fold. The really practical point for any Government must be as to which way a given country is tending. It is all very well to say that the matters to which the Conference called attention are evils which, by the conjoint action of the different States of the world, ought to be reduced and removed. It is all very well to say that, at any rate, we are comparatively without offence, and that there are many people much worse, but we do not know in what direction they are tending.

The CHAIRMAN

I have my doubts as to whither the right hon. and learned Gentleman is tending.

Sir J. SIMON

When the President of the Board of Trade is asked to say what course the Government propose to take in view of these recommendations, he contents himself by saying: "Look at our record, and see how admirably we stand as compared with the other countries of the world." That is all very well, but ought we not also to make a comparison between where we stand and where we stood a few years ago, and, although it would be out of order to illustrate that position, one can imagine any country one likes saying the same thing. The Minister of Commerce in a particular country might say: "I thoroughly applaud these Resolutions; they embody in suitable language my dearest aspiration, and they represent, the object at which my Government is aiming." This Minister of Commerce might go on to say, "I must search my conscience. Have I been improving or going worse?" He might ask himself, "Is there any single case which this Government can quote to-day, in 1927, in which they have reduced any tariff since they came into office?"

Mr. SANDEMAN ALLEN

I want to say a few words on the subject under discussion. The general ground for this Report has been fully covered by the right hon. Gentleman the Member for West Swansea (Mr. Runciman), and it really covers the whole ground of trade barriers. Speaking ac one who has been engaged in this matter as a member of the Committee of the International Chamber of Commerce which prepared the trade barriers report for Geneva, and subsequently endorsed it at Stockholm, I want to say how very satisfied I am with what the President of the Board of Trade has now stated. It is important to remember that the Economic Conference dealt with every barrier to the flow of international trade, and not merely with the tariff issue. The very large Conference of the International Chamber of Commerce held recently at Stockholm, and comprising representative business and industrial men, fully endorsed all these resolutions. As one illustration of the importance of what the President of the Board of Trade has said, I would mention that, in the Transport Section, the whole matter was very carefully studied, and a resolution was unanimously adopted to the effect that there was no necessity for new conventions, but that, if the nations of Europe who had signed the Conventions already made carried them out in the spirit as well as in the letter, the whole of the difficulties would be removed. Therefore, I feel that in this matter His Majesty's Government have long ago given a very strong lead. At the Stockholm Conference we felt how impossible it was to ask the British Government to take a lead, and this is the only exception I take to what the right hon. Gentleman the Member for West Swansea has said. I do not think it is for this Government to do so. It has been clearly pointed out that they have done what they can themselves, and have asked the League of Nations to remove as far as possible every restriction on trade between the nations.

I know that the nations represented at the Geneva and Stockholm Conferences will welcome what the President of the Board of Trade has said to-day as further proof of our goodwill. There was a unanimous feeling, arising from a sincere and deep conviction, that, as far as the delicate and difficult question of excessive tariffs was concerned, it was largely a matter of education, and some of those nations have already received a very painful education in that matter. I do not want the attention of the House to be diverted by considerations of that kind from what is being done at the Economic Conference and by the International Chamber of Commerce to remove all the different barriers. I know, from experience and from what has been said to-night, that we can count on His Majesty's Government supporting to the very utmost all those necessary steps which have to be taken piecemeal on every different subject by those concerned, in order to help forward the flow of trade and remove the absurd anomalies which exist in many places. We recognise that this country, of all countries, stands in the forefront in that respect, and has been of the greatest help, and we hope and believe that other countries will signify that they intend to act in the direction of removing the barriers they have set up so that there may be an opportunity for Europe in the future to recover from a good deal of what we are suffering at the present moment.

Resolutions to be reported To-morrow: Committee to sit, again To-morrow.

The remaining Orders were read and postponed.

Resolved, "That this House do now adjourn."—(Commander Eyres Monsell.)

Adjourned accordingly at Twenty-Seven Minutes after Ten o'Clock.