COTTON INDUSTRY.

HC Deb 02 April 1928 vol 215 cc1666-729

Mr. T. SHAW

I desire to draw the attention of the House in general, and of the Government in particular, to the position of a very large trade, which, for the last six or seven years, has been in a state of crisis previously unknown in its existence. I do not know whether any of those Members of the House who are not familiar with Lancashire have any idea at all of the colossal development of the cotton industry. I do not know of any industry in the world where there is such a concentration as there is in the cotton counties, Lancashire being the centre and putting out tentacles into one or two of the other counties adjoining. Certainly the Ruhr valley, which has been said to be the largest industrial concentration in Europe, bears absolutely no comparison with the formidable and gigantic development of the cotton trade in the Lancashire area. For instance, if we consider the development of this trade, we find that we have in Great Britain alone—nearly all in the county of Lancashire—over 60,000,000 of cotton spindles, or, roughly, more than one spindle for every inhabitant of the country. We have some 767,000 looms in Great Britain, and in the county of Lancashire alone, there are almost a quarter of the looms of the whole world.

I think my contention that there is no concentrated industry like this anywhere else in the world can be justified by facts of that kind. The concentration that applies to the county applies also to the towns. I know one small Lancashire town with a population of 25,000 or 26,000. When I was connected with it there were 6,000 members of one trade union alone—the weavers—in that town, which is equivalent to saying that almost one out of every four of the population was engaged in weaving. Adding the preparatory processes and other trades, shopkeepers, millowners, the concentration will be seen to be more formidable. I hope I shall not weary the House with too many figures—I am trying to drive home my point about its formidable development—but if we take a town like Oldham, we find that it has more spindles than many of the countries which are accused of competing against us. Burnley has some 51,000 voters on the register, but it has 87,000 looms in its weaving sheds. This trade—I am speaking of the time before the War—was an enormously prosperous one. It had a history of profits, and, if I may say so, of capacity, that no other industry in the world in the same line possessed. It made cotton cloths for all the world. It still makes cotton cloths for all the world, but the developments since the War have been of such a kind that this great industry, formerly so prosperous, and in which there never has been any question either of incapacity or of lack of desire to work, or of inferiority to others—this great industry, which is certainly equal in technique and in its work to any similar industry in the world, during the last six or seven years has been under a cloud, and the present position is so bad that one writer describes its state as "Lancashire under the Hammer." This is a book written by the editor of a Lancashire paper. It is a thought-compelling book, and ought to be in the hands of every man and woman who not only know Lancashire, but who, like those of us who are Lancastrians by birth, love Lancashire and want to see Lancashire flourish. The book, "Lancashire under the Hammer," has been written by the editor of the "Lancashire Daily Post," and, while I do not pretend to agree with all the conclusions of the writer, the book is worthy of being read by every Member of Parliament, because the condition of an industry which was the greatest exporting industry in the country is of vital importance to every Member of Parliament, whatever his party or political colour may be.

It was always easy, perhaps too easy before the War, to make fortunes in this industry. Fortunes were often made in it whilst the workers were being paid very low wages. It was the common thing for the butcher, the baker, the tinker and the tailor to go into trade with a small capital and become rich in a comparatively small number of years, and going into cotton meant a certain fortune if one were prepared to work in the ordinary way. That state of things has disappeared. Now, we have to face a condition of affairs in which nearly every spinner and manufacturer is protesting against the dangers of the future. Many of them are at their wits' end how to get along in the immediate future, and very many of them are fearing bankruptcy in the not distant future. If ever there was an industry where it might have been claimed that the competitive system was justified, it was this industry of the Lancashire cotton trade. Whether now anybody will claim that competitive industry can be justified by the success of the Lancashire cotton trade is a matter of another colour.

So bad have the conditions become that the employers have made very definite demands from the workers in the industry. They have made certain investigations and they give certain reasons, arising from their investigations, for the demands which they have made. The demands they have made are for a 25 per cent, reduction of the additions to wages and for an increase of the working hours from 48 to 52¼ I am not going to attempt to argue the rights or wrongs of the employers' demands. This is neither the discussion nor is this the time to enter into a Debate of that character. I am stating facts, in order to confirm my argument that the trade is in a state of chaos and that the future is very dangerous. There is evidently in the trade a great desire to find a way out. It is useless arguing that the old system of individualism in capitalism has broken down. We see the results of it; the breakdown is there. There is no question about it. The only point is how best to act and how best can the Government and the House of Commons help in order to bring back prosperity in this industry.

That a reduction of wages would help us is, to those who know the industry best, ridiculous. When one considers the prices of Lancashire cloth relative to the prices of competing cloth of other countries, the question of wages that are paid to spinners and weavers is a mere bagatelle, as I hope to prove by a few-figures. Many of the mills are running 32 hours and 34 hours a week, and most of the weaving sheds are not running all their machinery. I give the broad facts to show that we cannot even run the 48 hours which have been agreed upon, much less the 52¼ hours that are demanded. If I may add a personal word on this matter, it is that, outside the employers' association there is an attempt being made to introduce the 55½-hours week, which can only be to the disadvantage of the good employer. The Government could stop that in two days. A one-Clause Bill would stop that completely, and I am hoping that those particular employers will hear very definitely from the Government in the immediate future that there are methods of stopping any attempt to introduce the old 55½-hours week in the county of Lancashire, against the interests of the workers and the better type of employer.

I will quote a few passages from the book which I have mentioned, which will give a better idea to the House than I could do, by any extempore speaking. Under the heading "Seven Terrible Years," the author says: At least 400,000 men and women working less than 35 hours a week. No dividends; next to none, or not-easily-arrived-at dividends for the best part of two-thirds of the whole cotton industry. Yarn and cloth produced at a loss in many cases; at a pre-War rate of profit in exceptionally few. Where it had been left in spinning and manufacturing, boom money melted like snow. The accumulated wealth of the rich days before the War dwindling away. An unending tale of deeds of arrangement, moratoria and bankruptcies. Spinning mills and weaving sheds unsaleable, or obtainable in the open market at scrap prices. The clutch of the banks on Heaven-alone-knows what proportion of the industry. The growth of a hardly concealed panic amongst cotton men. That is a terrible picture of the condition of Lancashire, and it is a true picture. It is a picture following on an orgy of speculation which has never been exceeded in this country except, perhaps, in the time of the South Sea Bubble. It would be easy, if I had the time and the inclination, to deal with the position of the workers in the industry, and, frankly, I am more concerned with the position of the worker and his or her wage than I am with the position of the employer and his profit. My experience in Lancashire, and I have had a fairly considerable experience of dealing with the employers, is that they are perfectly well able to look after themselves, as a general rule, and they certainly do not need my assistance in order to look after their own interests. There is one thing to be said for them, and every honest man must say it—and perhaps that is the reason why during all this time of crisis there has been no violent outbreak in Lancashire—and that is that, while the Lancashire employer is as hard as nails, while he will drive a bargain as hard as any Greek who ever lived, once his word has passed, the workers know that that word will be honoured. When the Lancashire worker knows that he has an agreement with his employers, he knows that there will be no shuffling and no evasion, and that every letter of the agreement will be kept. It is for that reason that the Lancashire workers have gone through this period of bad trade without becoming in any way violent.

I remember in the worst of the boom, a fantastic state of affaire which simply beggars imagination. Let me quote a few figures from that unhappy time. There was the Cairo Mill with paid up capital of £l 15s. per share which were sold for £22 10s. per share. There was the Don Mill with shares of £3 10s. which sold for £20 per share; the Dale Mill, £3 shares sold for £20; the Delta, £l 10s. sold for £15 10s.; the Fern, £30 shares sold for £270, and the Leesbrook, £1 shares sold for £20. There were men in those days who became very rich through that kind of speculation. None of them went to prison, but some of them got titles. It would have been infinitely better had there been no titles and more prison.

Let me turn to the question of what is hampering the trade in many ways. I would like to quote, not Labour opinion but the opinion of the employers. They make a demand for a reduction in wages. Although the sum stated is 25 per cent., it is in reality, roughly, about 12½ per cent, of the real wages, because the deduction is not from the whole of the wages paid but from the additions to the base rate. I do not wish to quote a lot of figures, and particularly figures of a technical character which are exceptionally difficult to understand by hon. Members who do not know the trade, but here are figures relating to a standard cloth, called dhootie. The total proportion of the price on this cloth paid for spinning and weaving is 29.4 per cent. If the reduction of wages were made, the total result would be less than 3½per cent, on the total selling price of the cloth. That in no possible way could help us out of the present difficulty. There is a standard shirting in which the reduction would mean 2¾ per cent, from the selling price and there is a printer standard where the reduction would be about 2 per cent. Therefore, even if the reduction in wages took place it would need very much more than that in order to achieve the object we are aiming at.

7.0 p.m.

What do the employers say are the chief causes of their difficulties? They suggest to the workers that every effort should be made to reduce manufacturing costs, yet the employers in this trade are surrounded by a ring of combines who make their own prices, and the employers are in the grip of this ring of combines, who remorselessly squeeze every drop of blood they can out of the industry. The employers, further, propose a reduction both in local and national taxation. We do not need to argue that point in this House; it has been argued ad nauseam. They ask for the abolition of the Dyestuffs Act, which has affected the cotton trade adversely, in foreign competition. I suggest that the Government might review its policy with regard to dyestuffs. When the Dyestuffs Act was passed, and the Government found money for the development of the industry in this country, it was on the ground that we could never let a key industry escape again, and we must make certain we had this industry in our own hands. It was quite openly stated outside the Chamber that we could never allow ourselves to run into the danger of another country having such a terrible advantage over us. We invested a great deal of money in the industry. I remember, in 1924, a proposition was made that the money we had invested in the dyestuffs industry should be withdrawn and the industry be allowed to go on its own way. That proposition was turned down. I would like the President of the Board of Trade to let us know if it be a fact that not only has that direct national interest in the dye industry, which in 1918, 1919 and 1920 was necessary in order to guarantee the future safety of this country, been withdrawn, whether that money has been turned over to private hands and whether the British Dyestuffs Corporation with the capital which they have turned over has actually entered into an agreement with the Germans to share the profits. We ought to know definitely. I assert that the Government have sold out, and that they have sold out with the definite knowledge that this Corporation was going to enter into this agreement with the Germans in order to share the plunder, and all our plans for making this country safe have gone. That is one question the employers are pressing.

Mr. SPEAKER

I must point out to the right hon. Gentleman that the Dyestuffs Act is not open to consideration to-day. We must not deal with legislation.

Mr. SHAW

I suggest that another thing employers want is an inquiry into the question of freights. I am told that for exactly the same type of goods shipped from Liverpool in the one case and Antwerp in the other to the same market, freight charges are often three times as high to the British manufacturers as those from Antwerp. If this be the case, there is good ground for inquiry. Then there is the question of finishing and dyeing charges. I have a letter written by an employer to the "Manchester Guardian," in which he makes an extraordinary statement about the prices charged to Lancashire manufacturers for dyeing and finishing, and compares them with charges for exactly the same work in the United States. He makes the extraordinary statement that charges in America on the definite goods which he names made by his own firm are exactly one-half what the charges are in Lancashire, and the difference in these charges is more than the double cost of spinning and weaving wages. If that be so, I suggest it is the business of the Government, of this House, to insist on a full inquiry as to what exists in the trade and how best to remedy this state of affairs.

Then there is the question of markets, in the past—and this is not unknown—I am sure the right hon. Gentleman the President of the Board of Trade knows it and it is certainly not unknown to the hon. Gentleman the head of the Overseas Department—in the past Lancashire spinners and manufacturers have been content to take large profits and not to care afterwards where their goods were going and at what prices they were being sent out. It is time that ended. I think an inquiry would prove that the present system of merchanting is capable of being altered and developed in such a way as to remove many of the difficulties that now exist. Take the case of a manufacturer who is making goods, or has been making goods, for the Levant, the Near East. He turns out his stock and he goes into the Manchester office of a foreign firm of shippers. He knows nothing more about it. He does not know where these shippers may determine the goods to go or to what country. The actual maker of a cloth has not the slightest idea where the cloth is going. That is another thing, I venture to say, in which an improvement can be made, but all these improvements must be hinged on an understanding of some kind between employers generally, in order that the best advantage may be taken of the situation. The old idea that the man should go on producing without letting his neighbour know anything, that he should go on for ever and ever in the old-fashioned way, is as dead as a doornail; and unless Lancashire recognises that fact, there is a bitter awakening, even more bitter than we now have, for employer and employed in the industry of which I know a little, because I spent 21 years of my life working among the people to whom I am proud to belong.

It is the bitterest thing in the world for a Lancashire man who has left that district for some years to go back into a Lancashire town and talk with the friends of his youth, the workers in his trade, men and women who used to be proud and independent—perhaps the most independent body of workers in the world, who did not care for anybody, because they knew they were genuine and independent—genuine, golden-hearted people, who would not do a wrong or mean thing, and who would scorn to accept charity, but who are now gradually drifting and drifting, despairing, into a desperate plight. It is the business of this country in an industry of this kind not to wait until it is asked, but to go as far as it can by an inquiry of a most public kind into the circumstances, and to see on which of all the circumstances a remedy can be based. One well-known man in Lancashire, the hon. Member for Mossley (Mr. Hopkinson), will not be of my opinion as to the eminence of this authority, but Mr. J. L. Tattersall, in an article, states: It is generally admitted: That our competitors abroad have captured much of our trade by modern methods of production and of marketing. He goes on: The spinner is not to blame for this lost trade. I myself think that is justified. My personal opinion is that the combines have the trade by the throat. He continues: That charges for finishing by the combines are too high. That our merchant shippers are not pursuing energetic selling methods, nor are they supplying standard cloths to compete with those offered by manufacturers abroad. I suppose what he means is the making of fewer kinds and making them in standardised qualities. I think all these five matters are worthy of investigation, and there is certainly evidence to prove that with regard to three of them there is little doubt Mr. Tattersall has stated the truth. I ask the President of the Board of Trade to think for a moment what Lancashire men are. They are intensely proud, perhaps intensely prejudiced, and I am certain they would never willingly ask for Government assistance or intervention at all. I am speaking now of the manufacturing employer. The thing is in the blood of the whole Lancashire people—workers as well as employers. They have always taken the standpoint, "Keep Parliament out. We can manage our own business, and we do not need any interference. Leave us alone." They have managed it to the position described in the passages I have given. That is to what the absence of organisation or co-operation or arrangement from a centre has brought us. We are past the time when the Lancashire man can say he can keep his own end up.

Mr. AUSTIN HOPKINSON

May I remind the right hon. Gentleman that under the directions of the same Mr. J. L. Tattersall there has been co-ordination of the trade and combination amongst spinners, and the results have been disastrous in the last two years?

Mr. SHAW

I think the hon. Gentleman has forgotten one or two essential facts. The first is that the organisation left out altogether one big section of the trade, and there was every probability that if the organisation had been complete the thing would have been of great benefit both to the workers and the employers.

Mr. HOPKINSON

What about Japan, India and other foreign countries?

Mr. SHAW

We have heard a great deal about Japan and India, and it is assumed that their condition is what it is because of the extraordinary advantages possessed by these two countries. I have had an opportunity myself of making an investigation in India. I found that wages were shameful, and that the condition of the workers was quite different from that of our own people. But we have to use a sense of proportion and remember that we cannot compare European conditions with Indian conditions. I found also that while a Lancashire man was working on four looms a weaver in one of the finest firms in Madras had one loom only, and one loom wages cannot be compared with wages for four looms. On automatic looms two of our weavers in Hyde, Cheshire, would work 40 looms, which would work out—I am speaking from memory and subject to correction—I think, including cleaners, bobbin fillers, cut carriers, etc., at eight per worker, whereas in Madras with the same type of loom it would not work out at over two per person. When we talk about wages and hours we must observe a sense of proportion, and realise the other conditions, and when we do so it is extremely doubtful whether the Indian employer—I am not speaking of Japan—really has an advantage in the actual wages cost over the employer in this country.

There is a gentleman named Sir Charles Macara who has written very voluminously and very interestingly on the cotton trade. Whatever views he may share with his fellow employers he certainly does not share the view that Eastern countries have a tremendous advantage over this country. He says: I have pointed out ad nauseam how on balance of price and per capita production there are few if any advantages remaining with the spinner and manufacturer abroad. Sir Charles Macara has claimed that the Lancashire cotton trade has lost millions by gambling in cotton, which losses could have been avoided if there had been understanding honourably kept between spinners to prevent, as they could have prevented, these speculations. In a circular I have here it says that in the case of one crop no less than £300,000,000 was added to the value by these gambling transactions, which fell, of course, not on the people who did the gambling but largely on the unfortunate people who had to carry on the trade. We cannot go back to the days when with one halfpenny per pound profit on yarns, dividends of 7½ per cent, on capital could be paid. In the fantastic boom years that halfpenny per pound went up to 5d. and 6d. and 7d. and 8d. and 9d., 18 times the normal profit. The same was more or less true of the price of cloth. Mills were sold at prices that were simply ridiculous, and the question now is can this trade ever recover unless a radical revision of the capital of these concerns is made? Can any trade expect the workers to work for wages which will give a profit on these inflated capital sums? If we had a thorough inquiry into this trade, which I hope the Government will institute, it would be possible to bring some relief to the position of affairs we have in Lancashire to-day.

I do not want to paint too gloomy a picture. I am not as pessimistic as the author of the book "Lancashire Under the Hammer." I do not believe that Lancashire is under the hammer, but unless Lancashire puts her house in order she will come under the hammer. There are certain things which are evident to 98 per cent, of the men and women of Lancashire to-day, there are certain beliefs which are common to over 90 per cent, of workers and employers. One is that the old system of individual working is dead, that it can only lead to bankruptcy. Another is that unless Lancashire can escape from the grip of the combines and arrangements that are squeezing her to-day there is very great danger for the industry. There are Lancastrians who think that there ought to be a very searching inquiry into the relations between the banks and the spinning and manufacturing firms. I see the hon. Member for Stockport (Mr. Hammersley) in his place, and I nope he will lend his aid to this Debate, because on that subject certainly he does know what he is talking about. The hon. Member will pardon me for putting it in such a clumsy way.

There are Lancastrians who think that unless we have a totally different method of merchanting there can be no hope for the trade, and there are Lancastrians, amongst whom I am one, who want to see a much heavier proportion of British firms engaged in the merchanting trade. I hope the spinners and manufacturers will be their own merchants. That would be the best system of all. My final word is this. It is essential that the most searching inquiry should be made into the whole circumstances, from the capitalisation of the mills to the merchanting of the cloth, and on the basis of that investigation there should be a, rearrangement which will give Lancashire the chance of returning to her old state of comparative prosperity. Whether it is I, a Socialist, believing finally in the ownership of industry by the people of the country, to be worked for the benefit of the people of the country, or hon. Members opposite who believe in the capitalist system as the best system, no matter what view we take, our first object ought to be to see that every man and woman who is willing to work shall have something on the table to eat and decent clothes to wear.

That is the problem which is before Lancashire to-day. The old days of safety and steadiness of trade have apparently gone for ever, unless we adopt different methods. I plead with the Government to institute an inquiry into the whole of the circumstances connected with this trade, believing that by so doing they will render Lancashire invaluable service. The wholc tradition of Lancashire is against the Lancashire people themselves asking for it. They cannot swallow everything they have said about independence and non-interference all at once. They are going down the slope now, and going quicker every day. it is possible by a comprehensive inquiry to bring a ray of sunshine into the trade. One thing is certain. We still possess as good workers as there are in the world; we still possess employers and technicians who are as good as any in the world; and I do not see why, if a proper use is made of our skill, our machinery, and our technical superiority, with co-ordination, good will, and cooperation amongst employers and workers, Lancashire should not emerge successfully from her present position.

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

The right hon. Gentleman has made a speech in which I think everyone in the House has been deeply interested. He has said many things about the present condition of the cotton industry and the difficulties it has to encounter at the moment, with which probably the great majority of hon. Members will be in agreement. But the object of his speech was to move a specific Amendment to the effect that this House should insist that the Government should establish an outside inquiry into the conditions of this industry without delay. On that point, I join issue with him, and I will explain to the House the reasons for which I consider, while in sympathy with much that he has said, that a Government inquiry would be the least helpful thing one could do for the cotton trade at the moment. I am sure hon. Members opposite will recognise that I speak with as sincere a desire to put this trade on its feet as the right hon. Gentleman himself. Let me just make one remark on an observation of the right hon. Gentleman which was out of order, with regard to the Dyestuffs Act, and that is that the Labour Government did not attempt to repeal it when they were in office, and we do not propose to repeal it now that we are in office.

I come to the larger issue raised by the right hon. Gentleman, that there should be an outside investigation into the conditions in this industry at the moment. Let me point out that the industry comes within the purview of the Balfour Committee which has been inquiring into the condition of various industries in the country. They will publish a report in the course of the next few weeks, which will cover the whole of the textile trades of the country. That report is to be followed by their final report, in which they will make their general recommendations as to policy. In so far as any inquiry is desirable from outside, I really do not see what investigation could be undertaken more useful than what has already been done by the Balfour Committee. We should be only duplicating the work of this Committee; I do not see that it is necessary to set up another Committee which will make exactly the same sort of inquiry.

I have, however, a more fundamental objection than that to setting up a Government inquiry at the present time. The result of any Government inquiry is to stifle activity in the trade itself, and that is one reason why it is the least desirable thing to do at the moment. The fact of the Government setting up an inquiry puts the trade on the defensive. Everybody has to come and give evidence, to present his case; we have seen it in every coal inquiry that has ever taken place. The people who ought to be engaged in settling their own differences, in improving their own methods of manufacture and in developing their marketing organisation, when they come before an outside tribunal are much more intent on making out a forensic case than in doing anything else.

Mr. HOPKINSON

Does that apply to the Safeguarding of Industries Tribunal?

Sir P. CUNLIFFE-LISTER

No, because that is an inquiry for a very simple and specific purpose, and is followed by immediate action. It would be quite improper for me to discuss that with the hon. Gentleman, because the action involves legislation. At any rate, I do not think my hon. Friend is going to differ from what I am saying now. If he does we shall see, not Satan rebuking sin, but engaging in sin.

Mr. HOPKINSON

I am not rebuking the right hon. Gentleman, but I wish he would be as consistent as I am.

Sir P. CUNLIFFE-LISTER

I find the hon. Gentleman's consistency one of his great personal charms, but one of his great political disadvantages. I have no doubt that the result of a Government inquiry is at once to put people on the defensive, to make them engage in fighting a forensic case instead of getting on with their job. An inquiry would have a worse effect on would-be reformers in an industry—those people who feel it is their business to go ahead and carry reforms and try to bring others into line with them. They get discouraged, and their enthusiasm gets damped down. They do not know what a Government inquiry is going to propose, and they hesitate to come forward on their own account. The result upon the slack people who want everything to go on as before, is worse still. They regard a Government inquiry as the greatest possible encouragement to sit still and do nothing. They say, "Now that the Government is going to inquire, the Government will have to do something." Therefore, to their hope that Providence will provide them with something in the future, is added the expectation that the Government will do something.

So you get the keen people made much less keen and the slack people made much more slack. In the meantime what advantage comes to all those firms who have to meet an actual situation day by day, who have to make arrangements with their creditors, to make their accommodation with the banks, to employ their workmen and carry on their buying and selling? What earthly good is an interminable inquiry to those people? It is not going to bring efficiency to the industry or to bring more money into it. It is just going to act as a damper upon any efforts which are being made. Indeed, we have heard enough of moratoria in industry, but the imposition of a Government inquiry now would be to impose a moratorium on all effort and all enterprise and all initiative in that industry. In that I observe I have the support of the President of the Operative Cotton Spinners' Association, who said: The only useful purpose of such an inquiry would be to expose the rottenness and corruption of what had taken, place a few years ago.

Mr. MACKINDER

Hear, hear!

Sir P. CUNLIFFE-LISTER

If hon. Members like to have an inquiry of some kind into some flotations that took place that may be an interesting investigation. Nobody defends those flotations. They have done the greatest possible harm. I am perfectly certain that those flotations are not going to be made in Lancashire again, and that if any of the floaters set foot in Lancashire they will receive short shrift.

Mr. MACKINDER

They are still there.

Sir P. CUNLIFFE-LISTER

Then you ought to turn them out.

Mr. MACKINDER

There are several in this House.

Sir P. CUNLIFFE-LISTER

I am stating my personal opinion of those flotations, and I have never concealed it. I have always said that they were the very worst possible thing that ever happened to Lancashire. We do not disagree about it. But what is the good of having an inquiry into the wicked things—if you like to describe them so—done by irresponsible or scheming people years ago? What we want to know is, what is best for this industry in the future? I am not in the least fearful of Lancashire going into notations of that kind again. We do not want an inquiry to expose the misfortunes which Lancashire has suffered. The only justification for a Government inquiry would be, either that there were facts of benefit to the trade to be ascertained, which could not be ascertained in any other way, or that there was no chance of the necessary action being taken within the trade itself. As to the facts, I think they are sufficiently well known without any inquiry. As regards action I have something more to say. I am glad to see signs that action is being taken. I see that a Committee of the Manchester Chamber of Commerce has been set up. I was grateful to the right hon. Gentleman when he said that it was vital to the industry, if it was to win through, that there should be an understanding between the employers generally and an understanding between the different sections of the industry. That is exactly what the Chamber of Commerce committee is seeking. It represents the four great sections of the industry. It is dealing with the whole of the business transactions in the industry, from the first process to the sale in the most distant markets.

Mr. A. GREENWOOD

Are there any workers on it?

Sir P. CUNLIFFE-LISTER

No. That point may be quite arguable; it may be arguable that it would be desirable to have the workers represented. I do not propose to argue that question to-night. This is not a Committee of my constituting. Moreover, it is not dealing with the question of wages and hours. That is deliberately excluded. The four sections of the industry are getting together. I am sure that the hon. Gentleman will pick holes in anything that is done, but I am presenting to the House this thesis: That if you get a movement within an industry itself and that movement is likely to be damped down by the further imposition of a Government inquiry, your duty is to encourage whatever movements there are in the industry and not to damp them down. The other movement which I see on foot is a movement to secure amalgamation in the American section.

As regards the facts, we know that no inquiry is necessary. We know that this industry depends, as to 85 per cent., on its export trade. We know the comparative value and volume of the trade that was done before the War and to-day. The facts have all been published. We know exactly in what markets we have lost ground, in what articles we have lost ground, and to what competitors we have lost ground. We know the effect of the development of national industry in other countries.

The right hon. Gentleman said, "But there are freight rates." We discussed that subject at considerable length a fortnight or three weeks ago, and I think the House on that occasion was in general agreement that the way to deal with freight rates was not to set up a Government inquiry but to do what the Imperial Shipping Committee itself recommended, and is being done in the Lancashire trade, as in others; that is to get representative organisations of traders and shippers to discuss the question of shipping rates with the shipping conferences and get settlement where they can and then on any broad question of principle, if a serious grievance remains outstanding after the representative bodies have discussed the matter, let the case go to the Imperial Shipping Committee. That is the right way and not the setting up of a new ad hoc Government inquiry into this particular question.

The right hon. Gentleman also said, "We want an inquiry into the finishing charges." That is exactly the kind of thing that this Manchester Chamber of Commerce Committee is qualified to do. The Committee consists of four lots of five people. One lot is nominated by the spinners' organisation, another lot appointed by the manufacturers' organisation, a third lot by the finishers' organisation—the bleachers and dyers and so on—and a fourth lot by the merchants. Could you have a better body to go into the question of the charges for finishing? The proof of that is this: Since that Committee was set up the bleachers have made a reduction of their charges just in those directions in which it was considered the greatest encouragement would be given to the export market. When you get business like that being done, let us go ahead and encourage it and do not let us set up some new Committee.

Then the right hon. Gentleman said, "We must have an inquiry in order to inquire into the gambling in futures." I do not believe that an inquiry into that subject is necessary. I do not think that any inquiry will ever eliminate a certain amount of speculation in any commodity. I do know that what really causes uncertainty in this industry is the doubt as to how large the American cotton crop is going to be. If we could get certainty about that, we would get a certainty that would be far more valuable than any control of gambling in futures.

We know of the market opportunities that exist. Difficult as the position is, there are opportunities, if we can only take advantage of them. I was given a forecast of the immediate future by one of the ablest merchants, who knows all the markets. He said that the Far East is distinctly better. India, which has been improving, is buying still more. Indian purchasing power is undoubtedly increasing, and there is a closer relation between the price which India gets for what she sells and the price she has to give for what she buys. Though a large amount of the coarser trade will be done by India herself—I am not basing my opinion on any impressions of my own, but of those with whom I have discussed it, both merchants in this country and people in India—I have no doubt that the trend of purchasing power in India is going up, and we may look for a not unreasonable increase in our opportunities there. South America is very good, my informant said, and home trade above the normal.

Then we also know, without any inquiry, what are the conditions existing in the Lancashire industry to-day which handicap it in taking advantage of these opportunities. I do not want to go at any length into what I discussed the last time we debated the subject, but what I regard as the most striking thing about this trade is the divorce of one section of the trade from another. We have the situation in which one set of people spin, sometimes associated with manufacture but very often spinning alone; another section manufacturing; a completely separate section of people doing the finishing trade; and then in the case of the great bulk of goods, the selling in the markets of the world is done by a wholly separate set of merchants. That was all right when the world was your oyster, when you had only to make cotton of any sort you liked, and anybody who wanted to avoid being naked had to wear whatever you chose to give them. But we are all agreed about that and there is no need to inquire into it.

The thing to do is to get these people together. I agree that it is vital that there should be a closer link between the manufacturer and the merchant. That is what the Chamber of Commerce is doing, and I want the House to encourage them in going forward on those lines. You have these four sections sitting together and working at these problems in the most direct way. You have a committee of manufacturers presided over by a merchant, and a committee of finishers presided over by a manufacturer. I know enough of what is going on to be in a position to say—I think with certainty—that not only are these matters being discussed, but that we have every reason to hope that from those discussions very definite action will come which will be for the mutual benefit of all sections of the industry. Certainly, there can be no better way of meeting this great problem of the divorce of one section of the cotton trade from another than the way which the Manchester Chamber of Commerce has adopted. No Government inquiry is needed for that purpose.

There are, of course, the very serious difficulties of the American section. In regard to those difficulties, I do not think many people would deny that, first, there is a serious financial position. There is the gross inflation of capital due to these ill-starred promotions. Then there is the heavy load of debt which weighs down one firm after another—and if a firm goes into bankruptcy, somebody may buy up the bankrupt mill and be able to compete at an even cheaper rate in the market. The financial position has to be faced, but that means a drastic writing-down in the different concerns themselves, and arrangements for reconstruction, into which shareholders and creditors alike have to enter. Shareholders have to realise that the great bulk of that which they thought they had, has been lost, and that many of them have only liabilities and not assets.

Not only is there the great load of debt to which I have referred, but I do not think it will be denied—again I only quote the best opinion I can get on all sides in the trade—that the units themselves are uneconomic. You want much larger concentrations of mills—not floaters' combinations, but genuine producers' combinations, and that, of course, can only be got by large considered schemes of amalgamation into which the companies will come and into which the creditors will come, thus creating economic units and giving the industry a chance to rescue itself from this load of debt. Such a reorganisation will provide the industry with a chance of producing at a price which will compete with its rivals and also with a chance of obtaining finance in the future. A question of this kind faced the fine spinners years ago. I do not think it unreasonable to say that the problem with which the fine spinners were faced was the same in kind, or much the same in kind, though, no doubt, different in degree, compared with the problem with which the American section is faced to-day. The fine spinners faced it by amalgamation. It was much easier in those days, no doubt, but still that amalgamation took place and the fine spinners are on a very satisfactory footing at the present time. They are working and employing their labour full time. That is exactly, as it seems to me, what ought to take place in the American section. Let us encourage the attempts at amalgamation which are being made at the present time.

I am not going to ask the House to consider, nor am I going to pronounce an opinion upon, the particular details of any scheme of amalgamation, but when people are making carefully considered attempts at amalgamation, when a movement is on foot in the industry in that direction, for Heaven's sake do not let us deter them by setting up a Government inquiry which may block every effort of that kind. It certainly will not be a help to super-impose a Government inquiry on them. We can help them most, not by doing so, but by encouraging them to proceed, and I hope that we may find that other people who are concerned in this matter, especially the banks, will also give encouragement.

I know the difficulty with which the banks always feel themselves faced, the difficulty about "the limits of prudent finance" as they are called. I should have thought, if the limits of prudent finance meant the safe lending of money, that those limits have been passed somewhat in a good many cases; and I should have thought that the business of the banks now was to encourage the present movement. But I know the difficulty of dealing equally as between one client and another. A bank must deal equally fairly with all its clients, otherwise its clients may leave it for another bank. That I know is a consideration which must weigh with the banker equally with moral considerations; but it is, I submit, a reasonable proposition, as I am sure any banker would agree, that where you find, after great efforts have been made to finance an industry, that it is vital that reconstruction should take place and that amalgamations should be brought about, then surely it is good finance, and is fair as between one client and another, to give encouragement to those who are advancing any sound scheme of reconstruction and amalgamation. I do not think in any quarter of the House there is substantial disagreement as to the nature and the seriousness of the problem which the right hon. Gentleman has stated, though there may be disagreement as to the remedies and solutions which ought to be found for it, but I submit that a Government inquiry would discourage an industry which has always relied upon itself. It would cause delay while doing no good and would serve to damp down co-operatwe effort—where individualism is, to-day, if anything, too strong. I ask, should not we from this House send to this distressed industry the best message we can, which is to say: "Get on with the job yourselves"?

Mr. HOPKINSON

I should like to congratulate the right hon. Gentleman the President of the Board of Trade on having furnished me, an unrepentant Free Trader, with certain new and effective arguments in favour of Free Trade. Towards the end of his speech, the right hon. Gentleman referred to the case of the Fine Spinners' Association as being one of successful amalgamation. Undoubtedly, it is a case of successful amalgamation, but, I am afraid, as an analogy for the present action by the American section of the spinning trade in Lancashire, it is useless. The trouble is not the over-capitalisation of the mills, but the over-pledging of the mills on debentures and loans. It is easy to get rid of excessive capital. A stroke of the pen does it, and nobody loses a penny, and it has not the least effect on the industry or the concern in question. But the real trouble in the American section of the cotton trade, and particularly in my own district, is this—that, in case after case, the loans and the debenture payments on the mills are probably in excess of the actual values of the mills" as profit-earning arrangements. As the right hon. Gentleman has pointed out, that matter really belongs to past history. Those terrible times, beginning to be at their worst about 1918, and going on to the end of 1920 or the beginning of 1921, are what Lancashire is suffering from at present.

It may be said—I think with a certain amount of truth—that Lancashire brought its troubles on itself, and that the folly of those years has to be expiated by those who committed it. But I suggest that it is not fair to blame the majority of those unfortunate people who were deceived, because, in case after case, in these mill flotations they did not know with whom they were dealing. The habit grew up of transferring shares from one name to another. There were names which stank in the industry to such an extent that nobody would have touched a flotation under those names, but, owing to the transfer of shares to another name, the people did not know with whom they were dealing and they were deceived to their own undoing. In these discussions, a certain amount of blame has always been thrown upon our local banks in Lancashire, and I think the local banks themselves would be quite ready to admit that their policy was, on the whole, not as wise and prudent as it should have been. But contemplate the position during that wild rush of flotations. Sundry gentlemen from London, and one of the "big five" banks had taken a hand in this affair, and the profits were so gigantic that there was, immediately, a great deal of pressure from anybody who held control of mills or waste companies to refloat on an exorbitant scale. Our local banks found that they were already losing their customers. Customers—mill companies—would say, "Will you finance the flotation of our concern? If you do not, we know who will, and you will lose our custom."

The situation developed with very great speed and in such a way that our local banks felt obliged to take part to some extent in this wild rush, and they have been very sorry for it ever since. But, once having got over those hectic days, what should be the correct policy of our local banks? Surely, their policy should be to disentangle themselves at the earliest possible moment, without having any too much regard to what happens to the cotton trade itself. After all, the banks' position is this: Apart from the interests of the banks themselves, surely it is highly desirable that even the smaller local banks should be in as strong a position as possible. What on earth is going to happen to the other industries of Lancashire, if the local banks are to be saddled with the obligations of the cotton trade, which it is beyond their power to bear and which will render them unable to finance other local industries? Therefore, although cynical people may say that it is pure self-interest on the part of the local banks, there is no doubt that, if self-interest could be set aside altogether, national duty would demand that they should strengthen their position as early as they can and as well as they can without too much regard to what may happen to other concerns.

8.0 p.m.

The right hon. Gentleman the Member for Preston (Mr. T. Shaw) painted a very gloomy picture, and it is undoubtedly a true one as regards the greater part of the American section, but at the same time we have this phenomenon: We have mills, in many cases of very small proportions, mills in private hands, which throughout this crisis have not been doing altogether badly. In some years they may have made smallish losses; in other years they have made quite respectable profits, but, on the whole, they have managed to carry on when some of the great modern mills have absolutely failed to justify their existence. Therefore, in advocating amalgamations and in advocating the increasing size of spinning units, let us bear in mind, in our general estimate, these smaller concerns that have managed to keep their heads above water. I know of several cases in my own district where very old-fashioned concerns, very small comparatively, have been able to make profits when their larger and more modern neighbours have failed to do so.

That brings me to the whole root question of amalgamation. It is no use amalgamating and increasing businesses by amalgamation unless you have the right men to deal with them when they are amalgamated. We have had exactly the same question in the coal industry of this country. We have been told by everybody—by the Press, the politicians, and the Samuel Commission—that we must get the coal mines of Great Britain into larger and larger units, but what is the good of doing that unless you have got the men who can control and manage those units? Our experience in the coal industry—and really in this matter it is very analogous to the cotton-spinning industry—has been that under the ordinary play of the market, if there is a man who obviously can manage a really big concern, that man, by the ordinary nature and course of events, will ultimately, in default of very bad luck indeed, find himself in charge of concerns as big as he can manage. We have several very clear cases in the coal industry of this country, where probably there are not more than half-a-dozen men at the most who can manage concerns employing in the neighbourhood of 20,000 colliers, and in three cases, at any rate, those men, by the ordinary nature and course of events, have found themselves in control of 20,000 men more or less.

If we follow on the lines of Mr. J. L. Tattersall's proposals, and amalgamate, without knowing who is going to direct that amalgamation and whether these people are really capable of doing so, it seems to me that the last stage of the cotton trade will be even worse than the first. It does not follow that if you have two millstones, and you tie them together, they will float when they are tied together although they sink when they are separate. The amalgamation of a large number of concerns, of which a considerable number have practically their whole value represented by debenture debts, is a very different thing from the amalgamations which produced the Fine Cotton Spinners' Association, the Calico Printers' Association, or the Bradford Dyers' Association; and the mention of those names reminds me that the right hon. Gentleman the Member for Preston was guilty of a somewhat grave inconsistency in the course of his speech. He drew attention to the awful evils arising from the Bradford Dyers' Association and the Calico Printers' Association in throttling the trade, and then, in the very next breath, he suggested that we should have a similar association in the American cotton-spinning section. He must make up his mind which he does want, whether he wants monopolies in every branch of the industry, which is really, I believe, the policy of his party, or whether, on the other hand, he wises to preserve that independence of Lancasire of which he spoke with such enthusiasm in a different part of his speech.

What the Government can do by any administrative action—and it is to that aspect that this Debate must be limited to-night—it is almost impossible to say, but I would suggest this, that it is possible, through the Companies Section of the Board of Trade, to conduct a systematic inquiry, instead of a spasmodic inquiry, as has hitherto been the case, into the circumstances under which a certain number of the flotations were made; because, after all, the Government are responsible to a certain extent in these matters. Having passed Companies Acts, and having taken steps to see that the Companies Acts are properly administered, I think it does devolve on the Board of Trade in these instances to do what it can, by administrative action, to make certain that unfortunate people, if they are going to be cheated of their money, will not be cheated of their money in exactly the same way as they were cheated during 1919 and 1920 in the cotton industry. I cannot help thinking that the publication of a true and unbiased report as to how those flotations were made and how the shares were transferred from one name to another, might, as I say, save a very large number of unfortunate people in the future from being cheated of their money, although it might cause a certain amount of disturbance in the process.

Mr. FIELDEN

One hundred and fifty years ago my great-grandfather started in the cotton spinning and manufacturing trade, and I am the fourth generation carrying on the same trade, on the same site, but not in the same buildings, nor with the same machinery. Therefore, I may claim to have some interest of a sympathetic nature and also of a practical nature in the question which we are now discussing. The whole of the trade is in trouble, but I think the trouble lies mostly with the spinning section of the industry, and the truth is that we have in Lancashire to-day a great many more spindles than are called for by the demands of the world. If we could reduce the number of those spindles in active operation by a third, there can be little doubt that we could sell the production of the two-thirds at prices which would be reasonable and which would cover the costs. Why the world will not take the whole of our possible production is a matter into which we need not enter to-night. Other nations have started spinning and manufacturing, and the producing power throughout the world has increased more rapidly than the consuming power. Some few years ago we, in Lancashire, thought that a good time would come when the prices of raw cotton came down, so that we could bring our production more within the range of the people who bought. The prices of raw cotton have come down—they have been very much lower than they are to-day—and practically no relief has been found from that cause. I am quite sure that we could obtain equilibrium if we could stop a third of the Lancashire spindles. Is it possible to do that?

Sir WILFRID SUGDEN

I am sorry to interrupt my hon. Friend, but I know he is an expert, and I should like to ask if he is speaking of the American section of the trade, or of the Egyptian section, or of both together.

Mr. FIELDEN

I am speaking of the American section. The reduction of the number of spindles would bring about equilibrium. Is it possible to bring about that solution? The leaders of the Masters' Federation have attempted to do this. They have proposed that the whole industry should accept short time, and it has been tried twice, and on each occasion the position has improved rapidly. The moment improvement took place, however, members of the Federation fell away and began to undersell. There was, therefore, no object whatever in maintaining the restriction as to production, and the signal went up again for "Go as you please." The result has been that our buyers abroad know quite well the position in which we find ourselves in Lancashire. They know that we are needy sellers, and, therefore, they take very good care to keep offering extremely low prices. I do not blame them, but why these low prices are paid is a question that requires some explanation. I hope the House will not think I am going to give them an explanation, because I do not know what the answer is. The fact remains that they are selling at very much below the cost of production, and they are cutting each other's throats all the time.

Who are the people who are interested in these mills? The shareholders first, the loan holders next, and the people who have advanced money to allow the owners of the mills to pay for the cotton and to pay the wages. If we take those in order, the shareholders in a very great number of cases have really ceased to have any interest in the mills, unless their shares are only partly paid, and then their interest is such that they would very much like to be relieved of it. The loan holders are steadily trying to get their money out, with only a certain amount of success, and, therefore, we can scarcely look to them to find a solution; and we must look to those who have advanced money, through overdrafts and in other ways, such as by mortgage—in other words, the banks. The industry to-day is practically in the hands of the banks. I have tried to find out what is the policy of the banks with regard to this question, but I have been unable so far to do so. The banks maintain silence on the subject. They are supposed to be led by able men, and silence may be a sign in this case of ability, but some people think that the banks, having got into the hole by lending this large amount of money to the industry, do not see a way out, have not got a policy, and are, like many of the spinners, hoping that something will turn up. What attempts have been made by the leaders of the industry in respect of this position? They proposed that production should be restricted. When this failed, they look round for some other alternative, and they put forward the proposition that production should be largely increased by lessening the cost of the article, to be brought about by reducing wages and by longer hours. The two proposals were made within a few months of each other, and they seem to me to be utterly contradictory. Therefore, one can scarcely look for any relief or leadership from those who represent the masters.

Then, if the banks have no policy, the question arises where the trade is going, or whether anything can be done. The right hon. Gentleman the Member for Preston (Mr. Shaw) suggests that an inquiry should be instituted by the Government. That might be a good solution, if the trade were not in the condition in which it finds itself, but an inquiry of that nature would probably take a year or 18 months or two years, if it were going thoroughly to sift the whole matter. That delay would be fatal. There is sitting at the present time in Manchester a Committee, to which the right hon. Gentleman the President of the Board of Trade has referred, instituted by the Manchester Chamber of Commerce, and they are going into the question of costs, finishing, dyeing and transportation, as well as the cost of merchanting and selling. They have already made one Report. I have no means of knowing when their next Report will come out, but it is generally understood in Manchester that it will not be long before it makes its appearance. If this be so, we shall get most of the information that we require in a comparatively short time. When that information is before us, the question whether any action by the Government can be of use may be carefully considered. To me it is more a question of action than of a long drawn-out inquiry. Therefore, although the proposal before the House is very attractive, I feel that in a sense it will not have the effect that the right hon. Gentleman who suggested it hopes, and that, if we wait for the Report of the Committee of the Manchester Chamber of Commerce, which we expect within a few months, we shall attain the end that he and those interested in the cotton trade have in view and at heart. A very interesting paper was read before the Statistical Society in Manchester last autumn by Mr. Ellenger, and at the end of that paper were sonic notes by Mr. Gray, a manufacturer of cotton cloth in the Burnley district. He compared the price of manufacturing cloth in his mills with the cost of manufacturing cloth in Japan. There was nothing to do with merchanting, or finishing, or any of the other processes. It was purely and simply the cost of the cloth as it came out of the weaving machine. We may take as correct the figures of his own mills, because he is a man who has been in the trade for a long time, and has kept very careful costs. Whether the figures which he gives for Japan are correct, I cannot say, but I have never yet heard them challenged. The result which he brings out is that, if anything, the cost of the cloth in Lancashire at the door of the weaving shed, is slightly lower than the cost at the door of the weaving shed in Japan. If that be so, when we have carefully considered all the inquiries that are going on to-day as to the cost of marketing, finishing, transportation and other things, we may find that, after all, the Lancashire cotton trade, although it may have lost its world-wide supremacy, is by no means down and out.

Mr. KELLY

The subject with which we are dealing to-night is that of a demand for an inquiry into the position in the cotton trade of this country. I notice that the last speaker had some doubt as to the advantage of this inquiry. The only trouble that he seems to have on the matter is as to the right moment for the inquiry, and he asked that we might wait until the Manchester Chamber of Commerce had, through the Committee now sitting, reported the result of their investigations. That has been the position in the Lancashire cotton trade for some years—putting it off and putting it off in the hope that somebody will show some direction that will lead out of the difficulties bearing so heavily upon the industry. If the point put forward by the hon. Gentleman be correct that it is essential that there should be some investigation and some conclusion arrived at, surely this is the moment to engage upon it. My only fear is, that we have waited rather too long; this is an inquiry we ought to have engaged upon some time since.

The hon. Member for the Mossley Division (Mr. Hopkinson) and the hon. Member for the Exchange Division of Manchester (Mr. Fielden) have given us excellent reasons why this inquiry should take place at once. The Member for Mossley said we ought to be careful about amalgamations, and not suggest them unless we were quite sure that we had the management for them, though he saw advantages in them providing we had the people to control and manage them. The hon. Member for the Exchange Division of Manchester reminded us of the interesting statement made last autumn by Mr. Ellenger, which showed that despite all that has been said about the low costs of production in the East the costs of production in Lancashire have been even lower. There, surely, are two important points which need investigation, apart from the many other questions which could be submitted. I put this to the hon. Member for the Exchange Division: If we can produce cotton goods at that low figure in Lancashire, and, as we know, the world is not supplied with all that it needs of the products of Lancashire, how is it that we are not able to get our goods into the hands of the people who need them? How is it that there is such a difference in the price of the goods before they reach the consumer? If this point were investigated we might find that it is not the manufacturer who is responsible for so much of the difficulty, but somebody who comes between the manufacturer and the consumer.

There are other reasons why this investigation should take place, and without delay. There is the hardship suffered by the people engaged in the industry who for the last five, six or seven years have been either unemployed or underemployed, and who, with a patience which has almost got beyond the stage of virtue and has become almost vicious, have tolerated wages so low as not to give them the standard of life which ought to obtain. Surely those people have a right to consideration, and I think first consideration ought to be given to them by this House. Because of this hardship, and because at the moment there does not seem any bright prospect for these people, the Government ought to start this investigation instead of waiting for the results of the investigation by the Chamber of Commerce. I am not going to make any attack upon those who are conducting that inquiry, but I suggest that it would have been greatly strengthened if representatives of labour in the industry had been taking part in it. On the other side of the House there are hon. Members who have spent their life in the cotton industry, and I am sure there is not one of them who will not admit that the operatives in the cotton industry know as much about manufacture as the owner of the mill or the manufacturer himself.

Another good reason why the inquiry should be granted by the Government is found in a point put forward by the hon. Member for the Exchange Division. The power exercised by the banks over the many mills throughout Lancashire is well known to those of us who are closely interested in the industry. The hon. Member said the banks have no policy, that they are silent upon the position. Is it not time that the Government ought to get to the bottom of the position by having an independent investigation? We are asked to wait for the Report of the Balfour Committee on Industry and Trade, which may be reporting upon this particular section of their work within a few months, and then, we are told, the Government may find some reason for granting the inquiry for which we are asking. There is yet another reason why the inquiry should take place promptly. It has been one of the big features of the Lancashire cotton industry that people who could ill afford it have often loaned money in sums of £5, £10, and a little more to many of the mills. These people, as one knows full well from the reports from the districts, are feeling very insecure about their position, and it is time the Government helped us to assure these people that the industry is not down and out, as some are inclined to believe. There are also those shareholders, many of them workpeople in the mills, who have taken up small holdings of shares. Anyone who knows what these Lancashire operatives have suffered during the last few years knows that every call of a shilling or two on those shares has meant the selling up of their homes, has meant borrowing from moneylenders, and to-day there are many people in Lancashire who would make you a present of the shares which they hold in these cotton mills. Surely these people have a right to some consideration, and that is another justification for asking for the inquiry.

I do not know whether the President of the Board of Trade thinks he justified his refusal to agree to the request for this inquiry. He told us that the burdens at present borne by the industry are the outcome of rather a bad past, but that we ought not to trouble about that in the meantime. He had some hard things to say about "floaters" as against manufacturers, but surely the burden which was placed upon the industry by those happenings needs to be investigated, so that the whole truth about these flotations may be known, and we may guard ourselves against anything of the kind occurring in the future. This is an industry where £19 10s. was paid for £3 shares, and £22 15s. for £3 15s. shares, and where individuals took promotion fees of £10,000. People who were directors and were appointed only for a year or two, at a salary of £50 to £100, or at the most £200 in the case of the chairman, were compensated for loss of office by payments of £1,000 and £2,000.

When we find those things have gone on, and the industry is now bearing the burden, and the holdings of the small operatives have become so burdensome to them that they would be better off without them, surely we ought to undertake an investigation into the position of affairs. This is a subject upon which, if one attempted to go into all the details which ought to be the subject of inquiry by a Commission, would take up a great deal of time. I cannot see any justification on the part of the Government for refusing to set up this Committee of Inquiry. To tell us now that the industry is going along by its own efforts and is trying to bring about amalgamation knowing full well that many of those efforts in the past have failed, is not the kind of assistance which we expected to receive from the Government. There is still a great need in the world for the supply of cotton products and by means of an inquiry we might find out the real reason why the cotton industry is in its present condition. Despite the statement which has been made by the President of the Board of Trade, I hope the House, by its vote will decide in the Division Lobby to give an opportunity to have this Commission of Inquiry, and so help one of the greatest industries in the country to get out of its difficulties.

Mr. WADDINGTON

I am rather surprised that the Opposition should put an Amendment of this sort on the Order Paper to-day. When the Labour party were in office in 1924 they appointed what is known as the Balfour Committee to deal with the conditions of the export trade of this country, and that Committee took evidence of a very extensive character from the cotton trade organisations. On that Committee there were representatives of Labour, so that, if there be any point in regard to what is happening in reference to the Manchester Committee at the present moment, the same objection cannot be taken against the Balfour Committee, which had a number of Labour representatives upon it. The cotton trade, including the manufacturers and the spinners, have presented a detailed statement of the difficulties of their trade to the Balfour Committee, and they did that three years ago.

There was a provisional Report issued by that Committee, in which they surveyed the overseas markets, and it was interesting to find the conclusion which that Committee provisionally arrived at. They dealt with the decline in the exports of our manufactured goods, and they found that the principal market, in India, had declined by 2,000,000,000 yards in the course of a year. They found that four-fifths of that decline was not caused by somebody else taking the trade, but by the high price of our commodity and the diminished purchasing power of India. Surely that state of things was not the fault of any organisation, nor was it the fault of the trade in Lancashire. The high price was due to the scarcity of raw materials and the high price of cotton in comparison with other agricultural products. With a decline in the price of raw material and a larger supply during the last two years, the price of Lancashire cotton goods has reached a nearer approach to the value of the goods which are produced in India, and our trade has undoubtedly increased in that great Empire. If we look at the figures of the exports to India and to China, we shall find that we have an increase in those two countries of justover 2,000,000,000 yards in the last year as compared with the quantity which we sent out in 1913.

Mr. GREENWOOD

Surely the hon. Member means a decrease.

Mr. WADDINGTON

Yes, I mean a decrease of 2,017,000,000 yards, 1,400,000,000 yards less to India and 617,000,000 yards less to China. I do not say that the Government or Labour, or the capitalist is at fault, but what I ask is whether there is any inquiry in this country which would enable us to send a single yard more to China than we have sent during the last year. It is not the fault of the organisation at home, but it is the fault of world conditions. I suggest that, instead of the Government interfering with the internal affairs of our trade organisations, they are exercising the proper sphere of their duties when they take action such as they took in sending out the troops to Shanghai last year. That was the real province of Government, and Lancashire is beginning to receive the benefit of the action which was then taken by the Government. Our troops in Shanghai enabled peace and order to be kept there, and the establishment and restoration of easier conditions in that part of China has enabled Lancashire traders immediately to seize the position, and take advantage of the easier conditions by disposing of their goods at the auctions there. Orders are coming through from China for considerable quantities of Lancashire goods, which could not have happened if the Government had not taken the action which they took last year.

If the Government, instead of acting on this suggestion to set up an inquiry into the trade here, will deal with extensions in India—if they will induce the Government of India to go in for larger schemes of irrigation, the extension of railways, the development of roads, and the education and uplifting of the people of their country—they will be doing far better for Lancashire than anything that could be done by an inquiry of this sort. That has always been the policy, so far as I know, of the Conservative party in relation to India. At the present moment there is the great Sukkur barrage, which was instigated by the Conservative party and which is being carried out by the Government of India. If we have a common policy, on which all parties in this House are agreed, for benefiting India, let us pursue that with unanimity, and let us get the development of our Lancashire trade by the uplifting of the Indian people. That, I suggest, is a better policy than interfering and stirring up bitterness within the trade itself.

We do not want an imitation of what has occurred in the mining industry. We do not want these inquiries, which embitter feelings and would sap that good will which undoubtedly does exist in the Lancashire cotton trade at the present time. Therefore, I rejoice that the President of the Board of Trade has decided not to entertain this proposal for an inquiry. After all, do we not look too pessimistically on the condition of the Lancashire trade? Do we not have it drilled into us, as though the whole Lancashire trade was depressed and, as is suggested, under the hammer and down and out? It is no such thing, and it is a wrong idea, in this House and in the country to speak of Lancashire as being absolutely depressed in all its trades. What are the facts? There are 58,000,000 spindles. The depressed part of the trade does not cover more than 25,000,000 spindles, and at no time has it ever been found possible to get more than 22,000,000 spindles to join together in trying to improve conditions. Then there is the great portion of the trade which spins the Egyptian cotton and the finer classes of American cotton, and there is also that which spins the lower grade, or the coarser counts, as they are called. Those sections are certainly not losing money, and it is folly for us in the country or in this House to cry "stinking fish," as though the Lancashire trade as a whole were down and out.

I would like to remind the House also that this industry is exporting £150,000,000 worth of cotton goods now, and you cannot say that a trade which has that great export each year is down and out, and is not being looked after by those engaged in it. That is £150,000,000 out of £700,000,000 of exports; it is double the amount of any other trade. Therefore, when we think of the Lancashire cotton trade, let us remember that it is not all that is bad, but that it is one particular section that is wrong. What are the figures in regard to employment? I admit—and, indeed, it is very disastrous—the underemployment of those who are employed; that is a most regrettable feature of the trade; but, to show how the trade is being kept together, how the organisation is being kept together, I got the unemployment figures from the Ministry of Labour, and they are rather significant. There are 561,000 people employed in the trade, and the number wholly unemployed is 20,000, while the number temporarily stopped is 28,000. Those wholly unemployed are 3.6 per cent of those employed in the industry, and those temporarily stopped are 5.1 per cent., so that the total number unemployed, whether wholly or temporarily, is 8.7 per cent.

Mr. T. SHAW

I know that the hon. Gentleman is the very soul of honour. Will he kindly explain to the House how many people are working for really full wages, and will he give some estimate of the number of people in the trade who are getting a week's wages after having done a week's work?

Mr. WADDINGTON

As I have said, the under-employment is the serious feature in the trade. I tried to get those figures, but they were only available in relation to about 80,000 workpeople, which I did not think was a fair test to give to the House, They showed, however, that 9 per cent, of those workpeople were under-employed. From my own experience, I should be very happy to think that that percentage was not being exceeded in Lancashire; I am afraid it is. But I was not making the point so much that everyone was in full work, because I thought I made it clear that they were not in full work by speaking of underemployment. The point that I was trying to make was that the machinery of organisation was there, ready to take advantage of any return of trade, and it is a matter of gratification, I think, to Lancashire operatives, that they have been kept employed as fully as was possible, even although it has meant under-employment.

The next point with which I should like to deal before concluding is that in connection with manufacturers and merchanting. I have spoken both in Lancashire and in this House, of the danger of present conditions of trading as between the manufacturing side and the merchant side. I think that, among all of us in Lancashire, there is a consensus of opinion that there is room for great improvement in that direction, but it is not necessary to have an inquiry to establish that fact. It is already established, and steps are being taken in many ways to deal with it. It may interest some of my hon. Friends opposite, including the right hon. Gentleman the Member for Preston (Mr. T. Shaw), who is so keenly interested in the trade, to know something of what is happening in regard to the improvement of the finishing trade. The finishing trades have very special representatives in different world markets. It is costing them a good deal of money every year. Those representatives either come home to Manchester or send in their reports, and the whole object of the finishers is to bring the merchants and the manufacturers into touch. They show the finishes that are wanted in different countries, and by that means they are bringing about a combination of manufacturer, finisher and merchant, so that the process is more complete than it has been in the old days.

The same thing is happening also in the bleaching trade. I have been present at meetings in Manchester where there has been a representative from the Overseas Trade Department. One of the trade commissioners has gone down to Manchester, and we have had at such meetings representatives of the cotton spinners, manufacturers and merchants, with a view to seeing if it was possible to improve the export of our Lancashire goods in particular markets. I mention these points because I do not want it to be thought that within the trade itself nothing is being done to improve its condition. A real effort is being made, by those who are in the trade, to improve it. I was very glad to hear the right hon. Gentleman the Member for Preston say that he wants to see co-operation in this trade, that he wants to see a continuance of the good feeling between the various sections of the trade. I certainly reciprocate that view, and I hope that that good feeling will continue. It will continue quite, as well without an inquiry of this sort as it would with such an inquiry.

9.0 p.m.

Mr. MACKINDER

I am not in the Lancashire cotton trade, nor have I had had any connection with it, but I have some knowledge of the woollen textile trade, and there is not such a great difference between the two industries, except in the raw materials. The cotton trade is, of course, the greater, but the effect of the two trades on the exports of this country is similar, and I have not heard a single speech from any Member of the Government giving a reason against an inquiry. As a matter of fact, some of the statements of hon. Members on the other side of the House and below the Gangway have given reasons for an inquiry. If various statements which have been made are true, I should imagine that they would be duplicated a hundredfold if they could be taken from responsible people outside the House. For instance, the hon. Member who has just spoken, whose opinion and knowledge of the trade is respected by everyone on this side, has spoken of India and China. Surely the reason of our depression over there is worth inquiring into. Surely it is worth inquiring whether we can get our trade back again. If we can find the cause of our trade being lost in those parts, if we can cure it, surely it is worthy of inquiry. I have been told one of the reasons the Japanese are so successful in India and in China is that they have concentrated on a certain number of qualities of cloth—one might call it mass production. I do not know if that be true, but, if the Japanese can concentrate on mass producing a certain number of qualities of cloth, surely we can do the same, and we shall not do that by merely having an abstract argument in this House, or even in chambers of commerce, as to whether or not it can be done. We shall have to get down to an inquiry and find if it can be done.

9.0 p.m.

Some few weeks ago, travelling home, I got into conversation with a merchant who had just returned from South America, and he was in high glee. He had done such a very fine piece of trade that he felt he must tell me about it. He did not know I was a Member of Parliament. I do not know his name nor did he know mine. He had concentrated on getting South American trade from the United States, and after three years' hard work he succeeded in the field he was exploring. He said that he brought back several samples of cloth from South America which had been very extensively sold by people from the States. He brought them and showed them to manufacturers here and said, "What can you produce this at?" And they all gave him an answer which left him at least 10 per cent, over and above the market. They could not produce it at the price. He was convinced that they could if they would adopt the mass production methods of the United States people and put a certain number of looms on this particular work. Instead of shifting people about from one class of work to another, let them concentrate on producing the maximum amount at the cheapest possible cost. He took the risk. He got one manufacturer to put 50 looms on this work, and he took the responsibility. Now he is five per cent. below the market of the States. I am sure, if the Japanese are gaining the China and India trade by means of mass production, that we can. This knowledge and the almost inherited genius of our textile workers is beyond comparison with any other people in the world. Another hon. Member has quoted authority that our production at the loom is as cheap as that of the lower paid workers of the East. Something ought to be done. All the time men are losing money, and buildings and materials are depreciating. At the same time, the moral fibre of our people is deteriorating. The textile worker and the miner are the most sturdy and self-respecting people in this country, but they are losing, through no fault of their own. Trade is going down, exports are getting less, and the people who are suffering the most have the least to say about it. They are not allowed to have a say about it. An hon. Member opposite asked plaintively, what is the policy of the banks? He is a spinner. I suppose he has some dealings with the banks. He asked what is the action of the banks going to be, and he does not know. Surely that in itself demands an inquiry, to get to know what effect the action of the banks is going to have upon this most important trade.

If hon. Members who are interested in the trade do not know what effect the action of the banks will have, it is time the House got to know, because this House has a responsibility, not only to the banks, not only to the people who have their money invested in the industry, but it has a responsibility for the lives and bodies of the men and women working in the trade, and up to the present it has done nothing. The same hon. Member said it was a question of action rather than inquiry. You cannot get action before inquiry. I should like to know what kind of action he would suggest. I know it is a case of action. We feel that it is a case for action, but we feel that before any action is taken we ought to know what is the cause of the depression and loss of trade, not only abroad but in our own country. We might at least find out how the reduced purchasing power of the millions of people in this country will affect Lancashire trade. The hon. Member for Mossley (Mr. Hopkinson) said the folly ought to be expiated by the people who caused it. He was referring to the fictitious value created in the cotton textile industry round about 1919–20. I do not know. It has been suggested to me that if the folly that was created by some people could be expiated, this House might be denuded of a Member or two. I am not casting reflections upon certain very honourable gentlemen for whom I have a great deal of respect. We know whom we are talking about. The same hon. Member said he disagreed with Mr. Tattersall. Of course, the hon. Member for Mossley is an expert in everything. He is an expert in coal, in cotton, and in what is called back chat, and he certainly disagrees with the gentleman referred to by the name of Tattersall, who is also an expert. At all events, he is in the industry, and the letter he wrote is certainly worthy of a great deal more respect than being merely passed on.

This is not a party question. I am delighted to find that it is not being taken up as a party question, unless one might say the resolute resistance to the suggestion of an inquiry by the President of the Board, before hearing the whole of the Debate, is some slight indication that it is going to be a party question. The lives and the health and the very existence of such a large number of people is more than a party question and, if an inquiry will bring anything into it, at all events we ought to have some light let in on it. I know that it has been put to us time after time, even in this House, that the Chamber of Commerce are going to make an inquiry, or that they are making inquiries. How on earth can we have an inquiry into an industry which is already faced with a proposal for a reduction of wages and an increase in working hours? How on earth can anybody call it a full inquiry if they deliberately preclude from consideration those two most important features? It cannot be an inquiry at all. Whatever happens to the cotton trade, or to the textile trade generally, or to any other industry, if wages go down and working hours increase, you cannot exclude those facts from an inquiry which is intended to put the most important exporting industry we have in this country upon its feet. It is perfectly ridiculous in this year of 1928 for any section of the people, whether bankers, spinners, manufacturers or financiers, to say that they are the only people who can have a proper inquiry. If the hundreds and thousands of textile workers are to be precluded from giving to an inquiry any evidence and knowledge that they possess, and which may help, how can it be an inquiry? It is not an inquiry; it is merely a farce. I contend that the operatives can help in such an inquiry. The operatives ought to help. I maintain that no Commission, no Board of Inquiry can possibly sit unless it is going to take evidence, not only from the people who are interested in the trade financially, not only from the banks, not only from the people who have their money invested in it, but from the people who have their lives invested in it.

The right hon. Gentleman the President of the Board of Trade gave many excellent reasons for an inquiry, including the lack of cohesion between the various sections. Incidentally, it is a curious thing, not only about the cotton trade but about the textile trade generally, that we have the various sections almost in watertight compartments. There is no connection between them except in regard to the selling, or the buying, of the finished work of one section and the raw material of the other. I think it is time that a number of successful men who understand the industry made inquiries as to whether there is any possibility of creating the necessary cohesion and of bringing those watertight compartments a little nearer to each other. Surely, there is no reason at all why spinning should be almost an industry of itself. I say that an inquiry is needed if only to show how far the lack of cohesion between one section and another is responsible for the present deplorable state of affairs. Everybody who knows anything about textiles and anything about cotton is satisfied that there is something wrong with the trade. If it can be put right as a result of people getting together and collaborating, something on these lines ought to be attempted. It will not be made right by the information which is tabulated by the Board of Trade remaining in the pigeon-hole. It will not be made right, if one section of the trade is going to have an inquiry and is going to ignore the other section.

The figures which the President of the Board of Trade quoted are a disgrace, and there is no doubt that they have materially helped to bring down the position of the cotton industry to its present level. You cannot alter shares in value from £1 to £25 and expect to get a return which will not only give a wage to the employé but will also give a return on the capital. You cannot do the two things. An inquiry ought to be held. It might disclose some very ugly things. I think the President of the Board of Trade used a harsher term. I think he used the word "corrupt." It ought to be known how far that kind of corrupt practice has had its effect. It has been said that over-capitalisation has had a lot to do with the position in which the trade is to-day. If that be so, we ought to know about it. These are only statements. No one has produced what may be called definite evidence. [Interruption.] Perhaps the hon. Gentleman is going to produce evidence. There may be something in it, but I believe that the evidence he will produce will have no effect. I suggest that if an inquiry were held and if it definitely established that the industry was being held to ransom, it might have some effect, or at least it would be more likely to have some effect than hundreds of speeches such as the hon. Member and myself might make in this House.

We ought to know, the workers ought to know, and the country ought to know what is the true state of affairs. I suggest to the President of the Board of Trade that an inquiry is necessary, and that after an inquiry the matter ought not to be allowed to rest. We have had inquiries and Royal Commissions galore. We want something more than an inquiry. We want action after an inquiry. If there are people who have done things which are wrong and which are likely to affect the lives and conditions of hundreds of thousands of men and women in this country we ought to know the facts. On these grounds, I press the President of the Board of Trade to reconsider his decision and to let us have a full and frank inquiry as to the reasons why this most important of our export trades has suffered to the extent that it has. And then, after the inquiry, let us have action. Let us do something to bring the trade back to the premier position it ought to hold and the premier position it would hold if all the people inside the trade would pull together.

Mr. FINBURGH

I have listened with keen interest to the hon. Gentleman the Member for Shipley (Mr. Mackinder), and I think that if any arguments were necessary in opposition to the Amendment we have before us, he has supplied them. He says that we have had Royal Commissions galore, that we have had inquiries in abundance, and that nothing has resulted from them, because specific and determined action is necessary. It is for that very reason that I cannot support the Amendment proposed by the right hon. Gentleman the Member for Preston (Mr. T. Shaw). The hon. Member for Shipley wanted to know why it was that Japan was more successful than Lancashire was in its cotton trade. Let me acquaint the hon. Member that the methods of Japan were such as to deprive all and sundry of their rights and belongings so long as they obtained the business. I was, and am, a great sufferer from Japan copying my registered designs, and being able by one means or another to capture the business. But I am glad to say that even that section of business is returning to Lancashire. The hon. Member for Shipley said that everybody knows that there is something radically wrong with the cotton trade. We are suffering, and have been suffering for a number of years, from various causes. I could very easily give the reasons why Lancashire is suffering from the present depression. It is no great secret. It is due to many causes, and if I can claim the indulgence of the House in trying to give a few of the reasons, I think it will more than suffice to satisfy those who have any doubts on the subject.

The first, and perhaps the most difficult question that Lancashire has to face, is that the prices of her products are too dear. That arises from various reasons, the first of which is that the charges for processes which have been forced upon the trading community, the calico printers or by the bleachers, or by the Bradford dyers and others, who have taken advantage by imposing high prices upon the raw manufactured cloth, make it utterly impossible for us to compete in the markets of the world. An inquiry would serve no purpose there.

Mr. MACKINDER

I have made no such statement. I have said that it has been urged that that is the reason of the depression. Is that statement true? If so, we ought to know about it.

Mr. FINBURGH

I have no desire to misrepresent the hon. Member, and I apologise if I have led anyone to believe the contrary to what he did say. He did suggest that it would be very advisable for Lancashire to adopt the process of mass production. For the purpose of mass production it is necessary to have such a production in our own country that we are able to sell what remains in foreign countries; to dump it abroad. We are suffering from dumping here. We are getting the surplus of production from other countries, and that is one of the difficulties against which we have to contend. I have just returned from a business tour of Holland and Belgium, and I find there that in an industry similar to that in which I am engaged all the processes take place under one roof—the calico engraving, the bleaching, the dyeing, the printing, the shrinking, the mercerising, the packing, all under one roof. Is it any wonder that on my return to London I found representatives from that particular firm selling large quantities of their goods to London buyers? They certainly can beat us, and they are doing it, but even with that, I am not afraid for the prospects of Lancashire. Lancashire can hold its own, providing the high prices for processes were reduced, so as to make it possible for us to compete.

A second great point for consideration. and it is a matter in regard to which we have lost a great deal of our business, is the long credit which competing firms abroad are able to give to their customers, and which we are not able to give. I made it my business to inquire, and I found that the bankers there help the manufacturers considerably. The manufacturers give six months' credit to their customers; they accept bills of exchange, which are paid by them into their banks in Italy, in Czechoslovakia, in Germany and other countries, and then these very bills are sent to London and are being discounted, and we are providing the money to help our own competitors to do us all the injury they can. That is a positive fact, and we are suffering from it.

I think the inquiry suggested by the right hon. Gentleman would be disastrous to Lancashire. It would be disastrous if we were to institute a Government inquiry to ask the reason why this depression exists. We know what Government inquiries are. We know what Royal Commissions are. They are merely set up, in the majority of cases, to shelve a question. The question of the Lancashire cotton trade is one of great importance and requires immediate action. It does not want any long-drawn Government inquiry, and I have no confidence in such an inquiry, therefore I cannot support any such proposition. It would be very advisable, I hope after the Easter holiday, to try to institute a conference of the cotton trade in Manchester and to invite all those who are engaged in the very many sections of the industry to sit in conference, to appoint committees, and to see what can be done to reduce the cost. If we could succeed in that, if each section could do a little and if in the aggregate we could reduce the costs by 15 per cent., we should at once overcome the difficulties and every loom and spindle would, no doubt, find more mork than at present. I feel certain about that.

Our workmen are losing their cunning, and we are becoming discouraged, in a sense, but Lancashire is not dead yet. We are not afraid of the prospects. We only have to be true to ourselves, to recognise that blunders have been made, and to face the situation, and if such a conference could be convened—I am hopeful to have Lord Derby to preside for the first day or two and other gentlemen of similar eminence taking part—and pressure could be brought upon the various sections to reduce their charges, it would be possible to compete in the markets of the world.

I wish to say, without a moment's hesitation, that the proposal to reduce costs by reducing wages, or increasing hours, is no remedy at all. I would not sanction it. I am in the business, and I can speak feelingly because I am in it and cannot get out of it. We are hopeful. We see signs of improvement already. True, it may be, perhaps, the spoonful of broth to the patient, after a long illness, but there are signs that things are getting better. The hon. Member for the Exchange Division (Mr. Fielden) asked why the banks were silent with regard to their mode of action, and why certain things are allowed to continue. It is a most difficult thing for any manufacturer to stop his mill, whether it be a weaving shed or a spinning mill, because so long as he goes on, he can obtain credit for his yarn and so forth, and he pays on account and keeps his mill going; but if he were to close down everybody would demand what is due, and very few have the strength, financially and otherwise, to carry out what they would like to do. I think that is the reason why our banks are silent and have been prepared to tolerate a state of affairs which is not healthy for the industry, but which cannot be helped, and so they are hoping for better times to come along.

I have been struck particularly with the fact that whereas eight or 10 years ago one saw a lot of foreign buyers in the streets of Manchester, unfortunately one does not see them now. [An HON. MEMBER: "Thank goodness for that!"] I do not agree, because these buyers placed orders with Manchester firms, and it helped to provide work for our factories and workpeople. I should be very glad to hear any hon. Member who can contradict me on that point. I put the depression at the present time down to the fact that we have lost the majority of our customers in the various markets both in the Near East and the Far East. As far as this inquiry goes, I cannot possibly support it. It would be disastrous to the interests of Lancashire, and the trade itself would resent it most strongly and look upon Government interference with anything but favour. Rather let the remedy come from the trade itself. Let there be a determined effort made by the trade itself to set its house in order. It is in that direction that I strongly support the opinions which have been expressed from the Front Bench.

Mr. GREENWOOD

I think the right hon. Gentleman who opened this Debate will feel considerable disappointment at the lack of co-operation which we have had from hon. Members who are interested in various aspects of the textile trade. I should have thought that every independent person listening to this Debate would have come to the conclusion that the case for an inquiry was amply proved. The President of the Board of Trade, in his speech, was so strongly opposed to it that, much as we regret it, I am afraid that we shall have to protest against Mr. Speaker leaving the Chair, not that we do not feel considerable sympathy with Mr. Speaker—although, Mr. Deputy-Speaker, it means that greater responsibilities devolve on you—but because that is our only means of making a protest against the line which has been taken by the President of the Board of Trade. We have heard in the speeches to-night repeated references to master spinners, manufacturers and shareholders, but there has been very little reference indeed to that enormous army of over 500,000 operatives who are engaged in the cotton textile industry, and who, with their families, amount to a very substantial fraction of the people of this country.

We have statements of optimism as to the future of the cotton trade. The hon. Member for Rossendale (Mr. Waddington), whose sincerity I think we all recognise, felt very strongly that there was a future for it. The hon. Member who has just sat down, while admitting that we had lost the majority of our customers abroad—which I think is a little exaggeration of the facts—yet feels that there is an optimistic future for this industry. What are the facts? The truth is that this great staple industry, one of the most important in this country and still one of our fundamental trades, has passed through seven lean years of the most extraordinarily difficult kind, and during that period it has lost one-third of its export trade—and one-third represents a great deal in Lancashire. You have an industry where four out of every five looms that turn are working for the foreign markets. Two-thirds of that trade remains, but one-third has vanished for the time being. If we take our biggest markets, our export trade in India to-day is one-half of what it was before the War, while the export trade to China is one-third of what it was before the War. The number of spindles in this country since the War has increased by an almost microscopic amount. The number of looms to-day is actually less than the number before the War, and during the last seven years at least three-fifths of those 500,000 people in the industry have suffered from chronic underemployment.

The hon. Member for Rossendale quoted figures of unemployment. Those figures are utterly fictitious as regards the cotton industry. Everybody knows that there are people to-day—not merely scores but hundreds of thousands—who are working 48 hours in the week and bringing home half a week's wages. There is the weaver who goes and works his two looms. There is no record of that in the Ministry of Labour employment figures, and no one knows the extraordinary volume of hardship that there is among the great mass of Lancashire workers. I agree with the right hon. Gentleman the Member for Preston (Mr. T. Shaw) that there is no more independent body of workers in this country than the Lancashire cotton operatives. To-day scores of thousands of those people are in receipt of out-relief. Hundreds of thousands of Lancashire people have been in receipt of out-relief at some time or another in the last few years, people who would have said before the War that they would die rather than go to the Poor Law guardians. That is the state of affairs—shrinking trade,, chaos in the industry and lack of cooperation between various sections of the industry—which the President of the Board of Trade has admitted as a fact, and then we are told, in spite of all those seven years of difficulty in one of our staple trades, that all we have got to do is to leave it alone.

That is really the case of the President of the Board of Trade, as I understand it. It is that the trade is best left alone. After all, there is a Committee of the Manchester Chamber of Commerce! Well, far be it from me to utter words derogatory of Manchester or of the Manchester Chamber of Commerce, but what is the Manchester Chamber of Commerce? It is not the Lancashire cotton industry. It speaks with no authority on behalf of the Lancashire cotton industry and no authority, even as regards the employers in the industry Yet we are told: "Here is this Committee, let it continue its investigations." In that investigation which is being made, we are told, as a justification for the employés not being considered, that they are not discussing hours and wages. Queen Anne is dead but the President of the Board of Trade belongs to her age! To be told in this year of grace that wages and hours are the only thing with which the workers are interested, is to carry our minds back at least a century. I make this claim on behalf of the trade union movement of this country, that on no industrial or commercial question can there ever be a proper inquiry, unless we are associated with it. That surely is so in this great industry which affects the livelihood of 500,000 workpeople and the standard of life of perhaps 2,000,000 inhabitants of this great County of Lancashire. Suppose that the Manchester Chamber of Commerce issues its report, what earthly use is that report? It does not carry any authority with it. There is no justification for believing that its recommendations, if it makes any, will be accepted. The situation afterwards will be precisely what it is to-day. A year may go by and the situation in this staple industry, in all essentials, will be what it is to-day.

The President of the Board of Trade tries to escape from the responsibility of establishing some committee of investigation by saying that we know the facts. I do not agree with him. It is true to say that most of us know many of the facts, but none of us knows the real economic position of the cotton industry to-day in the markets of the world. Even if we did, the real point of an inquiry is not merely to diagnose the economic situation. Surely it would be to come to some understanding as to what treatment ought to be followed if the situation is to be improved. It does not help us to say that we know the facts and that therefore, there is no need for an inquiry. If the facts are known, why is it that for seven years this great trade has staggered in this way, tending, as a great part of it is, towards the bankruptcy court. It is no exaggeration to say that if it had not been for the steps taken, of which I approve, to keep the trade on its legs, half of it would be bankrupt. And that situation is not improving. If the facts are accepted surely we have arrived at a stage when there should be some agreement as to what is to be done for the future and what lines of co-operative action may be followed in order to recover the markets we have lost.

It is no use looking to the home market. Englishmen may swathe themselves in cotton goods and it would not recompense us for the loss of our foreign markets. They are essential to the industry, and something might be done if there was proper co-operation. The President of the Board of Trade has admitted to-day, and it has been admitted on previous occasions by hon. Members opposite, that the units are not large enough, that there is not proper co-operation between the various sections of the industry, and the problem on which an inquiry might throw a good deal of light and also obtain a considerable amount of agreement is the way in which these various sections might combine for the common good of the industry. Within the last few days a fresh attempt has been made to bring about some consolidation of forces in the industry. Mr. Tattersall is one of the most able men on the employers' side of the Lancashire cotton industry and, accepting our analysis of the situation and our view of the difficulties of the industry, he has set himself, within limits, to bring about some form of amalgamation. That is all to the good, but nobody will ever persuade those who have considered the situation that an amalgamation in the American branch of the spinning industry will solve the problem of the whole trade. Everybody knows that whatever you may do by increasing the size of units on the spinning and weaving side, until you do something to deal with the bleachers, finishers and dyers the trade will be held to ransom by that section of the industry and, therefore, every effort should be made to get a common policy for the industry as a whole.

The President of the Board of Trade in replying to me two weeks ago virtually admitted—he did not use these particular words—that the industry was too individualistic, that it was not prepared to co-operate in the way that it should. Why should we in this House, who are responsible in large measure for the welfare of the people of this country, stand aside and do nothing because various groups of employers in the industry are unable to co-operate? It is no use arguing that this will interfere with the course of trade. The course of trade has been interfered with, and we are asking that steps shall be taken to bring together the people engaged in one of our great trades for a common purpose. The inquiry may not be completely successful; but why is it that the Conservative party has a horror of knowledge and that whenever they can they burke an inquiry? There is no hon. Member opposite who would allow an inquiry into any industry in this country however bad its circumstances might be. Why is it? Why is it that people who are engaged in an industry, people who are supporters of the captains of industry, are always afraid of an independent inquiry? It does not imply guilt if you accept an inquiry; but there is something that suggests guilt on the part of the people who refuse to listen to a suggestion for an inquiry. I say that those who are opposed to an inquiry in this industry are afraid of the disclosures which would be brought to light. The President of the Board of Trade says that all this is ancient history. Ancient history is determining the situation today, and if the ancient history of seven years ago has led the industry into the condition in which it is to-day, we are entitled to know how that situation arose and to learn the method of escape.

The demand for an inquiry is reasonable. I do not believe that a voluntary inquiry would carry the same authority. There is something to be said for the Government itself taking the initiative in a matter of this kind. Voluntary inquiries have no power and carry little authority, but an inquiry set up by the Government into the textile industry would carry enormous weight and authority and it would convince a good many people of the seriousness of the situation and the need for doing something. The time has gone by for mock heroics about the cotton industry. I do not believe that it is going down to final destruction, but I am not optimistic about its future. When hon. Members opposite get up and wave the flag, and say that the industry will be all right, we have to remember that for some years it has not been all right; it has been all wrong.

It is time that we really faced the facts. Mere sham optimism about the future will do no good. Mere flag wagging will do nothing for the trade with India or China or some of the other markets. Mere expressions of optimism will do nothing whatever to beat the Japanese or even the Italians in the markets of the East. What is needed is a good deal more than that. What is needed is a sincere attempt on the part of all branches of this great industry to view the industry as one great economic unit, with one great economic purpose in the world. What is needed is a new attitude of mind on the part of people in the industry. I grieve to say that the Government have done nothing to assist in bringing together the warring elements on the employers' side. There is unity on the side of the 500,000 workers in the industry; there is disunity on the part of every large group of employers. It is that disunity, that old-fashioned early nineteenth century individualism, that has brought the industry where it is to-day. It is being beaten to-day in the markets of the East because Japan has proved itself capable of greater powers of co-ordination and organisation. We are not being beaten because labour costs in Lancashire are higher than they are anywhere else in the world. Labour costs in Lancashire are low, and Lancashire labour is the most efficient in the world. Where we are being beaten to-day is not through defects in labour here; it is not in the lack of skill of the operatives, but in the lack of vision of the employers, who cannot get themselves out of the pre-War frame of mind.

I do not say that in order to make a point. I say it in all seriousness, as an indictment of the people who to-day are standing in the way of the recovery of this great industry. If the President of the Board of Trade has his main concern in master spinners and manufacturers and shareholders, I would remind him that Lancashire became what it was because of the excellence of the labour in that great trade in Lancashire. We have a right to claim that the interests of 500,000 and more Lancashire cotton operatives should be considered in this House. It is their deliberate view that there should be an official inquiry, and they are prepared to do everything they can to help such an inquiry. What fundamental objection can there be? There is none except the fear that is common to almost all branches of employers in British industry—the fear of facts and the fear of knowledge, the fear that they may have to subordinate their own petty interests to the larger interests of the industry to which they belong

There is to-day no escape for Lancashire along the lines of nineteenth century individualism. The only way in which we are going to maintain the standard of life in that county is by a new outlook upon the problems of the industry, a good deal closer co-ordination of all the sections in it, and by the employers realising that in future the voices of the workers have as much right to be heard as those of merchants and manufacturers. We are speaking, not on behalf of shareholders or master spinners or manufacturers or merchants; we are speaking on behalf of 2,000,000 people in this great county, whose very lives depend directly upon the cotton trade, and millions more whose standard of life is in part dependent on it. There is time even now for the Government to reconsider its refusal of an inquiry and to agree, without tying its hands, to a full and complete investigation. I do not believe that in any case it will deter reorganisation, as was suggested. On the contrary, I believe it might hearten many people in the industry to know that the Government were taking an intelligent interest in a fundamental and basic trade. I am not at all certain that the Government will change its mind, but if the Government are determined that there shall be no inquiry, then I am afraid that, so far as we are concerned on this side, we must register our protest in the Lobby.

Mr. HAMMERSLEY

I am glad to see that the hon. Member for Mossley (Mr. Hopkinson) is back in his place, because in the earlier part of this Debate he introduced a curious argument regarding the banks and the cotton trade. As far as I understood him he said that the machinations of one of the London banks had forced local banks to advance more money to the cotton industry than they considered desirable, and he proceeded to argue from that that the business of these local banks was to divest themselves of responsibility in connection with the cotton trade, and to look after the remainder of their customers. If the facts are as the hon. Gentleman has stated, that the situation was caused by the action of the various banks in trying, one against the other, to obtain the business of various Lancashire cotton concerns, and by so doing adding considerably to the inflation of capital—if that is the case, those banks cannot properly divest themselves of the responsibility for rescuing the industry from that overcapitalised state which they were so instrumental in allowing to be brought into existence.

I would like particularly to refer to the speech of the right hon. Member for Preston (Mr. T. Shaw). All of us who are closely acquainted with the cotton trade will appreciate that his analysis of the situation was essentially accurate. After all, the cotton spinning trade is the largest manufacturing trade in this country, and we cannot absolve ourselves in this House from responsibility in connection with a trade which supplies so large a proportion of the employment of this country. But, agreeing, as one must, with the broad facts of the statement, which was, if paraphrased, that the production of cotton goods and the consumption of cotton goods all through the world is increasing and that Lancashire's share is gradually decreasing—admitting that to be the case, I listened carefully to all that the right hon. Member had to say and I wondered when one was to come to the fundamental and most important point, namely, the suggestion of the remedy, but that part of the right hon. Gentleman's speech was never delivered.

The Opposition have not put forward any practical proposals. They say, "Let us have an inquiry." If it is going to be an inquiry which will merely be dilatory action to enable the events that ought to be tackled here and now to be put on one side, then I say that it is not going to do any good. The facts are well known. The Lancashire cotton trade presents two salient features. One is a general situation. The other is a more particular situation. The vital necessity of the situation is to find some method of harnessing the sections of the trade together, of getting the producing end and the consuming end into touch with one another. The different sections of the trade at the moment are completely isolated. There is no link between the producer and the consumer. The users of cotton goods throughout the world are not the customers of Lancashire. They are the customers of the individual merchants. In the days gone by, when Lancashire was responsible for the production of practically all the cotton goods used in the export trade, naturally, those merchants had to go to Lancashire for their goods, but now they buy in the cheapest markets and supply their customers with goods which are not necessarily Lancashire goods. Therefore, the selling organisation on which we have to rely is one which, in many circumstances, sells not for Lancashire but for Lancashire's competitors.

Another point is that the various sections of trade are not co-ordinated. The spinning section and to a lesser extent the manufacturing section must rely for prosperity on large-scale production—on mass production. Much more important to them than the ratio of profit, is the quantity of the trade which goes through, but the other sections of the trade such as the finishing, printing, packing and so forth can organise themselves for profit on a partial production basis. Instead of relying on large-scale production they merely rely on the ratio of profit. It is obvious that if Lancashire, considered as a producing county, has not got co-ordination in these various sections, we cannot have the prosperity to which we think we are entitled. A proposal for bringing the various sections into line and co-ordinating their interests is being considered by the special committee of the Manchester Chamber of Commerce. In connection with that matter, I would point out that the Manchester Chamber of Commerce is interested more in those particular sections which, as I have said, can organise themselves on a partial production basis. This House obviously must bear in mind the national interest and we must consider this fact that, from the point of view of the nation, the mill employing 500 operatives is much more important than the office with two men and a boy.

10.0 p.m.

The second problem—I may call it the special problem—is the definite problem of the spinners. It would be conveying a wrong impression if one were to say that the whole spinning trade is in bad circumstances. The Egyptian section is a profitable section and compares with any other trade in the country in regard to the provision of employment. It is only in reference to that section—two-thirds of the trade—which uses American cotton that there is any serious problem. It is obvious that, if we are to make the American section prosperous, we must return to an economic figure for financial overhead costs. A good deal has been said about gross overcapitalisation. The fact that 169 recapitalised concerns, the paid up capital of which was something like £8,200,000, were sold for a figure of over £50,000,000, which means that there was something like £42,000,000 of inflated money. That situation has to be met. If it were only a matter of dealing with shareholders it would be a simple proposition. The whole of the shareholders' money has been lost, but the problem concerns not only shareholders' money but loan money and bank overdrafts. A scheme to which several speakers have referred has been put forward by the Yarn Association, and it is one which, in my view, attempts to deal with this problem in a businesslike and workable fashion. To my own knowledge, there are at least 60 mills in Lancashire which ought immediately to apply, on the published conditions, for inclusion in that corporation. I feel myself that though this may not be the identical way in which the problem will be solved, yet it is on lines like these, which will enable the loan money and the bank overdrafts to be dealt with, that a solution will be found. Even if we do get the American section, with respect to its financial overhead charges, back on an economic basis, we have not solved the whole of the problem. I would remind the. Labour party that if we only got 48 hours' production from our spinning mills, we should be in a much better position in regard to cost of production than we are at the present time. We are getting much nearer 44 hours than 48, and though this is not the time for referring to the Washington Hours Convention, it should not be forgotten that in America, where three States went in for the 48 hours, two of those three have already re-enacted laws which make it legal to work for 54 hours instead of 48. I think there will be common agreement with this broad analysis—that there are two paths which have to be examined. One relates to the question of the broad organisation of the trade, and the other to the question of these financial overhead costs in the American section. I understand the attitude which the Government are taking up is, as regards the first, to let the examination by the special committee of the Manchester Chamber of Commerce go forward; and, as regards the other, to give encouragement to the proposals for amalgamation. I submit that that policy is a reasonable one. But what is the policy of the Socialist party, beyond asking for an inquiry? I should like to know whether the official policy of the party opposite is that stated by Mr. Albert Law, prospective Labour candidate for Bolton and himself a cotton operative who, speaking at a Labour Conference at Bolton on Saturday, on the position of the cotton industry, said: Co-operation and amalgamation are not proposed not so much as remedies, but rather as a cloak under which the dread disorder of the industry may remain hidden and still go on with its deadly work of sapping the vitality of the industry. The disease of debt and false values must be rooted out. The quickest way is clean-cut bankruptcy in order that the industry may have a chance to continue its growth in a soil of honesty and ability. I should like to know whether that is the policy of the Socialist party.

Mr. SHAW

I think the hon. Member was quite plainly told in my speech what our policy is. Get the facts.

Mr. HAMMERSLEY

If the policy of the Socialist party, after seven years of this depression, is to say, "We want to know the facts," when most people in the trade are very well acquainted with what the facts are, I say that in this matter Lancashire is going to get very cold comfort from the Socialists. I thought that the circumstances of this trade would have provided a very useful practical opportunity for the Socialist party to put some of their theories into practice, and I will make an offer to the right hon. Member for Preston and his party whereby he can put some of his theories into practice. Without any cost, I am willing to provide, not one, two, or three, but up to 20 mills, which he can take over without cost provided he will look after their liabilities. [Laughter.] The Labour party, like any other party, must face the facts as they are.

Mr. SHAW

I am open to take the hon. Gentleman's offer. If he will give me any number of mills, I will accept the lot.

Mr. HAMMERSLEY

He must take over the mills as they stand.

Mr. SHAW

I will.

Mr. HAMMERSLEY

With their existing obligations.

Mr. SHAW

The hon. Gentleman surely does not want to ruin a concern by individualist theories and then say, "You are a Socialist. Take this bankrupt concern, and bring it back to prosperity."

Mr. HAMMERSLEY

What I would like the right hon. Gentleman to do is to apply his theories to the mills as they stand, but I very much fancy that that offer will not be accepted, and that all that Lancashire will get from the Socialist party in respect to this very difficult problem is a request for another inquiry. My own personal view is that there are two paths along which the Government are determined to help. It may be that those two paths may end, like so many explored paths have done in the past, in cul-de-sacs. If that is so, we shall have to adopt new methods. After all, England's greatest exporting trade and the welfare of hundreds of thousands of our fellow-countrymen are much more important than party cries and the shibboleths of party warfare. It may be that all these schemes will be rejected and that the only policy will be bankruptcy, but, if that is so, rather than see the industry of my native county dwindle and decay, I should be prepared to come to this House to speak and to vote for those concerns being made to do by legislation what they would refuse to do by the incentive of human reason.

Lieut.-Commander ASTBURY

I think we are indebted to the right hon. Member for Preston (Mr. T. Shaw) for bringing this matter before the House, because it is very rarely that the cotton industry of Lancashire is discussed across the Floor. I cannot agree with him, however, that there should be an inquiry into the industry. It has been pointed out by many Members that it would be quite futile, because the troubles from which we are suffering are well known to all of us. One hon. Member referred to the over-capitalisation of the mills, and I quite agree that at the time when these mills were floated it was nothing more nor less than a swindle on the British public. Personally, I did not take a single share in them, and I am well off in not having done so, but let me point out that that over-capitalisation has nothing to do with the depression in the cotton trade, for this reason, that you are paying no dividends on that capital, and, therefore, your overhead charges are not increased on that account; and it is not owing to that cause that we have the present depression in the industry. I think very often hon. Members seem to forget the enormous strides that foreign countries have made in the last 20 years. I have been in the cotton trade for 30 years, and we are being competed with now by Japan, Italy, the United States of America, and Holland to an extent that the cotton trade of this country has never known before.

I can give you an illustration with regard to Japan. It was mentioned by an hon. Member opposite that Japan is taking at the present time a large part of the lower grade cotton trade. The remarks he made are quite correct, and today practically Japan has got the whole of that trade. She can only do it in one way, and that is by working longer hours of labour and by giving lower wages. I defy any country to come up to the ability of our cotton operatives or our printing or dyeing operatives, and it is only in those conditions that she can compete so successfully with us in England. Let me give another illustration. Holland is to-day putting goods into the London market at 11d. a yard. Our cost of production is 1s., and the retail shops in London are selling that article at 2s. 11d. a yard. There is talk about reducing the wages of the operatives, but I do not believe that any reduction in wages or the lengthening of hours will have the slightest effect. We ought to look more at what is inherently depressing the cotton trade. If hon. Members only took the trouble to think for a few minutes, they would see that the cotton has to go through a number of hands. There is first the broker who wants his profit; then it is delivered to the spinner, who makes a profit, and then to the weaver, who has to make a profit, and then to the dyer, the printer, or the bleacher, who also make a profit, and then it has to be delivered to the merchant, who wants a Profit and eventually it goes to the retailer.

Mr. SHAW

And he makes the biggest profit of all.

Lieut-Commander ASTBURY

Yes. There are six hands through which these goods have to go, and if you put the low estimate of a profit of 5 per cent., you have 30 per cent, profit to make before you calculate anything else for wages or overhead charges, and I am confident in my own mind that it is only in this direction that a real solution of the depression in the cotton trade can be found. You are not going to do that by a Government inquiry. You will only set up the backs of the different trades in Lancashire by having an inquiry, because, to be quite candid, they do not believe in a Government inquiry. They think the Government should keep out of industry, but I am quite sure that the time will come when these five different sections of the trade will have to combine, and produce goods as one firm, and purchase goods as one firm. [HON. MEMBERS: "Come over here!"] You will not do it by nationalisation. Let me tell my hon. Friends opposite that, as far as individualism goes, the individual firms in Lancashire that are outside the combine are making the biggest profit. I do not want to be egotistical, but my firm has been going for 25 years, and the Cotton Producers' Association have never been able to do me any damage.

Mr. MACKINDER

Will you give us your industry?

Lieut.-Commander ASTBURY

One point has not been mentioned, and I do not refer to it in any controversial spirit. Before the coal stoppage, the cotton trade was showing signs of revival. We first had the coal stoppage, and then the general strike, and there is no doubt that these two stoppages alone put the cotton trade back for two or three years.

Mr. SHAW

Is the hon. Member aware that the cotton trade was not going up, and that 1925 was worse than 1924?

Lieut.-Commander ASTBURY

That might be so, but we do not get at once the effect of a stoppage in a strike like that. The repercussion comes afterwards, and what we were suffering form a few months ago was the direct effect of the stoppage. I am only too glad to be able to say that to-day the cotton trade is doing better, and I am sure that if there were less pessimism talked in this House and in the country, and a little more optimism and faith shown in ourselves and in those who work

with us, this depression would very soon pass away, and we should again be pre-eminent in the cotton trade.

Question put, "That Mr. Speaker do now leave the Chair."

The House divided: Ayes, 206; Noes, 88.

Division No. 65.]	AYES.	[10.18 p.m.
Acland-Troyte, Lieut.-Colonel	Grotrian, H. Brent	Pownall, Sir Assheton
Albery, Irving James	Guinness, Rt. Hon. Walter E.	Preston, William
Alexander, E. E. (Leyton)	Gunston, Captain D. W.	Price, Major C. W. M.
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.	Hacking, Douglas H.	Ralne, Sir Walter
Astbury, Lieut.-Commander F. W.	Hall, Lieut.-Col. Sir F. (Dulwich)	Ramsden, E.
Atkinson, C.	Hall, Capt. W. D'A. (Brecon & Rad.)	Rawson, Sir Cooper
Beamish, Rear-Admiral T. P. H.	Hammersley, S. S.	Rees, Sir Beddoe
Bellairs, Commander Carlyon	Harrison, G. J. C.	Reid, D. D. (County Down)
Betterton, Henry B.	Hartington, Marquess of	Remer, J. R.
Blades, Sir George Rowland	Harvey, G. (Lambeth, Kennington)	Rhys, Hon. C. A. U.
Blundell, F. N.	Harvey, Major S. E. (Devon, Totnes)	Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Bourne, Captain Robert Croft	Haslam, Henry C.	Roberts, Sir Samuel (Hereford)
Bowater, Col. Sir T. Vanslttart	Headlam, Lieut.-Colonel C. M.	Ropner, Major L.
Brass, Captain W.	Henderson, Capt. R. R.(Oxf'd, Henley)	Ruggles-Brise, Lieut.-Colonel E. A.
Brlacoe, Richard George	Henderson, Lieut.-Col. Sir Vivian	Runciman, Hilda (Cornwall,St. Ives)
Brocklebank, C. E. R,	Heneage, Lieut.-Colonel Arthur P.	Runciman, Rt. Hon. Walter
Brooke, Brigadier-General C. R. I.	Henn, Sir Sydney H.	Russell, Alexander West (Tynemouth)
Broun-Lindsay, Major H.	Hennessy, Major Sir G. R. J.	Rye, F. G.
Brown, Brig.-Gen.H.C. (Berks, Newb'y)	Herbert, Dennis (Hertford, Watford)	Salmon, Major I.
Buckingham, Sir H.	Hills, Major John Waller	Samuel, A. M. (Surrey, Farnham)
Bull, Rt. Hon. Sir William James	Holt, Captain H. P.	Samuel, Samuel (W'dsworth, Putney)
Butler, Sir Geoffrey	Hope, Capt. A. O. J. (Warw'k, Nun.)	Sanders, sir Robert A.
Butt, Sir Alfred	Hope, Sir Harry (Forfar)	Sanderson, Sir Frank
Campbell, E. T.	Hopkins, J. W. W.	Sassoon, Sir Philip Albert Gustave D.
Carver, Major W. H.	Hopklnson, Sir A. (Eng. Universities)	Savery, S. S.
Cassels, J. D.	Hopkinson, A. (Lancaster, Mossley)	Shaw, Lt.-Col. A. D.Mcl.(Renfrew,W.)
Cayzer, MaJ.Sir Herbt. R.(Prtsmth.S.)	Hudson, Capt. A. U. M. (Hackney, N.)	Sheffield, Sir Berkeley
Cecil, Rt. Hon. Sir Evelyn (Aston)	Hume, Sir G. H.	Shepperson, E. W.
Chadwick, Sir Robert Burton	Hunter-Weston, Lt.-Gen, Sir Aylmer	Smith, R. W. (Aberd'n & Kinc'dine, C.)
Christle, J. A.	Illffe, Sir Edward M.	Smith-Carington, Neville W.
Churchman, Sir Arthur C.	Inskip, Sir Thomas Walker H.	Smithers, Waldron
Cobb, Sir Cyril	James, Lieut.-Colonel Hon. Cuthbert	Somerville, A. A. (Windsor)
Cockerill, Brig.-General Sir George	Jephcott. A. R.	Sprot, Sir Alexander
Cooper, A. Duff	Kennedy, A. R. (Preston)	Stanley, Lieut.-Colonel Rt. Hon. G. F.
Couper, J. B.	Kindersley, Major Guy M.	Strauss, E. A.
Courthope, Colonel Sir G. L.	king, Commodore Henry Douglas	Stuart, Crichton-, Lord C.
Craig, Sir Ernest (Chester, Crewe)	Kinloch-Cooke, Sir Clement	Styles, Captain H. Walter
Crooke, J. Smedley (Deritend)	Knox, Sir Alfred	Sueter, Rear-Admiral Murray Fraser
Crookshank, Cpt.H.(Lindsey,Gainsbro)	Lamb, J. Q.	Sugden, Sir Wilfrid
Culverwell, C. T. (Bristol, West)	Lister, Cunliffe-, Rt. Hon. Sir Philip	Tasker, R. Inlgo.
Cunliffe, Sir Herbert	Little, Dr. E. Graham	Thom, Lt.-Col. J. G. (Dumbarton)
Davidson, Major-General Sir J. H.	Lloyd, Cyril E. (Dudley)	Thompson, Luke (Sunderland)
Davies, Dr. Vernon	Long, Major Eric	Thomson, F. C. (Aberdeen, South)
Dixey, A. C.	Looker, Herbert William	Thomson, Rt. Hon. Sir W. Mitchell-
Eden, Captain Anthony	Lougher, Lewis	Titchfield, Major the Marquess of
Edmondson, Major A. J.	Lucas-Tooth, Sir Hugh Vere	Tryon, Rt. Hon. George Clement
Elliot, Major Walter E.	Luce,Major-Gen.Sir Richard Harman	Waddington, R.
Everard, W. Lindsay	Lumley, L. R.	Wallace, Captain D. E.
Fairfax, Captain J. G.	McLean, Major A.	Ward, Lt.-Col. A.L.(Kingston-on-Hull)
Fanshawe, Captain G. D.	Makins, Brigadier-General E.	Warner, Brigadier-General W. W.
Fenby, T. D.	Manningham-Buller, Sir Mervyn	Watts, Dr. T.
Fermoy, Lord	Margesson, Captain D.	Wells, S. R.
Fielden, E. B.	Marriott, Sir J. A. R.	White, Lieut.-Col. Sir G. Dalrymple-
Finburgh, S.	Meller, R. J	Williams, A. M. (Cornwall, Northern)
Ford, Sir P. J.	Merriman, Sir F. B.	Williams, Com. C. (Devon, Torquay)
Forestier-Walker, Sir L.	Mitchell, S. (Lanark, Lanark)	Williams, Herbert G. (Reading)
Forrest, W.	Mitchell, W. Foot (Saffron Walden)	Wilson, R. R. (Stafford, Lichfleld)
Foster, Sir Harry S.	Moore, Lieut.-Colonel T. C. R. (Ayr)	Windsor-Clive, Lieut.-Colonel George
Fraser, Captain Ian	Morris, R. H.	Winterton, Rt. Hon. Earl
Fremantle, Lieut.-Colonel Francis E.	Nelson, Sir Frank	Withers, John James
Galbraith, J. F. W.	Neville, Sir Reginald J.	Wolmer, Viscount
Ganzonl, Sir John	Newman, Sir R. H. S. D. L. (Exeter)	Womersley, W. J.
Gault, Lieut.-Col. Andrew Hamilton	Nuttall, Ellis	Wood, B. C. (Somerset, Bridgwater)
Gilmour, Lt.-Col. Rt. Hon. Sir John	Oakley, T.	Wood, Rt. Hon. Sir Kingsley
Glyn, Major R. G. C.	Owen, Major G.	Woodcock, Colonel H. C.
Goff, Sir Park	Pennefather, sir John	Yerburgh, Major Robert D. T.
Gower, Sir Robert	Penny, Frederick George
Graham, Fergus (Cumberland, N.)	Percy, Lord Eustace (Hastings)	TELLERS FOR THE AYES.—
Grattan-Doyle, Sir N.	Peto, G. (Somerset, Frome)	Captain Bowyer and Sir Victor
Greene, W. P. Crawford	Power, Sir John Cecil	Warrender.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Greenwood, A. (Nelson and Colne)	Potts, John S.
Adamson, W. M. (Staff., Cannock)	Grenfell, D. R. (Glamorgan)	Richardson, R. (Houghton-le-Spring)
Alexander, A. V. (Sheffield, Hillsbro')	Griffith, F. Klngsley	Riley, Ben
Ammon, Charles George	Griffiths, T. (Monmouth, Pontypool)	Ritson, J.
Baker, J. (Wolverhampton, Bilston)	Grundy, T. W.	Roberts, Rt. Hon. F. O. (W.Bromwich)
Baker, Walter	Hall, F. (York, W.R., Normanton)	Saklatvala, Shapurji
Barker, G. (Monmouth, Abertillery)	Hardie, George D.	Salter, Dr. Alfred
Barnes, A.	Hayday, Arthur	Scrymgeour, E.
Barr, J.	Henderson, Right Hon. A. (Burnley)	Shaw, Rt. Hon. Thomas (Preston)
Batey, Joseph	Hilton, Cecil	Shiels, Dr. Drummond
Beckett, John (Gateshead)	Hirst, G. H.	Smith, Rennie (Penistone)
Bowerman, Rt. Hon. Charles W.	John, William (Rhondda, West)	Snell, Harry
Broad, F. A.	Johnston, Thomas (Dundee)	Stewart, J. (St. Rollox)
Bromley, J.	Jones, T. I. Mardy (Pontypridd)	Sullivan, Joseph
Brown, James (Ayr and Bute)	Kelly, W. T.	Sutton, J. E.
Buxton, Rt. Hon. Noel	Kennedy, T.	Tnurtle, Ernest
Charleton, H. C.	Lansbury, George	Varley, Frank B.
Cluse, W. S.	Lawrence, Susan	Viant, S. P.
Clynes, Rt. Hon. John R.	Lee, F.	Watson, W. M. (Dunfermilne)
Connolly, M.	Lowth, T.	Watts-Morgan, Lt.-Col. D. (Rhondda)
Cowan, D. M. (Scottish Universities)	Lunn, William	Wellock, Wilfred
Davies, Rhys John (Westhoughton)	MacDonald, Rt. Hon. J. R. (Aberavon)	Welsh, J. C.
Day, Harry	Mackinder, W.	Whiteley, W.
Dennison, R.	Maclean, Nell (Glasgow, Govan)	Williams, T (York, Don Valley)
Duncan, C.	March, S.	Wright, W.
Garro-Jones, Captain G. M.	Montague, Frederick	Young, Robert (Lancaster, Newton)
Gibbins, Joseph	Morrison, R. C (Tottenham, N.)
Gillett, George M.	Oliver, George Harold	TELLERS FOR THE NOES.—
Gosling, Harry	Paling, W.	Mr. Allen Parkinson and Mr. Charle
Graham, Rt. Hon. Wm. (Edin., Cent.)	Pethick-Lawrence, F. W.	Edwards.
Greenall, T.	Ponsonby, Arthur

Question put, and agreed to.

Supply accordingly considered in Committee.

[Captain FITZROY in the Chair.]